EXHIBIT 10.1
 
 

CONTRACT OF SALE

TRB CHATTANOOGA LLC

 
- Seller -
 

FREEMAN WEBB INVESTMENTS, INC.

- Purchaser -

as of April 17, 2008

 
Marina Pointe Apartments
 
5750 Lake Resort Drive
 
Chattanooga, Tennessee

 
 
 

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TABLE OF CONTENTS

Page:
1. Purchase Price

2. Escrow

3. Premises Sold "As Is"

4. Leases

5. Title

6. Acceptance of the Deed

7. Inspections

8. No Financing Contingency

9. Authorization of Purchaser and Seller

10. Included Premises .

11. Closing Costs

12. Closing Date

13. Closing Documents

14. Preclosing Obligations of Seller

15. Condemnation

16. Casualty

17. Assignment

18. Brokers

19. Section 1031 Tax Deferred Exchange

20. OFAC Matters

21. Miscellaneous
 
 
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CONTRACT OF SALE

This CONTRACT OF SALE (this "Contract") is made and entered into as of the 17th
day of April, 2008 by and between TRB Chattanooga LLC, a Tennessee limited
liability company having an office at 60 Cutter Mill Road, Suite 303, Great
Neck, New York 11021 ("Seller"), and Freeman Webb Investments, Inc., a Tennessee
corporation having an office at 555 Great Circle Road, Suite 100, Nashville,
Tennessee 37228-1310 ("Purchaser").

WITNESSETH:

WHEREAS, Seller is the current owner of the property known as the Marina Pointe
Apartments, 5750 Lake Resort Drive, Chattanooga, Tennessee and more particularly
described on Exhibit A attached hereto (the "Premises"); and

WHEREAS, Seller wishes to sell and Purchaser wishes to acquire the Premises in
accordance with the terms hereof.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
sufficiency of which being hereby acknowledged, the parties hereto do hereby
agree as follows:

1. Purchase Price. Seller agrees to sell and Purchaser agrees to acquire the
Premises for the sum of $27,300,000.00 payable as follows:

$300,000.00 within three (3) business days after the execution and delivery of
this Contract of Sale as the nonrefundable (except as specifically set forth
herein) Downpayment (hereinafter defined), by wire transfer to the order of
First American Title Insurance Company, as escrow agent (“Escrow Agent”), which
sum shall be held in escrow pursuant to the terms hereof; and

$27,000,000.00, at the Closing, by wire transfer of immediately available funds
to an account designated by Seller.

2. Escrow. Within three (3) business days after the execution of this Contract
of Sale, Purchaser will deliver to Escrow Agent a wire transfer in the amount of
$300,000.00 as the downpayment (the "Downpayment"). Escrow Agent shall deposit
the Downpayment into an interest-bearing account(s) maintained at a federally
insured financial institution(s). Escrow Agent shall deliver the Downpayment in
accordance with this Contract of Sale, or a joint instruction signed by Seller
and Purchaser, or separate instructions of like tenor signed by Seller and
Purchaser, or a final judgment of a court of competent jurisdiction. Escrow
Agent hereby is authorized and directed to deliver the Downpayment to Seller if,
as and when title closes. If Escrow Agent shall receive a written request by one
party for the release of the Downpayment other than as specifically authorized
above, Escrow Agent will give a copy thereof to the other party. If Escrow Agent
shall not receive an objection from the other party within five (5) business
days, then Escrow Agent shall so release the Downpayment. Provided, however, in
the event that Purchaser requests release of the Downpayment as a result of
Purchaser terminating this Contract prior to the end of the Due Diligence
Period, no consent or approval from the Seller is necessary and the Downpayment
shall be immediately returned to Purchaser. If Escrow Agent receives an
objection, then Escrow Agent shall continue to hold the Downpayment in
accordance with the terms hereof. Escrow Agent at any time may deposit the
Downpayment with a court of competent jurisdiction, and upon notice to Seller
and Purchaser of such deposit, Escrow Agent shall have no further responsibility
or liability hereunder. Escrow Agent may act upon any instruction or other
writing believed by Escrow Agent in good faith to be genuine and to be signed or
presented by the proper persons. Except as otherwise noted herein, any interest
or income thereon shall be paid to the party entitled to receive the
Downpayment; provided that if Seller shall receive the interest at Closing then
such interest shall serve as a credit against the purchase price. If Purchase
fails to make the deposit of the Downpayment as required hereunder, this
Contract shall terminate and neither party shall have any further obligations
hereunder to the other.

 
 

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Seller and Purchaser acknowledge that Escrow Agent is merely a stakeholder, and
that Escrow Agent shall not be liable for any act or omission unless taken or
suffered in bad faith, in willful disregard of this Contract of Sale or
involving gross negligence. Escrow Agent shall not be liable for the failure of
the institution(s) in which the Downpayment has been deposited or for
establishing accounts in excess of applicable guaranty limits. Seller and
Purchaser agree to indemnify and hold Escrow Agent harmless from and against any
reasonable costs, claims or expenses incurred in connection with the performance
of the Escrow Agent's duties hereunder, unless such costs, claims or expenses
were occasioned by Escrow Agent's bad faith or its willful disregard of this
Contract of Sale.

Escrow Agent shall not be bound by any agreement between Seller and Purchaser,
whether or not Escrow Agent has knowledge thereof, and Escrow Agent's only
duties and responsibilities shall be to hold, and to dispose of, the Downpayment
and interest earned thereon in accordance with this Contract of Sale. Escrow
Agent may consult with counsel, and any opinion of counsel shall be full and
complete authorization and protection in respect to any action taken or omitted
by Escrow Agent hereunder in good faith and in reliance upon such opinion.

All instructions or notices given to the Escrow Agent shall be in writing and
delivered in accordance with the requirements of this Contract of Sale. For
purposes of this paragraph, such instructions and notices shall be deemed
delivered on the date of delivery, if by hand, or on the date of mailing if
mailed, except that no instruction or notice to Escrow Agent shall be deemed
effectively delivered to Escrow Agent until actual receipt thereof by Escrow
Agent.

