Document:

exv10w1

 

Exhibit 10.1

AGREEMENT OF PURCHASE AND SALE

Article 1. — Parties.

     The parties to this Agreement are: (a) GABLES REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership, and GABLES GP, INC., a Texas corporation
(herein jointly referred to as “Seller”); (b) GABLES-TENNESSEE PROPERTIES,
L.L.C. (“GTP”), a Tennessee limited liability company, successor to
GABLES-TENNESSEE PROPERTIES, a Tennessee general partnership; and (c) AMERICA
FIRST APARTMENT INVESTORS, INC. (“Buyer”), a Maryland corporation. Unless
otherwise specified, words and phrases that are capitalized in this Agreement
are defined in Article 20 of this Agreement.

Article 2. — Property To Be Purchased.

     Seller currently owns all the membership interests in GTP, which owns an
apartment complex, developed in two phases and together known as “Gables
Hickory Hollow” located in Antioch, Davidson County, Tennessee, consisting of
the Land, the Improvements, the Tangible Personalty, the Leases, the Service
Agreements and the Other Intangible Property (herein referred to as the
“Property”). Seller intends to cause GTP to convey the Property to a newly
formed limited liability company that will be owned by Seller in the same
percentages as Seller owns GTP. To effectuate said plan, Seller shall: (a) form
a new limited liability company (the “Project LLC”) under Tennessee law, having
Seller as its only member; (b) GTP shall convey the Property to the Project
LLC; (c) the Project LLC shall have an agreed value of TWENTY NINE MILLION
SEVEN HUNDRED FIFTY THOUSAND AND NO/100 ($29,750,000.00) DOLLARS; (c)
simultaneously with the conveyance of the Property by GTP to the Project LLC,
Seller shall sell to Buyer and Buyer shall purchase from Seller, at said agreed
value, 100% of the membership interests in the Project LLC. The membership
interests in the Project LLC are herein referred to as the “Membership
Interests.”

Article 3. — Purchase Price.

     301. The Purchase Price to be paid by Buyer to Seller at Closing for the
purchase of the Membership Interests by Buyer shall be TWENTY NINE MILLION SIX
HUNDRED FIFTY THOUSAND AND NO/100 ($29,650,000.00) DOLLARS. Provided however,
if, prior to Closing, it is determined to the reasonable satisfaction of both
Seller and Buyer that the Nashville Fire Marshall will not require the
installation of a fire alarm system, the Purchase Price shall be increased by
One Hundred Thousand and No/100 Dollars ($100,000.00).

     302. Within two (2) Business Days after the Contract Date, Buyer shall
deposit with Escrow Agent good funds in the amount of THREE HUNDRED THOUSAND
AND NO/100 ($300,000.00) DOLLARS (the “Initial Deposit”). If Buyer does not
terminate this Agreement before the Due Diligence Date, on or before the first
Business Day after the Due Diligence Date, Buyer shall deposit with Escrow
Agent an additional THREE HUNDRED THOUSAND AND NO/100 ($300,000.00) DOLLARS
(the “Second Deposit”). “Earnest Money,” as used in this Agreement, shall mean
the Initial Deposit, the Second Deposit, all additional earnest money, if

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any, plus all interest earned on said funds. Escrow Agent shall promptly
deposit the Earnest Money in a short-term interest bearing account with the
Bank. All interest earned on the Earnest Money shall be added to and become a
part of the Earnest Money and shall constitute income to Buyer. Buyer
represents and warrants to Seller and Escrow Agent that Buyer’s federal tax
identification number is the one shown below Buyer’s execution of this
Agreement. Escrow Agent shall hold, administer and disburse the Earnest Money
in accordance with this Agreement. If Escrow Agent shall not otherwise be
required to disburse the Earnest Money, Escrow Agent shall pay the Earnest
Money to Seller at Closing, and Buyer shall receive a credit for the amount of
the Earnest Money against the Purchase Price. If Buyer fails or refuses to
deposit the Initial Deposit with Escrow Agent when due, Seller shall have the
right to terminate this Agreement by giving written notice of termination to
Buyer and Escrow Agent, whereupon no party shall have any further duties,
obligations or liabilities under this Agreement, except the Continuing
Obligations.

     303. Buyer shall receive a credit against the Purchase Price in an amount
equal to the sum of the unpaid principal balance plus accrued and unpaid
interest for which funds are not on deposit with the Bond Trustee to pay
interest as of the Proration Date with respect to the Bond Financing.

     304. After crediting to Buyer the Earnest Money, the amount specified in
Section 303 with respect to the Bond Financing, and the cash adjustments
provided in Article 4, the net amount of the Purchase Price, shall be paid at
Closing in good funds immediately available in Atlanta, Georgia before 2:00
p.m. on Closing Date by bank wire transfer to an account designated by Seller
at least two (2) Business Days before Closing.

Article 4. — Cash Adjustments And Closing Costs.

     401. The following items shall be prorated between GTP and the Project LLC
on a per diem basis as of the Proration Date:

          401.1 Rents for the month in which Closing occurs. At Closing, GTP shall
identify all Tenants that are in arrears in the payment of rent on Closing
Date. All rent payments (net of third party costs of collection) received by
the Project LLC after Closing from Tenants who were in arrears at Closing shall
be paid by the Project LLC to GTP to be applied towards the rents due to GTP
until all arrearages in rent have been paid. GTP shall not bring any suit or
other proceeding against any Tenant under the Leases after Closing on account
of delinquent rents without the prior written consent of the Project LLC. Buyer
assumes no obligation to collect or enforce the payment of any such moneys owed
to GTP. If the Project LLC employs an agent to collect delinquent rent after
Closing, such agent shall have the right to deduct and retain from GTP’s share
of any rent or other payments received by the Project LLC after Closing
compensation at the rate payable to such agent by the Project LLC.

          401.2 Taxes and Assessments. If Closing occurs before the amount of any of
the Taxes and Assessments have been finally determined, the prorating of such
Taxes and Assessments at Closing shall be made on the basis of the most
recently published tax rate applied to the most current valuation.

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          401.3 Utility charges payable with respect to the Property, including
water, sewer, electric, gas, telephone, trash removal, garbage removal and
cable television. The parties shall use reasonable efforts to transfer the
utility accounts as of the Proration Date. If any utility accounts are not
transferred as of the Proration Date, the parties shall jointly arrange for
said transfer as soon as practicable after Closing. GTP shall receive a credit
for the amount of any utility deposits to the extent, if any, that they are
transferred to the Project LLC.

          401.4 All charges under the Service Agreements.

          401.5 All interest and other costs that the Bond Financing requires to be
paid, including Bond Trustee fees and Bond Issuer fees.

     402. At or before Closing, GTP shall pay (or make other arrangements
acceptable to said employees) to all employees of the Property, GTP and/or
GTP’s management company, in full, an amount attributable or equal to all
vacation days, deferred compensation, sick leave, and other employee
compensation and benefits, whether or not actually accrued or earned, in whole
or in part, so that no such employee shall have any claim against Buyer for any
such compensation. GTP and Seller indemnify the Project LLC of and from any
liability arising in connection with GTP’s failure to comply with the
foregoing, which indemnity shall survive Closing and shall not be limited by
any limitation on damages or remedies set forth herein.

     403. [Intentionally Omitted]

     404. GTP shall transfer to the Project LLC, and the Project LLC shall
assume responsibility for and the benefit of, all refundable security deposits,
together with interest thereon to the extent that any law or contract requires
any interest to be paid to Tenants.

     405. Any item of income or expense required to be prorated under this
Article that for any reason is not prorated at Closing shall be prorated as
soon thereafter as practicable. If any mutual mistake, including any erroneous
mathematical calculation, is made in any proration at Closing, GTP and the
Project LLC shall, within one hundred eighty (180) days after Closing, correct
said mistake and make any payment required to produce an accurate proration.

     406. GTP shall pay the Tennessee real estate transfer tax (if applicable
with respect to any transfer of any interest in the Property or the transfer of
any Membership Interest contemplated by this Agreement), the attorneys’ fees of
Seller and GTP, and one-half of the escrow fees of the Escrow Agent. Buyer
shall pay the Mortgage Taxes, all recording costs, the costs of all surveys,
title examination fees, title insurance premiums, Buyer’s attorneys’ fees, all
expenses incurred in connection with the Bond Approvals, the Bond Opinions and
the Substitution of Credit Enhancement (excluding any attorney’s fees of Seller
in connection with any of the foregoing), and one-half of the escrow fees of
the Escrow Agent.

