Document:

exv10w1

Exhibit 10.1

EMPLOYMENT AGREEMENT

Effective as of August 17, 2011 between

AFC Enterprises, Inc. (the “Company”) and

Andrew Skehan (“Employee”)

     WHEREAS, the Company desires to employ Employee and to enter into an agreement embodying the
terms of such employment (the “Agreement”); and

     WHEREAS, Employee desires to accept such employment and to enter into such agreement;

     NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for
other good and valuable consideration, the parties agree as follows:

     1. Term of Agreement.

     This Agreement shall be effective as of the date hereof and, unless earlier terminated
pursuant to Section 8 or Section 9 hereof, shall be for an initial term of one (1) year (the
“Term”). The Term of this Agreement and Employee’s employment hereunder will automatically be
extended for an additional one-year period following the expiration of each year of employment
hereunder (the “Renewal Date”), without further action by Employee or the Company. Such automatic
one-year renewal shall continue from year to year unless and until either the Company or Employee
gives to the other written notice not less than thirty (30) days prior to the applicable Renewal
Date of its decision not to renew for an additional one year.

     For purposes of this Section 1 only, the first “year” of the Term shall be deemed to begin as
of the Start Date (as hereinafter defined) and end on December 25, 2011, and each one (1) year
period thereafter shall coincide with the Company’s fiscal year.

     2. Employment.

     2.01 Position. Beginning on August 17, 2011 (the “Agreement Start Date”), Employee
shall serve as Chief Operating Officer — International of the Company and its Popeyes Louisiana
Kitchen division, and shall perform such duties consistent with his position as may be assigned to
him from time to time by the Chief Executive Officer of the Company (the “CEO”) or the Board of
Directors of the Company (the “Board”). Employee shall initially perform his duties hereunder at
the Company’s corporate offices at 5555 Glenridge Connector, NE, Suite 300, Atlanta, Georgia,
subject to such reasonable amount of travel as is necessary to render the services provided
hereunder.

     2.02 Time and Efforts. Employee, so long as he is employed hereunder, shall devote
his full business time and attention to the services required of him hereunder, except as otherwise
agreed and for vacation time and reasonable periods of absence due to sickness or personal injury,
and shall use his best efforts, judgment and energy to perform, improve and advance the business
and interests of the Company in a manner consistent with the duties of his position. Anything
herein to the contrary notwithstanding, nothing shall preclude Employee from

 

 

(i)serving on the boards of directors of trade associations, (ii) engaging in charitable
activities and community affairs; or (iii) managing his personal investments and affairs, provided
that the activities described in the preceding clauses (i) through (iii) do not interfere with the
proper performance of his duties and responsibilities hereunder.

     3. Base Salary.

     Beginning on the Agreement Start Date, the Company shall pay Employee, in equal installments
no less frequently than monthly, a base salary at the rate of Three Hundred Forty Thousand Dollars
($340,000) per annum (the “Base Salary”) during the Term hereof. Employee’s Base Salary shall be
reviewed by the Board on an annual basis.

     4. Incentive Pay.

     4.01 Annual Plan. The Board, acting in its sole discretion, shall annually, at the
beginning of each fiscal year of the Company, approve an annual incentive plan (the “Annual
Incentive Plan”) for Employee, which Plan shall contain such terms and provisions as the Board
shall determine. The Annual Incentive Plan shall set forth the specific financial and performance
goals which must be achieved for Employee to be entitled to receive payment under such Annual
Incentive Plan. Any amounts payable to Employee pursuant to the Annual Incentive Plan is
hereinafter referred to as “Incentive Pay”.

     4.02 Target Incentive Pay. The target Incentive Pay (“Target Incentive Pay”) for
Employee for the 2011 fiscal year of the Company shall be as follows: Sixty Percent (60%) of
Employee’s Base Salary, or Two Hundred and Four Thousand Dollars ($204,000); provided, however,
that the Target Incentive Pay with respect to any fiscal year is subject to, and may be modified
by, the Annual Incentive Plan approved by the Board pursuant to Section 4.01 above and this Section
4.02 shall be read accordingly. For the 2011 fiscal year, Employee’s Target Incentive Pay shall be
paid and prorated for the amount of time remaining in the Company’s 2011 fiscal year by dividing
the actual number of days of Employee’s employment with the Company hereunder during fiscal 2011 by
the total number of days in the Company’s fiscal 2011. After 2011, the Target Incentive Pay for
Employee will be set by the Board for each fiscal year and will be included in the Annual Incentive
Plan for such year.

     4.03 Payment of Incentive Pay. If Employee is entitled to payment of any Incentive
Pay for any fiscal year, an accounting will be furnished and payment will be made to Employee as
set forth in the Annual Incentive Plan, but in no event later than two and one-half months
following the end of each fiscal year.

     4.04 Termination of Employment. If Employee’s employment hereunder shall terminate
other than pursuant to Sections 8.03 or 8.04, Employee shall receive, at the time contemplated by
the Annual Incentive Plan, such Incentive Pay, if any, to which he would have been entitled under
the terms of the Annual Incentive Plan had Employee remained in the employ of the Company for the
entire fiscal year in which such termination occurs. If Employee’s employment hereunder shall
terminate pursuant to (a) Section 8.03, the provisions of Section 8.03 shall

2

 

determine the amount of Incentive Pay payable to Employee; or (b) Section 8.04, no Incentive
Pay shall be payable to Employee after such termination.

     4.05 Special Bonus Pay. In addition to Employee’s Annual Incentive Pay, Employee
shall receive a one-time guaranteed payment in the amount of Eighty Five Thousand Dollars
($85,000), less applicable withholdings, payable within twenty (20) days of Employee’s Start Date.

     4.06 Relocation and Temporary Living Expenses. Employee shall be entitled to receive
reimbursement of miscellaneous relocation expenses in accordance with the terms and conditions of
the Company’s executive relocation package. Additionally, Employee shall be entitled to receive
reimbursement for temporary living expenses, personal travel expenses, and other related expenses
as incurred by Employee after the Start Date and pending Employee’s relocation to Atlanta, Georgia.
The total amount of temporary living expenses to be reimbursed shall not exceed Twenty Thousand
Dollars ($20,000).

     5. Stock Options and Restricted Stock Grants.

     Within twenty (20) days of the Employee’s Start Date, the Company shall grant to Employee
certain restricted stock shares pursuant to the Company’s 2006 Incentive Stock Plan, as hereinafter
set forth.

     (a) The Company shall grant to Employee 10,000 shares of restricted stock which shall vest
100% on the first anniversary of Employee’s Start Date, provided he is still employed by the
Company on such anniversary date.

     (b) As part of Employee’s compensation after the foregoing grant of restricted stock shares
has been made, Employee may be granted additional stock options, restricted stock shares and/or
other forms of equity compensation based upon Employee’s performance as determined in the sole
discretion of the Board.

     6. Employee Benefits.

     6.01 Life Insurance. During the Term and any renewal term of this Agreement, Employee
shall be entitled to term life insurance coverage paid by the Company with a death benefit in an
amount of five (5) times Employee’s Base Salary hereunder (the “Death Benefit”), payable solely
from, and to the extent of, the Death Benefit proceeds payable under such life insurance policy.

3

 

     6.02 Disability Insurance.

     (a) During the Term and any renewal term of this Agreement, Employee shall be entitled to
disability insurance coverage in an amount not less than his disability coverage on the Agreement
Start Date of this Agreement and the Company shall maintain in full force and effect during the
Term a Supplemental Disability Policy which will supplement the benefits payable under any
disability benefit provided to Employee by the Company under its basic employee health care benefit
program. Subject to Section 6.06 below, with respect to a disability as defined in the Supplemental
Disability Policy (a “Policy Disability”) occurring after the Company has obtained the Supplemental
Disability Policy, the total monthly disability benefit (the “Disability Benefit”) payable to
Employee under all disability policies maintained by the Company, after a maximum elimination
period of ninety (90) days, shall be in accordance with the terms and conditions of the Company’s
executive disability program.

     (b) Notwithstanding anything herein to the contrary, if the premiums for the Supplemental
Disability Policy for Employee shall exceed regular, non-rated premiums, the Company may, but shall
have no obligation to, fund such excess. In the event the Company determines not to fund such
excess it shall promptly notify Employee and Employee may, at his option, elect to pay the excess.
If Employee fails to pay such excess or if for any other reason the Company, after reasonable
efforts, is not able to obtain the Supplemental Disability Policy required herein, then Employee
shall not be entitled to the Supplemental Disability Policy Benefit hereunder except as may
otherwise be determined in the discretion of the Company and set forth in writing.

     (c) If the definition of a Policy Disability does not satisfy the requirements for a payment
based on a “disability” under § 409A of the Code and the related tax regulations, the payment of
his Disability Benefit shall begin when he has a Separation from Service (as defined in Section
8.01) as a result of his being Disabled or, if he is a Specified Employee (as defined in Section
8.01), shall begin on his Delayed Payment Date (as defined in Section 8.01), and the payment made
on his Delayed Payment Date shall include all the payments which would have been made on and after
the date of his Separation from Service but for his status as a Specified Employee.

     6.03 Employee Medical Benefit. The Company, at its expense, shall provide Employee
with an annual physical examination to be conducted by a physician or physicians as determined by
Employee, subject to the reasonable approval of the Company.

     6.04 Other Benefits. Employee shall be provided additional employee benefits in
addition to those identified in Sections 6.01 — 6.03, including, without limitation, participation
in the Company’s 401(k) plan beginning on the Agreement Start Date with immediate full vesting in
the Company’s matching contributions beginning with any matching contribution made for fiscal year
2011, health, accident and disability insurance under the Company’s regular and ongoing plans,
policies and programs available, from time to time, to senior officers of the Company, in
accordance with the provisions of such plans, policies and programs governing

4

 

eligibility and participation; provided, however, that such benefits may be modified, amended
or rescinded by the Board subject to applicable law and the terms of such plans.

     6.05 Vacation. Employee shall be entitled to four (4) weeks paid vacation and three
(3) days of paid personal business time each year during the Term hereof and any renewal hereof.
Any vacation or personal business days not used in any year shall be subject to forfeiture or
accrual pursuant to the Company’s then-current vacation policy.

     6.06 Paramount Provisions.

     (a) Notwithstanding anything in Sections 6.01and 6.02 above or any other provision of this
Agreement to the contrary, if the Company has met all of its obligations under this Agreement (and
provided that such obligations are not relieved in accordance with the terms hereof), with respect
to obtaining and maintaining in force (i) the life insurance policy described in Section 6.01
hereof on the life of Employee to fund the minimum death benefit, or (ii) the Supplemental
Disability Policy maintained for Employee pursuant to Section 6.02 hereof to fund such Employee’s
Disability Benefit, but all or any portion of the proceeds under any such policy are not actually
received by the Employee for any reason whatsoever, including without limitation the insolvency of
the insurer or any misrepresentation made by Employee in the application for such insurance, then
the right of Employee or his designated beneficiary to receive a Disability Benefit or a death
benefit, as the case may be, shall be reduced (but not below zero) by the amount by which the
Disability Benefit or death benefit otherwise payable exceeds the insurance proceeds actually
received. The Company agrees that any insurance company issuing the life insurance policy
described in Section 6.01 shall have at least an “A” rating by the Best Rating Service.

     (b) Anything in Sections 6.01, 6.02, 6.03, and 6.04 to the contrary notwithstanding, the
amount of the benefits provided for in Section 6 are subject to adjustment as shall be provided for
in the plan or insurance contract, as the case may be, pursuant to which such benefit is being paid
and the Employee will be given written notice of any such change. Anything in this Agreement to
the contrary notwithstanding, the Board shall have full authority to make all determinations deemed
necessary or advisable for the administration of the benefits described in this Section 6. The
good faith interpretation and construction by the Board of the terms of this Section 6 or the
benefit programs described herein shall be final, conclusive and binding on Employee.

     7. Business Expenses.

     All reasonable and customary business expenses incurred by Employee in the performance of his
duties hereunder shall be paid or reimbursed by the Company in accordance with the Company’s
policies in effect, from time to time. The amount of reasonable business expenses eligible for
reimbursement in any taxable year of Employee shall not affect the amount of reasonable business
expenses eligible for reimbursement in any other taxable year of Employee.

5

 

     8. Termination of Employment.

     8.01 Definitions. For purposes of this Agreement, the following terms shall have the
following meanings:

     The term “Cause” shall mean (i) Employee commits fraud or is convicted of a crime involving
moral turpitude, (ii) Employee, in carrying out his duties hereunder, has been guilty of gross
neglect or gross misconduct resulting in harm to the Company or any of its subsidiaries or
affiliates, (iii) Employee shall have failed to materially comply with the policies of the Company
or shall have refused to follow or comply with the duly promulgated directives of the Chief
Executive Officer of the Company or the Board, (iv) Employee has breached any of the provisions of
Sections 10.02 through and including 10.04 or (v) Employee otherwise materially breaches a material
term of this Agreement.