3. Premises Sold "AS IS". A. PURCHASER EXPRESSLY UNDERSTANDS AND AGREES AND
ACKNOWLEDGES THAT SELLER WOULD NOT HAVE ENTERED THIS CONTRACT OF SALE WITHOUT
THE EXPRESS PROVISIONS OF THIS PARAGRAPH 3. IN PARTICULAR, PURCHASER
ACKNOWLEDGES THAT SELLER ONLY RECENTLY ACQUIRED THE PREMISES BY DEED IN LIEU OF
FORECLOSURE AND THEREFORE SELLER IS BOTH UNWILLING AND UNABLE TO MAKE ANY MORE
REPRESENTATIONS OR WARRANTIES CONCERNING THE PREMISES THAN THE ONES SET FORTH IN
THIS CONTRACT OF SALE AND THOSE CONTAINED IN THE CLOSING DOCUMENTS TO BE
DELIVERED PURSUANT TO SECTION 13 HEREOF. IT IS UNDERSTOOD THAT THE PREMISES AND
ALL IMPROVEMENTS AND FIXTURES SHALL BE DELIVERED "AS IS", “WHERE IS” IN THEIR
PRESENT CONDITION AND WITH ALL FAULTS, SUBJECT TO REASONABLE WEAR AND TEAR AND
DETERIORATION BETWEEN NOW AND THE CLOSING DATE. SELLER SHALL NOT BE LIABLE FOR
ANY LATENT OR PATENT DEFECTS IN THE PREMISES. PURCHASER ACKNOWLEDGES THAT,
EXCEPT AS HEREIN SPECIFICALLY SET FORTH, NEITHER SELLER NOR ANY OF ITS
REPRESENTATIVES, EMPLOYEES, MEMBERS, OFFICERS, DIRECTORS, SHAREHOLDERS,
TRUSTEES, MEMBERS, PARTNERS, COUNSEL OR AGENTS HAS MADE OR WILL IN THE FUTURE
MAKE ANY DISCLOSURES, REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL
CONDITION, STATE OF REPAIR, TENANCY, INCOME, EXPENSES OR OPERATION OF THE
PREMISES. EXCEPTING ONLY THOSE REPRESENTATIONS (IF ANY) SPECIFICALLY SET FORTH
IN THIS CONTRACT OF SALE, PURCHASER ACKNOWLEDGES THAT IT HAS NOT RELIED ON ANY
REPRESENTATIONS, WARRANTIES OR OTHER STATEMENTS WHETHER ORAL OR WRITTEN IN ITS
DECISION TO ACQUIRE THE PREMISES IN ACCORDANCE WITH THE TERMS HEREOF.
 
 
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IN PARTICULAR, EXCEPT AS HEREIN SPECIFICALLY SET FORTH, SELLER HAS NOT MADE (AND
IS UNWILLING TO MAKE) ANY DISCLOSURES, REPRESENTATIONS OR WARRANTIES IN RESPECT
OF (I) THE PHYSICAL CONDITION OF THE PREMISES (INCLUDING, WITHOUT LIMITATION, IN
RESPECT OF THE PRESENCE, NON-PRESENCE OR CONDITION OF HAZARDOUS MATERIALS
(HEREAFTER DEFINED), (II) THE COMPLIANCE OR NON-COMPLIANCE OF THE PREMISES WITH
ANY PLANS OR SPECIFICATIONS OR WITH APPLICABLE LAWS (INCLUDING, WITHOUT
LIMITATION, THOSE RELATING TO THE PROTECTION OF THE ENVIRONMENT OR THE HEALTH,
SAFETY, ACCESSIBILITY OR WELFARE OF EMPLOYEES, WORKERS OR GUESTS TO THE PREMISES
(INCLUDING BUT NOT LIMITED TO THE OCCUPATIONAL SAFETY AND HEALTH ACT, AS
AMENDED, AND THE AMERICAN WITH DISABILITIES ACT, AS AMENDED)), (III) THE
REVENUES, INCOME OR EXPENSES OF THE PREMISES, (IV) THE ADEQUACY OR INADEQUACY OF
THE UTILITIES, IF ANY, PROVIDED TO THE PREMISES, (V) THE ZONING OF THE PREMISES
OR (VI) ANY OTHER MATTER WHATSOEVER AND WHETHER OR NOT CONCERNING THE PREMISES.
PURCHASER ACKNOWLEDGES THE FOREGOING AND WARRANTS AND REPRESENTS THAT IT (OR ITS
PRINCIPAL OFFICER IF PURCHASER SHALL BE AN ENTITY) HAS HAD SUFFICIENT TIME AND
OPPORTUNITY (OR THAT THIS CONTRACT OF SALE PROVIDES FOR SUFFICIENT TIME AND
OPPORTUNITY) TO INSPECT THE PREMISES AND OTHER MATTERS DEEMED IMPORTANT TO
PURCHASER, THAT IT (OR ITS PRINCIPAL OFFICER IF PURCHASER SHALL BE AN ENTITY) IS
EXPERIENCED IN OWNING REAL PROPERTY SIMILAR TO THE PREMISES AND THAT IT IS
REPRESENTED BY ADVISORS AND COUNSEL OF ITS CHOOSING.

 
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For purposes hereof, “Hazardous Wastes” shall mean and refer to explosives,
radioactive materials, asbestos, asbestos-containing materials, polychlorinated
biphenyls, lead, lead-based paint, radon, under and/or above ground storage
tanks, hazardous materials, toxic substances, hazardous wastes, hazardous
substances, mold, petroleum, petroleum based materials or any other materials or
substances which are listed or regulated in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
6901, et seq.), the Resources Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section 1251, et seq.),
the Safe Drinking Water Act (14 U.S.C. Section 1401, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Toxic
Substance Control Act (15 U.S.C. Section 2601, et seq.), or any other applicable
federal, state or local laws.
 

