Document:

EXHIBIT
10.2

     

    PURCHASE
AND SALE AGREEMENT

     

    THIS
PURCHASE AND SALE AGREEMENT (the “Agreement”),
made as of October __, 2010 by and between Troy Place (DE), LLC, a Delaware
limited liability company (“Troy”),
Jacksonville Place (DE), LLC, a Delaware limited liability company (“Jacksonville”),
Martin Place (DE), LLC, a Delaware limited liability company (“Martin”),
Murray Place (DE), LLC, a Delaware limited liability company (“Murray”)
and EDR Clemson Place Limited Partnership, a Delaware limited partnership
(“Clemson”,
and together with Troy, Jacksonville, Martin and Murray the “Seller” or Sellers”)
each with an address at 530 Oak Court Drive, Suite 300, Memphis, Tennessee 38117
and KAREP REIT I, INC., a Delaware corporation, or its permitted assignee or
assignees (“Buyer”),
with an address at 200 Business Park Drive, Suite 309, Armonk, New York
10504:

     

    WITNESSETH:

     

    WHEREAS,
each Seller is the fee title owner of its respective property as described in
Exhibit A-1 – Exhibit
A-5, each attached hereto and made a part hereof (singly and
collectively, the “Premises”).  Each
of the Premises, together with each such Premises’ respective Leases, Service
Contracts, Warranties, Permits, and Personal Property, as such terms are
hereafter defined, being sometimes hereinafter singly and collectively referred
to as the “Property”;
and

     

    WHEREAS,
each Seller has agreed to sell to the Buyer, and Buyer has agreed to buy from
each Seller, all of the Property of that Seller, subject to the terms and
conditions herein expressed.

     

    NOW,
THEREFORE, in consideration of the foregoing, the mutual agreements herein
contained and other good and valuable consideration to each of the parties
hereto paid by the other, the receipt and sufficiency whereof are hereby
acknowledged, it is hereby mutually covenanted and agreed by each Seller and
Buyer as follows:

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    1.           Property to be
Conveyed.  Subject to the terms and conditions hereof, each
Seller shall convey to Buyer, with respect to its Premises, and, except as
expressly provided herein, AS IS, WHERE IS AND WITH ALL FAULTS: (i) fee simple
title to its respective Premises, including, without limitation, all buildings
and improvements thereon or therein; any and all rights of such Seller in and to
all roadways, alleys, easements, rights of way, streets and/or ways adjacent or
appurtenant to its respective Premises; any rights of such Seller to any land
lying in the bed of any existing dedicated street, road or alley adjoining its
respective Premises; all rights of such Seller of ingress and egress to its
respective Premises, whether public or otherwise; all strips and gores adjoining
or abutting its respective Premises; all development rights, air rights, sewer
rights, whether private or otherwise, mineral rights, water, water rights and
water stock relating to its respective Premises; all easements and rights of way
used in connection with the beneficial use and enjoyment of its respective
Premises, and, subject to Section 7 hereof, the
unpaid awards and insurance policy proceeds due to such Seller for taking by
condemnation or eminent domain or for damage to its respective Premises by
reason of casualty or for a change of grade of any street or highway; (ii) good
title to all of such Seller’s equipment, fixtures, appliances, mechanical
systems, machinery, keys, furnishings, all rights to the trade names with
respect to each such Seller’s respective Premises (and all marks related
thereto), except with respect to the trade names “Troy Place”, “Jacksonville
Place”, “Martin Place”, “Murray Place” and “Clemson Place” which Buyer
acknowledges the applicable Sellers do not have the right to convey, any and all
rights of each such Seller (but not of Seller’s Affiliates) in the web sites and
domain names for each of the Premises and ownership of all social media
networks, plans and specifications, engineering and architectural drawings and
renderings, telephone exchange numbers, and all other tangible and intangible
personal property owned by such Seller of every type and kind now or hereafter
placed on, installed in or on, or used in connection with, such Seller’s
respective Premises, except for any items listed on Exhibit B attached
hereto and made a part hereto (the “Personal
Property”); (iii) any and all service and maintenance contracts and
agreements (but not including any property management agreement, which property
management agreements shall be terminated by such Seller as of the Closing Date)
relating to or affecting all of such Seller’s Property, including, but not
limited to, those listed on Exhibit C-1 attached
hereto and made a part hereto, provided, however, that Buyer may elect not to
assume any service and maintenance contract or agreement that is cancelable with
no more than thirty (30) day’s notice without cost to such Seller (the “Short-Term
Contracts”) by notifying such Seller in writing on or before 5:00 p.m.
(EDT) on the last day of the Due Diligence Period of those Short-Term Contracts
that Buyer elects not to assume (the assumed contracts and agreements are herein
referred to as the “Service
Contracts”); (iv) any and all warranties and guaranties currently in
effect relating to such Seller’s respective Personal Property or any of such
Seller’s respective Premises including, but not limited to, those listed on
Exhibit C-2
attached hereto and made a part hereto (the “Warranties”);
(v) all certificates of occupancy, variances, permits, licenses, sewer hookup
permits and approvals, consents and approvals issued by any governmental or
quasi-governmental authority which are necessary for the construction,
ownership, use, operation and/or occupancy of such Seller’s Premises, including,
but not limited to, those listed on Exhibit C-2 (the
“Permits”);
and (vi) all lease, tenancy and occupancy agreements (both written and verbal),
including all security and other refundable tenant deposits (including all
interest thereon to which the tenants are entitled to receive by law or under
any such lease, tenancy or occupancy agreement), all lease guaranties in
connection therewith, leasing materials and forms and marketing materials in
both printed (hard) form and electronic form (but only to the extent that such
marketing materials contain no reference to such Seller or any Affiliates),
including virtual tours and other electronic media and computers, monitors and
other equipment utilized for the display of same and all tenant files and
records for such Seller’s Premises (the “Leases”).
The title to each of the Sellers’ Premises and all improvements thereon or
therein shall be good and marketable fee simple title, free and clear of liens
and encumbrances except: (1) applicable building and zoning laws, ordinances and
regulations which do not prohibit the use of each such Seller’s respective
Premises for multi-tenant residential use, including student housing, (2) the
lien of current real estate taxes not yet due and payable subject to adjustment
as provided herein, and (3) all title and survey matters approved by Buyer in
accordance with Section 5.
hereof.  The exceptions set forth in clauses (1), (2) and (3) are
sometimes herein collectively called the “Permitted
Exceptions”.  For purposes of this Agreement, “Affiliates” of any Seller
shall mean entities controlling, controlled by, or under common control with,
such Seller.

    
      
         

      

      
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    2.           Inspection and Due Diligence
Period.  This Agreement is contingent upon Buyer being
satisfied that all of the Property is acceptable to Buyer in its sole and
absolute discretion.  Commencing on the Effective Date, as defined in
Section 27
hereof, Buyer shall have until October 25, 2010 (subject to extension for a
Delivery Failure as defined below) (the “Due
Diligence Period”), to conduct any examinations, inspections, reviews,
studies or tests as to the condition of each of the Premises, including any
buildings or improvements thereon, all parking areas, landscaping and amenities,
and to otherwise perform any due diligence with respect to each of the Premises
and the other Property it deems necessary in its sole and absolute discretion
(the “Inspections”);
provided, however, all Inspections shall be subject to the provisions of Section
15 of this Agreement.

     

    Buyer’s
right to conduct the Inspections shall include the right to perform or cause to
be performed such examinations, inspections, reviews, studies or tests of each
of the Premises and all of the other Property as Buyer shall deem necessary in
its sole discretion, including, without limitation, soil tests and borings,
zoning, traffic, marketing and land use studies, engineering inspections of all
building and improvements, including all apartment units, the roofs, load
bearing walls, structural support, elevators, HVAC and other mechanical systems,
and environmental assessments.  Buyer may also inspect and copy all
books and records with respect to the operation of each of the
Premises.  Seller agrees to fully and promptly cooperate in good faith
with Buyer’s Inspections.  Seller has provided to Buyer the documents
and items listed on Schedule 2
hereto.  To the extent reasonably available to Seller, without the
expenditure by Seller of any sum in excess of Five Hundred Dollars and 00/100
($500.00) per Premises, Seller will provide, within two (2) business days of
Buyer’s written request therefore, at any time during the Due Diligence Period,
such other documents and items as Buyer may reasonably have requested in
connection with Buyer’s inspection of each of the Premises and the other
Property, including, without limitation, the following: copies of any existing
surveys, appraisals, termite and pest inspections, title policies or reports
(including legible copies of all exceptions), engineering reports, all pleadings
(including settlement agreements) for all Material Litigation, as such term is
defined in Section
12.(b)iv.2. hereof, commenced by or against Seller or with respect to the
Property during the three year period prior to the date hereof, engineering
plans and specifications, insurance policies, operating statements and budgets,
financial records, a list of operating expenses, copies of all service and
maintenance contracts, warranties, permits, soil studies, environmental studies
and reports (including any radon, asbestos or lead paint studies), market
studies, architectural drawings and renderings, rent rolls, Leases, tenant files
and work orders and other records regarding the Property (collectively the
“Documents”)
and shall, commencing with the Effective Date, provide Buyer with reasonable
access to all portions of each of the Premises, subject to the provisions of
Section 15 of
this Agreement, including any required notice to tenants of the
Premises.

    
      
         

      

      
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    If Seller
fails to timely comply with its obligations set forth in this Section 2. (a “Delivery
Failure”), then Buyer may either:  (i) terminate this Agreement
and all of its obligations hereunder, or (ii) extend the Due Diligence Period
until Seller shall, in Buyer’s sole reasonable determination, cure such Delivery
Failure, but in no event shall the Due Diligence Period be extended for more
than seven (7) days from the date that Seller has cured each such Delivery
Failure.  If, in the event of a Delivery Failure,
either:  (1) Buyer elects to terminate this Agreement or (2) Buyer
elects to extend the Due Diligence Period and at the end of the Due Diligence
Period as so extended, the Delivery Failure remains uncured and Buyer elects to
terminate this Agreement, then in either event, this Agreement shall be null and
void in all respects, and thereafter neither party shall have any further
rights, liabilities or obligations hereunder, except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination, and the Escrow Agent
shall promptly return the Deposit to Buyer.

     

    If Buyer
shall determine, in its sole and absolute discretion, without any explanation to
Seller, that it is not satisfied with the results of its review, test and
inspection of each of the Premises, or for any or for no reason, then Buyer
shall have the right to terminate this Agreement and all of its obligations
hereunder by giving Seller written notice of such decision on or before 5:00
p.m. (EDT) on the last day of the Due Diligence Period or, if the last day of
the Due Diligence Period is not a business day, then by 5:00 p.m. (EDT) on the
next business day immediately following the last day of the Due Diligence
Period.  In the event Buyer so elects to terminate this Agreement,
then this Agreement shall be null and void in all respects, and thereafter
neither party shall have any further rights, liabilities or obligations
hereunder, except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination, and the Escrow Agent
shall promptly return the Deposit to Buyer.  In the event Buyer does
not elect to terminate this Agreement as permitted by this Section 2, Buyer is
deemed to have waived all matters relating to the Inspections that arose prior
to or during the Due Diligence Period (except title and survey matters, which
are governed by Section 5), and Buyer shall deliver the Deposit to the Escrow
Agent within two (2) business days after the last day of the Due Diligence
Period.

     

    3.           Purchase
Price.

     

    (a)           Purchase
Price.  The Purchase Price for the Property shall be equal to
Forty Six Million Seven Hundred Fifty Seven Thousand Dollars and 00/100
($46,757,000), payable in cash as hereafter provided.   The
Purchase Price shall be paid by Buyer to Seller at Closing as provided
herein:

     

    i.        No
later than October 25, 2010, to be deposited and held in escrow by the Escrow
Agent as provided in Section 3. (b)
hereof: One Million Dollars and 00/100 ($1,000,000.00);

     

    ii.       At
Closing, subject to adjustment and proration as provided in Section 9. hereof:
Forty Five Million Seven Hundred Fifty Seven Thousand Dollars and 00/100
($45,757,000);

     

    iii.      The
Purchase Price shall be allocated among each of the Premises as set forth on
Schedule
3(a)(iii).

    
      
         

      

      
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    (b)           Deposit.  No
later than October 25, 2010, Buyer shall deposit funds in the amount of One
Million Dollars and 00/100 ($1,000,000.00) (together with any interest earned
thereon, the “Deposit”)
with Chicago Title Insurance Company (the “Escrow
Agent”) located at 711 Third Avenue, 5th Floor,
New York, NY 10017, Attention: Kathleen Fiorito, pursuant to the wire
instructions attached hereto as Schedule
3(b).  In the event this Agreement is closed as contemplated
herein, the Deposit shall be applied to the cash portion of the Purchase Price
at Closing as a credit to Buyer, otherwise, the Escrow Agent shall hold and
apply the Deposit as provided in this Agreement.  Buyer and Sellers
shall provide their respective federal employer identification numbers to Escrow
Agent for purposes of federal and state tax reporting of interest earned on the
Deposit.  If this Agreement closes as provided herein or if the
Deposit is returned to Buyer as provided herein, Buyer shall be responsible for
the payment of any federal and state income tax with respect to any such accrued
interest.  If this Agreement does not close and Seller is entitled to
retain the Deposit, then it shall be responsible for the payment of any federal
and state income tax with respect to any such accrued interest.  Upon
expiration of the Due Diligence Period, the Deposit becomes non-refundable to
Buyer and shall be paid to or applied for the benefit of Seller in accordance
with the provisions hereof, except as expressly provided herein.

     

    (c)           Seller
Deposit.  In order to minimize the risk to Buyer of Seller’s
failure to close on the Premises in accordance with this Agreement, Seller has
agreed to post a deposit (the “Seller
Deposit”) in the form of a letter of credit in the amount of Three
Million Dollars and 00/100 ($3,000,000.00) issued by KeyBank in a form
reasonably acceptable to Buyer (the “LOC”).  The
LOC shall be delivered by Seller to Buyer on or before October 25,
2010.  Seller and Buyer agree that it would be impracticable and
extremely difficult to ascertain the amount of actual damages caused by a
failure of the Seller to perform its obligations under this
Agreement.  Consequently, Seller and Buyer agree that, in the event
Seller defaults in its obligations under this Agreement beyond any further
applicable grace period, Buyer shall be entitled to draw on the LOC and retain
the Seller Deposit as liquidated damages for such Seller default
hereunder.  Seller and Buyer agree that this liquidated damages
provision represents reasonable compensation for the loss which would be
incurred by Buyer due to its inability to purchase the Premises contemplated by
this Agreement as a result of a default by Seller hereunder.  Seller
further agrees that nothing in this Section 3(c) shall
limit the Buyer’s right to obtain specific performance of the Seller’s
obligation hereunder as an alternative remedy.

    
      
         

      

      
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    4.           Conveyances.  On
the Closing Date, each Seller shall, with respect to its respective Premises:
(i) convey to Buyer good and marketable fee simple title, subject to only the
Permitted Exceptions, to its respective Premises, by special warranty deed using
the applicable form provided by the Escrow Agent, as approved by Buyer and
Seller and where requested by Buyer, Seller shall quit claim any difference
between the surveyor’s description and the description of the property set forth
in the vesting deeds (singly and collectively, the “Deed”);
(ii) convey to Buyer good title to its respective Personal Property by a Bill of
Sale in the form attached hereto and made a part hereof as Exhibit D (the “Bill of
Sale”); (iii) assign to Buyer its respective Warranties, Service
Contracts and Permits by an Assignment in the form attached hereto and made a
part hereof as Exhibit
E (the “Assignment”)
and (iv) assign to Buyer its respective Leases by an Assignment and Assumption
of Leases in the form attached hereto and made a part hereof as Exhibit F (the “Assignment
of Leases”).  Notwithstanding anything in this Agreement to the
contrary, Buyer and Seller agree that this Agreement is for an “all or none”
sale of the Premises and Buyer shall buy and Seller shall sell all of the
Premises or none of the Premises.

     

    5.           Title and
Survey.

     

    (a)           Title.  Seller
has provided Buyer with a copy of Seller’s current title
policy for each of the Premises (singly and collectively, the “Existing
Title Policy”).  Buyer may at its option, and at Buyer’s sole
cost and expense: 
(i) promptly apply for and pursue completion of an update of any Existing Title
Policy, or (ii) apply for a new title commitment for any of the Premises (singly
and collectively, the “Commitment”)
including true, correct and complete legible copies of all items and documents
referred to therein, each Commitment evidencing the title company’s
agreement to issue
to the Buyer at Closing, an owner’s policy or policies of title insurance on
ALTA Form B-2006 in an amount equal to the portion of the Purchase Price
allocated to each Premises in accordance with Schedule 3(a)(iii)
hereof; insuring the good and clear marketable indefeasible fee title, both of
record and in fact, of the Buyer to each of the Premises, subject only to the
respective Permitted Exceptions; which policy or policies shall each provide
extended coverage over any unrecorded mechanics liens arising prior to the
Closing Date, insure the “gap” between Closing and the recording of the
respective Deed, delete as an exception to such policy the survey exception and
contain such endorsements as Buyer may require in its reasonable discretion
(singly and collectively, the “Title
Policy”).  Seller will cooperate, to a reasonable extent, with
Buyer’s efforts to obtain its desired title endorsement, at no cost or expense
to Seller.  Buyer shall, on or before 5:00 p.m. (EDT) on the last day
of the Due Diligence Period notify Seller in writing specifying Buyer’s
objections (the “Title
Objections”), if any, to the state of title as reflected in the
Commitment (“Buyer’s
Title Notice”).  All matters contained in the Commitment, which
are not listed as Title Objections in Buyer’s Title Notice, shall be deemed to
be accepted by Buyer and considered to be Permitted Exceptions with respect to
the Premises in question in addition to those Permitted Exceptions specified in
Section 1.
hereof.

    
      
         

      

      
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    (b)           Seller
shall use reasonable, good faith and diligent efforts to remove, on or before
the Closing Date, any Title Objections that Buyer has listed in the Buyer’s
Title Notice.  Notwithstanding the foregoing, Seller shall not be
required to expend a sum in excess of one-percent (1%) of the Purchase Price
allocable to any Premises to correct Title Objections as to that Premises,
except for mortgages and liens, which Seller shall remove in any event
regardless of the amount thereof. If Seller is unable or reasonably believes
that it will be unable as of the Closing Date, after such reasonable, good faith
and diligent efforts, to remove any such Title Objections, Seller shall notify
Buyer in writing of such fact as soon as reasonably possible, but in no event
later than the date that is ten (10) days after the date of Buyer’s Title
Notice.  In such event, Buyer may, at its sole election: (i) terminate
this Agreement, or (ii) accept title to each of the Premises subject to all such
Title Objections, provided that it shall give to the Seller written notice of
its election on or before the tenth (10th) day after the date on which it
receives Seller’s notice of Seller’s inability to cure such Title
Objections.

     

    In the
event that any title matter arises between the date of the Commitment and the
Closing Date, that was not contained in the Existing Title Policy or the
Commitment and that is objectionable to Buyer, Buyer shall give Seller prompt
written notice of any such new Title Objections and Seller shall, subject to the
cost limitations set forth in this Section 5.(a) above,
use reasonable, good faith and diligent efforts to remove such Title
Objections.  If Seller is unable or reasonably believes that it will
be unable, after reasonable, good faith and diligent efforts, to cure such
additional Title Objections by the Closing Date, it shall promptly, but in no
event later than ten (10) business days prior to the Closing Date, notify Buyer
in writing, in which case, Buyer may, at its election, by written notice to
Seller:  (1) terminate this Agreement, or (2) extend the Closing Date
for a reasonable period of time not to exceed thirty (30) days from the Closing
Date, during which time Seller shall, subject to the provisions of this Section 5.(a), use
reasonable, good faith and diligent efforts to remove such additional Title
Objections, or (3) accept title to such Premises subject to such additional
Title Objections.  If Buyer elects the alternative contained in Subsection (2) and at
the expiration of such period, Seller is unsuccessful in removing any additional
Title Objections, Seller shall notify Buyer of such fact and Buyer shall have
the option of either:  (a) accepting the title to all of the Premises
subject to such additional Title Objections, or (b) terminating this Agreement;
provided that it shall give to the Seller written notice of its election on or
before the tenth (10th) day after the date on which it receives notice of
Seller’s inability to cure such additional Title Objections.

     

    If Buyer
elects to terminate this Agreement under any of the foregoing provisions, then
this Agreement shall be null and void in all respects, and thereafter neither
party shall have any further rights, liabilities or obligations hereunder,
except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination, and the Escrow Agent
shall promptly return the Deposit, if any, to Buyer

     

    (b)           Survey.  Seller  has
provided Buyer with a legible copy of the most current “as-built” boundary line
survey for each of the Premises, prepared by a registered land surveyor and so
certified by the surveyor as having been made in compliance with the
requirements of an ALTA survey (singly and collectively, the “Survey”).
Buyer may at its option, and at Buyer’s sole cost and expense, promptly apply
for and pursue completion of an update of each Survey. If any Survey discloses
easements, restrictions, rights of way, encroachments or other matters which
would adversely and materially affect the use and occupancy of any of the
Premises for multi-tenant residential use, including student housing, as
determined in Buyer’s sole discretion, and which are not Permitted Exceptions
(“Survey
Objections”), Buyer may, at its option, on or before 5:00 p.m. (EDT) on
the last day of the Due Diligence Period, by written notice to Seller either:
(1) terminate this Agreement or (2) accept title to all of the Premises subject
to such Survey Objections.

    
      
         

      

      
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    If Buyer
elects to terminate this Agreement as provided above, this Agreement shall be
null and void in all respects, and thereafter neither party shall have any
further rights, liabilities or obligations hereunder, except as provided in
Section 14. and
Section 15.
hereof, each of which shall expressly survive such termination, and the Escrow
Agent shall promptly return the Deposit to Buyer.

     

    6.           Conditions Precedent to
Buyer’s and Seller’s Obligation to Close.

     

    (a) Conditions to Buyer’s
Obligation to Close. Without limitation of any other provisions hereof,
Buyer’s obligation to perform the terms of this Agreement shall be subject to
the satisfaction (as determined in Buyer’s sole discretion) of each of the
following conditions precedent with respect to each of the Premises (hereafter
“Buyer’s
Conditions”) (any one or more of which may be waived in writing by Buyer
in its sole and absolute discretion):

     

    i.           that
the Seller has cured all Title Objections as provided in Section 5.(a)
hereof;

     

    ii.          that
Buyer has not exercised its right to terminate this Agreement under Section 2., Section 5., Section 6.(b), Section 7., Section 10., Section 12. or Section 13.
hereof;

     

    iii.         that
each of the Seller’s representations, warranties, and covenants hereunder shall
be true and correct in all material respects and not materially misleading as of
the Closing Date;

     

    iv.         Buyer
has determined that no Hazardous or Toxic Material shall have been discharged,
disposed of or released or otherwise exist in, on or under any of the Premises
as of the Closing Date, which Hazardous or Toxic Material was not in existence
on the last day of the Due Diligence Period;

     

    v.          that
the physical condition of each of the Premises, and any improvements thereon, on
the Closing Date shall not have deteriorated from their condition on the last
day of the Due Diligence Period, reasonable wear and tear excepted.

     

    vi.         that
occupancy, gross revenues and general financial condition, including expenses
and revenues of each of the Premises is not adversely different from the
occupancy, gross revenues and general financial condition, including expenses
and revenues of each such Premises on the last day of the Due Diligence Period,
or if adversely different, there is no more than a five percent (5%)
variance;

     

    vii.        the
purchase and sale transaction contemplated by this Agreement has been
consummated with respect to each of the Premises in accordance with terms and
provisions hereof, except as expressly provided herein; and

     

    viii.       that
Seller has performed all of its obligations hereunder as provided
herein.

    
      
         

      

      
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    If Buyer
shall determine, in its sole discretion, that any of the Buyer’s Conditions are
not satisfied on the Closing Date with respect to each of the Premises (a “Buyer’s
Condition Failure”), then Buyer shall have the right, in its sole
discretion, and in addition to its other rights and remedies hereunder, to: (i)
terminate this Agreement, in which case this Agreement shall be null and void in
all respects, and thereafter neither party shall have any further rights,
liabilities or obligations hereunder, except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination, and the Escrow Agent
shall promptly return the Deposit to Buyer or (ii) waive the Buyer’s Condition
Failure and proceed to closing in accordance with the terms and provisions
hereof.

     

    (b)           Conditions to Seller’s
Obligation to Close.   Without limitation of any other
provisions hereof, Seller’s obligation to perform the terms of this Agreement
shall be subject to the satisfaction (as determined in Seller’s sole discretion)
of each of the following conditions precedent with respect to each of the
Premises (hereafter “Seller’s
Conditions”):  (i) Buyer has
not timely delivered notice of termination pursuant to the terms of this
Agreement, and (ii) all representations and warranties made by Buyer shall have
remained true in all material respects, (iii) Buyer shall not be in default of
its obligations under this Agreement.  If Seller shall determine, in
its sole discretion, that any of the Seller’s Conditions, or any of the other
obligations of Buyer under this Agreement, are not satisfied on the Closing Date
with respect to each of the Premises (a “Seller’s
Condition Failure”), then Seller shall have the
right, in its sole discretion to:  (i) terminate this Agreement and
exercise its remedies under Section 13(b) hereof
or (ii) waive the Seller’s Condition Failure and proceed to closing in
accordance with the terms and provisions hereof.

     

    7.           Condemnation and Damage and
Destruction.

     

    (a)           If
after the Effective Date hereof and prior to the Closing Date, all or a material
portion of any of the Premises is taken by eminent domain or condemnation (or
sale in lieu thereof) or experiences any material damage, destruction or
casualty (a “Condemnation
or Casualty Event”), Buyer may by written notice to Seller elect to:
terminate this Agreement, in which case this Agreement shall be null and void in
all respects, and thereafter neither party shall have any further rights,
liabilities or obligations hereunder, except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination, and the Escrow Agent
shall promptly return the Deposit, if any, to Buyer.  If Buyer does
not elect to cancel this Agreement as provided above, this Agreement shall
remain in full force and effect and the purchase contemplated herein, less any
interest taken by eminent domain or condemnation, shall be effected with no
adjustment or abatement of the Purchase Price, other than a credit to Buyer for
any applicable insurance deductible in the event of a casualty; provided, however, that at the Closing,
Seller shall pay to Buyer all amounts received by Seller with respect to such
Condemnation or Casualty Event and shall assign, transfer and set over to Buyer
all of the right, title and interest of Seller in and to: (i) any awards that
have been or that may thereafter be made for such Condemnation or Casualty
Event, and (ii) the rights to any and all insurance proceeds relating to such
Condemnation or Casualty Event.

