Document:

exv10w2

Exhibit 10.2

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

by and between

PARK PLACE CONDO, LLC,

an Iowa limited liability company,

(“Seller”)

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

(“Buyer”)

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page No.	 
	1. PURCHASE AND SALE
	 	 	1	 
	1.1 Property
	 	 	1	 
	1.2 No Warranty
	 	 	2	 
	 
	 	 	 	 
	2. PURCHASE PRICE
	 	 	2	 
	 
	 	 	 	 
	3. PAYMENT OF PURCHASE PRICE
	 	 	2	 
	3.1 Deposit
	 	 	2	 
	3.2 Remainder of Purchase Price
	 	 	3	 
	3.3 Liquidated Damages
	 	 	3	 
	 
	 	 	 	 
	4. ESCROW INSTRUCTIONS
	 	 	3	 
	4.1 Opening of Escrow
	 	 	3	 
	4.2 Conditions to Close
	 	 	3	 
	4.3 Recordation and Transfer
	 	 	4	 
	 
	 	 	 	 
	5. CLOSING
	 	 	4	 
	5.1 Generally
	 	 	4	 
	5.2 Extension Option
	 	 	4	 
	 
	 	 	 	 
	6. BUYER’S REVIEW
	 	 	5	 
	6.1 Delivery of Documents
	 	 	5	 
	6.2 Access
	 	 	5	 
	6.3 Title and Survey
	 	 	6	 
	6.4 Buyer’s Due Diligence
	 	 	6	 
	6.5 Buyer’s Termination Right
	 	 	7	 
	6.6 Contracts
	 	 	7	 
	 
	 	 	 	 
	7. REPRESENTATIONS AND WARRANTIES
	 	 	7	 
	7.1 Seller’s Representations and Warranties
	 	 	7	 
	7.2 Buyer’s Representations and Warranties
	 	 	10	 
	 
	 	 	 	 
	8. COVENANTS
	 	 	11	 
	8.1 Seller
	 	 	11	 
	8.2 Buyer
	 	 	13	 
	 
	 	 	 	 
	9. ADJUSTMENTS AND PRORATIONS
	 	 	14	 
	9.1 Generally
	 	 	14	 
	9.2 Rental Income
	 	 	14	 
	9.3 Proration Period
	 	 	15	 
	 
	 	 	 	 
	10. CLOSING DOCUMENTS
	 	 	15	 
	10.1 Seller’s Deliveries
	 	 	15	 
	10.2 Buyer’s Deliveries
	 	 	15	 
	10.3 Other Closing Documents
	 	 	16	 
	10.4 Closing Documents
	 	 	16	 

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	 	 	Page No.	 

	11. COSTS
	 	 	16	    
	 
	 	 	 	 
	12. CASUALTY OR CONDEMNATION
	 	 	16	 
	 
	 	 	 	 
	13. ATTORNEYS’ FEES
	 	 	16	 
	 
	 	 	 	 
	14. ASSIGNMENT
	 	 	17	 
	 
	 	 	 	 
	15. WAIVER
	 	 	17	 
	 
	 	 	 	 
	16. GOVERNING LAW
	 	 	17	 
	 
	 	 	 	 
	17. NOTICES
	 	 	17	 
	 
	 	 	 	 
	18. ENTIRE AGREEMENT
	 	 	18	 
	 
	 	 	 	 
	19. COUNTERPARTS; COPIES
	 	 	18	 
	 
	 	 	 	 
	20. AUTHORITY
	 	 	18	 
	 
	 	 	 	 
	21. RECORD ACCESS AND RETENTION
	 	 	18	 
	 
	 	 	 	 
	22. CONTRACT CONSIDERATION
	 	 	19	 

EXHIBITS

	 

	Exhibit “A”     Real Property Description

	 

	Exhibit “B”     Personal Property Description

	 

	Exhibit “C”     Due Diligence Documents

	 

	Exhibit “D”     Form of Warranty Deed

	 

	Exhibit “E”     Form of General Assignment

	 

	Exhibit “F”     Form of Bill of Sale

	 

	Exhibit “G”     Form of Non-Foreign Certificate

	 

	Exhibit “H”     Form of Tenant Notice

	 

	Exhibit “I”      Form of Assignment of Developer’s Rights

	 

	Exhibit “J”      Form of Confidentiality Agreement

	 

	SCHEDULES

	 

	Schedule 1      Leases

	 

	Schedule 2     Contracts

	 

	Schedule 3     Approvals

	 

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PURCHASE AND SALE AGREEMENT 

AND JOINT ESCROW INSTRUCTIONS

     This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Agreement”) is made and
entered into as of the 7th day of September, 2010, by and between PARK PLACE CONDO,
LLC, an Iowa limited liability company (“Seller”), and STEADFAST ASSET HOLDINGS, INC., a
California corporation (“Buyer”), with reference to the following facts:

RECITALS:

     A. Seller is the fee owner of one hundred forty-seven (147) condominium units, together with
a percentage interest in common elements related thereto, which condominiums and common elements
are located at 615 Park Street, Des Moines, Iowa and are more particularly described in
Exhibit “A-1” attached hereto (“Condo Property”). Seller is also the fee owner of that
certain land with a parking lot situated thereon, with forty (40) of the parking spaces within
such parking lot being owned by Seller (which spaces are depicted on Exhibit “A-2”
attached hereto), commonly known as 841 6th Avenue, Des Moines, Iowa, which serves the Condo
Property and is more particularly described in Exhibit “A-2” (“Parking Lot Property”).
The Condo Property and the Parking Lot Property, together with all structures, improvements,
machinery, fixtures and equipment affixed or attached to the land, shall be collectively referred
to herein as the “Real Property”.

     B. Seller desires to sell the Real Property, along with certain related personal and
intangible property, to Buyer, and Buyer desires to purchase such real, personal, and intangible
property from Seller in accordance with the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
hereto mutually agree as follows:

     1. PURCHASE AND SALE.

          1.1 Property.  Subject to the terms and conditions of this Agreement, and for
the consideration herein set forth, Seller agrees to sell and transfer, and Buyer agrees to
purchase and acquire, all of Seller’s right, title, and interest in and to the following
(collectively, the “Property”):

               1.1.1 The Real Property;

               1.1.2 All easements, licenses, interests, rights, and privileges appurtenant to
the Real Property;

               1.1.3 All equipment, tools, machinery, materials, supplies and other tangible personal
property owned by Seller and located on or used in connection with or arising out of the
ownership of the Real Property as of the date hereof, as more particularly described in
Exhibit “B” attached hereto (collectively, “Personal Property”);

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               1.1.4 All leases and occupancy agreements relating to the Property in effect on the Date of
Closing (as hereinafter defined), including all amendments thereto (collectively, “Leases”) (the
Leases in effect on the date of this Agreement are identified on Schedule 1 attached
hereto);

               1.1.5 Subject to Section 6.6 below, all maintenance, supply or other contracts relating to the
operation of the Property in effect as of the date hereof, which are identified on Schedule 2
attached hereto (collectively, “Contracts”);

               1.1.6 All approvals, plans, studies and surveys relating to the Property, which are identified
on Schedule 3 attached hereto (collectively, “Approvals”); and

               1.1.7 All entitlements and intangible personal property in connection with or arising out of
the ownership of the Real Property, including, without limitation, all licenses, permits and
certificates of occupancy for the Real Property and trade names and logos.

          1.2 No Warranty.  Subject to the representations, warranties and covenants of
Seller set forth in this Agreement, Seller is selling and Buyer is purchasing the Property “AS IS
WHERE IS” with all faults.

     2. PURCHASE PRICE.  The total purchase price (“Purchase Price”) to be paid by Buyer to
Seller for the Property shall be EIGHT MILLION NINE HUNDRED THOUSAND AND 00/100 DOLLARS
($8,900,000.00), payable all in cash.

