Exhibit 10.2


 


AGREEMENT
OF SALE


 


THIS AGREEMENT, entered into
as of the 28th day of September, 2005, by and between COMSTOCK BELLEMEADE, L.C.,
a Virginia limited liability company (“Purchaser”) and BELLEMEADE FARMS INVESTORS, LLC, a Delaware
limited liability company, FF BELLEMEADE FARMS, LLC, a Delaware limited
liability company and FF INVESTORS W-I LLC, a Delaware limited liability
company (collectively, the “Seller”).


 


WITNESSETH:


 


1.                                       PURCHASE AND SALE.  Purchaser agrees to purchase and Seller
agrees to sell at the price (the “Purchase Price”) of Forty Four Million Eighty
Two Thousand and No/100 Dollars ($44,082,000.00), all of the following property
(collectively, the “Property”):


 


a.                                       that certain parcel of
real property located in Leesburg, Virginia, more particularly described on Exhibit A
attached hereto (the “Land”);


 


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


 





















 


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


 


d.                                      those certain apartment
buildings containing approximately 316 apartment units, and all of Seller’s
right, title and interest in the other improvements, structures and fixtures
placed, constructed or installed on the Land (collectively, the “Improvements”);


 


e.                                       all of Seller’s right,
title and interest in all leases, licenses and concession agreements
(collectively, the “Leases”) covering space situated at or within the Land and
Improvements under any existing Lease occupied by tenants (collectively, the “Tenants”)
and all refundable security deposits deposited by Tenants with respect to the
Leases;


 


f.                                         all of Seller’s rights
in and to contractual rights and intangibles with respect to the operation,
maintenance, and repair of the Land and the Improvements, including service and
maintenance agreements (collectively, “Service Contracts”), utility agreements,
manufacturers’ warranties, assignable governmental permits, licenses,
certificates and approvals in connection with the ownership of the Property
(collectively, the “Licenses”), and all development rights relating or
appurtenant to the Land or the Improvements;


 


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g.                                      Seller’s right, if any,
to the use of the trade name “Bellemeade Farms Apartments” or “Bellemeade Farms”
(the “Trade Name”) in connection with the Property;


 


h.                                      the right, if
assignable, to the use of all telephone numbers used by Seller at the Property;
and


 


i.                                          subject to the provisions
of Paragraph 6 of this Agreement, all rights to any award made or to be made or
settlement in lieu thereof for damage to the Land or Improvements by reason of
condemnation, eminent domain, exercise of police power or change of grade of
any street.


 


2.                                       PURCHASE PRICE.  The Purchase Price shall be paid as follows:


 


a.                                       Upon the full execution
of this Agreement, the sum of $2,000,000.00 (the “Earnest Money”) payable to
the “Escrow Agent” (as defined in the Escrow Agreement) to be held in escrow by
the Escrow Agent, by and in accordance with the provisions of the Escrow
Agreement (“Escrow Agreement”) attached hereto as Exhibit C;


 


b.                                      on the Closing Date (as
hereinafter defined), $44,082,000.00 (less a credit for all Earnest Money
adjusted in accordance with the prorations by federally wired “immediately
available” funds delivered to the Escrow Agent’s account as set forth in the
Escrow Agreement no later than 12:00 Noon Central Time on the Closing
Date.  If the funds are not received by
the Escrow Agent by 12:00 Noon Central Time, then on the Closing Date,
Purchaser shall pay Seller an amount equal to any additional mortgage per diem
interest costs (including, if required, the payment of interest due Seller’s
lender for the full month in which the Closing occurs) actually incurred by
Seller.


 


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3.                                       TITLE COMMITMENT AND
SURVEY


 


a.                                       Attached hereto as Exhibit E
is a pro-forma title policy (“Pro-Forma Title Policy”) for an owner’s ALTA
standard coverage title insurance policy (“Title Policy”) issued by Chicago
Title Insurance Company (“Title Insurer”). 
The owner’s Title Policy issued at Closing will be in the amount of the
Purchase Price subject only to: (i) real estate taxes and assessments not
yet due and payable; (ii) existing
leases; and (iii) those matters shown in the Pro-Forma Title Policy.  All of the above are herein referred to as
the “Permitted Exceptions”.  The Pro-Forma
Title Policy shall be conclusive evidence of good title as therein shown as to
all matters insured by the policy, subject only to the exceptions therein
stated.  On the Closing Date, the Title
Insurer shall issue the Title Policy or a “marked up” commitment in conformity
with the Pro-Forma Title Policy.  Purchaser
shall pay all costs of the Title Policy including any additional costs of an “extended
coverage” Title Policy and any
special endorsements which Purchaser requires.


 


b.                                      Purchaser acknowledges
receipt of a survey (“Survey”) of the Property dated July 20, 2005
prepared by Burgess & Niple, Inc. (“Surveyor”).  Purchaser acknowledges and accepts all
matters as shown on the Survey.  Purchaser
shall pay for all costs of the update to the Survey performed by the Surveyor
which had updated the Survey from the survey dated October 7, 2003, as well
as the  costs for any recertification or for
any additional work which Purchaser requires.


 


4.                                       CONDITION OF
TITLE/CONVEYANCE.  Seller agrees to convey fee
simple title to the Property by Special Warranty Deed (“Deed”) in recordable
form


 


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subject only to the Permitted Exceptions.  If Seller is unable to convey title to the
Property subject only to the Permitted Exceptions hereof because of the
existence of an additional title exception (“Additional Unpermitted Exception”),
then Purchaser can elect to take title to the Property subject to the Additional
Unpermitted Exception or terminate this Agreement.  If Purchaser elects to terminate this
Agreement pursuant to this Paragraph, then the Earnest Money plus all accrued
interest shall be delivered to the Purchaser and except as specifically
provided for elsewhere in this Agreement, neither party shall have any further
obligation or liability hereunder. 
Notwithstanding the aforesaid, all liens of a definite ascertainable
amount which are Additional Unpermitted Exceptions shall be paid for by Seller
at the Closing or “insured over” by the Title Insurer.  Seller agrees not to place any mortgage or deed
of trust on the Property during the term of this Agreement without the consent
of Purchaser.


 


5.                                       PAYMENT OF CLOSING
COSTS.  Seller shall pay the grantor’s tax estimated
at One Dollar ($1.00) per each One Thousand Dollars ($1,000.00) of the Purchase
Price.  Purchaser shall pay the grantee’s
tax estimated at Two Dollars ($2.00) per each One Thousand Dollars ($1,000.00)
of the Purchase Price and any other transfer taxes, documentary stamps or
recording fees incurred in connection with the sale of the Property and recording
of the Deed.  Purchaser shall pay the
closing costs with reference to any loan which Purchaser obtains.  Purchaser and Seller shall equally share the
Escrow Agent’s escrow fees.


