EXHIBIT 10.4

PURCHASE AND SALE AGREEMENT

ARTICLE 1: PROPERTY/PURCHASE PRICE
1.1    Certain Basic Terms.

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(a)       Purchaser and Notice Address:
RESOURCE APARTMENT OP III, LP, a Delaware limited partnership
c/o Resource Real Estate, Inc.
1845 Walnut Street, 18th Floor
Philadelphia, PA 19103
Attention: Pamela Arms

                   With a copy to:
Resource Real Estate, Inc.
1845 Walnut Street, 18th Floor
Philadelphia, PA 19103
Attention: Aldie Jennings Loubier, Esq.

(b)       Seller and Notice Address:
SOUTH PAYNE OWNER, LLC, a Virginia limited liability company
606 Greenwich Street
Falls Church, Virginia 22046
Attention: Robbie Brooks

                   With a copy to:
Rudolph Fields LLP
7511 Arlington Road
Bethesda, Maryland 20814
Attention: Brandon Fields

 
 
 
(c)       Title Company:
Land Services USA, Inc.
1 South Church Street, Suite 300
West Chester, PA 19380
Attention: Alison Zugschwert

(d)       Escrow Agent
   Land Services USA, Inc.
1 South Church Street, Suite 300
West Chester, PA 19380
Attention: Alison Zugschwert

(e)       
Date of this Agreement:
The latest date of execution by the Seller or the Purchaser, as indicated on the
signature page.

(f)    
Purchase Price:
$2,500,000.00.

(g)    
Earnest Money:
$200,000.00.

(h)    
Due Diligence Period:
The period commencing on the Date of this Agreement and ending on August 8,
2016.

(i)    
Closing Date:
As agreed between Seller and Purchaser, but no later than ten (10) days
following the expiration of the Due Diligence Period.

(j)    
Broker:
CBRE.

1.2    Property. Subject to the terms of this Purchase and Sale Agreement (the
“Agreement”), Seller agrees to sell to Purchaser, and Purchaser agrees to
purchase from Seller, all of Seller’s right, title and interest in and to the

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multi-family residential apartment property containing eleven (11) residential
units, known as Payne Place and located at 219 and 221 South Payne Street in
Alexandria, Virginia (the “Property”), which shall include the following:
(a)    The parcel of land described on Exhibit A attached hereto (the “Land”),
together with all buildings, structures and other improvements on the Land (the
“Improvements”), and all appurtenances of the Land, including, without
limitation, easements, rights-of-way, privileges, benefits, tenements,
hereditaments and other rights relating thereto, and all right, title, and
interest, if any, of Seller in and to the land lying within any street, alley or
roadway adjoining the Land or any vacated or hereafter vacated street or alley
adjoining the Land.
(b)    All of Seller’s right, title and interest, in and to all fixtures,
furniture, equipment, supplies and other tangible personal property, if any,
owned by Seller (the “Personal Property”) presently attached or appurtenant to,
located in or on and used exclusively in connection with the Land, including,
without limitation, the personal property listed on Schedule I attached hereto,
but excluding any items of personal property owned by tenants, any managing
agent or others.
(c)    All of Seller’s interest, as landlord, in the “Leases,” being all leases,
subleases and all other occupancy agreements for any portion of the Land and the
Improvements, and all amendments and addenda thereto, and including all such
leases, subleases and other agreements which may be made by Seller after the
date hereof and before Closing as permitted by this Agreement.
(d)    All of Seller’s right, title and interest, if any, in and to all
intangible personal property related to the Property, to the extent they exist
and are assignable and without warranty (the “Intangible Personal Property”),
including, without limitation, the following items: (i) licenses, permits
approvals, certificates of occupancy, consents, authorizations, variances and
waivers related to the Property, (ii) all trade names, trademarks, logos and
symbols associated or used in connection with the Land and the Improvements,
including Seller’s rights and interests in the name “Payne Place Apartments” and
variations thereof, (iii) plans, specifications and other architectural and
engineering drawings related to the Improvements, (iv) warranties and
guaranties; (v) Service Contracts (as hereinafter defined) assumed by Purchaser
in accordance with this Agreement, (vi) any and all telephone and facsimile
numbers assigned to Seller with respect to the Property, and (vii) leasing,
marketing and promotional brochures and other advertising materials relating to
the Property, including, without limitation, all web addresses, domain names,
URLs, all social media accounts and logo, photo, video and e-brochure files for
the Property.
1.3    Earnest Money. The Earnest Money, in immediately available federal funds,
evidencing Purchaser’s good faith to perform Purchaser’s obligations under this
Agreement, shall be deposited by Purchaser with the Escrow Agent not later than
the third (3rd) business day after the Date of this Agreement. In the event that
Purchaser fails to timely deposit the Earnest Money with the Escrow Agent, this
Agreement shall be of no force and effect. The Earnest Money shall be applied to
the Purchase Price at Closing. If this Agreement terminates pursuant to any
express right of Purchaser to terminate this Agreement, the Earnest Money shall
be refunded to Purchaser immediately upon request, and all further rights and
obligations of the parties under this Agreement shall terminate. The Earnest
Money shall be held and disbursed by the Escrow Agent pursuant to Article 9 of
this Agreement.
ARTICLE 2:     INSPECTIONS
2.1    Property Information. Purchaser acknowledges that Seller has provided
Purchaser copies of, or access to with the right to copy, all information set
forth on Schedule I of that certain Access and Indemnification Agreement by and
between Purchaser and Seller dated July 15, 2016 (the “Property Information”).
Except as otherwise expressly provided herein, Seller makes no representations
or warranties as to the accuracy or completeness of the Property Information.
2.2    Confidentiality. Seller and Purchaser agree that the terms of the
transaction contemplated by this Agreement (including without limitation, the
Purchase Price and the other material economic terms of this transaction) and
the Property Information shall be maintained in strict confidence and no
disclosure, whether through press releases or any other means of publication
(oral or written), of such documentation and information will be made or
permitted without the consent of the other party, except (A) to (i) such
brokers, partners, attorneys, lenders, accountants and others

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as are involved in the negotiation and consummation of this transaction
(collectively, the “Representatives”), (ii) other parties on a need-to-know
basis, including, in connection with Purchaser’s due diligence on the Property
in accordance with this Agreement and (iii) Purchaser’s agents and consultants
who agree to maintain the confidentiality of such information, and (B) as
required by law, including public filings with the Securities and Exchange
Commission. Notwithstanding the foregoing, after Closing, Purchaser shall be
permitted to make public announcements provided the same does not identify
Seller, the Purchase Price or the address of the Property.
2.3    Inspections in General. During the Due Diligence Period, Purchaser, its
agents and affiliates, and their respective employees, engineers, analysts,
contractors, consultants and representatives (collectively, “Purchaser’s
Representatives”) shall have the right to enter upon the Property to perform, at
Purchaser’s sole cost and expense, inspections and investigations on the
Property and to observe, inspect and investigate the physical characteristics
and the condition of the Property and improvements in accordance with this
Agreement, including, without limitation, the examination of the Property
Information. Prior to the Date of this Agreement, Purchaser obtained and
delivered to Seller a certificate of liability and property damage insurance
naming Seller as additional insured, with combined single limit of coverage not
less than Two Million and 00/100 Dollars ($2,000,000.00), issued by a company
authorized to do business in the Commonwealth of Virginia. All of such entries
upon the Property shall be at reasonable times during normal business hours and
after at least 24 hours prior notice to Seller or Seller’s agent, and Seller or
Seller’s agent shall have the right to accompany Purchaser during any activities
performed by Purchaser on the Property. Upon reasonable prior written notice and
request from Purchaser, Seller shall notify tenants of the Property and permit
Purchaser to view occupied units, subject to the rights of tenants under their
Leases and except to the extent specifically prohibited in such tenants’ Leases.
If a sale of the Property from Seller to Purchaser is not consummated for any
reason, upon Seller’s written request, Purchaser agrees to provide Seller with
copies of any and all third party written reports generated in connection with
the rights granted herein provided that such third party vendors consent to such
distribution and Seller reimburses Purchaser for the actual costs related
thereto. If any inspection or test disturbs the Property, Purchaser will restore
the Property to substantially the same condition as existed before the
inspection or test. Purchaser hereby agrees to indemnify, defend, and hold
Seller, its employees, tenants, invitees, contractors, and agents (“Indemnified
Parties”) harmless from and against any losses, damages, expenses, liabilities,
claims, demands, and causes of action (together with any reasonable legal fees
and other costs and expenses incurred by the Indemnified Parties in connection
therewith) (collectively, “Losses”), resulting directly or indirectly from, or
in connection with, any entry on the Property (whether or not permitted by this
Agreement) by Purchaser or its employees, invitees, contractors, and/or agents,
including, without limitation, any Losses resulting, or alleged to be resulting,
from personal injury or death, or property damage, or mechanic's or
materialmen's liens, but specifically excepting therefrom any Losses arising
from (i) the mere discovery or disclosure of existing conditions that are not
exacerbated by Purchaser or (ii) the gross negligence and willful misconduct of
Seller of any of the Indemnified Parties.
2.4    Termination During Due Diligence Period. If Purchaser determines, in its
sole discretion, before the expiration of the Due Diligence Period that the
Property is unacceptable for Purchaser’s purposes, for any reason or for no
reason, Purchaser shall have the right to terminate this Agreement by giving to
Seller notice of termination before the expiration of the Due Diligence Period
and the Earnest Money shall be immediately refunded to Purchaser upon request.
In addition, upon such a termination, Purchaser shall immediately return the
Property Information to Seller. If Purchaser does not give notice of
termination, this Agreement shall continue in full force and effect and the
Earnest Money shall be non-refundable, except as otherwise expressly set forth
in this Agreement.
2.5    Purchaser’s Reliance on its Investigations. To the maximum extent
permitted by applicable law and except for Seller’s representations and
warranties contained herein and any warranties of title contained in the Deed
and the Assignment (hereafter defined) delivered at the Closing (“Seller’s
Warranties”), this sale is made and will be made without representation,
covenant, or warranty of any kind (whether express, implied, or, to the maximum
extent permitted by applicable law, statutory) by Seller. As a material part of
the consideration for this Agreement, Purchaser agrees to accept the Property on
an “as is” and “where is” basis, with all faults, and without any representation
or warranty, all of which Seller hereby disclaims, except for Seller’s
Warranties. Except for Seller’s Warranties, no warranty or representation is
made by Seller as to fitness for any particular purpose, merchantability,
design, quality, condition, operation or income, compliance with drawings or
specifications, absence of defects, absence of hazardous or toxic substances,
absence of faults, flooding, or compliance with laws and regulations including,
without limitation, those relating to health, safety, and the environment.
Purchaser acknowledges that Purchaser has entered into this