     3. PAYMENT OF PURCHASE PRICE.

          The Purchase Price shall be paid as follows:

          3.1 Deposit.  As part of the Opening of Escrow (as defined below), Buyer shall
deliver to First American Title Insurance Company (“Escrow Holder”), which has an address of First
American Title Insurance Company, 5 First American Way, Santa Ana, California 92707, Attn: Ryan
Hahn, the sum of ONE HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($150,000.00) (“Initial Deposit”) in
immediately available funds as a good faith deposit. In addition, if the Agreement has not been
terminated pursuant to Sections 6.2, 6.4 or 12 below, Buyer shall deposit with Escrow Holder an
additional sum of ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($100,000.00) (“Additional Deposit”) in
immediately available funds within five (5) business days after the expiration of the Due Diligence
Period (as hereinafter defined). The Initial Deposit, the Additional Deposit and the Extension
Deposit (as hereinafter defined), and all interest earned thereon, shall be collectively referred
to in this Agreement as the “Deposit”. The Deposit shall be in the form of wire transfer, cash or
certified or bank cashier’s check. Escrow Holder shall place the Deposit in an interest-bearing
account. All interest earned on the Deposit shall be included within the meaning of the term
“Deposit” in this Agreement. If Closing occurs in accordance with this Agreement, the Deposit shall
be applied against the Purchase Price. The Deposit shall be returned to Buyer if Escrow fails to
close due to (i) Seller’s breach of this Agreement, (ii) the failure of a Buyer condition to close,
or (iii) a casualty or condemnation event as described in Section 12 below.

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          3.2 Remainder of Purchase Price.  Before Close of Escrow, Buyer shall
deposit into Escrow immediately available funds in an amount which, when added to the
Deposit, will equal the Purchase Price plus any additional amounts necessary to cover costs
and/or prorations under this Agreement.

          3.3
Liquidated Damages.  SELLER AND BUYER AGREE THAT, IF THE PURCHASE AND SALE OF
THE PROPERTY IS NOT COMPLETED AND THIS AGREEMENT TERMINATES BECAUSE BUYER MATERIALLY DEFAULTS UNDER
OR MATERIALLY BREACHES THIS AGREEMENT, THE PORTION OF THE DEPOSIT THEN DEPOSITED WITH ESCROW HOLDER
PURSUANT TO THIS AGREEMENT AND ALL INTEREST THEREON SHALL BE PAID TO SELLER UPON TERMINATION OF
THIS AGREEMENT AND RETAINED BY SELLER AS LIQUIDATED DAMAGES AND AS SELLER’S SOLE REMEDY AT LAW OR
IN EQUITY. SELLER AND BUYER AGREE THAT, UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS
AGREEMENT, ACTUAL DAMAGES MAY BE DIFFICULT TO ASCERTAIN AND THE PORTION OF THE DEPOSIT THEN
DEPOSITED WITH ESCROW HOLDER PURSUANT TO THIS AGREEMENT AND ALL INTEREST THEREON IS A REASONABLE
ESTIMATE OF THE DAMAGES THAT WILL BE INCURRED BY SELLER IF BUYER MATERIALLY DEFAULTS UNDER OR
MATERIALLY BREACHES THIS AGREEMENT AND FAILS TO PURCHASE THE PROPERTY.

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

     4. ESCROW INSTRUCTIONS.

          4.1 Opening of Escrow.  Within five (5) business days after the mutual execution
of this Agreement, the parties shall open an escrow (“Escrow”) with Escrow Holder in order to
consummate the purchase and sale in accordance with the terms and provisions hereof. This Agreement
shall be deposited in the Escrow and the provisions hereof shall constitute joint primary escrow
instructions to Escrow Holder; provided, however, that the parties shall execute such additional
instructions as requested by Escrow Holder not inconsistent with the provisions hereof. The date as
of which Escrow Holder shall have received (i) the Initial Deposit and
(ii) executed counterparts of this Agreement from both Seller and Buyer shall constitute the
“Opening of Escrow.” Escrow Holder shall deliver written confirmation of the date of the
Opening of Escrow to the parties in the manner set forth in
Section 17 of this Agreement.

          4.2 Conditions to Close.  Escrow shall not close unless and until the following
conditions precedent and contingencies have been satisfied or waived in writing by the party for
whose benefit the conditions have been included:

               4.2.1 All contingencies described in Section 6 below have either been satisfied or waived in
writing by Buyer.

               4.2.2 All funds and instruments described in Sections 3 and 10 have been delivered to
Escrow Holder.

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               4.2.3 The title department of Escrow Holder, which has an address of 5 First American
Way, Santa Ana, California 92707, Attn: Kristen A. Heuter, shall have irrevocably committed to
Buyer in writing to issue an ALTA extended owner’s policy of title insurance, in form and content
acceptable to Buyer in its sole and absolute discretion, insuring Buyer’s title to the Real
Property in an amount equal to the Purchase Price.

               4.2.4 Seller and Buyer shall each have materially performed, observed and complied with all
covenants, agreements and conditions required by this Agreement to be performed, observed and/or
complied with by such party prior to, or as of, the Closing.

          Any condition not otherwise satisfied or waived as of the Closing shall be deemed fully
satisfied or waived by the party for whose benefit the condition had been included.

          4.3 Recordation and Transfer.  Upon satisfaction of the conditions set forth in
Section 4.2 above, Escrow Holder shall transfer the Property as follows:

               4.3.1 Cause the Warranty Deed and the Assignment of Developer’s
Rights (as such terms are hereinafter defined) to be recorded with the Recorder’s Office of Polk
County, Iowa;

               4.3.2 Deliver to the parties entitled thereto the other closing documents;

               4.3.3 Disburse all funds deposited with Escrow Holder by Buyer in
payment of the Purchase Price for the Property to Seller pursuant to instructions to be delivered
by Seller to Escrow Holder, less the amount of all items, costs and prorations chargeable to the
account of Seller; and

               4.3.4 Disburse the remaining balance of the funds deposited by Buyer to Buyer upon the Close
of Escrow pursuant to instructions to be delivered by Buyer to Escrow Holder after all costs
payable by Buyer pursuant to Section 11 below have been deducted.

     5. CLOSING.

          5.1 Generally.  Escrow shall close upon the recordation of the Warranty Deed and
the Assignment of Developer’s Rights in accordance with the provisions of this Agreement (“Date of
Closing”, “Closing Date”, “Closing” or “Close of Escrow”). The Close of Escrow shall occur no later
than the date that is forty-five (45) days after the expiration of the Due Diligence Period
(“Initial Scheduled Closing Date”) at the office of Escrow Holder, unless otherwise extended (i) by
operation of Sections 6.2, 12 or 21.2 below, (ii) by Buyer
pursuant to Section 5.2 below, or (iii)
by written agreement between Buyer and Seller.

          5.2 Extension Option.  Notwithstanding Section 5.1 above, Buyer shall have the
option (“Extension Option”) to extend the Initial Scheduled Closing Date for an additional thirty
(30) days (“Rescheduled Closing Date”), in Buyer’s sole and absolute discretion, by providing
written notice to Seller of such election prior to the Initial Scheduled Closing Date. In such
case, Buyer shall deposit with Escrow Holder an additional sum of FIFTY THOUSAND and 00/100 DOLLARS
($50,000.00) (“Extension Deposit”) in immediately available funds.

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     6. BUYER’S REVIEW.

          6.1 Delivery of Documents.  Within three (3) days after the Opening of Escrow,
Seller shall, at the sole expense of Seller, deliver to Buyer all documents pertaining to the
Property that have been prepared by, for or at the request of Seller or are in the possession of or
available to Seller, including, without limitation, (i) the
documents listed on Exhibit “C” attached hereto; (ii) copies of the Leases, Contracts and Approvals; (iii) copies of all
architectural, engineering and other drawings, plans and specifications for the buildings,
structures, improvements, machinery, fixtures and equipment included in the Real Property; (iv)
copies of all reports, studies, investigations, appraisals and other materials concerning the
design, construction, condition or status of the Real Property or any of the buildings, structures,
improvements, machinery, fixtures or equipment included in the Real Property, or any system,
element or component thereof, or any past or present Release (as hereinafter defined) or threatened
Release of any Hazardous Substances (as hereinafter defined) in, on, under or within the Real
Property or any other real property in the vicinity of the Real Property, or the compliance of the
Real Property with Environmental Laws (as hereinafter defined); and (v) copies of all environmental
impact reports, negative declarations, environmental impact certifications, and zoning, land use or
development agreements relating to the Real Property.

     As used in this Agreement, the following definitions shall apply: “Environmental Laws” shall
mean all federal, state and local laws, ordinances, rules and regulations now or hereafter in
force, as amended from time to time, in any way relating to or regulating human health or safety,
or industrial hygiene or environmental conditions, or protection of the environment, or pollution
or contamination of the air, soil, surface water or groundwater, and includes the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., the Clean Water Act, 33 U.S.C. §
1251, et seq., and the Hazardous Substance Account Act. “Hazardous Substances” shall mean any
substance or material that is described as a toxic or hazardous substance waste or material or a
pollutant or contaminant, or words of similar import, in any of the Environmental Laws, and
includes asbestos, petroleum (including crude oil or any fraction thereof, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel, or any mixture thereof),
petroleum products, polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive matter,
medical waste, and chemicals which may cause cancer or reproductive toxicity. “Release” shall mean
any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the environment, including continuing migration, of Hazardous
Substances into or through soil, surface water or groundwater.