     The term “Code” shall mean the Internal Revenue Code of 1986, as amended.
The term “Constructive Discharge” shall mean a Separation from Service by the Employee on
account of a material diminution of or change in his responsibilities or duties; provided, however,
that no Separation from Service by the Employee shall be considered a Constructive Discharge
unless, within one hundred eighty (180) days of the initial existence of such diminution or change
Employee has first provided written notice to the Chairman of the Company’s Board of Directors of
the factual circumstances forming the basis for the claim of constructive discharge and of his
intent to treat those circumstances as a Constructive Discharge under this Agreement, and has
further provided the Company with a period of at least thirty (30) days in which to cure such
alleged breach.

     The term “Delayed Payment Date” shall mean the date that is six (6) months and one (1) day
after the date of Employee’s Separation from Service.

     The term “Disability” shall mean the good faith determination by the Chief Executive Officer
of the Company or the Board that Employee has failed to or has been unable to perform his duties as
the result of any physical or mental disability for a period of ninety (90) consecutive days during
any one period of Disability.

     The term “Separation from Service” shall mean a “separation from service” with the Company
within the meaning of § 409A of the Code and the related income tax regulations.

     The term “Specified Employee” shall mean a “specified employee” within the meaning of § 409A
of the Code and the related income tax regulations.

     8.02 Termination upon Death or Disability. If Employee has a Separation from Service
due to his death or Disability, the Company shall pay to the estate of the Employee or to the
Employee, as the case may be, within fifteen (15) days following Employee’s death or upon his
termination in the event of Disability, all amounts then payable to Employee pro rated through the
date of termination pursuant to Section 3, and the amount of any accrued but unused vacation

6

 

under Section 6.05 for the year in which such termination occurs and any reimbursable amounts
owed Employee under Section 7. However, if the definition of a Disability does not satisfy the
requirements for a payment based on a “disability” under § 409A of the Code and the related tax
regulations, any payments due hereunder shall begin when he has a Separation from Service as a
result of his being Disabled or, if he is a Specified Employee, shall begin on his Delayed Payment
Date, and the payment made on his Delayed Payment Date shall include all the payments which would
have been made on and after the date of his Separation from Service but for his status as a
Specified Employee. Finally, the Company shall pay to Employee any Incentive Pay payable pursuant
to Section 4.03 hereof. Such payment shall be made in a lump sum in cash at Employee’s Separation
from Service or, if Employee is a Specified Employee, on Employee’s Delayed Payment Date.

     8.03 Termination by the Company without Cause or Employee’s Resignation for a
Constructive Discharge. The Company may terminate Employee’s employment under this Agreement
without Cause at any time upon written notice to Employee. If Employee has a Separation from
Service as a result of a termination without Cause (other than a Separation from Service described
in Section 8.02) or as a result of his resignation because he has experienced a Constructive
Discharge or as a result of the Company’s decision not to renew the Term pursuant to Section 1, the
Company shall pay or provide to Employee, in lieu of all other amounts payable hereunder or
benefits to be provided hereunder the following: (a) a payment equal to the sum of (x) and (y)
where (x) is one (1) times Employee’s Base Salary at the time of termination, and (y) is one (1)
times Employee’s Target Incentive Pay for the year in which such termination occurs (or, if no
Target Incentive Pay has been designated for such year, then the Target Incentive Pay for the last
year in which it was designated prior to such termination); and (b) the acceleration of any
unvested rights of Employee under any restricted stock, stock options (other than stock options for
which the performance criterion required for exercise has not been previously satisfied) or other
equity incentive awards such that they shall immediately vest under the terms of such awards. As a
condition precedent to the requirement of Company to make such payment or grant such accelerated
vesting, Employee shall not be in breach of his obligations under Section 10 hereof and Employee
shall execute and deliver to Company a general release in favor of the Company in substantially the
same form as the general release then being used by the Company.

     Any payment required to be made under this Section 8.03 shall be made to Employee in a lump
sum in cash on his Separation from Service or, if he is a Specified Employee, on his Delayed
Payment Date.

     8.04 Voluntary Termination by Employee or Termination for Cause. Employee may resign
his employment hereunder at any time whatsoever, with or without cause, upon thirty (30) days prior
written notice to the Company. The Company may terminate Employee’s employment hereunder at any
time without notice for Cause. In the event Employee has a Separation from Service as a result of
his resignation (other than as a result of a Constructive Discharge) or as a result of a
termination by the Company for Cause:

     (a) The Company shall pay to Employee in a lump sum in cash on his Separation from Service or,
if he is a Specified Employee, on his Delayed Payment Date all amounts then

7

 

due under Sections 3, 4 (but only to the extent of earned but unpaid Incentive Pay), 6 and 7,
prorated, through the date of termination for the year in which he is terminated; and

     (b) The Company shall be under no obligation to make severance payments to Employee or
continue any benefits being provided to Employee beyond the date of such termination other than
benefits to which Employee may be entitled as a result of Federal or state law.

     If Employee is terminated by the Company for Cause, Employee may within the ten (10) business
day period immediately following such termination request in writing that the Chairman of the Board
of Directors provide a written statement of the facts supporting his termination for Cause, and
Employee during the ten (10) business day period immediately following the delivery of such
statement may submit a written petition to the Chairman of the Board of Directors that his
employment be reinstated with full pay retroactive to the date of his termination of employment.
Any such petition shall set forth his reason or reasons why there was no Cause for his termination,
and he may request that he be granted a meeting with the Board of Directors so he (or Employee and
his attorney) can present such reason or reasons in person and answer any questions which any of
the members of the Board of Directors want to ask Employee. The Board of Directors will promptly
act on his petition, and the decision of the Board of Directors shall be final and binding on the
Company and on Employee.

     9. Change of Control, Change in Responsibilities.

     Upon the occurrence of both of the following events:

     (a) The dissolution or liquidation of the Company, or a reorganization, merger or
consolidation of the Company with one or more corporations as a result of which the owners of all
of the outstanding shares of Stock immediately prior to such reorganization, merger or
consolidation own in the aggregate, directly and indirectly, less than 50% of the outstanding
shares of Stock of the Company or any other entity into which the Company shall be merged or
consolidated immediately following the consummation thereof, or the sale, transfer or other
disposition of all or substantially all of the assets or more than 50% of the then outstanding
shares of Stock of the Company in a single transaction or series of related transactions (a “Change
in Control”); and

     (b) Within one (1) year of such Change in Control (1) there is a termination of employment
without Cause or (2) there is a material diminution of or change in Employee’s responsibilities or
duties and Employee elects, in writing, within ninety (90) days following the occurrence of such
diminution or change to resign effective thirty (30) days after the Company’s receipt of such
notice, then, if Employee has a Separation from Service as a result of such termination or
resignation, he shall be deemed to have been terminated by the Company other than for Cause and all
amounts payable to Employee pursuant to Section 8.03 shall become payable in a lump sum in cash on
his Separation from Service or, if he is a Specified Employee, on his Delayed Payment Date.

8

 

     A Change in Control of the Company shall not be deemed to occur by reason of any public
offering of the Stock of the Company.

     Except as expressly contemplated by this Agreement, or in any other agreement referred to in
Section 5 hereof, no merger, reorganization, recapitalization, sale of stock, sale of assets or
other change in the capital structure of the Company or in the identity of the legal or beneficial
owners of the Company shall affect the rights or obligations of the Company or Employee hereunder.

     10. Confidentiality and Non-Competition.

     10.01 Definitions. For purposes of this Section 10, the following terms shall have
the following meanings:

     “Affiliate” means any corporation, limited liability company, partnership or other entity of
which the Company owns at least fifty percent (50%) of the outstanding equity and voting rights,
directly or indirectly, through any other corporation, limited liability company, partnership or
other entity.

     “Businesses” means the businesses engaged in by the Company directly or through its Affiliates
immediately prior to termination of employment.

     “Confidential Information” means information which does not rise to the level of a Trade
Secret, but is valuable to the Company or any Affiliate and provided in confidence to Employee.

     “Proprietary Information” means, collectively, Trade Secrets and Confidential Information.

     “Restricted Period” means the period commencing as of the date hereof and ending on that date
two years (2) year after the termination of Employee’s employment with the Company for any reason,
whether voluntary or involuntary.

     “Trade Secrets” means information which derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use, and is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.

     10.02 Covenant Not-To-Disclose. The Company and Employee recognize that, during the
course of Employee’s employment with the Company, the Company has disclosed and will continue to
disclose to Employee Proprietary Information concerning the Company and the Affiliates, their
products, their franchisees, their services and other matters concerning their Businesses, all of
which constitute valuable assets of the Company and the Affiliates. The Company and Employee
further acknowledge that the Company has, and will, invest considerable amounts of time, effort and
corporate resources in developing such valuable assets and that disclosure by Employee of such
assets to the public shall cause irreparable harm,

9

 

damage and loss to the Company and the Affiliates. Accordingly, Employee acknowledges and
agrees that, except as may be required by law:

     (a) that the Proprietary Information is and shall remain the exclusive property of the Company
(or the applicable Affiliate);

     (b) to use the Proprietary Information exclusively for the purpose of fulfilling the
obligations under this Agreement;

     (c) to return the Proprietary Information, and any copies thereof, in his possession or under
his control, to the Company (or the applicable Affiliate) upon request of the Company (or the
Affiliate), or expiration or termination of Employee’s employment hereunder for any reason; and

     (d) to hold the Proprietary Information in confidence and not copy, publish or disclose to
others or allow any other party to copy, publish or disclose to others in any form, any Proprietary
Information without the prior written approval of an authorized representative of the Company.

     The obligations and restrictions set forth in this Section 10.02 shall survive the expiration
or termination of this Agreement, for any reason, and shall remain in full force and effect as
follows:

     (a) as to Trade Secrets, indefinitely, and

     (b) as to Confidential Information, for a period of two (2) years after the expiration or
termination of this Agreement for any reason.

     The confidentiality, property, and proprietary rights protections available in this Agreement
are in addition to, and not exclusive of, any and all other corporate rights, including those
provided under copyright, corporate officer or director fiduciary duties, and trade secret and
confidential information laws. The obligations set forth in this Section 10.02 shall not apply or
shall terminate with respect to any particular portion of the Proprietary Information which (i) was
in Employee’s possession, free of any obligation of confidence, prior to his receipt from the
Company or its Affiliate, (ii) Employee establishes the Proprietary Information is already in the
public domain at the time the Company or the Affiliate communicates it to Employee, or becomes
available to the public through no breach of this Agreement by Employee, or (iii)
Employee establishes that she received the Proprietary Information independently and in good faith
from a third party lawfully in possession thereof and having no obligation to keep such information
confidential.

     10.03 Covenant of Non-Disparagement and Cooperation. Employee agrees that he shall
not at any time during or following the Term of this Agreement make any remarks disparaging the
conduct or character of the Company or the Affiliates or any of the Company’s or the Affiliates’
current or former agents, employees, officers, directors,
successors or assigns (collectively the “Related Parties”). In addition, Employee agrees to
cooperate with the Related

10

 

Parties, at no extra cost, in any litigation or administrative proceedings (e.g., EEOC
charges) involving any matters with which Employee was involved during Employee’s employment with
the Company. The Company shall reimburse Employee for reasonable expenses incurred by Employee in
providing such assistance.

     10.04 Covenant Not-To-Induce. Employee covenants and agrees that during the
Restricted Period, she will not, directly or indirectly, on his own behalf or in the service or on
behalf of others, hire, solicit, take away or attempt to hire, solicit or take away any person who
is or was an employee of the Company or any Affiliate during the one (1) year period preceding the
termination of Employee’s employment.

     10.05 Remedies. The Company and Employee expressly agree that a violation of any of
the covenants contained in subsections 10.02 through and including 10.04 of this Section 10, or any
provision thereof, shall cause irreparable injury to the Company and that, accordingly, the Company
shall be entitled, in addition to any other rights and remedies it may have at law or in equity, to
an injunction enjoining and restraining Employee from doing or continuing to do any such act and
any other violation or threatened violation of said Sections 10.02 through and including 10.04
hereof.

     10.06 Severability. In the event any provision of this Agreement shall be found to
be void, the remaining provisions of this Agreement shall nevertheless be binding with the same
effect as though the void part were deleted; provided, however, if Sections 10.02 through and
including 10.04 of this Section 10 shall be declared invalid, in whole or in part, Employee shall
execute, as soon as possible, a supplemental agreement with the Company, granting the Company, to
the extent legally possible, the protection afforded by said subsections. It is expressly
understood and agreed by the parties hereto that the Company shall not be barred from enforcing the
restrictive covenants contained in each of Sections 10.02 through and including 10.04, as each are
separate and distinct, so that the invalidity of any one or more of said covenants shall not affect
the enforceability and validity of the other covenants.