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Agreement with the intention of making and relying upon its own investigation of
the physical, environmental, economic use, compliance, and legal condition of
the Property and that, other than the Seller’s Warranties, Purchaser is not now
relying, and will not later rely, upon any representations and warranties made
by Seller or anyone acting or claiming to act, by, through or under or on
Seller’s behalf concerning the Property. The provisions of this Paragraph 2.5
shall survive any Closing or termination of this Agreement for 6 months.

ARTICLE 3:      TITLE AND SURVEY REVIEW
3.1    Delivery of Title Commitment. Purchaser has received a title commitment
from the Title Company (individually or collectively, as the context may
require, the “Title Commitment”), covering the Property and certifying that fee
simple title to the Property is vested in Seller, together with copies of all
documents referenced in the Title Commitment. Purchaser has ordered an updated
survey (individually or collectively, as the context may require, the “Survey”)
of the Property.
3.2    Title Review and Cure. During the Due Diligence Period, Purchaser shall
review title to the Property as disclosed by the applicable Title Commitment and
the applicable Survey. Seller shall have no obligation to cure title objections
except liens and judgments of an ascertainable amount not created by Purchaser,
which liens or judgments Seller shall cause to be released at the Closing or
affirmatively insured over by the Title Company. Seller further agrees to remove
any exceptions or encumbrances to title which are created by Seller or its
employees, agents, representatives, contractors or subcontractors after the Date
of this Agreement without Purchaser’s consent. Purchaser may terminate this
Agreement and receive a refund of the Earnest Money if the Title Company revises
the Title Commitment after the expiration of the Due Diligence Period to add or
modify exceptions in a material adverse manner, if such additions or
modifications are not acceptable to Purchaser and are not removed by the Closing
Date. The term “Permitted Exceptions” shall mean: the specific exceptions
(exceptions that are not part of the promulgated title insurance form) in the
Title Commitment that either (i) Purchaser has not objected to or (ii) Purchaser
has objected to but subsequently waived the objection; items shown on the
Survey, which have not been removed as of the end of the Due Diligence Period;
real estate taxes for the current year not yet due and payable; and tenants in
possession as tenants only under the Leases.
3.3    Delivery of Title Policy at Closing. As a condition to Purchaser’s
obligation to close, the Title Company shall deliver to Purchaser at Closing an
ALTA Owner’s Policy of Title Insurance, Form 2006 issued by the Title Company at
ordinary rates as of the date and time of the recording of the Deed, in the
amount of the Purchase Price, insuring that fee simple title to the Property is
vested in Purchaser, and subject only to the Permitted Exceptions. Seller shall
execute at Closing an affidavit in such form reasonably acceptable to Seller as
the Title Company shall require for the issuance of the Title Policy. The Title
Policy may be delivered after Closing if that is customary in the locality.
ARTICLE 4:      OPERATIONS AND RISK OF LOSS
4.1    Ongoing Operations. During the pendency of this Agreement, Seller (a)
shall carry on its business and activities relating to the Property, including
leasing of the Property, maintaining the presently existing property insurance
and performing ordinary repairs and replacements, substantially in the same
manner as it did before the Date of this Agreement, provided that in no event
shall Seller be required to make any capital repairs, replacements or
improvements to the Property, except as required by the Leases or by applicable
law; (b) shall deliver to Purchaser any written notice of every threatened or
actual action, suit or proceeding concerning or affecting the Property or any
portion thereof or any written notice of Violation (as hereafter defined); and
(c) shall not offer for sale or otherwise market the Property.
4.2    Performance under Leases and Service Contracts. During the pendency of
this Agreement, Seller will perform its obligations under the Leases and any
service or maintenance agreements relating to the Property (“Service Contracts”)
and other agreements that may affect the Property. To the extent there are any
open permits relating to work performed at the Property prior to Closing, Seller
shall remain responsible after Closing for submitting

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information and documentation required to close such permits and to permit the
Title Company to issue the Title Policy at Closing.
4.3     New Contracts. During the pendency of this Agreement, Seller will not
enter into any contract that will be an obligation affecting the Property
subsequent to the Closing, except (a) Leases and (b) contracts entered into in
the ordinary course of business that are terminable without cause on 30-days’
notice and without penalty or cancellation fee, without the prior consent of the
Purchaser, which shall not be unreasonably withheld or delayed.
4.4    Termination of Service Contracts. During the Due Diligence Period,
Purchaser shall notify Seller which Service Contracts Purchaser wishes to assume
at Closing. Notwithstanding the foregoing, Purchaser shall assume all Service
Contracts that are not terminable on 30 days or less notice or that require the
payment of a termination charge (unless Purchaser agrees, as applicable, to pay
such termination charge or to assume such contract for the duration of the
notice period), to the extent that they are assumable and all required consents
have been obtained prior to Closing. Purchaser shall pay any transfer or
assignment charges due in connection with its assumption of any Service
Contracts solely to the extent such charges are set forth in the Service
Contracts or otherwise disclosed to Purchaser in writing prior to the end of the
Due Diligence Period. Notice of termination for all Service Contracts not
assumed by Purchaser shall be given by Seller not later than the Closing Date
and any charges due thereunder after the Closing Date and through the date of
actual termination shall be included as a prorated expense.
4.5    Damage or Condemnation. Risk of loss resulting from any condemnation or
eminent domain proceeding which is commenced or has been threatened before the
Closing, and risk of loss to the Property due to fire, flood or any other cause
before the Closing, shall remain with Seller. If before the Closing the Property
or any portion thereof shall be materially damaged, or if all or any material
portion of the Property shall be subjected to a bona fide threat of condemnation
or shall become the subject of any proceedings, judicial, administrative or
otherwise, with respect to the taking by eminent domain or condemnation, then
Purchaser may terminate this Agreement by written notice to Seller given within
5 days after Purchaser learns of the damage or taking, in which event the
Earnest Money shall be returned to Purchaser. If the Closing Date is within the
aforesaid 5-day period, then Closing shall be extended to the next business day
following the end of said 5-day period. If no such election is made, and in any
event if the damage or taking is not material, this Agreement shall remain in
full force and effect and the purchase contemplated herein, less any interest
taken by eminent domain or condemnation, shall be effected with no further
adjustment except as contemplated in this paragraph. In such an event, Seller
shall assign, transfer and set over to Purchaser all of the right, title and
interest of Seller in and to any awards that have been or that may thereafter be
made for any taking. To the extent that any damage to the Property due to
casualty exceeds the deductible under Seller’s insurance, Seller shall promptly
negotiate a settlement (the “Settlement”) with its adjuster (and the Closing
shall be delayed until the date five (5) days after the Settlement is agreed
upon) and Seller shall credit Purchaser at Closing with the amount of the
Settlement and an amount equal to Seller’s deductible, without duplication.
Seller agrees to not agree upon the terms of such Settlement until such terms
are approved by Purchaser. Purchaser shall have the right to participate in the
negotiation of the Settlement. For purposes of this paragraph, the phrases
“Material damage” and “materially damaged” means damage reasonably expected to
exceed ten percent (10%) of the Purchase Price to repair and “material portion”
means a taking reasonably expected to affect a portion of the Property with a
value in excess of ten percent (10%) of the Purchase Price.