    
      
         

      

      
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    (b)          If
after the Effective Date and prior to the Closing Date as a result of a
Condemnation or Casualty Event, an immaterial portion of any of the Premises is
taken or suffers any damage, this Agreement shall remain in full force and
effect and the purchase contemplated herein, less any interest taken as a result
of such Condemnation or Casualty Event, shall take place in accordance with the
provisions of this Agreement with no further adjustment or abatement of the
Purchase Price, other than for a credit to Buyer for any applicable insurance
deductible in the event of a casualty; provided, however, that at Closing,
Seller shall pay to Buyer all amounts received by Seller for such Condemnation
or Casualty Event and shall assign, transfer and set over to Buyer all of the
right, title and interest of Seller in and to: (i) any awards that have been or
that my hereafter be made for such taking, and (ii) the rights to any and all
insurance proceeds relating thereto.

     

    (c)          For
purposes of Subsection
7.(a), the term “material portion” shall refer to a portion of any or all
of the Premises, a taking of which or destruction or damage to which as a result
of a Condemnation or Casualty Event would, in the reasonable judgment of Buyer:
(i) require restoration or repair costing either: (A) $200,000 or more for any
one of the Premises or (B) $500,000 or more for all of the Premises in the
aggregate, (ii) decrease the value: (A) of any one of the Premises by $200,000
or more or (B) of all of the Premises, in the aggregate, by $500,000 or more, or
(iii) would materially adversely affect: (1) the ingress and/or egress to or
from any of the Premises or (2) the intended use of any of the Premises as
multifamily residential property, including student housing.  For
purposes of Subsection
7.(b), an “immaterial portion” shall refer to a portion of any Premises,
a taking of which or destruction or damage to which as a result of a
Condemnation or Casualty Event would, in the reasonable judgment of Buyer: (i)
require restoration or repair costing: (A) for any one of the Premises, of less
than $200,000 or (B) for more than one of the Premises, of less than $500,000 in
the aggregate, (ii) decrease the value: (A) of any one of the Premises, by less
than $200,000 or (B) of more than one of the Premises, by less than $500,000 in
the aggregate, (iii) does not materially adversely affect: (1) the ingress
and/or egress to or from any of the Premises or (2) the intended use of any of
the Premises as multifamily residential property, including student
housing.

     

    (d)          Prior
to Closing, in the event of any casualty or condemnation, Seller shall, subject
to the provisions of this Agreement, bear the sole risk of any loss resulting
from a Condemnation or Casualty Event.

     

    8.           Closing.

     

    (a)          The
transaction contemplated hereunder shall close (the “Closing”)
by escrow established with the Escrow Agent upon twenty (20) days notice from
Buyer and shall occur no earlier than January 15, 2011 and no later than
February 15, 2011, unless otherwise agreed by the parties hereto. (the “Closing
Date”)

     

    (b)          At
least five (5) business days prior to Closing, each Seller will deliver to Buyer
(or make available at the Premises as indicated) for its respective Premises,
the following:

     

    i.           A
current rent roll for such Seller’s respective Premises certified by such Seller
containing the name of each tenant, the date of the respective lease, the lease
rent being collected, the lease maturity date, the security deposit, if any, any
interest accrued thereon, and the date to which rent has been collected and the
amount so collected, together with copies of any Leases not previously delivered
to Buyer;

    
      
         

      

      
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    ii.          Copies
of all Service Contracts, to the extent assumed by Buyer, and not previously
delivered to Buyer pursuant to Section 2 (made
available at the Premises);

     

    iii.         Copies
of all employment contracts, if any not previously delivered to Buyer pursuant
to Section 2.,
and evidence of termination of all employees and employment contract not
expressly assumed by Buyer (made available at the Premises);

     

    iv.         Proof
of the valid existence of such Seller in the form of a current certificate of
legal existence dated not more than 30 days prior to the Closing Date and proof
of such Seller’s authority to consummate the purchase and sale contemplated by
this Agreement.

     

    v.          A
closing statement setting forth all adjustments and pro rations as of the
Closing Date as provided in Section 9(a) hereof
(the “Closing
Statement”);

     

    vi.         Copies
of all such Seller’s proposed closing documents, including, without limitation,
the Deed, Bills of Sale, Assignments, Assignment of Lease and all transfer tax
forms;

     

    vii.        A
payoff statement for each mortgage encumbering the Premises; and

     

    viii.       Any
additional documents that Buyer or the Escrow Agent may reasonably require in
connection with the transfer of title.

     

    (c)          On
the Closing Date, Seller shall be responsible for paying its legal fees, the
costs of curing any Title Objections (subject to Section 5.(a)) and
one-half of the cost of the escrow fee.  All conveyance and other
transfer taxes and sales and use taxes which may be assessed in connection with
the conveyance of the Property to Buyer, including the cost of filing the
required reporting forms therefor, shall be allocated in accordance with the
custom of the location in which each Premises is located.  All costs
associated with Buyer’s inspection rights under Section 2 hereof, the
Commitment, the Title Policy, the update of the Survey, one-half of the escrow
fee and its legal fees shall be paid solely by Buyer. At least one (1) business
day prior to the Closing Date, each Seller shall, with respect to its respective
Premises, deliver to the Escrow Agent in escrow (except as expressly noted
below), the fully executed, witnessed and acknowledged Deed, Bill of
Sale, Assignment, and the Assignment of Leases with all exhibits attached to
each such document, together with the following items:

     

    i.           a
mechanic’s lien and parties in possession affidavit, in form and substance
satisfactory to the Escrow Agent, executed by such Seller that: (A) shows its
respective Premises to be free of any liens, other than the liens included as
Permitted Exceptions, and that no work has been performed or contracted which
might give rise to any liens and (B) shows its respective Premises to be free
from possession by third parties other than pursuant to the tenant leases with
rights as tenants only;

     

    ii.          releases
or equivalent documents, for any mortgage or other liens encumbering its
respective Premises, or in the alternative, evidence of the payment in full of
such items satisfactory to the Escrow Agent so as to permit the Escrow Agent to
remove any such item as an exception to title on the Title
Policy;

    
      
         

      

      
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    iii.         a
current rent roll for such Seller’s respective Premises, certified by such
Seller to be delivered to Buyer at Closing, and all original tenant files,
including all original Leases, work orders and other documents with respect to
the Leases, and receipts for security deposits shall be available to Buyer at
Sellers’ respective Premises;

     

    iv.         to
the extent not previously provided to Buyer as part of the Documents,
correspondence with respect to suppliers and vendors, unpaid bills (to the
extent payment thereof is the obligation of Buyer hereunder or affects such
Seller’s respective Property after Closing), the original Warranties, Service
Contracts and Permits, and all mechanical drawings, plans and specifications,
engineering reports, environmental and soil tests and reports, appraisals,
surveys and maps, operating budgets, correspondence, and books and records for
such Seller’s respective Premises in such Seller’s possession or under its
control, which items shall be delivered to Buyer at such Seller’s respective
Premises;

     

    v.          evidence
reasonably satisfactory to Buyer and the Escrow Agent of such Seller’s authority
to consummate the transactions contemplated by this Agreement, including,
without limitation, corporate and partnership resolutions, incumbency
certificates, evidence of payment of all franchise and other taxes and
certificates of good standing or their equivalent from the appropriate
governmental authorities;

     

    vi.         a
FIRPTA Affidavit signed by such Seller or the appropriate tax-paying
entity;

     

    vii.        the
Closing Statement executed by such Seller;

     

    viii.       if
required by the Escrow Agent to issue the Title Policy, the customary “gap”
indemnity;

     

    ix.         written
cancellation letters for all Service Contracts not assumed by
Buyer;

     

    x.          a
fully completed IRS Form 1099S, which shall be the responsibility of the closing
settlement agent to file;

     

    xi.         a
certificate in form and substance reasonably acceptable to Buyer, confirming
that as of the Closing Date all of such Seller’s representations and warranties
set forth herein are true and correct;

     

    xii.        letters
to tenants under the Leases in the form attached hereto as Exhibit G shall be
delivered to Buyer at Sellers’ respective Premises; and

     

    xiii.       such
other documents and agreements as the Buyer or the Escrow Agent may reasonably
request.

     

    (d)          At
least one (1) business day prior to the Closing Date, in addition to each
Closing Statement, each Assignment and each Assignment of Leases executed by the
Buyer, Buyer shall deliver to the Escrow Agent:  (i) such other
documents and instruments as Seller and the Escrow Agent may reasonably request
and (ii) the cash portion of the Purchase Price as fully determined after
computation of adjustments and prorations as provided in Section 9. hereof, to
be delivered in the form of a wire transfer of immediately available federal
funds to the Escrow Agent.

    
      
         

      

      
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    (e)          Buyer
shall have the right, during the ten (10) business day period immediately prior
to the Closing Date, to inspect all portions of each of the Premises and all
other Property and to review all tenant files and other property
records.

     

    (f)           Possession
of the Property shall be delivered to Buyer by Seller at the Closing, subject
only to such rights of tenants set forth on the Rent Roll.

     

    (g)          Whenever
under the terms of this Agreement, the time for performance falls on a Saturday,
Sunday or legal holiday, such time for performance shall be extended to the next
business day.

     

    (h)          Except
for liabilities expressly assumed in accordance with this Agreement, Buyer
assumes none of the liabilities of Seller.

     

    9.           Prorations and
Adjustments.

     

    (a)          The
following items shall comprise prorations and adjustments to be determined as of
11:59 p.m. of the day immediately preceding the Closing Date, and shall increase
or decrease the cash portion of the Purchase Price, as the case may
be:

     

    i.           Income
and Expenses.  All income and
expenses of the Real Property and Improvements.  All rents prepaid for
a portion of the term on or after the Closing, shall be paid by credit to Buyer
at the Closing.  All other income and expense items subject to
proration pertaining to the period prior to the Closing Date will be allocated
to and paid by Seller and all income and expense items subject to proration
pertaining to the period starting on the Closing Date will be allocated to and
paid by Buyer.  Seller is responsible for lease commissions due
Seller's employees and locater fees for leases under which the tenant moves into
a unit prior to the Closing Date.  All non-refundable and fully earned
application fees which are not prepaid security deposits shall be retained by
Seller.  Any income receivable in connection with any service contract
will be prorated, but no lump sum or up front payments paid to Seller with
respect to any service contract will be prorated.  Except as provided
in subsection (vi) below, Rent will be prorated based on the Rent Roll provided
by Seller at the Closing as provided in subsection 8(b)(i), including collected
and uncollected rent for the month of Closing.  No later than three
(3) business days prior to the Closing Date, Buyer and Seller shall mutually
approve and provide to the Title Company a schedule of prorations in as complete
and accurate a form as possible.  No later than sixty (60) days after
the Closing, Seller and Buyer shall make appropriate post-Closing adjustments to
the prorations of income and expenses but in no event will any readjustment be
made after the 180th day
after the Closing Date, other than a readjustment of ad valorem taxes and
assessments.

     

    ii.          Deposits.  All deposits paid
as refundable security for rent, cleaning, pet deposits, or any other purposes
will be paid to Buyer at the Closing and the obligation, if any, to refund the
cash deposits to tenants is assumed by Buyer.  No non-refundable
deposits or fees paid by tenants shall be paid or payable to
Buyer.

    
      
         

      

      
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    iii.         Taxes.  Ad valorem taxes
and personal property taxes (if any) for the Property for the current calendar
year shall be prorated to date of the Closing, and Buyer shall credit to Seller
at the Closing, Buyer’s pro-rata portion of such taxes, all in accordance with
the custom for the jurisdiction in which the respective Property is
located.  Buyer’s pro rata portion of such taxes shall be based upon
taxes actually assessed for the current calendar year. If, for any reason, ad
valorem taxes and personal property taxes (if any) for the current calendar year
have not been assessed on the Property, such prorating shall be estimated based
upon ad valorem taxes and personal property taxes (if any) for the immediately
preceding calendar year, and adjusted within thirty (30) days of the date that
actual amounts are available.  Buyer and Seller agree that the sale of
the Premises does not constitute an “applicable asset acquisition” within the
meaning of Section 1060 of the Internal Revenue Code and will file all tax
returns consistently therewith.

     

    iv.         Expenses.  All other income
and ordinary operating expenses for or pertaining to the Property, including,
but not limited to, public utility charges, maintenance, service charges,
housekeeping expenses and all other normal operating charges of the Property
shall be prorated at the Closing. In the event the meter readings are not
available at the Closing, utility costs will be prorated based on the best
information available.

     

    v.        
 Reproration.  In the event any
prorations made by the parties are found to be erroneous, then either party
hereto who is entitled to additional monies shall invoice the other party for
such additional amounts as may be owing, and such amount shall be paid within
ten (10) days from receipt of the invoice. The obligations of Seller and Buyer
to reprorate shall survive the Closing for a period of 180 days, except as
provided in paragraph 9(a)(iii) with respect to taxes.

     

    vi.         Accounts
Receivable.  At Closing, all accounts receivable, more than
thirty (30) days old but not more than ninety (90) days old as of the Closing
Date, due from tenants at a Seller’s respective Property (the “Purchased
Receivables”) will be purchased from such Seller by Buyer at a discount
of fifty percent (50%) of the amount past due and Buyer shall have no further
obligation to such Seller for any accounts receivable
collections.  Such Seller may pursue collection of any delinquent
rents that are more than ninety (90) days old as of the Closing Date provided
that such Seller shall have no right to terminate a Lease or any tenant’s
occupancy under any Lease in connection therewith.

     

    vii.        Any
sales and use taxes generated in connection with the purchase or sale of the
Personal Property shall be allocated in accordance with the local custom in
which each Premises is located.

     

    viii.       Buyer
shall receive a credit against the Purchase Price at Closing in the amount of
Six Hundred Twenty Five Thousand Dollars and 00/100 ($625,000.00).

     

    (b)          With
respect to each Property, the parties shall cause the reading of all utility
services at such Property, including, without limitation, oil, water, electric,
telephone, gas and sewer, to be made as of 11:59 p.m. of the day immediately
preceding the Closing Date (as determined by the local time in which such
Property is located), or as soon prior thereto as possible, and the Seller for
such respective Property shall pay final utility bills that are not billed
directly to and paid by tenants through and including the aforementioned 11:59
p.m. time.  Each Seller shall obtain refunds of any security deposits
made for such utilities with respect to its respective Property, and Buyer shall
make its own utility deposits with respect to such Property to assure continued
services, or Buyer, if it elects, shall pay to such Seller the amount of such
deposits related to such Seller’s respective Property and receive the transfer
of such deposits.

    
      
         

      

      
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    (c)          To
the extent that any adjustment set forth herein is based upon estimated bills,
such amounts will be readjusted upon final determination of the amounts in
question; in all events by that date which is one hundred eighty (180) days
after the Closing Date.

     

    10.           Representations, Warranties
and Agreements of and Indemnity by Seller.  To induce Buyer to
execute, deliver and perform this Agreement, each Seller hereby represents and
warrants to, and agrees for the benefit of, Buyer that, with respect to its
respective Property, each of the following representations, warranties and
agreements on and as of the date hereof are, and will be on and as of the
Closing Date, true, complete, correct in all material respects and not
misleading in any material adverse respect:

     

    (a)          that
such Seller is the sole owner of its respective Property and such Seller has
full capacity, right, power and authority to execute, deliver and perform this
Agreement and all documents to be executed by such Seller pursuant hereto, and
all required action and approvals therefor have been duly taken and obtained,
and that the individuals signing this Agreement and all other documents executed
or to be executed pursuant hereto on behalf of such Seller are and shall be duly
authorized to sign the same on such Seller’s behalf and to bind such Seller
thereto, and that this Agreement and all documents to be executed pursuant
hereto by such Seller are and shall be binding upon and enforceable against such
Seller in accordance with their respective terms, and the transaction
contemplated hereby will not result in a breach of or constitute a default or
permit acceleration of maturity under any indenture, mortgage, deed of trust,
loan agreement or other agreement to which such Seller or its respective
Premises are subject or by which such Seller or its respective Premises are
bound;

     

    (b)          that
there are, and will be as of the Closing Date, no liens against the Property,
other than the Permitted Exceptions;

     

    (c)          that
Seller has not received any notice of, and has no actual knowledge of any
health, safety, building, pollution, environmental, zoning or other violations
of law, including, without limitation, any Environmental Laws, as such term is
hereafter defined, with respect to any of the Premises which have not been
entirely corrected;

     

    (d)          that:
(1) except as noted in the certified rent rolls described in Sections 8.(b)i. and
8(d)(iii). hereof, each of the Leases is and on the Closing Date will be
in full force and effect and Seller has not received notice from any tenant
thereunder of, nor is Seller aware of, a default by Seller of its obligations
under any such Lease, (2) except as noted in the certified rent rolls described
in Section
8.(b)i. hereof, there are and will be on the Closing Date no rents under
any of the Leases paid more than 30 days in advance, (3) Seller has complied in
all material respects with all of the terms and conditions to be performed by
the landlord under the Leases as of the date hereof, (4) except as noted in the
certified rent rolls described in Section 8.(b)i. hereof, to best of Seller’s
knowledge, it is not aware of any event of default by any tenant under any
Lease, (5) there is not, nor will there be as of the Closing Date, any
obligation on the part of the landlord under the Leases to any tenant thereof to
perform any work, other than customary and normal maintenance and repair work,
(6) the rent roll attached hereto as Exhibit H is true and
correct in all respects, (7) the security deposits set forth on the rent roll
are the only security deposits with respect to the Leases and Seller has
complied with applicable state law governing tenant security deposits, and (8)
with the exception of typical disputes for security deposit refunds (for which
Seller shall remain fully liable after the Closing), Seller is not aware of any
defense, counterclaim or right of setoff which any tenant may have under any
Lease;

    
      
         

      

      
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    (e)          that
Seller has complied in all material respects with all the terms and conditions
to be performed by Seller under the Service Contracts that will affect the Buyer
or any of the Premises after Closing; that all Service Contracts, including any
management and leasing contracts, are identified in Exhibit C-1,
including, but not limited to, any management and leasing contracts that may be
terminated without cause on 30-days’ notice; that other than the Service
Contracts, there are no outstanding written contracts or agreements, whether for
maintenance, labor, materials, supplies, services or otherwise, with any person,
firm, labor union or entity with respect to the Property, and there are, and
will be as of the Closing Date, no past due amounts thereunder; that except as
noted on Exhibit
I, there are no employees of Seller, Seller has not made any promise or
commitment to any employee for or on behalf of Buyer for continued employment
after the Closing Date; and the employment of all of Seller’s employees for each
of the Premises shall be terminated by Seller effective as of the Closing Date
and in connection therewith Seller shall be responsible for payment of wages,
accrued benefits and unemployment withholding and Seller shall comply with all
state and federal law regarding such terminations;

     

    (f)           that
no foreign person, as defined in the Internal Revenue Code, has an interest in
Seller, or will receive any moneys from the sale of the Premises, or is subject
to withholding as required by Section 1445 of the Internal Revenue
Code;

     

    (g)          that
Seller has not received any written notice of, nor, to the best of Seller’s
knowledge, are there any pending or threatened condemnation or eminent domain
suits, relative to any of the Premises;

     

    (h)          that
on the Closing Date, the improvements on each of the Premises and all
electrical, plumbing and mechanical systems, including, without limitation, the
heating, ventilating and air conditioning system and all other equipment will be
in the same condition as on the last day of the Due Diligence Period, reasonable
wear and tear excepted.  The inventory of appliances, furnishings,
furniture, fixtures, equipment and machinery provided to Buyer by Seller as part
of the Documents is a full and complete list of all such Personal Property to be
transferred hereunder all of which is currently fully operational.  On
the Closing Date, possession of the Property and each of the Premises shall be
delivered to the Buyer in a fully operational condition and all apartment units
shall be in a fully rentable condition;

     

    (i)           that
attached hereto as Exhibit J is a
current list of all real and personal property taxes, assessments and impact
fees for each of the Premises, each of which are and will be on the Closing Date
current.  To the best of Seller’s knowledge: (1) there are no present
proceeding with respect to such taxes, impact fees and assessment; and (2) all
sales and use taxes due and payable with respect to the Property, including any
sales and use taxes due and payable in connection with any property management
agreement, are, and will be as of the Closing Date, current.

    
      
         

      

      
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    (j)           that
except as set forth in Exhibit K, Seller has
not received any written notice of, nor, to the best of Seller’s knowledge, does
Seller have any knowledge of any pending or threatened law suits, arbitrations
or claims, including mechanics liens.  Seller shall immediately give
Buyer written notice, by certified mail, return receipt requested, of any such
pending or threatened law suits, arbitrations or claims, including mechanics
liens.  In the event such pending or threatened law suits,
arbitrations or claims, including mechanics liens, shall involve a potential
loss or expense in excess of Ten Thousand Dollars ($10,000) (except condemnation
or eminent domain suits, which are governed by Section 7. hereof and
litigation involving tenants which is governed by Section 12. hereof),
or would adversely affect the use and occupancy of any of the Premises as
currently used as multifamily residential student housing, and such lawsuit,
arbitration or claim, including any mechanics lien, is not resolved by Seller to
Buyer’s reasonable satisfaction within Seller’s cure periods under Section 13.(a)
hereof, then Buyer shall have the option to (i) terminate this Agreement, in
which case this Agreement shall be null and void in all respects, and thereafter
neither party shall have any further rights, liabilities or obligations
hereunder, except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination, and the Escrow Agent
shall promptly return the Deposit, if any, to Buyer or (ii) waive the objection
and proceed to Closing in accordance with the terms and provisions hereof;
provided that Buyer shall, within ten (10) days of Buyer’s receipt from Seller
of written notice as aforesaid, give to Seller written notice of Buyer’s
election; and

     

    (k)          that
there are not, nor will there be as of the Closing Date, any commissions, or
other compensation owed to any person in connection with the Premises, including
any commissions paid to any person for finding tenants for the
Premises;

     

    (l)           that
there are no sales, income, franchise, withholding or similar taxes due and
owing from Seller, or any Affiliate, that are, or could, become a lien on any of
the Property and that each Seller, or any Affiliate, has timely filed all
returns for all such taxes for the period on or before the Closing that are
required to be filed on or before the Closing Date; and

     

    (m)         that
to the best of such Seller’s actual knowledge, without any investigation or
inquiry: (1) there has not been any escape, removal, seepage, spillage,
discharge, emission or release of any Hazardous or Toxic Material caused by such
Seller, or any Affiliates, on, under, above or emanating from any of such
Seller’s respective Premises, or any parts thereof, including any of the
buildings and improvements thereon; and (2) there are no pending or anticipated
suits, actions, proceedings or notices from any governmental or quasi
governmental agency with respect to any of the Premises, or any parts thereof,
including the buildings and improvements thereon.  For purposes of
this Agreement, the term “Hazardous
or Toxic Material” shall be defined to include: (x) asbestos or any
material composed of or containing asbestos in any form and of any type, or (y)
the presence of lead paint at any of the Premises or (z) any actionable amount
of hazardous, toxic or dangerous waste, substance, material, smoke, gas or
particulate matter, as from time to time defined by or for purposes of the
Comprehensive Environmental Response Compensation and Liability Act, and any law
commonly referred to as of the date hereof as “Superfund” or “Superlien” or any
successor to such laws, or any other federal, state or local environmental,
health or safety statute, ordinance, code, rule, regulation, order or decree
regulating, relating to or imposing liability or standards concerning or in
connection with hazardous, toxic or dangerous wastes, substances, material, gas
or particulate matter as now or at any time hereinafter in effect (collectively,
the “Environmental
Laws”).  Seller shall give prompt written notice to Buyer if
Seller knows that there may be any Hazardous or Toxic Materials in or around any
of the Premises or if Seller or any of the Premises is subject to any threatened
or pending investigation by any governmental authority under any governmental
requirement or ordinance pertaining to any Hazardous or Toxic
Material;

    
      
         

      

      
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    Seller
agrees to indemnify and hold Buyer harmless from and against all liabilities,
claims, actions, cost and expenses (including sums paid in settlement of claims
and all consultant, expert and legal fees and expenses of Buyer and its counsel)
or a loss directly or indirectly arising out of or resulting from any Hazardous
or Toxic Materials in or upon any part of any of the Premises, or in the soil,
ground water or soil vapor on or under any of the Premises (including those
incurred in connection with any investigation of site conditions or any cleanup,
remediation, removal, or restoration work, or any resulting damage or injuries
to the person or property of any third parties or to any natural resources) and
(i) which was caused by the acts, omissions or negligence of Seller, its
Affiliates, agents or employees, and (ii) which arose during the Seller’s
ownership of the Property (and not before); and (iii) which was not disclosed in
any environmental report or test provided to or secured by Buyer and (iv) except
for any such damages which may arise from any Hazardous or Toxic Materials which
have been discharged, disposed of or released in, on or under the Premises after
the Closing Date, or before the Closing Date as a result of Buyer’s negligence
or willful misconduct.  Upon Buyer’s demand and reasonable belief that
the presence of such Hazardous or Toxic Materials has given rise to any
investigation, action, or proceeding alleging the presence of any Hazardous or
Toxic Material which affects any of the Premises in question or which is
otherwise brought or commenced against Buyer, whether alone or together with
Seller or any other persons, Seller shall defend any such investigation, action
or proceeding, all at Seller’s own cost and by counsel to be approved by Buyer
in the exercise of its reasonable judgment.  Seller shall not
compromise or settle any such investigation, action or proceeding or consent to
any fine, penalty or sanction in connection therewith, without Buyer’s consent,
unless the total burden of such fine, penalty or sanction falls solely on the
Seller and does not, in Buyer’s reasonable judgment, affect Buyer or any of the
Premises.  If it is subsequently determined or agreed that the
presence of such Hazardous or Toxic Materials giving rise to the investigation,
action, or proceeding was not caused by Seller, its Affiliates, agents or
employees, then Buyer shall reimburse Seller for all costs and expenses
(including sums paid in settlement of claims and all consultant, expert and
legal fees and expenses incurred by Seller and its counsel or any other losses
suffered by Seller) incurred or suffered by Seller in defending Buyer and any of
the Premises from such claim, action, or proceeding;

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    If
between the date hereof and Closing, Seller has actual knowledge that any of the
foregoing representations and warranties proves or becomes untrue, incorrect or
misleading in any material adverse respect, then Seller shall promptly notify
Buyer in writing of such fact and then in such event Buyer shall have the option
to: (i) terminate this Agreement, in which case this Agreement shall be null and
void in all respects, and thereafter neither party shall have any further
rights, liabilities or obligations hereunder, except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination, and the Escrow Agent
shall promptly return the Deposit, if any, to Buyer or (ii) waive the objection
and proceed to Closing in accordance with the terms and provisions hereof;
provided that Buyer shall, within ten (10) days of Buyer’s receipt from Seller
of written notice as aforesaid, give Seller written notice of Buyer’s
election.