 


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6.                                       DAMAGE, CASUALTY AND
CONDEMNATION


 


a.                                       If the Property suffers
damage as a result of any casualty prior to the Closing Date and can be
repaired or restored for $250,000 or less, then Seller shall commence the
repair or restoration in an expeditious manner, in which event the Closing Date
will be extended until such date as may reasonably be required to complete the
repair or restoration and Seller shall retain all insurance proceeds.  If the cost of repair or restoration exceeds
that amount, then Seller can elect to either: (a) repair and restore same,
in which event the Closing Date will be extended until such date as may
reasonably be required to complete the repair or restoration; or (b) terminate
this Agreement upon notice to Purchaser served within twenty (20) business days
of such casualty.  If Seller elects to
terminate this Agreement pursuant to this Paragraph, then Purchaser will have
the option to accept the Property in its damaged condition together with an
assignment from Seller of all insurance proceeds and receive a credit at
Closing in the amount of the deductible, provided Purchaser notifies Seller by
notice served within twenty (20) days after receipt of Seller’s notice of
election to terminate.


 


b.                                      If condemnation
proceedings (“Proceedings”) are instituted against the Property and the parties
reasonably believe that such Proceedings will result in an award in excess of
$250,000.00, then Purchaser can elect to either take the Property subject to
the Proceedings along with an assignment of Seller’s interest in the
Proceedings or terminate this Agreement. 
If Purchaser elects to terminate this Agreement, it shall be by notice
to the Seller within five (5) days after Seller notifies Purchaser of the
Proceedings.


 


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c.                                       If the Agreement is
terminated pursuant to this Paragraph, then the Earnest Money plus all accrued
interest shall be delivered to the Purchaser and except as specifically
provided for elsewhere in this Agreement, neither party shall have any further
obligation or liability hereunder.


 


7.                                       AS-IS CONDITION.


 


Except as may hereinafter be
specifically set forth in this Agreement, Purchaser is not relying on Seller
having made any inquiry as to the condition of the Property or the Leases.  Purchaser acknowledges and agrees that it
will be purchasing the Property based solely upon its inspection and
investigations of the Property and that Purchaser will be purchasing the
Property “AS IS” and “WITH ALL FAULTS” based upon the condition of the Property
as of August 12, 2005, subject to reasonable wear and tear and, subject to
the provisions of Paragraph 6, loss by fire or other casualty or condemnation
from August 12, 2005 until the Closing Date.  Without limiting the foregoing, Purchaser
acknowledges that, except as may otherwise be specifically set forth in
Paragraph 19 or elsewhere in this Agreement, neither Seller nor its
consultants, brokers or agents have made any other representations or
warranties of any kind upon which Purchaser is relying as to any matters
concerning the Property, including, but not limited to, any implied warranty as
to the quality of the construction of the Property or its fitness for use as an
apartment project, the condition of the Land or any of the Improvements,
whether or not the Property is


 


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subject to airport corridor
noise, the existence or nonexistence of asbestos, lead in water, lead in paint,
radon, underground or above ground storage tanks, petroleum, toxic waste or any
Hazardous Materials or Hazardous Substances (as such terms are defined below),
the Tenants of the Property or the Leases affecting the Property, economic
projections or market studies concerning the Property, any development rights,
taxes, bonds, covenants, conditions and restrictions affecting the Property,
water or water rights, topography, drainage, soil, subsoil of the Property, the
utilities serving the Property or any zoning, environmental or building laws, rules or
regulations affecting the Property. 
Seller makes no representation that the Property complies with Title III
of the Americans With Disabilities Act, the Fair Housing Act of 1968 as
amended, or any fire codes, building codes or health codes.  Except with respect to a Claim as defined and
as limited pursuant to Paragraph 19d hereof for a breach of any representation,
warranty or covenant of Seller under this Agreement, Purchaser hereby releases
Seller, which release shall also inure to the benefit of any member, manager,
or partner of Seller, FF Development L.P., FF Properties L.P. and their
affiliates (collectively referred to herein as the “Related Parties”) from any
and all liability in connection with any claims (including but not limited to
all health and medical claims) which Purchaser may have against Seller or any
of the Related Parties, and Purchaser hereby agrees not to assert any claims,
for damage, loss, compensation, contribution, cost


 


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recovery or otherwise, against
Seller or any of the Related Parties, whether in tort, contract, or otherwise,
relating directly or indirectly to the condition of the Property, including
without limitation (i) claims relating to the existence of asbestos; (ii) claims
attributable to indoor air quality issues, releases from building material and
furnishings, releases from cleaning, repairing, or decorating activities, and
the operation of heating and cooling systems and humidifiers; or (iii) claims
relating to Hazardous Materials or Hazardous Substances on, or environmental
conditions of, the Property, or arising under the Environmental Laws (as such
term is hereinafter defined), or relating in any way to the quality of the
indoor or outdoor environment at the Property; or (iv) claims relating to
mold, fungus, bacteria and/or other biological growth or biological growth
factors, or any other type of indoor contaminants that may exist on the
Property; or (v) claims relating to latent or patent construction defects
or any implied warranty as to fitness for use as an apartment project; or (vi) claims
relating to the failure of Seller to disclose any information relating to the
Property, except as may otherwise be expressly set forth in Paragraph 19 or
elsewhere in this Agreement.  As used in
this paragraph the term “affiliates” means, with respect to Seller or any manager,
member or partner of Seller, any other entity or person which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with Seller or any manager, member or partner of
Seller.  As used in the previous
sentence, “control”


 


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means the possession, directly
or indirectly, of the power to cause the direction of the management of Seller
or any manager, member or partner of Seller, whether through voting securities,
by contract, family relationship or otherwise. 
This release shall forever survive the Closing and the delivery and
recording of the Deed.  As used herein,
the term “Hazardous Materials” or “Hazardous Substances” means (i) hazardous
wastes, hazardous materials, hazardous substances, hazardous constituents,
toxic substances or related materials, whether solids, liquids or gases,
including but not limited to substances defined as “hazardous wastes,” “hazardous
materials,” “hazardous substances,” “toxic substances,” “pollutants,” “contaminants,”
“radioactive materials”, “toxic pollutants”, or other similar designations in,
or otherwise subject to regulation under, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), 42
U.S.C. § 9601 et seq.; the Toxic Substance Control Act (“TSCA”), 15
U.S.C. § 2601 et seq.; the Hazardous Materials Transportation Act,
49 U.S.C. § 1802; the Resource Conservation and Recovery Act (“RCRA”), 42
U.S.C. § 9601, et seq.; the Clean Water Act (“CWA”), 33 U.S.C. § 1251
et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et
seq.; the Clean Air Act (“CAA”), 42 U.S.C. § 7401 et seq.; and
in any permits, licenses, approvals, plans, rules, regulations or ordinances
adopted, or other criteria and guidelines promulgated pursuant to the preceding
laws or other similar federal, state or local laws,


 


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regulations, rules or
ordinance now or hereafter in effect relating to environmental matters
(collectively the “Environmental Laws”); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulation or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum products, (C) waste
oil, (D) waste aviation or motor vehicle fuel and their byproducts, (E) asbestos,
(F) lead in water, paint or elsewhere, (G) radon, (H) Polychlorinated
Biphenyls (PCB’s), (I) ureaformaldehyde, (J) volatile organic
compounds (VOC), (K) total petroleum hydrocarbons (TPH), (L)
benzine derivative (BTEX), and (M) petroleum byproducts.


 


Purchaser hereby specifically
acknowledges that Purchaser has carefully reviewed this subsection, and discussed
its import with legal counsel, is fully aware of its consequences, and that the
provisions of this subsection are a material part of this Agreement;
PROVIDED, HOWEVER, such release, waiver or discharge shall not apply and shall
be of no force or effect for any claims arising out of Seller’s fraud.