ARTICLE 5:     CLOSING
5.1    Closing. The consummation of the transaction contemplated herein
(“Closing”) shall occur on the Closing Date at the offices of the Escrow Agent.
The Closing may be held through an escrow closing arrangement, or effected via a
“mail away” closing (i.e. in which funds are sent via wire transfer and closing
documents are delivered via overnight delivery or courier delivery service to
the Escrow Agent).
5.2    Conditions to the Parties’ Obligations to Close. Except as set forth
below, the obligation of Seller, on the one hand, and Purchaser, on the other
hand, to consummate the transaction contemplated hereunder is contingent upon
the following:

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(a)    The other party’s representations and warranties contained herein shall
be true and correct in all material respects as of the Date of this Agreement
and the Closing Date;
(b)    As of the Closing Date, the other party shall have performed its
obligations, agreements and covenants hereunder and all deliveries to be made at
Closing have been tendered;
(c)    There shall exist no actions, suits, arbitrations, claims, attachments,
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings, pending or threatened against the other
party that would materially and adversely affect the other party’s ability to
perform its obligations under this Agreement;
(d)    There shall exist no pending or threatened action, suit or proceeding
with respect to the other party before or by any court or administrative agency
which seeks to restrain or prohibit, or to obtain damages or a discovery order
with respect to, this Agreement or the consummation of the transaction
contemplated hereby; and
(e)    The obligation of Purchaser to consummate the transaction contemplated
hereunder is contingent upon Seller adjusting the height of the newly
constructed fence along the southern property line from 6' to 5' to meet City of
Alexandria code requirements at Seller's expense.
So long as a party is not in default hereunder, if any condition to such party’s
obligation to proceed with the Closing hereunder has not been satisfied as of
the Closing Date, such party may, in its sole discretion, terminate this
Agreement by delivering written notice to the other party on or before the
Closing Date, in which event the Earnest Money shall be returned to the
Purchaser, or elect to close, notwithstanding the non-satisfaction of such
condition, in which event such party shall be deemed to have waived any such
condition. If such party elects to close, notwithstanding the nonsatisfaction of
such condition, there shall be no liability on the part of the other party for
nonsatisfaction of such condition or for breaches of representations and
warranties of which the party electing to close had knowledge as of the Closing.
5.3    Seller’s Deliveries in Escrow. On or before the Closing Date, Seller
shall deliver in escrow to the Escrow Agent the following:
(a)    Deed. Special warranty deed in the form of Exhibit B attached hereto (the
“Deed”), executed and acknowledged by Seller, conveying to Purchaser fee simple
title to the Land and Improvements, subject only to the Permitted Exceptions.
(b)    Bill of Sale and Assignment of Leases and Contracts. A Bill of Sale and
Assignment of Leases and Service Contracts for the Property in the form of
Exhibit C attached hereto (individually or collectively, as the context may
require, the “Assignment”), executed by Seller.
(c)    State Law Disclosures. Such disclosures and reports as are required by
applicable state and local law in connection with the conveyance of real
property;
(d)    FIRPTA. A Foreign Investment in Real Property Tax Act affidavit, executed
by Seller.
(e)    Representations and Warranties and Rent Roll. A certificate executed by
Seller reaffirming the representations and warranties made by Seller under this
Agreement as true and correct in all material respects as of the Closing Date,
together with an updated Rent Roll for the Property dated no more than two (2)
business days prior to the Closing Date.
(f)    Evidence of Authority. Appropriate evidence of Seller’s authority to
consummate the transactions contemplated by this Agreement as may be required by
the Title Company.
(g)    Transfer Documents. Duly completed and signed real estate transfer tax
returns or comparable instruments required by the recording office in which the
Deed is to be recorded.

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(h)    Additional Documents. Any additional documents that Escrow Agent or the
Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.
5.4    Purchaser’s Deliveries in Escrow. On or before the Closing Date,
Purchaser shall deliver in escrow to the Escrow Agent the following:
(a)    Purchase Price. The Purchase Price, less the Earnest Money that is
applied to the Purchase Price, plus or minus applicable prorations, deposited by
Purchaser with the Escrow Agent in immediate, same-day federal funds wired for
credit into the Escrow Agent’s escrow account at a bank satisfactory to Seller.
(b)    Bill of Sale and Assignment of Leases and Contracts. The Assignment,
executed by Purchaser.
(c)    State Law Disclosures. Such disclosures and reports as are required by
applicable state and local law in connection with the conveyance of real
property.
(d)    Additional Documents. Any additional documents that Escrow Agent or the
Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.
(e)    Transfer Documents. Duly completed and signed real estate transfer tax
returns or comparable instruments required by the recording office in which the
Deed is to be recorded
5.5    Closing Statements. At the Closing, Seller and Purchaser shall deliver to
the Escrow Agent executed closing statements consistent with this Agreement in
the form required by the Escrow Agent and approved by Seller and Purchaser.
5.6    Possession. Seller shall deliver possession of the Property to Purchaser
at the Closing.
5.7    Post-Closing Deliveries and Cooperation. Promptly after the Closing,
Seller shall deliver to the offices of Purchaser’s property manager for the
Property: the original Leases and lease files for tenants in possession as of
Closing; originals of all contracts (or copies if no originals are available)
and receipts for deposits; all keys, if any, used in the operation of the
Property; and, if in Seller’s possession or control, a copy of any “as-built”
plans and specifications of the Improvements. After the Closing, Seller agrees
that it will take such actions and properly execute and deliver to Purchaser
such further instruments of assignment, conveyance and transfer as may be
necessary to assure, complete and evidence the full and effective transfer and
conveyance of the Property, including, without limitation, taking any actions or
executing any documents required to transfer the web addresses, domain names and
URLs to Purchaser at Closing. The provisions in this Section 5.7 shall survive
Closing for 6 months.
5.8    Notice to Tenants. Seller and Purchaser shall deliver to each tenant
immediately after the Closing a notice regarding the sale in substantially the
form Exhibit D attached hereto, or such other form as may be required by
applicable state law.
5.9    Termination Notices. A termination of management agreement executed by
Seller and the current property manager terminating the property management
agreement as of the Closing Date and confirming that all amounts due to manager
under such agreement have been paid in full, negotiated for future payment by
Seller, or waived by manager. Copies of all notices sent to the counterparty to
each Service Contract terminated in accordance with this Agreement.
5.10    Costs. Each party shall pay its portion of the following costs as
indicated below:
(a)    Survey – Purchaser
(b)    Title Policy:
(i)
Basic premium, including search and exam fees – Purchaser

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(ii)
Extended coverage – Purchaser

(iii)
Endorsements – Purchaser

(c)    Seller shall pay the “grantor” tax and one- half (1/2) of the “Regional
Congestion Relief Fee” and Purchaser shall pay all other transfer and
recordation fees and taxes:
(d)    Recording charges:
(i)
Instruments to remove encumbrances that Seller is obligated to remove – Seller

(ii)
Deed – Purchaser.

