Document:

exv10w44

 

Exhibit 10.44

BUILDING PAD PURCHASE AGREEMENT

HOLLYMEAD TOWN CENTER

(2 over 2 Condominiums)

     THIS BUILDING PAD PURCHASE AGREEMENT (the “Agreement”) is entered into this 10th day of April,
2006, by and between HM ACQUISITION GROUP LLC, a Virginia limited liability company (the “Seller”)
and NVR, INC., a Virginia corporation d/b/a Ryan Homes (the “Purchaser”).

     WHEREAS, Seller is the owner of certain real property in Albemarle County, Virginia
(“County”), as more particularly described in the legal description to be attached hereto as
Exhibit “A-1”, the Record Plat to be attached hereto as Exhibit “A-2”, and the Site
Plan attached hereto as Exhibit “A-3”, each made a part hereof (the “Property”), which
Seller intends to develop into a condominium and record a condominium plat in regards thereto (the
"Condominium”); and

     WHEREAS, Seller desires to sell, and Purchaser wishes to purchase, the Property in the form of
fully developed condominium building pads on which clusters of residential condominium units can
be constructed, as more particularly shown on Exhibit “A-3” (the “Building Pads” or
individually a “Building Pad”) on which Purchaser intends to construct one hundred seventy (170)
two-over-two condominium units (the “Units” or individually a “Unit”), consisting of eighty five
(85) upper units (the “Upper Units”) and eighty five (85) lower units (the “Lower Units”) on the
Building Pads, pursuant and subject to the terms and conditions hereinafter set forth.

     NOW, THEREFORE, for and in consideration of the mutual promises of the parties as set forth
herein, Seller does hereby grant to Purchaser the right to purchase and Purchaser agrees to
purchase in fee simple the Building Pads pursuant and subject to the following covenants,
conditions, terms and obligations:

     1. INTENTIONALLY DELETED.

     2. ENVIRONMENTAL STUDY. Purchaser shall have a thirty (30) day feasibility
period, commencing upon the Effective Date (the “Feasibility Period”), to undertake at
Purchaser’s sole expense, an update of the Seller’s Phase I Environmental Assessment of
the Property (as updated, the “Environmental Study”). Seller shall deliver upon the
Effective Date a true and complete copy of the Phase I Environmental Assessment of the
Property to be updated by Seller and true and complete copies of any other
environmental studies, reports, documentation, etc. of the Property in Seller’s
possession. If Purchaser is not satisfied with the results of its Environmental Study,
Purchaser may as a matter of right, terminate this Agreement by written notice to
Seller at any time prior to the end of the Feasibility Period and receive a refund
of any

 

 

Deposit (as hereinafter defined) paid by Purchaser prior to such termination within ten (10)
days after receipt by Seller of written notice of said termination. The parties shall thereafter
be released from their obligations under this Agreement. In the event Purchaser terminates this
Agreement because of the results of the Environmental Study, it covenants and agrees to treat the
results of the Environmental Study as confidential.

     3. PURCHASE OF BUILDING PADS. Seller shall sell, and Purchaser agrees to purchase the
Building Pads, fully improved and finished in accordance with the provisions of this Agreement and
local governmental requirements, in accordance with the terms and schedule described more
particularly below:

          3(a) Purchaser agrees to purchase one (1) Building Pad within thirty (30) days after receipt
by Purchaser of written notice from Seller that the Conditions Precedent to Settlement (as defined
in Paragraph 6) have been met for two (2) Building Pads (the “Completion Notice”) and one (1)
Building Pad within one hundred fifty (150) days after receipt by Purchaser of the Completion
Notice. Thereafter, Purchaser agrees to purchase a minimum of one (1) Building Pad per quarter, or
such smaller number as may remain available subject to this Agreement, the first quarter to
commence one hundred twenty-one (121) days after receipt by Purchaser of the Completion Notice,
then continuing on a quarterly basis until all of the Building Pads are sold. Quarters shall
consist of ninety (90) days. In no event shall Purchaser be permitted to purchase a partial
Building Pad.

          3(b) At all times after the issuance of the initial Completion Notice, Seller shall meet the
Conditions Precedent to Settlement, as defined herein, for no fewer than the number of Building
Pads equal to the minimum number of Building Pads Purchaser is required to purchase over two
quarters pursuant to Subparagraph 3(a) above (the “Available Building Pads”). If Purchaser and
Seller have not previously agreed upon a delivery schedule for the Building Pads, Purchaser may
choose which of the Available Building Pads it will purchase to meet the quarterly Building Pad
settlement requirement. Seller shall notify Purchaser in writing of the location of the Available
Building Pads upon completion of Seller’s improvements to such Building Pads. Should Seller not
comply with the minimum Building Pad offering set forth above, Purchaser may (i) declare Seller to
be in default of this Agreement, or (ii) defer the Building Pad purchase schedule as provided in
Subparagraph 3(a) and the escalation of the Purchase Price (as hereinafter defined) as provided in
Paragraph 3(f) the same number of days Seller is in default, and extend by the same number of days
the running of each quarter.

          3(c) Purchaser shall have the right in any quarter to settle on more than the minimum number
of Building Pads required to be purchased in such quarter at the Purchase Price then in effect.
Purchaser shall receive cumulative credits toward the minimum number of Building Pads required to
be purchased in succeeding quarters in excess of the minimum required.

          3(d) Purchaser shall be entitled to more than one (1) settlement per month and shall further
be entitled to settle on one (1) or more Building Pads at a time. All settlements shall

2

 

be held at
the offices of NVR Settlement Services, 5875 Trinity Parkway, Suite 180, Centreville, VA 20120
(“Settlement Agent”), at such time or times as Purchaser shall designate by not less than five (5)
business days prior written notice to Seller.

          3(e) Purchaser’s option to purchase Building Pads hereunder shall be in full force and effect
so long as Purchaser fulfills its obligations hereunder. Should Purchaser fail to purchase the
minimum number of Building Pads as required herein during any one quarter, then Purchaser shall be
in default.

          3(f) The purchase price for each Building Pad purchased hereunder will be Sixty Seven Thousand
Dollars ($67,000.00) per Lower Unit and Eighty Seven Thousand Dollars ($87,000.00) per Upper Unit
for each such Unit to be constructed by Purchaser within such Building Pad (the “Purchase Price”).
The Purchase Price for each Lower Unit and for each Upper Unit shall increase by one percent (1%)
per quarter, commencing on the first day of the third quarter, and on the first day of each quarter
thereafter.

          3(g) The sum of Seven Hundred Eighty-Two Thousand Dollars ($782,000.00), in the form of a wire
transfer of good federal funds as a good-faith deposit (the “Deposit”) will be delivered by
Purchaser to Lawyers Title Insurance Corporation (the “Escrow Agent”), to be held and disbursed in
accordance with the terms of this Agreement and the Escrow Agreement attached hereto as Exhibit
“C” and to be executed along with this Agreement, as follows: (i) Three Hundred Thirty-Two
Thousand Dollars ($332,000.00) of the Deposit to be delivered to Escrow Agent within five (5) days
of the Effective Date; and (ii) Four Hundred Fifty Thousand Dollars ($450,000.00) of the Deposit to
be delivered to Escrow Agent within five (5) of notice from Seller to Purchaser that development of
the Property has commenced. The Deposit shall be remitted to Seller and applied to the Purchase
Price as hereinafter provided or remitted to Seller in the event of Purchaser’s default hereunder.

     4. INTENTIONALLY DELETED.

     5. SELLER’S OBLIGATION TO PREPARE BUILDING PADS. Seller shall, in accordance with
local government requirements and as required herein, at its own cost and expense, promptly and
diligently develop and improve the land into fully improved and finished condominium Building Pads
by complying with the pad construction requirements as shown on Seller’s approved Site Plan:

          5(a) Submitting all materials to the appropriate authority necessary, pursuant to local
government requirements, to obtain all necessary approvals regarding the subdivision and
development of fully improved and finished Building Pads promptly and diligently but no later than
three months from
the Effective Date of this Agreement. Seller shall use due diligence and all reasonable and good
faith efforts to obtain all governmental approvals necessary for the development of the Property to
be finally approved by the County by no later than December 31, 2006. If, despite the due
diligence and good faith efforts of Seller, Seller is unable to obtain such

3

 

approvals by no later
than March 31, 2007, or the approved preliminary plan for the Units permits less than one hundred
seventy (170) Units on the Property, then Seller may terminate this Agreement by written notice to
Purchaser within thirty (30) days of approval of the preliminary plan, in which event the Deposit
shall be returned to Purchaser and the parties shall have no further rights or obligations
hereunder. Such notice to terminate shall be invalid unless accompanied by Seller’s direction to
Escrow Agent providing for a full refund of the Deposit.

          5(b) Performing overlot clearing and rough grading.

          5(c) Providing required storm drainage structures and facilities; sediment control devices for
Seller’s property (but not devices needed for Purchaser’s construction); complete paving of
streets; installing sidewalks, as required; curbs and gutters; providing sewer and water
distribution systems, street lighting, driveway aprons; erecting street signs and installing front
property markers, all as shown on the approved Site Plan.

          5(d) Providing underground telephone, electrical and gas utility lines (if available) and
cable television (if available) adjacent to the Building Pad lines.

          5(e) Intentionally Deleted.

          5(f) Except as stated in Subparagraph 5(a) above, the development obligations provided for
above which are required for the issuance of building permits shall be complete by June 30, 2007.
Private utilities shall be installed by no later than June 30, 2007.

     6. DETAILS RELATING TO SELLER’S OBLIGATIONS. With respect to the obligations of
Seller as set forth in Paragraph 5, the following shall apply:

          6(a) Grading. Seller shall cut, fill and grade each Building Pad as necessary to the
proper and lawful drainage of such Building Pad before erection of a building thereon in accordance
with the Building Location Plan, attached hereto and made a part hereof as Exhibit “D”, and
in keeping with the requirements of the applicable governmental authorities. Each Building Pad
will be graded to Purchaser’s Building Location Plan so that it will have a balance grade as set
forth on Exhibit “D”. Balance grade will mean that when excavation on each Building Pad is
complete, the dirt required to meet grading on the Building Location Plan will be self-contained on
said Building Pad, including both fill and cut conditions. Seller will notify Purchaser at such
time as grading is completed on a given section(s). A “walk through” inspection will be made by a
representative of both Purchaser and Seller, and a list of discrepancies if any, will be jointly
prepared. Seller will promptly correct said agreed upon discrepancies. When part or all of the
foundation, at the design elevation of a Building sited on a given
Building Pad, cannot be placed at natural grade capable of supporting such foundation, Seller will
supply control house pads with the following dimensions: overall length and width of Building Pad
envelope, plus ten feet (10’) on any side starting at the minimum set-back line designated by
governmental authority or as designated on Exhibit “D”. Each such fill pad must be
certified to Purchaser by a registered

4

 

engineer, who is approved by Purchaser, to support a
footing/foundation of either standard design and specifications or an engineered footing design
approved for use by said engineer.

          6(b) Building Pads Cleared. Seller will clear and grub Building Pads per the limits
of clearing shown on Exhibit “D”. Building Pads will be delivered free of rubbish and
debris.

          6(c) Drainage.

               (1) Seller shall construct and complete all necessary storm drainage facilities as reflected
on the approved Site Plan. Seller shall further obtain and record proper instruments establishing
easements and rights-of-way needed for off-site storm drainage and other utilities, the same to be
unencumbered if so required by the local municipal authority. Seller is responsible for the
installation and maintenance of all storm water structures, pipes and all sediment control
facilities per the approved, or to be approved, Site Plan. Additionally, the responsibility and
liability for the retention facilities rests with Seller. Seller’s maintenance responsibility for
the above-mentioned appurtenances shall cease when the same are dedicated to, and accepted by, the
applicable governmental authorities or Homeowners Association, whichever applies.

               (2) Seller shall grant any and all easements as may be reasonably required by Purchaser
across, over and through the Property for control of on-site storm water relating to the Building
Pads conveyed to Purchaser. Said easements shall be free from liens and shall allow for the
construction, maintenance and use of drainage facilities and all uses incidental thereto, including
silt ponds, swales and riprap. Purchaser shall have the right to dedicate any and all of said
easements to public use and to have same accepted for maintenance by the applicable governmental
agencies. Upon request, Seller (and all other parties having an interest in such easement) will
join in the dedication and execute such instruments as may be reasonably required to effect same.
Said easements may be used by Purchaser, its agents, customers, invitees, designees, successors and
assigns who acquire Building Pads or Units. Said provisions shall be set forth in full in the
deeds of easement and shall be deemed covenants running with the Units. Title to said easements
and Purchaser’s rights therein shall be fully insurable under the same requirements with respect to
title as are applicable to the Building Pads and/or Units.

          6(d) Water and Sewer Mains. Seller shall install water and sewer mains in the street
or in the rear of each Building Pad with laterals to Building Pad lines as shown on the Site Plan.
The depth of sewer laterals at the connection points of same shall not exceed four feet (4’) from
the top of the curb. Seller shall be obligated to pay any allocation and/or tap fees and off-site
charges. Seller
shall furnish written evidence of the paid fees and written evidence that such are transferable
from Seller to Purchaser. Seller shall clearly mark and locate the sewer and water service for
each Building Pad at the location mentioned above.

          6(e) Bonds. Seller will post and maintain street, driveway apron, storm drain,
sediment control, front property markers maintenance and all other forms of surety bonds as may be

5

 

required by the applicable governmental authorities for work to be completed by Seller in
connection with development of the Building Pads and the drainage facilities contemplated by this
Agreement, whether such facilities are on or off the Building Pads.