B. As of the expiration of the Due Diligence Period, Purchaser will have, or
will have had ample opportunities to have:
 
(i) Examined and inspected the Premises and will know and be satisfied with the
physical condition, quality, quantity and state of repair of the Premises in all
respects, and by proceeding with this transaction following the expiration of
the Due Diligence Period will be deemed to have determined that the same is
satisfactory to Purchaser in all respects;
 
(ii) Reviewed the Lease(s) and all other premises information and all other
instruments, records and documents which Purchaser deems appropriate or
advisable to review in connection with this transaction, and Purchaser, by
proceeding with this transaction following the expiration of the Due Diligence
Period, will be deemed to have determined that the same and the information and
data contained therein and evidenced thereby are satisfactory to Purchaser in
all respects;
 
(iii) Reviewed all applicable laws, ordinances, rules and governmental
regulations (including, but not limited to, those relating to building, zoning
and land use) affecting the development, use, occupancy or enjoyment of the
Premises and the conformance and non-conformance of the Premises with same, and
Purchaser, by proceeding with this transaction following the expiration of the
Due Diligence Period, will be deemed to have determined that the same are
satisfactory to Purchaser;
 
(iv) Investigated, examined and approved the presence or absence of Hazardous
Materials, in, on or under the Premises, which investigations, examinations or
audits shall be performed or arranged by Purchaser, at Purchaser’s sole expense,
prior to the end of the Due Diligence Period;
 
 
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(v) Investigated, examined and approved the quality, nature, adequacy and
physical condition and aspects of the Premises, 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, the square footage within the
improvements on the Premises;
 
(vi) Investigated, examined and approved the quality, nature, adequacy, and
physical condition of soils, geology and any groundwater;
 
(vii) Investigated, examined and approved the existence, quality, nature,
adequacy and physical condition of utilities serving the Premises;
 
(viii) Investigated, examined and approved the zoning or other legal status of
the Premises or any other public or private restrictions on use of the Premises;
and
 
(ix) Investigated, examined and approved the compliance and non-compliance of
the Premises 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.
 
C. By closing this transaction without further documentation, Purchaser, on
behalf if itself and all of its officers, directors, members, managers,
trustees, beneficiaries, shareholders, employees, representatives, successors
and assigns, and their affiliates (collectively, the “Releasors”), will
automatically be deemed to have waived and relinquished any and all claims,
rights and remedies Releasors may now or hereafter have against Seller, its
successors, assigns, officers, directors, members, managers, trustees,
beneficiates, shareholders, employees, representatives, and their respective
successors, assigns and affiliates (the “Seller Parties”), whether known or
unknown, which may arise from or be related to this Contract of Sale or in any
manner related to the Premises (including without limitation any past, present
or future presence or existence of Hazardous Materials on, under or about the
Premises, any past present or future violation of any rules, regulations or
laws, now or hereafter enacted relating to the Premises, the physical or
structural condition of the Premises, the financial performance of the Premises
or any other matter or claim in any manner related to this Contract of Sale or
the Premises); provided, however, that the release contained herein shall not be
deemed to void the effect of any representations or warranties of Seller
specifically contained in this Contract of Sale which representations or
warranties by their terms are specifically set forth to survive Closing, or to
release Seller Parties from any liabilities they may have under the closing
documents delivered under Section 13 of this Contract. This section shall
survive the Closing and the recordation of the deed and will not be deemed
merged into the deed upon its recordation. If requested by Seller, Purchaser
agrees to execute a separate release and waiver at the Closing confirming and
acknowledging the foregoing.

 
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D. Purchaser acknowledges that Seller may have  information concerning the
condition of the property, including information about its environmental and/or
structural condition including possibly prior environmental or structural
inspection reports. Purchaser also specifically acknowledges
that Seller is under no obligation or duty to disclose such information to
Purchaser, other than as specifically agreed to herein, and that Purchaser is
not entitled to and does not expect any such disclosure other than as
specifically agreed to herein. Purchaser acknowledges that Seller does not wish
to expose itself to any potential claims (including without limitation that any
such information (including without limitation environmental and building
condition reports) is in any manner deficient or that the information disclosed
is not all of the relevant information that Seller may have on the matter) and
Purchaser agrees that it has or will be having its own environmental and
structural reports commissioned by licensed and insured consultants chosen by
Purchaser and that Purchaser will be relying solely on those reports in making
any assessments or conclusions as to the environmental and/or physical condition
of the Premises. Purchaser agrees that Seller shall have no obligation to
provide any information regarding the environmental or physical condition of the
Premises but in the event that Seller should provide any such information
(notwithstanding that Seller has no obligation to do so), Purchaser acknowledges
that any such information may not be all such information available to Seller on
any particular topic. Purchaser hereby waives any claim against Seller and the
Seller Parties related to any such information, except for any claims arising
out of the breach of any representations and warranties specifically set forth
herein (including without limitations claims that such information is wrong, is
inaccurate, is incomplete or that Seller knew or should have known that such
information is wrong, is inaccurate and/or is incomplete).
 
E. [INTENTIONALLY DELETED]

F. This Section shall survive the Closing or earlier termination of this
Contract of Sale.

4. Seller Representations. A. Seller warrants and represents that attached
hereto as Exhibit B is a copy of a rent roll for the Premises which is
materially true and correct as of the date thereon. Seller represents and
warrants that it will make available to Purchaser during the Due Diligence
Period, copies or originals of all lease files in its possession or in
possession of the management company. However, since Seller has only recently
acquired the Premises by deed-in-lieu of foreclosure Seller makes no
representations or warranties that the lease files it possesses are complete or
accurate. Seller represents and warrants that it has no knowledge of any leases
other than as disclosed to Purchaser on Exhibit B, and that there are no written
or oral agreements with tenants, to its knowledge, other than as disclosed on
Exhibit B.