(e)    Appraisals, engineering studies, termite inspections, environmental
inspections and other inspections and tests desired by Purchaser – Purchaser
(f)    Other – The Escrow Agent’s escrow fee shall be evenly divided between the
parties. Each party shall pay its own attorneys’ fees. Purchaser shall pay any
escrow cancellation fee or other fees due upon a termination of this Agreement.
All other costs shall be borne according to local custom.
ARTICLE 6:     PRORATIONS
6.1    Prorations. The day of Closing shall belong to Purchaser and all
prorations hereinafter provided to be made as of the Closing shall each be made
as of the end of the day before the Closing Date. In each such proration set
forth below, the portion thereof applicable to periods beginning as of Closing
shall be credited or charged to Purchaser and the portion thereof applicable to
periods ending as of Closing shall be credited or charged to Seller.
(a)    Taxes and Assessments. General real estate taxes and assessments imposed
by governmental authority and any assessments imposed by private covenant
constituting a lien or charge on the Property for the then current calendar year
or other current tax period (collectively, “Taxes”) not yet due and payable or
paid in advance shall be prorated. If custom in the location of the Property is
to prorate Taxes other than based on a calendar or fiscal year, then such custom
shall apply. If the Closing occurs prior to the receipt by Seller of the tax
bill for the calendar year or other applicable tax period in which the Closing
occurs, Purchaser and Seller shall prorate Taxes for such calendar year or other
applicable tax period based upon the most recent ascertainable assessed values
and tax rates. Any refund or rebate of Taxes resulting from a tax protest,
challenge or appeal (an “Appeal”) for a tax year ending prior to the Closing
Date shall belong to Seller, whether received before or after Closing, and
Seller shall have the sole authority to prosecute such Appeals. Any refund or
rebate of Taxes, less costs incurred in connection therewith, resulting from an
Appeal for the tax year in which the Closing Date occurs shall be prorated
between the parties in the same manner as prescribed above, whether received
before or after Closing, and Seller shall have the sole authority to prosecute
any such Appeal prior to the Closing Date and after the Closing Date Seller and
Purchaser shall mutually cooperate in the prosecution of any such Appeal.
(b)    Collected Rent. All collected rent and other collected income (and any
applicable state or local tax on rent) under Leases in effect on the Closing
Date shall be prorated. Seller shall be charged with any rent and other income
collected by Seller before Closing but applicable to any period of time after
Closing. Uncollected rent and other income shall not be prorated. Purchaser
shall apply rent and other income from tenants that are collected after the
Closing first to the obligations then owing to Purchaser for its period of
ownership and to costs of collection, remitting the balance, if any, to Seller.
Any prepaid rents for the period following the Closing Date shall be paid over
by Seller to Purchaser. Purchaser will make reasonable efforts, without suit, to
collect any rents applicable to the period before closing. Seller may, at
Seller’s sole cost and expense, pursue collection as to any rent not collected
by Purchaser within 6 months following the Closing Date provided that Seller
shall have no right to terminate any Lease or any tenant’s occupancy under any
Lease in connection therewith.

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(c)    Utilities. Utilities, including water, sewer, electric, and gas, based
upon the last reading of meters prior to the Closing shall be prorated. Seller
shall endeavor to obtain meter readings on the day before the Closing Date, and
if such readings are obtained, there shall be no proration of such items. Seller
shall pay at Closing the bills therefor for the period to the day preceding the
Closing, and Purchaser shall pay the bills therefor for the period subsequent
thereto. If the utility company will not issue separate bills, Purchaser will
receive a credit against the Purchase Price for Seller’s portion and will pay
the entire bill prior to delinquency after Closing. If Seller has paid any
utilities no more than 30 days in advance in the ordinary course of business,
then Purchaser shall be charged its portion of such payment at Closing.
(d)    Fees and Charges under Service Contracts, Licenses and Permits. Fees and
charges under such of the Service Contracts, licenses and permits as are being
assigned to and assumed by Purchaser at the Closing, shall be prorated on the
basis of the periods to which such Service Contracts, licenses and permits
relate.
6.2    Final Adjustment After Closing. If final prorations cannot be made at
Closing for any item being prorated under Paragraph 6.1, including Taxes, then
Purchaser and Seller agree to allocate such items on a fair and equitable basis
as soon as invoices or bills are available, with final adjustment to be made as
soon as reasonably possible after the Closing, to the effect that income and
expenses are received and paid by the parties on an accrual basis with respect
to their period of ownership. Payments in connection with the final adjustment
shall be due within 30 days of written notice. Seller shall have reasonable
access to, and the right to inspect, Purchaser’s books to confirm the final
prorations, with any audit costs at the sole cost and expense of the Seller.
6.3    Service Contracts. Purchaser will assume the obligations arising from and
after the Closing Date under those Service Contracts that are not terminated as
of the Closing Date.
6.4    Tenant Deposits. All tenant security deposits in Seller’s possession, as
reflected on the final Rent Roll delivered to Purchaser at Closing (and interest
thereon if required by law or contract to be earned thereon) and not theretofore
applied to tenant obligations under the Leases, shall be credited to Purchaser
at Closing or placed in escrow if required by law. As of the Closing, Purchaser
shall assume Seller’s obligations related to such tenant security deposits.
Purchaser will indemnify, defend, and hold Seller harmless from and against all
demands and claims made by tenants arising out of the transfer or disposition of
any security deposits transferred to Purchaser and will reimburse Seller for any
reasonable expenses (including all reasonable attorneys’ fees) incurred or that
may be incurred by Seller as a result of any such claims or demands by tenants.
6.5    Utility Deposits. Purchaser shall be responsible for making any deposits,
required with utility companies.
6.6    Sale Commissions. Seller and Purchaser represent and warrant each to the
other that they have not dealt with any real estate broker, sales person or
finder in connection with this transaction other than Broker. If this
transaction is closed, Seller shall pay Broker in accordance with their separate
agreement. 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.
6.7    Settlement and Prorations. Seller shall cause the Escrow Agent to prepare
a settlement statement containing the prorations described above and deliver the
same together with reasonable backup information from Seller no later than two
(2) business days prior to the Closing Date.
6.8    Rent Ready Credit. Not later than 12:00 p.m. EDT two (2) business days
prior to Closing (“Walk Though Date”), a representative of Purchaser and a
representative of Seller shall conduct an onsite walk-through of the then
unoccupied rental units on the Property to determine whether such unoccupied
rental units are in “rent ready” condition. With respect to any rental unit that
is vacated on or before five (5) days prior to Closing that Seller has not
placed in a “rent ready” condition before the Walk Through Date, Purchaser shall
receive a credit against the Purchase

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Price at Closing in the amount of $750 per unit. As used herein, “‘rent ready’
condition” shall mean ready for occupancy, equipped with working appliances and
cleaned.
ARTICLE 7:     REPRESENTATIONS AND WARRANTIES
7.1    Seller’s Representations and Warranties. As a material inducement to
Purchaser to execute this Agreement and consummate this transaction, Seller
represents and warrants to Purchaser that:
(a)    Organization and Authority. Seller has been duly organized and is validly
existing as a Virginia limited liability company, in good standing and qualified
to do business in the state in which the Property is located. Seller has the
full right and authority and has obtained any and all consents required to enter
into this Agreement and to consummate or cause to be consummated the transaction
contemplated hereby. This Agreement has been, and all of the documents to be
delivered by Seller at the Closing will be, authorized and properly executed and
constitutes, or will constitute, as appropriate, the valid and binding
obligation of Seller, enforceable in accordance with their terms. 
(b)    Conflicts and Pending Action. There is no agreement to which Seller is a
party or to Seller’s knowledge binding on Seller which is in conflict with this
Agreement. There is no action, suit or proceeding pending or, to Seller’s
knowledge, threatened against the Property, including condemnation proceedings,
or against the Seller, other than matters covered by Seller’s insurance and that
would not impair Seller’s ability to perform its obligations under this
Agreement.
(c)    Rent Roll, Leases and Operating Statements. The Rent Roll provided or to
be provided to Purchaser is the document used by Seller in the operation and
management of the Property. To Seller’s knowledge, the Rent Roll for the
Property provided or to be provided to Purchaser is or will be true, correct and
complete in all material respects as of the date thereof. The Leases are in full
force and effect and, to Seller’s actual knowledge, there are no existing
defaults by the tenants thereunder, except as disclosed in the Rent Roll. No
tenant under any of the Leases has any defense or offset to rent under the
Leases. Seller has not received written notice of any claimed default by Seller
under any of the Leases which remains uncured, and, to Seller’s actual
knowledge, Seller is not in default under any of the Leases. All inducements,
concessions, free rent and other consideration paid and/or payable to any tenant
under the Leases is set forth in the Leases. The Operating Statement for the
Property was prepared by or for Seller in the ordinary course of its business in
the same manner as it prepares or obtains such reports for its other properties
and are the Operating Statements used and relied upon by Seller in connection
with its operation of the Property.
(d)    Service Contracts. The list of Service Contracts for the Property set
forth on Schedule II is true, correct, and complete as of the Date of this
Agreement. To Seller’s knowledge, (i) true, correct and complete copies of all
Service Contracts were provided to Purchaser in accordance with this Agreement;
(ii) all Service Contracts are in full force and effect; (iii) neither Seller
nor, to Seller’s knowledge, any other party is in material default under any
Service Contract and (iv) there are no service or maintenance contracts that are
obligations of Seller or the Property other than the Service Contracts.
(e)    Books and Records. All books, records and other information prepared by
Seller or its property manager and provided to Purchaser by Seller were prepared
by or for Seller in the ordinary course of its business and are the same books,
records and other information used and relied upon by Seller in its operation of
the applicable Property.
(f)    Violations. To Seller’s knowledge, Seller has not received written notice
or other communication from any governmental entity of any violation by Seller
of any law, rule or regulation affecting the Property or its use including any
environmental law or regulation, nor any written notice that the Property is in
violation of any applicable building or zoning code or ordinance (each, a
“Violation”), except for any such matters which may have been previously cured
by Seller or which have been disclosed to Purchaser.
(g)    Commissions. Seller has no obligation to pay any leasing or brokerage
commission in connection with any of the Leases executed prior to the Closing
Date.