     10.07 Ownership of Property. Employee agrees and acknowledges that all works of
authorship and inventions, including but not limited to products, goods, know-how, Trade Secrets
and Confidential Information, and any revisions thereof, in any form and in whatever stage of
creation or development, arising out of or resulting from, or in connection with, the services
provided by Employee to the Company or any Affiliate under this Agreement are works made for hire
and shall be the sole and exclusive property of the Company or such Affiliate. Employee agrees to
execute such documents as the Company may reasonably request for the purpose of effectuating the
rights of the Company or the Affiliate in any such property.

     10.08 No Defense. The existence of any claim, demand, action or cause of action of
the Employee against the Company shall not constitute a defense to the enforcement by the Company
of any of the covenants or agreements in this Section 10.

11

 

     11. Indemnification and Liability Insurance.

     11.01 Company Obligations. The Company hereby indemnifies and agrees to hold
harmless Employee, to the extent allowed by applicable law, against all liabilities, obligations,
claims, demands, actions, causes of action, lawsuits, judgments, expenses and costs, including but
not limited to the reasonable costs of investigation and attorney’s fees, incurred by the Employee
as a result of any threat, demand, claim action or lawsuits, made, instituted or initiated against
the Employee, which arises out of, results from or relates to this Agreement or any action taken by
Employee in the course of performance of Employee’s duties hereunder, except for Employee’s own
gross negligence or willful misconduct.

     11.02 Notice and Defense of Claim. If any claim suit or other legal proceeding shall
be commenced, or any claim or demand be asserted against the Employee and Employee desires
indemnification pursuant to this paragraph, the Company shall be notified to such effect with
reasonable promptness and shall have the right to assume at its full cost and expense the entire
control of any legal proceeding, subject to the right of the Employee to participate at his full
cost and expense and with counsel of his choice in the defense, compromise or settlement thereof.
The Employee shall cooperate fully in all respects with the Company in any such defense, compromise
or settlement, including, without limitation, making available to the Company all pertinent
information under the control of the Employee. The Company may compromise or settle any such
action, suit, proceeding, claim or demand without Employee’s approval so long as the Company
obtains for Employee’s benefit a release of liability with respect to such claim from the claimant
and the Company assumes and agrees to pay any amounts due with respect to such settlement. In no
event shall the Company be liable for any settlement entered into by the Employee without the
Company’s prior written consent.

     11.03 Survival. The provisions of Sections 12.01 and 12.02 shall survive the
termination of this Agreement for a period of four (4) years, unless Employee is terminated for
Cause, in which event such provisions shall not survive termination of this Agreement.

     11.04 Liability Insurance. The Company shall use commercially reasonable efforts to
obtain and maintain directors’ and officers’ liability insurance covering the Employee to the same
extent as the Company covers its other officers and directors.

     12. Dispute Resolution.

     12.01 Agreement to Arbitrate. In consideration for his continued employment with the
Company, and other consideration, the sufficiency of which is hereby acknowledged, Employee
acknowledges and agrees that any controversy or claim arising out of or relating to Employee’s
employment, termination of employment, or this Agreement including, but not limited to,
controversies and claims that are protected or covered by any federal, state, or local statute,
regulation or common law, shall be settled by arbitration pursuant to the Federal Arbitration Act.
This includes, but is not limited to, violations or alleged violations of any federal or state
statute or common law (including, but not limited to, the laws of the United States or of any
state, or the Constitution of the United States or of any state), or of any other law, statute,
ordinance, including but not limited to, the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964, as amended, the Americans with Disabilities Act, the Equal Pay Act, the
Employee Retirement Income Security Act of 1972, as amended, the Rehabilitation Act

12

 

of 1973, and any other statute or common law. This provision shall not, however, preclude the
Company from seeking equitable relief as provided in Section 10.06 of this Agreement.

     12.02 Procedure. The arbitration shall be conducted in accordance with the
Employment Arbitration Rules of the American Arbitration Association: a single arbitrator who is
experienced in employment law shall be selected under those Rules, and the arbitration shall be
initiated in Atlanta, Georgia, unless the parties agree in writing to a different location or the
Arbitrator directs the arbitration to be held at a different location. Except for filing fees, all
costs of the arbitrator shall be allocated by the arbitrator. If the arbitrator awards monetary
relief to Employee, the arbitrator shall have the discretion to award Employee’s attorney’s fees
and costs if the arbitrator deems it appropriate. The award rendered by the arbitrator shall be
final and binding on the parties hereto and judgment thereon may be entered in any court having
jurisdiction thereof. In addition to that provided for in the Employment Arbitration Rules, the
arbitrator has sole discretion to permit discovery consistent with the Federal Rules of Civil
Procedure and the judicial interpretation of those rules upon request by any party; provided,
however, it is the intent of the parties that the arbitrator limit the time and scope of any such
discovery to the greatest extent practicable and provide a decision as rapidly as possible given
the circumstances of the claims to be determined. The arbitrator also shall have the power and
authority to grant injunctive relief for any violation of Sections 10.02 through and including
10.04 and the arbitrator’s order granting such relief may be entered in any court of competent
jurisdiction. The agreement to arbitrate any claim arising out of the employment relationship or
termination of employment shall not apply to those claims which cannot be made subject to this
provision by statute, regulation or common law. These include, but are not limited to, any claims
relating to work related injuries and claims for unemployment benefits under applicable state laws.

     12.03 Rights of Parties. Nothing in this clause shall be construed to prevent the
Company from asking a court of competent jurisdiction to enter appropriate equitable relief to
enjoin any violation of this Agreement by Employee. The Company shall have the right to seek such
relief in connection with or apart from the parties’ rights under this clause to arbitrate all
disputes. With respect to disputes arising under this Agreement that are submitted to a court
rather than an arbitrator, including actions to compel arbitration or for equitable relief in aid
of arbitration, the parties agree that venue and jurisdiction are proper in any state or federal
court lying within Atlanta, Georgia and specifically consent to the jurisdiction and venue of such
court for the purpose of any proceedings contemplated by this paragraph. By entering into this
Agreement the parties have waived any right which may exist for a trial by jury and have expressly
agreed to resolve any disputes covered by this Agreement through the arbitration process described
herein.

     13. Employee Acknowledgment.

     By signing this Agreement, Employee acknowledges that the Company has advised Employee of his
right to consult with an attorney prior to executing this Agreement; that she has the right to
retain counsel of his own choosing concerning the agreement to arbitrate or any

13

 

waiver of rights or claims; that she has read and fully understands the terms of this
Agreement and/or has had the right to have it reviewed and approved by counsel of choice, with
adequate opportunity and time for such review; and that she is fully aware of its contents and of
its legal effect. Accordingly, this Agreement shall not be construed against any party on the
grounds that the party drafted this Agreement. Instead, this Agreement shall be interpreted as
though drafted equally by all parties.

     14. Amendments.

     This Agreement may not be altered, modified or amended except by a written instrument signed
by each of the parties hereto.

     15. Successors.

     As used in this Agreement, the term the Company shall include any successors to all or
substantially all of the business and/or assets of the Company which assumes and agrees to perform
this Agreement.

     16. Assignment.

     Neither this Agreement nor any of the rights or obligations of either party hereunder shall be
assigned or delegated by any party hereto without the prior written consent of the other party,
except that the Company may without the consent of Employee assign its rights and delegate its
duties hereunder to any successor to the business of the Company. In the event of the assignment
by the Company of its rights and the delegation of its duties to a successor to the business of the
Company and the assumption of such rights and obligations by such successor, the Company shall,
effective upon such assumption, be relieved from any and all obligations whatsoever to Employee
hereunder.

     17. Waiver.

     Waiver by any party hereto of any breach or default by any other party of any of the terms of
this Agreement shall not operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived.

     18. Severability.

     In the event that any one or more of the provisions of this Agreement shall be or become
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

14

 

     19. Survival.

     Notwithstanding anything herein to the contrary, the provisions of Sections 6.06, 7, 8.03, 9,
10, 11, and 12 shall survive the termination of this Agreement.

     20. Entire Terms.

     This Agreement contains the entire understanding of the parties with respect to the employment
of Employee by the Company. There are no restrictions, agreements, promises, warranties, covenants
or undertakings other than those expressly set forth herein. This Agreement supersedes all prior
agreements, arrangements and understandings between the parties, whether oral or written, with
respect to the employment of Employee.

     21. Notices.

     Notices and all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or if mailed in the manner herein
specified, five (5) days after postmark of such mailing when mailed by United States registered
mail, return receipt requested, postage prepaid, addressed as follows:

If to Employee:

Andrew Skehan

5555 Glenridge Connector, NE

Suite 300

Atlanta, Georgia 30342

If to the Company to:

AFC Enterprises, Inc.

5555 Glenridge Connector NE

Suite 300

Atlanta, Georgia 30342

Attn: General Counsel

or to such other address or such other person as Employee or the Company shall designate in writing
in accordance with this Section 21 except that notices regarding changes in notices shall be
effective only upon receipt.

     22. Headings.

     Headings to Sections in this Agreement are for the convenience of the parties only and are not
intended to be a part of, or to affect the meaning or interpretation of, this Agreement.

15

 

     23. Governing Law.

     The Agreement shall be governed by the laws of the State of Georgia without reference to the
principles of conflict of laws.

     24. Compliance with § 409A of the Code. To the extent this Agreement is subject to §
409A of the Code, the Company and Employee intend all payments under this Agreement to comply with
the requirements of such section, and this Agreement shall, to the extent reasonably practicable,
be operated and administered to effectuate such intent.

[SIGNATURE PAGE FOLLOWS]

16

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and Employee has
hereunto set his hand as of the day and year first above written.

	 	 	 	 	 
	 	COMPANY:

AFC ENTERPRISES, INC.

 	 
	 	By:  	/s/ John M Cranor, III
 	 
	 	 	John M Cranor, III 	 
	 	 	Chairman of the Board 	 
	 

	 	 	 	 	 
	 	EMPLOYEE:

 	 
	 	  	/s/ Andrew Skehan
 	 
	 	 	Andrew Skehan 	 
	 	 	 	 
	 

17exv10w1

EXHIBIT 10.1

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

by and between

Cooper Creek Village, LLC

(“Seller”)

and

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

(“Buyer”)

 

 

TABLE OF CONTENTS

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

2

 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page No.	 
	 	 	 	10.3 Other Closing Documents
	 	 	16	 
	 	 	 	10.4 Closing Documents
	 	 	16	 
	11.	 	 	COSTS
	 	 	16	 
	12.	 	 	CASUALTY OR CONDEMNATION
	 	 	16	 
	13.	 	 	ATTORNEYS’ FEES
	 	 	17	 
	14.	 	 	ASSIGNMENT
	 	 	17	 
	15.	 	 	WAIVER
	 	 	17	 
	16.	 	 	GOVERNING LAW
	 	 	17	 
	17.	 	 	NOTICES
	 	 	17	 
	18.	 	 	ENTIRE AGREEMENT
	 	 	18	 
	19.	 	 	COUNTERPARTS; COPIES
	 	 	18	 
	20.	 	 	AUTHORITY
	 	 	18	 
	21.	 	 	RECORD ACCESS AND RETENTION
	 	 	18	 
	22.	 	 	CONTRACT CONSIDERATION
	 	 	19	 

EXHIBITS

	 	 	 

	Exhibit “A”

	 	Real Property Description
	Exhibit “B”

	 	Personal Property Description
	Exhibit “C”

	 	Due Diligence Documents
	Exhibit “D”

	 	Form of Deed
	Exhibit “E”

	 	Form of General Assignment
	Exhibit “F”

	 	Form of Bill of Sale
	Exhibit “G”

	 	Form of Non-Foreign Certificate
	Exhibit “H”

	 	Form of Tenant Notice
	 
	SCHEDULES
	 	 
	 
	Schedule 1

	 	Leases
	Schedule 2

	 	Contracts
	Schedule 3

	 	Approvals
	Schedule 7.1.8

	 	Litigation

2

 

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

     This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Agreement”) is made and
entered into as of the 24th day of June, 2011, by and between Cooper Creek Village, LLC, a
Kentucky limited liability company ( “Seller”), and STEADFAST ASSET HOLDINGS, INC., a California
corporation (“Buyer”), with reference to the following facts:

RECITALS:

     A. Seller is the fee owner of that certain land improved with a multifamily residential
project commonly known as Cooper Creek Village Apartments, consisting of 123 units situated
thereon, located at 4807 Cooper Village Terrace, Louisville, KY 40219 and more particularly
described in Exhibit “A” attached hereto, together with all structures, improvements,
machinery, fixtures and equipment affixed or attached to the land (collectively referred to herein
as the “Real Property”).