          6.2 Access.  Upon the execution of this Agreement, Seller shall allow Buyer or
Buyer’s agents or representatives access to the Property for purposes of any non-intrusive physical
or environmental inspection of the Property and, to the extent copies are not provided to Buyer by
Seller, review and copying of Seller’s books and records relating to the Property and any of the
documents described in Section 6.1 above, and other matters necessary in the discretion of Buyer to
evaluate and analyze the feasibility of the Property for Buyer’s intended use thereof. Buyer shall
not conduct or authorize any physically intrusive testing of, on, or under

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the Property without first obtaining Seller’s consent as to the timing and scope of work to be
performed, which consent shall not be unreasonably withheld, conditioned or delayed.

          6.3 Title and Survey.

               6.3.1 Within three (3) days after the Opening of Escrow, Seller shall have the abstract to the
Real Property updated and delivered to Buyer at Seller’s sole cost and expense (as provided in
Section 11 below). Upon receipt of the updated abstract, Buyer, at its sole cost and expense, shall
obtain a preliminary report of title prepared by the title department of Escrow Holder regarding
the Property (“Title Commitment”). Buyer shall have thirty (30) days following its receipt of the
Title Commitment (“Title Objection Period”) in which to notify Seller in writing of any objections
Buyer has, in Buyer’s sole and absolute discretion, to any matters shown on the Title Commitment
(“Title Objection Notice”). All objections raised by Buyer in the manner herein provided are
hereafter called “Objections.” Seller shall make reasonable efforts to remedy or remove all
Objections (or agree irrevocably in writing to remedy or remove all such Objections at or prior to
Closing) within fifteen (15) days following Seller’s receipt of the Title Objection Notice
(“Seller’s Cure Period”). In the event Seller is unable to remedy or cause the removal of any
Objections (or agrees irrevocably to do so at or prior to Closing) within Seller’s Cure Period,
then Buyer, within ten (10) days after the expiration of Seller’s Cure Period, shall deliver to
Seller written notice electing, in Buyer’s sole and absolute discretion, to either (i) terminate
this Agreement, or (ii) unconditionally waive any such Objections, failing which Buyer shall
conclusively be deemed to have elected (i) above. Any new title or survey information received by
Seller or Buyer after the expiration of the Title Objection Period or Seller’s Cure Period, as
applicable, from a supplemental title report, survey or other source which is not the result of the
acts or omissions of Buyer or its agents, contractors or invitees (each, a “New Title Matter”)
shall be subject to the same procedure provided in this Section 6.3 (and the Date of Closing shall
be extended commensurately if the Closing would have occurred but for those procedures being
implemented for a New Title Matter), except that the Buyer’s Title Objection Period and Seller’s
Cure Period for any New Title Matters shall be five (5) business days each. Close of Escrow shall
be delayed as needed to accommodate such additional time periods.

               6.3.2 Within three (3) days after the Opening of Escrow, Seller shall provide Buyer with a
copy of any existing survey of the Property in Seller’s possession or control. Buyer, at its sole
cost and expense, may elect to obtain a new survey or revise, modify, or re-certify an existing
survey of the Property as necessary in order for the title department of Escrow Holder to delete
the survey exception from title or to otherwise satisfy Buyer’s objectives.

          6.4 Buyer’s Due Diligence.  Subject to Section 21.2 below, Buyer shall have thirty
(30) days from and after Buyer’s receipt of the documents described in Section 6.1 above (“Due
Diligence Period”) to evaluate and analyze the feasibility of the Property for Buyer’s intended use
thereof, including, without limitation, the zoning of the Property, the physical, environmental and
geotechnical condition of the Property and the economic feasibility of owning and operating the
Property. If, during the Due Diligence Period, Buyer determines that the Property is not acceptable
for any reason whatsoever, Buyer shall have the right, by giving

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written notice to Seller on or before the last day of the Due Diligence Period, to
terminate this Agreement.

          6.5 Buyer’s Termination Right.  If Buyer exercises the right to terminate this
Agreement in accordance with Sections 6.3 or 6.4 hereof, this Agreement shall terminate as of the
date the termination notice is given by Buyer. If Buyer does not exercise the right to terminate
this Agreement in accordance with Sections 6.3 or Section 6.4 hereof, Buyer shall deposit with
Escrow Holder the Additional Deposit pursuant to Section 3.1 and this Agreement shall continue in
full force and effect.

          6.6 Contracts.  On or before the expiration of the Due Diligence Period, Buyer shall
notify Seller in writing as to which of the Contracts Buyer elects to assume at Closing, in
Buyer’s sole and absolute discretion. Seller shall notify the vendors under those Contract(s)
which Buyer has not agreed to assume and, provided that Closing occurs hereunder, such Contracts
shall terminate effective as of the Date of Closing.

     7. REPRESENTATIONS AND WARRANTIES.

          7.1 Seller’s Representations and Warranties.  The representations, warranties
and covenants of Seller in this Section 7.1 are a material inducement for Buyer to enter into
this Agreement. Buyer would not purchase the Property from Seller without such representations,
warranties and covenants of Seller. Such representations, warranties and covenants shall survive
the Closing for one (1) year. Seller represents, warrants and covenants to Buyer as of the date
of this Agreement and as of the Closing as follows:

               7.1.1 Seller is a limited liability company duly incorporated and
organized and validly existing and in good standing under the laws of the State of Iowa. Seller
has full power and authority to enter into this Agreement and to perform this Agreement. The
execution, delivery and performance of this Agreement by Seller have been duly and validly
authorized by all necessary action on the part of Seller and all required consents and approvals
have been duly obtained. This Agreement is a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.

               7.1.2 All of the Personal Property is described in Exhibit “B” attached hereto,
which is a materially accurate and materially complete list of all tangible and intangible
personal property owned by Seller relating to the ownership, management, operation, maintenance
or repair of the Real Property. All of the Personal Property is located at the Real Property.
Except for the liens granted to Ames Community Bank, successor by merger to
VisionBank of Iowa, and Michael K. McKernan (collectively, “Lenders”), which Seller shall
cause to be removed from title at or before Closing pursuant to subsection 7.1.14 below,
Seller has good title to the Personal Property, free and clear of all liens, encumbrances,
security interests and adverse claims of any kind or nature whatsoever.

               7.1.3 All of the Leases are described in Schedule 1 attached hereto, and there are
no persons leasing, using or occupying the Real Property or any part thereof except the tenants
under the Leases. All of the Contracts are described in Schedule 2 attached hereto, which
is an accurate and complete list of all presently effective contracts, agreements, warranties

7

 

and guaranties relating to the leasing, advertising, promotion, design, construction,
ownership, management, operation, maintenance or repair of the Real Property. All of the Approvals
are described in Schedule 3 attached hereto, which is an accurate and complete list of all
presently effective building permits, certificates of occupancy, and other certificates, permits,
licenses and approvals relating to the design, construction, ownership, occupancy, use, management,
operation, maintenance or repair of the Real Property. Except for the liens granted to Lenders,
which Seller shall cause to be removed from title at or before Closing pursuant to subsection
7.1.14 below, Seller has good title to the Leases, the Contracts and the Approvals, free and clear
of all liens, encumbrances, security interests and adverse claims of any kind or nature whatsoever.
To Seller’s knowledge, all of the copies of the documents delivered to Buyer pursuant to Section
6.1 hereof are accurate and complete copies of all originals of the documents described in Section
6.1 hereof and fairly and accurately represent the financial, physical and environmental condition
of the Property.