 


Purchaser’s
Initials 


 


b.                                      Seller has provided to
Purchaser certain unaudited historical financial information regarding the
Property relating to certain periods of time in which Seller owned the Property.  Except as may be otherwise specifically set
forth elsewhere in this Agreement, Seller makes no representation or warranty
that such material is complete or accurate or that Purchaser will achieve
similar financial or other results with


 


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respect to the operations of the Property, it being
acknowledged by Purchaser that Seller’s operation of the Property and
allocations of revenues or expenses may be vastly different than Purchaser may
be able to attain.  Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Property and releases Seller and
the Related Parties from any liability with respect to such historical
information; provided however, such release, waiver or discharge shall not
apply and shall be of no force or effect for any claims arising out of Seller’s
fraud.


 


Purchaser’s
Initials 


 


8.                                       CLOSING


 


The closing (“Closing”) of
this transaction shall be on September 28, 2005 (“Closing Date”), at which
time Seller shall deliver possession of the Property to Purchaser.


 


9.                                       CLOSING DOCUMENTS


 


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


 


b.                                      On the Closing Date,
Seller shall deliver to Purchaser possession of the Property; all keys used in
connection with the Property; copies of the Tenants Lease files (which will be
available at the Property).


 


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


 


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Deed (in the form of Exhibit F attached hereto)
subject to the Permitted Exceptions; the Bill of Sale (in the form of Exhibit G
attached hereto); a closing statement; an assignment and assumption of all
Service Contracts (in the form of Exhibit H attached hereto); an
assignment and assumption of all Leases and security deposits (in the form of Exhibit I
attached hereto); updated certified rent roll; a notice to the tenants of the
transfer of title and the assumption by Purchaser of the landlord’s obligations
under the Leases and the obligation to refund the security deposits (in the
form of Exhibit J attached hereto); a non-foreign affidavit (in the form
of Exhibit K attached hereto); an assignment of intangible property (in
the form of Exhibit L attached hereto); and an assignment of warranties
and guaranties relating to the Personal Property (in the form of Exhibit M-1
attached hereto); and such other documents as may be reasonably required by the
Title Insurer in order to consummate the transaction as set forth in this
Agreement.


 


10.                                 SELLER’S RIGHT TO CURE.  Intentionally Deleted.


 


11.                                 DEFAULT BY PURCHASER.  ALL EARNEST MONEY DEPOSITED INTO THE ESCROW
IS TO SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND
UNDERTAKINGS UNDER THIS AGREEMENT.  IN
THE EVENT OF ANY DEFAULT OF THE PURCHASER UNDER THE PROVISIONS OF THIS
AGREEMENT (PROVIDED PURCHASER SHALL NOT BE CONSIDERED IN DEFAULT UNDER THIS
AGREEMENT IF IT HAS WITHIN FIVE (5) DAYS AFTER RECEIPT OF WRITTEN NOTICE
FROM SELLER CURED ANY FAILURE TO MAINTAIN THE CONFIDENTIALITY REQUIRED UNDER
PARAGRAHS 17 AND 36.)  SELLER SHALL
RETAIN ALL OF THE


 


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EARNEST MONEY AND THE INTEREST THEREON AS SELLER’S SOLE
RIGHT TO DAMAGES OR ANY OTHER REMEDY AND PURCHASER SHALL HAVE NO FURTHER RIGHTS
TO PURCHASE THE PROPERTY.  THE PARTIES HAVE
AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER,
WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE.  THEREFORE, BY PLACING THEIR INITIALS BELOW,
THE PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S DAMAGES.


 


	
  Seller’s Initials

  	
  Purchaser’s Initials

  



 


12.                                 SELLER’S DEFAULT.  IF THIS SALE IS NOT COMPLETED BECAUSE OF
SELLER’S UNCURED DEFAULT, PURCHASER’S SOLE REMEDY SHALL BE THE RIGHT TO SUE FOR
ACTUAL DAMAGES NOT TO EXCEED $250,000.00 AND THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, AND THIS AGREEMENT SHALL TERMINATE
AND EXCEPT AS SPECIFICALLY PROVIDED FOR ELSEWHERE IN THIS AGREEMENT, NEITHER
PARTY SHALL HAVE ANY FURTHER OBLIGATION OR LIABILITY TO EACH OTHER AT LAW OR IN
EQUITY.  NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, IF SELLER’S DEFAULT IS ITS REFUSAL TO DELIVER
THE DEED AND THE OTHER DOCUMENTS REQUIRED TO BE DELIVERED AT CLOSING AND
WRONGFULLY REFUSES TO CONVEY THE PROPERTY TO PURCHASER AS A


 


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RESULT THEREOF, THEN PURCHASER WILL BE ENTITLED TO SUE FOR
SPECIFIC PERFORMANCE.


 


	
  Seller’s Initials

  	
  Purchaser’s Initials

  



 


13.                                 a.                                       PRORATIONS.  Rents (exclusive of Delinquent Rent, as
hereinafter defined, but including prepaid rents); refundable security deposits
and interest thereon if required by law (which will be assigned to and assumed
by Purchaser and credited to Purchaser at Closing); water and other utility
charges; fuels; prepaid operating expenses; real and personal property taxes;
and other similar items shall be adjusted ratably as of 11:59 P.M. on the
Closing Date, and credited or debited to the balance of the cash due at
Closing.  All supplemental taxes and
assessments attributable to the period prior to the Closing Date for the
calendar year in which the Closing occurs shall be prorated to the Closing
Date; provided, however, in no event shall Seller be charged with or (and
Purchaser shall) be responsible for any increase in the taxes on the Property
resulting from the sale of the Property or from any improvements made at any
time from and after the Closing Date.  If
the amount of any of the items to be prorated is not then ascertainable, the
adjustment thereof shall be on the basis of the most recent ascertainable data
and all prorations shall be final.  If
special assessments have been levied against the Property for completed
improvements, then the amount of any installments which are due prior to the
Closing Date shall be paid by the Seller; and the amount of installments which
are due after the Closing Date shall be paid by the Purchaser.  All assessments for incomplete improvements
shall be paid by Purchaser.


 


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b.                                      DELINQUENT RENTS.  If, as
of the Closing Date, basic rent is in arrears (“Delinquent Rent”) for the
calendar month in which the Closing occurs, then Seller’s portion of the first
rent collected by Purchaser during that calendar month will be delivered to
Seller for the Delinquent Rent.  If
Delinquent Rent is in arrears for a period prior to the calendar month in which
the Closing occurs, then rents collected by Purchaser shall first be applied to
current rent and then to Delinquent Rent. 
Purchaser shall deliver Seller’s pro rata share within 10 days of
Purchaser’s receipt of that Delinquent Rent except that the Delinquent Rent
received for the calendar month in which Closing occurs shall be paid in one
lump sum within ten (10) days of the last day of the calendar month.  This subparagraph of this Agreement shall
survive the Closing and the delivery and recording of the Deed.


 


14.                                 RECORDING.  This Agreement shall not be recorded and the
act of recording by Purchaser shall be an act of default hereunder by Purchaser
and shall be subject to the provisions of Paragraph 11.