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

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

     1. PURCHASE AND SALE.

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

               1.1.1 The Real Property;

               1.1.2 All easements, licenses, interests, rights, privileges, tenements, hereditaments and
appurtenances on or in anywise appertaining to the Real Property;

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

               1.1.4 All leases and occupancy agreements relating to the Property in effect on the Date of
Closing (as hereinafter defined), including all amendments thereto

1

 

(collectively, “Leases”) (the Leases in effect on the date of this Agreement are identified on Schedule 1 attached
hereto);

               1.1.5 Subject to Section 6.6 below, all service, maintenance, supply or other contracts
relating to the operation of the Property in effect as of the date hereof (including without
limitation all warranties and license agreements), which are identified on Schedule 2
attached hereto (collectively, “Contracts”);

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

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

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

     2. PURCHASE PRICE. The total purchase price (“Purchase Price”) to be paid by Buyer to
Seller for the Property shall be ELEVEN MILLION AND 00/100 DOLLARS ($11,000,000.00) payable all in
cash.

     3. PAYMENT OF PURCHASE PRICE.

          The Purchase Price shall be paid as follows:

          3.1 Deposit. As part of the Opening of Escrow (as defined below), Buyer shall deliver
to First American Title Insurance Company (“Escrow Holder”), which has an address of 5 First
American Way, Santa Ana, California 92707 Attn: Jeanne Gould, the sum of TWO HUNDRED THOUSAND AND
00/100 DOLLARS ($200,000.00) (“Initial Deposit”) in immediately available funds as a good faith
deposit. The Initial Deposit, the Extension Deposit (as hereinafter defined), and all interest
earned on any of the foregoing, shall be collectively referred to in this
Agreement as the “Deposit”. Escrow Holder shall place the Deposit in one or more government
insured interest-bearing accounts satisfactory to Seller and Buyer (which shall have no penalty for
early withdrawal), and shall not commingle the Deposit with any funds of Escrow Holder or any other
person or entity. All interest earned on the Deposit shall be included within the meaning of the
term “Deposit” in this Agreement. The Buyer shall be responsible for any and all taxes due and
owing with respect to the interest accruing on the Deposit. If Closing occurs in accordance with
this Agreement, the Deposit shall be applied against the Purchase Price. The Deposit shall be
returned to Buyer within one (1) business day only if (y) Buyer elects to properly terminate this
Agreement in accordance with Section 6.5 below or (z) Closing fails to occur due to (i) Seller’s
material breach of this Agreement (not caused by Buyer’s breach), (ii) the failure of a condition
to close set forth in Section 4.2.2 (with respect to deliveries by Seller only), 4.2.3, 4.2.4 (with
respect to performance by Seller only), 4.2.5 or 4.2.6 (with

2

 

respect to Seller’s ability to perform only) of this Agreement (to the extent all of the foregoing are not caused by Buyer’s breach or
failure to perform) , or (iii) a casualty or condemnation event as described in Section 12 below
occurs. In the event of a termination of this Agreement by either Seller or Buyer for any reason
other than pursuant to Section 6.5, Escrow Holder is authorized to deliver the Deposit to the party
hereto entitled to same pursuant to the terms hereof on or before the tenth business day following
receipt by Escrow Holder and the non-terminating party of written notice of such termination from
the terminating party, unless the other party hereto notifies Escrow Holder that it disputes the
right of the other party to receive the Deposit. In such event, Escrow Holder may interplead the
Deposit into a court of competent jurisdiction in the county in which the Deposit has been
deposited. All attorneys’ fees and costs and Escrow Holder’s costs and expenses incurred in
connection with such interpleader shall be assessed against the party that is not awarded the
Deposit, or if the Deposit is distributed in part to both parties, then in the inverse proportion
of such distribution.

          3.2 Remainder of Purchase Price. On or before the Closing Date, Buyer shall deposit
into Escrow (as defined below) immediately available funds in an amount which, when added to the
Deposit, will equal the Purchase Price plus any additional amounts necessary to cover costs and/or
prorations under this Agreement.

          3.3 Liquidated Damages. SELLER AND BUYER AGREE THAT, (i) IF THE PURCHASE AND SALE OF
THE PROPERTY IS NOT COMPLETED AND THIS AGREEMENT TERMINATES BECAUSE BUYER MATERIALLY DEFAULTS UNDER
OR MATERIALLY BREACHES THIS AGREEMENT (AFTER WRITTEN NOTICE AND A REASONABLE OPPORTUNITY TO CURE;
PROVIDED, HOWEVER, THAT NO SUCH NOTICE OR CURE SHALL EXTEND THE DUE DILIGENCE PERIOD OR, WITH
RESPECT TO THE DELIVERY BY BUYER OF THE PURCHASE PRICE OR ANY OTHER REQUIRED CLOSING DELIVERIES,
EXTEND THE CLOSING DATE OR RESCHEDULED CLOSING DATE (EACH AS HEREINAFTER DEFINED), AS APPLICABLE),
OR (ii) BECAUSE THE DEPOSIT BECAME NONREFUNDABLE, SELLER DID NOT BREACH AND BUYER HAS NO RIGHT TO
THE DEPOSIT UNDER SECTION 3.1 OR SECTION 3.4, SELLER MAY TERMINATE THIS AGREEMENT BY DELIVERING WRITTEN
NOTICE TO BUYER AND ESCROW AGENT AND THEREUPON THE DEPOSIT SHALL BE PAID TO SELLER AND RETAINED BY
SELLER AS LIQUIDATED DAMAGES AND AS SELLER’S SOLE REMEDY AT LAW OR IN EQUITY. SELLER AND BUYER
AGREE THAT, UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS AGREEMENT, ACTUAL DAMAGES MAY
BE DIFFICULT TO ASCERTAIN AND THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE
INCURRED BY SELLER IF BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES THIS AGREEMENT AND
FAILS TO PURCHASE THE PROPERTY.

     SELLER’S INITIALS: ________ BUYER’S INITIALS: ________

          3.4 Specific Performance. If Seller fails to consummate the sale of the Property
pursuant to this Agreement or otherwise materially defaults on its obligations hereunder at or
prior to Closing for any reason except failure by Buyer to perform hereunder or Buyer’s

3

 

breach hereunder, or if prior to Closing any one or more of Seller’s representations or warranties are
breached in any material respect, and such default or breach is not cured by the earlier of the
third (3rd) business day after written notice thereof from Buyer or the Closing Date (Buyer hereby
agreeing to give such written notice to Seller within one (1) business day after Buyer first learns
of any such default or breach by Seller, except no notice or cure period shall apply if Seller
fails to consummate the sale of the Property hereunder), or if Seller breaches its obligations
under Section 8.1.9 or Buyer receives a statement from Lenders as described in Section 8.1.9, Buyer
may elect to (a) terminate this Agreement by giving Seller timely written notice of such election
prior to or at Closing and recover the Deposit and any and all reasonable costs incurred to date
(subject to the limit as provided in the last sentence of this Section 3.4), (b) enforce specific
performance to consummate the sale of the Property hereunder, (c) waive said failure or breach and
proceed to Closing without any reduction in the Purchase Price, or (d) exercise any other remedies
at law or in equity. Notwithstanding anything herein to the contrary, Buyer shall be deemed to
have elected to terminate this Agreement under subsection (a) hereof if Buyer fails to deliver to
Seller written notice of its intent to file a claim or assert a cause of action for specific
performance or other remedy at law or in equity against Seller on or before ten (10) business days
following the scheduled Closing Date or, having given such notice, fails to file a lawsuit
asserting such claim or cause of action in the county in which the Property is located within
ninety (90) days following the scheduled Closing Date. Buyer’s remedies shall be limited to those
described in this Section 3.4 and Section 13. If, however, the equitable remedy of specific
performance is not available, Buyer may seek any other right or remedy available at law or in
equity; provided, however, that in no event shall Seller’s liability exceed the lesser of (1)
$250,000 or (2) the actual reasonable out-of-pocket expenses incurred by Buyer and paid (A) to
Buyer’s attorneys in connection with the negotiation of this Agreement and (B) to unrelated and
unaffiliated third party consultants or any potential in connection with the performance of
examinations, inspections and/or investigations pursuant to Section 6 or any potential financing.

     4. ESCROW INSTRUCTIONS.

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

4

 

          4.2 Conditions to Close. Closing (as hereinafter defined) shall not occur unless and
until the following conditions precedent and contingencies have been satisfied or waived in writing
by the party for whose benefit the conditions have been included:

               4.2.1 All contingencies described in Section 6 below have either been satisfied or waived in
writing by Buyer or been effectively waived by Buyer’s failure to terminate this Agreement.

               4.2.2 All funds and instruments described in Sections 3 and 10 have been delivered to Escrow
Holder and Seller and Buyer have approved, executed and delivered a settlement statement reflecting
the Purchase Price, all prorations, and all closing costs as required under this Agreement (the
“Settlement Statement”).

               4.2.3 Seller shall have caused the title department of Escrow Holder, which has an address of
5 First American Way, Santa Ana, California 92707 Attn: Jeanne Gould, to have irrevocably committed
to Buyer in writing to issue an ALTA extended owner’s policy of title insurance, in form and
content acceptable to Buyer in its reasonable discretion, insuring Buyer’s fee simple title to the
Real Property in an amount equal to the Purchase Price subject only to the Permitted Exceptions.

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

               4.2.5 Seller’s representations and warranties contained herein shall be true and correct in
all material respects as of the date hereof and as of the Closing Date, except
for representations and warranties made as of, or limited by, a specific date, which will be
true and correct in all material respects as of the specified date or as limited by the specified
date.

               4.2.6 There shall exist no pending or threatened actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings, against the other party that would materially and adversely
affect that party’s ability to perform its obligations under this Agreement; it being understood
and agreed that any previously threatened action by Lenders (as hereinafter defined) shall not be
deemed to materially and adversely affect Seller’s ability to perform its obligations under this
Agreement if and to the extent the approval and release required under Section 7.1.14 of this
Agreement has been obtained on or before the Closing Date.

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

               4.3.1 Cause the Deed (as such term is hereinafter defined) to be recorded with the Office of
the Clerk of Jefferson County, Kentucky;

               4.3.2 Deliver to the parties entitled thereto the other Closing Documents (as hereinafter
defined); and

5

 

               4.3.3 Disburse all funds deposited with Escrow Holder by Buyer in payment of the Purchase
Price for the Property (subject to applicable prorations) to Seller or, for closing costs, to the
party entitled thereto, all as set forth in the Settlement Statement.

     5. CLOSING.

          5.1 Generally. Unless this Agreement is earlier terminated by its terms hereunder,
Escrow shall close upon the recordation of the Deed in accordance with the provisions of this
Agreement (“Date of Closing”, “Closing Date”, or “Closing”). The Closing shall occur no later than
July 29, 2011 (“Initial Scheduled Closing Date”) at the office of Escrow Holder (or such other
location as may be mutually agreed upon by Seller and Buyer), unless otherwise extended (i) by
operation of Sections 6.2, 12 or 21.2 below, (ii) by Buyer pursuant to Section 5.2 below, or (iii)
by written agreement between Buyer and Seller.

          5.2 Extension Option. Notwithstanding Section 5.1 above, Buyer shall have the option
(“Extension Option”) to extend the Initial Scheduled Closing Date to not later than August 30, 2011
(“Rescheduled Closing Date”), in Buyer’s sole and absolute discretion, by providing
written notice to Seller of such election prior to the Initial Scheduled Closing Date and
depositing with Escrow Holder an additional sum of FIFTY THOUSAND and 00/100 DOLLARS ($50,000.00)
(“Extension Deposit”) in immediately available funds; it being understood and agreed that Buyer
shall have no further right to terminate this Agreement under Section 6.3 or 6.4 of this Agreement.

     6. BUYER’S REVIEW.

          6.1 Delivery of Documents. Within one (1) business day after the date hereof, Seller
shall, at the sole expense of Seller, deliver to Buyer all documents pertaining to the Property
that have been prepared by, for or at the request of Seller or are in the possession of or
available to Seller, including, without limitation, (i) the documents listed on Exhibit “C”
attached hereto; (ii) copies of the Leases, Contracts and Approvals; (iii) copies of all
architectural, engineering and other drawings, plans and specifications for the buildings,
structures, improvements, machinery, fixtures and equipment included in the Real Property; (iv)
copies of all reports, studies, investigations, appraisals and other materials concerning the
design, construction, condition or status of the Real Property or any of the buildings, structures,
improvements, machinery, fixtures or equipment included in the Real Property, or any system,
element or component thereof, or any past or present Release (as hereinafter defined) or threatened
Release of any Hazardous Substances (as hereinafter defined) in, on, under or within the Real
Property or any other real property in the vicinity of the Real Property, or the compliance of the
Real Property with Environmental Laws (as hereinafter defined); and (v) copies of all environmental
impact reports, negative declarations, environmental impact certifications, and zoning, land use or
development agreements relating to the Real Property (collectively, the “Seller Deliveries”).
Seller hereby acknowledges and agrees that the following in the possession of or available to
Seller as will be provided as required in the previous sentence: monthly operating statements
(year-to-date and 3-year historical); year-end financial statements, audited if available (past 3
years); and general ledger (year-to-date and 3-year historical).