               7.1.4 All information concerning the Leases is accurate and complete. Except as disclosed to
Buyer, to the knowledge of Seller, the Leases are in full force and effect and the full current
rent is accruing thereunder. The Leases have not been amended or modified except as disclosed in
writing to Buyer. No monthly rent has been paid more than one (1) month in advance (except as
otherwise expressly permitted or required pursuant to the terms of the Lease) and no security
deposit or prepaid rent has been paid except as otherwise disclosed in writing to Buyer. No tenant
under the Leases is entitled to interest on any security deposit. The tenants have accepted
possession of their respective premises under the Leases and all improvements and construction
required to be performed by the landlord under the Leases have been completed. Except as disclosed
to Buyer, to the knowledge of Seller, there is no existing breach or default by the landlord or by
any tenant under the Leases and, to Seller’s knowledge, the tenants have no defenses, claims or
demands against the landlord, under the Leases or otherwise, which can be offset against rents or
other charges due or to become due under the Leases. To Seller’s knowledge, no event has occurred
or condition exists which, with or without notice or the passage of time, or both, would constitute
a breach or a default by the landlord or by any tenant under the Leases. To Seller’s knowledge,
Seller has received no notice from any tenant under the Leases claiming any breach or default by
Seller under any of the Leases. To the knowledge of Seller, no money is owed to any tenant for
improvements or otherwise under the Leases and no improvement, moving, relocation or other payment
or credit of any kind is presently owed, or will or could become due and payable, to any tenant
under the Leases. There are no leasing commissions or other commissions, fees or compensation
presently owed or which will become due and payable with respect to any of the Leases or which
could become due and payable in the future upon the exercise of any right or option contained in
any of the Leases. Except for liens granted to Lenders, which Seller shall cause to be removed from
title at or before Closing pursuant to subsection 7.1.14 below, Seller has not assigned,
transferred, pledged or encumbered in any manner any of the Leases or any rents or other amount
payable by any tenant thereunder.

               7.1.5 To Seller’s knowledge, there are no defects or deficiencies in the design, construction,
fabrication, manufacture or installation of the Real Property or any part thereof or any system,
element or component thereof. To Seller’s knowledge, all systems, elements and components of the
Property (including all machinery, fixtures and equipment, the

8

 

roof, foundation and structural elements, and the elevator, mechanical, electrical and life safety
systems) are in good working order and repair and sound operating condition. Seller has received
no notice of any kind from any insurance broker, agent or underwriter that any noninsurable
condition exists in, on or about the Real Property or any part thereof. To Seller’s knowledge, the
Approvals have been duly and validly issued, are in full force and effect, and are all of the
certificates, permits, licenses and approvals that are required by law to own, operate, use and
occupy the Real Property as it is presently owned, operated, used and occupied. Seller has fully
performed, satisfied and discharged all of the obligations, requirements and conditions imposed on
the Real Property by the Approvals.

               7.1.6 Seller has received no notice of any kind from any insurance broker, agent or
underwriter that any noninsurable condition exists in, on or about the Real Property or any part
thereof. Seller has not received any notice that the Real Property is in violation of any
applicable building, earthquake, zoning, land use, environmental, antipollution, health, fire,
safety, access and accommodations for the physically handicapped, subdivision, energy and resource
conservation and similar laws, statutes, rules, regulations and ordinances or any covenants,
conditions and restrictions applicable to the Real Property.

               7.1.7 To Seller’s knowledge, there are no Hazardous Substances present in, on or under the
Real Property or any nearby real property which could migrate to the Real Property, and to Seller’s
knowledge, there is no present Release or threatened Release of any Hazardous Substances in, on or
under the Real Property in violation of applicable laws. Seller has never used the Real Property or
any part thereof, and has never permitted any person to use the Real Property or any part thereof,
for the production, processing, manufacture, generation, treatment, handling, storage or disposal
of Hazardous Substances in violation of applicable laws. To Seller’s knowledge, no underground
storage tanks of any kind are located in the Real Property. To Seller’s knowledge, the Real
Property and every part thereof, and all operations and activities therein and thereon and the use
and occupancy thereof, comply with all applicable Environmental Laws, and neither Seller nor any
person using or occupying the Real Property or any part thereof is violating any Environmental
Laws. To Seller’s knowledge, Seller has all permits, licenses and approvals (which are included in
the Approvals) required by all applicable Environmental Laws for the use and occupancy of, and all
operations and activities in, the Real Property. To Seller’s knowledge, Seller is in full
compliance with all such permits, licenses and approvals, and to Seller’s knowledge, all such
permits, licenses and approvals are in full force and effect. No claim, demand, action or
proceeding of any kind relating to any past or present Release or threatened Release of any
Hazardous Substances in, on or under the Real Property or any past or present violation of any
Environmental Laws at the Real Property has been made or commenced, or is pending, or to Seller’s
knowledge is being threatened or contemplated by any person.

               7.1.8 There is no litigation, arbitration or other legal or administrative suit, action,
proceeding or investigation of any kind pending or to Seller’s knowledge threatened or being
contemplated against or involving Seller relating to the Real Property or any part thereof and, to
Seller’s knowledge, there is no valid basis for any such litigation, arbitration or other legal or
administrative suit, action, proceeding or investigation. To Seller’s knowledge, there is no
general plan, land use or zoning action or proceeding of any kind, or general or

9

 

special assessment action or proceeding of any kind, or condemnation or eminent domain action or
proceeding of any kind pending or threatened or being contemplated with respect to the Real
Property or any part thereof. There is no legal or administrative action or proceeding pending to
contest or appeal the amount of real property taxes or assessments levied against the Real Property
or any part thereof or the assessed value of the Real Property or any part thereof for real
property tax purposes. To Seller’s knowledge, no supplemental real property taxes have been or will
be levied against or assessed with respect to the Real Property or any part thereof based on any
change in ownership or new construction or other event or occurrence relating to the Real Property
before the date of this Agreement, except any such supplemental real property taxes as have been
paid in full and discharged.

               7.1.9 To Seller’s knowledge, all water, sewer, gas, electric, steam,
telephone and drainage facilities and all other utilities required by law or reasonably necessary
or proper and usual for the full operation, use and occupancy of the Real Property are installed to
the boundary lines of the Real Property, are connected with valid permits, if required, and are
adequate to service the Real Property and to allow full compliance with all applicable laws, and
the cost of installation and connection of all such utilities to the Property has been fully paid.

               7.1.10 Seller is not “foreign person” as defined in Section 1445 of the Internal Revenue Code
of 1986, as amended, and the Income Tax Regulations thereunder.

               7.1.11 No withholding of tax or reporting will be required with respect to the sale of the
Property by Seller.

               7.1.12 Seller has not made a general assignment for the benefit of its creditors, and has not
admitted in writing its inability to pay its debts as they become due, nor has Seller filed, nor
does it contemplate the filing of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or any other proceeding for the relief of debts in general, nor has any
such proceeding been instituted by or against Seller.

               7.1.13 Except for CBRE Hubbell Commercial, Seller has not dealt with any investment adviser,
real estate broker or finder, or incurred any liability for any commission or fee to any investment
adviser, real estate broker or finder, in connection with the sale of the Property to Buyer or this
Agreement.

               7.1.14 All lenders with liens affecting the Property, including, without limitation, Lenders,
have approved the transaction contemplated by this Agreement and Seller shall cause such lenders,
including, without limitation, Lenders, to reconvey such liens at the Close of Escrow.

          7.2 Buyer’s Representations and Warranties.  Buyer represents and warrants to
Seller as follows:

               7.2.1 Buyer is a limited liability company, duly organized, validly existing, and in
good standing under the laws of the State of California.

10

 

               7.2.2 Buyer has all requisite power and authority to execute and deliver this Agreement
and to carry out its obligations hereunder and the transactions contemplated hereby. This Agreement
has been, and the documents contemplated hereby will be, duly executed and delivered by Buyer and
constitute its legal, valid, and binding obligation enforceable against it in accordance with its
terms.

     8. COVENANTS.

          8.1 Seller.  Seller covenants and agrees with Buyer as follows:

               8.1.1 Between the date of this Agreement and the Closing Date, Seller shall not execute any
additional lease affecting the Real Property or amend, modify, renew, extend or terminate any of
the Leases, the Contracts or the Approvals in any respect without the prior approval of Buyer,
which approval may not be unreasonably withheld by Buyer; provided, however, that any Leases which
are either executed or renewed on a month-to-month basis and which are consistent with the current
leasing practices of Seller, including, without limitation, current rental rates, shall be deemed
to be automatically approved by Buyer, and provided further that any Contracts that are not
terminable upon no more than thirty (30) days notice may be disapproved by Buyer in its sole and
absolute discretion. Further, Buyer shall be deemed to have approved a proposed Lease if Buyer has
not made an objection to such contract within two (2) business days of a receipt of a request for
approval. Further, Seller, in emergency situations or in situations that are critical to the
operation of the Property, may enter into Contracts for goods and services without the approval of
Buyer, provided that such Contracts must be terminable upon no more than thirty (30) days notice.
Between the date of this Agreement and the Closing Date, Seller shall not consent to any assignment
or sublease requested by any tenant under any of the Leases without the prior approval of Buyer,
which approval shall not be unreasonably withheld or delayed. Between the date of this Agreement
and the Closing Date, Seller shall manage, operate, maintain and repair the Real Property and the
Personal Property in the ordinary course of business in accordance with Seller’s existing practices
(including, without limitation, maintenance of substantially the same advertising and marketing
programs for the Real Property in effect as of the date of this Agreement), comply with the
Approvals and all covenants, conditions, restrictions, laws, statutes, rules, regulations and
ordinances applicable to the Real Property or the Personal Property, keep the Leases, the Contracts
and the Approvals in force, immediately give Buyer copies of all notices received by Seller
asserting any breach or default under the Leases or the Contracts or any violation of the Approvals
or any covenants, conditions, restrictions, laws, statutes, rules, regulations or ordinances
applicable to the Real Property or the Personal Property, and perform when due all of Seller’s
obligations under the Leases, the Contracts and the Approvals in accordance with the Leases, the
Contracts and the Approvals and all applicable laws. Seller shall not (i) create or agree to any
easements, liens, mortgages, encumbrances or other interests that would affect the Property or
Seller’s ability to comply with this Agreement; (ii) initiate or consent to, approve or otherwise
take any action with respect to zoning or any other governmental rules or regulations presently
applicable to all or any part of the Real Property; (iii) fail to pay when due and payable all
taxes and other public charges assessed against the Real Property or Seller; (iv) fail to keep
current and free from default any and all secured financing against the Real Property; or (v) fail
to pay in a timely fashion all proper bills for labor or services for work performed for or on
behalf of Seller with