     

    11.           Representations, Warranties
and Agreements of Buyer.  To induce Seller to execute, deliver
and perform this Agreement, Buyer, subject to the Buyer’s Conditions, hereby
represents, warrants to, and agrees for the benefit of each Seller on and as of
the date hereof and on and as of the Closing Date as follows:

     

    (a)          Buyer
is a corporation validly existing and in good standing under the laws of its
jurisdiction of organization; all representations and warranties of Buyer
appearing in other sections and subsections of this Agreement are true and
correct in all material respects and each Buyer’s assignees will
on  the Closing Date be qualified to do business in the states in
which the respective Premises being acquired by such assignee is
located;

     

    (b)          Buyer
has full capacity and all necessary authority to execute, deliver and perform
this Agreement and all documents to be executed by Buyer pursuant hereto are and
shall be binding upon and enforceable against Buyer in accordance with their
respective terms; the person(s) executing this Agreement on behalf of Buyer is
(are) authorized to do so;

     

    (c)          There
are no attachments, executions, assignments for the benefit of creditors,
appointments of receivers, voluntary of involuntary proceedings in bankruptcy or
under other debtor relief laws contemplated by, pending or threatened against
Buyer; and

     

    (d)          Neither
Buyer nor, to the best of Buyer’s reasonable knowledge, any beneficial owner of
Buyer:

     

    i.           is
listed on the Specially Designated Nationals and Blocked Persons Listed
maintained by OFAC 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 legal authority (such lists are collectively
referred to as the Lists);

     

    ii.          is
a Person who has been determined by competent authority to be a Person with whom
a U.S. Person is prohibited from transacting business, whether such prohibition
arises under U.S. law, regulation, executive orders or any lists published by
the United States Department of Commerce, the United States Department of State
including any agency or office thereof;

     

    iii.         is
owned or controlled by, or acts for or on behalf of, any Person on the Lists or
any other Person who has been determined by competent authority to be a Person
with whom a U.S. Person is prohibited from transacting business, whether such
prohibition arises under U.S. law, regulation, executive orders or any lists
published by the United States Department of Treasury or the United States
Department of State including any agency or office thereof; or

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    iv.         Is
under investigation by any governmental authority for, or has been charged with,
or convicted of, money laundering, drug trafficking, terrorist-related
activities, any crimes which in the United States would be predicate crimes to
money laundering, or any violation of any Anti-Money Laundering
Laws.

     

    (e)          On
or before the expiration of the Due Diligence Period, Buyer shall inform Seller
of any Short-Term Contracts that Buyer wishes Seller to terminate.

     

    12.          Covenants and Agreements of
Seller and Buyer.

     

    (a)          From
the date hereof to the Closing Date or earlier termination of this Agreement,
Seller shall not do, suffer or permit, or agree to do, any of the
following:

     

    i.           enter
into any transaction, contract or agreement in respect to or affecting any of
the Property after Closing;

     

    ii.          sell,
encumber or grant any interest in any of the Property, or any part thereof,
which will prevent Seller’s full performance of Seller’s obligations hereunder
except for residential leases in the ordinary course of business, as provided in
Section
12.(b)(ii) hereof; and

     

    iii.         fail
to operate each of the Premises in compliance with all applicable governmental
laws, statutes, regulations, ordinances and codes; fail to give Buyer prompt
written notice of any Hazardous or Toxic Material or violation of any
Environmental Law of which it has received notice of or has actual knowledge of,
on or at any of the Premises of which Seller is aware or should, with the
exercise of reasonable diligence, be aware; enter into any easement, covenant,
restriction or right of way for or burdening any of the Premises; or modify,
terminate or extend any Service Contract.

     

    (b)          Between
the date hereof and the Closing Date, Seller shall do the
following:

     

    i.           maintain
all current insurance in all current amounts on all of the
Property;

     

    ii.          continue
to manage, lease, operate, repair and maintain all of the Property in a manner
consistent with the Seller’s current standards and practices; continue to
perform all obligations of the landlord arising under the Leases and may
continue to negotiate leases and enter into a new Lease or renew an existing
Lease for any unit space on its current Lease form as delivered to and approved
by Buyer, provided such lease renewal or new Lease so entered into by Seller
shall be on a monthly rental and on other terms approved by the Buyer, and
Seller consults with Buyer with respect to all pricing and lease related
decisions related to the Premises; Seller’s obligations under this Subsection ii. shall
include, but not be limited to, actively marketing the lease-up of all units for
the 2010-2011 school term, continue to maintain the units at each of the
Premises and respond to tenant requests regarding such maintenance, repairs and
refurbishments to the units at each of the Premises and to promptly repair,
refurbish and restore units at each of the Premises as such units become vacant
so that such vacant units are promptly restored to a “rentable”
condition;

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    iii.         subject
to Section 7.
hereof, Seller shall repair, at its sole cost and expense, all damage to each of
the Premises occurring after the Due Diligence Period and on or prior to the
Closing Date except to the extent caused by Buyer or its agents; any such
repairs and any capital improvements to each of the Premises shall be completed,
lien free and at the sole cost and expense of Seller, in a manner reasonably
satisfactory to Buyer; if Seller is currently undertaking any capital
improvement at the Premises or commences any such capital improvement prior to
the Closing Date, such capital improvement must be completed, at Seller’s sole
cost and expense, to the reasonable satisfaction of Buyer, lien free, prior to
the Closing Date; and

     

    iv.         in
the event of any litigation filed between the date hereof and the Closing Date
by or against Seller or any of the Premises in connection with the Leases,
Seller shall retain complete control of such litigation, shall have the right to
select and direct counsel regarding same, and the right to enter into any
settlement agreement deemed appropriate by Seller.  Seller shall not
settle any litigation with any tenant in a manner that will adversely affect
Buyer or any of the Premises after the Closing Date, including, without
limitation, abating the rent or otherwise agreeing to modify the terms of the
current Leases.  From and after the Closing Date, should any such
litigation remain pending, or thereafter be filed or commenced for events
occurring prior to Closing Date, Seller shall prosecute or defend such action,
shall be totally responsible for all costs and judgments incurred in connection
therewith, and shall be entitled to all judgments, awards and costs which Seller
may obtain by way of successful prosecution or defense of such action, by way of
prevailing upon any counterclaim filed in connection therewith, or by way of
settlement, except for rent for periods subsequent to the
Closing.  Seller agrees not to enter into any settlement of litigation
that continues after Closing without prior written consent of Buyer that shall
not be unreasonably withheld.  It is the intention of both Buyer and
Seller that the foregoing provision shall apply solely to litigation filed after
the date hereof, Seller having, by its execution hereof, agreed with Buyer that,
to the best of Seller’s knowledge, no such litigation, whether by or against
Seller, is presently pending or contemplated except as expressly provided in
Exhibit K
hereto.  Regarding the foregoing litigation, by its execution hereof,
Buyer and Seller expressly agree as follows:

     

    1.          Other
than the litigation, claims, suits and charges which may be pending on the
Closing Date, or which may arise after Closing for events occurring or accruing
prior to Closing, which shall be the sole responsibility of Seller, Buyer shall,
at Closing, assume responsibility for all litigation, claims, suits and charges
(other than by litigation between Seller and Buyer) which may in the future be
filed in connection with the Premises.

     

    2.          Buyer’s
obligation to close the transaction as provided herein shall be and remain
unaffected by any pending tenant litigation or disputes so long as such tenant
litigation or dispute does not, with respect to each of the Premises, involve a
claim or claims in excess of $50,000.00 for any one of the Premises or
$125,000.00 in the aggregate for all of the Premises, or involve or include, in
the aggregate, five percent (5%) or more of the total units at any of the
Premises.  If, on the Closing Date, with respect to any of the
Premises, such tenant litigation involves or includes, claims in excess of
$50,000.00 for any one of the Premises or $125,000.00 in the aggregate for all
of the Premises, or involve or include, in the aggregate, five percent (5%) or
more of the total units at any of the Premises, then the Buyer, at its option,
may elect to: (i) terminate this Agreement, in which case this Agreement shall
be null and void in all respects, and thereafter neither party shall have any
further rights, liabilities or obligations hereunder, except as provided in
Section 14. and
Section 15.
hereof, each of which shall expressly survive such termination, and the Escrow
Agent shall promptly return the Deposit, if any, to Buyer or (ii) waive the
objection and proceed to Closing in accordance with the terms and provisions
hereof.  All pending litigation is listed in Exhibit
K.  Seller shall promptly notify Buyer of any changes to this
list.  For purposes of this Agreement, any litigation, claim, suit or
action in excess of the threshold amounts specified above or in Section 10.(j)
hereof, either singly or collectively, shall be deemed a “Material
Litigation”.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    3.          Seller
agrees to indemnify, defend and hold Buyer harmless from and against any
litigation, claim, suit, action, charge, cost or expense, including reasonable
attorneys’ fees, which is currently pending, was pending or which arises either
before or after Closing as a result of any act, omission, condition or event
occurring prior to the Closing Date.  Buyer agrees to indemnify,
defend and hold Seller harmless from and against any litigation, claim, suit,
action, charge, cost or expense, including reasonable attorneys’ fees, which
arises as a result of any act, omission, condition or event occurring on or
after the Closing Date.

     

    (c)          Buyer
covenants and agrees, at no cost to Buyer, to cooperate with Seller and Seller’s
accountants and independent auditors to provide reasonable and necessary access
to financial records related to the Premises, including, but not limited to any
financial statements and supporting records.  This provision shall
survive the Closing for one (1) year.  All such access shall be on
reasonable prior written notice from Seller to Buyer and at such reasonable
times and days as Buyer may determine.

     

    13.          Default.

     

    (a)          Seller’s
Default.  The obligation of Buyer to close the transaction
contemplated hereby is, at Buyer’s option, subject to satisfaction of Buyer’s
Conditions and all obligations of Seller to have been performed on or before the
Closing Date having been timely and duly performed.  In addition, if
Seller remains in default hereunder after five (5) business days’ written notice
from Buyer, then Buyer shall, in its sole discretion, elect as its sole and
exclusive remedy for such default by Seller to either: (i) terminate this
Agreement, in which case this Agreement shall be null and void in all respects,
and thereafter neither party shall have any further rights, liabilities or
obligations hereunder, except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination, and the Escrow Agent
shall promptly return the Deposit to Buyer, (ii) waive the default and proceed
to Closing in accordance with the terms and provisions hereof or (iii) bring
suit for specific performance of Seller’s obligations hereunder; or (iv) draw on
the LOC.

     

    (b)          Buyer’s
Default.  The obligation of Seller to close the transaction
contemplated hereby is, at Seller’s option, subject to all obligations of Buyer
to have been performed on or before the Closing Date having been timely and duly
performed.  If Buyer shall remain in default of its obligation under
this Agreement after five (5) business days’ written notice from Seller, Seller,
at its sole and exclusive remedy for such default by Buyer, shall be entitled to
terminate this Agreement and retain the Deposit.  Upon such
termination by Seller, this Agreement shall become null and void and of no
further force or effect, except as provided in Section 14. and Section 15. hereof,
each of which shall expressly survive such termination.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    14.          Broker.  Buyer and Seller
represent and warrant to each other that each has not dealt with any broker,
agent or similar person in connection with this transaction or the
Premises.  Each of Buyer and Seller agrees to indemnify, defend and
hold harmless the other party from and against any and all litigation, claim,
suit, action, charge, cost or expense, including
reasonable attorneys’ fees, for any brokerage or agent commission or fee
arising out of this transaction by any broker or agent with whom the
indemnifying party has dealt.  Each such party shall have the right,
however, to participate in the defense of any action brought by such agent or
broker.  The provisions of this Section 14. shall
survive the Closing Date.

     

    15.          Buyer’s Inspection
Indemnification.  (a)  From the Effective Date to the
earlier of the Closing Date or termination of this Agreement, Seller shall
permit Buyer and representatives, accountants, agents, attorneys, employees,
lenders, contractors, appraisers; architects and engineers
designated by Buyer (collectively “Permittees”),
upon reasonable notice and at reasonable times, access to and entry upon each of
the Premises to examine, inspect, measure and test the Property, all at Buyer’s
sole cost and expense. Seller shall have the right to require that a
representative may accompany any or all of the Permittees provided that such right
shall not cause undue delay in Buyer’s inspection.  Buyer will not,
and will cause the Permittees to not, unreasonably interfere with or permit
unreasonable interference with the quiet enjoyment of all or any portion of any
of the Premises by any tenant thereof, or interfere with or permit the
unreasonable interference with any person occupying or providing service at the
Premises.  Buyer and its Permittees shall restore any damage to the
Property caused by its tests and inspections. Buyer does hereby indemnify and
forever defend and hold Seller, and its members, agents, and employees harmless
from any loss, liability, suit, action judgment, or claim (including, without
limitation, any mechanics’ liens which may be filed against any of the Premises)
which any of the indemnified parties may suffer or sustain as a result of the
exercise by Buyer of its rights (and that of its Permittees) to enter upon the
Property or the office of Seller pursuant to this Section
15.  Notwithstanding the foregoing or anything else to the
contrary contained in this Agreement, Buyer’s obligations under this Section
shall survive the Closing or any termination of this Agreement.

     

    (b)          Buyer
shall provide, as a condition precedent to entering onto any of the Premises, a
public liability insurance policy in such form and issued by such company as
shall be satisfactory to Seller insuring against bodily injury, including death,
and personal injury, including without limitation libel, slander and invasion of
privacy, in an amount not less than $1,000,000.00 per occurrence, and
$3,000,000.00 in the aggregate, with deductible provisions not to exceed
$10,000.00 per occurrence, and for damage to or loss or destruction of property,
including loss of use thereof, in an amount not less than $500,000.00 per
occurrence and not less than $3,000,000.00 in the aggregate, with deductible
provisions not to exceed $10,000.00 per occurrence.  Each such policy
shall expressly provide therein that coverage includes the contractual liability
assumed by Buyer pursuant to this Agreement.  Furthermore, each such
policy shall be endorsed to show Seller as an additional named insured, shall
contain a waiver of subrogation rights and shall provide for no less than thirty
(30) days notice of any cancellation or adverse change to such
policy.

     

    (c)          Certificates
of insurance acceptable to Seller shall be provided to Seller on the Effective
Date.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    (d)          Buyer
hereby assumes all liability for any and all damage to property or injury to
persons resulting from or arising out of Buyer’s negligence or the negligence of
any Permittee.  Nothing contained in this Agreement shall be deemed or
construed to limit Buyer’s obligation under this paragraph so as to exclude
Buyer’s liability for damages which are not covered by or which exceed the
amount of insurance maintained pursuant to the provisions set forth
above.

     

    (e)          Buyer
further agrees to indemnify and hold Seller harmless from and against, and to
reimburse Seller with respect to, any claim, loss, damage, liability, cost or
expense (including reasonable attorney’s fees and disbursements) which may be
sustained or suffered by Seller arising out of, based upon, or by reason of,
Buyer’s negligence or the negligence of any Permittee, including without
limitation all costs, expenses and liability arising out of a claim for personal
injury or death to persons or damage to property.

     

    (f)       
   Buyer does hereby indemnify and forever defend and hold
Seller, and its members, agents, and employees harmless from any loss,
liability, suit, action judgment, or claim (including, without limitation,
reasonable attorneys’ fees and court costs and any mechanics’ or other liens
which may be filed or asserted against any of the Premises) which any of the
indemnified parties may suffer or sustain, or be threatened with, as a result of
or in connection with the exercise by Buyer of its rights (and that of its
Permittees) to enter upon the Property or the office of Seller or to conduct
such examinations, inspections or tests pursuant to this Section
15.  Notwithstanding the foregoing or anything else to the contrary
contained in this Agreement, Buyer’s obligations under this Section shall
survive the Closing or any termination of this Agreement.

     

    (g)          Notwithstanding
anything herein to the contrary, from the Effective Date to the earlier of the
Closing Date or termination of this Agreement, Seller shall provide to each
Permittee, within two (2) business days of Buyer’s written request therefore, to
the extent reasonably available to Seller without the expenditure by Seller of
any sum in excess of Five Hundred Dollars and 00/100 ($500.00) per Premises,
such documents, instruments, agreements and items as the Permittee may
reasonably request.

     

    16.          Waivers.  No
delay or omission by either of the parties hereto in exercising any right or
power accruing upon the non-compliance or failure of performance by the other
party under the provisions of this Agreement shall impair any such right or
power or be construed to be a waiver thereof.  A waiver by either of
the parties hereto of any of the covenants, conditions or agreements hereof to
be performed by the other party shall not be construed to be a waiver of any
subsequent breach thereof or of any other covenant, condition or agreement
herein contained.

     

    17.          Remedies
Cumulative.  All rights, privileges and remedies afforded the
parties by this Agreement shall be deemed cumulative and the exercise of one of
such remedies shall not be deemed to be a waiver of any other right, remedy or
privilege provided for herein.

     

    18.          Applicable
Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Tennessee, without regard to conflict
of laws rules.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    19.          Partial
Invalidity.  If any provisions of this Agreement or the
application thereof to any party or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement shall not be affected
thereby and each provision of this Agreement shall be valid and enforceable to
the fullest extent permitted by law; provided, that the transaction as a
whole as contemplated hereby can still be substantially completed.

     

    Notices.  Every
notice, demand or consent or other document or instrument required or desired to
be given to either of the parties hereto shall be in writing and shall be deemed
to have been given on the date of such notice, demand or consent if delivered by
electronic mail, facsimile or overnight courier (with evidence of transmission)
or mailed by registered or certified United States mail, postage prepaid, return
receipt requested, addressed to the respective parties as hereafter set forth,
unless otherwise changed in writing by the parties hereto:

     

    
      
        	
                In
      the case of a notice to Seller:

              	
                Education
      Realty Trust, Inc. (“EDR”)

                530
      Oak Court Drive,  Suite 300

                Memphis,
      TN  38117

                Attn:  Chief
      Financial Officer

                           rbrown@edrtrust.com

                Attn:  Chief
      Investment Officer

                           ttrubiana@edrtrust.com

                Phone: (901)
      259-2500

                Fax:     (901)
      259-2594

              
	 
      	 
      
	
                With
      a copy of such notice to (delivery of which shall not constitute notice to
      Seller):

              	
                Martin
      Tate, Morrow & Marston, P.C.

                6410
      Poplar Avenue, Suite 1000

                Memphis,
      TN  38119

                Attn:  Lee
      Welch, Esq.

                          lwelch@martintate.com

                Phone:
      (901) 259-2524

                Fax:     (901)
      259-2594

              
	 
      	 
      
	
                In
      the case of a notice to Buyer to:

              	
                c/o
      Kayne Anderson Real Estate Partners

                200
      Business Park Drive, Suite 309

                Armonk,
      New York 10504

                Attn:
      Frank L. Duemmler, Esq.

                Phone:
      (914)-940-6042

                Fax:  (914)-273-1904

                Email:
      fduemmler@kaynecapital.com

              

      

    

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    

    
      	
              With
      a copy of such notice to (delivery of

              which
      shall not constitute notice to Buyer):

            	
              Robinson
      & Cole LLP

              280
      Trumbull Street

              Hartford,
      Connecticut 06103

              Attn:
      Samuel L. Molinari, Esq.

              Phone:
      (860)-275-8397

              Fax:
      (860)-275-8299

              Email:
      smolinari@rc.com

            

    

    

    All such
copies shall be sent in the manner set forth above in this Section
20.  Each Seller acknowledges and agrees that any notice given
by Buyer to EDR in accordance with this Section 20 shall
constitute notice to each Seller.

     

    20.          Successors and
Assigns.  This Agreement shall be binding upon and shall inure
to the benefit of the respective successors and assigns of the parties
hereto.

     

    21.          Section Headings and
Exhibits.  The section headings in this Agreement are for
convenience and for reference only and in no way define or limit the scope or
contents of this Agreement or in any way affect its provisions.  All
exhibits attached hereto are hereby made a part of this Agreement.

     

    22.          Assignment.  Buyer
may assign this Agreement, and all of its rights hereunder, with respect to all
or any of the Premises, to any one or more entities controlled by it and each
such entity shall have all of the rights, remedies and obligations of Buyer with
respect to the Premises in question.  In the event of an assignment by
Buyer, Buyer shall nonetheless remain liable for all of the obligations under
this Agreement, including those obligations that survive this
Agreement.

     

    23.          Survival.  Seller’s
and Buyer’s representations, warranties, covenants, and indemnifications set
forth in this Agreement shall survive the Closing Date for a period of twelve
(12) months thereafter, provided, however, that nothing herein shall be deemed a
release or limitation of Seller’s liability under the Deed’s warranty of
title.  By executing below, EDR agrees to guaranty to Buyer and its
assignees the prompt performance of all obligations of each Seller hereunder,
including, but not limited to, each Seller’s representations, warranties,
covenants and indemnifications, as set forth in this Agreement, and to indemnify
and hold the Buyer, and each of its assignees, harmless from and against, and to
reimburse Buyer, and each of its assignees with respect to, any claim, loss,
damage, liability, cost or expense (including reasonable attorney’s fees and
disbursements) which may be sustained or suffered by Buyer, or any of its
assignees, arising out of, based upon, or by reason of, a default by any Seller
of its obligations hereunder, including without, limitation, if any of the
representations and warranties of Seller hereunder proves to be untrue,
incorrect or intentionally misleading.

     

    24.          Counterparts.  This
Agreement may be signed in several counterparts, each of which shall be deemed
an original, and all such counterparts shall constitute one and the same
instrument.  Any counterpart to which is attached the signatures of
all parties (including a facsimile or electronic version thereof) shall
constitute an original of this Agreement.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    25.          Modifications.  This
Agreement may only be modified, amended or supplemented by an agreement in
writing signed by Seller and Buyer.

     

    26.          Effective
Date.  Seller and Buyer shall each deliver four fully executed
copies of this Agreement (including by facsimile or electronic mail) to the
Escrow Agent, including signatures of Broker, if any.  Upon Escrow
Agent’s receipt of four fully executed copies of this Agreement from Buyer and
Seller, Escrow Agent shall notify each of Buyer and Seller by facsimile or
electronic mail that it has received four fully executed copies of this
Agreement from Buyer and Seller and the date of such notice shall be considered
the “Effective Date” for purposes of this Agreement.

     

    27.          Confidentiality.  Sellers,
and its partners, employees and agents, shall each maintain the confidentiality
of the terms and provisions of this Agreement and any and all information
provided by Buyer to Sellers.  Buyer, and its managers, members,
directors, officers, and agents, shall:  (a) maintain the
confidentiality of the results of investigation and all documents delivered by
the Sellers and (b) the confidentiality of the terms and provisions of this
Agreement.  Neither Sellers nor Buyer, nor their respective officers,
directors, partners, employees or agents, shall disclose either the terms and
provision of this Agreement or the results of any investigations made or
information delivered in connection herewith, except to its lenders, employees,
agents, attorneys, accountants, prospective investors, consultants and advisors
who need or deem it useful to review such terms, conditions and information in
connection with the transaction contemplated hereby provided, however, nothing
in this Agreement shall, or shall be deemed to, restrict or limit Sellers in
complying with securities laws, rules and regulations, provided, that Buyer
shall have the right to approve any filing or disclosure that references Buyer
or any of its affiliates, including any assignee of Buyer, or the transaction
contemplated by this Agreement, which approval it agrees not to unreasonably
withhold, delay or condition.

     

    28.          Time.  Time
is of the essence in the performance of each of the parties’ respective
agreements and obligations contained herein.

     

    29.          No Recording. This
Agreement shall not be recorded by either party, but Buyer and Seller agree that
upon request from the other to execute a Memorandum of this Agreement containing
the information permitted or required by the laws of the jurisdiction in which a
Premises for recordation in the proper office for the recording of deeds in the
jurisdiction in which a Premises is located,; provided, however, the cost of
recording shall be paid by the party requesting the recording.

     

    30.          Entire
Agreement.  This Agreement, together with the Exhibits hereto,
sets forth all of the agreements, representations, warranties and conditions of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior or contemporaneous letters of intent, agreements, representations,
warranties and conditions.

     

    THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    

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

       

      SELLERS:

      

      
        	
                TROY PLACE (DE), LLC,

              
	
                a Delaware limited liability company

              
	 
      	 
      
	
                By:

              	
                EDR Manager, LLC,

              
	 
      	
                a Delaware limited liability company,

              
	 
      	
                its manager

              
	 
      	 
      
	
                By:

              	
                Education Realty Operating Partnership,

              
	 
      	
                LP, a Delaware limited partnership

              
	 
      	
                its managing member

              
	 
      	 
      
	
                By:

              	
                Education Realty OP GP, Inc.,

              
	 
      	
                a Delaware corporation,

              
	 
      	
                its general partner

              
	 
      	 
      
	
                By:

              	
                /s/ Olan Brevard

              	 
      
	 
      	
                Olan Brevard

              
	 
      	
                Vice President

              
	 
      	 
      
	
                JACKSONVILLE PLACE (DE), LLC,

              
	
                a Delaware limited liability company

              
	 
      	 
      
	
                By:

              	
                Education Realty Operating Partnership,

              
	 
      	
                LP, a Delaware limited partnership

              
	 
      	
                its managing member

              
	 
      	 
      
	
                By:

              	
                Education Realty OP GP, Inc.,

              
	 
      	
                a Delaware corporation,

              
	 
      	
                its general partner

              
	 
      	 
      
	
                By:

              	
                /s/ Olan Brevard

              	 
      
	 
      	
                Olan Brevard

              
	 
      	
                Vice President

              

      

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

       

      
        	
                MARTIN PLACE (DE), LLC,

              
	
                a Delaware limited liability company

              
	 
      	 
      
	
                By:

              	
                Education Realty Operating Partnership,

              
	 
      	
                LP, a Delaware limited partnership

              
	 
      	
                its managing member

              
	 
      	 
      
	
                By:

              	
                Education Realty OP GP, Inc.,

              
	 
      	
                a Delaware corporation,

              
	 
      	
                its general partner

              
	 
      	 
      
	
                By:

              	
                /s/ Olan Brevard

              	 
      
	 
      	
                Olan Brevard

              
	 
      	
                Vice President

              
	 
      	 
      
	
                MURRAY PLACE (DE), LLC,

              
	
                a Delaware limited liability company

              
	 
      	 
      
	
                By:

              	
                EDR Manager, LLC,

              
	 
      	
                a Delaware limited liability company,

              
	 
      	
                its manager

              
	 
      	 
      
	
                By:

              	
                Education Realty Operating Partnership,

              
	 
      	
                LP, a Delaware limited partnership

              
	 
      	
                its managing member

              
	 
      	 
      
	
                By:

              	
                Education Realty OP GP, Inc.,

              
	 
      	
                a Delaware corporation,

              
	 
      	
                its general partner

              
	 
      	 
      
	
                By:

              	
                /s/ Olan Brevard

              	 
      
	 
      	
                Olan Brevard

              
	 
      	
                Vice President

              

      

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

       

      
        	
                EDR CLEMSON PLACE, LIMITED

              
	
                PARTNERSHIP, a Delaware limited partnership

              
	 
      	 
      	 
      
	
                By:

              	
                EDR
      CLEMSON PLACE GP, LLC,

              
	 
      	
                a
      Delaware limited liability company,

              
	 
      	
                its
      general partner

              
	 
      	 
      
	
                By:

              	
                Education
      Realty Operating Partnership,

              
	 
      	
                LP,
      a Delaware limited partnership

              
	 
      	
                its
      managing member

              
	 
      	 
      
	
                By:

              	
                Education
      Realty OP GP, Inc.,

              
	 
      	
                a
      Delaware corporation,

              
	 
      	
                its
      general partner

              
	 
      	 
      
	
                By:

              	
                /s/ Olan Brevard

              	 
      
	 
      	
                Olan
      Brevard

              
	 
      	
                Vice
      President

              
	 
      	 
      	 
      
	
                FOR PURPOSES OF THE OBLIGATIONS

              
	
                SET FORTH IN SECTION 23 OF THE

              
	
                AGREEMENT ONLY:

              
	 
      
	
                EDUCATION REALTY TRUST, INC.