          6(f) Dedication to Public. Seller shall cause all streets, roads and other public
improvements (including storm drainage facilities) to be constructed by Seller to be dedicated to
public use and accepted for maintenance by the applicable governmental authorities or Homeowners
Association, whichever applies, at the earliest practical date, but in no event shall the streets
or roads in front of or servicing any Building Pad conveyed hereunder to Purchaser or its
customers, successors or assigns and storm drainage facilities related thereto be accepted for
maintenance later than twelve (12) months after the date of conveyance of the last Building Pad
described herein, and each street and storm drainage facility related thereto shall be completed
and ready for dedication no later than twelve (12) months after construction of such street.

          6(g) Acceptance by the Homeowners Association. In accordance with Subparagraph 6(f),
Seller shall cause all approved private streets, roads, alleys, drives, parking areas, and other
private improvements to be dedicated to and accepted for maintenance by the Homeowners Association
at the earliest practical date, but in no event shall the streets, roads, drives and/or parking
areas in front of or servicing any Building Pad(s) conveyed hereunder to Purchaser or its
customers, successors and assigns be accepted for maintenance by such Association later than twelve
(12) months after the date of conveyance of the last Building Pad described herein and each such
private improvement related thereto shall be completed and ready for dedication and acceptance no
later than twelve (12) months after construction ceases on such improvement.

          6(h) Rock. In the event that rock is encountered on any Building Pad by Seller during
its grading operation, Seller will blast and/or excavate rock sixteen inches (16”) below the
Building Pad to cause the finished Building Pad to conform to the Building Location Plan.
Purchaser will reimburse Seller for any blasting of on-lot utility trenches done by Seller on
Purchaser’s behalf. The amount of reimbursement shall be determined prior to Seller commencing
such work.

          6(i) Quality of Work. All work, materials and improvements to be installed or
furnished by Seller will be completed in a good and workmanlike manner and in accordance with and
acceptable under the rules, regulations, laws and ordinances of the applicable governmental
authorities.

          6(j) Green Space. Seller shall be responsible for landscaping and trees in all areas
outside the boundaries of each Building Pad as well as all landscaping and trees to the extent
shown on the County approved landscaping plan or Site Plan obtained by Seller. Seller shall be
responsible for a permanent entry sign, including landscaping, which shall be shown on the approved
Site Plan. Seller shall also be responsible for meeting any state or local requirements for tree
conservation or reforestation as shown on the approved Site Plan.

6

 

          6(k) Amenities. Seller shall be responsible for the erection of all amenities
required pursuant to the approved Site Plan for the Property obtained by Seller.

          6(l) Property Markers. Seller shall install all property markers at the earliest
practical time in accordance with all applicable local government codes and requirements or place a
bond to cover future installation cost as may be required by same.

          6(m) Poor Soil Conditions. When expandable soils, poorly drained soils, or sink holes
are encountered, Seller must remove any such material and replace such soils with proper soils
suitable for supporting a footing/foundation and backfill. Replacement soils must be certified to
Purchaser by a registered engineer approved by Purchaser. If any unsuitable soils are encountered,
Seller will provide soil engineer’s certifications on all Building Pads impacted by such soils.

          6(n) Hazardous Materials. In the event Hazardous Materials (as defined below) are
found on any of the Building Pads after conveyance of any such Building Pad by Seller to Purchaser,
and shown to be present on the Building Pads prior to such conveyance, Seller shall have the option
of (i) remediating such Hazardous Materials in accordance with all applicable laws and regulations,
or (ii) repurchasing such affected Building Pad(s) for the Purchase Price paid by Purchaser, plus
the costs of such transaction, plus the costs of any improvements installed on such Building Pad by
Purchaser. The term “Hazardous Materials” means (A) hazardous wastes, hazardous substances, and
toxic materials prohibited or regulated by federal, state or local law, regulation or order, (B)
asbestos, (C) gas and oil petroleum products and their byproducts, and (D) Polychlorinated
Biphenyls (“PCBs”). Notwithstanding anything to the contrary contained in this Agreement, the
failure of Purchaser to provide written notice to Seller of the discovery of Hazardous Materials on
any Building Pads within thirty (30) after to laying the foundation for a residential structure on
such Building Pad shall be a waiver of any claim or obligation of Seller under this Section 6(n)
with respect to that Building Pad. This Subparagraph shall only apply to discoveries of Hazardous
Materials made by Purchaser or its subcontractors prior to laying the foundation.

          6(o) Seller/Purchaser Responsibility Checklist. Attached hereto as Exhibit
“E” is a list of obligations of Seller and Purchaser (“Checklist”). Should there be any
discrepancy between the Checklist and this Agreement, the terms of this Agreement shall prevail.

          6(p) Retaining Walls. Seller shall install retaining walls as shown on the approved
Site Plan. Purchaser shall install any retaining walls required for the construction of
Purchaser’s improvements which are not shown on the approved Site Plan.

     7. INSPECTION — SELLER IMPROVEMENTS.

          7(a) Prior to settlement on any of the Building Pads pursuant to this Agreement,
representatives of Seller and Purchaser shall inspect the improvements relating to

7

 

this Agreement
on all Building Pads and establish a list of deficiencies hereinafter referred to as the “Building
Pad Inspection Report” (Exhibit “F-1”). Seller shall use commercially reasonable efforts
to repair all deficiencies (except final paving) within thirty (30) days of said Building Pad
Inspection Report or as soon thereafter as reasonably possible, but in any event prior to
conclusion of Purchaser’s Building Pad construction and in a timely manner designed to insure
issuance of occupancy permits as agreed by and between Purchaser and Seller. Seller’s failure to
meet these dates shall be a default under this Agreement. Subsequent to settlement, Purchaser
shall be responsible for damages to Seller improvements serving the Building Pads not detailed on
the Building Pad Inspection Report that are shown to have been caused by Purchaser or its
subcontractor. Upon completion of Building Pad construction activity in a given phase, Purchaser
and Seller, upon notification of the other, shall meet to complete the “Building Pad Completion
Report” (Exhibit “F-2”) to list all deficiencies not listed on the Building Pad Inspection
Report. Purchaser shall repair all deficiencies listed on the Building Pad Completion Report
within thirty (30) days of notification, at its expense, or at such other time as shall be agreed
upon between Purchaser and Seller. In the event Purchaser shall fail to make repairs, then Seller
shall make such repairs and receive reimbursement from Purchaser within thirty (30) days of receipt
of written demand by Seller. If Purchaser fails to pay any amounts due pursuant to this Paragraph
7, Seller shall have the right to institute collection proceedings against Purchaser for the cost
to Seller to make the repairs and to suspend sales of Building Pads under this Agreement.

          7(b) Purchaser’s responsibilities under this Paragraph 7 shall cease upon the first to occur
of (i) Purchaser’s repair of any damage to Seller’s improvements as set forth in Subparagraph 7(a),
or (ii) payment by Purchaser of any amounts due and owing to Seller by Purchaser as set forth in
Subparagraph 7(a).

          7(c) In the event that the parties shall be unable to agree upon the completion of the
deficiencies in the Building Pad Inspection Report or Building Pad Completion Report described
above, or upon the defects in such allegedly completed items, Rivanna Engineering and Surveying
(“Engineer”) shall arbitrate such dispute and the parties agree to abide by the decision reached by
the Engineer. The parties also agree to equally share the cost of such arbitration.

     8. PURCHASER’S CONDITIONS PRECEDENT TO SETTLEMENT. The obligations of Purchaser to
purchase the Building Pads shall be conditioned upon satisfaction of the following, any of which
may be waived by Purchaser in its sole and absolute discretion (the “Conditions Precedent to
Settlement”):

          8(a) Unless caused solely by the actions or inactions of Purchaser, Building and plumbing
permits must be available for immediate issuance for the construction of Purchaser’s improvements
on each of the Building Pads.

8

 

          8(b) After expiration of the Feasibility Period referenced in Paragraph 1 above without
Purchaser having terminated this Agreement as set forth herein, Purchaser must have accepted the
results of the Environmental Study.

          8(c) Seller must have completed its improvements as to the Building Pads including, but not
limited to, base paving, such other matters as described in Paragraphs 5 and 6, and correction of
the deficiencies listed on the Building Pad Inspection Report prior to settlement. Any Unfinished
Items must have been agreed to with a schedule for completion. Seller shall have obtained a fully
executed agreement with the electric and gas companies (if available) and shall have paid all
required fees, with the exception of connection fees or tap-in charges applicable to individual
home sites, which, as to each Lot, shall be reimbursed to Seller at settlement thereof.

          8(d) All conditions of title have been met pursuant to Subparagraph 9(b) hereof.

          8(e) Seller is not in default of this Agreement beyond applicable notice and grace periods.

          8(f) The HOA shall be established pursuant to Paragraph 14.

          8(g) The representations and warranties by Seller contained in this Agreement must be true,
correct and valid as of the date of each settlement.

          8(h) Unless not available due solely to the actions or inactions of Purchaser, at all times
following the first settlement hereunder, certificates of occupancy, or their equivalent, shall be
available to Purchaser, for immediate issuance, upon satisfactory completion of residences upon
settled Building Pads, without governmental prohibition or moratoria.

     8A. SELLER’S CONDITIONS PRECEDENT TO SETTLEMENT. The obligations of Seller to sell the
Building Pads shall be conditioned upon satisfaction of the following, any of which may be waived
by Seller in its sole and absolute discretion (the “Seller Conditions Precedent to Settlement”):

          8A(a) Purchaser shall have performed all of its obligations with respect to this Agreement,
and shall not be in default of this Agreement beyond applicable grace and cure periods.

          8A(b) The representations and warranties by Purchaser contained in this Agreement are true,
connect and valid as of the date of each settlement.

     9. SETTLEMENT, CONVEYANCE AND TITLE, DEPOSIT CREDITS.

          9(a) The Purchase Price for each Building Pad shall be payable by check or wire transfer of
funds from Purchaser at the time of settlement. At the time of settlement, Purchaser shall deposit
the Purchase Price, less the Deposit Credit (defined below), if applicable, and Escrow

9

 

Agent shall
deposit the amount of the Deposit Credit, for each Building Pad being purchased in escrow with the
title insurance company, or its agent conducting settlement. Upon consummation of settlement, the
Purchase Price, less the Deposit Credit, if applicable, shall be released and delivered to Seller.
Commencing with the forty-third (43rd) Unit purchased under this Agreement, the Deposit shall be
returned to Purchaser in the form of application towards the Purchase Price of each Unit contained
within a Building Pad at the time of settlement of such Building Pad (the “Deposit Credit”) in the
amount of Six Thousand One Hundred Nine and 37/00 Dollars ($6,109.37) per Unit.

          9(b) The parties acknowledge that Seller is the record title owner of the Property. Seller
covenants that it has full legal, beneficial and equitable ownership of the Property, and that it
has the right and power to convey the Property. Indefeasible fee simple title to the Building Pads
are to be conveyed hereunder, free of liens, encumbrances, judgments, tenancies, reservations,
easements and rights-of-way, subject, however, to the condominium plat, the condominium declaration
and those easements, rights-of-way and restrictions shown thereon, matters of record as shown on
Seller’s current title insurance policy, and such other easements, lot line adjustments and other
instruments as shall be reasonably required for approval of the Site Plan or otherwise, and shall
not materially and adversely impact Purchaser’s development of the Units (collectively, the
"Permitted Exceptions”). Title is to be marketable and insurable at Purchaser’s cost at standard
rates by a title company of Purchaser’s choice, licensed to do business in the Commonwealth of
Virginia, without exceptions except as aforesaid and those standard printed exceptions appearing in
the policies customarily issued by that company. If Seller cannot convey title as aforesaid, this
entire Agreement, or the portion thereof in connection with Building Pads whose title cannot be
conveyed, may be terminated, at the option of Purchaser, unless title defects are such as may be
readily remedied by legal or other action. If legal or other action is necessary to cure title
defects, Seller may promptly undertake such action, at its own expense, whereupon the time for
settlements, running of quarters, payment escalation schedule, and all other items hereunder, shall
be extended for the reasonable period of time necessary for such prompt action. If title defects
are not cured within such reasonable period of time, Purchaser shall have the right to declare
Seller to be in default, or to declare this Agreement terminated or Purchaser may elect to extend
the time within which Seller shall cure title defects for up to ninety (90) days. In no event
shall Purchaser be obligated to take title and pay the Purchase Price for any of the Building Pads
if title
thereto cannot be conveyed in accordance with the provisions hereof, and no such Building Pads may
be annexed or otherwise added by Seller or any third party to the Condominium or Condominium
Association established pursuant to this Agreement.

     Notwithstanding anything in this Subparagraph 9(b) to the contrary, Purchaser shall review
title to the Property during the Feasibility Period. If Purchaser is not satisfied with its title
review, Purchaser may as a matter of right, terminate this Agreement by written notice to Seller at
any time prior to the end of the Feasibility Period and receive a refund of any Deposit (as
hereinafter defined) paid by Purchaser prior to such termination within ten (10) days after receipt
by Seller of written notice of said termination. The parties shall thereafter be released from
their obligations under this Agreement.

10

 

          9(c) Examination of title, title insurance, title certificate, preparation of Deeds and
individual Building Pad surveys are to be at the sole cost of Purchaser, provided, however, that
if, upon examination, title is found to be defective and not remedied as hereinbefore provided,
Seller agrees to reimburse Purchaser for any such costs reasonably incurred. Cost of transfer
taxes, recordation taxes, tax certificates, filing and recording fees are to be shared by Purchaser
and Seller, as grantee and grantor, respectively, in accordance with local custom, with Seller
paying the “grantor’s” portion of such transfer and recordation taxes, and Purchaser paying all
remaining amounts. Seller shall pay a settlement fee not to exceed $400.00 for each Building Pad.