11

 

respect to the Property. Between the date of this Agreement and the Closing Date, Seller shall
keep in force property insurance covering all buildings, structures, improvements, machinery,
fixtures and equipment included in the Real Property insuring against all risks of physical loss or
damage, subject to standard exclusions, in an amount equal to the actual replacement cost (without
deduction for depreciation) of such buildings, structures, improvements, machinery, fixtures and
equipment.

               8.1.2 Between the date of this Agreement and the Closing Date, Seller shall not use, produce,
process, manufacture, generate, treat, handle, store or dispose of any Hazardous Substances in
violation of applicable laws in, on or under the Real Property, or use the Real Property for any
such purposes, or Release any Hazardous Substances in violation of applicable laws, into any air,
soil, surface water or groundwater comprising the Real Property, or permit any person using or
occupying the Real Property or any part thereof to do any of the foregoing. Between the date of
this Agreement and the Closing Date, Seller shall comply, and shall cause all persons using or
occupying the Real Property or any part thereof to comply, with all Environmental Laws applicable
to the Real Property, or the use or occupancy thereof, or any operations or activities therein or
thereon. Between the date of this Agreement and the Closing Date, Seller shall duly obtain all
permits, licenses and approvals required by all applicable Environmental Laws for the use and
occupancy of, and all operations and activities in, the Real Property, comply fully with all such
permits, licenses and approvals, and keep all such permits, licenses and approvals in full force
and effect. Immediately after Seller obtains any information indicating that any Hazardous
Substances may be present or any Release or threatened Release of Hazardous Substances may have
occurred in, on or under the Real Property (or any nearby real property which could migrate to the
Real Property) or that any violation of any Environmental Laws may have occurred at the Real
Property, Seller shall give written notice thereof to Buyer with a reasonably detailed description
of the event, occurrence or condition in question. Seller shall immediately furnish to Buyer copies
of all written communications received by Seller from any person (including notices, complaints,
claims or citations that any Release or threatened Release of any Hazardous Substances or any
violation of any Environmental Laws has actually or allegedly occurred) or given by Seller to any
person concerning any past or present Release or threatened Release of any Hazardous Substances in,
on or under the Real Property (or any nearby real property which could migrate to the Real
Property) or any past or present violation of any Environmental Laws at the Real Property.

               8.1.3 Seller shall use its best efforts, in good faith and with diligence, to cause all of the
representations and warranties made by Seller in Section 7.1 hereof to be true and correct on and
as of the Closing Date.

               8.1.4 Seller shall indemnify and defend Buyer against and hold Buyer harmless from all claims,
demands, liabilities, losses, damages, costs and expenses, including reasonable attorneys’ fees and
disbursements, (i) that may be suffered or incurred by Buyer if any representation or warranty made
by Seller in Section 7.1 hereof was untrue or incorrect in any material respect when made or that
may be caused by any breach by Seller of any such representation or warranty, (ii) arising from or
based on any failure by Seller to perform all obligations of Seller in accordance with the Leases,
the Contracts or the Approvals before the Closing Date, or any breach, default or violation by
Seller (or any event by Seller or condition

12

 

which, after notice or the passage of time, or both, would constitute a breach, default or
violation by Seller) under the Leases, the Contracts or the Approvals that occurs before the
Closing Date, or any condition, event or circumstance relating to the Real Property that existed or
occurred before the Closing Date, or any personal injury or property damage occurring in, on or
about the Real Property before the Closing Date, and (iii) arising from, relating to or connected
with any past or present Release or threatened Release of any Hazardous Substances in, on or under
the Real Property or any past or present violation of any Environmental Laws at the Real Property
that exists or occurs, or the onset of which exists or occurs, before the Closing Date, including,
without limitation, all expenses of investigation and monitoring, costs of containment, abatement,
removal, repair, cleanup, restoration and remedial work, penalties and fines, attorneys’ fees and
disbursements, and other response costs. Any claim of Buyer in connection with said indemnities
shall be made within twelve (12) months after the Closing or shall automatically be null, void and
of no force or effect whatsoever, and Buyer’s remedies for any such claim shall be limited to
recovery of damages not to exceed ONE MILLION AND 00/100 DOLLARS ($1,000,000.00); provided,
however, that there shall be no such monetary limitation on Buyer’s damages in connection with any
third party personal injury claims or claims by made by tenants for breach of a Lease.

               8.1.5 Between the date of this Agreement and the Closing Date, Seller shall not in any manner
sell, convey, assign, transfer, encumber or otherwise dispose of the Real Property, the Leases, the
Personal Property, the Contracts or the Approvals, or any part thereof or interest therein.

               8.1.6 Seller shall pay all commissions, fees and expenses due to CBRE Hubbell Commercial, in
respect of the sale of the Property to Buyer or this Agreement. Seller hereby agrees to indemnify
and hold Buyer harmless from and against any and all claims for brokerage or finder’s fees or other
similar commissions or compensation made by any and all other brokers or finders claiming to have
dealt with Seller in connection with this Agreement or the consummation of the transaction
contemplated hereby. The indemnification obligations of Seller set forth in this Section 8.1.6
shall survive the Closing or the termination of this Agreement for any reason for a period of
twelve (12) months.

               8.1.7 Seller shall not dissolve its existing entity and shall remain validly existing and in
good standing under the laws of the State of Iowa during the period commencing on the date of this
Agreement and ending on the date that is twelve (12) months after the Closing Date; provided,
however, that if Buyer gives Seller written notice of a claim under this Agreement on or before the
expiration of such period, such covenant shall extend until the later to occur of (a) the date that
is eighteen (18) months after the Closing Date, or (b) the date such claim has been satisfactorily
resolved in Buyer’s reasonable discretion.

          8.2 Buyer. Buyer covenants and agrees with Seller as follows:

               8.2.1 All representations and warranties made by Buyer in Section 7.2 hereof shall survive
the Closing. Buyer shall use its best reasonable efforts, in good faith and with diligence, to
cause all of the representations and warranties made by Buyer in Section 7.2 hereof to be true and
correct on and as of the Closing Date. Buyer shall indemnify and defend Seller against and hold
Seller harmless from all claims, demands, liabilities, losses, damages,

13

 

costs and expenses, including reasonable attorneys’ fees and disbursements, that may be suffered or
incurred by Seller if any representation or warranty made by Buyer in Section 7.2 hereof was untrue
or incorrect in any respect when made or that may be caused by any breach by Buyer of any such
representation or warranty.

               8.2.2 Subject to Seller’s representations, warranties and covenants set forth in Section 7.1
above, Buyer shall indemnify and defend Seller against and hold Seller harmless from all claims,
demands, liabilities, losses, damages, costs and expenses, including reasonable attorneys’ fees and
disbursements, arising from or based on (i) any third party claim relating to the physical
condition of the Property caused by the act or omission of Buyer after the Closing Date; or (ii)
any failure by Buyer to perform all obligations of Buyer in accordance with the Leases or the
Contracts arising or accruing on or after the Closing Date and during Buyer’s ownership of the
Property or any breach, default or violation by Buyer (or any event by Buyer or condition which,
after notice or the passage of time, or both, would constitute a breach, default or violation by
Buyer) under the Leases or the Contracts that occurs on or after the Closing Date and during
Buyer’s ownership of the Property.