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(h)    Hazardous Substances. To Seller’s knowledge and except as disclosed in
the Property Information, no Hazardous Substances are or have been, stored,
treated, disposed of or incorporated into, on or around the Property in
violation of any applicable statutes, ordinances or regulations; and Seller has
not received written notice of any currently pending or, to the Seller's
knowledge, threatened action or proceeding relating to Hazardous Substances.
“Hazardous Substances” shall mean any hazardous or toxic materials, substances
or wastes, such as (a) substances defined as “hazardous substances,” “hazardous
materials,” or “toxic substances” in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (“CERCLA”), the Resource Conservation and
Recovery Act of 1976 (“RCRA”), and/or the Hazardous Materials Transportation Act
(49 USC Section 1801, et seq.), as any of such acts are amended from time to
time; (b) any materials, substances or wastes which are toxic, ignitable,
corrosive or reactive and which are regulated by any local governmental
authority, any agency of the State of Florida or any agency of the United States
of America; (c) asbestos, petroleum and petroleum based products, urea
formaldehyde foam insulation, polychlorinated biphenyls (PCBs), and freon and
other chlorofluorocarbons; and (d) those substances defined as any of the
foregoing in the regulations adopted and publications promulgated pursuant to
each of the aforesaid laws.
(i)    Compliance with International Trade Control Laws and OFAC Regulations.
Seller is not now nor shall it be at any time prior to or at the Closing an
individual, corporation, partnership, joint venture, association, joint stock
company, trust, trustee, estate, limited liability company, unincorporated
organization, real estate investment trust, government or any agency or
political subdivision thereof, or any other form of entity (collectively, a
“Person”) named in any executive orders or lists published by the Office of
Foreign Assets Control, Department of the Treasury (“OFAC”) as Persons with whom
a United States Citizen (“U.S. Person”) may not transact business or must limit
their interactions to types approved by OFAC (“Specially Designated Nationals
and Blocked Persons”).
7.2    Purchaser’s Representations and Warranties. As a material inducement to
Seller to execute this Agreement and consummate this transaction, Purchaser
represents and warrants to Seller that:
(a)    Organization and Authority. Purchaser has been duly organized and is
validly existing as a limited partnership, in good standing in the State of
Delaware and is (or will be at Closing) qualified to do business in the state in
which the Property is located. Purchaser has the full right and authority and
has obtained (or will obtain by Closing) any and all consents required to enter
into this Agreement and to consummate or cause to be consummated the transaction
contemplated hereby. This Agreement has been, and all of the documents to be
delivered by Purchaser at the Closing will be, authorized and properly executed
and constitutes, or will constitute, as appropriate, the valid and binding
obligation of Purchaser, enforceable in accordance with their terms.
(b)    Conflicts and Pending Action. There is no agreement to which Purchaser is
a party or to Purchaser’s knowledge binding on Purchaser which is in conflict
with this Agreement. There is no action or proceeding pending or, to Purchaser’s
knowledge, threatened against Purchaser which challenges or impairs Purchaser’s
ability to execute or perform its obligations under this Agreement.
(c)    Compliance with International Trade Control Laws and OFAC Regulations.
Purchaser (without reference to its constituent entities) is not now nor shall
it be at any time prior to or at the Closing a Person named in any executive
orders or lists published by OFAC as a Specially Designated National and Blocked
Person.

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ARTICLE 8:      DEFAULT AND DAMAGES
8.1    Default by Purchaser. If Purchaser shall default in its obligation to
close hereunder or otherwise defaults in its obligations hereunder, and such
default continues for a period of (5) days after written notice is received by
Purchaser (provided such five (5) day cure period shall not apply to Purchaser’s
obligation to deposit any Earnest Money and in no event shall the Closing Date
be extended as a result of such five (5) day cure period), then Purchaser agrees
that Seller shall have the right to have the Escrow Agent deliver the Earnest
Money to Seller as liquidated damages to recompense Seller for time spent, labor
and services performed, and the loss of its bargain. Purchaser and Seller have
considered carefully the loss to Seller occasioned by taking the Property off
the market as a consequence of the negotiation and execution of this Agreement,
the expenses of Seller incurred in connection with the preparation of this
Agreement and Seller’s performance hereunder, and the other damages, general and
special, which Purchaser and Seller realize and recognize Seller will sustain
but which Purchaser and Seller agree would be impracticable or extremely
difficult to calculate at this time if Purchaser so defaults. Based on all those
considerations, Purchaser and Seller agree that the Earnest Money, together with
the interest thereon, represents a reasonable estimate of Seller’s damages.
Seller agrees to accept the Earnest Money as Seller’s total damages and relief
hereunder if Purchaser defaults in its obligations to close hereunder, Seller
waiving all other rights and remedies.
8.2    Default by Seller. If Seller defaults in its obligation to sell and
convey the Property to Purchaser pursuant to this Agreement, or otherwise
defaults in its obligations hereunder, and such default continues for a period
of five (5) days after written notice is received by Seller, Purchaser’s sole
remedy shall be to elect one of the following: (a) to terminate this Agreement,
in which event Purchaser shall be entitled to the return by the Escrow Agent to
Purchaser of the Earnest Money plus reimbursement for Purchaser’s reasonable
documented out-of-pocket expenses incurred in connection with this Agreement not
to exceed Fifteen Thousand Dollars ($15,000.00) in the aggregate, or (b) to
bring a suit for specific performance (but not damages) provided that any suit
for specific performance must be brought within 60 days of Seller’s default, to
the extent permitted by law, Purchaser waiving the right to bring suit at any
later date. Purchaser agrees not to file a lis pendens or other similar notice
against the Property except in connection with, and after, the proper filing of
a suit for specific performance.
ARTICLE 9:      EARNEST MONEY PROVISIONS
9.1    Investment and Use of Funds. The Escrow Agent shall invest the Earnest
Money in government insured interest-bearing accounts satisfactory to Purchaser,
shall not commingle the Earnest Money with any funds of the Escrow Agent or
others, and shall promptly provide Purchaser and Seller with confirmation of the
investments made. If the Closing under this Agreement occurs, the Escrow Agent
shall apply the Earnest Money against the Purchase Price due Seller at Closing.
9.2    Contract Terminations. Upon a termination of this Agreement in accordance
with its terms, the party with the right to terminate this Agreement (the
“Terminating Party”) may give written notice to the Escrow Agent and the other
party (the “Non-Terminating Party”) of such termination and the reason for such
termination. Such request shall also constitute a request for the release of the
Earnest Money to the Terminating Party. The Non-Terminating Party shall then
have five business days in which to object in writing to the release of the
Earnest Money to the Terminating Party. If the Non-Terminating Party provides
such an objection, then the Escrow Agent shall retain the Earnest Money until it
receives written instructions executed by both Seller and Purchaser as to the
disposition and disbursement of the Earnest Money, or until ordered by final
court order, decree or judgment, which is not subject to appeal, to deliver the
Earnest Money to a particular party, in which event the Earnest Money shall be
delivered in accordance with such notice, instruction, order, decree or
judgment. Notwithstanding the foregoing, or anything to the contrary contained
herein, in the event Purchaser terminates this Agreement in accordance with the
terms of Section 2.4 herein, then Escrow Agent shall promptly, and without the
requirement of notice from the Seller, return the Earnest Money to Purchaser.
9.3    Interpleader. Seller and Purchaser mutually agree that in the event of
any controversy regarding the Earnest Money, unless mutual written instructions
are received by the Escrow Agent directing the Earnest Money’s disposition, the
Escrow Agent shall not take any action, but instead shall await the disposition
of any proceeding relating to the Earnest Money or, at the Escrow Agent’s
option, the Escrow Agent may interplead all parties and deposit the