 


15.                                 ASSIGNMENT.  The Purchaser shall not have the right to
assign its interest in this Agreement without the prior written consent of the
Seller.  Any assignment or transfer of,
or attempt to assign or transfer, Purchaser’s interest in this Agreement shall
be an act of default hereunder by Purchaser and subject to the provisions of
Paragraph 11.  Seller hereby consents to
an assignment to an entity, the ownership and control of which is held by the
same persons owning and controlling Purchaser. 
However, Purchaser shall remain liable for all of the Purchaser’s
obligations and undertakings set forth in this Agreement and the exhibits
attached hereto.  Purchaser shall


 


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notify Seller of any assignment no later than ten (10) business
days prior to the Closing Date.


 


16.                                 BROKER. The parties hereto
acknowledge that Ideal Realty Group (“Broker”) is the only real estate broker
involved in this transaction.  The
foregoing does not apply to any fee which may be paid by Seller to any
affiliate of Seller or FF Properties L.P. or an exclusive broker engaged by an
affiliate of Seller as a result of this transaction for which Seller shall be
responsible and Purchaser has no obligations relating to said fees.  Seller agrees to pay Broker a commission or
fee (“Fee”) pursuant to an agreement between Seller and Broker.  Purchaser agrees to indemnify, defend and
hold harmless the Seller and any member, partner or affiliate or parent of
Seller, and all shareholders, employees, officers and directors of Seller or
Seller’s partner(s), or member(s), or parent or affiliate (each of the above is
individually referred to as a “Seller Indemnitee”) from all claims, including
attorneys’ fees and costs incurred by a Seller Indemnitee as a result of anyone’s
claiming by or through Purchaser any fee, commission or compensation on account
of this Agreement, its negotiation or the sale


 


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hereby contemplated. 
Purchaser does now and shall at all times consent to a Seller Indemnitee’s
selection of defense counsel.  Seller
agrees to indemnify, defend and hold harmless the Purchaser and all
shareholders, employees, officers and directors of Purchaser or Purchaser’s
parent or affiliate (each of the above is individually referred to as a “Purchaser
Indemnitee”) from all claims, including attorneys’ fees and costs incurred by a
Purchaser Indemnitee as a result of anyone’s claiming by or through Seller any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated.  Seller
does now and shall at all times consent to a Purchaser Indemnitee’s selection
of defense counsel.  Notwithstanding
anything contained in this Agreement to the contrary, the provisions of this
Paragraph shall forever survive the Closing and delivery of the Deed or earlier
termination of this Agreement.


 


17.                                 DOCUMENTS, INSPECTION
OF PROPERTY AND APPROVAL PERIOD.


 


a.                                       Seller has heretofore
delivered or shall deliver or make available to Purchaser, originals or copies
of the following documents to the extent that they are in Seller’s possession
(collectively the “Documents”):


 


i.                                          Copies of all
certificates of occupancy.


 


ii.                                       Copies of any third
party environmental and seismic or soils (as applicable) reports relating to
the Property.


 


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


 


iv.                                   Copies of all Service
Contracts pertaining to the Property and a schedule listing all such
Service Contracts.


 


v.                                      A schedule listing
all Personal Property.


 


vi.                                   True, correct and
complete copies of any Leases and licenses which are located at the Property
for Purchaser’s review.


 


vii.                                A current rent roll (“Rent
Roll”).


 


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


 


ix.            Such other non-confidential
documents as Purchaser may reasonably require and which are in Seller’s
possession.


 


Purchaser by its execution of this Agreement hereby
acknowledges that it has approved all of the Documents and has prior to the
date hereof inspected and by its execution hereof does approve the condition of
the Property.  Purchaser agrees to
indemnify, defend, protect and hold Seller, its partners, members,
shareholders, affiliates, officers, managers, employees, trustees and
beneficiaries, and FF Properties L.P. and the respective successors and assigns
of each of the foregoing (“Indemnified Parties”) harmless from any and all
loss, costs, including attorneys’ fees, liability or damages which any of the
Indemnified Parties may incur or suffer as a result of Purchaser’s prior
inspection and investigation of the Property including the entry of Purchaser,
its employees or agents and its lender onto the Property, including without
limitation, liability for mechanics’ lien claims.  Purchaser shall keep all information or data
received or discovered in connection with any of the inspections, reviews or
examinations strictly confidential. 
Notwithstanding anything contained in this Agreement to the contrary,
Purchaser’s indemnity obligations under this Paragraph shall forever survive
the Closing and delivery and recording of the Deed or the earlier termination
of this Agreement.


 


b.             Purchaser acknowledges that it is a sophisticated and
experienced purchaser of real estate; that numerous apartment complexes contain
mold; water


 


19





















 


damage, fungi, bacteria
and/or other biological growth or biological growth factors; and that the
Property may contain mold, water damage, fungi, bacteria, and/or other
biological growth or biological growth factors which Purchaser may not have
discovered during its inspection of the Property.  Purchaser agrees that in purchasing the
Property from the Seller, it is assuming the risk that the Property may contain
mold, water damage, fungi, bacteria, and/or other biological growth or
biological growth factors even as a result of a patent or latent construction
defect.


 


c.             Purchaser agrees to repair to the reasonable
satisfaction of Seller any damage to the Property which may arise as a result
of Purchaser’s prior inspection of the Property.


 


d.             If at anytime during its prior inspection of the
Property Purchaser discovered or was advised of any fact or circumstance which
would cause a representation or warranty of Seller to be untrue or misleading,
or with the passage of time would become untrue or misleading, then Purchaser
shall be deemed to have waived its right to seek damages or termination of this
Agreement.


 


e.             As a result of Purchaser’s prior inspection of the
Property, it is conclusively presumed that Purchaser (i) has approved the
Documents and the condition of the Property, (ii) has acknowledged and
agreed that all Earnest Money plus the interest accrued thereon shall belong to
Seller unless Seller is in default hereunder or this Agreement is terminated in
accordance with its terms, (iii) has acknowledged and agreed that, prior
to purchase, Purchaser has been given adequate access to inspect the Property,
including the opportunity to conduct invasive testing to discover any patent or
latent


 


20





















 


defects in or on the
Property, examine the books and records relating to the Property; conduct
interviews or take any other necessary steps to fully and adequately discover
any and all latent or patent defects with the Property, (iv) has
acknowledged that it has the full and complete knowledge necessary to purchase
the Property, or has chosen not to obtain the full and complete knowledge,
although provided with the opportunity by Seller, and (v) has conducted,
or had the opportunity to conduct, sufficient examination of the building,
building envelope, building systems, building grounds, building components and
surrounding conditions including but not limited to soils.