     407. For a period of one hundred eighty (180) days following Closing Date,
the Project LLC shall make available to GTP, and GTP shall make available to
the Project LLC and their respective employees, agents, consultants,
accountants and representatives all books and records

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maintained with respect to the Property that relate to any of the items to be
prorated or allocated under this Agreement, which books and records shall be
made available for inspection and
copying upon reasonable notice during regular business hours. Any such
inspection and copying shall be at reasonable intervals and at the inspecting
party’s sole cost and expense.

Article 5. — Closing Date And Place.

     Closing of the transaction provided for in this Agreement shall be by mail
through the Escrow Agent, at 10:00 a.m. on that date (“Scheduled Closing Date”)
that is the earliest of (a) December 15, 2004, (b) the sixtieth (60th) day
following the Due Diligence Date, or (c) such date to which both Seller and
Buyer may agree in writing. On or before the Business Day immediately preceding
Scheduled Closing Date, all documents shall be executed and delivered into
escrow, pending Closing. Notwithstanding the foregoing, if Buyer sends a
Buyer’s Notice of Title Objection pursuant to Article 6, then, if Seller so
elects, Scheduled Closing Date shall be extended to allow Seller at least ten
(10) days after receipt of Buyer’s Notice of Title Objection within which to
decide whether or not to cure or satisfy Buyer’s Title Objection.

Article 6. — Title.

     601. At Closing, GTP shall convey to the Project LLC by quitclaim deed fee

simple title in and to the Property, subject to the Permitted Title Exceptions.
Within ten (10) Business Days after the Contract Date, Buyer shall obtain and
deliver to Seller an owner’s title insurance commitment for an ALTA (1992)
Owner’s Title Insurance Policy for the benefit of the Project LLC, together
with legible copies of all documents referenced therein. If said title
insurance commitment or the Survey (as defined below) shows any title exception
or survey matter (“Buyer’s Title Objection”) that is not a Permitted Title
Exception and that is objectionable to Buyer, within ten (10) days after
receipt of the title commitment (together with copies of all documents referred
to therein) and the Survey (defined in Section 602), Buyer shall give written
notice (“Buyer’s Title Objection Notice”) thereof to GTP, and GTP shall have
the right, but no obligation (except as expressly set forth below), to cause
Buyer’s Title Objection to be cured or satisfied before or at Closing. Within
ten (10) days after GTP’s receipt of Buyer’s Title Objection Notice, GTP shall
respond in writing (“GTP’s Title Objection Response”) to Buyer’s Title
Objection and shall notify Buyer whether GTP elects to cure Buyer’s Title
Objection. If GTP fails to respond timely to Buyer’s Title Objection, GTP shall
be deemed to have elected not to cure Buyer’s Title Objection. If GTP notifies
Buyer that GTP will cure Buyer’s Title Objection, GTP shall be obligated to do
so before or at Closing; and if GTP thereafter fails to cure Buyer’s Title
Objection before or at Closing, Buyer shall have the right either (a) to
proceed with Closing and deduct from the Purchase Price the reasonable costs
reasonably incurred by Buyer to cure Buyer’s Title Objection, or (b) to receive
a return of the Earnest Money. Following Buyer’s receipt of the Earnest Money,
this Agreement shall terminate and be of no further force or effect, except for
the Continuing Obligations. If GTP notifies Buyer that GTP does not intend to
cure Buyer’s Title Objection, or if GTP is deemed to have elected not to cure
Buyer’s Title Objection, then, at the option of Buyer, evidenced by written
notice to GTP and Escrow Agent, Buyer shall have the right to elect (a) to
terminate this Agreement and to receive a refund of the Earnest Money; or (b)
to close the purchase, regardless of Buyer’s Title Objection, thereby waiving
Buyer’s Title Objection. If GTP cures or satisfies Buyer’s Title Objection
before or at Closing, then this Agreement shall remain in full force and
effect.

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     602. Within thirty (30) days after the Contract Date, Buyer shall furnish
to Seller, a current plat of survey (the “Survey”) of the Premises dated on or
subsequent to the Contract Date certified to GTP, Seller, Buyer and the Title
Company (and such other Persons or entities as Buyer may designate) by a
surveyor registered in the State, prepared in accordance with the most recent
version of the Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys (as jointly established and adopted by the American Land Title
Association and American Congress On Surveying and Mapping) for an Urban
ALTA/ACSM LAND TITLE SURVEY (as defined therein).

Article 7. — Representations, Warranties And Covenants Of Seller.

     Seller and GTP hereby represent, warrant and covenant to Buyer and to the
Project LLC that:

     701. Gables Realty Limited Partnership is a limited partnership duly
organized, validly existing, and in good standing under the laws of the State
of Delaware, Gables GP, Inc. is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Texas, and GTP is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Tennessee; (b) each of Seller and GTP will be duly
bound by the actions of the legal entities executing and delivering this
Agreement and Closing Documents on its behalf, and the individuals executing
and delivering said documents on behalf of said legal entities have all
necessary power and authority to do so; (c) each of Seller and GTP has all
necessary power and authority to execute, deliver and perform this Agreement
and Closing Documents and to complete the transactions provided for herein; (d)
neither the execution, delivery nor performance of this Agreement or any of
Closing Documents, with or without notice, the passage of time, or both, (i)
will constitute or result in a violation or breach by Seller or GTP of any
judgment, order, writ, injunction, or decree issued against or imposed on
Seller or GTP, or (ii) will result in a violation of any Legal Requirement or
Private Covenant to which Seller or GTP is a party or which otherwise affects
the Property; (e) neither GTP nor Seller is the subject of any Creditor Event;
(f) this Agreement constitutes, and Closing Documents when executed and
delivered will constitute, valid and binding legal obligations of Seller and
GTP, enforceable in accordance with their respective terms and conditions,
subject to all rules of law and principles of equity generally applicable to
the enforceability of legal obligations including bankruptcy, reorganization
and other debtor relief laws; (g) Exhibit “I” to this Agreement is a complete
and accurate, in all material respects, list (the “Rent Roll”) of all the
Leases in effect on the date of this Agreement; (h) there are no Service
Agreements other than those agreements listed on Exhibit “J” to this Agreement;
(i) to Seller’s knowledge, there are no material defaults by any party under
the Leases or the Service Agreements; (j) the operating statements supplied by
Seller and GTP to Buyer with respect to the operation of the Property,
including the year end financial statements for 2002 and 2003 and the interim
statements for the Property’s operations through June of 2004, are true,
complete and accurate in all material respects; (k) Exhibit “K” to this
Agreement is a complete and accurate, in all material respects, list of all
pending litigation relating to the Property on the date of this Agreement; and
(l) the Property has all necessary and properly functioning door closers and
smoke detectors as required by applicable fire codes.

     702. In connection with the Bond Financing:

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          702.1 The current aggregate outstanding balance of the Bonds is
$26,150,000 of principal, plus, with respect to each series of bonds included
in the Bonds, accrued (but not delinquent) interest since the most recent
interest payment date of each such series. There is no scheduled amortization
or sinking fund required in connection with any of the Bond Financing.

          702.2 Seller has supplied to Buyer certain certificates executed and
delivered by Seller’s predecessor in title to the Property, copies of which are
attached hereto as Exhibit “N”, but does not make any representations to, or
authorize reliance by, Buyer or any third parties on such certificates.

          702.3 In accordance with Section 903 below, within five (5) days after the
Contract Date, Seller shall deliver to Buyer the Delivered Bond Documents. Each
of GTP and Seller has not entered into, or consented or agreed to, and each of
GTP and Seller has no knowledge that there have occurred, any amendments,
waivers or consents in connection with the Bond Financing except as evidenced
or contained in the Delivered Bond Documents.

          702.4 Each of GTP and Seller has delivered to the Bond Issuer and the Bond
Trustee all reports and certificates required to have been submitted during the
Gables Period for the Property pursuant to the applicable Bond Documents for
the Property.