          9(d) Real Estate Taxes are to be prorated to the date of settlement on a calendar year basis.
Any and all other assessments, payments, impositions or other charges with respect to the Building
Pads, including any charges made, or to be made, for any and all public improvements, whether
on-site or off-site, shall not be adjusted at the time of settlement, and shall be borne solely by
Seller, including, but not limited to, capital facilities charges and inspection fees. Purchaser
shall pay or reimburse at each settlement Seller for half of all County impact fees, up to One
Thousand Five Hundred Dollars ($1,500.00) per Unit. Seller shall be responsible for half of all
County impact fees, up to One Thousand Five Hundred Dollars ($1,500.00) per Unit, and for all
County impacts fees over Three Thousand Dollars ($3,000.00) per Unit. Any sewer or water charges
that are placed on a front-foot benefit charge basis and are deferrable to the ultimate purchaser
shall not be adjusted at settlement, but shall be assumed by Purchaser.

          9(e) At settlement(s), title to the Building Pads being acquired shall be conveyed by Seller
to Purchaser or Purchaser’s designee by Special Warranty Deed, containing the usual covenants of
title, in proper form for recording in the County.

          9(f) Prior to any settlements hereunder, Seller shall deliver to Purchaser a “Certification of
Non-Foreign Status” which meets the requirements of Section 1445 of the Internal Revenue Code and
Internal Revenue Regulations for the purpose of informing the transferee that withholding of
Federal taxes is not required.

          9(g) Possession of the Building Pads shall be given to Purchaser or its agents and assigns at
the time of settlement, free from any parties in possession.

          9(h) All notices of violations of local ordinances or requirements issued by legal authorities
or prosecutions in any Court on account thereof affecting, or against, any of the Building Pads
except for violations by Purchaser, shall be defended and complied with by Seller prior to the time
of settlement hereunder, and the Building Pads conveyed free thereof.

          9(i) Seller shall pay any agricultural roll-back tax due in connection with the conveyance or
deed under any state, county, township, municipal or local law, regulation or ordinance (or any
similar tax or assessment) to the date of conveyance. Purchaser shall be responsible for any
roll-back attributed to the period of time on and after the date of conveyance.

11

 

     10. POST SETTLEMENT OBLIGATIONS. The following obligations of the parties shall
survive settlement of the Units:

          10(a) Maintenance of the Property pursuant to Subparagraph 15(b);

          10(b) Work to be performed by Purchaser or Seller pursuant to Paragraph 7;

          10(c) All of Seller’s responsibilities pursuant to the organization and management of the
Homeowners Association as required under Paragraph 14 which are not completed by the time Purchaser
settles on the Building Pads;

          10(d) Liability for brokerage commissions as set forth in Subparagraph 11(b);

          10(e) Seller’s representations and warranties provided in Paragraph 12, and Purchaser’s
representations and warranties provided in Paragraph 13.

     11. DEFAULT; LIABILITY.

          11(a) In the event of any breach, failure or default by Purchaser under the terms of this
Agreement to purchase all or any portion of the Property (which breach, failure or default is not
remedied or cured by Purchaser pursuant to any other provisions hereof), the Deposit shall be
remitted to Seller, and Seller’s sole and exclusive right and remedy shall be to retain the
Deposit, or so much thereof as shall not have been previously applied as a Deposit Credit, as full,
fixed and liquidated damages, not as a penalty, whereupon this Agreement shall terminate and
thereafter Purchaser and Seller shall be relieved of further liability hereunder, at law or in
equity; it being the agreement of the parties that except as expressly provided herein or with
regard to any obligation to indemnify Seller, Purchaser shall have no liability or obligation for
default hereunder except to the extent of the Deposit
made herein and other specific obligations, and in no event shall Purchaser’s liability or
responsibility for any failure, breach or default in the purchase of all or any portion of the
Property hereunder exceed the total amount of the Deposit after application of the Deposit Credit
applicable to any Unit closed by Purchaser hereunder, and in no event shall Seller be entitled to
specific performance of this Agreement or any other equitable remedies.

          11(b) In the event of any breach, failure or default by Seller to consummate the sale of all
or any portion of the Property under the terms of this Agreement (which breach, failure or default
is not remedied or cured by Seller pursuant to any other provisions hereof), Purchaser’s sole and
exclusive right and remedy shall be to elect either to: (a) terminate this Agreement and receive
return of the Deposit, and thereafter Purchaser and Seller shall be relieved of further liability
hereunder, at law or in equity, or (b) to seek specific performance of this Agreement; it being the
agreement of the parties that except as expressly provided hereunder with regard to any
indemnification of Purchaser by Seller, Seller shall have no liability or obligation for default

12

 

hereunder except to the extent of the return of the Deposit or specific enforcement of this
Agreement.

          11(c) Seller and Purchaser warrant that they have made no commitments of any kind regarding
brokerage fees, finder’s fees or commissions relative to this Agreement which could incur liability
to either party hereto. Seller and Purchaser agree to indemnify and hold each other harmless from
any and all liability, loss or damage, including reasonable attorneys’ fees and related costs and
expenses arising out of, or resulting from, any and all brokerage claims that may be made against
Seller or Purchaser or their successors or assigns arising from this Agreement.

          11(d) Seller agrees to indemnify and hold Purchaser harmless from any claim, liability, loss,
damage and/or expense including judgments, costs and attorneys’ fees by reason of injuries to or
death of any person or persons, expressly including therein employees of Purchaser, its
subcontractors, employees and agents, or loss of or damage to their property or that of any person,
firm, association or corporation, however the same shall occur or be caused or by reason of claim
of any and every character whatsoever in any manner resulting from, arising out of, or connected
with the work, or undertaking performed pursuant to this Agreement by Seller, or acts or omissions
of Seller or its employees and agents, whether such acts or omissions be claimed to be negligent or
not. This indemnification provision shall not cover the negligence of Purchaser or its
subcontractors, employees and agents. Seller shall maintain in full force and effect liability
insurance covering damage to property and persons resulting from or connected with such activity.

          11(e) Purchaser agrees to indemnify and hold Seller harmless from any claim, liability, loss,
damage and/or expense including judgments, costs and attorneys’ fees by reason of injuries to or
death of any person or persons, expressly including therein employees of Seller, its
subcontractors, employees and agents, or loss of or damage to their property or that of any person,
firm, association or corporation, however the same shall occur or be caused or by reason of claim
of any and every character whatsoever in any manner resulting from, arising out of, or connected
with the work, or
undertaking performed pursuant to this Agreement by Purchaser, or acts or omissions of Purchaser or
its employees and agents, whether such acts or omissions be claimed to be negligent or not. This
indemnification provision shall not cover the negligence of Seller or its subcontractors, employees
and agents. Purchaser shall maintain in full force and effect liability insurance covering damage
to property and persons resulting from or connected with such activity.

          11(f) No failure or default by Purchaser or Seller, including failure to timely exercise
options, shall result in the termination or limitation of any right hereunder or the exercise of
any rights or remedies with respect to such failure or default unless and until Seller or Purchaser
shall have been notified in writing and shall have failed to remedy said failure within fifteen
(15) days after the receipt of said written notice or if the cure thereof cannot be completed
within fifteen (15) days, then a reasonable period of time not to exceed an additional thirty (30)
days provided the party diligently and continuously pursues such cure.

13

 

     12. SELLER’S REPRESENTATIONS. Seller hereby represents and warrants to Purchaser
that:

          12(a) Except as reflected on the Site Plan, the condominium plat or related documents, or
previous submissions and proffers approved by applicable governmental authorities, Seller has not
made, and will not make, any commitments or representations to the applicable governmental
authorities, or to adjoining or surrounding property owners or community or civic associations,
which would, interfere with Purchaser’s ability to improve the Building Pads with the construction
thereon of residential dwellings built according to Purchaser’s standard design, as reflected in
the elevation drawings attached hereto as Exhibit “G”.

          12(b) Seller has granted no person any contract right or other right to the use of any portion
of the Building Pads, or the furnishing or use of any facility or amenity on, or relating to, the
Building Pads or Units, other than utility easements and other Permitted Exceptions.

          12(c) All contractors, subcontractors, laborers and materialmen performing work upon, or
furnishing labor or materials to improve or benefit, the Building Pads or Condominium at Seller’s
request have been, or will be, paid in full by Seller. Seller will execute the necessary affidavits
and indemnification agreements reasonably required by Purchaser’s title insurance company to
eliminate from its Owner’s Title Policies any exceptions to unfiled mechanic’s liens.

          12(d) All necessary dedications to public use with respect to the Building Pads shown or
implied from the Condominium Plats, have been, or will be made to the applicable governmental
authorities, and Purchaser will incur no legal liability or expense whatsoever with respect to any
such dedications.

          12(e) Intentionally deleted.

          12(f) Prior to settlement on any of the Building Pads, all appropriate and necessary
governmental approvals shall have been granted with respect to the Property to provide for the
improvements contemplated by this Agreement to be provided by Seller to be completed.

          12(g) Prior to, or at the time of, settlement on each Building Pad, all utilities, including,
but not limited to, sewer, water, electric, telephone, and gas utility lines (if available), shall
be available to Purchaser in adequate capacities for immediate single family residential use and
connection at that Building Pad, without governmental prohibitions or moratoria.

          12(h) Prior to, or at the time of, settlement on each Building Pad, building, plumbing
connection, and other permits required for the erection of condominium buildings, and use and
occupancy permits for finished residences on such Building Pads, shall be available to Purchaser
for immediate issuance or, in the case of use and occupancy permits, upon completion of the Units
within such Building Pads, without governmental prohibitions or moratoria.

14

 

          12(i) Intentionally deleted.

          12(j) Seller is a limited liability company, duly organized and validly existing, licensed
under the laws of the Commonwealth of Virginia, and qualified to do business in the Commonwealth of
Virginia, in good standing, and that Seller has the authority to execute and perform this
Agreement.

          12(k) Seller represents and warrants that it has done nothing to introduce any Hazardous
Materials (as defined in Subparagraph 6(n)) onto the Property. In addition, except as shown in the
environmental studies or reports obtained by Seller and delivered to Purchaser prior to the date
hereof, to Seller’s actual knowledge, no Hazardous Materials exist on the Property or affect the
Property.

          12(l) In addition to any other warranty made in connection with this Agreement, Seller
warrants and agrees that (i) Seller owns all of the Property to be sold by it under this Agreement,
free and clear of all unrecorded mechanic’s liens; (ii) none of the Building Pads are subject to
any unrecorded restrictive covenant or equitable servitude of any kind, which would, in any way,
limit the free choice of Purchaser, or its assigns, with respect to the nature or location of the
residential dwelling to be constructed on any Building Pad; (iii) each of the Building Pads is
stable, has been constructed in accordance with Paragraph 6 and other applicable requirements in
this Agreement, and to Seller’s actual knowledge is otherwise is suitable for the construction of a
residential structure by customary means and without extraordinary site preparation measures; (iv)
all of the streets, sewers, water lines and utility facilities installed, or to be installed, by
Seller or its subcontractors or agents are, and will be, in compliance with the applicable
requirements of law, of good quality and suitable for their intended purpose; (v) all of the
Building Pads, as laid out by Seller, are in compliance with the applicable zoning and subdivision
requirements; (vi) none of the development site preparation and construction work
previously performed in the area has to Seller’s actual knowledge concentrated and diverted surface
water or percolating water improperly onto any of the Building Pads or other property.

     The warranties set forth above will survive the conveyance of the Building Pads for a period
of eighteen (18) months from the date of the respective settlement date for the applicable Building
Pad, and will be for the benefit of Purchaser and its successors and assigns, but only to the
extent that (i) Purchaser is unaware of the breach or untruth of such representation or warranty at
the time of settlement, and (ii) the amount of such claims exceeds $50,000 in each instance. In
addition to the other remedies available to Purchaser at any time but subject to the limitations
set forth below, Seller will indemnify Purchaser for, and will save it harmless from, all claims,
damages, suits (for injunctive relief or otherwise), and other proceedings and costs of any kind
(including Purchaser’s attorneys’ fees) which may be asserted against or incurred by Purchaser at
any time hereafter by reason of any allegation or occurrence that involves a breach of any of the
warranties provided above.

15

 

     All of the foregoing covenants, warranties and representations will be effective, repeated and
true at the time of settlement on each Building Pad.

     Notwithstanding anything to the contrary contained in this Agreement, if any of the matters
described in Sections 12(f) — (h) are not true and correct in all material respects prior to
settlement due to governmental moratorium or other delays outside of the control of Seller, then as
Purchaser’s sole and exclusive remedy, the quarterly Building Pad purchase schedule and any
escalation of the Purchase Price shall be suspended for an equal number of days, but Seller shall
not otherwise be deemed to be in default under this Agreement or in breach of such representation
and warranty. Purchaser may terminate this Agreement if such moratorium or any other delays are in
effect for more than eleven (11) months cumulatively. In such event, Seller and Purchaser shall be
relieved from further liability hereunder, at law or in equity, and any remaining Deposit balance
will be refunded to Purchaser.

12A. SELLER’S COVENANTS

          12A(a) Seller will, during the term of this Agreement, keep any mortgage(s) against the
Property current and not in default, and pay taxes and other public charges against the Property so
as to avoid forfeiture of Purchaser’s rights under this Agreement.