              
	 
      	 
      	 
      
	
                By

              	
                /s/ Olan Brevard

              	 
      
	 
      	 
      	 
      
	
                Name:  Olan Brevard

              
	 
      
	
                Title: Vice President

              
	 
      
	
                BUYER:

              
	 
      
	
                KAREP REIT I, INC., a Delaware corporation

              
	 
      	 
      	 
      
	
                By

              	
                /s/ Frank L. Duemmler

              	 
      
	
                Name: Frank L. Duemmler

              
	
                Title: Vice President

              

      

       

      
        
           

        

        
          30

          
            

          

        

        
           

        

      
  

    The
Escrow Agent hereby executes this Agreement solely for the purpose of
acknowledging receipt of the Deposit and acknowledging and agreeing to be bound
by the provisions of this Agreement relating to the Deposit.

    

    
      	 
      	
              ESCROW
      AGENT:

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Yosi (Joe) Benlevi

            	 
      
	 
      	
              Name:
      Yosi (Joe) Benlevi

            
	 
      	
              Title:
      V.P. & Senior Underwriting
Counsel

            

    

    

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    
 

    LIST
OF EXHIBITS

    

    
      	
              Exhibit
      A-1

            	
              Troy
      Real Property Legal Description

            

    

    

    
      	
              Exhibit
      A-2

            	
              Jacksonville
      Real Property Legal Description

            

    

    

    
      	
              Exhibit
      A-3

            	
              Martin
      Real Property Legal Description

            

    

    

    
      	
              Exhibit
      A-4

            	
              Murray
      Real Property Legal Description

            

    

    

    
      	
              Exhibit
      A-5

            	
              Clemson
      Real Property Legal Description

            

    

    

    
      	
              Exhibit
      B

            	
              List
      of Excluded Personal Property

            

    

    

    
      	
              Exhibit
      C-1

            	
              List
      of Service and Maintenance
Contracts

            

    

    

    
      	
              Exhibit
      C-2

            	
              List
      of Guaranties, Warranties and
Permits

            

    

    

    
      	
              Exhibit
      D

            	
              Form
      of Bill of Sale

            

    

    

    
      	
              Exhibit
      E

            	
              Form
      of Assignment (contracts, etc.)

            

    

    

    
      	
              Exhibit
      F

            	
              Form
      of Assignment of Leases (tenant leases & security
      deposits)

            

    

    

    
      	
              Exhibit
      G

            	
              Tenant
      Letters

            

    

    

    
      	
              Exhibit
      H

            	
              Rent
      Roll

            

    

    

    
      	
              Exhibit
      I

            	
              List
      of Employees

            

    

    

    
      	
              Exhibit
      J

            	
              Real
      and Personal Property Taxes

            

    

    

    
      	
              Exhibit
      K

            	
              Litigation

            

    

    

    
      	
              Schedule
      2

            	
              Due
      Diligence Checklist

            

    

    

    
      	
              Schedule
      3(a)(iii)

            	
              Purchase
      Price Allocations

            

    

    

    
      	
              Schedule
      3(b)

            	
              Wire
      Instructions

            

    

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    EXHIBIT
A-1

    

    TROY

    REAL PROPERTY LEGAL
DESCRIPTION –

    

    LEGAL
DESCRIPTION

    

    PARCEL
A

    A Parcel
of Land lying on the west side of Gibbs Street and on the south side of
Henderson Avenue and being a portion of the south 1⁄2 Section 28, Township 10
North, Range 21 East, Pike County, Alabama and being more particularly described
as follows:

    

    Commencing
at the point of intersection of the south right-of-way of Henderson Avenue and
the west right-of-way of Gibbs Street, said point being a 4”x 4” concrete
monument; thence along the west right-of-way of Gibbs Street (30' from
centerline) S 03°45’00” W 299.83 feet to a 4”x 4” concrete monument at the POINT
OF BEGINNING of the parcel herein described.  Thence continuing along
said right-of-way S 03’45’00”W 739.37 feet to a 1⁄2” rebar (CAP CA 0537-LS);
thence leaving said right-of-way N 63°04’37" W 338.45
feet to a 1⁄2” rebar (CAP CA 0537-LS); thence N 47°02’22” W 517.56
feet to a 1⁄2” rebar (CAP CA 0537-LS); Thence N 01°54’24” E 261.57
feet to a 4"x6” concrete monument; thence N 87°30’21” W 234.36
feet to a 5/8” rebar (CAP CA 00050-LS); thence N 02°35'18” W 324.52
feet to a 5/8” rebar (CAP CA 00050-LS); said point lying on the south
right-of-way of Henderson Avenue; thence along said right-of-way S 86°14'56” E 591.20
feet to a 4"x 4” concrete monument; thence leaving said right-of-way S
03°49’03” W
299.62 feet to a 4”x 4”concrete monument; thence S 86°l3'14” E 399.86
feet to the POINT OF BEGINNING.  Said parcel containing 12.97 acres
more or less.

    

    TOGETHER
WITH an easement for the purpose of connecting to existing sewer lines over
and across
the following described property:

    

    PARCEL B

    A parcel
of land lying on the west side of Gibbs Street and on the north side of Elm
Street and being a portion of the SE 1⁄4 of the SW 1⁄4 of Section 28,
Township 10 North, Range 21 East, Pike County, Alabama and being more
particularly described as follows:

    

    Commencing at
the point of intersection of the south right-of-way of Henderson Avenue and
the west
right-of-way of Gibbs Street, said point being a 4” x 4” concrete monument;
thence along the west right-of-way of Gibbs Street (30' from centerline) S
03°45’00” W
1039.20 feet to a 1⁄2” rebar (CAP CA 0537-LS) at the POINT OF BEGINNING of the
parcel herein described; thence continuing along said right-of-way S 03°45'00” W
542.62 feet to the point of the intersection of the west right-of-way of Gibbs
street and the north right-of-way of Elm street; thence along the north
right-of-way of Elm Street (50’ from centerline) N 87°28’26” W 388.95 feet to a
5/8” rebar (CAP CA 0537-LS); thence leaving said right-of-way N 01°48'12” E
351.18 feet to a 5/8” rebar (CAP CA 0537-LS); thence N 88°24’28” W 154.99 feet
to a 4” x 4” concrete monument; thence N 79°26’19” W 136.53 feet to a 4"x 6”
concrete monument; thence N 01°54’24” E 650.30
feet to a 1⁄2” rebar (CAP CA 0537-LS); thence S 47°02’22” E 517.56
feet to a 1⁄2” rebar (CAP CA 0537-LS); thence S 63°04’37” E 338.45
feet to the POINT OF BEGINNING.  Said parcel containing 9.46 acres
more or less.

    
      
         

      

      
        Page 1 of 2

        
          

        

      

      
         

      

    

    

    Said
Property also being described as follows:

    

    A parcel
of land lying on the west side of Gibbs Street and on the south side of
Henderson Avenue and being a portion of the South 1⁄2 of Section 28, Township 10
North, Range 21 East, Pike County, Alabama and being more particularly described
as follows:

    

    Commencing
at the point of intersection of the South right-of-way of Henderson Avenue
and the West right-of-way of Gibbs Street, said point being a 4" x 4" concrete
monument; thence along the West right-of-way Gibbs Street (30 feet from
centerline) South 03 degrees 45 minutes 00 seconds West 299.83 feet to a 4" x 4"
concrete monument at the POINT OF BEGINNING of the parcel herein described;
thence continuing along said right-of-way South 03 degrees 45 minutes 00 seconds
West 739.37 feet to a 1⁄2” rebar (CAP CA 0537-LS); thence leaving said
right-of-way line North 63 degrees 04 minutes 37 seconds West 338.45 feet to a
1⁄2” rebar (CAP CA 0537-LS); thence North 47 degrees 02 minutes 22 West 517.56
feet to a 1⁄2” rebar (CAP CA 0537-LS); thence North 01 degrees 54 minutes 24
seconds East 261.57 feet to a 4" x 6" concrete monument; thence North 87 degrees
30 minutes 21 seconds West 234.36 feet to a 5/8" rebar (CAP CA 00050-LS); thence
North 02 degrees 35 minutes 18 seconds West 324.52 feet to a 5/8" rebar (CAP CA
00050-LS); said point lying on the South right-of-way of Henderson Avenue;
thence along said right-of-way South 86 degrees 14 minutes 56 seconds East
591.20 feet to a 4" x 4" concrete monument; thence leaving said right-of-way
South 03 degrees 49 minutes 03 seconds West 299.62 feet to a 4" x 4" concrete
monument; thence South 86 degrees 13 minutes 14 seconds East 399.86 feet to the
POINT OF BEGINNING.  Said parcel containing 12.97 acres more or
less.

    

    Together
with those certain rights as described in that certain Sewer Easement Agreement,
dated October 29, 1999, by and between Troy Place LLC, a Georgia Limited
Liability Company, and Carol Crow Amos, W. Roy Crow, and John C. Crow which said
agreement appears of record in the Office of the Judge of Probate
of Pike County, Alabama, In Deed Book 190, at page 322.

    

    Tax ID#:
55-10-08-28-3-001-002.000

    
      
         

      

      
        Page 2 of 2

        
          

        

      

      
         

      

    

    

    EXHIBIT
A-2

    

    JACKSONVILLE

    REAL PROPERTY LEGAL
DESCRIPTION

    

    LEGAL
DESCRIPTION

    

    Being a
parcel of property lying in the City of Jacksonville, County of Calhoun, State
of Alabama, and being more fully described as follows:

    

    Portion
of the Northeast Quarter and the Northwest Quarter of Section 11, Township 14
South, Range 8 East of Calhoun County, Alabama and being described as follows:
Commence at the Northeast comer of Block 1131⁄2 as shown on the map of the
Jacksonville Mining and Manufacturing Company recorded in Office of the Judge of
Probate, Calhoun County, Alabama 3⁄4"  pipe found; thence North
88°11'05" East a distance of 24.84 feet to a 3⁄4" pipe found; thence South
01°51'14" East a distance of 364.70 feet to a 1⁄2" rebar found on the North
right-of-way of Alabama Highway Number 204; thence North 88°18' East along the
North right-of-way a distance of 49.96 feet to a 1⁄2" pipe found; thence leaving
AL Hwy. 204 North 01°49'16" West a distance of 364.87 feet to a 1" pipe found;
thence North 88°08' East a distance of 285.18 feet to a 1⁄2" rebar set (RBS) said
point being on the West right-of-way of Southern Railway (Abandoned) now known
as Chief Ladiga Trail; thence North 19°06'10" East along Chief Ladiga Trail a
distance of 1025.00 feet to a 1⁄2" RBS; thence South 88°10'44" West a distance of
700.00 feet to a 1⁄2" RBS; thence South 19°06'10" West a distance of 945.23 feet
to a 1⁄2" RBS; thence South 88°10'44" West a distance of 58.37 feet to a 1⁄2" RBS;
thence South 01°48'13" East a distance of 78.88 feet a 4" pipe; thence South
01°48'13" East a distance of 440.00 feet to a 4" pipe found on the North
right-of-way of Alabama Highway Number 204; thence North 88°08'23" East along
the North right-of-way of Alabama Highway 204 a distance of 59.93 feet to a nail
found; thence leaving Alabama Highway 204 proceeding North 01°48'34" West a
distance of 365.18 feet to a 4" pipe found; thence North 88°11'05" East a
distance of 334.72 feet to a point of beginning; said property containing 16.39
acres more or less.

    

    Said
parcel also being described as follows:

    

    Commence
at the Northeast corner of Block 113-1/2 of the Jacksonville Mining and
Manufacturing Company as recorded in the Calhoun County Probate Office and run
North 88°11'05" East a distance of 24.84 feet to an existing pinch top pipe and
the point of beginning. From said paint of beginning run North 88°05'28" East a
distance of 50.28 feet to an existing 1" pipe; thence run North 88°16'06" East a
distance of 285.04 feet to an existing iron with cap stamped L.S. 12160 on the
Westerly right-of-way line of Southern Railway (Abandoned) now known as Chief
Ladiga Trail; thence run North 19°11'07" East along said line a distance of
1024.74 feet to on existing iron with cap stamped L.S. 20353; thence leaving
said line run South 88°15'06" West a distance of 699.89 feet to an existing iron
with cap stamped L.S. 20353; thence run South 19°10'53" West a distance of
945.12 feet to an iron pin set (1/2” rebar with cap stamped JBW&T INC.
CA0046LS); thence run South 88°12'22" West a distance of 58.37 feet to an
existing iron with cap stamped L.S. 20353; thence run South 01°45'25" East a
distance of 440.23 feet to a 4" pipe on the Northerly right-of-way line of
Alabama Highway 204; thence run North 87°56'02" East along said right-of-way
line a distance of 59.78 feet to an iron pin set; thence leaving said
right-of-way line run North 01°44'43" West a distance of 365.15 feet to an
existing 4" pipe; thence run North 88°11'05" East a distance of 334.59 feet to
the point of beginning.

    
      
         

      

      
        Page 1 of 2

        
          

        

      

      
         

      

    

    Said
parcel of land being portion of the NE 1/4 and the NW 1/4, Section 11-T-14-S,
R-8-E, also being a portion of Lot 1 of Jacksonville Place Subdivision as
recorded in Plat Book DO, Page 48, Calhoun County Probate Office, being subject
to any easement rights for utilities on or over said property, lying and being
in the City of Jacksonville, Calhoun County, Alabama and containing 15.96 acres,
more or less.

    

    
      	
              Parcel
      #:

            	
              11-12-01-11-1-001-012.001

            

    

    11-12-01-11-2-001-003.005

    

    
      
        
        

      

      
        Page 2 of 2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-3

    

    MARTIN

    REAL PROPERTY LEGAL
DESCRIPTION

    

    LEGAL
DESCRIPTION

    

    PARCEL
1

    

    BEING a
16.061 acre tract of and located on the south side of Hannings Lane and the
north side of Peach Street in the City of Martin, Tennessee, and lying in the
2nd Civil District of Weakley County, and being part of Parcel 8 Group A Tax Map
78-D and being that conveyed to Martin Place LLC, a Georgia Limited Liability
Company, by Special Warranty Deed in Book 374 Page 549 as recorded in the
Register's Office of Weakley County, Tennessee as more particularly described as
follows:

    

    BEGINNING
at a point in the centerline of Peach Street at the southeast corner of a tract
belonging to the University of Tennessee (Deed from Valda Dodd to the University
of Tennessee Book 113 page 490 and Affidavit of Heirship of T.M. and Bonnie
Todd, Book 113 Page 489), said point lies 32.26 feet south of a found iron pin
on the University of Tennessee's east line and also lies South 89 degrees 24
minutes 05 seconds East, a distance of 204.77 feet, from the centerline
intersection of Peach Street with Scateswood Drive, said point of beginning is
the southwest corner of the tract being described herein:

    

    Thence,
North 00 degrees 33 minutes 31 seconds East, a distance of 798.82 feet, along
the east line of the University of Tennessee, passing a found iron pin on line
at 32.26 feet to a wood post in a fence;

    

    Thence,
North 00 degrees 00 minutes 16 seconds East, a distance of 396.03 feet,
continuing along the east line of the University of Tennessee, to a found iron
pin at the northeast corner of the University of Tennessee, said pin lies in the
south line of another tract belonging to the University of Tennessee (DB. 137
PG. 222);

    

    Thence,
North 88 degrees 23 minutes 07 seconds East, a distance of 164.24 feet, along
the south line of the University of Tennessee, to a found iron pin at their
southeast corner, said pin lies at the southwest corner of a 22 foot wide strip
belonging to Martin Place, LLC (DB. 374 PG. 553);

    

    Thence,
North 88 degrees 23 minutes 07 seconds East, a distance of 22.00 feet along the
south line of said 22 foot wide strip belonging to Marlin Place, LLC, to a found
iron pin at the southwest corner of the Catholic Diocese of Memphis Property
(Plat Book 3 Page 79 Slide 58);

    

    Thence,
North 88 degrees 23 minutes 07 seconds East, a distance of 577.45 feet, along
the south line of said Catholic Diocese property, to a found iron pin at the
southeast corner of said Church property, said pin lies in the west line of a
tract belonging to Margie Taylor (Margie M. Taylor Revocable Trust, Deed Book
336 Page 473; Book 106 Page 455; Book 115 Page 417; Book 109 Page
539);

    
      
         

      

      
        Page 1 of 3

        
          

        

      

      
         

      

    

    

    Thence,
South 01 degree 45 minutes 25 seconds East, a distance of 588.85 feet, along the
west line of Taylor and continuing with the west line of a tract belonging to C
& J Enterprises (DB. 319 PG. 248), to a found iron pin in an 18 inch locust
tree at an inside corner of C & J Enterprises;

    Thence,
South 36 degrees 01 minute 52 seconds West, a distance of 182.00 feet, along the
west line of C & J Enterprises, to a found iron pin;

    

    Thence,
South 89 degrees 40 minutes 28 seconds West a distance of 290.00 feel along an
inside line of C &J Enterprises to a found iron pin;

    

    Thence,
South 20 degrees 11 minutes 26 seconds West, a distance of 512.00 feet, along
the west line of C & J Enterprises, passing a found iron pin on line at
469.87 feet, to a point in the centerline of Peach Street at the southwest
corner of C & J Enterprises;

    

    Thence,
North 89 degrees 34 minutes 18 seconds West, a distance of 215.50 feet, along
the centerline of Peach Street to the point of beginning, containing 16.061
acres or 699,617.1600 square feet.

    

    PARCEL
2

    

    BEING a
0.214 acre strip of land located on the south side of Hanning Lane in the City
of Martin, Tennessee and lying in the 2nd Civil District of Weakley County, and
being part of Parcel 8 Group A Tax Map 78-D and being that conveyed to Martin
Place, LLC, a Georgia Limited Liability Company, by Quitclaim Deed in Book 374
Page 553 as recorded in the Registers Office of Weakley County, Tennessee as
more particularly described as follows:

    

    BEGINNING
at a found iron pin in the south right of way of Hannings Lane, said right of
way is 50 feet in width, said pin ties at the northwest corner of a tract
belonging to Branstetter (DB. 310 PG. 119), and is the northeast corner of the
strip of land being described herein;

    

    Thence,
South 02 degrees13 minutes 09 seconds West, a distance of 424.45 feel along the
west line of Branstetter, passing a found iron pin on line at Branstetter's
southwest corner at 200.13 feet, said pin also being an inside northwest corner
of the Catholic Diocese of Memphis (Plat Book 3 Page 79 Slide 58), and
continuing along the west line of said Catholic Diocese property, to a found
iron pin at the southwest corner, said pin lies on the north line of a tract
belonging to Martin Place, LLC (DB. 374 PG. 549);

    

    Thence,
South 88 degrees 23 minutes 07 seconds West, a distance of 22.00 feet, along the
north line of Martin Place, LLC, to a found iron pin at the southeast corner of
the University of Tennessee property (DB. 137 PG. 222);

    
      
         

      

      
        Page 2 of 3

        
          

        

      

      
         

      

    

    Thence,
North 02 degrees 13 minutes 00 seconds East, a distance of 424.78 feet, along
the east line of said University of Tennessee property, to a found iron pin in
the south right of way of Hannings Lane, being the northeast corner of said
University of Tennessee property;

    

    Thence,
North 89 degrees 14 minutes 08 seconds East, a distance of 22.00 feet along the
south right of way of Hannings Lane, to the point of beginning, containing 0.214
acres or 9,324.7450 square feet.

    

    Being the
same property conveyed to Martin Place, LLC by Special Warranty Deed from Glenn
S. Gallien, Jr., John H. Gallien, Thomas W. Gallien, Sr., and Mark F. Gallien,
of record in Book D374, Page 549. in the Register's Office for Weakley County,
Tennessee and as shown on that certain survey dated as of November 1, 2004,
prepared by James W. Crocker, Tennessee Registered Land Surveyor No. 1125 for
Greenwich Capital Financial Products, Inc., Martin Place (DE), LLC and Chicago
Title Insurance Company.

    
      
         

      

      
        Page 3 of 3

        
          

        

      

      
         

      

    

    

    EXHIBIT
A-4

    

    MURRAY

    REAL PROPERTY LEGAL
DESCRIPTION

    

    Located
in Calloway County, Kentucky and being described as follows:

    

    PARCEL
I:

    

    Being all
of Parcel 3 as shown on approved Minor Subdivision Plat recorded in Plat Book
28, Card 14, Slide 2630 in the office of the Clerk of Court of Calloway County,
Kentucky.

    

    PARCEL
II:

    

    Non-exclusive
easement rights for ingress and egress over Parcel 6 of that certain Minor
Subdivision Plat recorded in Plat Book 28, Card 14, Slide 2630, said records, as
granted in that certain Access Easement Agreement dated November 22, 1999,
recorded .in Deed Book 334, page 111, said records.

    

    PARCEL
III:

    

    Non-exclusive
easement rights for drainage purposes across Parcel 6 and on Parcel 5 of that
certain Minor Subdivision Plat recorded in Plat Book 28, Card 14, Slide 2630,
said records, as granted in that certain Drainage Easement Agreement dated
November 22, 1999, recorded in Deed Book 334, page 117, said
records.

    

    PARCEL
IV:

    

    Temporary
easements for installation and maintenance of a certain sign on Parcel 7 of that
certain Minor Subdivision Plat recorded in Plat Book 28, Card 14, Slide 2630,
said records, as granted in that certain Sign Lease and Easement Agreement dated
November 22, 1999, recorded in Deed Book 334, page 102, said
records.

    

    PARCEL
V:

    

    Non-exclusive
easement over, through and across "Borrow Area" on Parcel 8 of that certain
Minor Subdivision Plat recorded in Plat Book 28, Card 14, Slide 2630, said
records, as granted in and as the term "Borrow Area" is defined in that certain
Soil Removal Easement Agreement dated November 22, 1999, recorded in Deed Book
334, page 95, said records.

    
      
         

      

      
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    EXHIBIT
A-5

    

    CLEMSON

    REAL PROPERTY LEGAL
DESCRIPTION

    

    “All
those certain pieces, parcels or lots of land situate, lying and being in the
State of South Carolina, County of Pickens, within the City limits of the Town
of Clemson, being known and designated as Lot Numbers 1-48, and also the 50’
road right of way for Calhoun Street (now known as Clemson Place Circle, private
road, as shown on Clemson Engineering Services plat dated April 8, 2003) shown
on a plat entitled Providence Place Subdivision, dated December 28, 1992, by
Perry G. Davis, Jr., LS #14802 of B.P. Barber and Associates, Inc., recorded in
Plat Book 55, Page 97, records of Pickens County, South Carolina, to which plat
reference is hereby made for a more complete metes and bounds description
thereof."  Said land is more particularly described as
follows:

    

    Beginning
at an Iron pin (.5" rebar) at the southeast corner of said property (Clemson
Place Apartments in Clemson, S.C.) adjacent to Calhoun Street and the Bradley
Complex proceed N 20 51 48 E for 355.52 feet to a 3 inch diameter concrete
monument; thence N 45 54 01 E for 54.69 feet to a .5" rebar pin; thence N 26 35
48 W for 138.41 feet to a .5" rebar pin; thence N 71 06 56 W for 200.07 feet to
a 1" pipe thence N 71 07 13 W for 145.09 feet to a
1" pipe, thence N 71 06 27 W for 887.04 feet to a
3 inch diameter concrete monument; thence S 64 59 27 W for 565.75 feet to a 3
inch diameter concrete monument; thence N 39 03 24 W for 64.36 feet to a .5"
rebar pin; thence S 05 35 22 W for 159.18 feet to a 1" pipe; thence S 71 26 17 E
124.51 feet to a .5” rebar pin; thence S 71 26 41 E 918.96 feet to a 1.25" pipe;
thence S 71 27 57 E for 674.25 feet to the beginning corner.

    

    TOGETHER
with a perpetual non-exclusive right of way and easement, twenty (20) feet in width, to
construct, install, maintain, repair, replace and extend sanitary sewer and
storm drainage lines over and across the Riverpoint property, as granted in that
certain Agreement and Easement made by and between Frederick L. Russell, Trustee
under three agreements with S. W. Helschman, dated April 1, 1968, Riverpoint
Associates, and the City of Clemson, South Carolina, dated July 9, 1992 and
recorded in Book 180 at Page 77.

    

    This
property is bounded on the East by Marlon Bledsoe, James D. Burton & Edna
Moore, on the North side separated by a 20 foot buffer, James C. Dozler, John M.
Geer, Jr., John R. Hambrick and Dr. B.R. Myers and also by Hazelwood Drive (five
foot buffer between road right of way). On the West by Aileen P. Moore and
Riverpoint Associates (20 foot buffer between Riverpoint Associates and this
property) and on the South by Riverbank Commons (Regime 1) and The Bradley
Company (University Place).