          702.5 Each of GTP and Seller has at all times during the Gables Period
complied with the covenants and restrictions contained in the Land Use
Restriction Agreement, Regulatory Agreement or similar document (the “LURA”)
affecting the Property. During the Gables Period, as required by, and in
accordance with, the LURA and the Code, 20% or more of the residential units in
the Property have been occupied by individuals whose income is 80% or less of
area median gross income, which occupancy occurred at all times necessary for
interest on the Bonds to continue to be excludible from gross income for
federal income tax purposes under the Code. GTP and Seller have no knowledge of
any acts or omissions that occurred during any periods prior to the Gables
Period that would have caused interest on the Bonds to no longer be excludible
from gross income for federal income tax purposes under the Code.

          702.6 There does not exist any default by GTP or Seller under any of the
Bond Documents, or any fact or circumstance (including the proposed transfer of
the Property to the Project LLC, the transfer of Membership Interests to Buyer,
and the Substitution of Credit Enhancement for each part of the Bond Financing)
that, with or without notice or the passage of time, or both, would constitute
a default by GTP or Seller under any of the Bond Documents or would materially
and adversely affect the exclusion of any interest on the Bond Financing from
gross income for federal income tax purposes, and neither GTP nor Seller has
any knowledge that either Bond Trustee or Bond Issuer has waived or consented
to the waiver of any obligations or duties of any Person under any of the Bond
Documents, including any obligations or duties related to the exclusion of
interest on the Bonds from gross income for federal income tax purposes;

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          702.7 Neither GTP nor Seller has received or become aware of notice of a
default under any of the Bond Documents, including a notice that questions the
authority of the Bond Issuer to execute and deliver the bonds involved in any
part of the Bond Financing or the validity or enforceability of any such bonds
or the Bond Documents. Neither GTP nor Seller has received or is aware of (a)
notice of a claim that interest on the Bonds is not exempt from federal income
taxation, or (b) of any fact or circumstance that creates a material risk that
interest on the Bonds no longer would be excludible from gross income of any
holders thereof for purposes of federal income taxation;

          702.8 Neither GTP nor Seller has received any notice or communication from
the Internal Revenue Service (the “Service”) with respect to the Bonds, and
each of GTP and Seller has no knowledge of the receipt by any other Person of
any such notice or communication. With respect to the Gables Period for the
Property, any reports required to be filed with the Service with respect to the
Property have been timely filed and any arbitrage earnings required under the
Bond Documents or under the Code to be rebated have been rebated. With respect
to all periods prior to the Gables Period, GTP and Seller have no knowledge
that any reports required to be filed with the Service with respect to the
Property were not timely filed and any arbitrage earnings required under the
Bond Documents or under the Code to be rebated were not rebated.

          702.9 There has not occurred any act or omission by GTP or Seller that has
caused or will cause the interest on the Bonds to be or become subject to
federal income taxation pursuant to the applicable provisions of the Code.
Neither GTP nor Seller is aware of any act or omission by any other Person or
entity that has caused or will cause the interest on the Bonds to be or become
subject to federal income taxation pursuant to the applicable provisions of the
Code. Each of GTP and Seller has no knowledge of any fact or circumstance that
has occurred or currently exists that could, either now or with the passage of
time, materially and adversely affect the exclusion of interest on the bonds
involved in any part of the Bond Financing from gross income for federal income
tax purposes.

          702.10 As of the Closing Date, GTP and Seller will have taken all actions,
if any, required to be taken by GTP and Seller, as applicable, under the Bond
Documents with respect to the Substitution of Credit Enhancement and the
transfer of the Property or any interest therein pursuant to and as
contemplated in this Agreement.

     703. Whenever the phrase “to Seller’s knowledge” or “Seller is not aware,”
or “to GTP’s knowledge” or “GTP is not aware,” or any similar phrase is used in
this Agreement with respect to Seller or GTP, said phrase shall refer to the
actual present knowledge, without any investigation or inquiry, of Gloria Lutz,
Regional Manager, and Dennis Rainosek, Vice President, who are the
representatives of Seller responsible, respectively, for the management and
sale of the Property. No knowledge of any Person other than said individual
shall be imputed to Seller or GTP with respect to any representation or
warranty contained in this Agreement or in any Closing Document.

     704. Each of GTP and Seller respectively represents and warrants to Buyer
that no real estate transfer tax will be due or payable with respect to the
conveyance of the Property by GTP to the Project LLC.

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     705. As of Closing, each of the warranties and representations set forth
in Article 7 above will be true in all material respects, except for changes in
the operation of the Property occurring prior to Closing that are specifically
permitted by this Agreement.

     706. Each of GTP and Seller hereby agrees to defend, indemnify and hold
Buyer harmless against and from all actions, administrative proceedings, causes
of action, charges, claims, costs, damages, decrees, demands, duties, expenses,
fees, fines, judgments, liabilities, losses, obligations, orders, penalties,
responsibilities, suits, taxes, and undertakings of every nature and kind
whatsoever, whether meritorious or frivolous, including attorneys’ fees at both
trial and appellate levels, caused by or arising out of, or alleged to have
been caused by or to have arisen out of: (a) the performance or failure to
perform the obligations of Seller or GTP under the Bond Documents or relating
to the Bond Financing or the ownership or operation of the Property during the
Gables Period; or (b) the breach of any representation or warranty by Seller or
GTP under this Agreement. In the event of any legal action relating to such
period, each of GTP and Seller shall defend the same at their respective
expense with legal counsel selected by Seller, reasonably acceptable to Buyer.
Buyer shall cooperate with GTP and Seller relative to any such claim.

     707. Buyer hereby agrees to defend, indemnify and hold each of GTP and
Seller harmless against all actions, administrative proceedings, causes of
action, charges, claims, costs, damages, decrees, demands, duties, expenses,
fees, fines, judgments, liabilities, losses, obligations, orders, penalties,
responsibilities, suits, taxes, and undertakings of every nature and kind
whatsoever, whether meritorious or frivolous, including attorneys’ fees at both
the trial and appellate levels, caused by or arising out of, or alleged to have
been caused by or to have arisen out of: (a) the performance or failure to
perform the obligations of Buyer under the Bond Documents or relating to the
Bond Financing or the ownership or operation of the Property after the Gables
Period; or (b) the breach of any representation or warranty by Buyer under this
Agreement. In the event of any legal action relating to such period, Buyer
shall defend the same at Buyer’s expense with legal counsel selected by Buyer,
reasonably acceptable to Seller. GTP and Seller shall cooperate with Buyer
relative to any such claim.

Article 8. — Representations And Warranties Of Buyer.

801. Buyer hereby represents, warrants and covenants to Seller and
to the Project LLC that: (a) Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the State
of Maryland; (b) Buyer will be duly bound by the actions of the
legal entities executing and delivering this Agreement and Closing
Documents on its behalf, and the individuals executing and
delivering said documents on behalf of said legal entities have all
necessary power and authority to do so; (c) Buyer has all necessary
power and authority to execute, deliver and perform this Agreement
and Closing Documents and to complete the transactions provided for
herein; (d) neither the execution, delivery nor performance of this
Agreement or any of Closing Documents, with or without notice, the
passage of time, or both, (i) will constitute or result in a
violation or breach by Buyer of any judgment, order, writ,
injunction, or decree issued against or imposed on Buyer, or (ii)
will result in a violation of any Legal Requirement or

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Private Covenant to which Buyer is a party or which otherwise
affects this transaction; (e) Buyer is not the subject of any
Creditor Event; and (f) this Agreement constitutes, and Closing
Documents when executed and delivered will constitute, valid and
binding legal obligations of Buyer, enforceable in accordance with
their respective terms and conditions, subject to all rules of law
and principles of equity generally applicable to the enforceability
of legal obligations including bankruptcy, reorganization and other
debtor relief laws.

Article 9. — Covenants.

     901. From the Contract Date until Closing, GTP: (a) shall maintain and
operate the Property in substantially the same manner as it is presently being
maintained and operated; (b) shall not cause the accrual of any liabilities
with respect to the Property other than in the ordinary course of business; and
(c) shall comply in all material respects with all terms and provisions of all
Bond Documents currently in effect.

     902. From the Contract Date until Closing, GTP shall not, without the
prior written consent of Buyer: (a) initiate, consent to, approve, acquiesce
in or otherwise take any action with respect to any change in any zoning,
special use permit or subdivision regulation with respect to the Property; (b)
terminate, modify, alter, or supplement any appurtenant easement or any of the
Permitted Title Exceptions; (c) transfer, assign, encumber, pledge, convey,
ground lease, or sell the Property or any portion thereof; (d) modify, extend
or amend any Service Agreement or enter into any new Service Agreement that
will survive Closing; or (e) agree to any amendment or supplement, or grant or
seek any waiver or consent, with respect to the Bond Documents or the Bond
Financing, except for consents that would not materially and adversely affect
GTP’s and Seller’s ability to effect the transactions contemplated in this
Agreement.