          12A(b) Prior to settlement on any of the Building Pads:

	 	(i)	 	all appropriate and necessary governmental
approvals shall be obtained with respect to the Property to provide for
the improvements contemplated by this Agreement to be completed; and
	 
	 	(ii)	 	all utilities, including, but not limited to,
sewer, water, electric, telephone, and gas utility lines (if
available), shall be available to Purchaser in adequate capacities for
immediate use and connection at that Building Pad.

     13. PURCHASER’S REPRESENTATIONS. Purchaser hereby represents, warrants and covenants
to Seller that Purchaser is a duly organized and validly existing corporation under the laws of the
Commonwealth of Virginia, qualified to do business in the Commonwealth of Virginia; that Purchaser
has the power to execute and perform this Agreement; that all necessary consents and approvals from
Purchaser have been obtained; and that the persons executing this Agreement on behalf of Purchaser
are duly empowered to bind Purchaser to perform its obligations hereunder.

          To the extent that Purchaser engages in the sale of Units, Purchaser agrees to indemnify
Seller and its subsidiary and affiliated corporations and the directors, officers and employees of
any of them (collectively called “Indemnities”) for, and to save all of them harmless against, any
and all damages, costs, liabilities, judgments, proceedings and other obligations and claims of any
kind (including, without limitation, providing legal representation

16

 

to defend against the same,
and/or indemnification to Seller for its reasonable attorneys’ fees incurred either in defense of
any such claim, and/or in enforcing the provisions of this condition) which may be imposed on, or
asserted against, any of the Indemnitees at any time because of, or in connection with, the
development, construction or sale of Units or the ownership, condition and/or use of the Property,
or of any portion of the Property. The indemnity and save harmless obligations will also include,
without limitation, providing legal representation to defend against the liabilities provided
above, and/or indemnification to Seller for its reasonable attorneys’ fees incurred either in
defense of any such claim, and/or in enforcing the provisions of this indemnity .

     14. CONDOMINIUM ASSOCIATION/HOMEOWNERS ASSOCIATION.

          14(a) Purchaser and/or Purchaser’s designee (for purposes of this Paragraph 14, together
“Purchaser”) shall form an expandable, residential condominium (“Residential Condominium”) and
related association (the “Residential Condominium Association”) for the Building Pads conveyed to
it and the new homes and other improvements to be built on same by Purchaser (“Purchaser
Improvements”) for sale to its residential purchaser/customers (which Building Pads and Purchaser’s
Improvements shall be made the units and common elements, whether limited or general, in the
Residential Condominium), at Purchaser’s sole cost and expense in compliance with all applicable
laws and regulations, under which Purchaser shall serve as the declarant. Seller shall, in turn,
form a separate, but related Homeowners Association (“HOA”) at Seller’s sole cost and expense and
subject all of the Property [including, but not limited to the aforesaid Building Pads and
Purchaser’s Improvements which will comprise the Residential Condominium and the as-planned HOA
common areas and amenities, if any (e.g. as-planned clubhouse, pool, private streets, landscaping
and entrance monuments, etc.; together, “HOA Amenities”) to an HOA declaration of covenants,
conditions and restrictions (the “HOA Declaration”), under which Seller shall serve as the
declarant and the
architectural review committee, and shall deliver to Purchaser copies of the Declaration, Bylaws,
Articles of Incorporation, budget and any other documents required by law to establish a homeowners
association (“HOA”) for the Property (collectively, the “HOA Organizational Documents”). All HOA
Organizational Documents shall comply with applicable FHA/VA regulations. The Residential
Condominium Association members shall also be members of the HOA established by Seller for the
Property. Purchaser shall have the opportunity to review the HOA Organizational Documents and upon
request by Purchaser, Seller shall promptly make any reasonable changes thereto. The mutual intent
of the parties under this Paragraph 14 is that the HOA own, manage and maintain the HOA Amenities
and that the Residential Condominium members (i.e. Unit owners) individually own their respective
units and collectively own, and the Residential Condominium Association manage and maintain any
buildings and common elements (limited or general) to be part of the Residential Condominium.
Consistent with the foregoing, Seller shall be responsible for arranging for and financing the
management of the HOA during the period of declarant control for the HOA. Similarly, Seller shall
be responsible for arranging for and financing the management of the Residential Condominium during
the period of declarant control and Seller agrees to act as and/or designate others (acceptable to
Purchaser) to act as members of the board and officers of the Residential Condominium

17

 

Association
during the period of declarant control and to otherwise perform for the Residential Condominium the
duties applicable to the HOA set forth in Subparagraph 14(c) during that declarant control period.
Seller shall be responsible for any HOA deficits that arise during the developer control period,
and Purchaser shall be responsible for a Residential Condominium Association deficits arising
during the declarant control period.

          14(b) If the applicable public authorities with jurisdiction (if any) over approvals of the
foregoing intended divisions between the HOA and the Residential Condominium defined in
Subparagraph 14(a) above withhold and/or refuse approval of this intended division, Purchaser and
Seller agree to cooperate with each other to resolve same and, if necessary, to work out an
alternative (approvable) arrangement that maintains the above-described HOA/Residential Condominium
divisions (including HOA ownership of the HOA Amenities, etc.) to the maximum extent approvable and
mutually acceptable to the parties. If despite that required cooperation and the parties’ best
efforts in that regard, the only practical solution becomes to subject the entire Property to
expandable residential condominium regime to include the above-defined HOA Amenities (hereinafter,
the “Greater Condominium”), then that is how the parties shall proceed and all of Seller’s
obligations in regard to the “HOA” defined in the following paragraphs shall obligate Seller with
equal effect in regard to the Greater Condominium.

          14(c) Seller, through its designees, shall administer the affairs of the HOA and Purchaser
shall administer the affairs of the Residential Condominium Association until such time as control
is assumed by the individual residential members, including those persons who have purchased
dwelling units in the Residential Condominium from Purchaser. During that time, Seller and
Purchaser shall employ a professional management company for budget, preparation and management of
the Homeowners Association and Residential Condominium, respectively; said management company shall
be acceptable to both parties. Seller and Purchaser shall be responsible for the maintenance of
the
HOA and Residential Condominium common areas, respectively, until such time as maintenance is
assumed by the HOA and Unit owner controlled Residential Condominium Association and its members
respectively.

          14(d) Seller will convey (without charge) to the HOA the common areas as established by the
HOA Declaration. The conveyance shall be subject to rights of ingress and egress and common usage
of each member (including all members of the Residential Condominium) in the HOA’s common area.
Seller shall bear the cost of preparing and recording the deed conveying the common areas to the
HOA.

          14(e) Seller agrees to participate in the preparation of an FHA/VA Application, so long as no
costs are incurred by Seller. Seller further agrees to implement changes (to the extent that such
changes do not affect the economics of Seller’s project) to plans and documents at Purchaser’s
expense, if required, to gain FHA/VA approval; provided, however, that the plans or plats already
approved by the local governmental authorities shall not be subject to redesign and resubmission of
approval. The time required for obtaining said FHA/VA approval shall not defer the purchase price
schedule contained herein.

18

 

          14(f) Seller hereby agrees to indemnify and hold harmless Purchaser from any and all claims,
liability, loss or expense Purchaser may incur relative to improvements installed or work performed
by Seller within the HOA.

     15. MISCELLANEOUS.

          15(a) During the time this Agreement remains in full force and effect, Seller agrees that
Purchaser, its agents and representatives, may enter upon the Property at reasonable times and upon
reasonable prior written notice for the purpose of making surveys, test borings, soil analyses and
engineering studies, and to perform all other activities as Purchaser may deem necessary, provided
that Purchaser provide Seller with evidence of public liability and property damage insurance in an
amount, issued by company and on a form reasonably acceptable to Seller.

          15(b) Purchaser shall be responsible for the removal of dirt, mud, and debris from the streets
fronting the Building Pads where dwellings are under construction. Seller shall be responsible for
performing those tasks and snow removal on all streets until public dedication or acceptance by the
applicable Condominium or Homeowners’ Association thereof. The terms “streets” and “roads” shall
mean all streets and roads shown on Exhibit “A-2” , as well as any access roads connecting
those roads shown on the subdivision and/or Condominium Plats to any other road, highway or
thoroughfare.

          15(c) All notices and other communications hereunder shall be in writing, and be deemed to
have been received (i) immediately upon personal delivery or confirmed fax receipt, (ii) one
(1) business day after being sent by confirmed overnight mail, or (iii) upon actual receipt, if
mailed by certified mail, return receipt requested, postage prepaid:

	 	 	 	 	 
	 

	 	If to Purchaser:
	 	NVR, INC.
	 

	 	 	 	13226 Lovers Lane
	 

	 	 	 	Culpeper, VA 22701
	 

	 	 	 	Attn: Andrew C. Holzwarth
	 

	 	 	 	Facsimile: 540/727-2004
	 
	 	 	 	 
	 

	 	with a copy to:
	 	NVR, INC.
	 

	 	 	 	12600 Fair Lakes Circle
	 

	 	 	 	Suite 210
	 

	 	 	 	Fairfax, VA 22033
	 

	 	 	 	Attn: Rainer Altmann
	 

	 	 	 	Facsimile No.: 703/631-5022
	 
	 	 	 	 
	 

	 	with a copy to:
	 	NVR, INC.
	 

	 	 	 	12600 Fair Lakes Circle
	 

	 	 	 	Suite 210

19

 

	 	 	 	 	 
	 

	 	 	 	Fairfax, VA 22033
	 

	 	 	 	Attn: Ed Kirschner
	 

	 	 	 	Facsimile No.: 703/631-5022
	 
	 	 	 	 
	 

	 	with a copy to:
	 	SHULMAN, ROGERS, GANDAL, PORDY & ECKER, P.A.
	 

	 	 	 	11921 Rockville Pike, Third Floor
	 

	 	 	 	Rockville, MD 20852
	 

	 	 	 	Attn: Michelle R. Curtis, Esq.
	 

	 	 	 	Facsimile No.: 301-230-2891
	 
	 	 	 	 
	 

	 	If to Seller, to:
	 	HM ACQUISITION GROUP LLC
	 

	 	 	 	210 5th Street, NE
	 

	 	 	 	Charlottesville, VA 22902
	 

	 	 	 	Attn: J.P. Williamson
	 

	 	 	 	Facsimile No.: 434-979-7779
	 
	 	 	 	 
	 

	 	with a copy to:
	 	ASSET CAPITAL PARTNERS, L.P.
	 

	 	 	 	4733 Bethesda Avenue, Suite 800
	 

	 	 	 	Bethesda, MD 20814
	 

	 	 	 	Attn: Peter Minshall
	 

	 	 	 	Facsimile No.: 301-656-1960
	 
	 	 	 	 
	 

	 	with a copy to:
	 	KENNERLY LAMISHAW & ROSSI LLP
	 

	 	 	 	707 Wilshire Boulevard, Suite 1400
	 

	 	 	 	Los Angeles, CA 90077
	 

	 	 	 	Attn: Howard Parelskin
	 

	 	 	 	Facsimile No.: 213-596-5791
	 
	 	 	 	 
	 

	 	If to Escrow Agent, to:
	 	LAWYERS TITLE INSURANCE CORPORATION
	 

	 	 	 	11 North Washington Street, Suite 620
	 

	 	 	 	Rockville, MD 20850
	 

	 	 	 	Attn: Carson Mills
	 

	 	 	 	Facsimile No.: 301-294-1910

          The parties hereto shall be responsible for notifying each other of any change of address or
facsimile number.

          15(d) Purchaser shall have the right to review and approve or disapprove any and all changes
made to the proposed, submitted and/or approved development documents, including, but not limited
to, plans, designs and drawings, including Site Plans, construction (all types), landscape
improvements (trees, shrubs, fences and walls) and covenants, restrictions and easements of record,
provided that Purchaser’s approval shall not be unreasonably withheld, conditioned or

20

 

delayed, and
provided that failure to respond to a request for approval within ten (10) business days shall be
deemed approval. The parties agree that any revised Building Pad configuration and/or change in
the Building Pad yield arising from any such revised development documents shall, if modifying the
anticipated Record Plat, constitute the Building Pads that are the subject of this Agreement.

          15(e) If any term, covenant or condition of this Agreement, or the application thereof to any
party or circumstance, shall be invalid or unenforceable, this Agreement shall not be affected
thereby, and each term shall be valid and enforceable to the fullest extent permitted by law.

          15(f) It is the intention of the parties hereto that all questions with respect to the
construction of this Agreement, and the rights or liabilities of the parties hereunder, shall be
determined in accordance with the laws of the jurisdiction in which the Property is located,
without regard to conflict of law rules. Time is hereby declared to be of the essence in the
performance of each of Seller’s obligations hereunder.

          15(g) Any date specified in this Agreement which is a Saturday, Sunday or legal holiday shall
be extended to the first regular business day after such date, which is not a Saturday, Sunday or
legal holiday.

          15(h) This Agreement, together with the Exhibits, contains the final and entire agreement
between the parties hereto. No change or modification of this Agreement or any waiver of the
provisions hereof shall be valid unless the same is in writing and signed by the parties hereto.
Waiver from time to time of any provision hereunder will not be deemed to be a full waiver of such
provision or a waiver of any other provisions hereunder. The terms of this Agreement are mutually
agreed to be clear and unambiguous, shall be considered the workmanship of all of the parties and
shall not be construed against the drafting party.

          15(i) This Agreement may be executed in several counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

          15(j) Titles to Paragraphs and Subparagraphs are for convenience only, and are not intended to
limit or expand the covenants and obligations expressed thereunder.

          15(k) In the event of any dispute or controversy arising out of or relating to this
Agreement or the parties’ compliance therewith, it is agreed that the exclusive forum for
determination of any and all such disputes or controversies shall be the appropriate trial court
for the jurisdiction in which the Property is located. Moreover, in addition to any other relief
to which it may be entitled, the prevailing party shall be entitled to recover its attorneys’ fees
and costs incurred in regard to such dispute or controversy. THE PARTIES WAIVE THEIR RESPECTIVE
RIGHTS OF TRIAL BY JURY.