    

    This
being the identical property conveyed to Clemson Place, LLC a South Carolina
Limited Liability
Company by deed dated September 23, 1997, and recorded In Deed Book 395 at
Page
32.

    

    Pickens
County Tax Map Parcel #4044-11-66-9178

    COMMENT:  Title
Company needs to verify.

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
B

    LIST OF EXCLUDED PERSONAL
PROPERTY

    (Applies to all Properties
except where noted)

    

    
      	
              1.

            	
              Telephone
      Services: Telephone service will be cut off at Closing. Office and
      administrative telephone equipment will remain at the property. Telephone
      exchange numbers will be ported/transferred to the
    Premises.

            

    

    

    
      	
              2.

            	
              Property
      Websites: Existing websites will be shut down at Closing and not
      transferred. Domain names will be transferred to
  Buyer.

            

    

    

    
      	
              6.

            	
              AMSI (eSite, ePO and
      eService): Access to these systems (application and data) will be
      shut down at time at Closing.

            

    

    

    
      	
              7.

            	
              Property Solutions
      (Resident Pay, Resident Works, Prospect Portal): Access to these
      systems (application and data) will be shut down at
    Closing.

            

    

    

    
      	
              8.

            	
              Performance Management
      System (PM): Access to these systems (application and data) will be
      shut down at Closing.

            

    

    

    
      	
              9.

            	
              EDR Intranet:
      Access to this system (application and content) will be shut down at
      Closing.

            

    

    

    
      	
              10.

            	
              Company E-Mail:
      Access to each e-mail account (including saved e-mails) will be shut down
      at Closing.

            

    

    

    
      	
              12.

            	
              Symantec Anti-Virus
      Software: Remains the property of Sellers or their
      affiliates.

            

    

    

    
      	
              13.

            	
              “Troy Place”,
      “Jacksonville Place”, “Martin Place”, “Murray Place” and “Clemson
      Place”: Sellers have no right transfer the name “Place” in
      conjunction with these Premises. Buyer shall have a period of thirty (30)
      days after the Closing Date to remove any such signs referencing “Troy
      Place”, “Jacksonville Place”, “Martin Place”, “Murray Place” and “Clemson
      Place” from the applicable Premises, however, Seller does not require
      Buyer to change the name of any streets or to remove street
      signs.

            

    

    

    Seller
shall afford Buyer, during the period after Closing, with reasonable access to
Sellers’ (or their affiliates’) proprietary software for the purpose of copying
information generated by such proprietary software with regard to the
Premises.

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
C-1

    LIST OF SERVICE AND
MAINTENANCE CONTRACTS

    

    See
attached

    

    Buyer has
requested that Seller terminate the copier and scanner
contracts.  Seller has agreed to

    terminate
such copier and scanner contracts as may be terminated upon thirty (30) days
notice

    and
without any cost to Seller.

     

    
      
        
        

      

      
        Page 1 of 1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
C-2

    LIST OF GUARANTIES,
WARRANTIES AND PERMITS

    

    NONE,
except any manufacturer’s warranties for replacement appliances

    (e.g.,
hot water heaters, air conditioning units, garbage disposals etc.)

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
D

    FORM OF BILL OF
SALE

    

    BILL
OF SALE

    

    FOR
VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
undersigned, _______________________, a _______________________ (herein referred
to as “Seller”),
does hereby grant, sell, convey and transfer to                                      
a                                      
(herein after referred to as “Buyer”),
any and all right, title and interest which Seller may have in the personal
property and intangibles described in Exhibit A.  Seller represents to
the Buyer that Seller has good title to the personal property and intangibles,
subject to the claims or rights of no person.

    

    IN
WITNESS WHEREOF, the parties have executed this Bill of Sale as of this ______
day of ___________, _______

    

    
      	
              SELLER:

            
	 
      
	 
      	
              By

            	 
      	 
      
	 
      	
              Name:

            	 
      
	 
      	
              Title:

            	 
      

    

    

    
      	
              State
      of

            	
              )

            

    

    
      	
              County
      of

            	
              )

            	
              ss.:

            

    

    

    On the ______ day of ____________,
_____ before me, the undersigned personally appeared
______________________________, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person on behalf of which the individual acted, executed the
instrument.

    

    
      	 
      	 
      
	 
      	
              Notary
      Public

            

    

    My
Commission Expires:_________________

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
E

    FORM OF
ASSIGNMENT

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
F

    FORM OF ASSIGNMENT OF
LEASES

     

    ASSIGNMENT OF TENANT LEASES
AND SECURITY DEPOSITS

    

    FOR
VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
undersigned, ____________________, a ______________________
(herein referred to as “Assignor”),
does hereby transfer and assign to                                               
a                                               
(herein referred to as “Assignee”),
any and all rights, title and interest which Assignor may have as landlord or
otherwise, in all of the leases and rental agreements with tenants located on
the real property described on Exhibit “A” attached hereto and made a part
hereof, which leases and rental agreements (including tenant security and other
deposits, with all interest thereon) are set forth in the rent roll attached
hereto marked Exhibit “B” (the “Rent
Roll”).  Assignor represents that such Rent Roll is true,
accurate and correct as of the date hereof.

     

    Assignor
agrees to indemnify and hold harmless Assignee from and against all obligations
and liabilities arising out of Assignor’s performance or failure to perform
Assignor’s obligations as landlord under such leases and rental agreements up to
and including the date hereof, including, but not limited to, any and all
liabilities with respect to any claims for security deposits as set forth in the
Rent Roll which security deposits have been paid over to Assignee, the receipt
of which Assignee hereby acknowledges.

     

    Assignee
hereby accepts and agrees to perform all of the terms, covenants and conditions
of such leases and rental agreements on the part of the lessor therein required
to be performed from and after the date hereof, but not prior thereto,
including, but not limited to, the obligation to repay in accordance with the
terms of such leases and rental agreements to the lessees thereunder, security
and other deposits, but only to the extent such deposits have been disclosed by
Assignor as set forth in said Rent Roll and actually delivered to
Assignee.  Assignee covenants and agrees to indemnify, and hold
harmless Assignor from and against any and all losses, liability, claims or
causes of action existing in favor of, or asserted by, the lessees under such
leases and rental agreements, including but not limited to any and all
liabilities with respect to any claims for security deposits as set forth in the
Rent Roll which security deposits have been paid over or credited to Assignee,
arising out of or relating to Assignee’s failure to perform any of the
obligations as lessor under such leases and rental agreements after the date
hereof, but not prior thereto.

    

    [THE
BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        Page 1 of 3

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have executed this Assignment as of the ____ day of
_____________, ____.

     

    
      
        
          
            	
                    ASSIGNOR:

                  	 	 
      
	 
      	 	 
      
	 	 	 	 
	
                    By

                  	 
      	 	 
      
	
                    Name:

                  	 	 
      
	
                    Title:

                  	 	 
      
	 
      	 	 
      
	 
      	 	 
      

          

        

      

    

    

    
      
        
          
            
              	 
      	
                      ASSIGNEE:

                    
	 
      	
                      _______________________________,
      LLC

                    
	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	
                      Name:

                    	 
      
	 
      	
                      Title:

                    	 
      

            

          

        

      

    

    
      
         

      

      
        Page 2 of 3

        
          

        

      

      
         

      

    

    
      	
              State
      of

            	
              )

            

    

    
      	
              County
      of

            	
              )

            	
              ss.:

            

    

    

    On the
______ day of _____________, ________ before me, the undersigned personally
appeared ______________________________, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person on behalf of which the individual acted, executed
the instrument.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            

    

    

    My
Commission Expires:_________________

    

    
      	
              State
      of

            	
              )

            

    

    
      	
              County
      of

            	
              )

            	
              ss.:

            

    

    

    On the
______ day of _____________, _____ before me, the undersigned personally
appeared ______________________________, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person on behalf of which the individual acted, executed
the instrument.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            

    

    

    My
Commission Expires:_________________

    
      
         

      

      
        Page 3 of 3

        
          

        

      

      
         

      

    

    EXHIBIT
A

    DESCRIPTION OF
PROPERTY

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
B

    RENT
ROLL

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
G

    TENANT
LETTERS

    

    Letterhead
of Seller

    

    [Date]

    

    Dear
Tenant of _______________ Apartments

    

    
      	
              RE:

            	
              Lease
      (the “Lease”) of
      Unit ____________ in
______________________

            

    

    

    Ladies
and Gentlemen:

    

    Please be
advised that, effective as of the date of this letter, [insert Buyer’s name] (“Buyer”) has acquired the
__________________________, and in connection with the sale, (i) [insert name of Seller]
(“Seller”) has conveyed
to Buyer all of Seller’s right, title, and interest under the Lease,
(ii) Seller has transferred to Buyer any and all unapplied and refundable
portions of your security and/or other deposits, and (iii) Buyer has
assumed all rights and obligations under the Lease arising from and after the
date of this letter.  From and after the date of this letter, you are
advised to perform all of your duties under the Lease directly to
Buyer.  Please make all rent payments and provide all notices under
the Lease to Buyer at:

     

    [Insert
Buyer’s name and address]

    

    Sincerely,

    

    [Seller’s
Name]

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

     

    EXHIBIT
H

    RENT
ROLL

    

    To be
provided separately

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
I

    LIST OF
EMPLOYEES

    

    NONE

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
J

    REAL AND PERSONAL PROPERTY
TAXES

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    EXHIBIT
K

    LITIGATION

    

    NONE

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    SCHEDULE
2

    DUE DILIGENCE
CHECKLIST

    

    
      	
              1.

            	
              Team directory, including
      attorneys, consultants, contractors, lenders,
  etc.

            

    

    
      	
              2.

            	
              The past three (3) years detailed
      operating history (each by month), including
      concessions.

            

    

    
      	
              3.

            	
              Current Year Budget and Next Year
      Budget (if available)

            

    

    
      	
              4.

            	
              YTD Detailed Operating
      Statement

            

    

    
      	
              5.

            	
              Current Balance
      Sheet

            

    

    
      	
              6.

            	
              Occupancy history (past three
      years)

            

    

    
      	
              7.

            	
              Current Rent Roll with security
      deposits showing tenant name, apt. area, lease start and termination date,
      vacancies, reimbursements, overlapping renewals or new
      leases

            

    

    
      	
              8.

            	
              Trailing 24 month Rental
      Collections Report

            

    

    
      	
              9.

            	
              Trailing 24 month Incident
      Reports

            

    

    
      	
              10.

            	
              Trailing 24 month Work Order
      Reports

            

    

    
      	
              11.

            	
              Most recent tax
      bill(s)/assessment and last two years of all tax bills for the property,
      including real estate and personal property
  tax.

            

    

    
      	
              12.

            	
              Last 12 months of utility bills
      (gas, electric, oil, etc).  Any correspondence with the utility
      companies.  Are there any utility service issues relating to the
      Property?

            

    

    
      	
              13.

            	
              Current employee list with
      salaries and pay scale

            

    

    
      	
              14.

            	
              Copy of a standard lease (and all
      addendums)

            

    

    
      	
              15.

            	
              Current Market
      reports

            

    

    
      	
              16.

            	
              Current Preleasing
      Report

            

    

    
      	
              17.

            	
              Most recent Title
      Report

            

    

    
      	
              18.

            	
              Most recent Property
      Appraisal

            

    

    
      	
              19.

            	
              Most recent Property
      Survey.  Advise if there are any easements or other agreements
      relating to the Property and provide a copy of the documents if there
      are.  Include any agreements with adjacent Property owners or
      anyone else relating to the use of the Property or that would otherwise
      affect the Property.

            

    

    
      	
              20.

            	
              Copies of all agreements that
      affect the property, including ground lease, reciprocal use agreements,
      warranties, third-party service contracts, rooftop and signage leases
      and/or licenses, .

            

    

    
      	
              21.

            	
              Copies of permits, certificates
      and licenses needed to operate
      property.  Including  Certificates of Occupancy and
      Permits for Food Service, Pool, Sanitation, Leasing, Boiler, Sprinkler,
      etc.

            

    

    
      	
              22.

            	
              Owner’s insurance certificates
      and any insurance losses for 3
years.

            

    

    
      	
              23.

            	
              Owner's insurance casualty
      report.

            

    

    
      	
              24.

            	
              List of personal property
      included and excluded in the Property
  sale.

            

    

    
      	
              25.

            	
              List any Trademarks, Copyrighted
      Material and Websites associated with the
  Property

            

    

    
      	
              26.

            	
              Provide the Property's
      Telecommunications Contracts and
Provider

            

    

    
      	
              27.

            	
              Provide the Property's Website
      Hosting Information / Contracts and
  Provider

            

    

    
      	
              28.

            	
              Any reports concerning the
      condition of the Property and operation of the Property, including
      Property Condition Assessment Report(s), engineering report(s), fire flow
      / hydrant flow test, elevator inspections,
  etc.

            

    

    
      
         

      

      
        Page 1 of 2

        
          

        

      

      
         

      

    

    
      	
              29.

            	
              Last Termite Inspection
      Report

            

    

    
      	
              30.

            	
              Deferred maintenance
      schedule

            

    

    
      	
              31.

            	
              CapEx for past five years and
      projected CapEx for next five
years

            

    

    
      	
              32.

            	
              Any environmental reports,
      environmental insurance policies, O&M plans and other environmentally
      related documents.

            

    

    
      	
              33.

            	
              Advise and provide associated
      documentation for any outstanding legal matters anticipated or pending
      with any person, partnership, corporation, governmental agency, or other
      entity pertaining to, or that would have an effect on, the
      Property.

            

    

    
      	
              34.

            	
              All municipal correspondence
      affecting the property and/or proposed improvements.  Include
      any correspondence with any government agency regarding highway projects
      or any proposed taking of land on this
  site.

            

    

    
      	
              35.

            	
              Maps or pictures of the
      property.  Include those that show the property/properties in
      relation to the University or
College.

            

    

    
      	
              36.

            	
              Plans and specifications for the
      existing building and site
construction.

            

    

    
      	
              37.

            	
              Name of all architects,
      engineers, and major sub-contractors, material-men and suppliers used in
      construction and development of
property

            

    

    
      	
              38.

            	
              Name and Contact Info of all
      Vendors and Service
Contractors

            

    

     

    
      
         

      

      
        Page 2 of 2

        
          

        

      

      
         

      

    

     

    SCHEDULE
3(a)(iii)

    PURCHASE
PRICE ALLOCATIONS

    

    
      
        
          
            
              
                	
                        Property

                      	     	
                        Total

                      	 
	
                        Troy
      Place

                      	 	$	12,773,000	 
	 
      	 	 	 	 
	
                        The
      Reserve at Jacksonville

                      	 	 	7,400,000	 
	 
      	 	 	 	 
	
                        The
      Reserve at Martin

                      	 	 	10,524,000	 
	 
      	 	 	 	 
	
                        The
      Chase at Murray

                      	 	 	7,661,000	 
	 
      	 	 	 	 
	
                        Clemson
      Place

                      	 	 	8,399,000	 
	 
      	 	 	 	 
	
                        Total
      Purchase Price

                      	 	$	46,757,000	 

              

            

          

        

      

    

    
      
         

      

      
        Page 1 of 1

        
          

        

      

      
         

      

    

    

    SCHEDULE
3(b)

    WIRE
INSTRUCTIONS

    

    To be
provided to Escrow Agent prior to Closing

    
      
         

      

      
        Page 1 of 1EXECUTION
COPY

       

    

    
      
        	
                BANC
      OF 

                AMERICA
      

                SECURITIES
      LLC

                 

                BANK
      OF 

                AMERICA,
      N.A.

                 

                One
      Bryant Park

                New
      York, NY 

                10036

              	
                  

              	
                WELLS
      FARGO 

                CAPITAL
      

                FINANCE,
      LLC

                 

                2450
      Colorado 

                Avenue,

                Suite
      3000 West,

                Santa
      Monica, CA 

                90404

              	
                  

              	
                CITIGROUP
      

                GLOBAL
      

                MARKETS
      INC.

                 

                390
      Greenwich 

                Street

                New
      York, New 

                York
      10013

              	
                  

              	
                BARCLAYS
      

                CAPITAL

                 

                BARCLAYS
      

                BANK
      PLC

                 

                745
      Seventh 

                Avenue

                New
      York, New 

                York
      10019

              	
                  

              	
                GOLDMAN
      

                SACHS
      

                LENDING
      

                PARTNERS
      

                LLC

                 

                200
      West Street

                 

                New
      York, New 

                York  10282

              

      

    

    

    August
11, 2010

    

    Chemtura
Corporation

    199
Benson Road

    Middlebury,
CT 06749

    

    Attention:  Stephen
Forsyth

                      Chief
Financial Officer

    

    Re:         Commitment
for Senior Credit Facility

    

    Ladies
and Gentlemen:

     

    Chemtura
Corporation, a Delaware corporation (the “Company” or “you”), has advised
Bank of America, N.A. (“Bank of America”),
Banc of America Securities LLC (“BAS”), Wells Fargo
Capital Finance, LLC (“Wells Fargo”),
Citigroup (as defined below), Barclays Bank PLC (“Barclays Bank”),
Barclays Capital, the investment banking division of Barclays Bank (“Barclays Capital”
and, together with Barclays Bank, “Barclays”), and
Goldman Sachs Lending Partners LLC (“GS”) that the Company
and certain of its subsidiaries, each a debtor and debtor-in-possession under
chapter 11 (“Chapter
11”) of title 11 of the United States Code (the “Bankruptcy Code”),
intend to be reorganized pursuant to a Chapter 11 plan of
reorganization.  In connection therewith, you have advised us that the
Company intends (a) to establish a $275 million senior secured asset-based
revolving credit facility (the “Senior Credit
Facility”) having the terms set forth on Exhibits A and B hereto, and (b)
to issue at least $750 million in aggregate principal amount of senior secured
term loans (the “Term
Loans”) and/or senior unsecured notes (the “Senior Notes”), the
proceeds of which would be used by the Company (i) to refinance the Company’s
amended and restated senior secured superpriority debtor-in-possession credit
agreement dated as of February 3, 2010 (as heretofore and hereafter amended,
supplemented or otherwise modified, the “Existing Credit
Agreement”), (ii) to pay related transaction costs, fees and expenses,
(iii) to fund distributions to be made in accordance with the Plan (as defined
in Exhibit B) and (iv) for other general corporate purposes and
activities.  For purposes hereof, “Citigroup” shall mean Citigroup
Global Markets Inc. (“CGMI”), Citibank,
N.A., Citicorp USA, Inc., Citicorp North America, Inc. and/or any of their
affiliates as Citigroup shall determine to be appropriate to provide the
services contemplated herein.  BAS, Bank of America, Wells Fargo,
Citigroup, Barclays and GS are herein referred to as “we”, “us”, or the “Commitment
Parties”.  Bank of America, Wells Fargo, Citigroup, Barclays
and GS are herein referred to as the “Initial
Lenders”.  This letter and the exhibits and annexes attached
hereto are herein referred to collectively as this “Commitment
Letter”.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Subject
to the terms and conditions of this Commitment Letter, severally and not
jointly, each of the Initial Lenders is pleased to confirm its respective
several (and not joint) commitment to provide the Borrowers (as defined in
Exhibit A hereto) with its portion of the full $275 million principal amount of
the Senior Credit Facility, with (i) Bank of America pleased to offer its
commitment to provide $61.875 million in principal amount of the Senior Credit
Facility, (ii) Wells Fargo pleased to offer its commitment to provide $61.875
million  in principal amount of the Senior Credit Facility, (iii)
CGMI, on behalf of Citigroup, pleased to offer its commitment to provide $61.875
million in principal amount of the Senior Credit Facility, (iv) Barclays Bank
pleased to offer its commitment to provide $61.875 million in principal amount
of the Senior Credit Facility and (v) GS pleased to offer its commitment to
provide $27.5 million in principal amount of the Senior Credit
Facility.  Each commitment of an Initial Lender hereunder is referred
to hereinafter as such Initial Lender’s “Commitment”.  BAS,
Wells Fargo and Citigroup are pleased to advise you of their willingness in
connection with the foregoing commitment to act as joint lead arrangers (in such
capacities, the “Arrangers”) for the
Senior Credit Facility, and to form, with your consent (not to be unreasonably
withheld), a syndicate of financial institutions (“Lenders”) for the
Senior Credit Facility, and BAS and Wells Fargo shall receive league table
credit in connection with such capacities.  BAS, Wells Fargo,
Citigroup, Barclays Capital and GS are pleased to advise you of their
willingness in connection with the foregoing commitment to act as joint book
runners for the Senior Credit Facility.  Each Commitment Party’s
obligations hereunder are several and not joint with any other Commitment
Party.

     

    Bank of
America will act as the sole and exclusive administrative and collateral agent,
Wells Fargo will act as the sole and exclusive syndication agent and Citigroup,
Barclays Bank and GS will act as co-documentation agents, in each case for the
Senior Credit Facility.  No additional agents, co-agents or arrangers
will be appointed and no other titles will be awarded unless you and we shall so
agree.  In any marketing material with respect to the Senior Credit
Facility, BAS’s and Bank of America’s names shall appear above or to the left of
the name of any other Commitment Party or Lender and Wells Fargo’s name shall
appear immediately to the right of the name of BAS and Bank of America and above
or to the left of the name of any other Commitment Party or Lender other than
BAS and Bank of America.  You agree that, effective upon your
acceptance of this Commitment Letter and continuing through 30 days after the
Closing Date (as defined in Exhibit A hereto) (or, if earlier, the expiration or
termination of the Commitments hereunder), you shall not solicit any other bank,
investment bank, financial institution, person or entity to provide, structure,
arrange or syndicate the Senior Credit Facility or any other senior financing
similar to the Senior Credit Facility; provided that, the
Company and its subsidiaries shall be allowed to solicit any other bank,
investment bank, financial institution, person or entity to provide, structure,
arrange or syndicate any other senior financing similar to the Senior Credit
Facility to the extent the Company and its subsidiaries do so in discharge of
their fiduciary duties and obligations as debtors-in-possession.

    

    The
undertakings of the Commitment Parties herein are subject to satisfaction of the
following conditions: (a) the preparation, execution and delivery of loan
documentation, including without limitation, a credit agreement, an
intercreditor agreement with the holders of the Term Loans or their
representative(s), security agreements, pledge agreements, guaranties and other
agreements, incorporating substantially the terms and conditions set forth in
Exhibits A and B hereto and, to the extent not covered by such terms and
conditions, otherwise reasonably acceptable to the Company and the Commitment
Parties; (b) the Company’s engagement of one or more investment banks
satisfactory to the Commitment Parties to publicly sell or privately place the
Senior Notes; (c) the approval of the Bankruptcy Court (as defined in the Plan),
by a date no later than August 13, 2010, for the payment of all fees, expenses,
indemnities and other obligations set forth herein and in the Fee Letter dated
as of the date hereof and delivered herewith (the “Fee Letter”); (d)
your compliance in all material respects (or, with respect to any term that is
qualified as to materiality, your compliance in all respects) with the terms of
this Commitment Letter with respect to syndication, supplementing Information
and Projections, compensation, reimbursement and indemnification, and with the
terms of the Fee Letter; and (e) from and after the date hereof until the
earlier of completion of the syndication of the Senior Credit Facility and the
date that is 30 days after the Closing Date, there shall be no competing
offering, placement or arrangement of any debt securities or bank financing by
or on behalf of Company or any of its subsidiaries other than the Senior Notes,
the Term Loans and any Foreign Asset Based Financing (as defined in Exhibit A
hereto).

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    

    The
Arrangers intend to commence syndication efforts promptly upon your acceptance
of this Commitment Letter and the Fee Letter; provided that the
Arrangers and Initial Lenders agree that notwithstanding their respective rights
to syndicate the Senior Credit Facility and receive commitments with respect
thereto, no such commitment from any other Lender shall release such Initial
Lender from its Commitment or otherwise reduce or reallocate such Commitment
prior to the Closing Date, and each Initial Lender shall retain exclusive
control over all rights and obligations with respect to its Commitment,
including all rights with respect to consents, modifications and amendments of
this Commitment Letter and the Fee Letter (as defined below), until the Closing
Date has occurred.  You agree to use commercially reasonable efforts
to assist the Arrangers in achieving a syndication of the Senior Credit Facility
that is reasonably satisfactory to the Arrangers (provided, that your obligation
to use such efforts shall cease upon the earlier of completion of such
syndication and the date that is 60 days after the Closing
Date).  Such assistance shall include (a) your providing, and using
commercially reasonable efforts to cause your advisors to provide, to the
Commitment Parties and the other Lenders, upon request, all information
reasonably deemed necessary by the Commitment Parties to complete syndication;
(b) your assistance in the preparation of a customary Information
Memorandum to be
used in connection with the syndication; (c) your using commercially reasonable
efforts to ensure that the syndication efforts benefit from your existing
banking relationships; and (d) otherwise using commercially reasonable efforts
to assist the Commitment Parties in their syndication efforts, including by
making your senior management and using commercially reasonable efforts to make
your advisors available from time to time to attend and make presentations
regarding the business and prospects of Company and subsidiaries at one or more
meetings of prospective Lenders at mutually agreed upon times as the Commitment
Parties may reasonably request.  Notwithstanding the foregoing or
anything herein to the contrary, the syndication of the Senior Credit Facility
shall not be a condition precedent to the closing of the Senior Credit
Facility.