     903. On or before the Contract Date, if available to Seller, Seller shall
deliver to Buyer, or make available at the Property, copies of the items (the
“Due Diligence Items”) listed on Exhibit “L.”

     904. From the Contract Date until Closing, GTP shall provide to Buyer, its
agents, representatives and contractors, the right to enter upon the Property
at reasonable times to make investigations, surveys, tests and studies;
provided, however (a) Buyer shall not interfere with the normal operation of
the Property and the quiet enjoyment of the Tenants; (b) Buyer shall not have
the right to undertake any environmental study or test beyond the scope of a
standard “Phase I” inspection without the prior written consent of GTP, which
consent may be withheld for any reason or for no reason; (c) Buyer shall give
GTP at least twenty-four (24) hours advance notice in writing or by telephone
of each proposed entry upon the Property by or on behalf of Buyer, and GTP
shall have the right to accompany Buyer and all of its agents, representatives
and contractors at all times while they are upon the Property; (d) Buyer shall
promptly pay for all work performed by order of Buyer, its agents,
representatives, or contractors with respect to the Property and shall not
cause the creation of any lien with respect to the Property in favor of any
Person, including any contractor, subcontractor, materialman, mechanic,
surveyor, architect or laborer; and (e) Buyer shall promptly deliver to Seller
copies of all surveys, title commitments, environmental reports, and other
engineering reports obtained by Buyer with respect to the Property. Buyer shall
indemnify and hold harmless Seller and GTP against and from all losses,

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claims, damages, liabilities and expenses, including costs of investigation and
reasonable legal fees and disbursements, that may be imposed upon Seller or GTP
or incurred by Seller or GTP as a result of the exercise by Buyer of any right
granted to Buyer in this Section. Seller grants to Buyer, its agents,
contractors, and employees, a license, terminable only upon the termination of
this Agreement, to inspect GTP’s books and records, including lease files,
concerning the Property. GTP shall also use reasonable good faith efforts to
cause its manager and agents for the Property to make their files and records
regarding the Property available to Buyer for its inspection and review.

     905. Buyer shall have the option, in its sole discretion, to accept or
reject any of the Service Agreements that can be terminated by GTP on or prior
to Closing Date without the payment of any termination fee, cancellation fee,
damages, or other similar charges; provided that Buyer shall reimburse Seller
for all costs associated with the termination of said Service Agreements, e.g.,
if a Service Agreement requires a 30 day notice to terminate, Buyer shall
reimburse Seller at Closing for the cost of said 30 days. On or before ten (10)
days preceding the scheduled Closing Date, Buyer shall deliver to GTP a list of
such terminable Service Agreements that Buyer would like for Seller to
terminate (“Rejected Service Agreements”). GTP hereby agrees to terminate all
Rejected Service Agreements before or at Closing. The parties acknowledge and
agree that all existing management agreements and leasing agreements with
respect to the Property shall be Rejected Service Agreements.

Article 10. — Conditions Precedent.

     1001. If, and only if, Seller and Buyer are not able to agree on a
mutually satisfactory resolution of the issue concerning the need to install a
new fire alarm, then, in such event, Buyer shall have the right to terminate
this Agreement by delivering to Seller, before 5:00 o’clock p.m. on Monday,
November 8, 2004 (the “Due Diligence Date”), a written termination notice, with
a copy of said termination notice to Escrow Agent. Upon receipt of a copy of
such termination notice on or before the Due Diligence Date, notwithstanding
the provisions of Section 1602, Escrow Agent shall promptly return the Earnest
Money to Buyer, whereupon no party shall have any further duties, obligations
or liabilities under this Agreement, except the Continuing Obligations. As
additional consideration for such termination right, within three (3) Business
Days after the termination date, Buyer shall send a check to Seller in the
amount of One Hundred and No/100 Dollars ($100.00) as a termination fee.

     1002. Notwithstanding any other provision of this Agreement, neither
Seller nor GTP shall be obligated to sell the Membership Interests, to organize
the Project LLC, or to convey the Property to the Project LLC unless and until
the following conditions precedent have been satisfied: (a) at least thirty
(30) days prior to the Scheduled Closing Date, Buyer is able to obtain a
written commitment from a reputable credit provider for the Substitution of
Credit Enhancement, which commitment is acceptable to Buyer; (b) on or before
Scheduled Closing Date, Seller receives in a timely manner all items required
by this Agreement to be delivered by Buyer before or at Closing; (c) on and
before Scheduled Closing Date, there does not exist any material default, event
of default, or event that, with the passage of time, the giving of notice, or
both, would constitute a material default or event of default by Buyer under
this Agreement; (d) on and before Scheduled Closing Date, each and every
representation and warranty made by

10

 

Buyer in this Agreement is true in all material respects; and (e) on or before
Scheduled Closing Date, the Substitution of Credit Enhancement is accomplished
and the Bond Approvals and the Bond Opinions are obtained in the manner
required by this Agreement.

     1003. If the conditions precedent set forth in Section 1002 are not
satisfied on or before the dates specified in Section 1002, and if Seller is
not in default, then Seller shall have the right: (a) to terminate this
Agreement by giving written notice of termination to Buyer and Escrow Agent,
whereupon Escrow Agent shall promptly pay the Earnest Money to Buyer if Buyer
is not in default, or to Seller if Buyer is in default, and this Agreement
shall terminate, except for the Continuing Obligations; or (b) if Buyer is
willing or obligated to close, to close the transactions contemplated by this
Agreement, regardless of such unsatisfied conditions precedent, without any
reduction in the Purchase Price.

     1004. Notwithstanding any other provision of this Agreement, Buyer shall
not be obligated to purchase the Membership Interests unless the following
conditions precedent have been satisfied: (a) at least thirty (30) days prior
to the Scheduled Closing Date, Buyer is able to obtain a written commitment
from a reputable credit provider for the Substitution of Credit Enhancement,
which commitment is acceptable to Buyer; (b) on or before the Scheduled Closing
Date, Buyer receives all items required by this Agreement to be delivered by
Seller before or at Closing; (c) on and before the Scheduled Closing Date,
there does not exist any material default, event of default, or event that with
the passage of time, the giving of notice, or both, would constitute a material
default or event of default by Seller under this Agreement; (d) on and before
the Scheduled Closing Date, each and every representation and warranty made by
Seller in this Agreement is true in all material respects; and (e) on and
before the Scheduled Closing Date, the provider of the new credit enhancement
contemplated by the Substitution of Credit Enhancement complies in all material
respects with its obligations under its commitment to accomplish the
Substitution of Credit Enhancement, the Bond Assignment is executed and
delivered by each party thereto (other than Buyer), and the Bond Approvals and
the Bond Opinions are obtained.

     1005. If the conditions precedent set forth in Section 1004 have not have
been satisfied on or before the dates specified in Section 1004, and if Buyer
is not in default, then Buyer shall have the right: (a) to terminate this
Agreement by giving written notice of termination to Seller and Escrow Agent,
whereupon Escrow Agent shall promptly pay the Earnest Money to Buyer, and this
Agreement shall terminate, except for the Continuing Obligations; or (b) if
Seller is willing or obligated to close, to close the transaction contemplated
hereby, regardless of such unsatisfied conditions precedent, without any
reduction in the Purchase Price.

     1006. Beginning on the Contract Date, Buyer shall continuously and
diligently use its good faith best efforts to obtain a written commitment from
a reputable credit provider for the Substitution of Credit Enhancement, which
commitment is acceptable to Buyer, and Buyer shall pay all costs in connection
therewith, and GTP and Seller shall cooperate with Buyer in connection
therewith.