B.  Except as may be listed on Exhibit C attached hereto, Seller warrants and
represents that to its knowledge no tenant at the Premises is in monetary
default.

 
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C. Seller warrants and represents that Seller has not nor will it in the future
collect rent more than thirty (30) days in advance, nor does it have any
knowledge that there are rents that have been prepaid more than thirty (30) days
in advance except as may be specifically listed on Exhibit B and identified as
prepaid rents.

D. Seller warrants and represents that it has no knowledge that there are any
service contracts pending in respect of the Premises that are not terminable on
thirty (30) days or less notice, except those which Seller will disclose to
Purchaser during the Due Diligence Period.

E. Seller warrants and represents that there are no employees at the Premises
who Purchaser would be responsible for following Closing.

F. As of the date hereof, Seller warrants and represents that it has no
knowledge of any pending or contemplated condemnation proceedings affecting the
Premises or any part thereof.

G. Seller warrants and represents that it has not received, nor to its knowledge
have there been issued, any notices of non-compliance of the Premises or its
operation with any applicable codes, laws, regulations, statutes, ordinances,
covenants, conditions or restrictions of any governmental or quasi-governmental
entity or of any other person or entity, which have not been fully and duly
complied with.

H. Seller warrants and represents that, to the best of its knowledge, any and
all state, federal, and municipal payroll taxes, including, but not limited to,
unemployment taxes, due for employees of the Property have been properly paid
and will continue to be properly paid prior to Closing.

I. The warranties and representations contained in this Section 4 shall survive
the Closing for a period of six (6) months.

5. Title. A. Purchaser agrees to promptly order a commitment for title insurance
from Escrow Agent. Seller agrees to promptly furnish to Purchaser an updated
ALTA survey of the Premises. Purchaser shall have until the end of the Due
Diligence Period to notify Seller in writing of any objections it may have to
said title commitment or survey, otherwise Purchaser shall be deemed to have
waived any objections it may have to Seller's title to the Premises and shall be
required to close on its acquisition of the Premises without offset or
abatement. Purchaser agrees to take title if insurable by Escrow Agent at
standard premiums and subject only to the Permitted Exceptions (hereafter
defined). If Purchaser shall timely notify Seller of a defect in Seller's title
or survey, Seller shall notify Purchaser within ten (10) days after receipt of
such notice whether Seller will attempt to cure such defects. If Seller elects
to cure such defects, then Seller shall be entitled, at its option, to
extensions of the Closing Date (hereafter defined) for up to thirty (30) days in
the aggregate to attempt to cure such defect(s). If Seller shall have elected to
attempt to cure such defects and should Seller not cure such defect(s)
regardless of the reason within ten (10) days prior to the Closing Date, or if
Seller elects not to cure such defects, then Purchaser shall have the option to
close on its purchase of the Premises in accordance with the terms hereof, with
no abatement or offset, or to terminate this Contract, in which event the
Downpayment, together with interest thereon, shall be returned to Purchaser and
the parties shall have no other liability to each other. Purchaser shall have
three (3) days following its receipt of an update title commitment (but in no
event later than the Closing Date) to notify Seller of any new title defects
raised thereby which did not exist at the time of the issuance of the initial
title commitment or survey and the provisions above of this Paragraph shall
apply in respect of such new title defects.

 
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B. The Premises are sold subject to the following (collectively, the "Permitted
Exceptions"):

(1) any matters of record (other than liens or judgments for the payment of
money) which do not adversely affect the marketability or insurability of title;

(2) current city, state and county ad valorem taxes not yet due and payable;

(3) easements and rights-of-way for the installation or maintenance of public
utilities, streets and sidewalks, such do not interfere with the operation of
the Premises;

(4) the rights of tenants, as tenants only, under the apartment leases; and

(5) such other matters, if any, as are not objected to by Purchaser as provided
in A above or which are accepted by Purchaser.

Notwithstanding anything in this agreement to the contrary, under no
circumstances shall any liens or mortgages or deeds of trust, mechanic’s liens,
attachments, liens to secure the payment of income taxes of Seller or Seller’s
constituents, or delinquent property taxes against the Property be considered to
be Permitted Exceptions and Purchaser’s failure to object to same shall not be
deemed to be a waiver by Purchaser.

C. Purchaser agrees to accept a limited warranty deed (or the local equivalent),
in form satisfactory for recording, for the sale of the Premises.

6. Acceptance of Deed. The acceptance of the deed by Purchaser shall constitute
and be deemed and considered full compliance by Seller of all the terms and
conditions of this Contract of Sale on the part of Seller to be performed. It is
further expressly agreed that none of the provisions of this Contract of Sale
shall survive the delivery and acceptance of the deed, except insofar as may
herein otherwise be expressly and specifically provided.

7. Inspections. A. At Purchaser's cost and expense, Purchaser and its advisors
shall be permitted to inspect the Premises for structural integrity, compliance
with applicable laws, to perform an environmental audit of the Premises, to
review the historical and projected financial information relative to the
operations of the Premises and any such other matters as Purchaser shall deem
significant (the "Inspections"). Purchaser agrees to indemnify and hold harmless
Seller from any damage to person or property that may be caused by the
Inspections. Purchaser shall not do any invasive testing (i.e. conducting
borings) without the prior written consent of Seller, which consent shall not be
unreasonably withheld.

 
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B.  Purchaser shall have until 5:00 p.m., CDT on the date which is 45 days after
the Effective Date (as hereinafter defined) (the “Due Diligence Period”) in
which to conduct the Inspections and to conduct all such other investigations of
the Premises as Purchaser desires necessary to determine whether the Premises is
suitable and satisfactory to Purchaser. Purchaser may, in Purchaser’s sole
discretion and for any reason, terminate this Contract at any time prior to the
end of the Due Diligence Period by giving written notice to Seller of such
election. In the event Purchaser so terminates this Contract then the
Downpayment shall be immediately returned to Purchaser, except for the sum of
$100 which shall be retained by Seller as full consideration for the execution
of this Contract and the parties shall have no liability to each other.