 


18.           INDEMNIFICATION
AND INSURANCE REQUIREMENTS.  In
addition to all other covenants contained herein binding on Purchaser,
Purchaser hereby further agrees:


 


a.             To indemnify, defend and hold harmless the Seller,
Fairfield Properties, Fairfield Financial A LLC, Fairfield Residential LLC, FF
Development L.P., FF Properties L.P., FF Properties, Inc., Fairfield
Bellemeade Farms LP and FF Bellemeade Farms LLC, the Roland and Dawn Arnall
Living Trust, Roland Edmund Arnall, Dawn Lynn Arnall and any other Seller
Related Parties and the members, partners, officers, directors, trustees,
affiliates, parents, subsidiaries, shareholders, managers, beneficiaries,
employees and agents of each of the foregoing entities (individually, the “Seller
Indemnified Party” or collectively, the “Seller Indemnified Parties”), to the
extent enforceable under applicable law, from any and all losses, liabilities,
damages, penalties, fines, liens, judgments, costs or expenses whatsoever,
whether in tort, contract or otherwise (including without limitation, court
costs and


 


21





















 


reasonable attorneys’
fees and disbursements) (collectively, “Losses”) that (i) are actually
incurred by a Seller Indemnified Party; (ii) arise out of, or in any way
relate to claims made or brought by any party or parties who acquire or
contract to acquire any ownership interest in the Property following the
Closing (including but not limited to any unit owner or owners or any
condominium association or associations); (iii) arise out of claims
asserted at any time after the conversion of the Property into a condominium
form of ownership, cooperative housing corporation, community apartment
property or stock corporation, including but not limited to claims by any unit
owner or owners or any condominium association or associations, their agents,
employees and successors and assigns in connection with or related thereto and (iv) relate
to either (A) the physical condition of the Property including, without
limitation, latent or patent defects, and claims relating to the existence of
asbestos, any other construction defects, claims relating to mold, all
structural and seismic elements, all mechanical, electrical, plumbing, sewage,
heating, ventilating, air conditioning and other systems, or (B) any law
or regulation applicable to the Property, including, without limitation, any
Environmental Law and any other federal, state or local law.  The insurance to be provided by Purchaser as
described in this Section below shall in no way be construed to limit
Purchaser’s indemnity obligations under this Paragraph 18(a) or Purchaser’s
other obligations under other provisions of Paragraph 18 or under other
Paragraphs of this Agreement.  Purchaser
does now and shall at all times consent to the Indemnified Parties’ selection
of defense counsel.  The indemnification
obligations contained in this Paragraph 18 shall not apply to any Losses
resulting from (i) governmental enforcement of chain-of-title liability


 


22





















 


under CERCLA or other
similar Environmental Laws or (ii) a breach of Seller’s representations
and warranties as stated in and as limited by Paragraph 19 herein.  The provisions of this Paragraph 18 shall
survive the Closing and the delivery and recording of the Deed.


 


b.             Purchaser has delivered to Seller a certificate of
insurance attached hereto as Exhibit X containing insurance coverages (“Insurance
Coverages”) to be maintained by Purchaser. 
By no later than ninety (90) days after the Closing, Purchaser shall
deliver to Seller certified copies of all of the insurance policies showing the
agreed upon Insurance Coverages. 
Purchaser at its own cost and expense shall maintain all of said
Insurance Coverages including keeping the Seller Indemnified Parties as additional
insureds thereunder for a period of five (5) years after the Closing Date
and shall provide written evidence of same to Seller no later than the date of
termination of any insurance policy fulfilling the required Insurance
Coverages.


 


c.             Purchaser shall cause to be delivered at Closing to
Seller either (i) a Guaranty (“Guaranty”) executed by Comstock
Homebuilding Companies, Inc., in favor of the Seller Indemnified Parties
in the form of Exhibit T-1 attached hereto guarantying the obligations of
Purchaser under Paragraphs 18(a) and 18(b) above or (ii) an
irrevocable stand-by Letter of Credit (“Letter of Credit”) issued by a bank
reasonably acceptable to Seller with an expiration date of no later than five (5) years
from its issuance (or one (1) year from its issuance, provided that
replacement one (1) year letters of credit are issued to Seller thirty
(30) days prior to the expiration of the then existing letter of credit) in the
face amount of $1,000,000.00 to secure Purchaser’s obligations


 


23





















 


under Paragraphs 18a.
and 18b.  The Letter of Credit shall be
substantially in the form as shown on Exhibit S attached hereto (as
modified to reflect reasonable bank requirements) and will allow Seller to draw
on the Letter of Credit (subject to refund of any amounts to Purchaser
following a draw under the Letter of Credit that exceed Seller Indemnified
Parties actual damages under Sections 18(a) and 18(b))by presentation of:


 


(i)            a sight draft in the face amount of the Letter of Credit,
and


 


(ii)           a statement executed by Seller or any
Seller Indemnified Party stating that “COMSTOCK BELLEMEADE L.C. (“Comstock”) or
its successors and assigns have (a) breached the provisions of either
Paragraph 18a. or Paragraph 18b. of that certain Agreement of Sale dated August 28,
2005, as amended between BELLEMEADE
FARMS INVESTORS, LLC, a Delaware limited liability company, FF BELLEMEADE
FARMS, LLC, a Delaware limited liability company and FF INVESTORS W-I LLC, a
Delaware limited liability company as
Seller and COMSTOCK BELLEMEADE L.C. as Purchaser relating to the Property
commonly known as Bellemeade Farms Apartments, Leesburg, Virginia and Comstock
has failed to cure said breach within five (5) days of written notice
given to Comstock in the manner described in Paragraph 22 of said Agreement of
Sale or (b) failed to deliver an acceptable replacement Letter of Credit
to the undersigned by thirty (30) days prior to the expiration date of this
Letter of Credit.


 


Following the Closing, Purchaser may from time to time
deliver a written request (the “Substitution Request”) to Seller asking that
any Guaranty then held by Seller be replaced by a Letter of Credit
substantially in the Form of Exhibit S (the “Substitution


 


24





















 


Letter of Credit”) or that any Letter of Credit then
held by Seller be replaced by an executed Guaranty in the form of Exhibit T-1
(the “Substitution Guaranty”).  The
Substitution Request shall be accompanied by either the Substitution Guaranty
or the Substitution Letter of Credit. 
Provided that if at the time Seller received the Substitution Request
and the required Substitution Guaranty or Substitution Letter of Credit, (i) Purchaser
has not breached any of the Purchaser’s obligations or liabilities under
Paragraph 18a. or 18b. and (ii) there is not then any pending claims
against any Indemnified Party covered by the indemnification given under
Paragraph 18a., Seller shall honor said Substitution Request and return the
Letter of Credit or Guaranty then in Seller’s possession.  It is expressly acknowledged and agreed that
the return of any Letter of Credit by Seller shall be good and sufficient
consideration for the execution and deliver of any Substitution Guaranty or
Substitution Letter of Credit.


 


19.           SELLER’S
REPRESENTATIONS, WARRANTIES AND COVENANTS


 


a.             Any reference herein to Seller’s knowledge or to the
best of Seller’s knowledge shall only mean such knowledge or notice that has
actually been received by Gino Barra or James Flanagan not having made and with
no duty to make a diligent inquiry and any representation or warranty of the
Seller is based upon those matters of which Gino Barra or James Flanagan has
actual knowledge as opposed to constructive or imputed knowledge.  Any knowledge or notice given, had or received
by any of Seller’s agents, servants or employees shall not be construed or
imputed to Seller or the individual partners or the general partner of Seller.


 


25





















 


b.             Subject to the limitations set forth in subparagraph a
above, Seller hereby makes the following representations, warranties and
covenants, all of which are made to the best of Seller’s knowledge:


 


i.              Seller has not received written
notice from any governmental authority that the present use and occupancy of
the Property do not conform with applicable building and zoning laws.