     1007. Buyer shall cooperate with Seller to obtain the Bond Approvals.
Seller shall be responsible for making request of the Bond Issuer and the Bond
Trustee for the Bond Approvals, and Buyer shall supply to Bond Issuer and Bond
Trustee information concerning Buyer’s experience with owning or operating
apartment properties, its financial condition, its principals

11

 

and any other information that may be reasonably requested by the Bond
Issuer and/or Bond Trustee. Buyer shall make no contact with the Bond Issuer,
the Bond Trustee or their respective counsel without participation by, or prior
approval of, Seller and/or its counsel. As of Closing Date, Buyer shall have
taken all actions that Buyer is required to take under the Bond Documents and
that are within Buyer’s control with respect to the Substitution of Credit
Enhancement and the transfer of the Membership Interests pursuant to and as
contemplated in this Agreement.

Article 11. — Items To Be Delivered By Seller and GTP At Closing.

     At Closing, Seller and/or GTP, as applicable, shall execute and deliver to
Buyer, and to others as applicable:

     1101. Such documents evidencing the existence and authority of Seller and
GTP as may be reasonably required by Buyer or the Title Company.

     1102. A closing agreement for the sale of the Membership Interests
substantially in the form of Exhibit “C-1".

     1103. A title affidavit substantially in the form of Exhibit “D”, together
with any other affidavits or certificates reasonably required by the Title
Company.

     1104. A quitclaim deed substantially in the form of Exhibit “E”.

     1105. A bill of sale and assignment and assumption substantially in the
form of Exhibit “F”.

     1106. Two (2) assignments of membership interests (the “Membership
Assignments”), one from Seller and one from GTP, substantially in the form of
Exhibit “G”.

     1107. A notice to the Tenants substantially in the form of Exhibit “H”.

     1108. A certificate of organization and an operating agreement for the
Project LLC.

     1109. Physical possession of the Property to the Project LLC.

     1110. All of the original Leases and written Service Agreements, and any
and all building plans, specifications, surveys, site plans, engineering
studies, soil tests, licenses, permits, and certificates of occupancy, in the
possession or control of Seller, that, notwithstanding the foregoing, may be
left at the applicable Property instead of being delivered to Buyer.

     1111. All warranties or guaranties that are applicable to the Property.

     1112. All keys for the Property.

     1113. A properly completed transfer tax form, if required.

12

 

     1114. An assignment and assumption of the Bond Documents (the “Bond
Assignment") substantially in the form of Exhibit “O”, but with such changes as
Bond Issuer, Bond Trustee or bond counsel may reasonably request.

     1115. An updated Rent Roll as of Closing and any additional income
certifications.

     1116. A Tradename License Agreement in the form of Exhibit “P.”

     1117. Any other document reasonably requested by Buyer to effect the
transfer of the Membership Interests in accordance with this Agreement.

Article 12A. — Items to be Delivered by Project LLC at Closing.

     At Closing, Seller shall execute and deliver in the name of and on behalf
of the Project LLC:

     1201A. A closing agreement substantially in the form of Exhibit “C-2.”

     1202A. A bill of sale and assignment and assumption substantially in the
form of Exhibit “F.”

     1203A. A notice to Tenants substantially in the form of Exhibit “H”.

     1204A. A Bond Assignment substantially in the form of Exhibit “O,” but
with such changes as Bond Issuer, Bond Trustee or bond counsel may reasonably
request.

     1205A. A Tradename License Agreement substantially in the form of Exhibit
“P.”

Article 12B. — Items to be Delivered By Buyer at Closing.

     At Closing, Buyer shall execute and deliver:

     1201B. If applicable, a duly executed assignment of Buyer’s rights under
this Agreement, subject to the provisions of Section 1811.

     1202B. A closing agreement for the sale of the Membership Interests
substantially in the form of Exhibit “C-1.”

     1203B. The two Membership Assignments.

     1204B. The funds required to be paid pursuant to Section 304.

     1205B. Any other document reasonably requested by Seller or GTP to effect
the closing of this transaction in accordance with this Agreement.

13

 

Article 13. — Damage, Destruction Or Condemnation.

     1301. Before Closing, all risk of loss to the Property by fire or other
casualty shall be upon GTP. If, before Closing, there occurs damage to or
destruction of any of the buildings located on the Property, that would cost in
excess of FIVE HUNDRED THOUSAND AND NO/100 ($500,000.00) DOLLARS to repair,
Seller shall promptly file a claim under its applicable insurance policies for
such casualty (including loss of rents insurance), and Buyer shall have the
option (a) to proceed with Closing and to receive at Closing an assignment of
Seller’s insurance proceeds with respect to said damage, except for the
insurance proceeds attributable to the loss of rents before Closing and any
costs incurred by Seller to protect or repair the Property, and Buyer shall
receive a credit at Closing in the amount of Seller’s deductible under its
insurance policy, or (b) to terminate this Agreement. If Buyer elects to
terminate this Agreement, Buyer shall send a written termination notice to
Seller and to Escrow Agent within ten (10) Business Days after Buyer receives
notice of such damage or destruction. If necessary, Closing Date shall be
extended to allow Buyer at least ten (10) Business Days within which to make
said election. If Buyer does not send such notice within such time, Buyer shall
be conclusively deemed to have elected to proceed with Closing, subject to
receipt of the insurance proceeds and credit described above, and shall not
have any further right to terminate this Agreement because of such damage or
destruction. If Buyer properly terminates this Agreement pursuant to this
Section, the Earnest Money shall be returned to Buyer, and neither party shall
have any further duties, obligations or liabilities to the other under this
Agreement except for the Continuing Obligations. If, before Closing, there
occurs damage to or destruction of any of the buildings located at any of the
Property that would cost FIVE HUNDRED THOUSAND AND NO/100 ($500,000.00) DOLLARS
or less to repair, then, in such event, Seller agrees (x) to repair such damage
prior to Closing, or at Seller’s option, to allow Buyer a credit against the
Purchase Price in an amount equal to the estimated cost of repair plus the
estimated rents that Buyer will lose as a result of said damage, (y) this
Agreement shall remain in full force and effect, and (z) Buyer shall be
obligated to proceed with the purchase of the Property at the Purchase Price
(less any credit pursuant to clause (x) above).

     1302. If, before Closing, any Condemnation of any portion of the Property
occurs, other than a Permitted Road Widening (hereinafter defined), Buyer shall
have the option either (a) to terminate this Agreement by giving written notice
of termination within ten (10) Business Days after Buyer has received notice of
such Condemnation; or (b) to complete the transaction provided for in this
Agreement, in which event all Condemnation proceeds collected by Seller before
Closing shall be credited against the Purchase Price, and, at Closing, Seller
shall assign to Buyer all Condemnation proceeds that have not been paid at that
time. If any Permitted Road Widening occurs, the transaction provided for in
this Agreement shall be completed in accordance with Section (b) of the
immediately preceding sentence, and all Condemnation proceeds shall be the
property of Seller. “Permitted Road Widening,” as used in this Agreement, shall
mean any Condemnation that results in the widening of one or more roads
adjacent to the Property and that does not result in the loss of any building
or any parking spaces, does not cause the Property to become a “non-conforming
use” under any applicable Legal

14

 

Requirement, and does not interfere with the Property’s being used as a
multi-family rental project. A parking space shall not be deemed to be lost if
it can be moved to some other location on any part of the Land without
materially diminishing the usefulness of the Property.

Article 14. — Brokerage Commissions.

     Seller shall indemnify, hold harmless and defend Buyer against all claims
for sales commissions or other similar compensation that may be asserted by
Broker with respect to this transaction. Seller shall indemnify, hold harmless
and defend Buyer against all claims for sales commissions or other similar
compensation that may be asserted by any Person other than Broker with respect
to this transaction to the extent that the liability for said compensation is
based upon actions of Seller. Buyer shall indemnify, hold harmless and defend
Seller against all claims for sales commissions or other similar compensation
that may be asserted by any Person other than Broker with respect to this
transaction to the extent that the liability for said compensation is based
upon actions of Buyer.

Article 15. — Remedies On Default.

     1501. If Buyer fails or refuses to purchase the Membership Interests as
provided in this Agreement (other than by reason of a default by Seller or GTP
hereunder) or otherwise defaults hereunder without any default by Seller or
GTP, and such default by Buyer is not cured within five (5) days after written
notice, Seller shall have the option to terminate this Agreement by giving
written notice of termination to Buyer and Escrow Agent, whereupon Escrow Agent
shall pay to Seller all the Earnest Money, as liquidated damages, which shall
be the sole remedy of Seller against Buyer for Buyer’s failure or refusal to
purchase the Membership Interests as provided in this Agreement, and neither
Seller nor Buyer shall have any further rights or duties under this Agreement
except for the Continuing Obligations. Seller and Buyer hereby agree that if
Buyer defaults on its obligation to purchase the Membership Interests pursuant
to this Agreement, (a) the amount of damages to Seller would be difficult, if
not impossible, to determine, and (b) the amount of liquidated damages stated
above constitutes a reasonable good faith estimate by the parties, as of the
Contract Date, of the actual damages that Seller might incur if Buyer fails or
refuses to purchase the Membership Interests pursuant to this Agreement.