               8.2.3 Provided Seller complies with the covenant set forth in
Section 8.1.7 above, Buyer shall not bring a claim against any member of Seller for the payment or
performance of any of Seller’s obligations under this Agreement.

     9. ADJUSTMENTS AND PRORATIONS.

          9.1 Generally. All taxes, including, without limitation, real estate taxes and
personal property taxes, collected rents, laundry income, parking income, furniture rental, charges
for utilities, including water, sewer, and fuel oil, and for utility services, maintenance
services, maintenance and service contracts, all operating costs and expenses, and all other
income, costs, and charges of every kind which in any manner relate to the operation of the
Property (but not including insurance premiums) shall be prorated to the Date of Closing. If the
amount of said taxes, assessments, or rents is not known on the Date of Closing, they shall be
apportioned on the basis of the amounts for the preceding year, with a reapportionment as soon as
the new amounts can be ascertained. Any deposits on utilities paid by Seller shall be returned to
Seller. The foregoing provisions of this Section 9.1 shall not apply to any taxes, assessments, or
other payments which are directly payable by tenants under their leases or reimbursable by such
tenants to the owner of the Property, as landlord, under their leases. On the Date of Closing,
Seller shall deliver to Buyer all inventories of supplies on hand at the Property owned by Seller,
if any, at no additional cost to Buyer.

          9.2 Rental Income. Rental income from the Property shall be prorated as of the Closing
Date. Non-delinquent rents shall be prorated to the Closing Date. Rents delinquent as of the
Closing Date, but collected later, shall be prorated as of the Closing Date when collected. Rents
collected after the Closing Date from tenants whose rental was delinquent at the Closing Date shall
be deemed to apply first to the current rental due at the time of payment and second to rentals
which were delinquent at the Closing Date. Rents collected after the Closing Date to which Seller
is entitled shall be promptly paid to Seller. For a period of sixty (60) days after the Closing
Date, Buyer shall use reasonable efforts to collect all rents which are delinquent as of the
Closing Date with no obligation to incur any expenses or commence litigation to collect

14

 

such rents. Commencing as of sixty one (61) days after the Closing Date, Seller may use
reasonable efforts, including litigation, to collect any rents delinquent as of the Closing Date
which are still uncollected; provided, however, in exercising its remedies against tenants as
outlined in this Section, Seller shall not evict any tenant of the Property or otherwise
unreasonably interfere with Buyer’s operation of the Property. With respect to security deposits,
if any, made by tenants at the Property, Buyer shall receive credit therefor at Closing.

          9.3 Proration Period. If any of the items subject to proration hereunder cannot
be prorated at the Closing because the information necessary to compute such proration is
unavailable, or if any errors or omissions in computing prorations at the Close of Escrow are
discovered subsequent to the Close of Escrow, then such item shall be reapportioned and such errors
and omissions corrected as soon as practicable after the Close of Escrow and the proper party
reimbursed.

     10. CLOSING DOCUMENTS

          10.1 Seller’s Deliveries. Conditioned upon performance by Buyer hereunder, Seller
shall execute and deliver to Escrow Holder prior to Closing the following documents:

               10.1.1 Warranty Deed. A warranty deed with respect to the Real Property,
executed by Seller in the form of attached Exhibit “D” (collectively, “Warranty
Deed”);

               10.1.2
Assignment and Assumption of Leases, Contracts and Approvals. An assignment of
all of Seller’s right, title and interest in and to the Leases, Contracts and Approvals in the form
of attached Exhibit “E” (“General Assignment”);

               10.1.3
Bill of Sale. A bill of sale in the form of attached Exhibit “F”, assigning and transferring to Buyer all of the right, title, and interest of Seller in and to
the Personal Property;

               10.1.4 Non-Foreign Certificates. Certifications that Seller is not a nonresident
aliens (a foreign corporation, partnership, trust, or estate as defined in the Internal Revenue
Code and Treasury Regulations promulgated thereunder), each in the
form of attached Exhibit “G”;

               10.1.5 Tenant Notices. Notices to the tenants under all Leases of the occurrence
of the sale of the Property in the form of attached Exhibit
“H”; and

               10.1.6 Assignment of Developer’s Rights. An assignment of all of Seller’s right, title
and interest as Developer under that certain Declaration of Submission of Property to Horizontal
Property Regime dated October 31, 2006 and recorded on December 18, 2008 under Book No. 11997, Page
Nos. 522-587 with the Polk County Recorder’s Office, in the form of attached Exhibit “I”
(“Assignment of Developer’s Rights”).

          10.2 Buyer’s Deliveries. Conditioned upon performance by Seller hereunder,
Buyer shall execute and deliver to Escrow Holder prior to Closing the General Assignment.

15

 

          10.3 Other Closing Documents. Each party shall deliver to the other party or
Escrow Holder such duly executed and acknowledged or verified certificates, affidavits, and other
usual closing documents respecting the power and authority to perform the obligations hereunder and
as to the due authorization thereof by the appropriate corporate, partnership, or other
representatives acting for it, as counsel for the other party or Escrow Holder may reasonably
request.

          10.4 Closing Documents. All documents to be delivered to Escrow Holder pursuant to
this Section 10 shall hereinafter be referred to as “Closing Documents”.

     11. COSTS. Seller shall pay all real estate transfer taxes, the cost of all
documentary stamps and the cost to update the abstract through the date hereof and the costs of any
endorsements to the title policy to the extent that such endorsements are necessary to cure any
Title Objections. Buyer shall pay the cost for a standard ALTA Owner’s Policy of Title Insurance
and extended ALTA title insurance coverage, if desired, and the cost of any endorsements to the
title policy (if requested by Buyer) and recording fees for the Warranty Deed and General
Assignment. Seller and Buyer shall each pay one-half (1/2) of (i) Escrow Holder’s escrow fee
(excluding charges assessed by Escrow Holder for special services, which shall be paid by the party
requesting or using such special services), and (ii) other closing costs. Each party shall pay its
own attorney’s fees.

     12. CASUALTY OR CONDEMNATION. If, before the Closing Date, (i) the improvements on the
Real Property are materially damaged by any casualty, as reasonably determined by Buyer, or (ii)
proceedings are commenced for the taking by exercise of the power of eminent domain of all or a
material part of the Property, as reasonably determined by Buyer, Buyer shall have the right, by
giving notice to Seller within sixty (60) days after Seller gives written notice of the casualty or
condemnation to Buyer, to terminate this Agreement, in which event this Agreement shall
automatically terminate. If, before the Closing Date, (a) the improvements on the Real Property are
damaged by any casualty, but not in a material manner, (b) proceedings are commenced for the taking
by exercise of the power of eminent domain of less than such a material part of the Property, or
(c) Buyer has the right to terminate this Agreement pursuant to the preceding sentence but Buyer
does not exercise such right, then this Agreement shall remain in full force and effect and, on the
Closing Date, one of the following shall occur, as applicable: (1) the full repair and restoration
cost, as mutually determined by Buyer and Seller, shall be a credit to Buyer against the total
Purchase Price for the Property, or (2) the condemnation award (or, if not theretofore received,
the right to receive such award) payable on account of the taking shall be transferred to Buyer.
Seller shall give notice to Buyer immediately after the occurrence of any damage to the
improvements on the Real Property by any casualty or the commencement of any eminent domain
proceedings. Buyer shall have a period of sixty (60) days after Seller has given the notice to
Buyer required by this Section 12 to make the determination as to whether to terminate this
Agreement. If necessary, the Closing Date shall be postponed until Seller has given the notice to
Buyer required by this Section 12 and the period of thirty (30) days described in this Section 12
has expired.

     13. ATTORNEYS’ FEES. In any action to enforce or interpret the provisions of this
Agreement, the prevailing party shall be entitled to an award of its attorneys’ fees and costs.

16

 

     14. ASSIGNMENT. Buyer shall have the right, by giving notice to Seller before the
Closing Date, to assign this Agreement or to have Seller convey, assign and transfer the Property
at the Closing in accordance with this Agreement to any person or entity designated by Buyer in
such notice.

     15. WAIVER. No waiver of any breach of any agreement or provision contained herein
shall be deemed a waiver of any preceding or succeeding breach of any other agreement or provision
herein contained. No extension of time for the performance of any obligation or act shall be deemed
an extension of time for the performance of any other obligation or act.

     16. GOVERNING LAW. This Agreement shall be construed under the laws of the State of
Iowa.

     17. NOTICES. All notices required or permitted to be given hereunder shall be in
writing and sent by overnight delivery service (such as Federal Express), in which case notice
shall be deemed given on the day after the date sent, or by personal delivery, in which case notice
shall be deemed given on the date received, or by certified mail, in which case notice shall be
deemed given three (3) days after the date sent, or by fax (with copy by overnight delivery
service), in which case notice shall be deemed given on the date sent, to the appropriate address
set forth below or at such other place or places as either Buyer or Seller may, from time to time,
respectively, designate in a written notice given to the other in the manner described above.