    

    It is
understood and agreed that BAS in consultation with
you will manage all aspects of the syndication, including decisions as to the
selection of prospective Lenders (subject to your prior approval (not to be
unreasonably withheld) of all Lenders) and any titles offered to proposed
Lenders, when commitments will be accepted and the final allocations of the
commitments among the Lenders.  It is understood that no Lender
participating in the Senior Credit Facility will receive compensation from you
in order to obtain its commitment, except on the terms provided herein, and that
all fees and other compensation payable to the Lenders in order to obtain their
commitments to the Senior Credit Facility shall be paid from the fees set forth
in the Fee Letter (and the Company shall have no additional liability
therefor). It is
also understood and agreed that the amount and distribution of fees among the
Lenders will be at the discretion of the Commitment Parties.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    You
hereby represent, warrant and covenant that (a) all information, other than
Projections (as defined below), which has been or is hereafter made available to
any Commitment Party, any Lender or any potential Lender by you or any of your
representatives (or on your or their behalf) in connection with the transactions
contemplated hereby (collectively, “Information”) is and
will be (taken as a whole) complete and correct in all material respects and
does not and will not (taken as a whole) contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein, taken as a whole, not misleading in light of the
circumstances under which such statements were or are made; and (b) all
financial projections concerning Company and subsidiaries that have been or are
hereafter made available to any Commitment Party, any Lender or any potential
Lender by you or any of your representatives (“Projections”) have
been and will be prepared in good faith based upon assumptions that are or were
reasonably believed by the preparer thereof to be reasonable as of the date of
the preparation of such Projections (it being understood that the Projections
are subject to significant uncertainties and contingencies, many of which are
beyond the Company’s control, and that no assurance can be given that the
Projections will be realized).  If, at any time from the date hereof
until the earlier of 30 days after the Closing Date and the termination of this
Commitment Letter, any of the representations and warranties in the preceding
sentence would not be accurate and complete in any material respect if the
Information or Projections were being furnished, and such representations and
warranties were being made, at such time, then the Company agrees to promptly
supplement the Information and/or Projections from time to time so that the
representations and warranties contained in this paragraph remain accurate and
complete in all material respects as described in the preceding
sentence.  In issuing its commitment and in arranging and syndicating
the Senior Credit Facility, each Commitment Party is
and will be relying on, without independent verification, the Information and
Projections.

    

    By
executing this Commitment Letter, you agree to pay, or reimburse the Commitment
Parties on demand for, all reasonable and documented out-of-pocket costs and
expenses incurred by the Commitment Parties (whether incurred before or after
the date hereof) in connection with the Senior Credit Facilities and the
preparation, negotiation, execution and delivery of this Commitment Letter, the
definitive documentation therefor and the other transactions contemplated
hereby, including without limitation, third-party appraisal costs, per diem
costs and other charges of field examiners and other employees in connection
with matters relating to the collateral, due diligence expenses and the
reasonable fees and expenses of Shearman & Sterling LLP (it being understood
that fees and expenses of not more than one counsel for  all of the
Commitment Parties shall be payable or reimburseable under the preceding
provisions of this sentence) and special and local counsel (in each case
reasonably retained by the Commitment Parties jointly), regardless of whether
any of the transactions contemplated hereby are consummated.  You will
also pay all documented out-of-pocket costs and expenses of the Commitment
Parties (including without limitation, the reasonable fees and disbursements of
Shearman & Sterling LLP and special and local counsel (in each case
reasonably retained by the Commitment Parties jointly)) incurred in connection
with the enforcement of any of their rights and remedies under this Commitment
Letter.

    

    You agree
to indemnify and hold harmless each Commitment Party,
each Lender, and each of their respective affiliates and each of their
respective officers, directors, employees, agents, advisors and representatives
(each, an “Indemnified
Party”) from and against (and will reimburse each Indemnified Party as
the same are incurred for) any and all claims, damages, losses, liabilities and
expenses (including, without limitation, the reasonable and documented fees and
disbursements of outside counsel) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection with
or by reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or the preparation of a defense in
connection therewith) (a) any matters contemplated by this Commitment Letter or
any related transaction or (b) the Senior Credit Facility or any use made or
proposed to be made with the proceeds thereof, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted primarily from such
Indemnified Party’s gross negligence or willful misconduct.  In the
case of an investigation, litigation or proceeding to which the indemnity in
this paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Company, any of its
directors, security holders or creditors, an Indemnified Party or any other
person or whether or not an Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are
consummated.  You also agree that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort, or otherwise) to you
or your affiliates or to your or their respective security holders or creditors
arising out of, related to or in connection with any aspect of the transactions
contemplated hereby, except to the extent such liability is determined in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted primarily from such Indemnified Party’s gross negligence or willful
misconduct.  In no event, however, shall any Indemnified Party be
liable on any theory of liability for any special, indirect, consequential or
punitive damages (including without limitation, any loss of profits, business or
anticipated savings).  It is further agreed that each Commitment Party
shall only have liability to you (as opposed to any other person), and that each
Initial Lender shall be liable solely in respect of its own Commitment on a
several, and not joint, basis with any other Commitment Party or
Lender.  Notwithstanding any other provision of this Commitment
Letter, no Indemnified Party shall be liable for any damages arising from the
use by others of information or other materials obtained through electronic
telecommunications or other information transmission systems, except to the
extent such liability is determined in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted primarily from such Indemnified
Party’s gross negligence or willful misconduct.

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    

    By
accepting delivery of this Commitment Letter, the Company agrees that this
Commitment Letter is for the Company’s confidential use only and that neither
its existence nor its terms will be disclosed by the Company to any person other
than the Company’s affiliates and its and their respective officers, directors,
employees, advisors, agents and representatives (the “Company
Representatives”), and then only on a confidential and “need to know”
basis in connection with the transactions contemplated hereby; provided,
however, that the Company may make public disclosures of the terms and
conditions hereof (other than the Fee Letter and its terms and substance, except
as set forth in the Fee Letter) (a) as it is required by law or regulations or
by subpoena or similar legal process (in which case the Company shall use
commercially reasonable efforts to inform the Commitment Parties promptly
thereof prior to such disclosure to the extent it is legally permitted to do
so), in the opinion of the Company’s counsel, to make, (b) in connection with
any exercise of remedies under or in connection with a breach of this letter
agreement or the definitive agreement entered into in connection herewith, (c)
to the extent necessary to obtain required approval from any governmental
authority (including a bankruptcy court) for the Senior Credit Facility or the
fees, expenses, indemnities and other obligations set forth herein and in the
Fee Letter or (d) to any official committee appointed in the Company’s
bankruptcy cases and to the ad hoc committee of bondholders in the Company’s
bankruptcy cases and their respective legal and financial advisers.

    

    The
Commitment Parties will treat as confidential all confidential information
provided to them by or on behalf of the Company hereunder and will not disclose
any such information to any person without the prior written consent of the
Company; provided that nothing
herein shall prevent any Commitment Party from disclosing any such information
(a) to  such Commitment Party’s and its affiliates’ employees,
officers, directors, agents and advisors who are informed of the confidential
nature of such information and instructed to keep such information confidential,
(b) to the extent requested by any regulatory or self-regulatory authority, (c)
to the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) in connection with the exercise of any remedies
hereunder or the enforcement of rights hereunder or any suit, action or
proceeding relating to this letter or other agreements in connection herewith,
(e) to assignees or participants or potential assignees or participants in the
Senior Credit Facility, or (f) to the extent that such information becomes
publicly available other than by reason of disclosure by such Commitment Party
in violation of this paragraph or becomes available to such Commitment Party on
a nonconfidential basis from a source other than the Company or the Company
Representatives, provided that such source is not known by such Commitment Party
to be bound by a confidentiality obligation to the Company or the Company
Representatives.

    

    You
acknowledge that each Commitment Party or its affiliates may be providing
financing or other services to parties whose interests may conflict with
yours.  Each Commitment Party agrees that it will not furnish
confidential information obtained from you to any of its other customers and
that it will treat confidential information relating to you and your affiliates
with the same degree of care as it treats their own confidential
information.  The Commitment Parties further advise you that they will
not make available to you confidential information that they have obtained or
may obtain from any other customer.  In connection with the services
and transactions contemplated hereby, you agree that each Commitment Party is
permitted to access, use and share, with any of its affiliates, agents, advisors
or representatives, any information concerning you or any of your affiliates
that is or may come into the possession of such Commitment Party or any of its
affiliates.

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    

    In
connection with all aspects of each transaction contemplated by this letter, you
acknowledge and agree, and acknowledge your affiliates’ understanding, that (a)
the Senior Credit Facility and any related arranging or other services described
in this letter constitute an arm’s-length commercial transaction between you and
your affiliates, on the one hand, and each Commitment Party and its affiliates,
on the other hand, and you are capable of evaluating and understanding, and do
understand and accept, the terms, risks and conditions of the transactions
contemplated by this Commitment Letter; (b) in connection with the process
leading to such transaction, each Commitment Party is and has been acting solely
as a principal and is not the financial advisor, agent or fiduciary for you or
any of your affiliates, stockholders, creditors or employees or any other party;
(c) no Commitment Party has assumed or will assume an advisory, agency or
fiduciary responsibility in your or your affiliates’ favor with respect to any
of the transactions contemplated hereby or the process leading thereto
(irrespective of whether such Commitment Party has advised or is currently
advising you or your affiliates on other matters) and no Commitment Party has
any obligation to you or your affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth in this letter;
(d) each Commitment Party and its affiliates may be engaged in a broad range of
transactions that involve interests that differ from yours and your affiliates,
and no Commitment Party has any obligation to disclose any of such interests by
virtue of any advisory, agency or fiduciary relationship; and (e) no Commitment
Party has provided any legal, accounting, regulatory or tax advice with respect
to any of the transactions contemplated hereby and you have consulted your own
legal, accounting, regulatory and tax advisors to the extent you have deemed
appropriate.  You hereby waive and release, to the fullest extent
permitted by law, any claims that you may have against any Commitment Party with
respect to any breach or alleged breach of agency or fiduciary
duty.

    

    This
Commitment Letter and the Fee Letter shall be governed by the laws of the State
of New York.  Each of you and the Commitment Parties hereby
irrevocably waives any and all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Commitment Letter, the Fee Letter, the transactions
contemplated hereby or thereby, or the actions of any Commitment Party in the
negotiation, performance or enforcement hereof or thereof.  The
Company irrevocably and unconditionally (i) submits to the exclusive
jurisdiction of any Federal court located in the City of New York (including the
Bankruptcy Court) or, if that court does not have subject matter jurisdiction,
in any New York State court located in the City of New York, over any suit,
action or proceeding arising out of or relating to this Commitment Letter, (ii)
accepts for itself and in respect of its property the jurisdiction of such
courts, (iii) waives any objection to the laying of venue of any such suit,
action or proceeding brought in any such courts and any claim that any such
suit, action or proceeding has been brought in an inconvenient forum and (iv)
consents to the service of any process, summons, notice or document in any such
suit, action or proceeding by registered mail addressed to the Company at its
address specified on the first page of this Commitment Letter.  A
final judgment in any such suit, action or proceeding will be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Nothing herein will affect the right of any
Commitment Party to serve legal process in any other manner permitted by law or
affect any Commitment Party’s right to bring any suit, action or proceeding
against the Company or its property in the courts of other
jurisdictions.

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    Upon the
effectiveness of this Commitment Letter in accordance with the terms of the last
paragraph of this Commitment Letter, in the event of any termination of this
Commitment Letter or any undertaking hereunder, the compensation, reimbursement,
indemnification, confidentiality, syndication, jurisdiction, governing law and
waiver of jury trial provisions contained herein and in the Fee Letter shall
remain in full force and effect regardless of whether definitive financing
documentation for the Senior Credit Facility shall be executed and delivered and
notwithstanding the termination of this Commitment Letter, any Commitment or any
of the Commitment Parties’ agreements to perform any services described herein;
provided that
your obligations under this Commitment Letter, other than those relating to
confidentiality and to the syndication of the Senior Credit Facility, shall, to
the extent covered by the definitive documentation relating to the Senior Credit
Facility, automatically terminate and be superseded by the applicable provisions
contained in such definitive documentation upon the initial extension of credit
under the Senior Credit Facility.

    

    This
Commitment Letter and the Fee Letter may be executed in counterparts which,
taken together, shall constitute an original.  Delivery of an executed
counterpart of this Commitment Letter or the Fee Letter by facsimile or
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof or thereof.

    

    The
Commitment Parties hereby notify you that pursuant to the requirements of the
USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001)
(“Act”), the
Commitment Parties are required to obtain, verify and record information that
identifies Company, which information includes Company's legal name, address,
tax ID number and other information that will allow the Commitment Parties to
identify Company in accordance with the Act.  The Commitment Parties
will also require information regarding each personal guarantor, if any, and may
require information regarding Company’s management and owners, such as legal
name, address, social security number and date of birth.

    

    This
Commitment Letter and the Fee Letter embody the entire agreement and
understanding among the Commitment Parties, you and your affiliates with respect
to the Senior Credit Facility, and supersede all prior agreements and
understandings relating thereto.  However, please note that the terms
of the undertakings of the Commitment Parties hereunder are not limited to those
set forth in this Commitment Letter.  Those matters that are not
covered or made clear are subject to mutual agreement of the
parties.  No party has been authorized by any Commitment Party to make
any oral or written statements that are inconsistent with this Commitment Letter
and the Fee Letter.  This Commitment Letter is not assignable by
Company without our prior written consent and is intended to be solely for the
benefit of the parties hereto and the Indemnified Parties.

    

    This
offer will expire at 5:00 p.m. (New York City time) on August 11, 2010, unless
you execute this letter and the Fee Letter and return them to us prior to that
time.  This Commitment Letter and the Fee Letter shall be of no force
and effect unless (a) executed by you and delivered to us within the time frame
required by the preceding sentence, and (b) the Bankruptcy Court shall have
approved the payment of all fees, expenses, indemnities and other obligations
set forth in this Commitment Letter and in the Fee Letter.  If this
Commitment Letter and the Fee Letter shall have become effective, this
undertaking and the Commitments will thereafter expire on November 30, 2010
(unless extended with the consent of the Initial Lenders), unless the definitive
documentation for the Senior Credit Facility is executed and delivered by that
date.

    

    [Remainder
of page intentionally left blank]

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    We look
forward to working with you in the coming weeks on this important
financing.

     

    
      
        
          
            	
                    BANK
      OF AMERICA, N.A.

                  	 
      
	 
      	 
      	 
      
	
                    By

                  	 
      	 
      
	 
      	
                    Name:

                  	 
      
	 
      	
                    Title:

                  	 
      
	 
      	 
      	 
      
	
                    BANC
      OF AMERICA SECURITIES LLC

                  	 
      
	 
      	 
      	 
      
	
                    By

                  	 
      	 
      
	 
      	
                    Name:

                  	 
      
	 
      	
                    Title:

                  	 
      

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  WELLS
      FARGO CAPITAL FINANCE, LLC

                	 
      
	 
      	 
      	 
      
	
                  By

                	 
      	 
      
	 
      	
                  Name:

                	 
      
	 
      	
                  Title:

                	 
      

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  CITIGROUP
      GLOBAL MARKETS INC.

                	 
      
	 
      	 
      	 
      
	
                  By

                	 
      	 
      
	 
      	
                  Name:

                	 
      
	 
      	
                  Title:

                	 
      

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  BARCLAYS
      BANK PLC

                	 
      
	 
      	 
      	 
      
	
                  By

                	 
      	 
      
	 
      	
                  Name:

                	 
      
	 
      	
                  Title:

                	 
      

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  GOLDMAN
      SACHS LENDING PARTNERS LLC

                	 
      
	 
      	 
      	 
      
	
                  By

                	 
      	 
      
	 
      	
                  Name:

                	 
      
	 
      	
                  Title:

                	 
      

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  Accepted
      and Agreed to as of

                	 
      
	
                  the
      date first above written:

                	 
      
	 
      	 
      
	
                  CHEMTURA
      CORPORATION

                	 
      
	 
      	 
      
	
                  By

                	 
      	 
      
	 
      	
                  Name:

                	 
      
	 
      	
                  Title:

                	 
      

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    CONFIDENTIAL

     

    Exhibit
A

     

    Chemtura
Corporation

     

    Summary
of Material Terms and Conditions of Revolving Facility

     

    
      
        
          
            
              
                
                  
                    	
                            Borrowers:

                          	 
      	
                            Chemtura
      Corporation, a Delaware corporation (the “Company”), and all of
      the Company’s direct and indirect wholly-owned material domestic
      subsidiaries that own any assets included in the Borrowing Base
      (collectively, the “Subsidiary Borrowers”
      and, together with the Company, the “Borrowers”).

                          
	 	 	 
	
                            Guarantors:

                          	 
      	
                            All
      of the Company’s direct and indirect wholly-owned subsidiaries (other than
      the Subsidiary Borrowers and those subsidiaries contemplated under the
      Plan (as defined in Exhibit B) to be liquidated, dissolved or merged into
      other Guarantors prior to the date that is 90 days after the Closing Date
      (provided that such subsidiaries shall be required to become Guarantors if
      not so liquidated, dissolved or merged by such date)) that were guarantors
      under the Company’s amended and restated senior secured superpriority
      debtor-in-possession credit agreement dated as of February 3, 2010 (as
      heretofore and hereafter amended, supplemented or otherwise modified, the
      “Existing Credit
      Agreement”), and all of the Company’s direct and indirect
      wholly-owned material domestic subsidiaries formed or acquired after the
      Closing Date (collectively, the “Guarantors”).  The
      Borrowers and the Guarantors are referred to herein as “Loan Parties” and
      each, a “Loan Party”.  All obligations of the Borrowers under the
      Revolving Facility and the Loan Parties’ obligations under any interest
      rate protection or other hedging arrangements (“Revolving Facility Hedging
      Arrangements”) entered into with, and under any cash management
      services (“Revolving
      Facility Cash Management Services”) provided by, any entity that is
      a Revolving Lender at the time of such transaction, or any affiliate
      thereof, will be unconditionally guaranteed by the
    Guarantors.

                          
	 	 	 
	
                            Revolving
      Lenders:

                          	 
      	
                            An
      affiliate of each Arranger and other financial institutions or entities
      acceptable to the Administrative Agent, with the consent of the Company
      (not to be unreasonably withheld) (the “Revolving Lenders” or
      the “Lenders”).

                          
	 	 	 
	
                            Administrative
      Agent:

                          	 
      	
                            Bank
      of America, N.A. or an affiliate thereof (in such capacity, the “Administrative
      Agent”).

                          

                  

                

              

            

          

        

      

    

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Syndication
      Agent:

                                  	 
      	
                                    Wells
      Fargo Capital Finance, LLC.

                                  
	 	 	 
	
                                    Co-Documentation
      Agents:

                                  	 
      	
                                    Citibank,
      N.A. or an affiliate thereof, Barclays Bank PLC or an affiliate thereof
      and Goldman Sachs Lending Partners LLC.

                                  
	 	 	 
	
                                    Collateral
      Agent:

                                  	 
      	
                                    Bank
      of America, N.A. or an affiliate thereof (in such capacity, the “Collateral Agent” and
      together with the Administrative Agent, the “Agents”).

                                  
	 	 	 
	
                                    Joint
      Lead Arrangers:

                                  	 
      	
                                    Banc
      of America Securities LLC, Wells Fargo Capital Finance, LLC and Citigroup
      Global Markets Inc. (collectively, “Arrangers”).

                                  
	 	 	 
	
                                    Joint
      Book Runners:

                                  	 
      	
                                    Banc
      of America Securities LLC, Wells Fargo Capital Finance, LLC, Citigroup
      Global Markets Inc., Barclays Capital, the investment banking division of
      Barclays Bank PLC and Goldman Sachs Lending Partners
  LLC.

                                  
	 	 	 
	
                                    Revolving
      Facility:

                                  	 
      	
                                    A
      senior secured revolving credit facility in an aggregate principal amount
      of $275 million (initially), subject to Availability (the “Revolving
      Facility”).  A letter of credit subfacility for letters of
      credit (“Letters of
      Credit”) in an aggregate amount of $125 million shall be available
      under the unused commitments of the Revolving Facility.  A bank
      affiliate of Wells Fargo Capital Finance, LLC (and/or any other Lender
      that from time to time agrees with the Borrowers to become an issuer of
      Letters of Credit) shall be the issuing bank with respect to Letters of
      Credit.  Loans under the Revolving Facility (the “Revolving Loans”) shall
      be denominated in US Dollars.

                                  
	 	 	 
	 	 	      
                                    All
      Revolving Loans shall become due and payable on the Revolving Facility
      Termination Date.

                                  
	 	 	 
	
                                    Revolving
      Facility Termination Date:

                                  	 
      	
                                    The
      “Revolving Facility
      Termination Date” shall be the earlier of (a) the fifth anniversary
      of the closing date of the Revolving Facility (the “Closing Date”) and (b)
      the acceleration of the Revolving Loans and the termination of the
      commitments under the Revolving Facility in accordance with the Loan
      Documents.

                                  
	 	 	 
	
                                    Availability:

                                  	 
      	
                                    Availability
      under the Revolving Facility (the “Availability”) will be
      equal to (i) the lesser of (A) the Borrowing Base (as defined below) and
      (B) the then effective commitments under the Revolving Facility minus (ii) the
      aggregate amount of the Revolving Loans and any undrawn or unreimbursed
      Letters of Credit (the “Revolving Facility
      Usage”).

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	 
      	 
      	
                      “Borrowing Base” shall
      mean the sum of (i) 85% of eligible accounts receivable, plus (ii) the lesser of
      (A) 85% of the Orderly Liquidation Value Percentage (as defined below) of
      eligible inventory and (B) 75% of the cost of eligible inventory, in each
      case less such
      eligibility reserves as the Administrative Agent, in its reasonable
      judgment, consistent with standards for similar asset-based financings
      taking into account current market conditions, deems appropriate and in
      each case, subject to field audits, asset appraisals and such other
      reports.

                       

                      “Orderly Liquidation Value
      Percentage” shall mean the orderly liquidation value (net of costs
      and expenses incurred in connection with liquidation) of inventory as a
      percentage of the cost of such inventory, which percentage shall be
      determined by reference to the most recent third-party appraisal of such
      inventory received by the Administrative Agent.

                       

                      Notwithstanding
      anything to the contrary herein, criteria for reserves against the
      Borrowing Base and the definition of Orderly Liquidation Value Percentage
      shall be substantially similar to (and in any event no less favorable to
      the Company than) the Existing Credit Agreement.

                    
	 	 	 
	
                      Eligibility:

                    	 
      	
                      Eligibility
      of accounts receivable and inventory for purposes of computing “Availability” and the
      Borrowing Base will be determined by the Administrative Agent in
      accordance with criteria substantially similar to (and in any event no
      less favorable to the Company than) the Existing Credit
      Agreement.

                    
	 	 	 
	 
      	 
      	
                      The
      Administrative Agent shall have the right to conduct field audits and
      examinations of receivables and inventory and appraisals of inventory (i)
      unless clause (ii) or (iii) applies, no more than twice per calendar year,
      (ii) if Availability is less than the greater of (x) $40 million and (y)
      15% of the aggregate commitments under the Revolving Facility, three times
      per calendar year(provided that no such field audit and examination and
      appraisal shall be required under the circumstances described in this
      clause (ii) unless (A) 120 days have passed since the most recent field
      audit and examination and appraisal conducted by the Administrative Agent
      and (B) Availability continues to be less than the minimum amount
      described in this clause (ii)) and (iii) at any time, at the reasonable
      request of the Administrative Agent, if an event of default has occurred
      and is
continuing.

                    

            

          

        

      

    

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  	
                          Purpose:

                        	 
      	
                          Proceeds
      of the Revolving Loans shall be used solely to refinance the Existing
      Credit Agreement and for other general corporate purposes and activities
      (including payment of fees and expenses in connection with the
      transactions contemplated hereby and working capital).

                        
	 	 	 
	
                          Loan
      Documents:

                        	 
      	
                          The
      Revolving Facility will be documented by a credit agreement (the “Revolving Facility Credit
      Agreement”) and other guarantees, security agreements, an
      intercreditor agreement with the holders of the Term Loans or their
      representative(s), and other relevant documentation (together with the
      Revolving Facility Credit Agreement, collectively, the “Loan Documents”)
      reflecting the terms and provisions set forth in this term sheet
      (including Annex A attached hereto) and Exhibit B to the Commitment Letter
      and, to the extent not covered by such terms and provisions, otherwise
      reasonably acceptable to the Company and the Initial
    Lenders.

                        
	 	 	 
	
                          Interest
      Rates and Fees:

                        	 
      	
                          As
      set forth on Annex A attached hereto.

                        
	 	 	 
	
                          Commitment
      Increase:

                        	 
      	
                          The
      Company will have the right, no more than twice a year, to increase the
      aggregate commitments under the Revolving Facility (the “Facility Amount”), in
      minimum increments of $25,000,000, to a maximum Facility Amount of
      $400,000,000; provided that no Event
      of Default, or event which with the giving of notice or lapse of time or
      both would be an Event of Default, has occurred and is continuing. 
      The Company may offer the increase to (x) its existing Revolving Lenders,
      and each existing Revolving Lender will have the right, but no obligation,
      to commit to all or a portion of the proposed increase (the “Proposed Increased
      Commitment”) or (y) third party financial institutions acceptable
      to the Administrative Agent (such acceptance not to be unreasonably
      withheld or delayed), provided that the
      minimum commitment of each such third party financial institution equals
      or exceeds $5,000,000.

                        
	 	 	 
	
                          Optional
      Prepayments:

                        	 
      	
                          The
      Company may, upon at least 3 business days’ notice for LIBO Rate Loans and
      1 business day’s notice for Base Rate Loans and at the end of any
      applicable interest period (or at other times with the payment of
      applicable breakage costs), prepay in full or in part, without premium or
      penalty (other than such breakage costs), the Revolving Loans; provided that each such
      partial prepayment shall be in an aggregate amount of $1,000,000 or
      multiples of $500,000 (or, if less, the then outstanding principal amount
      of the Revolving
Loans).

                        

                

              

            

          

        

      

    

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

    

    
      
        
          
            	
                    Mandatory
      Prepayments:

                  	 
      	
                    Mandatory
      prepayments of the Revolving Loans (and cash collateralization of
      outstanding Letters of Credit) shall be required (a) if the Revolving
      Facility Usage exceeds the lesser of (i) the Borrowing Base and (ii) the
      then effective commitments under the Revolving Facility and (b) with net
      cash proceeds from sales or casualty events of any Revolving Facility
      Collateral (excluding sales or other dispositions of inventory and certain
      other assets in the ordinary course of business), subject to customary
      exceptions (no less favorable to the Company than in the Existing Credit
      Agreement, except to the extent that making a provision less favorable is
      necessary to protect the interests of the Lenders to substantially the
      same degree as the corresponding interests of the lenders under the
      Existing Credit Agreement were protected by the corresponding provision
      under the Existing Credit Agreement (it being acknowledged by the Initial
      Lenders that after review of the Existing Credit Agreement they are aware
      of no such provisions on the date of the Commitment Letter)) and a dollar
      threshold to be mutually agreed upon for excluded sales and casualty
      events.