21

 

          15(m) Seller recognizes that Purchaser is subject to the requirements of Revised
Interpretation No. 46 (“FIN 46R”), Consolidation of Variable Interest Entities, an authoritative
accounting pronouncement issued by the Financial Accounting Standards Board. Seller confirms that
it has an affirmative obligation to timely cooperate in all material respects with the Purchaser’s
obligation to comply with the financial reporting requirements of FIN 46R, including providing
Seller’s financial statements (i.e., balance sheet, income statement and statement of cash flows)
prepared in accordance with generally accepted accounting principles on a quarterly basis as
established by buyer and certain other information such as, but not limited to, asset values,
development stage, cost estimation, etc. Purchaser agrees that such information shall be used only
to prepare financial statements in accordance with generally accepted accounting principles to
comply with the Purchaser’s legal financial reporting obligations to the Securities and Exchange
Commission and other users of Purchaser’s audited financial statements. Such information shall not
be distributed individually to any other third party nor used for any other purposes. Financial
information provided will be consolidated with other information from multiple entities and will
not be identified in any of Purchaser’s public financial reports on an individual or specific
attribution basis. The information will be collected, controlled and kept confidential by the
Purchaser’s Chief Accounting Officer, or his designee, and will not be shared or distributed to the
Purchaser’s operations personnel in any form, oral or written.

     16. ASSIGNMENT; SURVIVAL. Seller may not assign this Agreement to any party other
than affiliated entities controlled by Seller without the consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed. Purchaser may not assign this Agreement to
any party other than affiliated entities controlled by Purchaser without the consent of Seller,
which consent shall not be unreasonably withheld, conditioned or delayed. Prior to satisfaction of
the conditions described in Section 5, above, sale of a majority of membership interests in Seller,
or a sale of membership interests causing a change in decision-making authority for the Seller,
shall be deemed an assignment for the purposes of this provision. The Agreement shall be binding
upon the parties hereto and each of their respective heirs, executors, administrators, successors
and assigns. Unless otherwise expressly provided, the provisions hereof as to any particular
Building Pad shall survive the execution and delivery of the applicable deed(s) executed hereunder
for a period of eighteen (18) months and thereafter shall expire and be of no further force and
effect.

     17. RULE AGAINST PERPETUITIES. Solely for the purpose of avoiding the rule
against perpetuities, and not as a modification to any provisions of this Agreement, all
obligations of the parties under this Agreement shall be fully performed no later than twenty-one
(21) years from the Effective Date.

     18. FORCE MAJEURE. In the event that either party hereto shall be delayed or hindered
in or prevented from the performance of any act required hereunder by reason of labor difficulties,
inability to procure materials, restrictive governmental laws or regulations, insurrection, war,
acts of God, acts of terrorism, or other reason of like nature not the fault of the party delayed
in performing work or doing acts required under the terms of this Agreement, specifically excluding

22

 

moratorium (except for purposes of the time periods set forth in Section 5(f), above), then
performance of such act shall be excused for the period of the delay, and thereafter the period for
the performance of any such act shall be extended for the lesser of (i) a period equivalent to the
period of such delay, or (ii) eleven (11) months. If upon the expiration of the extension period
the required performance remains unperformed by Seller, Purchaser may either postpone said
performance pursuant to Paragraph 4 and forthwith continue to settle on Units as provided herein,
or Purchaser may at its option declare this Agreement terminated and in such event the Deposit
shall be returned to Purchaser and there shall be no further liability on the part of either party
to the other.

     19. EFFECTIVE DATE. This Agreement shall become effective on the date last signed
(“Effective Date”). In addition, this Agreement, and any waiver or modification hereto, will only
be effective if signed by the Area President of Purchaser and at least two (2) other officers of
Purchaser.

[SIGNATURE PAGE FOLLOWS]

23

 

     WITNESS, the following signatures and seals.

	 	 	 	 	 	 	 
	 	 	 	 	SELLER:
	 
	 	 	 	 	 	 
	WITNESS:	 	 	 	HM ACQUISITION GROUP LLC
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Peter C. Minshall
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Peter C. Minshall
	 

	 	 	 	Title:
	 	CEO
	 

	 	 	 	Date:
	 	4/10/06
	 
	 	 	 	 	 	 
	 	 	 	 	PURCHASER:
	 
	 	 	 	 	 	 
	WITNESS:	 	 	 	NVR, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Rainer Altmann
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Rainer Altmann
	 

	 	 	 	Title:
	 	Area President
	 

	 	 	 	Date:
	 	03/23/06
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Andrew C. Holzwarth
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Andrew C. Holzwarth
	 

	 	 	 	Title:
	 	Vice President & Division Manager
	 

	 	 	 	Date:
	 	3/20/06
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ L. Alan Shearer
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	L. Alan Shearer
	 

	 	 	 	Title:
	 	Senior Vice President, Land
	 

	 	 	 	Date:
	 	3/22/06

24

 

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	 	)
	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	) ss:	 	 
	COUNTY OF	 	 	 	)	 	 
	 

	 	 	 	 	 	 	 	 

     I HEREBY CERTIFY that on the___day of                    , 2006, before the
subscriber, a Notary Public in and for the above jurisdiction, personally appeared
                                        , who has satisfactorily been proven to be the person whose name is subscribed to
the within instrument, who acknowledged himself to be the                                        of HM ACQUISITION GROUP
LLC and that he, being authorized so to do, executed the foregoing instrument for the purposes
therein contained by signing the name of the limited liability company by himself.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.

	 	 	 
	 

	 	 
	 

	 	Notary Public

My Commission Expires:                                         

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	 	)
	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	) ss:	 	 
	COUNTY OF

	 	 	 	 	 	)	 	 
	 

	 	 	 	 	 	 	 	 

     I HEREBY CERTIFY that on the___day of                    , 2006, before the
subscriber, a Notary Public in and for the above jurisdiction, personally appeared Rainer Altmann,
who has satisfactorily been proven to be the person whose name is subscribed to the within
instrument, who acknowledged himself to be the Area President of NVR, INC., a Virginia corporation
and that he, being authorized so to do, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation.

     GIVEN, my hand and official seal this___day of                                          , 2006.

	 	 	 
	 

	 	 
	 

	 	Notary Public

My Commission Expires:                                        

25

 

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	 	)
	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	) ss:	 	 
	COUNTY OF	 	 	 	)	 	 
	 

	 	 	 	 	 	 	 	 

     I HEREBY CERTIFY that on the___day of                    , 2006, before the
subscriber, a Notary Public in and for the above jurisdiction, personally appeared Andrew C.
Holzwarth, who has satisfactorily been proven to be the person whose name is subscribed to the
within instrument, who acknowledged himself to be the Vice President & Division Manager of NVR,
INC., a Virginia corporation and that he, being authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the corporation.

     GIVEN, my hand and official seal this___day of                                         , 2006.

	 	 	 
	 

	 	 
	 

	 	Notary Public

My Commission Expires:                                        

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	 	)
	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	) ss:	 	 
	COUNTY OF	 	 	 	)	 	 
	 

	 	 	 	 	 	 	 	 

     I HEREBY CERTIFY that on the___day of                     , 2006, before the
subscriber, a Notary Public in and for the above jurisdiction, personally appeared L. Alan Shearer,
who has satisfactorily been proven to be the person whose name is subscribed to the within
instrument, who acknowledged himself to be the Senior Vice President, Land of NVR, INC., a Virginia
corporation and that he, being authorized so to do, executed the foregoing instrument for the
purposes therein contained by signing the name of the corporation.

     GIVEN, my hand and official seal this___day of                                          , 2006.

	 	 	 
	 

	 	 
	 

	 	Notary Public

My Commission Expires:                                         

26

 

LIST OF EXHIBITS

	 	 	 
	A-1.

	 	Legal Description of the Property
	 
	 	 
	A-2.

	 	Record Plat(s)
	 
	 	 
	A-3.

	 	Site Plan
	 
	 	 
	B.

	 	Phase I Environmental Study
	 
	 	 
	C.

	 	Escrow Agreement
	 
	 	 
	D.

	 	Building Location Plan
	 
	 	 
	E.

	 	Purchaser/Seller Responsibility Schedule
	 
	 	 
	F-1.

	 	Building Pad Inspection Report
	 
	 	 
	F-2.

	 	Building Pad Completion Report
	 
	 	 
	G.

	 	Elevation Drawings

27exv10w45

 

Exhibit 10.45

AGREEMENT OF PURCHASE AND SALE

     
ARTICLE 1:   PROPERTY/PURCHASE PRICE

	 	 	 	 	 	 	 
	1.1	 	Certain Basic Terms.	 	 
	 
	 	 	 	 	 	 
	(a)	 	Purchaser and Notice
Address:	 	With a copy to:

			
	Asset Capital Partners, L.P.
	 	Kennerly Lamishaw & Rossi LLP
	Attn: Blair Fernau
	 	Attn: Howard Parelskin
	7315 Wisconsin Avenue, Suite
	 	707 Wilshire Boulevard, Suite 1400
	Bethesda, MD 20816
	 	Los Angeles, CA 90017
	Telephone: 301/656-2333
	 	Telephone: 213/426-2075
	Facsimile: 301/656-1960
	 	Facsimile: 213/312-1266
	E-mail:    bfernau@assetcapitalcorp.com
	 	E-mail:    howardparelskin@klrfirm.com

	 	 	 	 	 	 	 
	(b)
	 	Seller and Notice
Address:	 	With a copy to:

									
	C-9813 and B-9813 Godwin Drive LLC
	 	 	 	REMAX Realty Services
	Attn:
	 	Carl and Elizabeth Richmond	 	 	 	Attn:	 	Dan McGlynn
	5123 Edgemoor Lane
	 	 	 	4825 Bethesda Avenue, Suite 200
	Bethesda, MD 20814
	 	 	 	Bethesda, MD 20814
	Telephone: 301/656-4651	 	 	 	Telephone: 301/347-4125
	 	 	 	 	Facsimile: 301/652-4444
	 	 	 	 	E-mail: danmcglynn@mris.com

	 	 	 	 	 	 	 
	(c)
	 	Title Company:	 	Escrow Agent:

									
	Chicago Title Insurance Company	 	 	 	Chicago Title Insurance Company
	Attn: Dianne Boyle	 	 	 	Attn: Dianne Boyle
	1129 20th Street, NW	 	 	 	1129 20th Street, NW
	Washington, D.C. 20036	 	 	 	Washington, D.C. 20036
	Telephone: 202/263-4745	 	 	 	Telephone: 202/263-4745
	Facsimile: 202/955-5769	 	 	 	Facsimile: 202/955-5769
	boyled@cft.com	 	 	 	boyled@cft.com

	 	 	 	 	 
	(c)

	 	Date of this

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

	 	Purchase 
Price:
	 	$6,250,000.00 
	 
	 	 	 	 
	(e)

	 	Earnest
 Money:
	 	$75,000.00 initial deposit with an additional
$175,000.00 to be deposited following the completion of
the due-diligence period for a total of $250,000.00,
together with interest thereon, and all other amounts
designated as “Earnest Money” hereunder.
	 
	 	 	 	 
	(f)

	 	Due Diligence

Period:
	 	The period ending 30 days after the Date of this
Agreement.
	 
	 	 	 	 
	(g)

	 	Closing Date:
	 	As designated by the Purchaser upon not less than 5
business days’ prior notice, but no later than 30 days
after the Due Diligence Period.
	 
	 	 	 	 
	(h)

	 	Broker:	 	CBRE, Inc. and RE/MAX Realty Services

 

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

     (a) The “Real Property,” being the land described
in Exhibit A attached hereto, together with (i) all improvements located thereon
(“Improvements”), and (ii) all and singular the rights, easements, tenements, and
appurtenances thereon.

     (b) The landlord’s interest in the “Leases”, being all
leases, rental agreements and other agreements permitting occupancy of the Improvements,
including leases which may be made by Seller after the date hereof and prior to Closing as
permitted by this Agreement.

     (c) The “Tangible Personal Property,” being all
equipment, machinery, furniture, furnishings, supplies and other tangible personal property
owned by Seller, and Seller’s interest and corresponding obligation in any such property
leased by Seller, now or hereafter located in and used in connection with the operation,
ownership or management of the Real Property.

     (d) The “Intangible Personal Property,” being all
intangible personal property in the Sellers' possession related to the Real Property and the Improvements, including,
without limitation: all trade names and trade marks associated with the Real Property and
the Improvements; the plans and specifications and other architectural and engineering
drawings for the Improvements; warranties and guaranties; contract rights related to the
construction, operation, or ownership of the Real Property (but only to the extent Seller’s
obligations thereunder are expressly assumed by Purchaser pursuant to this Agreement);
governmental permits, approvals and licenses; tenant lists and correspondence; all records
and promotional materials relating to the Property; and telephone exchange numbers.

          1.3 Earnest Money. Within 3 business days after receipt of a
fully executed copy of this Agreement, Purchaser shall deposit the Earnest Money with the Escrow
Agent. The Earnest Money shall be applied to the Purchase Price at Closing. If this Agreement
terminates pursuant to any express right of Purchaser or Seller to terminate this Agreement other
than as a result of Purchaser’s default, the Earnest Money shall be refunded to Purchaser
immediately upon request, and all further rights and obligations of the parties under this
Agreement shall terminate. The Earnest Money shall be held and disbursed by the Escrow Agent
pursuant to Article 9 of this Agreement.