	 	 	 

	To Seller:

	 	Park Place Condo, LLC
	 

	 	2618 2nd Avenue
	 

	 	Seattle, WA 98121
	 

	 	Attn: Michael McKernan
	 

	 	Fax No.: (206) 985-0102
	 

	 	Telephone No.: (206) 985-0109
	 
	 	 
	With Copy To:

	 	Anthony A. Longnecker, Esq.
	 

	 	Nyemaster Goode Law Firm
	 

	 	700 Walnut, Suite 1600
	 

	 	Des Moines, IA 50309-3899
	 

	 	Fax No.: (515) 283-3108
	 

	 	Telephone No.: (515) 283-3196
	 
	 	 
	To Buyer:

	 	Steadfast Asset Holdings, Inc.
	 

	 	18100 Von Karman, Suite 500
	 

	 	Irvine, California 92612
	 

	 	Attn: Ana Marie del Rio, Esq.
	 

	 	Fax No.: (949) 852-0143
	 

	 	Telephone No.: (949) 852-0700

17

 

	 	 	 

	With Copy To:

	 	Garrett DeFrenza Stiepel LLP
	 

	 	695 Town Center Drive, Suite 500
	 

	 	Costa Mesa, California 92626
	 

	 	Attn: Marcello F. De Frenza, Esq.
	 

	 	Fax No.: (714) 384-4320
	 

	 	Telephone No.: (714) 384-4300

     18. ENTIRE AGREEMENT. This instrument, executed in duplicate, sets forth the entire
agreement between the parties and may not be canceled, modified, or amended except by a written
instrument executed by both Seller and Buyer.

     19. COUNTERPARTS; COPIES. This Agreement may be executed and delivered in any number
of counterparts, each of which so executed and delivered shall be deemed to be an original and all
of which shall constitute one and the same instrument. Electronic, photocopy and facsimile copies
of signatures may be used in place and stead of original signatures with the same force and effect
as originals.

     20. AUTHORITY. The individual(s) executing this Agreement on behalf of each party
hereto hereby represent and warrant that he/she has the capacity, with full power and authority, to
bind such party to the terms and provisions of this Agreement.

     21. RECORD ACCESS AND RETENTION.

          21.1 Where there is a legitimate reason (including, without limitation, a tax or other
audit, other governmental inquiry, or actual or prospective claim by or against either Seller or
Buyer, or to which Seller or Buyer may become a party) for Seller or Buyer to require access to
records or other information relating to the Property that is in the possession or control of the
other party, and if providing such access would not adversely affect (excluding records and
information requested in connection with a claim against the other party so long as such
information is not subject to attorney-client privilege) the party whose records or other
information are being sought (in the good faith judgment of such party), each party will allow the
other reasonable access to such records and information at its then-current location (or such other
location as the party in possession of such records or information may reasonably designate), in
order to analyze and/or copy the same (at the requesting party’s sole cost and expense), for use
solely for the purposes for which the same are being requested. In any case in which a party hereto
desires to obtain any records or information pursuant to this Section 21.1, such party shall notify
the other in writing of such request, setting forth in such notice the purposes for which such
records and information are being requested and the expected use thereof (including, if applicable,
the nature of any claim or other proceeding in which the same will be used and the parties
thereto), and the party receiving such request may, as a condition to granting the same, require
that the requesting party enter into an agreement protecting the confidentiality of such records
and information, which shall be in the form attached hereto as Exhibit “J”. In no event
shall a party be obligated to provide access to records or other information under this Section
21.1 in connection with any litigation, claim, or dispute between Buyer and Seller, or in which
Buyer and Seller are or may become adverse parties, other than in accordance with applicable
discovery and evidentiary rules and procedures applicable to such

18

 

matter, and no access to or disclosure of records or information shall be required hereunder if the
same would or reasonably could result in the loss of any attorney-client privilege or other
applicable evidentiary privileges that may be applicable to such records or information. Each party
shall maintain its records for use under this Section 21.1 for a period of not less than one (1)
year after the Closing Date. The provisions of this Section shall survive Closing.

          21.2 If Seller fails to make available to Buyer records or other information as required
pursuant to Section 21.1 above within two (2) business days after Buyer’s request for the same, the
Due Diligence Period shall be extended one (1) day for each day such records or other information
is not made available to Buyer. If the Due Diligence Period is extended by virtue of the foregoing
such that the Closing Date will occur less than ten (10) days after the expiration of the extended
Due Diligence Period, the Closing Date shall be automatically extended to the date that is ten (10)
days after the expiration of such extended Due Diligence Period.

     22. CONTRACT CONSIDERATION. The parties have bargained for and expressly agree
that the rights and obligations of each party contained in this Agreement, including, without
limitation, Buyer’s obligation to deliver the Initial Deposit to Escrow Holder, constitute
sufficient consideration for the other party’s execution, delivery and obligations under this
Agreement, including without limitation, Buyer’s exclusive right to inspect and purchase the
Property pursuant to this Agreement and all contingencies and conditions of Closing for the benefit
of Buyer set forth in this Agreement.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

19

 

	 	 	IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed the day
and year first above written.

	 	 	 	 	 

	 	 	SELLER:
	 
	 	 	 	 
	 	 	PARK PLACE CONDO, LLC,
	 	 	an Iowa limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael K. McKernan
	 

	 	 	 	 
	 

	 	Name:
	 	Michael K. McKernan
	 

	 	Its:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BUYER:
	 
	 	 	 	 
	 	 	STEADFAST ASSET HOLDINGS, INC.,
	 	 	a California corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ana Marie del Rio 
	 

	 	 	 	 
	 

	 	Name:
	 	Ana Marie del Rio 
	 

	 	Its:
	 	Secretary 

THE UNDERSIGNED, AS A RELATED PARTY TO SELLER, SHALL RECEIVE A DIRECT AND SUBSTANTIVE BENEFIT FROM
THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT. ACCORDINGLY, IN ORDER TO INDUCE
BUYER TO ENTER INTO THIS AGREEMENT, THE UNDERSIGNED HEREBY AGREES TO RELEASE AND RECONVEY, ON OR
BEFORE THE CLOSE OF ESCROW AND FOR NO CONSIDERATION FROM SELLER, THE LIEN OF THAT CERTAIN MORTGAGE
DATED MAY 9, 2009, EXECUTED BY SELLER IN FAVOR OF THE UNDERSIGNED, WHICH WAS RECORDED ON MAY 21,
2009 UNDER BOOK NO. 13048, PAGES 183-194, IN THE RECORDER’S OFFICE OF POLK COUNTY, IOWA (“MORTAGE”).
THE UNDERSIGNED FURTHER REPRESENTS AND WARRANTS THAT HE IS THE SOLE HOLDER OF THE MORTGAGE AND HAS
NOT ASSIGNED ANY INTEREST THEREIN.

	 	 	 

	 

	 	/s/ Michael K. McKernan
	 

	 	 
	 

	 	Michael K. McKernan

20

 

THE UNDERSIGNED HEREBY ACCEPTS THE FOREGOING PURCHASE AND SALE
AGREEMENT AS OF SEPTEMBER ___, 2010, AND AGREES TO ACT AS ESCROW
HOLDER IN ACCORDANCE THEREWITH.

	 	 	 	 	 

	 	 	FIRST AMERICAN TITLE INSURANCE COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ryan Hahn
	 

	 	 	 	 
	 

	 	 	 	Ryan Hahn, Escrow Officer

21exv10w3

Exhibit 10.3

FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT 

AND JOINT ESCROW INSTRUCTIONS

     This First Amendment to Purchase and Sale Agreement and Joint Escrow Instructions
(“Amendment”), dated as of October 20, 2010, is made between PARK PLACE CONDO, LLC, an
Iowa limited liability company (“Seller”), and STEADFAST ASSET HOLDINGS, INC., a
California corporation (“Buyer”), with reference to the following facts:

     A. Seller and Buyer entered into that certain Purchase and Sale Agreement and Joint
Escrow Instructions dated September 7, 2010 (“Agreement”), for the purchase and sale of
that certain real property located in the City of Des Moines, County of Polk and State of
Iowa, consisting of one hundred forty-seven (147) condominium units, together with a
percentage interest in common elements related thereto, certain land with a parking lot
situated thereon, together with forty (40) of the parking spaces located within such
parking lot, and other appurtenant rights, all as more particularly described in the
Agreement (collectively, “Property”).