                     

                    If
      at the end of any business day the amount of unrestricted cash and cash
      equivalents held by the Loan Parties (other than cash and cash equivalents
      held in (x) collection, lockbox and disbursement accounts in the ordinary
      course of collections and disbursements, (y) payroll accounts, trust
      accounts, escrow accounts or security deposits established pursuant to
      statutory obligations or for the payment of taxes or holding funds in
      trust for third parties not affiliated with the Company in the ordinary
      course of business or in connection with acquisitions, investments or
      dispositions permitted under the Revolving Facility Credit Agreement,
      deposits in the ordinary course of business in connection with workers’
      compensation, unemployment insurance and other types of social security,
      and reserve accounts expressly contemplated under the Plan and/or the
      disclosure statement for the Plan (the “Disclosure
      Statement”) (including, but not limited to reserves expressly
      contemplated under the Plan and/or Disclosure Statement for diacetyl
      claims and environmental claims, and escrow accounts established pursuant
      to contractual obligations to third parties not affiliated with the
      Company for casualty payments and insurance proceeds)) shall exceed $20
      million in the aggregate, mandatory prepayments of the Revolving Loans
      (and cash collateralization of outstanding Letters of Credit) shall be
      required on the following business day in an amount necessary to eliminate
      such excess (net of the Company’s known cash uses (for example, Senior
      Note and Term Loan interest payments) on the date of such prepayment and
      for the 2 business days
thereafter).

                  

          

        

      

    

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                	 	 	
                        Mandatory
      prepayments of the Revolving Facility shall be applied first to repay
      Revolving Loans (without reducing commitments), and second, to cash
      collateralize outstanding Letters of Credit (without reducing
      commitments). 

                      
	 	 	 
	
                        Commitment
      Reductions:

                      	 
      	
                        The
      Company may, upon at least 3 business days’ notice, reduce in full or in
      part, without premium or penalty, commitments under the Revolving
      Facility; provided
      that each such partial reduction shall be in an aggregate amount of
      $10,000,000 or multiples of $5,000,000 in excess
  thereof.

                      
	 	 	 
	
                        Security
      and Priority:

                      	 
      	
                        All
      amounts owing by the Borrowers under the Revolving Facility, any Revolving
      Facility Hedging Arrangements and any Revolving Facility Cash Management
      Services (provided that in the case of Revolving Facility Hedging
      Arrangements and Revolving Facility Cash Management Services, customary
      reserves (substantially similar to (and in any event no less favorable to
      the Company than) those in the Existing Credit Agreement) are applied to
      the Borrowing Base) and by the Guarantors in respect thereof shall be
      secured by (i) first priority liens on the Revolving Facility Collateral
      and (ii) second priority liens on the Term Facility
      Collateral.

                         

                        “Revolving Facility
      Collateral” means all of the existing and future inventory and
      accounts (as defined in the Existing Credit Agreement) of the Loan
      Parties, together with all general intangibles relating to inventory and
      accounts, all contract rights under agreements relating to inventory and
      accounts, all documents relating to inventory, all supporting obligations
      and letter-of-credit rights relating to inventory and accounts, all
      instruments evidencing payment for inventory and accounts; all money,
      cash, cash equivalents, securities and other property of any kind held
      directly or indirectly by the Administrative Agent or any Revolving Lender
      under the Revolving Facility; all deposit accounts (it being understood
      that account control agreements shall be entered into within a reasonable
      time period (to be mutually agreed upon in the Loan Documents) after the
      Closing Date and shall not be required with respect to payroll accounts,
      trust accounts, escrow accounts or security deposits established pursuant
      to statutory obligations or for the payment of taxes or holding funds in
      trust for third parties not affiliated with the Company in the ordinary
      course of business or in connection with acquisitions, investments or
      dispositions permitted under the Revolving Facility Credit Agreement,
      deposits in the ordinary course of business in connection with workers’
      compensation, unemployment insurance and other types of social security,
      and reserve accounts expressly contemplated under the Plan and/or
      Disclosure Statement (including, but not limited to reserves expressly
      contemplated under the Plan and/or Disclosure Statement for diacetyl
      claims and environmental claims, and escrow accounts established pursuant
      to contractual obligations to third parties not affiliated with the
      Company for casualty payments and insurance proceeds), or with respect to
      deposit accounts holding deposits below $500,000), credits, and balances
      with any financial institution with which any Loan Party maintains
      deposits and which contain proceeds of or collections on, inventory and
      accounts; all books, records and other property related to or referring to
      any of the foregoing, including books, records, account ledgers, data
      processing records, computer software and other property and all proceeds
      of any of the foregoing, including, proceeds of any insurance policies,
      claims against third
parties.

                      

              

            

          

        

      

    

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	 
      	
                  “Term Facility
      Collateral” means all tangible and intangible assets of the Loan
      Parties (other than any assets comprising Revolving Facility Collateral),
      including, without limitation, real property, equipment, intellectual
      property, equity interests of their direct subsidiaries (including 100% of
      the non-voting capital stock of their respective foreign subsidiaries and
      no more than (to the extent the pledge of any greater percentage would
      result in material adverse tax consequences to the Loan Parties) 65% of
      the voting capital stock of their respective foreign subsidiaries that are
      classified as controlled foreign corporations under Section 957 of the
      International Revenue Code (“CFC”) and entities that
      are treated as partnerships or disregarded entities for United States
      federal income tax purposes and whose assets are solely capital stock of
      CFCs) and other investment property.

                   

                  The
      Revolving Facility Collateral and the Term Facility Collateral are
      collectively referred to herein as the “Collateral”.

                   

                  Notwithstanding
      the foregoing, the Collateral and the requirements for perfecting a
      security interest in the Collateral shall in each case contain exceptions
      substantially similar to those in the Existing Credit Agreement, it being
      understood that in circumstances where the Company and the Administrative
      Agent reasonably agree that the cost of perfecting a security interest in
      any Collateral is materially excessive in relation to the benefit afforded
      the Lenders, the Loan Parties shall not be required to perfect such
      security interest.

                

        

      

    

    
      
         

      

      
        A-7

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	
                      Intercreditor
      Agreement:

                    	 
      	
                      The
      lien priority, relative rights and other creditors’ rights issues in
      respect of the Collateral, including, without limitation, the right of the
      Collateral Agent to enter upon and use the Term Facility Collateral to
      assemble, process, remove, sell, protect, secure and otherwise enforce the
      rights of the secured parties under the Revolving Facility in the
      Revolving Facility Collateral, will be set forth in a customary
      intercreditor agreement (the “Intercreditor
      Agreement”) reasonably acceptable to the Company and the Initial
      Lenders.

                    
	 	 	 
	
                      Conditions
      Precedent to the Initial Extension of Credit:

                    	 
      	
                      As
      set forth in Exhibit B.

                    
	 	 	 
	
                      Conditions
      Precedent to Each Loan and Letter of Credit:

                    	 
      	
                      On
      the funding date of each Revolving Loan (and on the date of issuance of
      any Letter of Credit) (i) no Event of Default, or event which with the
      giving of notice or lapse of time or both would be an Event of Default,
      shall have occurred and be continuing under the Loan Documents and (ii)
      the representations and warranties of the Borrowers and each Guarantor
      therein shall be true and correct in all material respects (or, with
      respect to any representation or warranty that is qualified as to
      materiality, true and correct in all respects) immediately prior to, and
      after giving effect to, such funding or issuance, other than any such
      representations or warranties that, by their terms, refer to a specific
      earlier date, in which case such representations or warranties shall have
      been true and correct in all material respects as of such specific
      date.

                    

            

          

        

      

    

    
      
         

      

      
        A-8

        
          

        

      

      
         

      

    

    

    
      
        
          
            	
                    Representations
      and Warranties:

                  	 
      	
                    The
      Loan Documents will contain representations and warranties customarily
      found in the Administrative Agent’s loan agreements for similar
      asset-based financings and other representations and warranties reasonably
      deemed by the Administrative Agent appropriate to the specific transaction
      (which will be applicable to the Borrowers, the Guarantors and their
      respective subsidiaries, and will be substantially similar (and in any
      event not less favorable to the Company in any material respect, except to
      the extent that making a provision less favorable is necessary to protect
      the interests of the Lenders to substantially the same degree as the
      corresponding interests of the lenders under the Existing Credit Agreement
      were protected by the corresponding provision under the Existing Credit
      Agreement (it being acknowledged by the Initial Lenders that after review
      of the Existing Credit Agreement they are aware of no such provisions on
      the date of the Commitment Letter)) to the representations and warranties
      set forth in the Existing Credit Agreement, subject to the right of the
      Initial Lenders to negotiate such representations and warranties in good
      faith), including, without limitation with respect to: valid existence,
      compliance with law, requisite power, due authorization, approvals, no
      conflict with agreements or applicable law, enforceability of the Loan
      Documents, ownership of subsidiaries, material accuracy of financial
      statements and all other information provided, absence of Material Adverse
      Change, solvency, absence of material adverse litigation, taxes, margin
      regulations, no burdensome restrictions, no default under material
      agreements or the Loan Documents, inapplicability of Investment Company
      Act, use of proceeds, insurance, labor matters, ERISA, environmental
      matters, security interests, existing debt, liens and investments,
      necessary rights to intellectual property and ownership of
      properties.

                  
	 	 	 
	
                    Affirmative
      Covenants:

                  	 
      	
                    The
      Loan Documents will contain affirmative covenants customarily found in the
      Administrative Agent’s loan agreements for similar asset-based financings
      and other affirmative covenants reasonably deemed by the Administrative
      Agent to be appropriate to the specific transaction, subject to, where
      appropriate, materiality thresholds, carve-outs and exceptions as agreed
      (which will applicable to the Borrowers, the Guarantors and their
      respective subsidiaries, and will be substantially similar (and in any
      event not less favorable to the Company in any material respect except as
      expressly set forth in item M below and except to the extent that making a
      provision less favorable is necessary to protect the interests of the
      Lenders to substantially the same degree as the corresponding interests of
      the lenders under the Existing Credit Agreement were protected by the
      corresponding provision under the Existing Credit Agreement (it being
      acknowledged by the Initial Lenders that after review of the Existing
      Credit Agreement they are aware of no such provisions on the date of the
      Commitment Letter)) to the affirmative covenants set forth in the Existing
      Credit Agreement, subject to the right of the Initial Lenders to negotiate
      such affirmative covenants in good faith), including, without limitation,
      the
following:

                  

          

        

      

    

    
      
         

      

      
        A-9

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	 
      	 
      	
                                          A.

                                        	
                                          Preservation
      of corporate existence.

                                        
	 	 	 	 
	 
      	 
      	
                                          B.

                                        	
                                          Compliance
      with laws (including ERISA and applicable environmental
    laws).

                                        
	 	 	 	 
	 
      	 
      	
                                          C.

                                        	
                                          Conduct
      of business.

                                        
	 	 	 	 
	 
      	 
      	
                                          D.

                                        	
                                          Payment
      of taxes.

                                        
	 	 	 	 
	 
      	 
      	
                                          E.

                                        	
                                          Maintenance
      of insurance.

                                        
	 	 	 	 
	 
      	 
      	
                                          F.

                                        	
                                          Access
      to books and records and visitation rights.

                                        
	 	 	 	 
	 
      	 
      	
                                          G.

                                        	
                                          Maintenance
      of books and records.

                                        
	 	 	 	 
	 
      	 
      	
                                          H.

                                        	
                                          Maintenance
      of properties.

                                        
	 	 	 	 
	 
      	 
      	
                                          I.

                                        	
                                          Use
      of proceeds.

                                        
	 	 	 	 
	 
      	 
      	
                                          J.

                                        	
                                          Provision
      of additional collateral, guarantees and mortgages.

                                        
	 	 	 	 
	 
      	 
      	
                                          K.

                                        	
                                          Use
      of reasonable efforts to deliver landlord and bailee
    waivers.

                                        
	 	 	 	 
	 
      	 
      	
                                          L.

                                        	
                                          Further
      assurances.

                                        
	 	 	 	 
	 
      	 
      	
                                          M.

                                        	
                                          Maintenance
      with respect to bank accounts (with exceptions as set forth above under
      the “Security and Priority” provisions) of account control agreements in
      form and substance reasonably acceptable to the Administrative
      Agent.  Cash dominion (i.e., required daily transfer of balances in
      lockbox collection accounts to repay outstanding Revolving Loans) by the
      Administrative Agent will be exercisable only during the period from the
      date the Availability falls below the greater of (i) $40 million and (ii)
      15% of the aggregate commitments under the Revolving Facility, to the date
      Availability has been at least equal to the greater of (i) $40 million and
      (ii) 15% of the aggregate commitments under the Revolving Facility for 45
      consecutive days (with a grace period to cure Availability falling below
      the foregoing threshold and/or provisions for increasing the frequency of
      Availability reporting, in each case to be set forth in the Revolving
      Facility Credit Agreement). Notwithstanding anything to the contrary
      herein, the Company and its subsidiaries shall be permitted to retain
      their cash management system and deposit accounts at Citibank and its
      affiliates, subject to obtaining such account control
      agreements.

                                        

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        A-10

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  Negative
      Covenants:

                	 
      	
                  The
      Loan Documents will contain negative covenants customarily found in the
      Administrative Agent’s loan agreements for similar asset-based financings
      and other negative covenants reasonably deemed by the Administrative Agent
      to be appropriate to the specific transaction and where appropriate,
      subject to materiality thresholds, carve-outs and exceptions as agreed
      (which will be applicable to the Borrowers, the Guarantors and their
      respective subsidiaries, and will be substantially similar (and in any
      event not less favorable to the Company in any material respect except as
      expressly described below and except to the extent that making a provision
      less favorable is necessary to protect the interests of the Lenders to
      substantially the same degree as the corresponding interests of the
      lenders under the Existing Credit Agreement were protected by the
      corresponding provision under the Existing Credit Agreement (it being
      acknowledged by the Initial Lenders that after review of the Existing
      Credit Agreement they are aware of no such provisions on the date of the
      Commitment Letter)) to the negative covenants set forth in the Existing
      Credit Agreement, subject to the right of the Initial Lenders to negotiate
      such negative covenants in good faith), including, without limitation, the
      following:

                

        

      

    

    
      
         

      

      
        A-11

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	 
      	 
      	
                      A.

                    	
                      Limitations
      on debt and guarantees (with exceptions in any event permitting (i) the
      Senior Notes and the Term Loans, (ii) debt and guarantees outstanding on
      the Closing Date as permitted under the Existing Credit Agreement that is
      in effect as of the date of the Commitment Letter (as modified by any
      amendments, modifications or waivers thereto (other than those that are
      adverse to the interests of the Lenders in more than a de minimis
      respect)) and (in the case of the Loan Parties) contemplated under (and
      remaining outstanding on the Closing Date in accordance with) the Plan
      and/or Disclosure Statement, (iii) up to $250 million (or the foreign
      currency equivalent) at any time outstanding of asset-based financing
      (including receivables and/or and inventory based financing), factoring
      arrangements or other securitization programs, in each case of foreign
      subsidiaries of the Company (collectively, “Foreign Asset Based
      Financing”), (iv) guarantee by the Company of up to 15 million
      pounds Sterling of its repayment obligations to Chemtura Manufacturing UK
      Limited, to assure funding of contributions to the Great Lakes (UK)
      Limited Pension Plan, (v) guarantees of obligations of joint ventures and
      other non-Loan Party subsidiaries of the Company to the extent investments
      would be permitted in such entities under paragraph C below,
      (vi) purchase money debt and capital leases not exceeding $30 million
      at any time outstanding, plus any leases (including operating leases that
      are recharacterized as capital leases) outstanding on the Closing Date as
      permitted under the Existing Credit Agreement that is in effect as of the
      date of the Commitment Letter (as modified by any amendments,
      modifications or waivers thereto (other than those that are adverse to the
      interests of the Lenders in more than a de minimis respect)),
      (vii) an additional $20 million of debt outstanding at any time in
      excess of the $5 million permitted under section 5.02(b)(xi) of the
      Existing Credit Agreement that is in effect as of the date of the
      Commitment Letter, and (viii) an additional $40 million of debt of
      foreign subsidiaries outstanding at any time in excess of the $10 million
      permitted under section 5.02(b)(vi) of the Existing Credit Agreement that
      is in effect as of the date of the Commitment Letter).

                    
	 	 	 	 
	 
      	 
      	
                      B.

                    	
                      Limitations
      on liens (with exceptions in any event permitting (i) the liens securing
      the Term Loans and, to the extent the Senior Notes are secured, the Senior
      Notes, (ii) liens outstanding on the Closing Date as permitted under the
      Existing Credit Agreement that is in effect as of the date of the
      Commitment Letter (as modified by any amendments, modifications or waivers
      thereto (other than those that are adverse to the interests of the Lenders
      in more than a de minimis respect)), (iii) liens securing up to $250
      million (or the foreign currency equivalent) at any time outstanding of
      Foreign Asset Based Financing, (iv) general “basket” for liens on assets
      of the foreign subsidiaries of the Company securing up to $50 million (or
      the foreign currency equivalent) at any time outstanding of obligations of
      the Company’s foreign subsidiaries, (v) liens on (and restrictions on
      additional liens on) assets of Chemtura Manufacturing UK Limited securing
      obligations to its U.K. pension plan trustees, (vi) general “basket” for
      liens on assets (other than collateral included in the calculation of the
      Borrowing Base) securing up to $25 million at any time outstanding of
      obligations of the Company and/or its domestic subsidiaries and (vii)
      liens on assets (other than collateral included in the calculation of the
      Borrowing Base) corresponding to secured debt, capital leases and
      guarantees permitted under the debt covenant described in item A
      above).

                    

            

          

        

      

    

    
      
         

      

      
        A-12

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  	 
      	 
      	
                          C.

                        	
                          Limitations
      on loans and investments (with exceptions in any event permitting (w)
      loans and investments not to exceed $25 million at any time outstanding,
      (x) loans and investments outstanding on the Closing Date as permitted
      under the Existing Credit Agreement that is in effect as of the date of
      the Commitment Letter (as modified by any amendments, modifications or
      waivers thereto (other than those that are adverse to the interests of the
      Lenders in more than a de minimis respect)) , (y) investments in (and
      guarantees of obligations of) joint ventures in an amount not to exceed $5
      million at any time outstanding (with unfunded guarantees not counting
      against such limitation), it being understood that funding and
      reimbursement arrangements with respect to the Rubicon joint venture that
      are consistent with past practices shall not be deemed loans or
      investments subject to limitation under this covenant, and (z) any loan or
      investment if (a) immediately after giving effect to such transaction, on
      a proforma basis, (i) the Fixed Charge Coverage Ratio shall be at least
      1.1 to 1.0 and (ii) each of the Average Excess Availability (as defined in
      Annex A) for the 30 day period prior to such transaction, and the
      Availability on the date of such transaction, shall be at least equal to
      the greater $40 million and 20% of the aggregate commitments under the
      Revolving Facility (the conditions described in this clause (a) being the
      “Fixed Charge
      and Liquidity Conditions”) and (b) no default exists immediately
      before or after giving effect to such transaction).

                        
	 	 	 	 
	 
      	 
      	
                          D.

                        	
                          Limitations
      on asset dispositions, including, without limitation, the issuance and
      sale of capital stock of subsidiaries (with exceptions in any event
      permitting up to $250 million (or the foreign currency equivalent) at any
      time outstanding of Foreign Asset Based Financing).

                        
	 	 	 	 
	 
      	 
      	
                          E.

                        	
                          Limitations
      on dividends, redemptions, repurchases with respect to capital stock and
      prepayments, redemptions and repurchases of debt (collectively, “Restricted
      Payments”) (with exceptions in any event permitting (x) dividends,
      redemptions and repurchases contemplated under (and made in accordance
      with) the Plan and/or the Disclosure Statement and (y) any other
      Restricted Payments if (a) the Fixed Charge and Liquidity Conditions are
      satisfied and (b) no default exists immediately before or after giving
      effect to such Restricted
Payment).

                        

                

              

            

          

        

      

    

    
      
         

      

      
        A-13

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      	 
      	 
      	
                              F.

                            	
                              Limitations
      on mergers, consolidations, acquisitions, joint ventures or creation of
      subsidiaries (with exceptions in any event permitting (x) mergers,
      consolidations, acquisitions and subsidiaries contemplated under (and
      consummated in accordance with) the Plan and/or the Disclosure Statement,
      (y) mergers and consolidations of any Loan Party with another Loan Party
      (provided that the surviving entity in any such merger or consolidation
      involving the Company shall be the Company), any non-Loan Party subsidiary
      with another non-Loan Party subsidiary, any non-Loan Party subsidiary with
      a Loan Party (provided that the surviving entity shall be a Loan Party)
      and (z) any mergers, consolidations, acquisitions, joint ventures or
      creations of subsidiaries if (a) the Fixed Charge and Liquidity Conditions
      are satisfied, (b) no default exists immediately before or after giving
      effect to such transaction, and (c) in the case of a merger or
      consolidation of any Loan Party, the surviving entity shall be a Loan
      Party and, in the case of a merger or consolidation of the Company, the
      Company shall be the surviving entity).  The Loan Documents shall
      permit any Guarantor to be liquidated, dissolved or merged into other
      Guarantors or the Company after the Closing Date, and shall contain
      customary automatic guaranty release provisions for any Guarantors that
      are so liquidated, dissolved or merged.

                            
	 	 	 	 
	 
      	 
      	
                              G.

                            	
                              Limitations
      on material changes in business.

                            
	 	 	 	 
	 
      	 
      	
                              H.

                            	
                              Limitations
      on transactions with affiliates.

                            
	 	 	 	 
	 
      	 
      	
                              I.

                            	
                              Limitations
      on restrictions on distributions from subsidiaries and granting of
      negative pledges.

                            
	 	 	 	 
	 
      	 
      	
                              J.

                            	
                              Limitations
      on changes in accounting treatment and reporting practices (except as
      permitted or required by generally accepted accounting principles) or the
      fiscal year without the Administrative Agent’s consent (it being
      understood that application of fresh start accounting shall not be
      restricted).

                            
	 	 	 	 
	 
      	 
      	
                              K.

                            	
                              Limitations
      on sale/leasebacks and operating leases.

                            
	 	 	 	 
	 
      	 
      	
                              L.

                            	
                              Limitations
      on speculative transactions except for the sole purpose of hedging in the
      normal course of business and consistent with industry
      practices.

                            

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        A-14

        
          

        

      

      
         

      

    

    

    
      
        
          
            	
                    Financial
      Covenants:

                  	 
      	
                    Financial
      covenants will be limited to a minimum Fixed Charge Coverage Ratio of 1.1
      to 1.0 at all times during any Testing Period.

                     

                    “Testing
      Period” means the period from the date the  Availability falls
      below the greater of (i) $34 million and (ii) 12.5% of the aggregate
      commitments under the Revolving Facility, to the date Availability has
      been at least equal to the greater of (i) $34 million and (ii) 12.5% of
      the aggregate commitments under the Revolving Facility for 45 consecutive
      days.

                     

                    “Fixed
      Charge Coverage Ratio” means, at any time, the ratio, determined on a
      consolidated basis for the Company and its subsidiaries for the most
      recently ended period of twelve fiscal months, of (a) EBITDA for such
      period minus capital
      expenditures made (other than those funded by the issuance of debt or
      equity) during such period minus taxes
      paid in cash during such period (to the extent added back to net income in
      the calculation of EBITDA for such period), to (b) the sum of (i) interest
      expense paid in cash during such period plus (ii) scheduled principal
      payments made on borrowed money plus (iii) declared or paid dividend or
      other distributions, or repurchases, redemption or other acquisition or
      retirement for value, in each case to the extent paid (or declared for
      payment) in cash with respect to capital stock (except that this
      clause (iii) shall not include such payments made or declared
      (1) to the Company or its subsidiaries or (2) by a subsidiary of
      the Company to a person other than the Company or its subsidiaries if such
      payment or declaration is made ratably to holders of the relevant class of
      capital stock of the relevant subsidiary), plus (iv) to the extent not
      deducted from consolidated net income to determine EBITDA during such
      period, amounts paid during such period with respect to any (A)
      environmental liabilities, and (B) pension and other post employment
      benefit liabilities. Notwithstanding anything herein to the contrary, (A)
      the amounts described in clauses (i), (ii), (iii) and (iv) of the
      preceding sentence shall not include amounts paid as contemplated under
      and in accordance with the Plan and/or Disclosure Statement, (B) the
      initial contribution (and the payments made to fund such contribution) to
      the Great Lakes (UK) Limited Pension Plan on or after the Closing Date in
      an amount not in excess of 15 million Pounds Sterling shall be deemed to
      be contemplated under (and made in accordance with) the Plan and the
      Disclosure Statement, and (C) for purposes of calculating the Fixed Charge
      Coverage Ratio for any portion of the relevant 12-month period that occurs
      prior to the Closing Date, the amount of each of the various components of
      the Fixed Charge Coverage Ratio calculation described in the preceding
      sentence in each month set forth on Annex B attached hereto shall be
      deemed to be the amount therefor set forth opposite such month in Annex
      B.

                  

          

        

      

    

    
      
         

      

      
        A-15

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	 
      	
                  “EBITDA”
      means, for any person for any period, (a) consolidated net income (or net
      loss) plus (b) without duplication, to the extent included in the
      calculation of consolidated net income of such person for such period in
      accordance with GAAP, the sum of (i) interest expense, (ii) income tax
      expense, (iii) depreciation expense, (iv) amortization expense, (v)
      non-cash charges related to restructuring (including but not limited to
      facility closure and severance expense), asset impairment or other
      extraordinary items and fees and expenses incurred in connection with the
      Chapter 11 reorganization, the Plan, the financings expressly contemplated
      by the Plan and/or Disclosure Statement, the adoption of fresh start
      accounting and any Foreign Asset Based Financing, (vi) any losses from
      sales of assets other than in the ordinary course of business, (vii)
      non-cash expenses in respect of employees’ compensation payable in equity
      interests, (viii) losses incurred on the early extinguishment of debt,
      (ix) charges for legal and other expenses in connection with Designated
      Litigation Liabilities (to be defined as liabilities for litigation
      matters the liability for which have been estimated or determined under
      and in accordance with the Plan and/or Disclosure Statement) in an
      aggregate amount not to exceed $15,000,000 and (x) losses incurred after
      the Closing Date as a result of the adoption of fresh start accounting
      (which losses are required to be disclosed to SEC within 210 days of the
      adoption of fresh start accounting), minus (c) without duplication, (i)
      cash payments for non-cash restructuring charges reserved in a prior
      period to the extent a charge or expense for such payments was included in
      EBITDA for a prior period pursuant to clause (b) above, (ii) gains
      recognized on the early extinguishment of debt, (iii) gains incurred after
      the Closing Date as a result of the adoption of fresh start accounting
      (which gains are required to be disclosed to SEC within 210 days of the
      adoption of fresh start accounting), and (iv) to the extent included in
      the calculation of net income of such Person for such period in accordance
      with GAAP, any gains from sales of assets other than in the ordinary
      course of business and any other extraordinary gains, provided, however,
      that in any event and for all periods, non-cash gains or losses on foreign
      currency translation in connection with the re-measurement of balance
      sheet assets and liabilities shall be excluded from the calculation of
      EBITDA.  For the purposes of calculating EBITDA for any period, if
      during such period the Company or any of its subsidiaries shall have made
      an acquisition, EBITDA for such period shall be calculated after giving
      pro forma effect thereto as if such acquisition occurred on the first day
      of such period.  For purposes of calculating the Fixed Charge
      Coverage Ratio for any portion of the relevant 12-month period that occurs
      prior to the Closing Date, EBITDA for each month set forth in Annex B
      attached hereto shall be deemed to be the amount set forth opposite such
      month in Annex B.