6

 

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

          6.2 Access. Commencing upon the execution of this Agreement by Buyer and Seller,
Seller shall allow (or cause to be allowed) Buyer or Buyer’s agents or representatives access to
the Property for purposes of any non-intrusive physical or environmental test, study or inspection
of the Property and, to the extent copies are not provided to Buyer by Seller, review and copying
of Seller’s books and records relating to the Property and any of the documents described in
Section 6.1 above, and other matters necessary in the discretion of Buyer to evaluate and analyze
the feasibility of the Property for Buyer’s intended use thereof. Buyer shall not conduct or
authorize any physically intrusive testing of, on, or under the Property without first obtaining
Seller’s written consent as to the timing and scope of work to be performed, which consent shall
not be unreasonably withheld, conditioned or delayed. Seller hereby acknowledges and agrees that
Buyer or Buyer’s representatives may communicate with any governmental authority for the sole
purpose of gathering information in connection with the Property or the Seller, or the transaction
contemplated by this Agreement.

          6.3 Title and Survey.

               6.3.1 Within one (1) business day after the date hereof, Seller shall cause Escrow Holder to
issue to Buyer a current commitment for an owner’s policy of title insurance in the amount of the
Purchase Price on an ALTA 2006 form (“Title Commitment”) together with copies of all documents of
record reflected therein as exceptions to title at Seller’s sole cost and expense (as provided in
Section 11 below). Buyer shall have until June 30, 2011 following its receipt of the Title
Commitment (“Title Objection Period”) in which to notify Seller in writing of any objections Buyer
has, in Buyer’s sole and absolute discretion, to any matters shown on the Title Commitment (“Title
Objection Notice”). All objections raised by Buyer in the manner herein provided are hereafter
called “Objections.” Seller shall make reasonable efforts to remedy or remove all Objections (or
agree irrevocably in writing to remedy or remove all such Objections at or prior to Closing) within
fifteen (15) days following Seller’s receipt of the Title

7

 

Objection Notice (“Seller’s Cure Period”). In the event Seller is unable to remedy or cause the removal of any Objections (or agree
irrevocably to do so at or prior to Closing) within Seller’s Cure Period, then Buyer, within ten
(10) days after the expiration of Seller’s Cure Period, shall deliver to Seller written notice
electing, in Buyer’s sole and absolute discretion, to either (i) terminate this Agreement, or (ii)
unconditionally waive any such Objections, failing which Buyer shall conclusively be deemed to have
elected (i) above. Any new title or survey information received by Seller or Buyer after the
expiration of the Title Objection Period or Seller’s Cure Period, as applicable, from a
supplemental title report, survey or other source which is not the result of the acts or omissions
of Buyer or its agents, contractors or invitees (each, a “New Title
Matter”) shall be subject to the same procedure provided in this Section 6.3 (and the Date of
Closing shall be extended commensurately if the Closing would have occurred but for those
procedures being implemented for a New Title Matter), except that the Buyer’s Title Objection
Period and Seller’s Cure Period for any New Title Matters shall be five (5) business days each.
Closing shall be delayed as needed to accommodate such additional time periods. Seller shall have
no obligation to cure title objections except financing liens of an ascertainable amount created
by, under or through Seller, which liens Seller shall cause to be released at or prior to Closing
(with Seller having the right to apply the Purchase Price or a portion thereof for such purpose),
and Seller shall deliver the Property free and clear of any such financing liens. Seller further
agrees to remove any exceptions or encumbrances to title which are voluntarily created by, under or
through Seller after the date hereof without Buyer’s consent. The term “Permitted Exceptions”
shall mean: the specific exceptions (excluding exceptions that are part of the promulgated title
insurance form) in the Title Commitment to which Buyer has not raised an Objection as provided
herein or has subsequently waived such Objection in writing and that Seller is not required to
remove as provided above; items shown on the Survey which have not been removed as of the end of
the Due Diligence Period; real estate taxes not yet due and payable; and rights of tenants (as
tenants only) under the Leases.

               6.3.2 Within one (1) business day after the date hereof, Seller shall provide Buyer with a
copy of any existing survey of the Property in Seller’s possession or control. Buyer, at its sole
cost and expense, may elect to obtain a new survey or revise, modify, or re-certify an existing
survey of the Property as necessary in order for the title department of Escrow Holder to delete
the survey exception from title or to otherwise satisfy Buyer’s objectives.

          6.4 Buyer’s Due Diligence. Subject to Section 21.2 below, Buyer shall have until June
30, 2011 (“Due Diligence Period”) to evaluate and analyze the feasibility of the Property for
Buyer’s intended use thereof, including, without limitation, the zoning of the Property, the
physical, environmental and geotechnical condition of the Property and the economic feasibility of
owning and operating the Property. If, during the Due Diligence Period, Buyer determines that the
Property is not acceptable for any reason whatsoever in Buyer’s sole and absolute discretion, Buyer
shall have the right, by giving written notice to Seller on or before the last day of the Due
Diligence Period, to terminate this Agreement. Buyer agrees to indemnify and hold Seller harmless
and defend Seller from and against any claims, liabilities, liens, cause of action, expenses,
costs, or damages (including reasonable attorneys’ fees and personal injury claims) resulting from
the inspection of the Property prior to the Closing Date by Buyer or Buyer’s contractors,
employees, representatives, or agents; provided, however, that

8

 

Buyer shall not be responsible for
any losses or expenses resulting from the discovery of adverse information regarding the Property.
In the event this Agreement is terminated for any reason, Buyer shall restore the Property to the
extent of any physical change or damage made as a result of the conduct of any inspection or
investigation of the Property by Buyer or Buyer’s agents, representatives or contractors to
substantially the same condition that existed immediately prior to Buyer’s inspection and
investigation. Any provision to the contrary herein notwithstanding,
the provisions of the previous two sentences shall survive termination of this Agreement for
any reason for a period of twelve (12) months and control over any provisions to the contrary
herein.

          6.5 Buyer’s Termination Right. If Buyer exercises the right to terminate this
Agreement in accordance with Sections 6.3 or 6.4 hereof, this Agreement shall terminate as of the
date the termination notice is given by Buyer (except as to such matters that are expressly
specified to survive the termination of this Agreement), and Escrow Holder shall return the Deposit
to Buyer If Buyer does not exercise the right to terminate this Agreement in accordance with
Sections 6.3 or Section 6.4 hereof, this Agreement shall continue in full force and effect and the
Deposit shall become non-refundable except as provided in Section 3.1 above.

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

     7. REPRESENTATIONS AND WARRANTIES.

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

               7.1.1 Seller is a limited liability company duly incorporated and organized and validly
existing and in good standing under the laws of the Commonwealth of Kentucky. Seller has full
power and authority to enter into this Agreement and to perform this Agreement. The execution,
delivery and performance of this Agreement by Seller have been duly and validly authorized by all
necessary action on the part of Seller and all required consents and approvals have been duly
obtained. This Agreement is a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms. There is no agreement to which Seller is a party or, to
Seller’s knowledge, that is binding on Seller which is in conflict with this Agreement. At
Closing, Seller will cause good and indefeasible title to the Real Property to be conveyed to
Buyer, subject only to the Permitted Exceptions.

               7.1.2 All of the Personal Property is described in Exhibit “B” attached hereto, which
is a materially accurate and materially complete list of all tangible and intangible
personal property owned by Seller relating to the ownership, management, operation,
maintenance or repair of the Real

9

 

Property. All of the Personal Property is located at the Real
Property. Seller has and can convey good title to the Personal Property, free and clear of all
liens, encumbrances, security interests and adverse claims of any kind or nature whatsoever.

               7.1.3 All of the Leases are described in Schedule 1 attached hereto, and there are no
persons leasing, using or occupying the Real Property or any part thereof except the tenants under
the Leases. All of the Contracts are described in Schedule 2 attached hereto, which is an
accurate and complete list of all presently effective contracts, agreements, warranties and
guaranties relating to the leasing, advertising, promotion, design, construction, ownership,
management, operation, maintenance or repair of the Real Property. All of the Approvals are
described in Schedule 3 attached hereto, which is an accurate and complete list of all
presently effective building permits, certificates of occupancy, and other certificates, permits,
licenses and approvals relating to the design, construction, ownership, occupancy, use, management,
operation, maintenance or repair of the Real Property. Except for the liens granted to Lenders (as
hereinafter defined), which Seller shall cause to be removed from title at or before Closing
pursuant to subsection 7.1.14 below, Seller has and can convey good title to the Leases, the
Contracts and the Approvals, free and clear of all liens, encumbrances, security interests and
adverse claims of any kind or nature whatsoever. To Seller’s knowledge, all of the copies of the
documents delivered to Buyer pursuant to Section 6.1 hereof are accurate and complete copies of all
originals of the documents described in Section 6.1 hereof and fairly and accurately represent the
financial, physical and environmental condition of the Property.

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

10

 

pledged or encumbered in any manner any of the Leases or any rents or other amount payable by any tenant
thereunder.

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

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

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

11

 

               7.1.8 Except for ordinary evictions and those non-material matters described on Schedule
7.1.8, there is no litigation, arbitration or other legal or administrative suit, action,
proceeding or investigation of any kind pending or to Seller’s knowledge threatened or being
contemplated against or involving Seller relating to the Real Property or any part thereof and, to
Seller’s knowledge, there is no valid basis for any such litigation, arbitration or other legal or
administrative suit, action, proceeding or investigation. To Seller’s knowledge, there is no
general plan, land use or zoning action or proceeding of any kind, or general or special assessment
action or proceeding of any kind, or condemnation or eminent domain action or proceeding of any
kind pending or threatened or being contemplated with respect to the Real Property or any part
thereof. There is no legal or administrative action or proceeding pending to contest or appeal the
amount of real property taxes or assessments levied against the Real Property or any part thereof
or the assessed value of the Real Property or any part thereof for real property tax purposes. To
Seller’s knowledge, no supplemental real property taxes have been or will be levied against or
assessed with respect to the Real Property or any part thereof based on any change in ownership or
new construction or other event or occurrence relating to the Real Property before the date of this
Agreement, except any such supplemental real property taxes as have been paid in full and
discharged.

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

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

               7.1.11 No withholding of tax or reporting (except for filing appropriate final property and
transfer tax returns at the respective taxing authorities to be paid on the Closing Date, and
customary income tax filings) will be required with respect to the sale of the Property by Seller.

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

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

               7.1.14 All lenders with liens affecting the Property, including, without limitation,
Freddie Mac (with respect to which Wells Fargo Bank NA is the servicer) (collectively, “Lenders”),
have approved the transaction contemplated by this Agreement (or

12

 

will approve the transaction) and Seller shall cause such lenders, including, without limitation, Lenders, to fully and
unconditionally release such liens at the Closing.

               7.1.15 The transaction contemplated by this Agreement (and any underlying
obligations contemplated by this Agreement) does not and shall not constitute a non-exempt
prohibited transaction under the Employee Retirement Income Security Act of 1974 (“ERISA”) or a
comparable violation of state law.

               7.1.16 Seller is not any of the following: (i) a person or entity that is listed in
the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist
Financing (effective September 24, 2001) (herein called the “Executive Order”); (ii) a person or
entity owned or controlled by, or acting for or on behalf of any person or entity that is listed in
the Annex to, or is otherwise subject to the provisions of, the Executive Order; (iii) a person or
entity that is named as a “specifically designated national” or “blocked person” on the most
current list published by the U.S. Treasury Department’s Office of Foreign Assets Control (herein
called “OFAC”) at its official website, http://www.treas.gov/offices/enforcement/ofac; (iv)
a person or entity that is otherwise the target of any economic sanctions program currently
administered by OFAC; or (v) a person or entity that is affiliated with any person or entity
identified in the foregoing clauses (i), (ii), (iii), or (iv).

               7.1.17 To Seller’s knowledge, all of the Seller Deliveries provided to Buyer are true and
complete copies of such documents. To Seller’s knowledge, Seller has used commercially reasonable
efforts to disclose to Buyer, in writing (which disclosure may be by delivery of the Seller
Deliveries), all material information, knowledge and findings relating to the Property and its
operations in Seller’s possession or control.