C. Seller agrees to cooperate, and to cause its property manager to cooperate,
with Purchaser in connection with the Inspections referenced above and to
provide access to the Premises in connection therewith (subject to the
provisions of applicable leases).
 
8. No Financing Contingency. It is expressly understood and agreed that the
obligations of Purchaser hereunder are NOT contingent on Purchaser being able to
secure financing for all or any portion of the purchase price.

9. Authorization of Purchaser and Seller. A. Purchaser warrants and represents
that it was duly organized and is in good standing in its jurisdiction of
organization and that it is in good standing in the State in which the Premises
is located. Purchaser warrants and represents that it has the authority to enter
into this Contract of Sale and agrees to supply to Seller such information as
Seller may require (such as its certificate of incorporation, by-laws and
resolutions adopted by its board of directors) to establish to Seller's
reasonable satisfaction the accuracy of the warranties and representations
contained in this paragraph. Purchaser represents that its signatory is fully
authorized to execute and deliver this Contract of Sale on its behalf.

B. Seller warrants and represents that it was duly organized and is in good
standing in its jurisdiction of organization and that it is in good standing in
the State in which the Premises is located. Seller warrants and represents that
it has the authority to enter into this Contract of Sale and agrees to supply to
Purchaser such information as Purchaser may require (such as its articles of
organization, operating agreement and resolutions adopted by its members) to
establish to Purchaser's reasonable satisfaction the accuracy of the warranties
and representations contained in this paragraph. Seller represents that its
signatory is fully authorized to execute and deliver this Contract of Sale on
its behalf.

 
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10. Included Premises. This sale includes all the right, title and interest of
Seller in and to all easements, rights of way, privileges, transferrable
permits, records, reports, transferrable licenses, appurtenances and rights to
the same belonging to and inuring to the benefit of the Premises, supplies,
fixtures and articles of personal property (including, but not limited to,
machinery, computers, drills and other tools, snow removal equipment,
landscaping equipment, and all other personal property located in apartments at
the Premises including without limitation (as applicable) air conditioners,
dishwashers, refrigerators and stoves) attached to or appurtenant to the
Premises or used in connection with the operation of the Premises and owned by
Seller. This sale also includes all the right, title and interest of Seller in
and to any intangible property associated with the Premises, including, without
limitation, building and trade names and all of Seller’s interest in and to any
oral or written lease, covering any portion of the Premises.

11. Closing Costs. A. Purchaser shall pay for all of its costs of closing
including its own attorney fees and Purchaser shall pay for the transfer taxes,
stamps and recording fees and costs (and similar items) in respect of the sale.
Seller shall pay for all of its costs of closing including its own attorney fees
and Seller shall pay for the cost of Purchaser’s standard title insurance
premiums and for the cost of an updated survey certified in favor of Purchaser.
The parties shall split the costs, if any, of Escrow Agent for serving as escrow
and closing agent for this transaction.

B. Real property taxes, rents, wages, utilities, water/sewer charges and other
operating expenses shall be adjusted as of the day before the Closing Date. For
delinquent rent not adjusted pursuant to the previous sentence and received
after the Closing Date, Purchaser shall be entitled to credit first the month
during which the rent is received and then shall apply the balance, if any, to
unpaid rent for the immediately preceding month(s) and agrees to send to Seller
its prorata share, if any, of such rent. Purchaser agrees to use its good faith
efforts to attempt to collect such delinquencies and Seller shall retain its
contract rights as against the delinquent tenants for such delinquent rent, but
Seller shall have no right to terminate any lease. If the actual taxes or other
charges shall not have been set by the Closing Date, the apportionment shall be
upon the basis of the tax rate (or other charge) for the previous year applied
to the latest assessed valuation and such taxes shall be reprorated once the
final tax bills for the year of Closing are available. Seller shall be
responsible to pay the installments of any special assessments that are due and
payable through the Closing Date and the Purchaser shall be responsible for the
installments for the periods following the Closing Date.

12. Closing Date. A. The parties agree that the closing (the "Closing") shall
occur on or before thirty (30) days following the expiration of the Due
Diligence Period (the "Closing Date"). The Closing shall take place in escrow
through the offices of Escrow Agent.

B. Notwithstanding anything contained in this Contract of Sale to the contrary
it is understood and agreed that in the event of any default on the part of
Purchaser, Seller agrees to look solely to the Downpayment in accordance with
the terms hereof as its liquidated damages and waives any claim for specific
performance or any other claim either against the Purchaser or against any
person disclosed or undisclosed. In the event Seller shall default hereunder (or
in the event of any claim of Purchaser against Seller related to this Contract
of Sale or the Premises other than a breach of any representations, warranties
or agreement which should survive the Closing), except as specifically set forth
herein, Purchaser's sole right shall be to either recover its Downpayment with
interest thereon or to seek specific performance of this Contract of Sale, with
it being understood that Seller shall in no event be liable for consequential or
other monetary damages in respect of this Contract of Sale, the Premises or the
transaction contemplated hereby. Seller and Purchaser acknowledge that the
amount of damages of Seller occasioned by a default of Purchaser hereunder would
be difficult or impossible to accurately predict and Seller and Purchaser, after
consultation with counsel of their own choosing, agree that the liquidated
damages provided for in this paragraph are reasonable sums to be used as
liquidated damages. In connection with any obligations which are specifically
agreed herein to survive the Closing, a party may be entitled to monetary
damages from the other, but shall not be entitled to any special or
consequential damages.