                

        

      

    

    
      
         

      

      
        A-16

        
          

        

      

      
         

      

    

    

    
      
        
          
            	
                    Financial
      Reporting Requirements:

                  	 
      	
                    The
      Company shall provide: (i) monthly consolidated financial statements of
      the Company, the Borrowers, the Guarantors and their respective
      subsidiaries, including balance sheet, income statement and cash flow
      statement within 30 days of month-end, certified by the Company’s
      Responsible Officer; (ii) quarterly consolidated financial statements of
      the Company, the Borrowers, the Guarantors and their respective
      subsidiaries within 45 days of quarter-end for the first 3 fiscal quarters
      of the fiscal year (except that if the Confirmation Order (as defined in
      Exhibit B) shall have been entered by the Bankruptcy Court (as defined in
      the Plan) on or prior to September 16, 2010, such period shall be 90 days
      with respect to the third fiscal quarter of 2010), certified by the
      Company’s Responsible Officer; (iii) annual audited consolidated financial
      statements of the Company and its subsidiaries within 90 days of year-end
      (except that such period shall be 105 days with respect to the 2010 fiscal
      year), certified with respect to such consolidated statements by
      independent certified public accountants reasonably acceptable to the
      Administrative Agent; (iv) copies of all reports on Form 10-K, 10-Q or 8-K
      filed with the Securities and Exchange Commission; (v) monthly
      certificates certifying as to the Fixed Charge Coverage Ratio as of the
      end of each calendar month (regardless of whether a Testing Period then
      applies); and (vi) projections for the balance of the term of the
      Revolving Facility provided annually and annual business and financial
      plans provided in each case within 45 days after the beginning of each
      fiscal year.

                  
	 	 	 
	
                    Other
      Reporting Requirements:

                  	 
      	
                    The
      Loan Documents will contain other reporting requirements customarily found
      in the Administrative Agent’s loan documents for similar asset-based
      financings and other reporting requirements deemed by the Administrative
      Agent appropriate to the specific transaction (which will be substantially
      similar (and in any event not more burdensome to the Company in any
      material respect except in circumstances where the Administrative Agent
      believes in good faith other modifications are appropriate) to the
      reporting requirements set forth in the Existing Credit Agreement),
      including, without limitation, with respect to litigation, contingent
      liabilities, ERISA or environmental events and Borrowing Base and Fixed
      Charge Coverage Ratio certificates on a monthly basis (or (in the case of
      Borrowing Base certificates) weekly basis during any Testing Period) and
      appropriate supporting data for such Borrowing Base and Fixed Charge
      Coverage Ratio certificates at such times and in form and substance as is
      reasonably satisfactory to the Administrative
  Agent.

                  

          

        

      

    

    
      
         

      

      
        A-17

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  Events
      of Default:

                	 
      	
                  The
      Loan Documents will contain events of default customarily found in the
      Administrative Agent’s loan agreements for similar asset-based financings
      and other events of default reasonably deemed by the Administrative Agent
      to be appropriate to the specific transaction (which will be applicable to
      the Company, the Borrowers, the Guarantors and their respective
      subsidiaries, and will be substantially similar (and in any event not less
      favorable to the Company in any material respect except in circumstances
      where the Administrative Agent believes in good faith other modifications
      are appropriate) to the events of default set forth in the Existing Credit
      Agreement, subject to the right of the Initial Lenders to negotiate such
      events of default in good faith), including, without limitation, the
      following, with, where appropriate, customary grace periods and exceptions
      (which grace periods and exceptions shall in any event not be less
      favorable to the Company than those in the Existing Credit Agreement,
      except to the extent that making a provision less favorable is necessary
      to protect the interests of the Lenders to substantially the same degree
      as the corresponding interests of the lenders under the Existing Credit
      Agreement were protected by the corresponding provision under the Existing
      Credit Agreement (it being acknowledged by the Initial Lenders that after
      review of the Existing Credit Agreement they are aware of no such
      provisions on the date of the Commitment Letter)) as set forth in the
      Revolving Facility Credit
Agreement:

                

        

      

    

    

    
      
        
          
            	 
      	 
      	
                    A.

                  	
                    Failure
      to pay principal, interest or any other amount when
due.

                  
	 	 	 	 
	 
      	 
      	
                    B.

                  	
                    Representations
      and warranties incorrect in any material respect when
    given.

                  

          

        

      

    

    
      
         

      

      
        A-18

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      	 
      	 
      	
                              C.

                            	
                              Failure
      to comply with covenants (with grace period as
    appropriate).

                            
	 	 	 	 
	 
      	 
      	
                              D.

                            	
                              Cross-default
      to payment defaults, or default or event of default if the effect is to
      accelerate or permit acceleration of indebtedness with a principal amount
      in excess of $20 million; provided that any cross-default that results
      from the breach of a financial covenant under the Term Loans but that has
      not resulted in the acceleration of the Term Loans shall be subject to a
      grace period to be agreed.

                            
	 	 	 	 
	 
      	 
      	
                              E.

                            	
                              Commencement
      of enforcement of any judgment that is not stayed or vacated, or failure
      (for a period of 30 days or longer) to satisfy or stay execution of any
      judgment, in each case if the aggregate amount of such judgments exceeds
      $20 million (except to the extent fully covered by insurance or
      indemnity).

                            
	 	 	 	 
	 
      	 
      	
                              F.

                            	
                              Bankruptcy
      or insolvency of the Company or any material subsidiary of the
      Company.

                            
	 	 	 	 
	 
      	 
      	
                              G.

                            	
                              The
      occurrence of certain ERISA events that result in or are reasonably likely
      to result in liability in excess of $20 million.

                            
	 	 	 	 
	 
      	 
      	
                              H.

                            	
                              Actual
      or asserted invalidity or impairment of any  Loan Document
      (including the failure of any lien to remain
perfected).

                            
	 	 	 	 
	 
      	 
      	
                              I.

                            	
                              Change
      of control after the Closing Date (to be defined as mutually agreed upon
      in the Loan
Documents).

                            

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          	
                  Indemnification:

                	 
      	
                  The
      Loan Documents will contain customary indemnification provisions
      (including coverage of environmental liabilities) by the Loan Parties in
      favor of the  Agents, each Arranger, each Revolving Lender, each
      Letter of Credit issuer and each of their respective affiliates and the
      respective officers, directors, employees, agents, advisors, attorneys and
      representatives of each of
them.

                

        

      

    

    
      
         

      

      
        A-19

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                	
                        Expenses:

                      	 
      	
                        The
      Company and each Borrower shall jointly and severally pay or reimburse the
      Agents and the Arrangers for all reasonable and documented out-of-pocket
      costs and expenses incurred by the Agents and the Arrangers (including,
      without limitation, third-party appraisal costs, per diem costs and other
      charges of field examiners and other employees in connection with matters
      relating to the collateral and reasonable attorneys’ fees and expenses (it
      being agreed that reasonable fees and expense of not more than one counsel
      for all of the Agents and Arrangers (with one additional counsel if there
      is a conflict between or among the Agents and the Arrangers in the opinion
      of counsel) shall be payable or reimbursable under the preceding
      provisions of this sentence, together with reasonable fees and expenses of
      special and local counsel, in each case reasonably retained by the
      Commitment Parties jointly)) in connection with (i) the preparation,
      negotiation and execution of the Loan Documents; (ii) the syndication and
      funding of the Revolving Loans and any issuance of Letters of Credit;
      (iii) the creation, perfection or protection of the liens under the Loan
      Documents (including all search, filing and recording fees); and (vi) the
      on-going administration of the Loan Documents (including the preparation,
      negotiation and execution of any amendments, consents, waivers,
      assignments, restatements or supplements thereto).

                         

                        The
      Company and each Borrower further agree to jointly and severally pay or
      reimburse the Agents and each of the Revolving Lenders and Letter of
      Credit issuers for all documented out-of-pocket costs and expenses,
      including reasonable attorneys’ fees and expenses, incurred by the Agents
      or such Revolving Lenders and Letter of Credit issuers in connection with
      (i) the enforcement of the Loan Documents; (ii) any refinancing or
      restructuring of the Revolving Facility in the nature of a “work-out” or
      any insolvency or bankruptcy proceeding; and (iii) any legal proceeding
      relating to or arising out of the Revolving Facility or the other
      transactions contemplated by the Loan Documents.

                      
	 	 	 
	
                        Assignments
      and Participations:

                      	 
      	
                        Assignments
      must be in a minimum amount of $5 million and except for assignments to
      another Revolving Lender or an affiliate or approved fund of a Revolving
      Lender, are subject to the consent of the Administrative Agent and the
      Company, which in the case of the Company, shall not be unreasonably
      withheld or delayed or during the continuance of an event of default under
      the Loan Documents, required.  No participation shall include voting
      rights, other than for customary matters requiring consent of 100% of the
      Revolving Lenders.

                      
	 	 	 
	
                        Requisite
      Revolving Lenders:

                      	 
      	
                        Revolving
      Lenders holding at least 50% of the outstanding commitments and/or
      exposure under the Revolving Facility (the “Requisite Revolving
      Lenders”).

                      
	 	 	 
	
                        Amendments:

                      	 
      	
                        Requisite
      Revolving Lenders, except for provisions customarily requiring approval by
      affected Revolving Lenders to be mutually agreed
  upon.

                      

              

            

          

        

      

    

     

    
      
        
        

      

      
        A-20

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              	
                      Miscellaneous:

                    	 
      	
                      The
      Loan Documents will include (i) standard yield protection provisions
      (including, without limitation, provisions relating to compliance with
      risk-based capital guidelines, increased costs and payments free and clear
      of withholding taxes (subject to customary qualifications)), (ii) waivers
      of consequential damages and jury trial, and (iii) normal agency, set-off
      and sharing language.

                    
	 	 	 
	
                      Governing
      Law and Submission to Exclusive Jurisdiction:

                    	 
      	
                      State
      of New York.

                    
	 	 	 
	
                      Counsel
      to Administrative Agent:

                    	
                        

                    	
                      Shearman
      & Sterling
LLP.

                    

            

          

        

      

    

    
      
         

      

      
        A-21

        
          

        

      

      
         

      

    

    ANNEX
A

    TO
EXHIBIT A

     

    Asset-Based
Revolving Facility

    Interest
Rates And Fees

     

    
      
        
          
            
              
                	
                        Interest
      Rates:

                      	 
      	
                        Loans
      will bear interest, at the option of the Company, at one of the following
      rates:

                      
	 	 	 
	 
      	 
      	
                        (i)
      the Applicable Margin (as defined below) plus the Administrative
      Agent’s fluctuating Base Rate (as defined below), payable monthly in
      arrears; or

                      
	 	 	 
	 
      	 
      	
                        (ii)
      the Applicable Margin plus the current LIBO
      rate as quoted by the Administrative Agent, adjusted for reserve
      requirements, if any, and subject to customary change of circumstance
      provisions, for interest periods of one, two, three or six months (the
      “LIBO Rate”),
      payable at the end of the relevant interest period, but in the case of any
      interest period of 6 months, also at the end of the third month of such
      interest period.

                      
	 	 	 
	 
      	
                          

                      	
                        “Applicable Margin”
      means the applicable percentage per annum set forth below determined by
      reference to (i) for the fiscal quarter in which the Closing Date occurs
      and the first full fiscal quarter ending after the Closing Date, Average
      Excess Availability as of the Closing Date (after giving effect to all
      transactions contemplated to occur on the Closing Date) and (ii) for each
      subsequent fiscal quarter, Average Excess Availability for the immediately
      preceding fiscal
quarter:

                      

              

            

          

        

      

    

     

    
      	
              Average

            	 	 	 	 	 	 
	
              Excess

            	 	 	 	 	 	 
	
              Availability

            	 	
              LIBO Rate Loan

            	 	 	
              Base Rate Loan

            	 
	 	 	 	 	 	 	 	 	 
	
              <$100
      million

            	 	 	3.25	%	 	 	2.25	%
	 
      	 	 	 	 	 	 	 	 
	
              $100
      million to $200 million

            	 	 	3.00	%	 	 	2.00	%
	 
      	 	 	 	 	 	 	 	 
	
              >$200
      million

            	 	 	2.75	%	 	 	1.75	%

    

     

    
      
        
          
            	 
      	 
      	
                    “Average Excess
      Availability” means, for any period the average amount of
      Availability for each day during such period.

                  
	 	 	 
	 
      	
                      

                  	
                    “Base Rate” means the
      highest of (i) Bank of America, N.A.’s “prime rate”, (ii) the Federal
      Funds Effective Rate plus 1/2 of 1% and (iii) the one-month LIBO Rate plus
      1.00%.

                  

          

        

      

    

    
      
         

      

      
        A-22

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  	 
      	 
      	
                          Interest
      shall be calculated on the basis of the actual number of days elapsed in a
      360-day year.

                        
	 	 	 
	
                          Default
      Interest:

                        	 
      	
                          During
      the continuance of an event of default (as defined in the Loan Documents),
      Loans will bear interest at an additional 2% per
    annum.

                        
	 	 	 
	
                          Unused
      Commitment Fee:

                        	 
      	
                          From
      and after the Closing Date, a non-refundable unused commitment fee at the
      rate of 0.50% per
      annum will accrue as a percentage of the daily average unused
      portion of the Revolving Facility (whether or not then available), payable
      monthly in arrears and on the Revolving Facility Termination
      Date.

                        
	 	 	 
	
                          Letter
      of Credit Fees:

                        	 
      	
                          A
      percentage per annum equal to the Applicable Margin for LIBO Rate Loans to
      the Revolving Lenders and 0.125% per annum to the
      applicable Letter of Credit issuer will accrue on the outstanding undrawn
      amount of any Letter of Credit, payable monthly in arrears and computed on
      a 360-day basis.  In addition, the Borrowers will pay to the
      applicable Letter of Credit issuer standard opening, amendment,
      presentation, wire and other administration charges applicable to each
      Letter of Credit.

                        
	 	 	 
	 
      	
                            

                        	
                          During
      the continuance of an event of default (as defined in the Loan Documents),
      the Letter of Credit Fees will increase by an additional 2% per
    annum.

                        

                

              

            

          

        

      

    

    
      
         

      

      
        A-23

        
          

        

      

      
         

      

    

    ANNEX
B

    TO
EXHIBIT A

     

    Fixed
Charge Coverage Ratio Components

    
      
         

      

      
        A-24

        
          

        

      

      
         

      

    

    Exhibit
B

     

    Chemtura
Corporation

     

    Conditions
Precedent to Initial extension of Credit

     

    
      	
              1.

            	
              Confirmation
      Order:  The Bankruptcy Court shall have entered a final
      order (the “Confirmation
      Order”) confirming a Chapter 11 plan of reorganization for the
      Debtors (as amended, supplemented or modified, or with any of the terms or
      conditions thereof waived, in each case as described below, the “Plan”) in accordance
      with Section 1129 of the Bankruptcy Code, which plan shall be
      substantially as set forth in the plan dated July 20, 2010 (together with
      all exhibits and other attachments thereto, as such plan and any of the
      foregoing shall be amended, modified or supplemented from time to time or
      any of the terms or conditions thereof waived (with the consent of the
      Initial Lenders with respect to any amendment, modification, supplement or
      waiver that is adverse in any material respect to the Initial Lenders (it
      being understood that any amendment, modification, supplement or waiver
      that would result in an aggregate increase of more than $75 million in (w)
      debt of or reinstated liquidated claims against the Company and its
      subsidiaries and/or (x) Restricted Payments by the Company and its
      subsidiaries and/or (y) amounts (without duplication of amounts in clause
      (w)) secured by liens on assets of the Company and its subsidiaries or (z)
      investments or loans by the Company and its subsidiaries, in each case
      from the respective amounts therefor contemplated under the Plan and/or
      Disclosure Statement, each as in effect on the date of the Commitment
      Letter, shall be deemed (solely for purposes of this sentence) adverse in
      a material respect to the Initial Lenders), as reasonably determined by
      the Initial Lenders), the “Plan Documents”), or
      otherwise reasonably satisfactory to the Initial Lenders.  The
      Confirmation Order shall approve the transactions contemplated by
      Revolving Facility, shall be in full force and effect and shall not have
      been stayed, reversed or vacated, or otherwise amended or modified in any
      manner that is materially adverse to the rights or interests of the
      Lenders (unless otherwise reasonably satisfactory to the Initial
      Lenders).  The Plan shall have, or contemporaneous with the
      effectiveness of the Revolving Facility and the initial extension of
      credit thereunder will, become effective.  Further, either (i) the
      settlement of certain diacetyl claims as set forth in the settlement
      agreement (the “Settlement Agreement”),
      a copy of which is annexed to the motion filed with the Bankruptcy Court
      on July 29, 2010 (the “Settlement Motion”),
      shall have been approved, without material modification (it being
      understood that modifications contemplated under and in accordance with
      Section 3.3 of the Settlement Agreement are not material), by an order of
      the Bankruptcy Court (the “Settlement Order”) and
      both (x) the Settlement Agreement shall remain in full force and effect,
      without a right of the Company to terminate the Settlement Agreement in
      accordance with Section 4.2 thereof and (y) the Settlement Order shall not
      be reversed, vacated or stayed or (ii) claims that were the subject of the
      Settlement Agreement in an amount and number such that (if such amount and
      number of claimants had accepted the Settlement Agreement) the Company
      would not have had the right to terminate the Settlement Agreement in
      accordance with Section 4.2 thereof, shall have been (A) estimated, for
      purposes of creating a cash reserve that will provide the sole source of
      recovery for such estimated claims, and/or (B) settled pursuant to
      settlement agreements in full force and effect, with such settlements and
      estimates described in clauses (A) and (B) being in an aggregate cash
      amount substantially consistent with (or less than) the aggregate
      settlement amount set forth in the Settlement Agreement and in each case
      being approved pursuant to one or more orders of the Bankruptcy Court
      (collectively, the “Estimation/Settlement
      Orders”), and  such Estimation/Settlement Orders shall
      not be reversed, vacated or
stayed.

            

    

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

     

    
      	
              2.

            	
              Other
      Indebtedness.  The Lenders shall have received reasonably
      satisfactory evidence that the obligations of the Company and each of its
      other debtor subsidiaries with respect to the Existing Credit Agreement
      have been satisfied and discharged and any collateral in respect thereof
      released, except that letters of credit issued under the Existing Credit
      Agreement that are supported by cash or letters of credit issued under the
      Senior Credit Facility may remain outstanding.  Concurrently with the
      consummation of the Plan, all pre-existing indebtedness of the Company and
      its subsidiaries (other than indebtedness permitted to remain outstanding
      under the Plan and the Loan Documents) shall have been repaid,
      repurchased, discharged or otherwise satisfied in full, all commitments
      relating thereto shall have been terminated, and all liens or security
      interests related thereto shall have been terminated or released. 
       In addition, the Agents shall have received evidence that the
      Company has received the net cash proceeds from the issuance of at least
      $750 million in principal amount of Term Loans and/or the Senior
      Notes.  (a) Neither the Term Loans nor the Senior Notes shall (i)
      have a stated maturity date earlier or a weighted average life to maturity
      shorter than six months after the Revolving Facility Termination Date or
      (ii) have any direct restriction on any specific payment of the Revolving
      Facility or impose any other direct restriction on the Company or any of
      its subsidiaries that by its express terms conflicts with any express term
      or provision set forth in the Loan Documents and (b) the priority of any
      lien on the Revolving Facility Collateral securing the Term Loans or
      Senior Notes shall be junior to the lien securing the Revolving Facility,
      as described under the heading “Security and Priority” in Exhibit A, and
      shall be subject to an intercreditor agreement described under the heading
      “Intercreditor Agreement” in Exhibit A.  The terms of the Term Loans,
      taken as a whole, shall be substantially consistent with those set forth
      on the term sheet attached to the engagement letter dated as of the date
      of the Commitment Letter among the Company and the joint book runners or
      their affiliates, except to the extent failure to be substantially
      consistent is not materially adverse to the interests of the
      Lenders.  The terms of each of the Senior Notes and the Term Loans
      shall not contain any financial covenant with such maximum or minimum
      level for any period that (i) is materially adverse to the interests of
      the Lenders or (ii) does not take into account drawings under the
      Revolving Facility and the forecasts delivered by the Company pursuant to
      Section 3(iv) below.1

            

    

     

    
      	
              3.

            	
              Financial
      Statements.  The Lenders shall have received (i) audited
      annual financial statements of the Company and its subsidiaries, on a
      consolidated basis, for the year ended December 31, 2009; (ii) interim
      unaudited monthly and quarterly financial statements of the Company and
      its subsidiaries since December 31, 2009 through the most recently ended
      fiscal month ending at least 30 days prior to the Closing Date (or in the
      case of quarterly financial statements, through the most recently ended
      fiscal quarter ending at least 45 days prior to the Closing Date); (iii)
      customary unaudited pro forma financial statements; and (iv) the Company’s
      business plan which shall include a financial forecast on a monthly basis
      for the first twelve months after the Closing Date and on an annual basis
      thereafter through the year 2014, prepared by the Company’s
      management.

            

    

     

    
      

    

    
      1 After
the definitive terms of the Term Loans and the Senior Notes are provided to the
Initial Lenders, the Initial Lenders shall as soon as practicable, but in any
event prior to the funding of the Senior Notes and the Term Loans, notify the
Company whether or not such definitive terms satisfy the conditions set forth in
the last three sentences of this paragraph.

    

    
      
         

      

      
        B-2

        
          

        

      

      
         

      

    

     

    
      	
              4.

            	
              Minimum
      Availability.  Availability under the Revolving Facility,
      after giving effect to the all borrowings and issuances of letters of
      credit on the Closing Date, and to all other transactions contemplated in
      paragraph 1 above to occur on the Closing Date, shall be no less than $150
      million.

            

    

     

    
      	
              5.

            	
              Payment of
      Fees.  All costs, fees and expenses (including, without
      limitation, legal fees and expenses, title premiums, survey charges and
      recording taxes and fees) and other compensation contemplated by the
      Commitment Letter and the Fee Letter and payable to the Agents or the
      Lenders shall have been paid to the extent
due.

            

    

     

    
      	
              6.

            	
              Customary Closing
      Documents.  The Administrative Agent shall have received: (i)
      customary legal opinions, corporate records and documents from public
      officials, lien searches and officer’s certificates; (ii) customary
      evidence of authority; (iii) reasonably satisfactory commitments for title
      insurance; (iv) a customary solvency certificate from the chief financial
      officer of the Company and each Borrower and Guarantor, in form and
      substance reasonably satisfactory to the Administrative Agent; (v) a field
      exam and audit with respect to inventory and receivables and an appraisal
      with respect to inventory of the Borrowers performed by the Administrative
      Agent working in conjunction with the administrative agent under the
      Existing Credit Agreement (and conducted in accordance with criteria for
      eligibility of accounts receivable and inventory substantially similar to
      (and in any event no less favorable to the Company than) the Existing
      Credit Agreement, except to the extent that making a criterion less
      favorable is necessary to protect the interests of the Lenders to
      substantially the same degree as the corresponding interests of the
      lenders under the Existing Credit Agreement were protected by the
      corresponding criterion under the Existing Credit Agreement (it being
      acknowledged by the Initial Lenders that after review of the Existing
      Credit Agreement they are aware of no such criteria on the date of the
      Commitment Letter)); and (vi) all material third party and governmental
      consents necessary in connection with the Plan, the material related
      transactions or the financing thereof.  The Lenders shall have
      received all documentation and other information requested by the
      Administrative Agent (to the extent requested no later than 3 business
      days prior to the Closing Date) as is required by bank regulatory
      authorities under applicable “know-your-customer” and anti-money
      laundering rules and regulations, including the Patriot Act.  The
      Loan Documents (including the Revolving Facility Credit Agreement,
      guarantees, security agreements and the Intercreditor Agreement) shall
      have been duly executed and
delivered.

            

    

     

    
      	
              7.

            	
              Security. 
      The Collateral Agent, for the benefit of the Revolving Lenders, shall have
      been granted perfected first priority security interests in the Revolving
      Facility Collateral, and second priority security interests in the Term
      Facility Collateral, in each case to the extent described in Exhibit A to
      the Commitment Letter in the section titled “Security and Priority”, and
      in each case in form and
      substance reasonably satisfactory to the
Agents.

            

    

    
      
         

      

      
        B-3

        
          

        

      

      
         

      

    

     

    
      	
              8.

            	
              Material Adverse
      Effect.  Since December 31, 2009, there shall not have
      occurred a material adverse change, or any event or occurrence which could
      reasonably be expected to result in a material adverse change, in (i) the
      business, condition (financial or otherwise), operations, performance,
      properties, contingent liabilities, material agreements or prospects of
      the Company, the Borrowers, the Guarantors and their respective
      subsidiaries, taken as a whole (it being understood that (a) matters
      disclosed prior to the date hereof in connection with the Cases, and (b)
      to the extent consistent with the disclosure described in clause (a), the
      continuation and prosecution of the Cases, and the filing, solicitation of
      approvals and negotiation of the Plan for the Cases, shall not constitute
      such a change), (ii) the rights and remedies of the Agents or any Lender
      under any Loan Document and (iii) the ability of any Loan Party to perform
      its obligations under any Loan Document to which its is a party (any of
      the foregoing being a “Material Adverse
      Change”).  There shall exist no action, suit, investigation,
      litigation or proceeding pending in any court or before any arbitrator or
      governmental instrumentality that (i) could reasonably be expected to
      result in a Material Adverse Change or (ii) restrains, prevents or imposes
      or can reasonably be expected to impose conditions materially adverse to
      the Lenders upon the Revolving Facility or any of the other material
      transactions contemplated
hereby.

            

    

    
      
         

      

      
        B-4

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