     1502. If Seller or GTP fails or refuses to sell the Membership Interests
to Buyer as provided in this Agreement or otherwise defaults hereunder without
any default by Buyer, and such default by Seller or GTP is not cured within
five (5) days after written notice, Buyer shall have the right to exercise any
one of the following remedies: (a) to terminate this Agreement by sending a
written termination notice to Seller and Escrow Agent, whereupon Escrow Agent
shall promptly refund to Buyer all the Earnest Money being held by Escrow
Agent, Seller shall reimburse Buyer within ten (10) days following receipt by
Seller of a detailed itemization of Buyer’s out-of-pocket third party costs
incurred in connection with this Agreement, including legal fees, all expenses
incurred to obtain financing, etc., and neither Seller nor Buyer shall have any
further rights or duties under this Agreement, except the Continuing
Obligations; or (b) Buyer shall have the right to specific performance. Except
as specifically stated above, Seller shall not be liable for monetary damages
for its failure or refusal to sell the Property.

15

 

     1503. If any representation or warranty in this Agreement is true as of
the Contract Date and is untrue in any material respect as of Closing Date as a
result of events occurring between the Contract Date and Closing Date, other
than a default under this Agreement on the part of the party making said
representation or warranty, then, in such event, the other party’s sole remedy
shall be either: (a) to waive said representation or warranty in writing and
proceed with Closing of this transaction without any change in the Purchase
Price; or (b) to terminate this Agreement by giving written notice to the other
party before Closing. If either party terminates this Agreement in accordance
with the immediately preceding sentence, Escrow Agent shall promptly refund all
the Earnest Money to Buyer, whereupon neither Seller nor Buyer shall have any
further rights or duties under this Agreement, except for the Continuing
Obligations.

     1504. Notwithstanding any other provision of this Agreement, if Buyer
purchases the Membership Interests from Seller, Buyer shall have no right to
assert any remedies against GTP or Seller for the breach of any representation
or warranty by GTP or Seller if Buyer had knowledge of said breach before
Closing.

Article 16. — Escrow Agent.

     1601. In performing its duties hereunder, Escrow Agent shall not incur any
liability to anyone for any damages, losses or expenses, except for its gross
negligence or willful misconduct, and it shall accordingly not incur any such
liability with respect (a) to any action taken or omitted in good faith upon
advice of its counsel or (b) to any action taken or omitted in reliance upon
any instrument, including any written notice or instruction provided for in
this Agreement, not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information contained therein, that Escrow Agent shall in good faith believe to
be genuine, to have been signed or presented by a proper Person, and to conform
to the provisions of this Agreement. Seller and Buyer hereby agree to indemnify
and hold harmless Escrow Agent against all losses, claims, damages, liabilities
and expenses, including reasonable costs of investigation and legal fees and
disbursements, that may be imposed upon Escrow Agent or incurred by Escrow
Agent in connection with its acceptance or performance of its duties hereunder,
including any litigation arising out of this Agreement or involving the subject
matter hereof unless caused by the gross negligence or willful misconduct of
Escrow Agent. If any dispute arises between Seller and Buyer sufficient in the
discretion of Escrow Agent to justify its doing so, Escrow Agent shall be
entitled to tender into the registry or custody of the clerk of any state or
federal court having jurisdiction over the county in which the Land is located,
any or all money, property or documents in its hands relating to this
Agreement, together with such legal pleadings as it shall deem appropriate, and
thereupon be discharged from all further duties and liabilities under this
Agreement. Seller and Buyer shall bear all costs and expenses of any such legal
proceedings.

     1602. If Seller or Buyer (the “Objecting Party”) receives written notice
from the other party (the “Demanding Party”) alleging that the Objecting Party
is in default under this Agreement, and if the Objecting Party in good faith
believes that it is not in default or that, for any reason, the Demanding Party
is not entitled to receive payment of the Earnest Money, the Objecting Party
shall have the right to give written notice to the Demanding Party and Escrow

16

 

Agent objecting to the payment of the Earnest Money to the Demanding Party. If
Escrow Agent receives any such written objection before the payment of the
Earnest Money to the Demanding Party, Escrow Agent shall hold the Earnest Money
until the earlier of receipt by Escrow Agent of (a) consistent written
instructions from Seller and Buyer with respect to the disposition of the
Earnest Money or (b) a court order issued by a court of competent jurisdiction
directing the disposition of the Earnest Money. Nothing contained in this
Section shall prevent the return of the Earnest Money to Buyer pursuant to
Section 1001 or prevent the Escrow Agent from exercising any of its rights
under Section 1601.

Article 17. — Other Terms And Conditions.

     1701. The Continuing Obligations shall survive: (a) the termination of
this Agreement before Closing (if applicable); (b) Closing; and (c) the
delivery of Closing Documents, except as otherwise specifically agreed in
writing by Seller and Buyer or as may be satisfied by the delivery of Closing
Documents. All other representations, warranties, covenants, indemnities,
agreements and obligations under this Agreement shall survive Closing and the
delivery of Closing Documents, except as otherwise specifically agreed to in
writing by Seller and Buyer or as may be satisfied by the delivery of Closing
Documents, and none of such representations, warranties, covenants,
indemnities, agreements or obligations shall merge with the transfer of title.
The representations and warranties made in Section 704 shall continue in full
force and effect until the expiration of the applicable period of limitations.
All other representations and warranties made in this Agreement shall expire
one hundred eighty (180) days after Closing Date (the “Expiration Date”). If
any party (the “Claimant”) shall determine that any other party has breached
one or more such representations and warranties, Claimant shall send to that
other party written notice of such claim no later than the Expiration Date. If
any notice of any claim is not sent on or before the Expiration Date, said
claim shall expire and shall no longer be of any force or effect.

     1702. Any notice, request, demand, instruction or other communication (a
“Notice”) to be given to any party with respect to this Agreement may be given
either by the party or its legal counsel and shall be deemed to have been
properly sent and given when delivered by hand or sent by reputable overnight
courier service, or by facsimile when immediately followed by delivery by hand
or by reputable overnight courier service. If delivered by hand, a Notice shall
be deemed to have been sent, given, and received when actually delivered to the
address specified in, or pursuant to, this section. If sent by courier service,
a Notice shall be deemed to have been sent and given when delivered to said
courier service by the sender, with the proper address and delivery charges
either prepaid or charged to a proper account, and shall be deemed to have been
received when actually delivered to the address specified in, or pursuant to,
this section. If given by facsimile, a Notice shall be deemed to have been
sent, given, and received when said facsimile is transmitted. The addresses to
which Notices shall be sent are:

17

 

	 	 	 
	If to Seller or GTP:

	 	Gables Realty Limited Partnership

Gables GP, Inc.

2859 Paces Ferry Road

Suite 1450

Atlanta, Georgia 30339

Attn: Mr. Edward A. Fish, III

Tel: 770-438-5513

Fax: 770-435-7434

E-mail: efish@gables.com
	 
	 	 
	With a copy to:

	 	Holt Ney Zatcoff & Wasserman, LLP

100 Galleria Parkway

Suite 600

Atlanta, Georgia 30339

Attn: Robert G. Holt, Esq.

Tel: 770-956-9600

Fax: 770-956-1490

E-mail: rholt@hnzw.com
	 
	 	 
	If to Buyer:

	 	America First Companies

Attention: Joseph N. Grego

101 East 52nd Street

25th Floor

New York, NY 10022

Tel: 212-935-8760

Fax: 212-935-8761

E-mail: jgrego@am1st.com
	 
	 	 
	With a copy to:

	 	Kutak Rock LLP

The Omaha Building

1650 Farnam Street

Omaha, Nebraska 68102-2186

Attention: J. Toger Swanson, Esq.