ARTICLE 2: INSPECTION

          2.1 Seller’s Delivery of Specified Documents. To the extent
such items are in Seller’s possession or control, Seller shall provide to Purchaser the following
(the “Property Information”) within 5 business days after the Date of this Agreement:

     (a) Rent Roll. A current rent roll and delinquency
report (“Rent Roll”) for the Property;

     (b) Leases. Copies of all Leases in effect as of the
Date of this Agreement, and any guarantees or other assurances related thereto;

     (c) Financial Information. Operating statements of the
Property for the 36 months preceding this Agreement (“Operating Statements”) for the two
calendar years preceding this Agreement and year-to-date for the current year;

     (d) Tax Statements; Tax Consultant. Copies of all ad
valorem tax statements relating to the Property for the current tax year and for the 24
months preceding the Agreement;

     (e) Loss History. The insurance loss history report for
the Property for the 24 months preceding this Agreement;

     (f) Utility Bills. Access to utility bills for the
Property for the 12 months preceding this Agreement;

     (g) Personal Property Inventory. An inventory of the
Personal Property to be conveyed to Purchaser at Closing;

     (h) Business License and Permit. Copies of all
certificates, approvals, licenses and/or permits required for the operation of the Property
(collectively, the “Permits”);

     (i) Service Contracts. A list, together with copies,
of all service, supply, equipment rental, and other contracts related to the operation of
the Property (“Service Contracts”);

     (j) Maintenance Records. Engineering and property
inspection reports and access all available maintenance work orders and other records for
the 36 months preceding this Agreement related to the Property;

2

 

     (k) List of Capital Improvements. A list of all capital
improvements known to the Seller and performed on the Property within the 36 months
preceding this Agreement;

     (l) Environmental Reports. Any environmental reports
related to the Property;

     (m) Plans and Specifications. All construction plans and
specifications relating to the original development of the Property and any major capital
repairs or tenant improvements; and

     (n) Existing Title and Survey. Copy of Seller’s
existing title insurance policy and any existing ALTA “as-built” survey of the Property.

     In addition, Seller shall make available to Purchaser at the Property all of the documents and
information in the Sellers' possession more particularly described in Exhibit G attached hereto, and any other
information regarding the Property which Purchaser shall reasonably request. Seller shall during
the pendency of this Agreement provide Purchaser with any document described above coming into
Seller’s possession or produced by Seller after the initial delivery of the Property Information.
Seller shall provide Purchaser with an updated Rent Roll, dated as of the last day of the month,
for each month during the pendency of this Agreement.

          2.2 Due Diligence. Purchaser shall have through the last
day of the Due Diligence Period in which to examine, inspect, and investigate the Property and, in
Purchaser’s sole and absolute judgment and discretion, to determine whether the Property is
acceptable to Purchaser and to obtain all necessary internal approvals. Purchaser may terminate
this Agreement for any reason by giving written notice of termination to Seller (the “Due
Diligence Termination Notice”) on or before the last day of the Due Diligence Period. If
Purchaser does not give a notice of its intent to continue this Agreement beyond the expiration of
the Due Diligence Period, Purchaser shall be deemed to have given a Due Diligence Termination
Notice, and this Agreement shall be deemed terminated. Purchaser shall have reasonable access to
the Property and Seller’s books and records for the purpose of conducting inspections, studies, or
tests reasonably required by Purchaser. During the Due Diligence Period, Purchaser will advise
Seller of those Service Contracts which Purchaser will assume and which Service Contracts are to be
terminated by Seller at Closing.

ARTICLE 3: TITLE AND SURVEY REVIEW

          3.1 Delivery of Title Commitment and Survey. Purchaser shall
cause to be prepared: (i) a current, effective commitment for title insurance (the “Title
Commitment”) issued by the Title Company, in the amount of the Purchase Price with Purchaser as
the proposed insured, and accompanied by true, complete, and legible copies of all documents
referred to in the Title Commitment; and (ii) a current ALTA-ACSM survey of the Property (the
“Survey”). During the Due Diligence Period, Purchaser shall review title to the Property as
disclosed by the Title Commitment and the Survey. Seller will reasonably cooperate with Purchaser
in curing any objections Purchaser may have to title to the Property.

ARTICLE 4: OPERATIONS AND RISK OF LOSS

          4.1 Ongoing Operations. During the pendency of this
Agreement:

     (a) Performance under Leases and Service
Contracts. Seller shall (i) carry on its business and activities relating to and
otherwise maintain the Property substantially in the same manner as it did before the Date
of this Agreement, and (ii) shall perform its material obligations under the Leases and
Service Contracts and other agreements that may affect the Property. Without Purchaser’s
prior written consent in each instance, Seller will not amend or terminate any existing
Lease, or enter into a new Lease concerning the Property.

     (b) Listings and Other Offers. Seller will not
list the Property with any broker or otherwise solicit or make or accept any offers to sell
the Property, engage in any discussions or negotiations with any third party with respect
to the sale or other disposition of the Property, or enter into any contracts or agreements
(whether binding or not) regarding any disposition of the Property.

          4.2 Damage; Condemnation. Risk of loss or condemnation up to
and including the Closing Date shall be borne by Seller.

          4.3 Estoppel Certificates. Following the expiration of the
Due Diligence Period and prior to the Closing Date, Seller shall obtain tenant estoppel
certificates in a form to be supplied by Purchaser or its lender (“Tenant Estoppel Certificate”)
from each tenant under Leases applicable to any portion of the Property.

3

 

ARTICLE 5: CLOSING

          5.1 Closing. The consummation of the transaction contemplated
herein (“Closing”) shall occur on the Closing Date at the offices of the Escrow Agent.
Closing shall occur through an escrow with the Escrow Agent. Upon satisfaction or completion of all
closing conditions and deliveries, the parties shall direct the Escrow Agent to immediately record
and deliver the closing documents to the appropriate parties and make disbursements according to
the closing statements executed by Seller and Purchaser.

          5.2 Conditions to the Parties’ Obligations to Close. In
addition to all other conditions set forth herein, the obligation of Seller, on the one hand, and
Purchaser, on the other hand, to consummate the transactions contemplated hereunder shall be
contingent upon the following:

     (a) The other party’s representations and warranties
contained herein shall be true and correct as of the date of this Agreement and the Closing
Date;

     (b) As of the Closing Date, the other party shall have
performed its obligations hereunder and all deliveries to be made at Closing have been
tendered;

     (c) There shall exist no pending or threatened action,
suit or proceeding with respect to the other party before or by any court or administrative
agency which seeks to restrain or prohibit, or to obtain damages or a discovery order with
respect to, this Agreement or the consummation of the transactions contemplated hereby;

     (d) The obligation of Purchaser to consummate the
transactions contemplated hereunder shall also be subject to the conditions that:

     (i) Purchaser shall be satisfied that none of Seller or any of its
affiliates is listed on any Government Lists and that the sale of the Property to
Purchaser will not result in a violation of the Patriot Act, any OFAC Laws and
Regulations or any other anti-terrorism or anti-money laundering laws and
regulations, including, without limitation, the Bank Secrecy Act, as amended and
the Money Laundering Control Act of 1986, as amended. Seller shall deliver to
Purchaser upon Purchaser’s request from time to time such information requested by
Purchaser regarding the identity of Seller in order for Purchaser to comply with
the Patriot Act, the OFAC Laws and Regulations and such other anti-terrorism and
anti-money laundering laws and regulations; and

     (ii) Title Company shall be unconditionally committed to deliver to
Purchaser at Closing an Owner’s Policy of Title Insurance (the “Title
Policy”), with extended coverage and such additional endorsements as Title
Company shall have committed to provide prior to the expiration of the Due
Diligence Period, issued by the Title Company as of the date and time of the
recording of the Deed, in the amount of the Purchase Price, insuring Purchaser as
owner of good, marketable and indefeasible fee simple title to the Property, and
subject only to the Permitted Exceptions. Seller shall execute at Closing an
owner’s affidavit in such form as the Title Company shall reasonably require for
the issuance of the Title Policy. The term “Permitted Exceptions” shall
mean: the specific exceptions (exceptions that are not part of the promulgated
title insurance form) in the Title Commitment that the Title Company has not agreed
to insure over or remove from the Title Commitment as of the end of the Due
Diligence Period and that Seller is has not agreed to remove; 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 tenants in possession as tenants only
under the Leases without any option to purchase or acquire an interest in the
Property.

     So long as a party is not in default hereunder, if any condition to such party’s obligation to
proceed with the Closing hereunder has not been satisfied as of the Closing Date, such party may,
in its sole discretion, (i) terminate this Agreement by delivering written notice to the other
party on or before the Closing Date, in which event the Earnest Money shall be returned to
Purchaser, (ii) elect to extend the Closing until such condition is satisfied, and (iii) elect to
consummate the transaction, notwithstanding the non-satisfaction of such condition, in which event
such party shall be deemed to have waived any such condition. The failure of a condition due to the
breach of a party shall not relieve such breaching party from any liability it would otherwise have
hereunder.

          5.3 Seller’s Deliveries in Escrow. At least one business day
prior to the Closing Date, Seller shall deliver in escrow to the Escrow Agent the following:

     (a) Deed. A special warranty deed (warranting
title from Seller) in form provided for under the law of the state where the Property is
located, or otherwise in conformity with the custom in such jurisdiction and mutually
satisfactory to the parties, executed and acknowledged by Seller, conveying to Purchaser
good, indefeasible and marketable fee simple title to the Real Property, subject only to
the Permitted Exceptions (the “Deed”);

     (b) Bill of Sale and Assignment of Leases and
Contracts. A Bill of Sale and Assignment of Leases and Contracts in the form of
Exhibit D attached hereto (the “Assignment”),

4

 

executed and acknowledged by Seller, vesting in Purchaser good title to the property
described therein free of any claims, except for the Permitted Exceptions to the extent
applicable;

     (c) State Law Disclosures. Such disclosures and
reports as are required by applicable state and local law in connection with the conveyance
of real property;

     (d) FIRPTA. A Foreign Investment in Real
Property Tax Act affidavit executed by Seller;

     (e) Certificate of Representations and
Warranties. A certificate, executed by Seller, reaffirming and updating to the Closing
Date the representations and warranties given by Seller under Article 7, which certificate
will include an updated Rent Roll, list of Service Contracts, and Operating Statements;

     (f) Contract Terminations. Written evidence of
the termination of all leasing and management agreements affecting the Property, as well as
any Service Contracts which Purchaser did not agree to assume during the Due Diligence
Period;

     (g) Estoppel Certificate. The Estoppel
Certificate(s), which shall be in a form acceptable to Purchaser with no adverse disclosure
therein.

     (h) Authority. Evidence of the existence,
organization and authority of Seller and of the authority of the persons executing
documents on behalf of Seller reasonably satisfactory to the Escrow Agent and the Title
Company; and

     (i) Additional Documents. Any additional
documents that Purchaser, Escrow Agent or the Title Company may reasonably require for the
proper consummation of the transaction contemplated by this Agreement.

          5.4 Purchaser’s Deliveries in Escrow. Except as set forth
below, at least one business day prior to the Closing Date, Purchaser shall deliver in escrow to
the Escrow Agent the following:

     (a) Purchase Price. On or before the Closing
Date, the Purchase Price, less the Earnest Money that is applied to the Purchase Price,
plus or minus applicable prorations and adjustments;

     (b) Bill of Sale and Assignment of Leases and
Contracts. The Assignment, executed by Purchaser;

     (c) State Law Disclosures. Such disclosures and
reports as are required by applicable state and local law in connection with the conveyance
of real property; and

     (d) Additional Documents. Any additional
documents that Seller, Escrow Agent or the Title Company may reasonably require for the
proper consummation of the transaction contemplated by this Agreement.

          5.5 Closing Statements. At least one business day prior to
the Closing Date, Seller and Purchaser shall deposit with the Escrow Agent executed closing
statements consistent with this Agreement in the form required by the Escrow Agent.

          5.6 Possession. Seller shall deliver possession of the
Property to Purchaser at the Closing subject only to the Permitted Exceptions.

          5.7 Delivery of Books and Records. Immediately after the
Closing, Seller shall deliver to Purchaser’s property manager at the Property: the original Leases;
copies or originals of all books and records of account, contracts, copies of correspondence with
tenants and suppliers, receipts for deposits, unpaid bills and other papers or documents which
pertain to the Property; all advertising materials, booklets, keys and other items, if any, used in
the operation of the Property; an electronic version of all data maintained by Seller regarding
each of the Leases, each of the tenants under the Leases, correspondence and working files and
other books and records relating to the operation and management of the Property; and, if in
Seller’s possession or control, the original “as-built” plans and specifications and all other
available plans and specifications.

          5.8 Notice to Tenants. Seller and Purchaser shall deliver to
each tenant immediately after the Closing a notice regarding the sale in substantially the form
Exhibit E attached hereto, or such other form as may be required by applicable state law.

5

 

ARTICLE 6: PRORATIONS

          6.1 Prorations. The items in this Paragraph 6.1 shall
be prorated between Seller and Purchaser as of the close of the day immediately preceding the
Closing Date, the Closing Date being a day of income and expense to Purchaser:

     (a) Taxes and Assessments. Purchaser shall
receive a credit for any accrued but unpaid general real estate and personal property taxes
and assessments (including without limitation any assessments imposed by private covenant,
“Taxes”) applicable to any period before the Closing Date, even if such Taxes are
not yet due and payable. If the amount of any Taxes has not been determined as of Closing,
such credit shall be based on 105 percent of the most recent ascertainable Taxes and shall
be reprorated upon issuance of the final tax bill. Purchaser shall receive a credit for
any special assessments which are levied or charged against the Property, only if due and
payable.