     B. Buyer and Seller acknowledge that, after the Opening of Escrow, Buyer has learned
certain facts about the Property in connection with Buyer’s due diligence investigation
that justify a reduction of the Purchase Price. Buyer and Seller now desire to reduce the
Purchase Price for the Property, extend the Title Objection Period, the Due Diligence
Period and the Closing Date, and to further amend the Agreement as set forth below. Except
as otherwise expressly defined in this Amendment, all initially capitalized terms used in
this Amendment have the same meanings as in the Agreement.

     THEREFORE, for valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties agree to amend the Agreement as follows:

     1. Purchase Price. The “Purchase Price”, as such term is defined in Section 2
of the Agreement, is hereby reduced from Eight Million Nine Hundred Thousand and 00/100
Dollars ($8,900,000.00) to Eight Million Fifty Thousand and 00/100 Dollars
($8,050,000.00).

     2. Title Objection Period/Due Diligence Period/Closing Date.

          (a) Notwithstanding anything to the contrary contained in the Agreement, the Title
Objection Period, as such term is defined in Section 6.3.1 of the Agreement, is hereby
extended until 5:00 p.m. Iowa time on November 16, 2010 (“Extended Title Objection
Period”). Accordingly, all references to the “Title Objection Period” throughout the
Agreement shall refer to the “Extended Title Objection Period”.

          (b) Notwithstanding anything to the contrary contained in the Agreement, the Due
Diligence Period, as such term is defined in Section 6.4 of the Agreement, is hereby
extended until 5:00 p.m. Iowa time on November 23, 2010 (“Extended Due Diligence Period”).
Accordingly, (i) all references to the “Due Diligence Period” throughout the Agreement
shall refer to the “Extended Due Diligence Period”, and (ii) Buyer shall, if applicable,
deposit the Additional Deposit (as defined in Section 3.1 of the Agreement) with Escrow
Holder by 5:00 p.m. Iowa time on December 2, 2010.

          (c) Section 5.1 of the Agreement is hereby amended to provide that the Close of
Escrow shall occur (if at all) on or before 5:00 p.m. Iowa time on December 31, 2010,
unless

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otherwise extended (i) by operation of Sections 6.3, 12 or 21.2 of the Agreement, (ii) by Buyer
pursuant to Section 5.2 of the Agreement, or (iii) by written agreement between Buyer and Seller.
Accordingly, all references to the “Initial Scheduled Closing Date” throughout the Agreement shall
refer to December 31, 2010. Notwithstanding the foregoing, Buyer may elect to close Escrow at any
time before the Initial Scheduled Closing Date by providing Seller at least five (5) days’ prior
written notice of the date on which Buyer elects to close Escrow. Furthermore, if the Initial
Scheduled Closing Date is automatically extended beyond December 31, 2010, by virtue of Sections
6.3, 12 or 21.2 of the Agreement, in addition to Buyer’s other rights under the Agreement, Buyer
may terminate the Agreement, as amended by this Amendment, by written notice to Seller, in which
event the Deposit shall be immediately released to Buyer by Escrow Holder.

     3. Approval of Lender. Seller hereby represents and warrants that Ames Community Bank,
successor by merger to VisionBank of Iowa (“Bank”), has approved (i) the transaction contemplated
by the Agreement, as amended by this Amendment, and (ii) the terms and conditions of this
Amendment, all as more particularly set forth in that certain letter from Bank dated October 19,
2010, a copy of which is attached hereto as Exhibit “A”.

     4. Reaffirmation of Representations, Warranties and Covenants. By executing this
Amendment, Seller hereby reaffirms the representations, warranties and covenants of Seller set
forth in Section 7.1 of the Agreement.

     5. Record Access and Retention. Section 21 of the Agreement is deleted and replaced in
its entirety by the following:

     “21. Record Access and Retention

	 	 	“21.1 Seller shall provide to Buyer (at Buyer’s expense) copies of, or shall
provide Buyer reasonable access to, such factual information as may be
reasonably requested by Buyer, and in the possession or control of Seller, or
its property manager or accountants, to enable Buyer’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 one (1) prior calendar year (provided,
however, such audit shall not include an audit of management fees or interest
expenses attributable to the Seller). Buyer shall be responsible for all
out-of-pocket costs associated with this audit. Seller shall reasonably
cooperate (at no cost to Seller) with Buyer’s auditor in the conduct of such
audit. In addition, Seller agrees to provide to Buyer or any affiliate of Buyer,
if requested by such auditor, historical financial statements for the Property,
including (without limitation) income and balance sheet data for the Property,
whether required before or after Closing. Without limiting the foregoing, (i)
Buyer or its designated independent or other auditor may audit Seller’s
operating statements of the Property, at Buyer’s expense, and Seller shall
provide such documentation as Buyer or its auditor may reasonably request in
order to complete such audit, and (ii) Seller shall furnish to Buyer such
financial and other information as may be reasonably required by Buyer or any
affiliate of Buyer to make any required filings with the Securities and Exchange

- 2 -

 

	 	 	Commission or other governmental authority. Seller’s obligation to maintain its
records for use under this Section 21.1 shall be an on-going condition to Buyer’s
obligation to close Escrow. Seller shall maintain its records for use under this
Section 21.1 for a period of not less than one (1) year after the Closing Date.
The provisions of this Section shall survive Closing.
	 
	 	 	“21.2 If Seller fails to make available to Buyer records or other information as
required pursuant to Section 21.1 above within two (2) business days after Buyer’s
request for the same, the Due Diligence Period shall be extended one (1) day for
each day such records or other information is not made available to Buyer. If the
Due Diligence Period is extended by virtue of the foregoing such that the Closing
Date will occur less than ten (10) days after the expiration of the extended Due
Diligence Period, the Closing Date shall be automatically extended to the date
that is ten (10) days after the expiration of such extended Due Diligence Period.
As provided above, Seller’s obligations under this Section 21 shall be ongoing
through and after the Closing Date and shall constitute a condition to Closing for
Buyer’s benefit until Close of Escrow.”

     6. Counterparts; Copies. This Amendment may be executed and delivered in any number of
counterparts, each of which so executed and delivered shall be deemed to be an original and all of
which shall constitute one and the same instrument. Electronic, photocopy and facsimile copies of
signatures may be used in place and stead of original signatures with the same force and effect as
originals.

     7. Conflicts. If any conflict between this Amendment and the Agreement should arise,
the terms of this Amendment shall control.

     8. Continuing Effect. There are no other amendments or modifications to the Agreement
other than this Amendment. Except as expressly amended by this Amendment, the Agreement shall
remain in full force and effect and is hereby ratified and reaffirmed.

     9. Authority. The individual(s) executing this Amendment on behalf of each party
hereto hereby represent and warrant that he/she has the capacity, with full power and authority, to
bind such party to the terms and provisions of this Amendment.

     10. Attorneys’ Fees. In any action to enforce or interpret the provisions of this
Amendment, the prevailing party shall be entitled to an award of its attorneys’ fees and costs.

SIGNATURES ON NEXT PAGE

- 3 -

 

     NOW THEREFORE, the parties have executed this Amendment as of the date first written above.

	 	 	 	 	 	 	 

	SELLER:	 	BUYER:
	 
	 	 	 	 	 	 
	PARK PLACE CONDO, LLC,	 	STEADFAST ASSET HOLDINGS, INC.,
	an Iowa limited liability company	 	a California corporation
	 
	 	 	 	 	 	 
	By:

	 	/s/ Michael K. McKernan

	 	By:
	 	/s/ Ana Marie Del Rio
	 

	 	 
	 	 	 	 
	Name:

	 	Michael K. McKernan
	 	Name:
	 	Ana Marie Del Rio
	Its:

	 	Manager
	 	Its:
	 	Secretary

THE UNDERSIGNED, AS A RELATED PARTY TO SELLER, SHALL RECEIVE A DIRECT AND SUBSTANTIVE BENEFIT
FROM THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THE AGREEMENT, AS AMENDED BY THIS AMENDMENT.
ACCORDINGLY, THE UNDERSIGNED HEREBY CONSENTS TO AND APPROVES (I) THE TRANSACTION CONTEMPLATED BY
THE AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND (II) THE TERMS
AND CONDITIONS OF THIS AMENDMENT.

	 	 	 	 	 
	 	 	 
	 	/s/ Michael K. McKernan

 	 
	 	Michael K. McKernan	 
	 	 	 
	 

- 4 -

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