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

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

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

               7.2.3 Except for Hendricks & Partners, Buyer has not dealt with any investment adviser, real
estate broker or finder, or incurred any liability for any commission or fee to any investment
adviser, real estate broker or finder, in connection with the purchase of the Property or this
Agreement.

13

 

     8. COVENANTS.

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

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

14

 

(without
deduction for depreciation) of such buildings, structures, improvements, machinery, fixtures and
equipment.

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

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

               8.1.4 Seller shall promptly notify Buyer in writing of any litigation, arbitration,
condemnation or administrative hearing before any court or governmental agency concerning Seller or
the Property which is instituted after the date hereof.

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

15

 

which, after notice or the passage of time, or both, would constitute a breach, default
or violation by Seller) under the Leases, the Contracts or the Approvals that occurs before the
Closing Date, or any condition, event or circumstance relating to the Real Property that existed or
occurred before the Closing Date, or any personal injury or property damage occurring in, on or
about the Real Property before the Closing Date, and (iii) arising from, relating to or connected
with any past or present Release or threatened Release of any Hazardous Substances in, on or under
the Real Property or any past or present violation of any Environmental Laws at the Real Property
that exists or occurs, or the onset of which exists or occurs, before the Closing Date, including,
without limitation, all expenses of investigation and monitoring, costs of containment, abatement,
removal, repair, cleanup, restoration and remedial work, penalties and fines, attorneys’ fees and
disbursements, and other response costs. Any claim of Buyer in connection with said indemnities
shall be made within twelve (12) months after the Closing or shall automatically be null, void and
of no force or effect whatsoever.

               8.1.6 Between the date of this Agreement and the Closing Date, Seller shall not in any manner
sell, convey, assign, transfer, encumber or otherwise dispose of the Real Property, the Leases, the
Personal Property, the Contracts or the Approvals, or any part thereof or interest therein;
provided, however, that subject to prior written notice to Buyer, Seller may sell, convey, assign,
transfer, encumber or otherwise dispose of Personal Property or Contracts in the ordinary course of
its business.

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

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

               8.1.9 Not later than one (1) business day after the date of this Agreement, Seller shall
provide to Buyer copies of all documents evidencing, securing or otherwise relating to any loan in
favor of the Lenders and any material correspondence to or from Lenders relating to the maturity of
such loan. Seller shall use commercially reasonable and good faith efforts (i) to obtain as soon
as possible, but in all events prior to June 29, 2011, a payoff statement from Lenders indicating
the amount (subject only to additional legal fees not to exceed $100,000) required to satisfy any
such loan in full as of the Initial Scheduled Closing Date (with a per diem thereafter); (ii) to schedule as soon as possible,
but in all events prior to

16

 

June
29, 2011, a meeting or conference call with Lenders, Seller and Buyer (or its employees, officers,
agents, representatives, directors, consultants, accountants or other designees; collectively the
“Buyer Representatives”) the purpose of which is to discuss the repayment in full to Lenders in
connection with the Closing hereunder, at which the Buyer Representatives may ask such questions or
provide such information regarding this Agreement or the closing of the transaction contemplated
hereby as such Buyer Representative may determine reasonably necessary, all of which are hereby
expressly authorized by Seller; and (iii) to obtain, on or before July 21, 2011, an agreement in
form and substance reasonably acceptable to Buyer executed by Lenders whereby Lenders either (x)
agree to forbear from the commencement of (other otherwise agree not to commence) any enforcement
action with respect to any loan to Seller or secured by the Property for so long as this Agreement
shall be outstanding or (y) agree that, even if an action has been commenced by Lenders, to accept
a satisfaction in full of the amounts due to Lender (as provided in (i) above and subject to the
cap provided therein) on the Closing Date. Seller hereby releases Buyer and Buyer’s Representative
from any and all claims, demands, liabilities, losses, damages, costs and expenses in connection
with Buyer’s or Buyer’s Representatives inclusion in conversations with Lenders as provided in
subsection (ii) above or subsection (b) below and shall indemnify Buyer and Buyer’s Representatives
from and against any and all claims, demands, liabilities, losses, damages, costs and expenses in
connection therewith. From and after the date hereof and continuing through and including the
Closing Date, Seller shall (a) provide to Buyer copies of all correspondence to or from (including
email correspondence) or agreements with Lenders and/or notices of any suit or action filed by or
on behalf of Lenders, all within one (1) business day of delivery or receipt thereof; (b) use
commercially reasonable efforts to include Buyer in any telephonic conversations or email
correspondence with Lenders; and (c) promptly (and in all events within thirty (30) days), file all
necessary motions to dismiss any action or suit commenced by Lenders. Additionally, if and to the
extent that Lenders fail to accept satisfaction in full of any loan on the Closing Date, if
requested by Buyer, (and provided that all funds for Closing are in escrow with the Escrow Agent
and Buyer has provided an affidavit or other necessary statement that Buyer is ready, willing and
able to perform), Seller shall, within five (5) business days, file such action as may be necessary
for an expedited proceeding to require Lenders to accept said satisfaction. Buyer hereby consents
to Seller providing a copy of this Agreement to Lenders. Seller’s breach of this Section 8.1.9
shall constitute a material default under this Agreement for which Buyer shall be entitled to
terminate this Agreement under Section 3.4 and receive the Deposit and its reasonable costs (as
provided in subsection (a) of Section 3.4 and specifically including any non-refundable deposits
paid by Buyer and any legal fees or costs incurred by any prospective lender to Buyer) for which,
notwithstanding the cure period provided in Section 3.4, no cure period shall be afforded Seller
(unless Buyer so agrees in its sole and absolute discretion). Additionally, upon the receipt of
any statement (whether verbal or in writing) from Lenders that Lenders will not accept satisfaction
in full of any Loan or release all liens on the Closing Date, Buyer shall be entitled to terminate
this Agreement under Section 3.4 and receive the Deposit and its reasonable costs (as provided in
subsection (a) of Section 3.4 and specifically including any non-refundable deposits paid by Buyer
and any legal fees or costs incurred by any prospective lender to Buyer) for which the cure period
set forth in the first sentence of Section 3.4 shall be afforded Seller.

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

17

 

               8.2.1 All representations and warranties made by Buyer in Section 7.2 hereof shall survive the
Closing. Buyer shall use commercially reasonable efforts, in good faith and with diligence, to
cause all of the representations and warranties made by Buyer in Section 7.2 hereof to be true and
correct on and as of the Closing Date. Buyer shall indemnify and defend Seller against and hold
Seller harmless from all claims, demands, liabilities, losses, damages, costs and expenses,
including reasonable attorneys’ fees and disbursements, that may be suffered or incurred by Seller
if any representation or warranty made by Buyer in Section 7.2 hereof was untrue or incorrect in
any material respect when made or that may be caused by any breach by Buyer of any such
representation or warranty.

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

               8.2.3 Buyer hereby agrees to indemnify and hold Seller harmless from and against any and all
claims for brokerage or finder’s fees or other similar commissions or compensation made by any and
all other brokers or finders claiming to have dealt with Buyer other than Hendricks and Partners in
connection with this Agreement or the consummation of the transaction contemplated hereby. The
indemnification obligations of Buyer set forth in this Section 8.2.3 shall survive the Closing or
the termination of this Agreement for any reason for a period of twelve (12) months.

     9. ADJUSTMENTS AND PRORATIONS.

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

18

 

          9.2 Rental Income. Rental income from the Property shall be prorated as of the
Closing Date. Non-delinquent rents shall be prorated to the Closing Date. Rents delinquent as of
the Closing Date, but collected later, shall be prorated as of the Closing Date when collected.
Rents collected after the Closing Date from tenants whose rental was delinquent at the Closing Date
shall be deemed to apply first to the current rental due at the time of payment and second to
rentals which were delinquent at the Closing Date. Rents collected after the Closing Date to which
Seller is entitled shall be promptly paid to Seller. For a period of sixty (60) days after the
Closing Date, Buyer shall use reasonable efforts to collect all rents which are delinquent as of
the Closing Date with no obligation to incur any expenses or commence litigation to collect such
rents. Commencing as of sixty one (61) days after the Closing Date, Seller may use reasonable
efforts, including litigation, to collect any rents delinquent as of the Closing Date which are
still uncollected; provided, however, in exercising its remedies against tenants as outlined in
this Section, Seller shall not evict any tenant of the Property or otherwise unreasonably interfere
with Buyer’s operation of the Property. With respect to security deposits, if any, made by tenants
at the Property, Buyer shall receive credit therefor at Closing. Any leasing commissions with
respect to the Leases shall be the sole responsibility of Seller, and shall be paid or discharged
fully at or prior to Closing.

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

     10. CLOSING DOCUMENTS

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

               10.1.1 Deed. A special warranty deed with respect to the Real Property, executed by
Seller and Buyer in the form of attached Exhibit “D” (the “Deed”), subject only to the
Permitted Exceptions;

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

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

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

19

 

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

               10.1.6 Affidavit(s). An affidavit(s) as to construction, debts, liens and parties in
possession in the form customarily used by Escrow Holder, certified to Buyer and Escrow Holder,
identifying no construction, debts, liens or parties in possession (other than residential tenants
disclosed to Buyer) that may affect the Property after the Closing Date.

               10.1.7 Possession. Sole possession of the Property, subject to rights of tenants in
possession as tenants only under the Leases.

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

          10.3 Other Closing Documents. Each party shall deliver to the other party or Escrow
Holder such duly executed and acknowledged or verified certificates, affidavits, and other usual
closing documents respecting the power and authority to perform the obligations hereunder and as to
the due authorization thereof by the appropriate corporate, partnership, or other representatives
acting for it, as counsel for the other party or Escrow Holder may reasonably request, and such
conveyancing or transfer tax forms or returns, if any, as are required to be delivered by Seller or
Buyer under applicable state or local law in connection with the conveyance of the Real Property.
Each party shall deliver any additional documents that the other party or Escrow Holder may
reasonably require for the proper consummation of the transaction contemplated by this Agreement
(provided, however, no such additional document shall expand any obligation, covenant,
representation or warranty of such party or result in any new or additional obligation,
covenant, representation or warranty of such party under this Agreement beyond those expressly
set forth in this Agreement).

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

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

     12. CASUALTY OR CONDEMNATION. During the period from the Opening of Escrow through
Closing, all risk of loss from fire or other casualty or condemnation shall be borne by Seller.
If, before the Closing Date, (i) the improvements on the Real Property are materially damaged by
any casualty, as reasonably determined by Buyer, or (ii) proceedings are

20

 

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

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

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

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

     16. GOVERNING LAW. This Agreement shall be construed under the laws of the
Commonwealth of Kentucky (without regard to the principles thereof governing conflicts of laws).

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

21

 

	 	 	 

	To Seller:

	 	Cooper Creek Village, LLC 

Attn: Don Cook 

101 North Seventh Street 

Louisville, Ky 40202 

Fax (502) 753-7503 

Telephone No. : (502) 753-7500
	 
	 	 
	With Copy To:

	 	Adams Law Group 

Attn: Tad Adams 

6004 Brownsboro Park blvd. suite A

Louisville, Ky 40207 

Fax (502) 895-1702 

Telephone # (502) 895-8210
	 
	 	 
	To Buyer:

	 	Steadfast Asset Holdings, Inc.

18100 Von Karman, Suite 500 

Irvine, California 92612 

Attn: Ana Marie del Rio, Esq. 

Fax No.: (949) 852-0143 

Telephone No.: (949) 852-0700
	 
	 	 
	With Copy To:

	 	Katten Muchin Rosenman LLP 

2900 K Street NW, North Tower — Suite 200

Washington, DC 20007-5118 

Attn: Virginia A. Davis 

Fax No.: (202) 339-8244 

Telephone No.: (202) 625-3602

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

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

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

     21. RECORD ACCESS AND RETENTION. Seller shall provide to Buyer (at Buyer’s expense)
copies of, or shall provide Buyer reasonable access to, such factual

22

 

information as may be
reasonably requested by Buyer, and in the possession or control of Seller, or its property manager
or accountants, to enable Buyer’s auditor to conduct an audit, in accordance with Rule 3-14 of
Securities and Exchange Commission Regulation S-X, of the income statements of the Property for the
year to date of the year in which Closing occurs plus one (1) prior calendar year (provided,
however, such audit
shall not include an audit of management fees or interest expenses attributable to the
Seller). Buyer shall be responsible for all out-of-pocket costs associated with this audit.
Seller shall reasonably cooperate (at no cost to Seller) with Buyer’s auditor in the conduct of
such audit. In addition, Seller agrees to provide to Buyer or any affiliate of Buyer, if requested
by such auditor, historical financial statements for the Property, including (without limitation)
income and balance sheet data for the Property, whether required before or after Closing. Without
limiting the foregoing, (i) Buyer or its designated independent or other auditor may audit Seller’s
operating statements of the Property, at Buyer’s expense, and Seller shall provide such
documentation as Buyer or its auditor may reasonably request in order to complete such audit, and
(ii) Seller shall furnish to Buyer such financial and other information as may be reasonably
required by Buyer or any affiliate of Buyer to make any required filings with the Securities and
Exchange Commission or other governmental authority. Seller’s obligation to maintain its records
for use under this Section 21.1 shall be an on-going condition to Buyer’s obligation to close
Escrow. Seller shall maintain its records for use under this Section 21.1 for a period of not less
than one (1) year after the Closing Date. The provisions of this Section shall survive Closing.