 


ii.             Except as may be set forth on the
tax bills and the Title Commitment, there are presently no pending, and Seller
has received no written notice of, special assessments of any nature with
respect to the Property or any part thereof, nor has Seller received any
written notice of any special assessments being contemplated.


 


iii.            The Rent Roll attached hereto as Exhibit O
is true and accurate and contains information regarding the security deposits
held in connection with each lease and a delinquency report for the Leases and
will be updated and certified as of the Closing Date.


 


iv.            Seller has not received written
notice of any pending litigation affecting the Property, except as may be set
forth on Exhibit P attached hereto.


 


v.             The existing casualty insurance for
the Property is for full replacement value.


 


vi.            This Agreement has been duly
authorized and executed on behalf of Seller and constitutes a valid and binding
agreement, enforceable against


 


26





















 


Seller in accordance with its
terms.  The performance by Seller of its
obligations hereunder does not and will not violate any law; and neither this
Agreement nor the performance by Seller of its obligations hereunder violates
any agreement or contract to which Seller is bound or a party.  Seller has obtained (or will obtain prior to
Closing) all consents, releases and permissions and given all required
notifications, related to the transactions herein contemplated.


 


vii.           Seller does not have any employees on
site at the Property.


 


viii.          The Financial Statements delivered to
Purchaser by Seller are copies of the Financial Statements which Seller or its
affiliate relies upon for the purposes of reporting to its investors and filing
Federal income tax statements and Seller has no reason to believe that they are
incorrect.


 


ix.            The Property is connected with and
has water, sewage disposal, telephone, gas and electrical services.


 


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


 


xi.            None of the Property is subject to
any option to purchase or right of first refusal, recorded or unrecorded.


 


27





















 


xii.           Seller has not received any written notice
from any governmental authority of any pending or threatened condemnation
proceeding affecting the Property or any part thereof.


 


xiii.          Seller is the sole owner of the
Property.


 


xiv.          Other then the occupancy by the Seller
and the tenants shown on the Rent Roll (as adjusted over time), occupancy by
any party with a right of entry or possession under the Service Contracts and
any party given any rights to use or occupy the Property under any of the
Permitted Exceptions, all of the Property is vacant and free of any written
leases, tenancies, licenses or other rights of present or future occupancy for
any portion of the Property.


 


xv.           Seller has not received any written
notices of any default by Seller with respect to the Leases which has not been
cured.


 


c.             Seller hereby covenants that from August 12, 2005
(except as provided in sub-paragraph iv. below) and up to including the
Closing:


 


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


 


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


 


28





















 


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


 


iv.            After August 31, 2005 and until
the Closing Date, Seller will not enter into any new Lease or extend any
existing Lease for a term in excess of six (6) months except for the
Leases shown on Exhibit Z.


 


v.             Seller shall, at Purchaser’s sole
cost and expense, reasonably cooperate with Purchaser in the termination of any
Service Contracts by Purchaser following the Closing Date.


 


d.             Purchaser’s right to make a claim against Seller for a
breach of an indemnity (except for Seller’s indemnity for a brokerage
commission), representation, warranty or covenant under this Agreement or the
Exhibits attached hereto (“Claim”) shall expire two hundred seventy (270) days
after the Closing and delivery of the Deed (“Survival Date”).  As to any Claim, Purchaser must: (i) notify
Seller of the existence of the Claim in question, which notification (“Claim
Notice”) shall contain a reasonable description of the nature of the Claim or
the facts, circumstances, conditions or events then known to Purchaser which
give rise to the claim in question; and (ii) institute legal proceedings
in a court of competent jurisdiction within sixty (60) days after the Survival
Date (“Judicial Proceedings Date”).  Any
Claim for which a Claim Notice is not delivered by Purchaser to Seller on or
prior to the Survival Date or for which legal proceedings are not instituted on
or prior to the Judicial Proceedings Date, then such Claim shall be deemed to
have been waived by Purchaser and rendered null and void and of no further
force or effect.  Seller’s total
liability in the aggregate for all Claims shall


 


29





















 


not exceed Two Hundred
Fifty Thousand and No/100 ($250,000.00) Dollars.  Seller shall not be liable for any Claim(s)
which in the aggregate do(es) not exceed Twenty Five Thousand ($25,000.00)
Dollars.


 


20.           COMPLIANCE
WITH OFAC.


 


a.             To the best knowledge of Purchaser, without any duty to
make diligent inquiry, Purchaser is in compliance with all laws, statutes, rules and
regulations or any federal, state or local governmental authority in the United
States of America applicable to Purchaser and all beneficial owners of
Purchaser, including, without limitation, the requirements of Executive Order No. 133224,
66 Fed Reg. 49079 (September 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 rules, regulations, legislation, or orders are collectively called the “Orders”).  Purchaser agrees to make its policies,
procedures and practices regarding compliance with the Orders available to
Seller for its review and inspection during normal business hours and upon
reasonable prior notice.


 


b.             Neither Purchaser nor any beneficial owner of Purchaser:


 


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


 


30





















 


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


 


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


 


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


 


If Purchaser obtains knowledge
that Purchaser or any beneficial owner in Purchaser has become listed on the
Lists or has been indicted, arraigned, or custodially detained on charges
involving money laundering or predicate crimes to money laundering, Purchaser
shall immediately notify Seller.


 


21.           CONDITIONS
PRECEDENT TO CLOSING.


 


a.             In addition to any conditions provided in other
provisions of this Agreement, Purchaser’s obligation to purchase the Property
is and shall be conditioned on the following:


 


i.              That at no time prior to the
Closing shall any of the following have been done by or against or with respect
to Seller: (i) the commencement of a case under Title 11 of the U.S. Code,
as now constituted or hereafter amended, or under any other applicable federal
or state bankruptcy law or other similar law; (ii)


 


31





















 


the appointment of a trustee
or receiver of any property interest; or (iii) an assignment for the
benefit of creditors.


 


ii.             On the Closing Date, there shall
not be any uncured Unpermitted Exception or any violation of law, ordinance,
order or requirement relating to the Property which is imposed in writing and
delivered to Seller by any governmental authority relating to the Property,
which is not remedied by Seller.


 


iii.            If the transaction contemplated
hereby shall require authorization or approval of any governmental agency
having jurisdiction, all such authorizations and approvals shall have been
obtained and shall be in full force and effect on and as of the Closing
Date.  If such authorizations and
approvals shall not have been obtained on or prior to the last day for Closing
hereinabove provided, the Closing Date may be deferred, at the election of
either party, for an additional period of time, not to exceed 30 days, as shall
be necessary to obtain any authorizations or approvals not then obtained.


 


iv.            Seller shall deliver to Purchaser on
the Closing Date an executed Certification as to Representations, Warranties,
Covenants and Conditions in the form of Exhibit U attached hereof.


 


v.             All services required to be
performed by Phoenix Renovation Corp. (“Phoenix”) under that certain Multi-Unit
Repipe Contract (“Contract”) dated February 2, 2005 shall have been
completed by the Closing Date and all amounts due Phoenix under the Contract
shall have been paid for by Seller.