     (b) Collected Rent. All collected rent and other
income, including base rent, additional rent and other charges payable under Leases in
effect on the Closing Date. Seller shall be charged and Purchaser credited with any
rentals collected by Seller before Closing but applicable to any period of time after
Closing. Uncollected rent and other income shall not be prorated. If Purchaser collects
delinquencies after Closing, Purchaser shall apply such rent to the obligations owing
Purchaser for its period of ownership and to costs of collection, remitting the balance, if
any, to Seller. Purchaser shall bill and attempt to collect such delinquent rent in the
ordinary course of business, but shall not be obligated to engage a collection agency or
take legal action to collect any delinquencies. Seller shall not have the right to seek
collection of any rents delinquent for any period prior to the Closing unless the tenant
has vacated the premises under the Lease before the Closing Date and the Lease is not
assigned to Purchaser.

     (c) Utilities. Utilities, including water,
sewer, electric, and gas, based upon the last reading of meters prior to the Closing, and
common expenses associated with operation of the Property. Seller shall endeavor to obtain
meter readings on the day before the Closing Date, and if such readings are obtained, there
shall be no proration of such items. Seller shall pay at Closing the bills therefor for
the period to the day preceding the Closing, and Purchaser shall pay the bills therefor for
the period subsequent thereto. If the utility company or vendor will not issue separate
bills, Purchaser will receive a credit against the Purchase Price for Seller’s portion and
will pay the entire bill prior to delinquency after Closing. If Seller has paid any
utilities no more than 30 days in advance in the ordinary course of business, then
Purchaser shall be charged its portion of such payment at Closing.

     (d) Fees and Charges under Service Contracts.
Fees and charges under such of the Service Contracts as are being assigned to and assumed
by Purchaser at the Closing, on the basis of the periods to which such Service Contracts
relate.

          6.2 Final Adjustment After Closing. In the event that final
bills are not available or cannot be issued prior to Closing for any item being prorated under
Paragraph 6.1, then Purchaser and Seller agree to allocate such items on a fair and
equitable basis as soon as such bills are available, final adjustment to be made as soon as
reasonably possible after the Closing. Payments in connection with the final adjustment shall be
due within 30 days of written notice.

          6.3 Tenant Deposits. All tenant and other security deposits
(and interest thereon if required by law or contract to be earned thereon) shall be transferred or
credited to Purchaser at Closing. As of the Closing, Purchaser shall assume Seller’s obligations
related to tenant security deposits, but only to the extent they are properly credited and
transferred to Purchaser.

          6.4 Utility Deposits. Seller shall receive a credit for the
amount of deposits, if any, with utility companies that are transferable and that are assigned to
Purchaser at the Closing.

          6.5 Title and Survey Costs. The cost of the Survey, including
any revisions necessary to make the Survey conform to the requirements of this Agreement, shall be
paid by Purchaser. The premium for the Title Policy shall be paid by Seller. Fees due Escrow
Agent shall be shared equally by Purchaser and Seller.

          6.6 Sales, Transfer, and Documentary Taxes. Seller and
Purchaser shall share all sales, gross receipts, compensating, documentary, excise, transfer, deed
or similar taxes and fees imposed in connection with this transaction under applicable state or
local law in accordance with local custom in the state in which the Property is located.

          Notwithstanding the foregoing, Seller shall be responsible for Grantor’s Tax and deed
preparation costs and Purchaser shall be responsible for all other transfer and recording fees.

          6.7 Wages. Seller shall pay the wages, and the employment
taxes and fringe benefits applicable thereto, payable to employees of Seller as of their discharge
on the Closing Date.

6

 

          6.8 Commissions. Seller and Purchaser represent and warrant
each to the other that they have not dealt with any real estate broker, sales person or finder in
connection with this transaction other than Broker. If this transaction is closed, Seller shall
pay Broker in accordance with their separate agreement. Broker is an independent contractor and is
not authorized to make any agreement or representation on behalf of either party. Except as
expressly set forth above, in the event of any claim for broker’s or finder’s fees or commissions
in connection with the negotiation, execution or consummation of this Agreement or the transactions
contemplated hereby, each party shall indemnify and hold harmless the other party from and against
any such claim based upon any statement, representation or agreement of such party.

          6.9 Seller’s Obligations. Other than those obligations of
Seller expressly assumed by Purchaser hereunder or expressly agreed to in writing by Purchaser,
Seller shall pay and discharge any and all liabilities of each and every kind arising out of or by
virtue of the conduct of its business before and as of the Closing Date on or related to the
Property.

ARTICLE 7:  REPRESENTATIONS AND WARRANTIES

          7.1 Seller’s Representations and Warranties. As a material
inducement to Purchaser to execute this Agreement and consummate this transaction, Seller
represents and warrants to Purchaser that:

     (a) Organization and Authority. Seller has been
duly organized, is validly existing, and is in good standing as a limited liability company
in its state of formation. Seller is in good standing and is qualified to do business in
the state where the Property is located. Seller has the full right and authority and has
obtained any and all consents required to enter into this Agreement and to consummate or
cause to be consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Seller at the Closing will be, authorized and
properly executed and constitutes, or will constitute, as appropriate, the valid and
binding obligation of Seller, enforceable in accordance with their terms.

     (b) Conflicts and Pending Actions or Proceedings.
There is no agreement to which Seller is a party or, to Seller’s knowledge, binding on
Seller which is in conflict with this Agreement. There is no action or proceeding pending
or, to Seller’s knowledge, threatened against Seller or relating to the Property, which
challenges or impairs Seller’s ability to execute or perform its obligations under this
Agreement.

     (c) Rent Roll. All information set forth in any
Rent Roll delivered to Purchaser shall be true, correct, and complete in all material
respects as of its date. Except as shown on the Rent Roll, no tenant under any Lease is
entitled to any concession or allowance, nor has any tenant paid rent more than for the
current month. There are no leasing or other commissions due, nor will any become due, in
connection with any existing Lease, and no understanding or agreement with any party exists
as to payment of any leasing commissions or fees regarding future leases or as to the
procuring of tenants. No person is entitled to occupy all or any portion of the Property
except as reflected in the Leases and the Rent Roll, and no person has any option, right of
first refusal or other right to acquire title to the Property or any interest therein other
than Purchaser.

     (d) Leases. The Leases and copies of Leases to
be delivered to Purchaser pursuant to this Agreement will be true, correct, and complete as
of the date of its delivery and as of the Closing Date, and are accurately reflected on the
Rent Roll. To Seller’s knowledge, no tenants have asserted nor are there any defenses or
offsets to rent accruing after the Closing Date and no default or breach exists on the part
of any tenant. Seller has not received any notice of any default or breach on the part of
the landlord under any Lease, nor, to the best of Seller’s knowledge, does there exist any
such default or breach on the part of the landlord. Neither Seller nor, to Seller’s
knowledge, any other party is in default under any Lease.

     (e) Service Contracts. The list and copies of
Service Contracts to be delivered to Purchaser pursuant to this Agreement will be true,
correct, and complete as of the date of its delivery and as of the Closing Date. Neither
Seller nor, to Seller’s knowledge, any other party is in default under any Service
Contract.

     (f) Operating Statements. The Operating
Statements to be delivered to Purchaser pursuant to this Agreement will show all items of
income and expense (operating and capital) incurred in connection with Seller’s ownership,
operation, and management of the Property for the periods indicated and will be true,
correct, and complete in all material respects, and represent the financial information on
which Seller has relied in its operation, management and ownership of the Property.

     (g) Notice of Violations or Defects. Seller has
received no written notice from any governmental agency and has no knowledge that the
Property or the use thereof violates any governmental law or regulation, nor has Seller
received any notice from the property owners’ association

7

 

under the CC&Rs or acquired knowledge regarding any violation of any covenants or
restrictions encumbering the Property or from any insurance company or underwriter of any
defect that would materially adversely affect the insurability of the Property or cause an
increase in insurance premiums.

     (h) Environmental. Seller has no knowledge and
has received no written notice of any violation of Environmental Laws related to the
Property or the presence or release of Hazardous Materials on or from the Property except
as disclosed in the Property Information. To the best of Seller’s knowledge, Seller has
not manufactured, introduced, released or discharged from or onto the Property any
Hazardous Materials or any toxic wastes, substances or materials (including, without
limitation, asbestos), and Seller has not used the Property or any part thereof for the
generation, treatment, storage, handling or disposal of any Hazardous Materials, in
violation of any Environmental Laws. The term “Environmental Laws” includes
without limitation the Resource Conservation and Recovery Act and the Comprehensive
Environmental Response Compensation and Liability Act and other federal laws governing the
environment as in effect on the date of this Agreement together with their implementing
regulations and guidelines as of the date of this Agreement, and all state, regional,
county, municipal and other local laws, regulations and ordinances that are equivalent or
similar to the federal laws recited above or that purport to regulate Hazardous Materials.
The term “Hazardous Materials” includes petroleum, including crude oil or any
fraction thereof, natural gas, natural gas liquids, liquified natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas or such synthetic gas), asbestos and asbestos
containing materials and any substance, material waste, pollutant or contaminant listed or
defined as hazardous or toxic under any Environmental Law. To Seller’s knowledge, there
are not now, nor have there been, any above-ground or underground storage tanks located on
the Property.

     (i) Property Information. To Seller’s
knowledge, the Property Information delivered and made available to Purchaser is true,
correct and complete in all material respects.

     (j) Anti-Terrorism/Anti-Money Laundering.
Neither Seller nor any of its affiliates (i) is listed on any Government Lists, (ii) has
been determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13244 (September 23, 2001) or in any enabling or
implementing legislation or other Presidential Executive Orders in respect thereof, (iii)
is a person or entity who has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude or for any violation of the Patriot Act, or
(iv) is currently under investigation by any governmental authority for alleged criminal
activity. Seller has no reason to believe that this transaction, including, without
limitation, the source of its funds, would result in a violation by Purchaser or Seller of
the Patriot Act, OFAC Laws and Regulations, or any other anti-terrorism or anti-money
laundering laws or regulations, including, without limitation, the Bank Secrecy Act, as
amended, or the Money Laundering Control Act of 1986, as amended.

          7.2 Purchaser’s Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this transaction, Purchaser
represents and warrants to Seller that:

     (a) Organization and Authority. Purchaser has
been duly organized and is validly existing as a limited partnership in its state of
formation and will be qualified to do business in the state in which the Real Property is
located on the Closing Date if required under applicable law. Subject only to obtaining
certain internal approvals on or before the expiration of the Due Diligence Period,
Purchaser has the full right and authority and has obtained any and all consents required
to enter into this Agreement and to consummate or cause to be consummated the transactions
contemplated hereby. This Agreement has been, and all of the documents to be delivered by
Purchaser at the Closing will be, authorized and properly executed and constitutes, or will
constitute, as appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.

     (b) Conflicts and Pending Action. There is no
agreement to which Purchaser is a party or to Purchaser’s knowledge binding on Purchaser
which is in conflict with this Agreement. There is no action or proceeding pending or, to
Purchaser’s knowledge, threatened against Purchaser which challenges or impairs Purchaser’s
ability to execute or perform its obligations under this Agreement.

     (c) Anti-Terrorism/Anti-Money Laundering.
Neither Purchaser nor any of its affiliates (i) is listed on any Government Lists, (ii) has
been determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13244 (September 23, 2001) or in any enabling or
implementing legislation or other Presidential Executive Orders in respect thereof, (iii)
is a person or entity who has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude or for any violation of the Patriot Act, or
(iv) is currently under investigation by any governmental authority for alleged criminal
activity. Purchaser has no reason to believe that this transaction, including, without
limitation, the source of its funds, would result in a violation by Purchaser or Seller of
the Patriot Act, OFAC Laws and Regulations, or any other anti-terrorism or anti-money
laundering laws or

8

 

regulations, including, without limitation, the Bank Secrecy Act, as amended, or the
Money Laundering Control Act of 1986, as amended.

          7.3 Survival of Representations and Warranties. The
representations and warranties set forth in this Article 7 are made as of the date of this
Agreement and are remade as of the Closing Date and shall not be deemed to be merged into or waived
by the instruments of Closing, but shall survive the Closing for a period of 12 months. Seller and
Purchaser shall have the right to bring an action thereon only if Seller or Purchaser, as the case
may be, has given the other party written notice of the circumstances giving rise to the alleged
breach within such 12 month period. Each party agrees to defend and indemnify the other against
any claim, liability, damage or expense asserted against or suffered by such other party arising
out of the breach or inaccuracy of any such representation or warranty.

ARTICLE 8:  DEFAULT AND REMEDIES

          8.1 Seller’s Default. If Seller defaults in its obligation to
sell and convey the Property to Purchaser pursuant to this Agreement, Purchaser’s sole remedy shall
be to elect one of the following: (a) to terminate this Agreement, in which event Purchaser shall
be entitled to the return by the Escrow Agent to Purchaser of the Earnest Money and recovery of
Purchaser’s actual out-of-pocket expenses in entering into this Agreement and performing its
obligations hereunder, or (b) to bring a suit for specific performance provided that any suit for
specific performance must be brought within 60 days of Seller’s default, to the extent permitted by
law, Purchaser hereby waives the right to bring suit at any later date; provided, however, that if
specific performance is not a remedy available to Purchaser due to the willful or intentional act
of Seller (such as the prior conveyance of the Property to third party in violation of this
Agreement), then in lieu of specific performance, Purchaser shall have the right to recover to
pursue any and all available remedies, at law or in equity.