 
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13. Closing Documents. A. Seller agrees to execute and deliver to Purchaser on
the Closing Date all documents, in form reasonably satisfactory to Purchaser,
necessary to effectuate the provisions hereof including, without limitation:

a. The deed.

b. An assignment and assumption of leases, together with appropriate
indemnifications, together with an assignment of the security deposits, if any,
held in respect of the leases as listed on the then rent roll.

c. A notice of sale to the tenants, if any, of the Premises directing the
tenants to make all further rent payments to Purchaser as Purchaser may direct.

d. The original lease and property files and keys in Seller's possession.

e. An affidavit pursuant to Section 1445 of the Internal Revenue Code, as
amended.

f. A bill of sale covering all personal property and intangible property
referred to in Section 10 hereof.

g. Such other documents that shall reasonably be required to consummate the
transactions herein contemplated, including an Owner’s Affidavit in such form as
may be required by the title company in order to allow them to remove the
related standard exceptions from the title policy.

 
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B. Purchaser agrees to execute and deliver to Seller on the Closing Date all
documents, in form reasonably satisfactory to Seller, necessary to effectuate
the provisions hereof including, without limitation:

a. The balance of the cash portion of the purchase price referred to
hereinabove.

b. The assignment and assumption of the leases, together with appropriate
indemnifications.

c. Such other documents that shall reasonably be required to consummate the
transactions herein contemplated.

14. Pre-Closing Obligations of Seller. Between the date hereof and the Closing
Date, Seller shall:

a. Keep the Premises and all parts thereof in the same state of repair and
condition as they are currently in (including making ordinary repairs and
replacements) reasonable wear and tear excepted; provided that nothing in this
Contract shall require Seller to expend more than $10,000.00 in the aggregate on
repairs and/or replacements to the Premises. Seller shall promptly notify
Purchaser of any repairs or replacements which exceed the $10,000 limitation as
set forth above, and which Seller does not intend to complete; Purchaser shall
then have 10 days from such notification within which to terminate this Contract
if it so chooses and receive an immediate refund of the Downpayment.

b. Not apply all or any part of the security deposit of any tenant, to the
extent Seller shall have any, unless such tenant's lease has terminated and such
tenant has vacated the Premises.

c. Not withdraw, settle or compromise any reduction proceeding affecting real
estate taxes assessed against the Premises without the prior consent of
Purchaser which consent shall not be unreasonably withheld or delayed. Any
future refunds and fees of counsel shall be prorated between Purchaser and
Seller as of the Closing Date. This Paragraph 14(c) shall survive the Closing
and the delivery of the deed.

d. Not remove from the Premises any fixture, equipment or personal property
included in this sale unless the same is replaced with items of at least equal
value prior to the Closing Date.

e. Subject to the leases for the Premises, permit Purchaser or its
representatives access to the Premises upon reasonable prior notice and at
reasonable times.

 
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f. Seller will not alter, amend or modify the terms and provisions of any
leases, or, enter into new tenant leases with a term in excess of twelve (12)
months, or at rental rates below those set forth in the rent roll, without the
prior written approval of Purchaser.

g. Seller will not grant or purport to create to any third party any interest in
the Premises or any part thereof or further encumber the Premises without the
prior written approval of the Purchaser.

h. Seller will not enter into any maintenance, management or other service
contracts without the prior written approval of Purchaser.

i. Seller will cause fire and extended coverage insurance relating to the
Premises to be maintained in full force and effect at an amount no less than the
full replacement cost of the Premises.

j. Seller will promptly notify Purchaser in writing of any violation, alleged
violation or anticipated violation, or any law, regulation, ordinance, order or
other requirement of any governmental authority having jurisdiction over or
affecting the Premises, or any part thereof, of which it is notified.

k. Seller will not, without the prior written consent of Purchaser, permit any
structural modifications or additions to the Premises.

l. Seller shall not execute an assignment of any of the tenant leases or an
assignment of any rent accruing under a tenant lease.

m. Seller shall continue to maintain, operate and manage the Premises in the
same manner that Seller has heretofore maintained and operated the Premises, and
shall use good faith efforts to preserve for Purchaser the relationships of
Seller and tenants.

15. Condemnation. A. As of the date hereof, Seller has no knowledge of any
pending or contemplated condemnation proceedings affecting the Premises or any
part thereof.

B. If prior to the Closing, all of the Premises shall be taken by condemnation,
eminent domain or deed in lieu thereof, this Contract of Sale shall be
automatically terminated, the Downpayment together with any interest thereon
shall be returned to Purchaser and thereupon neither party shall have any
further liability or obligation to the other. If prior to the Closing Date, a
portion, but less than all, of the Premises shall be taken by condemnation,
eminent domain or deed in lieu thereof, which shall have a material, adverse
financial impact on the value or use of the Premises then Purchaser may, at
Purchaser’s option, terminate this Contract of Sale by sending written notice
thereof to Seller within thirty (30) days of such condemnation or other taking,
in which event the Downpayment and the interest thereon shall be returned to
Purchaser and thereupon neither party shall have any further liability or
obligations to the other. If this Contract of Sale is not terminated as provided
above Purchaser shall (a) accept title to the Premises subject to the
condemnation or other taking, and (b) pay in full the purchase price and on the
Closing Date the net proceeds of the award or payment (after payment of all
actual collection costs) shall be assigned by Seller to Purchaser and net monies
theretofore received by Seller in connection with such condemnation or other
taking shall be paid over to Purchaser or allowed as a credit against the
purchase price hereunder (unless previously used by Seller in connection with
the repair of the Premises in connection therewith). This Paragraph shall govern
to the extent inconsistent with any applicable law.