Tel: 402-346-6000

Fax: 402-346-1148

E-mail: toger.swanson@kutakrock.com

18

 

	 	 	 
	If to Escrow Agent:

	 	LandAmerica National Commercial Services

Attention: Deborah Goodman

National Commercial Services

Suite 1895, Riverwood Building

3350 Cumberland Circle, NW

Atlanta, GA 30339

Telephone: 770-980-9440

Facsimile: 770-980-9799

Email: dgoodman@landam.com

Each party shall have the right to change the address to which Notices to it
are to be sent by giving written notice of said change to the other parties as
provided in this Section. If any notice is given in accordance with this
section and the addressee fails or refuses to accept delivery of said Notice,
or the address specified in, or pursuant to, this section is not the correct
address, then, in such event, said Notice shall conclusively be deemed to have
been received by the addressee on the earlier to occur of (a) the time
specified above in this section or (b) the date when an attempt is made to
deliver said Notice to the address specified in, or pursuant to, this section.

     1703. If any dispute arises between Seller and Buyer with respect to this
Agreement, the losing party shall reimburse the prevailing party for all
reasonable costs incurred as a result of said dispute, including reasonable
attorneys’ fees at both the trial and appellate levels.

     1704. If Buyer fails or refuses to purchase the Membership Interests
pursuant to this Agreement when required to do so, then, in such event, Buyer
shall promptly return to Seller any and all items furnished by Seller or GTP to
Buyer with respect to the Property.

     1705. Each of Seller and Buyer shall keep the provisions of this Agreement
confidential until Closing, if Closing occurs, and permanently if Closing does
not occur; provided, however, that each party may disclose the provisions of
this Agreement to its attorneys, accountants, financial advisors, investors,
consultants, engineers and lenders and as may be required by any applicable
Legal Requirement.

     1706. Under no circumstances shall any Person record in any public records
any copy of this Agreement or any affidavit, short form agreement or other
instrument or document giving public notice of the existence of this Agreement,
except for (a) GTP’s recording of the deed to the Project LLC subsequent to
Closing and (b) presenting this Agreement to a court of competent jurisdiction
in connection with the enforcement of the provisions of this Agreement, or
recording of a lis pendens if Buyer seeks specific performance of this
Agreement.

Article 18. — Interpretation And Construction.

     The following rules of interpretation and construction shall apply for all
purposes to this Agreement, to all amendments to the Agreement, and to all
Closing Documents, unless the context shall clearly require otherwise:

19

 

     1801. The terms “include,” “including” and similar terms shall be
construed as if followed by the phrase, “without being limited to.”

     1802. Words of masculine, feminine or neuter gender shall mean and include
the correlative words of the other genders, and words importing the singular
number shall mean and include the plural number, and vice versa.

     1803. The term “provisions” shall be construed as if preceded by the
phrase “terms, covenants, agreements, requirements, conditions and/or.”

     1804. All section and exhibit captions herein are used for convenience and
reference only and in no way define, limit or describe the scope or intent of,
or in any way affect, this Agreement.

     1805. Each reference to an agreement, instrument or other document of any
nature shall include all revisions, amendments, modifications and supplements
thereto, from time to time.

     1806. The words “herein,” “hereof,” “hereunder” and similar words shall
refer to this Agreement as a whole and not to any particular section or
subsection of this Agreement.

     1807. No inference in favor of or against any party shall be drawn from
the fact that such party has drafted any portion hereof.

     1808. Each exhibit referred to in this Agreement is hereby incorporated
herein by reference and made a part of this Agreement with the same effect as
if it were restated word for word in this Agreement.

     1809. If any party is designated in this Agreement to be more than one
Person, then, in such event, each Person so designated shall be jointly and
severally liable for all duties, obligations and liabilities of said party.

     1810. Time is of the essence of each and every provision in this
Agreement. If any provision of this Agreement requires that action be taken on
or before a particular date that falls on a day that is not a Business Day, the
time for the taking of such action shall automatically be postponed until the
next following Business Day.

     1811. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective representatives, heirs, successors and
assigns. Notwithstanding the foregoing, except for assignment to an Affiliate,
Buyer shall not have any right to assign any of its right, title or interest in
or to this Agreement without the prior written consent of Seller, which consent
may be withheld for any reason or for no reason.

     1812. This Agreement constitutes the sole and entire agreement between the
parties hereto, and no modification, alteration, or amendment of this Agreement
shall be binding unless signed by the party against whom such modification,
alteration, or amendment is sought to be

20

 

enforced. No representation, warranty, covenant, inducement or obligation not
included in this Agreement shall be binding upon either party hereto.

     1813. This Agreement shall be governed by and construed in accordance with
the laws of the State.

     1814. If all or any portion of any provision of this Agreement shall be
declared invalid or unenforceable under applicable law, then the performance of
such portion shall be excused to the extent of such invalidity or
unenforceability, but the remainder of this Agreement shall remain in full
force and effect; provided, however, that if the excused performance of such
unenforceable provision shall materially adversely affect the interest of
either party, the party so affected shall have the right to terminate this
Agreement by written notice thereof to the other party and Escrow Agent, in
which event Escrow Agent shall promptly refund all the Earnest Money to Buyer,
whereupon no party shall have any further duties, obligations or liabilities
under this Agreement except for the Continuing Obligations.

     1815. This Agreement may be executed in multiple counterparts, each of
which shall be an original and all of which together shall constitute one and
the same Agreement. It shall not be necessary that each party execute each
counterpart, or that any one counterpart be executed by more than one party, so
long as each party executes at least one counterpart. The signature of any
party to any counterpart may be appended to any other counterpart.

     1816. BUYER ACKNOWLEDGES AND AGREES THAT BUYER IS EXPERIENCED IN THE
OWNERSHIP AND OPERATION OF PROPERTY SIMILAR TO THE PROPERTY AND THAT BUYER IS
QUALIFIED TO INSPECT AND EVALUATE THE PROPERTY AND THE MEMBERSHIP INTERESTS.
BUYER ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS, WARRANTIES, AND
COVENANTS EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN CLOSING DOCUMENTS [THE
“EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS”], BUYER IS FULLY RELYING ON
ITS (OR ITS REPRESENTATIVES’) INSPECTIONS OF THE PROPERTY AND THE MEMBERSHIP
INTERESTS AND NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) MADE BY SELLER, GTP, OR
ANY OF THEIR REPRESENTATIVES. BUYER ACKNOWLEDGES THAT BUYER (OR BUYER’S
REPRESENTATIVES), BEFORE CLOSING DATE WILL HAVE THOROUGHLY INSPECTED AND
EXAMINED THE PROPERTY AND THE MEMBERSHIP INTERESTS TO THE EXTENT DEEMED
NECESSARY BY BUYER TO ENABLE BUYER TO EVALUATE THE PHYSICAL, LEGAL AND
FINANCIAL CONDITION OF THE PROPERTY AND THE MEMBERSHIP INTERESTS AND ALL OTHER
ASPECTS OF THE PROPERTY AND THE MEMBERSHIP INTERESTS. BUYER ACKNOWLEDGES THAT,
EXCEPT FOR THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS, AS A MATERIAL
PART OF THE CONSIDERATION FOR THIS AGREEMENT AND THE PURCHASE, SUBJECT TO
ARTICLES 6, 7, 10 AND 13 OF THIS AGREEMENT, BUYER AGREES FOR THE PROJECT LLC TO
ACCEPT THE PROPERTY ON CLOSING DATE IN THEIR “AS IS,” “WHERE IS” CONDITION,
WITH ALL FAULTS, AND WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, IN CONNECTION WITH THE SALE OF THE MEMBERSHIP
INTERESTS

21

 