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

     23. JURY TRIAL WAIVER. EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO WHICH SELLER AND/OR BUYER MAY BE PARTIES ARISING OUT OF, IN CONNECTION
WITH, OR IN ANY WAY PERTAINING TO, THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY THE PARTIES AND EACH HEREBY REPRESENTS AND WARRANTS TO THE OTHER THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER REPRESENTS AND WARRANTS
TO THE OTHER THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, OF ITS OWN FREE WILL, AND HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL. THE PROVISIONS OF THIS SECTION SHALL SURVIVE CLOSING OR THE
TERMINATION OF THIS AGREEMENT.

23

 

     24. COUNSEL . EACH PARTY HERETO WARRANTS AND REPRESENTS THAT EACH PARTY HAS BEEN AFFORDED THE OPPORTUNITY
TO BE REPRESENTED BY COUNSEL OF ITS CHOICE IN CONNECTION WITH THE EXECUTION OF THIS AGREEMENT AND
HAS HAD AMPLE OPPORTUNITY TO READ, REVIEW, AND UNDERSTAND THE PROVISIONS OF THIS AGREEMENT.

     25. EQUAL PARTICIPATION. SELLER AND BUYER HAVE PARTICIPATED EQUALLY IN THE PREPARATION
OF THIS AGREEMENT, AND, THEREFORE, THIS AGREEMENT AND EACH PROVISION THEREOF SHALL NOT BE CONSTRUED
IN FAVOR OF OR AGAINST ANY PARTY TO THIS AGREEMENT BY REASON OF ONE PARTY’S BEING DEEMED TO
PREPARED THIS AGREEMENT OR IMPOSED SUCH PROVISION.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

24

 

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

	 	 	 	 	 
	 	SELLER:

Cooper Creek Village, LLC, a Kentucky limited

liability company

 	 
	 	By:  	/s/ Donald J. Cook
 	 
	 	 	Name:  	Donald J. Cook 	 
	 	 	Its: Managing Member 	 
	 
	 	BUYER:

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

 	 
	 	By:  	/s/ Ana Marie del Rio
 	 
	 	 	Name:  	Ana Marie del Rio  	 
	 	 	Its:  Secretary 	 

25

 

	 	 	 	 	 

THE UNDERSIGNED HEREBY ACCEPTS THE FOREGOING PURCHASE AND SALE AGREEMENT AS OF JUNE 24, 2011, AND
AGREES TO ACT AS ESCROW HOLDER IN ACCORDANCE THEREWITH.

	 	 	 	 	 
	 	FIRST AMERICAN TITLE INSURANCE COMPANY

 	 
	 	By:  	/s/
Brenna Ryan for Jeanne Gould	 
	 	 	Escrow Officer 	 
	 	 	 	 
	 

26

 

EXHIBIT “A”

Description of Property

EXHIBIT “A-2”

Page 1 of 1

 

EXHIBIT “B”

Personal Property Description

Cooper Creek Village Inventory

Manager Office

U Shaped Desk

Green Leather Sofa

Area rug

Small bookshelf — grey

Long glass top table

2 prints

1 guest Chair

Dell Computer w/Monitor

Various Accessories

Spare Offices

Crendeza

Large desk

Small Desk

Various Accessories

Conference Room

Conference Table

6 chairs

2 side chairs

Buffet

Small dresser

Mirror

Print

2 plants

Flower Arrangement

Various Accessories

Kitchen

Refrigerator

Stove

Dishwasher

Front Office (Leasing Area)

3 side chairs

2 guest chairs

Office chair

Small Desk

Chest

EXHIBIT “B”

Page 1 of 3

 

4 shelf table

2 prints

Mirro

Various accessories

Area rug

Entry

Rug runner

Umbrella sand

2 plants

Picture

Various accessories

Side Office

Chest

Antique Table

3 chairs

Mirror

Dog print

Assistant Office

2 lateral file cabinets

1 black file cabinet

Desk

Credenza w/hutch

Dell Computer w/Monitor

HP Laser Printer

Fax/Copier

Built-In Bookshelf with Various accessories

Side table

Printer table

Area rug

Print

Various accessories

Fitness Center

Schwinn Treadmill

Tectrix Bike

Climbmax 3000

Vectra — full body workout system

Built in lockers without keys

Pool Furniture

5 large planters

2 trash cans

3 umbrellas

 

 

19 Lounge Chairs (purchased in 2009)

4 tables with 12 Chairs

Various original pool furniture (basement)

Equipment

Nitsuko Phone System with two phones and 2 port voicemail

Sound System Onkyo Stereo receiver (speakers at pool and in fitness ctr.)

3 Com Switch

Belkin Firewall and wireless router

Golf Cart

Key Machine

Various tools

Leaf Blower

Various Ladders

 

 

EXHIBIT “C”

Due Diligence Documents

	 	 	 
	 

	 	CONSTRUCTION / REHABILITATION
	1

	 	Plans & Specifications
	2

	 	    a. Most current civil, landscape, architectural, structural mechanical, electrical & fire protection plans
	3

	 	Construction contracts
	4

	 	Current capital improvements and schedule over past 3 years & Capital Budget for next 3 years
	5

	 	Warranties in effect (construction, roof, mechanical equipment, etc.)
	6

	 	Copies of all Licenses and Permits, including Business License (with expiration date & annual costs)
	7

	 	Certificate(s) of Occupancy
	8

	 	Tenant work in progress
	9

	 	Copies of all Governmental correspondence or notices pertaining to the property including but not limited to
Building Code, Health Code, Zoning and Fire Code
	10

	 	Maintenance Records/work orders (for past 12 months)
	 

	 	Other
	 

	 	FINANCIAL
	1

	 	Monthly Operating Statements (YTD and 3-year historical)
	2

	 	Current Year Operating Budget
	3

	 	Agreements, bonds affecting property (if any)
	4

	 	City or County Development Agreements (if any)
	5

	 	Year-End Financial Statements, Audited if available (past 3 years)
	6

	 	Loan Documents (executed Notes, Deeds of Trust, etc.) — For loan assumptions only
	7

	 	Property Tax Bills (current and for past 3 years, including special assessments or districts and appeals) &
Assessment
	8

	 	Tax Returns (past 3 years) — For company purchases only
	9

	 	Type of Accounting Software:
	10

	 	General Ledger — YTD and 3-year historical
	11

	 	Utility Bills (current & past 12 months)
	12

	 	Other
	 

	 	MANAGEMENT/LEASING/OPERATIONS
	1

	 	Current Monthly Rent Rolls (showing, square footage, monthly rent, deposits, financial concessions, other
concessions, lease term, extension options, defaults (financial or otherwise), and such other information as
Buyer may require)
	2

	 	Security Deposit/Resident Ledgers
	3

	 	Market Rent Survey (if available, comparison of subject w/other properties)
	4

	 	Occupancy History (past 3 years)
	5

	 	Leases for all tenants and all available tenant correspondence files (including amendments/letters/agreements)
	6

	 	Form of Lease (with all addendums)
	7

	 	Schedule of leases under negotiation or leases out for signature
	8

	 	Aged Delinquency Report (showing total rent outstanding) and status of all files placed for eviction or collection
	9

	 	Tenant contact sheet (name, address, phone number)
	10

	 	Copies of all operating & management service contracts, including but not limited to:
	11

	 	    a. Laundry
	12

	 	    b. Landscaping
	13

	 	    c. HVAC

EXHIBIT “C”

Page 1 of 3

 

	 	 	 
	14

	 	    d. Janitorial Services
	15

	 	    e. Security
	16

	 	    f. Equipment Leases (such as copier, etc.)
	17

	 	    g. Trash
	18

	 	    h. Pest Control
	19

	 	    i. Pool
	20

	 	    j. Cable/TV (if none, please indicate in writing)
	21

	 	    k. Advertising
	22

	 	    l. Fire Extinguisher
	23

	 	    m. Apartment Furniture Rental
	24

	 	    n. Alarm Monitoring
	25

	 	    o. Elevator
	26

	 	    p. Phone
	27

	 	    q. Property Management Agreement; indicate whether entity is related party for disclosure purposes
	28

	 	    r. Other:
	29

	 	Inventory of Personal Property and Supplies Inventory (on site)
	30

	 	Current Staff Information (employees, titles, hire dates, salary, unit information)
	31

	 	List of which utilities are paid by Resident & Owner
	32

	 	List of account numbers for any utility accounts
	33

	 	Schedule of meters and required deposits (gas, electric, telephone, water)
	34

	 	Current list of all vendors utilized at the property
	35

	 	Property Brochure
	36

	 	Certificates of insurance and copies of all insurance policies, including cost (last 3-yrs); insurance loss runs
	37

	 	Pending Litigation Information (if applicable)
	38

	 	O&M Manuals
	39

	 	Other
	 

	 	PHYSICAL ITEMS
	1

	 	Site Plan & Elevations
	2

	 	Unit Floor Plans (w/sq. footage)
	3

	 	Property Information (including number of pools, spas, dumpsters (with size), year built)
	4

	 	Property Photos (including aerial photos if available)
	5

	 	Model Units, if any (apt. #, bedrooms, rent loss)
	6

	 	Building (# of bldgs., storage units, laundry rooms)
	7

	 	Parking (carport, garages, or open spaces & number of each type)
	8

	 	Zoning Maps & Description (also any ordinances, amendments, CC&R’s, special use permits, etc.)
	9

	 	Certificates of Occupancy & Building Permits (include placed in service date per bldg. if applicable)
	10

	 	Flood Map & Designation
	11

	 	List of fire safety equipment, such as smoke sensors, suppression devices, etc. (including system type, rating,
map of locations, etc.)
	12

	 	Other
	 

	 	THIRD PARTY REPORTS
	1

	 	All existing reports, including, (but not limited to):
	2

	 	    a. Soils or Geotechnical Report
	3

	 	    b. Phase I Environmental Report
	4

	 	    c. Property Condition Report
	5

	 	    d. Lead-Based Paint Report
	6

	 	    e. Mold Report
	7

	 	    f. List of fire suppressions devices (system type, rating, location , etc.)

EXHIBIT “C”

Page 2 of 3

 

	 	 	 
	8

	 	    g. Asbestos Report
	9

	 	    h. O & M Plan (if any)
	10

	 	    i. Engineering study or inspection
	11

	 	    j. Termite
	12

	 	    k. Radon
	13

	 	    l. Appraisal (if dated w/n 24 months)
	14

	 	    m. Certified As-Built ALTA Survey
	15

	 	Other
	 

	 	TITLE AND OTHER
	1

	 	Title Insurance Commitment and all recorded documents referenced therein
	2

	 	Any zoning report or compliance letter
	 

	 	CAPITAL SOURCE — SPECIFIC INFORMATION: REIT
	1

	 	Property Services Questionnaire
	2

	 	Bank Reconciliations: YTD and Year-End for past 2 years
	3

	 	Trial Balance: Year-End for past 2 years and for the years then ended
	4

	 	Trial Balance as of 3/31/10 and for the 3-month period then ended
	5

	 	Cash Disbursement Journals: Monthly for current and previous years (cutoff selections for expense testing)
	6

	 	Invoices and/or related support for Cash Disbursement Journals selected by E&Y (to perform Cutoff Testing)
	7

	 	Signed Letter of Representation from Seller
	8

	 	Copy of 25 leases (as selected by E&Y) from the rent rolls provided
	9

	 	Copy of check/evidence of payment of property tax bills for all property tax expenses recorded in previous year
	10

	 	APN Number for the parcel(s) being purchased (to verify the completeness of the expense in #8 directly above)
	11

	 	Copy of invoices or service contract and evidence of payment (check copy or other) for 25 expenses selected by
E&Y (utilities, cleaning, repairs and maintenance and G&A expense, etc.)
	12

	 	GL detail for the real estate balance sheet account for previous year and quarters of previous year. Provide
invoices for a sample of capitalized costs (selections by TBD) in order to verify the completeness of
repairs/maintenance expense.
	13

	 	Other

EXHIBIT “C”

Page 3 of 3

 

EXHIBIT “D”

Form of Deed

SPECIAL WARRANTY DEED

     THIS SPECIAL WARRANTY DEED is made as of ____________ ___, 2011, between

     _________________________

     ____________________

     ____________________

     ____________________ (the “Grantor”)

     and

     _________________________

     ____________________

     ____________________

     ____________________ (the “Grantee”)

W I T N E S S E T H:

     For good and valuable consideration, the receipt of which is hereby acknowledged by Grantor,
Grantor does hereby grant and convey unto Grantee in fee simple and with covenant of Special
Warranty all of Grantor’s right, title and interest in and to the real property, together with all
improvements thereon and appurtenances thereto, located in Jefferson County, Kentucky and more
fully described as follows (the “Property”):

See attached Exhibit A.