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Earnest Money with a court of competent jurisdiction in which event the Escrow
Agent may recover all of its court costs and reasonable attorneys’ fees. Seller
or Purchaser, whichever loses in any such interpleader action, shall be solely
obligated to pay such costs and fees of the Escrow Agent, as well as the
reasonable attorneys’ fees of the prevailing party in accordance with the other
provisions of this Agreement.
9.4    Liability of Escrow Agent. The parties acknowledge that the Escrow Agent
is acting solely as a stakeholder at their request and for their convenience,
that the Escrow Agent shall not be deemed to be the agent of either of the
parties, and that the Escrow Agent shall not be liable to either of the parties
for any action or omission on its part taken or made in good faith, and not in
disregard of this Agreement, but shall be liable for its negligent acts and for
any loss, cost or expense incurred by Seller or Purchaser resulting from the
Escrow Agent’s mistake of law respecting the Escrow Agent’s scope or nature of
its duties. Seller and Purchaser shall jointly and severally indemnify and hold
the Escrow Agent harmless from and against all costs, claims and expenses,
including reasonable attorneys’ fees, incurred in connection with the
performance of the Escrow Agent’s duties hereunder, except with respect to
actions or omissions taken or made by the Escrow Agent in bad faith, in
disregard of this Agreement or involving negligence on the part of the Escrow
Agent.
ARTICLE 10:      MISCELLANEOUS
10.1    Parties Bound. Except for an assignment pursuant to Paragraph 10.16 or
in accordance with this Section 10.1, neither party may assign this Agreement
without the prior written consent of the other, and any such prohibited
assignment shall be void. No assignment permitted under this Agreement shall
relieve the assigning party of any liability hereunder, whether arising before
or after the date of such assignment. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the respective legal
representatives, successors, assigns, heirs, and devisees of the parties.
Purchaser may assign this Agreement to an entity controlled by Purchaser or its
principals, or affiliated with the Purchaser, or to any financial institution
which may become a “partner” (which shall include an affiliation through any
form of business organization) of the Purchaser (or any of their affiliates),
provided, however, a copy of the assignment and assumption agreement shall be
delivered to Seller at least five (5) business days prior to Closing Date.
10.2    No Recordation. Neither Purchaser nor Seller shall not record this
Agreement or any memorandum of this Agreement.
10.3    Headings. The article and paragraph headings of this Agreement are for
convenience only and in no way limit or enlarge the scope or meaning of the
language hereof.
10.4    Invalidity and Waiver. If any portion of this Agreement is held invalid
or inoperative, then so far as is reasonable and possible the remainder of this
Agreement shall be deemed valid and operative, and effect shall be given to the
intent manifested by the portion held invalid or inoperative. The failure by
either party to enforce against the other any term or provision of this
Agreement shall not be deemed to be a waiver of such party’s right to enforce
against the other party the same or any other such term or provision in the
future.
10.5    Governing Law. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the law of the state in
which the Property is located.
10.6    Survival. Unless otherwise expressly stated in this Agreement, each of
the covenants, obligations, representations, warranties and agreements contained
in this Agreement shall survive the Closing and the execution and delivery of
the Deed required hereunder only for a period of six (6) months immediately
following the Closing Date; provided, however the indemnification provisions of
Paragraphs 6.4 and 6.6 and the provisions of Paragraph 6.2 shall survive the
termination of this Agreement or the Closing, whichever occurs, and shall not be
merged, until the applicable statute of limitations with respect to any claim,
cause of action, suit or other action relating thereto shall have fully and
finally expired. Any claim brought after Closing shall be actionable or
enforceable if and only if: (i) notice of such claim is given to the party which
allegedly made such misrepresentation or breached such covenant, obligation,
warranty or agreement within 9 months after the Closing Date; and (ii) the
amount of damages or losses as a result of such claim suffered or sustained by
the party making such claim exceeds $50,000.00.

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10.7    No Third Party Beneficiary. This Agreement is not intended to give or
confer any benefits, rights, privileges, claims, actions, or remedies to any
person or entity as a third party beneficiary or otherwise.
10.8    Entirety and Amendments. This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
relating to the Property except for any confidentiality agreement binding on
Purchaser, which shall not be superseded by this Agreement. This Agreement may
be amended or supplemented only by an instrument in writing executed by the
party against whom enforcement is sought.
10.9    Time. Time is of the essence in the performance of this Agreement.
10.10    Attorneys’ Fees. Should either party employ attorneys to enforce any of
the provisions hereof, the party against whom any final judgment is entered
agrees to pay the prevailing party all reasonable costs, charges, and expenses,
including attorneys’ fees, expended or incurred in connection therewith.
10.11    Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the addresses set forth in
Paragraph 1.1. All notices shall be in writing and shall be deemed to have been
properly given or served as of (i) the date of personal delivery with
acknowledgment of receipt; (ii) three (3) business days after the same is
deposited in the United States mail, prepaid, for delivery by registered or
certified mail, return receipt requested; or (iii) the first business day after
the date delivered to a reputable overnight courier service providing proof of
delivery. Notwithstanding the foregoing, notices to Seller or Purchaser under
this Agreement may be delivered by electronic mail with an original copy thereof
transmitted to the recipient by one of the means described in subsections (i),
(ii), or (iii) above. Notices sent pursuant to this Section 10.11 shall be
deemed effective when actually delivered by electronic mail.
10.12    Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction, to the effect that any ambiguities are to be resolved against the
drafting party, shall not be employed in the interpretation of this Agreement or
any exhibits or amendments hereto.
10.13    Calculation of Time Periods. Unless otherwise specified, in computing
any period of time described herein, the day of the act or event after which the
designated period of time begins to run is not to be included and the last day
of the period so computed is to be included, unless such last day is a Saturday,
Sunday or legal holiday for national banks in the location where the Property is
located, in which event the period shall run until the end of the next day which
is neither a Saturday, Sunday, or legal holiday. The last day of any period of
time described herein shall be deemed to end at 5:00 p.m. local time where the
Property is located.
10.14    Procedure for Indemnity. The following provisions govern actions for
indemnity under this Agreement. Promptly after receipt by an indemnitee of
notice of any claim, such indemnitee will, if a claim in respect thereof is to
be made against the indemnitor, deliver to the indemnitor written notice thereof
and the indemnitor shall have the right to participate in such proceeding and,
if the indemnitor agrees in writing that it will be responsible for any costs,
expenses, judgments, damages, and losses incurred by the indemnitee with respect
to such claim, to assume the defense thereof, with counsel mutually satisfactory
to the parties; provided, however, that an indemnitee shall have the right to
retain its own counsel, with the fees and expenses to be paid by the indemnitor,
if the indemnitee reasonably believes that representation of such indemnitee by
the counsel retained by the indemnitor would be inappropriate due to actual or
potential differing interests between such indemnitee and any other party
represented by such counsel in such proceeding. The failure of indemnitee to
deliver written notice to the indemnitor within a reasonable time after
indemnitee receives notice of any such claim shall relieve such indemnitor of
any liability to the indemnitee under this indemnity only if and to the extent
that such failure is prejudicial to its ability to defend such action, and the
omission so to deliver written notice to the indemnitor will not relieve it of
any other liability that it may have to any indemnitee. If an indemnitee settles
a claim without the prior written consent of the indemnitor, then the indemnitor
shall be released from liability with respect to such claim unless the
indemnitor has unreasonably withheld such consent.
10.15    Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
such counterparts shall constitute one Agreement. To facilitate