 


32





















 


b.             If
there is a failure of a condition precedent, Purchaser can either (i) waive
such failure and close this transaction, or (ii) notify Seller within two (2) business
days after Purchaser is aware of such failure that Purchaser has elected to
terminate this Agreement and obtain a return of the Earnest Money.  In event of termination, except as may be
specifically set forth elsewhere in this Agreement, neither party shall have
any further liability hereunder.


 


c.             If
Purchaser elects not to close
because of an alleged failure of a condition precedent, then Purchaser shall
first deliver to Seller a written statement setting forth in detail such
failure.


 


22.           ENVIRONMENTAL
AND PROPERTY CONDITION REPORTS. 
Seller has delivered to Purchaser at Purchaser’s request the following
environmental and property condition reports (“Reports”) of the Property:


 


a.             Property Condition Report dated August 14, 2003
prepared by Pan Western Corporation;


 


b.             Structural Review dated August 20, 2003 prepared by
R. D. Boyens Engineering;


 


c.             Phase I Environmental Site Assessment dated October 13,
2003 prepared by ATC Associates, Inc.;


 


d.             National Account Termite report dated September 18,
2003 prepared by Terminix International Company L.P.;


 


e.             Asbestos Management Plan V2.1 dated October 8, 2003
prepared by ATC Associates Inc.


 


33





















 


f.              Survey for Visible AMG and Remediation Recommendations,
Bellemeade Farms, Building 7, Apartment 714 dated November 29, 2004
prepared by Searchlight Safety LLC.


 


g.             Mold Incident Report dated March 17, 2004 for 775
Gateway Drive, Apt. 101.


 


Seller
makes no representation or warranty that the Reports are accurate or
complete.  Purchaser hereby releases
Seller from any liability whatsoever with respect to the Reports, including,
without limitation, the matters set forth in the Reports or the accuracy and/or
completeness of the Reports.


 


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


 


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


 


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


 


34





















 


	
  TO SELLER:

  	
   

  	
  Fairfield Residential LLC

  
	
   

  	
   

  	
  5510 Morehouse Drive

  
	
   

  	
   

  	
  Suite 200

  
	
   

  	
   

  	
  San Diego, California 92121

  
	
   

  	
   

  	
  Attn: Gino A. Barra

  
	
   

  	
   

  	
  858/457-2123

  
	
   

  	
   

  	
  858/457-3982 (FAX)

  
	
   

  	
   

  	
  E-mail:
  gbarra@ffres.com

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Robbins, Salomon & Patt, Ltd.

  
	
   

  	
   

  	
  25 East Washington Street

  
	
   

  	
   

  	
  Suite 1000

  
	
   

  	
   

  	
  Chicago, Illinois 60602

  
	
   

  	
   

  	
  Attn: John T. Duax

  
	
   

  	
   

  	
  312/782-9000

  
	
   

  	
   

  	
  312/782-6690 (FAX)

  
	
   

  	
   

  	
  E-mail: jduax@rsplaw.com

  
	
   

  	
   

  	
   

  
	
  TO PURCHASER:

  	
   

  	
  Comstock Bellemeade, L.C.

  
	
   

  	
   

  	
  11465 Sunset Hills Road, 5th Floor

  
	
   

  	
   

  	
  Reston, Virginia 20190

  
	
   

  	
   

  	
  Attn: Christopher Clemente

  
	
   

  	
   

  	
  703/883-1700 ext. 215

  
	
   

  	
   

  	
  703/760-1520 (FAX)

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Comstock Bellemeade, L.C.

  
	
   

  	
   

  	
  11465 Sunset Hills Road, 5th Floor

  
	
   

  	
   

  	
  Reston, Virginia 20190

  
	
   

  	
   

  	
  Attn: Jubal Thompson

  
	
   

  	
   

  	
  703/883-1700 ext. 135

  
	
   

  	
   

  	
  703/760-1520 (FAX)

  



 


subject to the right of either party to designate a
different address for itself by notice similarly given.  Any notice or demand so given shall be deemed
to be delivered or made on the next business day if sent by overnight courier,
or on the same day if sent by facsimile (with facsimile confirmation sheet)
before the close of business, or the next day if sent by facsimile after the
close of business, or on the 4th business day after the same is deposited in
the United States Mail as registered or certified matter, addressed as above 


 


35





















 


provided, with postage thereon fully prepaid.  Any such notice, demand or document not
given, delivered or made by registered or certified mail or by overnight
courier or by facsimile as aforesaid shall be deemed to be given, delivered or
made upon receipt of the same by the party to whom the same is to be given,
delivered or made.  Copies of all notices
shall be served upon the Escrow Agent.


 


26.           EXECUTION
OF AGREEMENT AND ESCROW AGREEMENT. 
The parties hereto will each execute three (3) copies of this
Agreement and the Escrow Agreement and forward them to the Escrow Agent.  Purchaser’s three (3) executed copies of
this Agreement and the Escrow Agreements will be accompanied by the Earnest
Money.  Seller’s three (3) executed
copies of this Agreement and the Escrow Agreements will be accompanied with a
direction to deliver a fully executed copy of this Agreement to the Purchaser
and to the Seller, each accompanied by an Escrow Agreement executed by the
Seller, the Purchaser and the Escrow Agent.


 


27.           GOVERNING
LAW.  The provisions of this
Agreement shall be governed by the laws of the state in which the Property is
located without regard to principles of conflicts of laws.


 


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


 


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


 


36





















 


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


 


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


 


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


 


33.           NO
WAIVER.  No waiver by a party of any
breach of this Agreement or of any warranty or representation hereunder by the
other party shall be deemed to be a waiver of any other breach by such other party
(whether preceding or succeeding and whether or not of the same or similar
nature), and no acceptance of payment or performance by a party after any
breach by the other party shall be deemed to be a waiver of any breach of this
Agreement or of any representation or warranty hereunder by such other party,
whether or not the first party knows of such breach at the time it accepts such


 


37





















 


payment or
performance.  No failure or delay by a
party to exercise any right it may have by reason of the default of the other
party shall operate as a waiver of default or modification of this Agreement or
shall prevent the exercise of any right by the first party while the other
party continues to be so in default.


 


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


 


35.           TAX
DEFERRED EXCHANGE.  Purchaser and
Seller may use this Property in connection with a 1031 or 1033 tax deferred
exchange.  The parties agree to cooperate
with each other and will execute such documents as may reasonably be required
by each other in order to effectuate such tax deferred exchange, provided that
neither Purchaser nor Seller will assume any liability or cost in connection
with the tax deferred exchange and provided that the Closing will not be
delayed.  Either party’s inability to
obtain any benefits for a tax deferred exchange under Section 1031 or 1033
of I.R.C. will not relieve such party of any of its obligations under this
Agreement.


 


36.           CONFIDENTIALITY.  Purchaser and Seller each hereby agree to
keep the terms and conditions of this Agreement and any information obtained
with reference to the Property, including but not limited to the Reports,
confidential, provided that the parties may reveal such information regarding
the terms and provisions of this Agreement as may be necessary in their reasonable
discretion to comply with the provisions of this Agreement or in the ordinary
course of business.