     Grantor covenants lawful seisin of the estate hereby conveyed, full right and power to convey
same and that said estate is free of encumbrances except liens for real property taxes and
assessments due and payable in 2011, and thereafter, which Grantee assumes and agrees to pay;
however, this conveyance is made subject to easements, covenants, restrictions and stipulations of
record and governmental laws and regulations affecting the Property herein conveyed.

     To have and to hold the Property together with all of the rights, privileges, appurtenances
and improvements thereunto belonging unto the Grantee, and its successors and assigns forever, with
covenant of special warranty of title.

- 4 -

 

TRANSFER YEAR PROPERTY TAX BILL TO BE ADDRESSED IN CARE OF THE GRANTEE, _______________________.

	 	 	 	 	 
	 	GRANTOR:

_________________________,

____________________

 	 
	 	By:  	_____________________
 	 
	 	 	Title:____________________________ 	 
	 	 	Date: ____________ ___, 2011

(the “Grantor”) 	 
	 

Consideration Certificate

     For purposes of KRS Chapter 382.135, Grantor and Grantee, by execution of this Special
Warranty Deed swear and affirm, under penalty of perjury that the Property herein conveyed is
transferred for the full, accurate and true consideration _____________________ Dollars
($____________).

- 5 -

 

	 	 	 
	GRANTOR:	 	GRANTEE:
	_________________________,
	 	_________________________,
	____________________
	 	____________________
	 
	By:______________________
	 	By:______________________
	Title:_____________________
	 	Title:_____________________
	Date: ____________ ___, 2011
	 	Date:  ____________ ___, 2011

	 	 	 	 	 
	COMMONWEALTH OF KENTUCKY

	 	)

) SS:

	COUNTY OF JEFFERSON

	 	)	 

     The Special Warranty Deed and foregoing consideration statement were subscribed, sworn to and
acknowledged before me this ___ day of ____________, 2011, by ____________________ who acknowledged
himself to be the ____________________ of _________________________, a ____________________, and
the within named Grantor, to be the free act and voluntary deed of said company and to be his free
act and voluntary deed as its officer aforesaid.

     My commission expires: ________________________.

________________________
                    
                    
          
____________________

NOTARY PUBLIC

	 	 	 	 	 
	STATE OF ____________________

	 	)

) SS:

	COUNTY OF ____________________

	 	)	 

     The Special Warranty Deed and foregoing consideration statement were subscribed, sworn to and
acknowledged before me this ___ day of ____________, 2011, by

EXHIBIT “D”

 Page 1 of 1 

 

____________________ who acknowledged
himself to be the ____________________ of _________________________, a ____________________, and
the within named Grantee, to be the free act and voluntary deed of said company and to be his free
act and voluntary deed as its officer aforesaid.

     My commission expires: ________________________.

     ____________________

	 	 	 	 	 
	 	____________________

NOTARY PUBLIC
 	 

THIS INSTRUMENT PREPARED BY:

________________________

- 2 -

 

EXHIBIT “E”

Form of Assignment of Leases

ASSIGNMENT AND ASSUMPTION

OF LEASES, CONTRACTS AND APPROVALS

     THIS ASSIGNMENT AND ASSUMPTION OF LEASES, CONTRACTS AND APPROVALS (this “Assignment”) is made
as of the _____ day of __________________, 2011, by and between Cooper Creek Village, LLC, a
Kentucky limited liability company (“Assignor”), and _________________________, a
_________________________ (“Assignee”).

W I T N E S S E T H:

     For good and valuable consideration, receipt and sufficiency of which are hereby acknowledged,
Assignor and Assignee hereby agree as follows:

     1. Assignor hereby sells, transfers, assigns and conveys to Assignee the following:

          (a) All right, title and interest of Assignor in and to those certain leases described on
Exhibit A attached hereto and made a part hereof (collectively, the “Leases”), relating to
the leasing of space in or on that certain land and improvements located in the County of
Jefferson, Commonwealth of Kentucky, more particularly described in Exhibit B attached
hereto, and all of the rights, interests, benefits and privileges of the lessor thereunder, and all
prepaid rents and security or other deposits held by Assignor under the Leases and not credited to
Assignee under the Purchase Agreement (defined below) or credited or returned to tenants; but
subject to all terms, conditions, reservations and limitations set forth in the Leases.

          (b) To the extent assignable and without costs to Seller, all right, title and interest of
Assignor in and to those certain contracts set forth on Exhibit C attached hereto and made
a part hereof, and all warranties, guaranties, indemnities and claims (including, without
limitation, for workmanship, materials and performance) and which exist or may hereafter exist
against any contractor, subcontractor, manufacturer or supplier or laborer or other services
relating thereto (collectively, the “Contracts”).

          (c) To the extent assignable, all right, title and interest of Assignor in and to those
certain approvals, plans, studies and surveys set forth on Exhibit D attached hereto and
made a part hereof (collectively, the “Approvals”).

     2. This Assignment is given pursuant to that certain Purchase and Sale Agreement and Joint
Escrow Instructions (as amended, the “Purchase Agreement”) dated as of June ___ 2011, between
Assignor and STEADFAST ASSET HOLDINGS, INC., a California corporation, providing for, among other
things, the conveyance of the Leases, the Contracts and the Approvals.

EXHIBIT “E”

Page 1 of 7

 

     3. Assignee hereby accepts the assignment of the Leases, the Contracts and the Approvals and
agrees to assume and discharge, in accordance with the terms thereof, (a) all of the obligations
thereunder arising from and after the date hereof.

     4. Assignor agrees to indemnify, defend and hold harmless Assignee from and against any and
all claims, damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) asserted against or suffered or incurred by Assignee as a
result of or in connection with any liabilities or obligations under the Leases, the Contracts or
the Approvals relating to periods prior to the date hereof. The indemnification obligation of
Assignor set forth herein shall automatically expire twelve (12) months after the date of this
Agreement.

     5. In any action to enforce the provisions of this Assignment, the prevailing party shall be
entitled to an award of its attorneys’ fees and costs. This Assignment may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same Assignment. The terms, covenants and
conditions hereof shall inure to the benefit of and be binding upon the respective parties hereto,
their heirs, executors, administrators, successors and assigns. Any alteration, change or
modification of or to this Assignment, in order to become effective, must be made in writing and in
each instance signed on behalf of each party to be charged. No provision of this Assignment that
is held to be inoperative, unenforceable or invalid shall affect the remaining provisions, and to
this end all provisions of this Agreement shall be severable. This Assignment shall be governed by
the laws of the Commonwealth of Kentucky.

     IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first above
written.

	 	 	 	 	 
	 	ASSIGNOR:

Cooper Creek Village, LLC, a Kentucky limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  

    	 	 
	 	 	Its: 	 	 
	 
	 	ASSIGNEE:

	, 	 
	 	a

	 
	 
	 	By:  	 	 
	 	 	Name:  

    	 	 
	 	 	Title:  	 	 
	 

EXHIBIT “E”

Page 2 of 7

 

	 	 	 
	Exhibit A

	 	Leases
	Exhibit B

	 	Description of the Property
	Exhibit C

	 	Contracts
	Exhibit D

	 	Approvals

EXHIBIT “E”

Page 3 of 7

 

Exhibit A

Leases

[To be Attached]

EXHIBIT “E”

Page 4 of 7

 

Exhibit B

Description of Property

Approvals

[To be Attached]

EXHIBIT “E”

Page 5 of 7

 

EXHIBIT “F”

Form of Bill of Sale

BILL OF SALE

     Know all men by these presents, that Cooper Creek Village, LLC, a Kentucky limited liability
company (“Grantor”), for and in consideration of the sum of ten dollars and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, does bargain, sell,
grant, transfer, assign, and convey to _________________________ (“Grantee”) all of its right,
title, and interest, if any, in and to any and all tangible personal property owned by Grantor and
now at, in or upon or used in connection with the property commonly known as Cooper Creek Village
Apartments, located at 4807 Cooper Village Terrace in the City of Louisville, County of
Jefferson and Commonwealth of Kentucky (“Property”), and more particularly described on Exhibit
A attached hereto.

     Grantor is selling and Grantee is purchasing the Property “AS IS WHERE IS” with all faults
except as provided in that certain Purchase and Sale Agreement and Joint Escrow Instructions dated
as of June __, 2011 between Grantor and STEADFAST ASSET HOLDINGS, INC., a California corporation.

     IN WITNESS WHEREOF, Grantor has executed this Bill of Sale as of the ____ day of
___________________, 2011.

	 	 	 	 	 
	 	Cooper Creek Village, LLC, a Kentucky limited

liability company

 	 
	 	By:  	 
	 	 	Name:  	 	 
	 	 	Its:  	
 	 
	 	 	 	 
	 	 	 	 
	 

EXHIBITS:

A — Legal Description

EXHIBIT “F”

Page 1 of 2

 

Exhibit A

Legal Description

EXHIBIT “F”

Page 2 of 2

 

EXHIBIT “G”

Form of Non-Foreign Certificate

CERTIFICATE OF NON-FOREIGN STATUS

     Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person. To inform
_________________________ (“Transferee”), that withholding of tax is not required upon the
disposition of a U.S. real property interest by Cooper Creek Village, LLC, a Kentucky limited
liability company (“Transferor”), the undersigned hereby certifies to Transferee the following on
behalf of Transferor:

     1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign
estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);

     2. Transferor’s U.S. employer identification number is _____________; and

     3. Transferor’s office address is ____________________.

     Transferor understands that this certification may be disclosed to the Internal Revenue
Service by Transferee and that any false statement contained herein could be punished by fine,
imprisonment, or both.

     Under penalties of perjury, the undersigned declares that the undersigned has examined this
certification and to the best of the undersigned’s knowledge and belief it is true, correct and
complete, and the undersigned further declares that the undersigned has authority to sign this
document on behalf of Transferor.

     Dated as of ____________________, 2011.

	 	 	 	 	 
	 	Cooper Creek Village, LLC, a Kentucky 

limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 	 
	 	 	 	 
	 

EXHIBIT “G”

Page 1 of 1

 

EXHIBIT “H”

Form of Tenant Notice

____________________, 2011

     To: _____________________________

            _____________________________

            _____________________________

            _____________________________

     Re: Notice of Lease Assignment and Transfer of Security Deposit

     This letter is to notify you that the property commonly known as Cooper Creek Village
Apartments, 4807 Cooper Village Terrace, Louisville, Kentucky (“Property”) has this date
been sold and the ownership transferred.

     In connection with this sale, all of the interest of the lessor under your lease of space in
the Property, together with your security deposit in the amount of $__________, have been
transferred to the new owner. You are hereby notified that, from and after the date hereof and
until further notice, all future payments under your lease should be made payable to
“_____________” and mailed to _________________________. In addition, all questions or other
matters regarding your lease should be directed to the ___________________ at (_____)
___________________.

     Thank you for your cooperation.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	 	, 
	 	a	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 	 
	 
	 	 	 
	 

EXHIBIT “J”

Page 1 of 1

 

SCHEDULE 2

CONTRACTS

	1.	 	Advertising Agreement with Apartment Guide dated January 23, 2009, and August 25, 2010

	2.	 	Advertising Contract with ForRent.com dated December 16, 2010

	3.	 	Standard Service Agreement (Bulk Accounts) with Insight Kentucky Partners II, LP dated
January 1, 2009

	4.	 	Laundry Facilities Lease with Automatic Apartment Laundries, Inc. dated September 24,
1998

	5.	 	Landscaping Agreement with U.S. Lawns of East Louisville dated April 1, 2011

	6.	 	Service Agreement with Waste Management of Kentucky, LLC dated March 1, 2008

	7.	 	Orkin Pest Control Reports/Plans (various)

	8.	 	Management Agreement with Renaissance Development dated January 1, 2009

	9.	 	Cavalier Master Services Agreement

	10.	 	All other Contracts relating to the operation of the Property and identified on Exhibit
C, Due Diligence Documents

SCHEDULE 2

 

 

SCHEDULE 3

APPROVALS

	 	 	All Approvals relating to the Property and identified on Exhibit C, Due Diligence Documents

SCHEDULE 3

 

 

SCHEDULE 7.1.8

LITIGATION

Threatened enforcement action by Lenders as a result of maturity default under loan secured by the
Property

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}]]