 
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16. Casualty. The risk of loss or damage or destruction to the Premises by fire
or other casualty is assumed by Seller until the Closing, but, except as
specifically set forth in this Paragraph, Seller shall not be obligated to
repair or replace any such loss or damage. In the event of fire or other
casualty, Seller shall have thirty (30) days to notify Purchaser whether it
intends to rebuild the Premises, but if Seller shall fail to notify Purchaser of
its election within such thirty (30) day period Seller shall be deemed to have
elected not to rebuild. If Seller elects (or is deemed to have elected) not to
repair or replace any such loss or damage to the Premises then Purchaser shall
have the option of declaring this Contract of Sale terminated within thirty (30)
days of Seller's election not to rebuild, in which event Seller or Purchaser
shall instruct Escrow Agent to refund to Purchaser, with the interest earned
thereon, the Downpayment whereupon this Contract of Sale and all rights of
Purchaser hereunder and to the Premises shall terminate and neither Seller nor
Purchaser shall have any further claim against the other; provided that if
neither party shall have elected to terminate this Contract as aforesaid then
Purchaser shall close title in accordance with this Contract and pay in full the
Purchase Price, without any abatement thereof or claim against Seller for such
loss or damage, and accepting an assignment, without recourse, of Seller's
rights, if any, to any payments to be made under any applicable hazard insurance
policies, if any, together with any payments under such policies made to Seller
prior to the Closing not expended to repair or replace such loss, damage or
destruction and Seller shall credit to Purchaser the amount of any insurance
deductible. If Seller elects to repair or replace any such loss or damage,
Seller shall be entitled to reasonable adjournments of the Closing Date in which
to perform the work, not exceeding one hundred twenty (120) days in the
aggregate. If Seller elects to repair or replace any such loss or damage to the
Premises and if such loss or damage is not repaired (substantial completion
thereof) prior to the Closing Date, as adjourned by Seller pursuant to this
Paragraph, Purchaser shall have the option of: (a) declaring this Contract of
Sale terminated, in which event Seller or Purchaser shall instruct Escrow Agent
to refund to Purchaser, with the interest earned thereon, the Downpayment
whereupon this Contract of Sale and all rights of Purchaser hereunder and to the
Premises shall terminate and neither Seller nor Purchaser shall have any further
claim against the other or (b) closing title in accordance with this Contract of
Sale and paying in full the Purchase Price, without any abatement thereof or
claim against Seller for such loss or damage, and accepting an assignment,
without recourse, of Seller's rights, if any, to any payments to be made under
any applicable hazard insurance policies for work not yet completed, together
with any payments under such policies made to Seller prior to the Closing not
expended to repair or replace such loss, damage or destruction; provided that if
Purchaser shall have failed to timely make an election it shall be deemed to
have chosen (b) above. Notwithstanding the foregoing, if the cost of the repairs
and replacements is less than $25,000, as determined by an independent third
party professional chosen by Seller and acting reasonably, Purchaser shall close
title with a credit against the purchase price in such amount which shall not
exceed $25,000 and Seller shall retain the rights to the insurance proceeds, if
any, in respect of such casualty. This Paragraph shall govern to the extent
inconsistent with any applicable law.

 
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17. Assignment. Purchaser will not, without the prior written consent of Seller
(which consent may be withheld in Seller's absolute discretion), sell, assign or
transfer its interest in this Contract of Sale. The sale of more than a 25%
interest in Purchaser (if Purchaser shall be other than a natural person) shall
be deemed an assignment requiring the consent of Seller as set forth in the
preceding sentence. Notwithstanding the foregoing, Purchaser shall be permitted
to assign this Contract to a corporation, partnership or other entity which is
beneficially owned in whole or in part by William H. Freeman, James A. Webb, III
and/or Kent A. Burns. Any purported assignment of this Contract of Sale in
violation of this Paragraph 17 shall be ineffective and void ab initio.

18. Brokers. Purchaser and Seller each represents and warrants that, except for
CB Richard Ellis, Inc. (“Broker"): (i) it has not dealt with any broker in
respect of the sale of the Premises to Purchaser and (ii) no broker brought the
Premises to the attention of the Purchaser or was otherwise involved in the
Purchaser's interest in the Premises. Seller agrees to compensate Broker as per
a separate agreement. Each party shall indemnify, defend and hold harmless the
other for any claims which would constitute a breach of the foregoing
representations and warranties. The provisions of this Paragraph shall survive
the Closing and the delivery of the deed or the other termination of this
Contract of Sale.

19. -Section 1031 Tax Deferred Exchange. At the option of either Seller or
Purchaser, each party agrees to cooperate with the other to qualify this
transaction as a like-kind exchange of property described in Section 1031 of the
Internal Revenue Code of 1986, as amended. Seller and Purchaser further agree to
consent to the assignment of this Contract of Sale to a "Qualified Intermediary"
and/or take such other action reasonably necessary to qualify this transaction
as a like-kind exchange provided that (i) such exchange shall be at the cost and
expense of the requesting party, (ii) the other party shall incur no liability
as a result of such exchange and (iii) no such assignment of this Contract of
Sale shall relieve the requesting party of its obligations under this Contract
of Sale and the requesting party shall remain liable for the performance of its
obligations hereunder including, without limitation, the representations,
warranties, and covenants given by it under this Contract of Sale.

20. OFAC Matters. Each of Seller and Purchaser represent, warrant and agree as
follows as applicable to each of them:
 
A. Seller and Purchaser, and all direct or to their knowledge indirect
beneficial owners of Seller and Purchaser, are in compliance with all laws,
statutes, orders, legislation, rules and regulations of any federal, state or
local governmental authority in the United States of America applicable to such
Persons (as hereinafter defined), including, without limitation, the
requirements of Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001)
(the “Order”) and other similar requirements contained in the rules and
regulations of the Office of Foreign Asset Control, Department of the Treasury
(“OFAC”) and in any enabling legislation or other Executive Orders in respect
thereof (the Order and such other laws, statutes, rules, regulations,
legislation, or orders are collectively called the “Orders”). For purposes of
this subsection, “Person” shall mean any corporation, partnership, limited
liability company, joint venture, individual, trust, real estate investment
trust, banking association, federal or state savings and loan institution and
any other legal entity, whether or not a party hereto; and
 
 
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B. Neither Seller nor Purchaser nor any of the direct or to their knowledge
indirect beneficial owners of Seller nor Purchaser:
 
1. 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”);
 
2. has been determined by competent authority to be subject to the prohibitions
contained in the Orders;
 
3. is owned or controlled by, nor acts for or on behalf of, any Person on the
Lists or any other Person who has been determined by competent authority to be
subject to the prohibitions contained in the Orders;
 
4. shall transfer or permit the transfer of any interest in Seller or such
parties to any Person who is, or whose beneficial owners are, listed on the
Lists; or
 
5. shall assign this Contract of Sale or any interest herein, to any Person who
is listed on the Lists or who is engaged in illegal activities (or to a Person
in which a Person who is listed on the Lists or who is engaged in illegal
activities has any beneficial interest).
 