 


38





















 


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


 


38.           MISCELLANEOUS
PROVISIONS.


 


a.             This Agreement shall not be construed more strictly
against any party merely by virtue of the fact that the same has been prepared
by such party or its counsel, it being recognized that each party hereto has
contributed substantially and materially to the preparation of this Agreement,
and that each party hereto acknowledges and waives any claim contesting the
existence and the adequacy of the consideration given by the other parties
hereto in entering into this Agreement.


 


b.             Except as to those obligations which specifically
survive the Closing, all of Seller’s other obligations hereunder shall merge
with the Deed.


 


c.             In the event of a dispute, the parties hereto waive a
trial by jury.


 


39.           RIGHT
TO CONTINUE TO MARKET.  Intentionally
Deleted.


 


40.           THIRD
PARTY BENEFICIARY.  It is expressly
agreed and it is the intention of Purchaser and Seller that no party acquiring
the Property from Purchaser following the conversion of the Property into a
condominium form of ownership, cooperative housing corporation, community
apartment property or stock corporation, including but not limited to any unit
owner or owners or any condominium association or association, their agents,
employees and successors and assigns shall be considered to be


 


39





















 


a third party
beneficiary to any and all of the obligations and/or liabilities of Purchaser
or Seller under this Agreement.


 


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


 


	
  Executed by Purchaser on

  	
  PURCHASER:

  
	
  September 28, 2005.

  	
   

  
	
   

  	
  COMSTOCK BELLEMEADE, L.C.

  
	
   

  	
  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comstock Homebuilding Companies, Inc.,

  
	
   

  	
   

  	
  its manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
   

  	
   

  	
  Christopher Clemente

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Witness:

  	
  /s/ Bruce Labovitz

  	
   

  
	
   

  	
  Name:

  	
  Bruce Labovitz

  	
   

  
							



 


40





















 


	
  Executed by Seller on

  	
  SELLER:

  
	
  September 28, 2005.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FF BELLEMEADE FARMS, LLC, a

  
	
   

  	
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  FF PROPERTIES, INC., a Delaware

  
	
   

  	
   

  	
  Corporation, its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gino Barra

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Gino Barra

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FF INVESTORS W-I LLC, a Delaware limited

  
	
   

  	
  Liability company, on behalf of the Archstone

  
	
   

  	
  Mid-Atlantic Portfolio Series

  
	
   

  	
   

  
	
   

  	
  By:

  	
  FF PROPERTIES, INC., a Delaware corporation,

  
	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gino Barra

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Gino Barra

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
								



 


41





















 


	
   

  	
  BELLEMEADE FARMS INVESTORS, LLC, a

  
	
   

  	
  Delaware limited liability company,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stuart Isen

  	
   

  
	
   

  	
   

  	
  Title: Authorized Representative

  



 


42





















 


Ideal Realty Group (“Broker”) executes this Agreement in
its capacity as a real estate broker and acknowledges that the fee or
commission (“Fee”) due to it as a result of the transaction described in this
Agreement is the amount as set forth in the agreement between Broker and
Seller.  Broker also acknowledges that
payment of the aforesaid Fee is conditioned upon the Closing and the receipt of
the Purchase Price by the Seller.  Broker
agrees to deliver a receipt to the Seller at the Closing for the Fee and a
release stating that no other fees or commissions are due to Broker from Seller
or Purchaser.


 


	
   

  	
  IDEAL REALTY GROUP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Allen Manesh

  	
   

  
	
   

  	
  Title:

  	
  President

  



 


43





















 


EXHIBITS


 


	
  A

  	
  -

  	
  Legal

  
	
  B

  	
  -

  	
  Personal Property

  
	
  C

  	
  -

  	
  Escrow Agreement

  
	
  D

  	
  -

  	
  Intentionally Deleted

  
	
  E

  	
  -

  	
  Pro-forma Title Policy

  
	
  F

  	
  -

  	
  Deed

  
	
  G

  	
  -

  	
  Bill of Sale

  
	
  H

  	
  -

  	
  Assignment and Assumption of Service Contracts

  
	
  I

  	
  -

  	
  Assignment and Assumption of Leases and
  Security Deposits

  
	
  J

  	
  -

  	
  Notice to Tenants

  
	
  K

  	
  -

  	
  Non-Foreign Affidavit

  
	
  L

  	
  -

  	
  Assignment of Intangible Property

  
	
  M

  	
  -

  	
  Intentionally
  Deleted

  
	
  M-1

  	
  -

  	
  Assignment of Guaranties, Warranties, Permits,
  Licenses and Approvals

  
	
  N

  	
  -

  	
  Intentionally Deleted

  
	
  O

  	
  -

  	
  Rent Roll

  
	
  P

  	
  -

  	
  Litigation

  
	
  Q

  	
  -

  	
  Service Contracts

  
	
  R

  	
  -

  	
  Intentionally
  Deleted

  
	
  S

  	
  -

  	
  Letter of Credit

  
	
  T-1

  	
  -

  	
  Guaranty

  
	
  U

  	
  -

  	
  Intentionally Deleted

  
	
  V

  	
  -

  	
  Certifications as to Representations,
  Warranties, Covenants and Conditions

  
	
  X

  	
  -

  	
  Certificate of Insurance

  
	
  Z

  	
  -

  	
  Extended Leases

  



 





















 


TABLE
OF CONTENTS


 


 


	
  1.

  	
  PURCHASE AND SALE

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  PURCHASE PRICE

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  TITLE COMMITMENT
  AND SURVEY

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  CONDITION
  OF TITLE/CONVEYANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  PAYMENT OF
  CLOSING COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  DAMAGE,
  CASUALTY AND CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  AS-IS CONDITION

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  CLOSING DOCUMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  SELLER’S
  RIGHT TO CURE

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  DEFAULT BY PURCHASER

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  SELLER’S DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  PRORATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  DELINQUENT RENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  RECORDING

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  ASSIGNMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  BROKER.

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  DOCUMENTS,
  INSPECTION OF PROPERTY AND APPROVAL PERIOD.

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  INDEMNIFICATION AND INSURANCE
  REQUIREMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  SELLER’S REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  COMPLIANCE WITH OFAC

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  CONDITIONS PRECEDENT TO
  CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  ENVIRONMENTAL AND PROPERTY
  CONDITION REPORTS

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  ORGANIZATIONAL DOCUMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  TIME OF ESSENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  EXECUTION OF AGREEMENT AND
  ESCROW AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  GOVERNING LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  ENTIRE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  COUNTERPARTS

  	
   

  



 


i





















 


	
  31.

  	
  CAPTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  NON-BUSINESS DAYS

  	
   

  
	
   

  	
   

  	
   

  
	
  33.

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  34.

  	
  NO WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  35.

  	
  ATTORNEYS’ FEES

  	
   

  
	
   

  	
   

  	
   

  
	
  36.

  	
  TAX DEFERRED EXCHANGE

  	
   

  
	
   

  	
   

  	
   

  
	
  37.

  	
  CONFIDENTIALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  38.

  	
  SURVIVAL OF INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  39.

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  40.

  	
  RIGHT TO CONTINUE TO MARKET

  	
   

  
	
   

  	
   

  	
   

  
	
  41.

  	
  THIRD PARTY BENEFICIARY

  	
   

  



 


ii