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execution of this Agreement, the parties may execute and exchange by electronic
mail counterparts of the signature pages.
10.16    Section 1031 Exchange. Either party may consummate the purchase or sale
(as applicable) of the Property as part of a so-called like kind exchange (an
“Exchange”) pursuant to § 1031 of the Internal Revenue Code of 1986, as amended
(the “Code”), provided that: (a) the Closing shall not be delayed or affected by
reason of the Exchange nor shall the consummation or accomplishment of an
Exchange be a condition precedent or condition subsequent to the exchanging
party’s obligations under this Agreement; (b) the exchanging party shall effect
its Exchange through an assignment of this Agreement, or its rights under this
Agreement, to a qualified intermediary (c) neither party shall be required to
take an assignment of the purchase agreement for the relinquished or replacement
property or be required to acquire or hold title to any real property for
purposes of consummating an Exchange desired by the other party; and (d) the
exchanging party shall pay any additional costs that would not otherwise have
been incurred by the non-exchanging party had the exchanging party not
consummated the transaction through an Exchange. Neither party shall by this
Agreement or acquiescence to an Exchange desired by the other party have its
rights under this Agreement affected or diminished in any manner or be
responsible for compliance with or be deemed to have warranted to the exchanging
party that its Exchange in fact complies with § 1031 of the Code.
10.17    WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.18    Lead Warning Statement. EVERY PURCHASER OF ANY INTEREST IN RESIDENTIAL
REAL PROPERTY ON WHICH A RESIDENTIAL DWELLING WAS BUILT PRIOR TO 1978 IS
NOTIFIED THAT SUCH PROPERTY MAY PRESENT EXPOSURE TO LEAD FROM LEAD-BASED PAINT
THAT MAY PLACE YOUNG CHILDREN AT RISK OF DEVELOPING LEAD POISONING. LEAD
POISONING IN YOUNG CHILDREN MAY PRODUCE PERMANENT NEUROLOGICAL DAMAGE, INCLUDING
LEARNING DISABILITIES, REDUCED INTELLIGENCE QUOTIENT, BEHAVIORAL PROBLEMS, AND
IMPAIRED MEMORY. LEAD POISONING ALSO POSES A PARTICULAR RISK TO PREGNANT WOMEN.
THE SELLER OF ANY INTEREST IN RESIDENTIAL REAL PROPERTY IS REQUIRED TO PROVIDE
THE PURCHASER WITH ANY INFORMATION ON LEAD-BASED PAINT HAZARDS FROM RISK
ASSESSMENTS OR INSPECTIONS IN THE SELLER’S POSSESSION AND NOTIFY THE PURCHASER
OF ANY KNOWN LEAD-BASED PAINT HAZARDS. A RISK ASSESSMENT OR INSPECTION FOR
POSSIBLE LEAD-BASED PAINT HAZARDS IS RECOMMENDED PRIOR TO PURCHASE.
By its execution of this Agreement, Purchaser acknowledges that (a) it has read
and understand the foregoing Lead Warning Statement, (b) it has reviewed, or
during the Due Diligence Period will review, the Property Information concerning
lead-based paint or lead-based paint hazards, and (c) Seller has provided, or
Purchaser has independently obtained, a lead hazard information pamphlet in the
form prescribed by the Environmental Protection Agency under Section 406 of the
Toxic Substances Control Act. Purchaser shall conduct such studies and tests for
lead-based paint during the Due Diligence Period as Purchaser deems appropriate.
By its execution of this Agreement, Seller acknowledges that, to the best of
Seller’s knowledge, the statements contained herein and the information
provided, or to be provided, to the Purchaser pursuant to the terms of this
Agreement concerning lead-based paint and lead-based paint hazards are accurate.
10.19    Limitation of Liability. Purchaser agrees that it will not have any
claims or causes of action against any disclosed or undisclosed officer,
director, employee, trustee, shareholder, member, partner, principal, parent,
subsidiary or other affiliate of Seller, or any officer, director, employee,
trustee, shareholder, member, partner or principal of any such parent,
subsidiary or other affiliate of Seller, arising out of or in connection with
this Agreement or the transactions contemplated hereby. Except as set forth
below, Purchaser agrees not to sue or otherwise seek to enforce any personal
obligation against Seller or any such person or party with respect to any
matters arising out of or in connection with this Agreement or the transactions
contemplated hereby. This Section shall in no way limit or prevent Purchaser
from bringing a suit against Seller for specific performance pursuant to the
terms of Section 8.2 above.

16

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10.20    Section 3-14 Compliance. Subject to Paragraph 2.2, Purchaser or its
designated independent or other auditor may audit Seller’s operating statements
of the Property, at Purchaser’s expense, and Seller shall provide such
documentation as Purchaser or its auditor may reasonably request in order to
complete such audit.  Seller shall provide to Purchaser (at Purchaser’s expense)
copies of, or shall provide Purchaser reasonable access to, such factual
information as may be reasonably requested by Purchaser, and in the possession
or control of Seller, or its property manager or accountants, necessary to
enable Purchaser's auditor to conduct an audit, in accordance with Rule 3-14 of
Securities and Exchange Commission Regulation S-X, of the income statements of
the Property for the year to date of the year in which Closing occurs plus the
one (1) immediately preceding calendar year.  Purchaser shall be responsible for
all out-of-pocket costs associated with this audit.  Seller shall reasonably
cooperate (at no cost to Seller) with Purchaser’s auditor in the conduct of such
audit, which will include verbal requests for information regarding internal
controls and follow-up questions on the financial information provided to the
Purchaser.  In addition, Seller agrees to provide to Purchaser or any affiliate
of Purchaser, if requested by such auditor, historical financial statements for
the Property, including (without limitation) income data for the Property and a
balance sheet for the last full calendar year of ownership, whether required
before or after Closing.  Seller’s obligation to maintain its records for use
under this Section 10.20 shall be an on-going condition to Closing for
Purchaser’s benefit until Closing.  Seller shall maintain its records for use
under this Section 10.20 for a period of not less than two (2) years after the
Closing Date.  The provisions of this Section shall expressly survive closing
and recordation of the Deed.

17

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SIGNATURE PAGE TO
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year written below.

Date:   

SELLER:
SOUTH PAYNE OWNER, LLC

By:   
     Name:   
     Title:   

 
Date:   
PURCHASER:
RESOURCE APARTMENT OP III, LP

By: Resource Apartment REIT III, Inc., its general partner

By:   
     Name:   
     Title:   

 
 

Escrow Agent has executed this Agreement in order to confirm that the Escrow
Agent has received and shall hold the Earnest Money and the interest earned
thereon, in escrow, and shall disburse the Earnest Money, and the interest
earned thereon, pursuant to the provisions of Article 9.
Date:   
LAND SERVICES USA, INC.
By:   
     Name:   
     Title:   

EXHIBIT A

LEGAL DESCRIPTION

All of those lots or parcels of land located in City of Alexandria County,
Virginia, and more particularly described as follows:
 
Parcel 1:

Beginning on the West side of Payne Street 176 feet 7 inches North of Duke
Street and running thence North on Payne Street 16 feet more or less to Dudley’s
line; thence West parallel to Duke Street 123 feet 5 inches; thence South
parallel to Payne Street 16 feet more or less; the length of the first line; and
thence East in a direct line 123 feet 5 inches to the beginning, being known as
Premises 219 South Payne Street.

Parcel 2:

Beginning on the West side of Payne Street at the South line of the above
described lot of ground and running thence South on Payne Street 30 feet more or
less to the North lien of the lot of ground conveyed by E.C. Arwell and his wife
to E.G. Atwell; thence West parallel to Duke Street 123 feet 5 inches; thence
North parallel to Payne Street 30 feet; and thence East in a direct line 123
feet 5 inches to the beginning, being known as Premises 221 South Payne Street.

Together with an easement for off street parking on Premises known as 212-214
South Payne Street as set forth in Declaration of Easement recorded in Deed Book
567, page 42 amended in Deed Book 614, page 110.

Being the same property conveyed to South Payne Owner, LLC, a Virginia limited
liability company by deed from WP Partners, L.L.C., a Virginia limited liability
company, dated October 15, 2014 and recorded October 16, 2014 in the Clerk's
Office of the Circuit Court for Alexandria, as Instrument No. 140014969.
 
The following is provided as an accommodation for informational purposes only. 
No insurance is provided over same:

Current Property Address:      219 and 221 South Payne Street, Alexandria,
Virginia 22314 

Current Parcel ID No:             074.01-11-16, Account No. 10288000

EXHIBIT B

SPECIAL WARRANTY DEED

PREPARED BY:     
Gordon Feinblatt LLC
223 East Redwood Street
Baltimore, MD 21201
Attn: Danielle S. Zoller, Esq. (VSB #40529)

RETURN TO:        
Resource Real Estate, Inc.
1845 Walnut Street, 18th Floor
Philadelphia, PA 19103
Attn: Aldie Jennings Loubier, Esq.

Consideration:     $2,500,000.00    
Assessed Value:    $___________
Tax Map No(s).:    ____________

SPECIAL WARRANTY DEED
THIS DEED is made this _____ day of _______________, 2016, by SOUTH PAYNE OWNER,
LLC, a Virginia limited liability company, having an address at
_____________________ (the “Grantor”), to RESOURCE APARTMENT OP III, LP, a
Delaware limited partnership, having an address at c/o Resource Real Estate,
Inc., 1845 Walnut Street, 18th Floor, Philadelphia, Pennsylvania 19103 (the
“Grantee”).
WITNESSETH that, for and in consideration of the sum of Two Million Five Hundred
Thousand Dollars ($2,500,000.00), cash in hand paid, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
all parties, Grantor does hereby grant, assign and convey to Grantee, its
successors and assigns, in fee simple, all that certain real property lying and
being in the City of Alexandria, Virginia, commonly known as 219 and 221 South
Payne Street, Alexandria, Virginia 22314 and more particularly described in the
attached Exhibit A and incorporated herein by reference.
TOGETHER WITH all buildings, structures and other improvements thereon and all
and singular the tenements, hereditaments, rights-of-way, easements, privileges,
benefits and appurtenances to the same belonging or in anywise appertaining and
the reversion or reversions, remainder or remainders, rents, issues and profits
thereof, and all the right, title and interest of Grantor in and to the land
lying in and above the bed of any street, alley, or roadway within, abutting or
adjoining the above described real property.
AND Grantor hereby covenants that it will warrant specially the property hereby
granted and that it will execute such further assurances of the same as may be
requisite.
TO HAVE AND TO HOLD the property above described and all rights, privileges and
interests hereby conveyed unto Grantee, its successors and assigns, in fee
simple.