This Section 20 shall survive the Closing.

21. Miscellaneous. A. If either party shall be required to employ an attorney to
enforce or defend the rights of such party related to this transaction or the
Premises, the prevailing party shall be entitled to recover reasonable
attorneys' fees. This paragraph shall survive the Closing or earlier termination
of this Contract of Sale.

B. This Contract of Sale contains the complete agreement between the parties,
supersedes all prior agreements (oral or written) and no term hereof may be
waived or amended except by the written agreement of the party to be charged by
such waiver or amendment. This Contract of Sale has been negotiated and shall
not be construed against its drafter. The parties agree that there are no oral
agreements, understandings, representations or warranties which are not
expressly set forth herein.

 
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C. All notices, demands and other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been properly
given if delivered by hand or sent by United States registered or certified
mail, return receipt requested, or sent by Federal Express, United Parcel
Service or other reputable overnight delivery service, to Seller (for the
attention of Jeffrey A. Gould) at its address set forth above with a copy to
Mark H. Lundy, TRB Chattanooga LLC, 60 Cutter Mill Road, Great Neck, New York
11021 and with a copy to Marc T. McNamee, Esq., Neal and Harwell, PLC, Suite
2000, One Nashville Place, 150 4th Avenue North, Nashville, Tennessee 37219-2498
or at such other addresses as it may designate by notice hereunder and to
Purchaser at its address set forth above (for the attention of Kent A. Burns)
with a copy to Jack F. King, Jr., Esq., Miller & Marin PLLC, 150 4th Avenue
North, Nashville, Tennessee, or at such other addresses as it may designate by
notice hereunder. The address for Escrow Agent is 315 Deaderick Street, Suite
2055, Nashville, Tennessee 37238.

D. The respective attorneys for Seller and Purchaser are authorized to give and
receive any notices required or permitted to be sent hereunder and are permitted
to agree on adjournments of the Closing Date.

E. This Contract of Sale shall not be binding until executed and delivered by
Seller and Purchaser. Once fully executed and delivered, this Contract of Sale
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and permitted assigns.

F. This Contract of Sale shall be governed by and construed in accordance with
the laws of the State in which the Premises is located.

G. Purchaser agrees to make the checks or wire payments for the Purchase Price
to such parties as Seller shall direct.

H. If any provision hereof shall be deemed unenforceable, the remaining terms of
this Contract of Sale shall be unaffected thereby and shall remain in full force
and effect.

I. The headings herein are for reference purposes only and shall not be deemed
to affect the interpretation of this Contract of Sale.

J. SELLER AND PURCHASER HEREBY WAIVE ANY AND ALL RIGHTS THAT EITHER MAY HAVE TO
A JURY TRIAL IN RESPECT OF ANY DISPUTE CONCERNING THIS CONTRACT OF SALE OR THE
PREMISES.

 
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K. Each of Seller and Purchaser expressly understands and agrees and
acknowledges that neither party would have entered this Contract of Sale without
the express provisions of this Subparagraph K. Notwithstanding anything to the
contrary set forth in this Contract of Sale, in no event shall either party ever
be liable to the other party for consequential, compensatory or any other
monetary damages in respect of this Contract of Sale, the Premises or the
transaction contemplated hereby, except in connection with any claims arising
out of those obligations set forth herein that specifically survive Closing. In
connection with any obligations which are specifically agreed herein to survive
Closing, the parties agree that a party may be entitled to monetary damages from
the other, but shall not be entitled to any special or consequential damages..
In addition, each party hereby agrees that in no event shall either party make
or bring any claim for any matter whatsoever against any member, shareholder,
partner, officer, director, trustee, employee, agent, representative or counsel
of or for the other party. Each party acknowledges that it agrees to this
Subparagraph K and that it has consulted with counsel of its own choosing in so
agreeing. This Subparagraph shall survive the Closing or earlier termination of
this Contract of Sale.

L. Purchaser understands and agrees that it shall not be permitted to record
this Contract or a memorandum hereof and any breach of this provision shall
constitute a default by Purchaser under this Contract in which event Seller
shall be entitled to the Downpayment, this Contract shall be terminated and
Seller shall (notwithstanding any other provisions of this Contract) be entitled
to such remedies as are available in law or equity.

M. Time is of the essence in this Contract.

N. For the purpose of this agreement, all references to the Effective Date shall
mean the latest date upon which the Seller or Purchaser executes this agreement.
In the event any time period specified in this agreement expires on a Saturday,
Sunday or banking holiday, then the time period so expiring shall be extended to
expire on the next business day.

[SIGNATURES ON FOLLOWING PAGE]

 
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IN WITNESS WHEREOF, the undersigned have executed and delivered this Contract of
Sale as of the date first hereinabove written.

Date Signed: ______________________
TRB CHATTANOOGA LLC, as Seller
Tax ID # ________________________
     
 
By:_______________________________
 
Mark H. Lundy
 
Senior Vice President of the sole member
       
Date Signed: _____________________
FREEMAN WEBB INVESTMENTS, INC., as
Tax ID #________________________
Purchaser
   
 
By:_______________________________
 
Kent A. Burns
 
President
   
 
First American Title Insurance Company, solely in its capacity as Escrow Agent
   
 
By:_______________________________
 
Name:_____________________________
 
Title:_____________________________

 
 
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EXHIBIT A

Legal Description
 
 
 

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EXHIBIT B

Rent Roll

 
 

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EXHIBIT C

Delinquency List

 
 

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EXHIBIT D

Employees