          8.2 Purchaser’s Default. In the event that Purchaser fails,
without legal excuse, to complete the purchase of the Property, the Earnest Money deposit made by
Purchaser shall be forfeited to the Seller as the sole and exclusive remedy available to the Seller
for such failure. The parties acknowledge that Seller’s actual damages in the event of a default
by Purchaser under this Agreement will be difficult to ascertain, and that such liquidated damages
represent the parties’ best estimate of such damages.

ARTICLE 9: EARNEST MONEY PROVISIONS

          9.1 Investment and Use of Funds. The Escrow Agent shall
invest the Earnest Money in a government insured interest-bearing account satisfactory to Purchaser
at an institution having assets of not less than $125,000,000, shall not commingle the Earnest
Money with any funds of the Escrow Agent or others, and shall promptly provide Purchaser and Seller
with confirmation of the investments made. If the Closing under this Agreement occurs, the Escrow
Agent shall deliver the Earnest Money to, or upon the instructions of, Purchaser on the Closing
Date. Provided such supplemental escrow instructions are not in conflict with this Agreement as it
may be amended in writing from time to time, Seller and Purchaser agree to execute such
supplemental escrow instructions as may be appropriate to enable Escrow Agent to comply with the
terms of this Agreement.

          9.2 Termination before Expiration of Due Diligence Period.
The Purchaser shall notify the Escrow Agent of the date that the Due Diligence Period ends promptly
after such date is established under this Agreement, and Escrow Agent may rely upon such notice.
If Purchaser elects to terminate the Purchase Agreement pursuant to Paragraph 2.2, Escrow
Agent shall pay the entire Earnest Money to Purchaser one business day following receipt of the Due
Diligence Termination Notice from Purchaser (as long as the current investment can be liquidated in
one day) and this Agreement shall thereupon terminate, in which event Purchaser agrees to return to
Seller the Property Information. No notice to Escrow Agent from Seller shall be required for the
release of the Earnest Money to Purchaser by Escrow Agent. The Earnest Money shall be released and
delivered to Purchaser from Escrow Agent upon Escrow Agent’s receipt of the Due Diligence
Termination Notice, despite any objection or potential objection by Seller. Seller agrees it shall
have no right to bring any action against Escrow Agent which would have the effect of delaying,
preventing, or in any way interrupting Escrow Agent’s delivery of the Earnest Money to Purchaser
pursuant to this paragraph, any remedy of Seller being against Purchaser, not Escrow Agent.

          9.3 Other Terminations. Upon a termination of this Agreement
other than as described in Paragraph 9.2, either party to this Agreement (the
“Terminating Party”) may give written notice to the Escrow Agent and the other party (the
“Non-Terminating Party”) of such termination and the reason for such termination. Such
request shall also constitute a request for the release of the Earnest Money to the Terminating
Party. The Non-Terminating Party shall then have five business days in which to object in writing
to the release of the Earnest Money to the Terminating Party. If the Non-Terminating Party
provides such an objection, then the Escrow Agent shall retain the Earnest Money until it receives
written instructions executed by both Seller and Purchaser as to the disposition and

9

 

disbursement of the Earnest Money, or until ordered by final court order, decree or judgment,
which is not subject to appeal, to deliver the Earnest Money to a particular party, in which event
the Earnest Money shall be delivered in accordance with such notice, instruction, order, decree or
judgment.

          9.4 Interpleader. Except as provided in Paragraph 9.2
above, Seller and Purchaser mutually agree that in the event of any controversy regarding the
Earnest Money, unless mutual written instructions are received by the Escrow Agent directing the
Earnest Money’s disposition, the Escrow Agent shall not take any action, but instead shall await
the disposition of any proceeding relating to the Earnest Money or, at the Escrow Agent’s option,
the Escrow Agent may interplead all parties and deposit the Earnest Money with a court of competent
jurisdiction in which event the Escrow Agent may recover all of its court costs and reasonable
attorneys’ fees. Seller or Purchaser, whichever loses in any such interpleader action, shall be
solely obligated to pay such costs and fees of the Escrow Agent, as well as the reasonable
attorneys’ fees of the prevailing party in accordance with the other provisions of this Agreement.

          9.5 Liability of Escrow Agent. The parties acknowledge that
the Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that
the Escrow Agent shall not be deemed to be the agent of either of the parties, and that the Escrow
Agent shall not be liable to either of the parties for any action or omission on its part taken or
made in good faith, and not in disregard of this Agreement, but shall be liable for its negligent
acts and for any loss, cost or expense incurred by Seller or Purchaser resulting from the Escrow
Agent’s mistake of law respecting the Escrow Agent’s scope or nature of its duties. Seller and
Purchaser shall jointly and severally indemnify and hold the Escrow Agent harmless from and against
all costs, claims and expenses, including reasonable attorneys’ fees, incurred in connection with
the performance of the Escrow Agent’s duties hereunder, except with respect to actions or omissions
taken or made by the Escrow Agent in bad faith, in disregard of this Agreement or involving
negligence on the part of the Escrow Agent.

          9.6 Escrow Fee. Except as expressly provided herein to the
contrary, the escrow fee, if any, charged by the Escrow Agent for holding the Earnest Money or
conducting the Closing shall be shared equally by Seller and Purchaser.

ARTICLE 10:  MISCELLANEOUS

          10.1 Parties Bound. Neither party may assign this Agreement
without the prior written consent of the other, and any such prohibited assignment shall be void;
provided, however, that Purchaser may assign this Agreement without Seller’s consent to an
Affiliate or to effect an Exchange pursuant to Paragraph 10.15 hereof. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the respective legal
representatives, successors, assigns, heirs, and devisees of the parties. For the purposes of this
paragraph, the term “Affiliate” means (a) an entity that directly or indirectly controls,
is controlled by or is under common control with the Purchaser, or (b) an entity at least a
majority of whose economic interest is owned by Purchaser; and the term “control” means the power
to direct the management of such entity through voting rights, ownership or contractual
obligations.

          10.2 Invalidity and Waiver. If any portion of this Agreement is
held invalid or inoperative, then so far as is reasonable and possible the remainder of this
Agreement shall be deemed valid and operative, and, to the greatest extent legally possible, effect
shall be given to the intent manifested by the portion held invalid or inoperative. The failure by
either party to enforce against the other any term or provision of this Agreement shall not be
deemed to be a waiver of such party’s right to enforce against the other party or any
other such term or provision in the future.

          10.3 Governing Law. This Agreement shall, in all respects, be
governed, construed, applied, and enforced in accordance with the law of the state in which the
Real Property is located.

          10.4 Survival. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully performed at the Closing
shall survive the Closing and shall not be deemed to be merged into or waived by the instruments of
Closing.

          10.5 No Third Party Beneficiary. This Agreement is not intended
to give or confer any benefits, rights, privileges, claims, actions, or remedies to any person or
entity as a third party beneficiary, decree, or otherwise.

10

 

          10.6 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and understandings relating to
the Property. This Agreement may be amended or supplemented only by an instrument in writing
executed by the party against whom enforcement is sought.

          10.7 Time. Time is of the essence in the performance of this
Agreement.

          10.8 Confidentiality. Seller and Purchaser shall make no public
announcement or disclosure of any information related to this Agreement to outside brokers or third
parties, before or after the Closing, without the prior written specific consent of the other;
provided, however, that Seller and Purchaser may make disclosure of this Agreement to its lenders,
creditors, officers, employees and agents as necessary to perform its obligations hereunder, and
either party may disclose information which, by its nature, is a matter of public record.

          10.9 Notices. All notices required or permitted hereunder shall
be in writing and shall be served on the parties at the addresses set forth in Paragraph
1.1. Any such notices shall be either (a) sent by overnight delivery using a nationally
recognized overnight courier, in which case notice shall be deemed delivered one business day after
deposit with such courier, (b) sent by telefax, in which case notice shall be deemed delivered upon
transmission of such notice, or (c) sent by personal delivery, in which case notice shall be deemed
delivered upon receipt. A party’s address may be changed by written notice to the other party;
provided, however, that no notice of a change of address shall be effective until actual receipt of
such notice. Copies of notices are for informational purposes only, and a failure to give or
receive copies of any notice shall not be deemed a failure to give notice. Notices given by
counsel to the Purchaser shall be deemed given by Purchaser and notices given by counsel to the
Seller shall be deemed given by Seller.

          10.10 Construction. The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and agree that the normal rule of
construction — to the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.

          10.11 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event after which the
designated period of time begins to run is not to be included and the last day of the period so
computed is to be included at, unless such last day is a Saturday, Sunday or legal holiday for
national banks in the location where the Property is located, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal holiday. The last day
of any period of time described herein shall be deemed to end at 6:00 p.m. local time where the
Property is located.

          10.12 Audit Cooperation. At Purchaser’s request, at any time before
or after Closing, Seller shall provide to Purchaser’s designated independent auditor access to the
books and records of the Property, and all related information regarding the period for which
Purchaser is required to have the Property audited under the regulations of the Securities and
Exchange Commission, and Seller shall provide to such auditor a representation letter regarding the
books and records of the Property, in substantially the form of Exhibit F attached hereto,
in connection with the normal course of auditing the Property in accordance with generally accepted
auditing standards. The Purchaser agrees to indemnify and hold harmless the Seller from any claim,
damage, loss, or liability to which Seller is at any time subjected by any person who is not a
party to this Agreement as a result of Seller’s compliance with this paragraph.

          10.13 Procedure for Indemnity. The following provisions govern
actions for indemnity under this Agreement. Promptly after receipt by an indemnitee of notice of
any claim, such indemnitee will, if a claim in respect thereof is to be made against the
indemnitor, deliver to the indemnitor written notice thereof and the indemnitor shall have the
right to participate in and, if the indemnitor agrees in writing that it will be responsible for
any costs, expenses, judgments, damages, and losses incurred by the indemnitee with respect to such
claim, to assume the defense thereof, with counsel mutually satisfactory to the parties; provided,
however, that an indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnitor, if the indemnitee reasonably believes that representation of
such indemnitee by the counsel retained by the indemnitor would be inappropriate due to actual or
potential differing interests between such indemnitee and any other party represented by such
counsel in such proceeding. The failure of indemnitee to deliver written notice to the indemnitor
within a reasonable time after indemnitee receives notice of any such claim shall relieve such
indemnitor of any liability to the indemnitee under this indemnity only if and to the extent that
such failure is prejudicial to its ability to defend such action, and the omission so to deliver
written notice to the indemnitor will not relieve it of any liability that it may have to any
indemnitee other than under this indemnity. If an indemnitee settles a claim without the prior
written consent of the indemnitor, then the indemnitor shall be released from liability with
respect to such claim unless the indemnitor has unreasonably withheld such consent.

11

 

          10.14 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, and all of such
counterparts shall constitute one Agreement. To facilitate execution of this Agreement, the
parties may execute and exchange by telephone facsimile counterparts of the signature pages.

          10.15 Section 1031 Exchange. Either party may consummate the
purchase or sale (as applicable) of the Property as part of a so-called like kind exchange (an
“Exchange”) pursuant to § 1031 of the Internal Revenue Code of 1986, as amended (the
“Code”), provided that: (a) the Closing shall not be delayed or affected by reason of the
Exchange nor shall the consummation or accomplishment of an Exchange be a condition precedent or
condition subsequent to the exchanging party’s obligations under this Agreement; (b) the exchanging
party shall effect its Exchange through an assignment of this Agreement, or its rights under this
Agreement, to a qualified intermediary (c) neither party shall be required to take an assignment of
the purchase agreement for the relinquished or replacement property or be required to acquire or
hold title to any real property for purposes of consummating an Exchange desired by the other
party; and (d) the exchanging party shall pay any additional costs that would not otherwise have
been incurred by the non-exchanging party had the exchanging party not consummated the transaction
through an Exchange. Neither party shall by this Agreement or acquiescence to an Exchange desired
by the other party have its rights under this Agreement affected or diminished in any manner or be
responsible for compliance with or be deemed to have warranted to the exchanging party that its
Exchange in fact complies with § 1031 of the Code.

          10.16 Attorneys’ Fees. Should either party employ attorneys to
enforce any of the provisions hereof, the party against whom any final judgment is entered agrees
to pay the prevailing party all reasonable costs, charges, and expenses, including attorneys’ fees,
expended or incurred in connection therewith.

          10.17 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either party at Closing, each
party agrees to perform, execute and deliver, but without any obligation to incur any additional
liability or expense, on or after the Closing any further deliveries and assurances as may be
reasonably necessary to consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.

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

	 	 	 	 	 	 	 	 	 
	Date:

	 	6/13/06 	 	 	 	By:	 	/s/ Carl H. Richmond Jr. 
	
	 	 
	 	 	 		 	 
	 

	 	 	 	 	 	Name:	 	Carl H. Richmond Jr. 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	Member
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	“Seller"
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ASSET CAPITAL PARTNERS, L.P.
	 
	 	 	 	 	 	 	 	  
	Date:

	 	6/21/06 	 	 	 	By:	 	/s/ Elizabeth S. Richmond
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Elizabeth S. Richmond 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	Chief Investment Officer 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	“Purchaser"

Escrow Agent has executed this Agreement in order to confirm that the Escrow Agent has received and
shall hold the Earnest Money and the interest earned thereon, in escrow, and shall disburse the
Earnest Money, and the interest earned thereon, pursuant to the provisions of Article 9.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	CHICAGO TITLE INSURANCE COMPANY
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Dianne E. Boyle
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Dianne E. Boyle
	 

	 	 	 	 	 	 	 	 
	Date:

	 	6/22/06 	 	 	 	Title:	 	Assistant Vice President &
Commercial Counsel 
	 

	 	 
	 	 	 	 	 	 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]