WITNESS the hand and seal of the Grantor as of the day and year first above
written.
WITNESS/ATTEST:                SOUTH PAYNE OWNER, LLC

By:                      (SEAL)
Name:                     
Title:                     

COMMONWEALTH OF VIRGINIA, CITY/COUNTY OF     ___________________, to-wit:

I HEREBY CERTIFY that on     the ___ day of ____________, 2016, before me, a
Notary Public of the Commonwealth of Virginia, personally appeared
_______________________, who acknowledged him/herself to be the
____________________ of South Payne Owner, LLC, the within grantor, and that
he/she, being duly authorized to do so, executed the foregoing Deed on behalf of
South Payne Owner, LLC, for the purposes therein contained.

As witness my hand and notarial seal.

[NOTARY SEAL]                                            
Notary Public
My commission expires:                 
Notary Registration No.:                 

EXHIBIT A

Legal Description

EXHIBIT C
BILL OF SALE AND ASSIGNMENT OF LEASES AND CONTRACTS
This instrument is executed and delivered as of the ____ day of _________, 2016
pursuant to that certain Purchase and Sale Agreement (“Agreement”), dated
____________, 2016, by and between ______________________________________
(“Seller”), and __________________, a _____________________ (“Purchaser”),
covering the real property described in Exhibit A attached hereto (“Real
Property”).
1.Sale of Personalty. For good and valuable consideration, Seller hereby sells,
transfers, sets over, assigns and conveys to Purchaser the following (the
“Personal Property”):
(a)    Tangible Personalty. All of Seller’s right, title and interest in and to
all fixtures, furniture, equipment, supplies and other tangible personal
property, if any, owned by Seller presently attached or appurtenant to, located
in or on and used exclusively in connection with the Land, but excluding any
items of personal property owned by tenants, any managing agent or others,
including, without limitation, the personal property listed on Exhibit B
attached hereto, but excluding word processing and computing equipment (such as,
but without limitation, CPUs, printers, hubs, switches, firewalls, networking
equipment and modems) and any items of personal property owned by tenants, any
managing agent or others.
(b)    Intangible Personalty. All of Seller’s right, title and interest, if any,
in and to all intangible personal property related to the Property, to the
extent assignable and without warranty, including, without limitation, the
following items: (i) licenses, permits approvals, certificates of occupancy,
consents, authorizations, variances and waivers related to the Property, (ii)
all trade names, trademarks, logos and symbols associated or used in connection
with the Land and the Improvements, including Seller’s rights and interests in
the name “Payne Place Apartments” and variations thereof, (iii) plans,
specifications and other architectural and engineering drawings related to the
Improvements, (iv) warranties and guaranties; (v) any and all telephone and
facsimile numbers assigned to Seller with respect to the Property, and (vi)
leasing, marketing and promotional brochures and other advertising materials
relating to the Property, including, without limitation, all web addresses,
domain names, URLs, all social media accounts and logo, photo, video and
e-brochure files for the Property.
2.    Assignment of Leases and Contracts. For good and valuable consideration,
Seller hereby assigns, transfers, sets over and conveys to Purchaser, and
Purchaser hereby accepts such assignment of, the following (the “Assigned
Property”):
(a)    Leases. All of the landlord’s right, title and interest in and to all
leases, subleases and other occupancy agreements (“Leases”) covering the Real
Property and identified on the rent roll attached hereto as Exhibit C, together
with any and all deposits (whether cash or otherwise) made thereunder by way of
security, if any, and any accrued interest thereon, and Purchaser hereby assumes
all of the landlord’s obligations under the Leases arising from and after the
Closing Date (as defined in the Agreement);
(b)    Service Contracts. The service contracts described in Exhibit C attached
hereto (the “Service Contracts”).
3.    Assumption. Purchaser hereby assumes the obligations of Seller under the
Leases and Service Contracts arising from and after the Closing Date and shall
defend, indemnify and hold harmless Seller from and against any liability,
damages, causes of action, expenses, and reasonable attorneys’ fees incurred by
Seller by reason of the failure of Purchaser to fulfill, perform, discharge, and
observe its obligations with respect to the Leases or the Service Contracts
arising on and after the Closing Date. Seller shall defend, indemnify and hold
harmless Purchaser from and against any liability, damages, causes of action,
expenses, and reasonable attorneys’ fees incurred by Purchaser by reason of the
failure of Seller to fulfill, perform, discharge, and observe its obligations
with respect to the Leases or the Service Contracts arising prior to the Closing
Date.
4.    Warranty of Title to Assigned Property. Seller warrants and defends title
to the Tangible Personalty and the Assigned Property unto Purchaser, its
successors and assigns, against any person or entity claiming, or to claim, the
same or any part thereof by, through or under Seller, subject only to the
matters to which the deed from Seller to Purchaser (conveying the Real Property)
is subject, to the extent applicable.
5.    Agreement Applies. The covenants, agreements, representations, warranties,
indemnities and limitations provided in the Agreement with respect to the
property conveyed hereunder (including, without limitation, the limitations of
liability provided in the Agreement), are hereby incorporated herein by this
reference as if herein set out in full and shall inure to the benefit of and
shall be binding upon Purchaser and Seller and their respective successors and
assigns.
6.    Disclaimer. Except as set forth herein and in the Agreement, which
provisions are hereby incorporated by this reference as if herein set out in
full, the Personal Property and Assigned Property are conveyed by Seller and
accepted by Purchaser AS IS, WHERE IS, AND WITHOUT ANY REPRESENTATIONS OR
WARRANTIES OF WHATSOEVER NATURE, EXPRESS OR IMPLIED, IT BEING THE INTENTION OF
SELLER AND PURCHASER EXPRESSLY TO NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
ANY PARTICULAR PURPOSE, WARRANTIES CREATED BY ANY AFFIRMATION OF FACT OR PROMISE
OR BY ANY DESCRIPTION OF THE PROPERTY CONVEYED HEREUNDER, AND ALL OTHER
REPRESENTATIONS AND WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE UNIFORM
COMMERCIAL CODE OF THE STATE OR STATES WHERE THE REAL PROPERTY IS LOCATED.
7.    Limitation of Liability. Purchaser agrees that it will not have any claims
or causes of action against any disclosed or undisclosed officer, director,
employee, trustee, shareholder, member, partner, principal, parent, subsidiary
or other affiliate of Seller, or any officer, director, employee, trustee,
shareholder, member, partner or principal of any such parent, subsidiary or
other affiliate of Seller, arising out of or in connection with this Agreement
or the transactions contemplated hereby. Purchaser agrees not to sue or
otherwise seek to enforce any personal obligation against Seller or any such
person or party with respect to any matters arising out of or in connection with
this Agreement or the transactions contemplated hereby.
IN WITNESS WHEREOF, the undersigned have caused this Bill of Sale and Assignment
of Leases and Contracts to be executed as of the date written above.
SELLER:

SOUTH PAYNE OWNER, LLC

By: /s/ Wade Casstevens   
     Name: Wade Casstevens   
     Title: Manager   

PURCHASER:

RESOURCE APARTMENT OP III, LP

By: /s/ Shelle Weisbaum   
     Name: Shelle Weisbaum   
     Title: Senior Vice President   

EXHIBIT D
NOTICE TO RESIDENTS
[Date]

[Project Name]
[Address]
[City/State/ZIP]

Dear Resident:
Notice is hereby given to the tenants of ______________________ (the “Property”)
that ___________, the current owner of the Property, has sold the Property to
_____________(“Purchaser”) effective (date of takeover). Purchaser has assumed
all of the obligations of landlord under your lease, including any obligations
with respect to your security deposit, if any, which has been transferred to
Purchaser. All rent payments should be directed to the property manager at the
leasing center for Payne Place Apartments located at ____ S. Payne Street,
Alexandria, Virginia 22314.
 
 
Sincerely,

__________________________________________,

By:   
     Name:   
     Title:   

 
 
____________________________________,
a ________________________

By:   
     Name:   
     Title:   

SCHEDULE I
INVENTORY OF PERSONAL PROPERTY

•
Picnic Table – Back Patio

•
Charcoal Grill – Back Patio

•
Tools – Maintenance Room

•
Miscellaneous Replacement Parts & Cleaning Materials – Maintenance Room

Folding Table – Laundry Room

SCHEDULE II
LIST OF SERVICE CONTRACTS
•
American Disposal Company (Trash & Recycling Services)

•
Beltway Cleaning Services (Building Maintenance & Cleaning)

•
Coinmach Corporation (Laundry Machine Space Rental & Service)

•
Home Paramount Pest Control (Pest Control Services)

•
Castle Sprinkler and Alarm Inc. (Fire Extinguisher Service)

•
Ruppert Landscape (Landscape Maintenance)

18