TO BUYER, EXCEPT FOR THE EXPRESS REPRESENTATIONS, WARRANTIES, AND COVENANTS,
THE CONVEYANCE OF THE PROPERTY TO THE PROJECT LLC AND THE SALE OF THE
MEMBERSHIP INTERESTS TO BUYER ARE WITHOUT ANY REPRESENTATION, WARRANTY, OR
GUARANTEE, AND SELLER, GTP, AND THEIR MEMBERS, PARTNERS, OFFICERS, AGENTS,
DIRECTORS, EMPLOYEES, ATTORNEYS, CONTRACTORS AND AFFILIATES DISCLAIM ANY AND
ALL REPRESENTATIONS, WARRANTIES, AND GUARANTEES, EXPRESS OR IMPLIED, OR ARISING
BY OPERATION OF LAW (EXCEPT THE EXPRESS REPRESENTATIONS, WARRANTIES AND
COVENANTS), OF OR RELATING TO THE PROPERTY AND THE MEMBERSHIP INTERESTS,
INCLUDING: (1) THE USE, INCOME POTENTIAL, EXPENSES, OPERATION, CHARACTERISTICS
OR CONDITION OF THE PROPERTY AND THE MEMBERSHIP INTERESTS OR ANY PORTION
THEREOF, INCLUDING WARRANTIES OF SUITABILITY, HABITABILITY, MERCHANTABILITY,
DESIGN OR FITNESS FOR ANY SPECIFIC PURPOSE OR A PARTICULAR PURPOSE, OR GOOD AND
WORKMANLIKE CONSTRUCTION; (2) THE NATURE, MANNER, CONSTRUCTION, CONDITION,
STATE OF REPAIR OR LACK OF REPAIR OF ANY IMPROVEMENTS LOCATED ON THE PROPERTY,
ON THE SURFACE OR SUBSURFACE THEREOF, WHETHER OR NOT OBVIOUS, VISIBLE OR
APPARENT; (3) THE NATURE OR QUALITY OF CONSTRUCTION, STRUCTURAL DESIGN OR
ENGINEERING OF THE PROPERTY; (4) THE ENVIRONMENTAL CONDITION OF THE PROPERTY
AND THE PRESENCE OR ABSENCE OF OR CONTAMINATION BY HAZARDOUS MATERIALS, OR THE
COMPLIANCE OF THE PROPERTY WITH ALL REGULATIONS OR LAWS PERTAINING TO HEALTH OR
THE ENVIRONMENT, INCLUDING THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT, THE RESOURCE CONSERVATION AND RECOVERY ACT, THE
CLEAN WATER ACT, AND ALL STATE ENVIRONMENTAL LAWS, EACH AS MAY BE AMENDED FROM
TIME TO TIME, AND INCLUDING ANY AND ALL REGULATIONS, RULES OR POLICIES
PROMULGATED THEREUNDER; (5) THE QUALITY OF THE LABOR AND MATERIALS INCLUDED IN
THE PROPERTY; (6) THE SOILS CONDITIONS, DRAINAGE, FLOODING CHARACTERISTICS,
UTILITIES OR OTHER CONDITIONS EXISTING IN, ON, OR UNDER THE PROPERTY; AND (7)
COMPLIANCE OR NON-COMPLIANCE OF THE PROPERTY WITH ANY LEGAL REQUIREMENTS OR
PRIVATE AGREEMENTS.

Article 19. — Limitation Of Liability.

     In any action or proceeding brought with respect to this Agreement or any
of Closing Documents, no deficiency or other money judgment shall be sought or
enforced against any directors, employees, officers, or shareholders of any
party hereto. In the event of any default by any party under this Agreement or
any of Closing Documents, the other parties shall look solely to the defaulting
party for the full satisfaction of all liabilities or obligations of the
defaulting party arising with respect to this Agreement or any of Closing
Documents. If the assets of the defaulting party are insufficient to pay in
full all such liabilities and obligations of the defaulting party arising with
respect to this Agreement, none of the directors, employees, officers or
shareholders of the defaulting party shall be held personally liable or
responsible for the payment of any such deficiency.

22

 

Article 20. — Definitions.

     Unless the context shall clearly indicate otherwise, when used in this
Agreement the words and phrases set forth below shall be defined as follows:

     “Affiliate” shall mean any entity controlling, controlled by, or under
common control with the relevant entity. For purposes of this definition, the
term “control” (including derivative terms) means the direct or indirect
ability to direct the management and policy of the relevant entity, whether by
ownership, control of voting interests, contract or otherwise.

     “Bank” shall mean the bank in which Escrow Agent deposits the Earnest
Money.

     “Bond Approvals” shall mean all approvals, consents, information or other
responses from each Bond Issuer and/or Bond Trustee with respect to any part of
the Bond Financing that are required under the applicable Bond Documents,
without requiring any material adverse change in the Bond Financing, for: (a)
Seller to transfer the Membership Interests in the Project LLC to Buyer; (b)
GTP to convey the Property to the Project LLC; (c) the Project LLC to assume
the obligations of GTP with respect to the Bond Financing arising from and
after Closing; and (d) GTP to be released from all duties, obligations and
liabilities accruing after Closing with respect to the Bond Financing.

     “Bond Assignment” is defined in Section 1114.

     “Bond Documents” shall mean all documents evidencing and/or securing
and/or effecting any part of the Bond Financing and/or any predecessor bonds,
including any updates or amendments thereto.

     “Bond Financing” shall mean each issue of the Bonds.

     “Bond Issuer” shall mean The Industrial Development Board of the
Metropolitan Government of Nashville and Davidson County, Tennessee, in its
capacity as the issuer of the Bonds.

     “Bond Opinions” shall mean one or more opinions of McKenna Long &
Aldridge, Atlanta, Georgia, bond counsel, addressed to Buyer and Seller and, if
required by the Bond Documents, to the Bond Issuer and the Bond Trustee, that
neither Buyer’s purchase of the Membership Interests nor the transfer of the
Property to the Project LLC’s by GTP will (a) cause a default under the Bond
Financing, (b) cause interest on the Bonds to be no longer excludible from
gross income for federal income tax purposes, or (c) require any substantive
change in the low income limits for tenants of the Property, or the percentage
of the Property required to be occupied by low income tenants, in order for
interest on the Bonds to continue to be excludible from gross income for
federal income tax purposes.

     “Bond Trustee” shall mean Wachovia Bank, National Association.

23

 

     “Bonds” shall mean (a): $13,400,000 The Industrial Development Board of
the Metropolitan Government of Nashville and Davidson County, Tennessee
Multifamily Housing Revenue Bonds (Arbor Knoll Project) Series 1985 and (b)
$13,250,000 The Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County, Tennessee Multifamily Housing Revenue Bonds
(Arbor Crest Project) Series 1985.

     “Broker” shall mean Gables Residential Services, Inc. a Texas corporation,
d/b/a Gables Residential Brokerage Services.

     “Business Day” shall mean each and every day, other than Saturdays and
Sundays, when the main office of the Bank is open for business.

     “Closing” shall mean the simultaneous payment of monies and execution and
delivery of substantially all of Closing Documents evidencing the consummation
of the transactions provided for in this Agreement.

     “Closing Date” shall mean the contract date of Closing, which shall be the
date upon which Closing actually occurs or such other date as may be agreed to
in writing by Seller and Buyer.

     “Closing Documents” shall mean each and every document, instrument,
agreement, closing statement, certificate, and affidavit executed and delivered
pursuant to this Agreement in connection with the consummation of the
transactions provided for by this Agreement, whether executed or delivered
prior, at, or subsequent to Closing.

     “Code” shall mean, as applicable, the Internal Revenue Code of 1954, as
amended, and all regulations thereunder, or the Internal Revenue Code of 1986,
as amended, and all regulations thereunder.

     “Condemnation” shall mean any taking or notice of intent to take the
Property by any Government Authority or other entity having the power of
eminent domain, or any voluntary conveyance in lieu of any such taking.

     “Continuing Obligations” shall mean the indemnities of Seller in Section
706, the indemnities of Buyer in Sections 707 and 904, and the indemnities of
Seller and Buyer in Article 14 and Section 1601.

     “Contract Date” shall mean the date this Agreement is executed and
delivered by all of the parties hereto, which date shall be inserted on the
execution page of this Agreement.

     “County” shall mean the county in which the Land is located.

     “Creditor Event” shall mean any of the following:

24

 

          (a) If the subject party (or any of its Affiliates), files in any court,
pursuant to any statute of either the United States or of any State, a petition
in bankruptcy or insolvency, or for reorganization or arrangement, or for the
appointment of a receiver or trustee of all or any portion of its property, or
if any of them makes an assignment for the benefit of, or enter into any
arrangement with, its creditors.

          (b) If the Property or interest therein of the subject party (or any of
its Affiliates), is seized under any levy, execution, attachment or other
process of court and the same is not vacated or stayed on appeal or otherwise
within thirty (30) days thereafter, or if any of its property, or interest
therein, is sold by judicial sale and such sale is not vacated, set aside or
stayed on appeal or otherwise within thirty (30) days thereafter.

          (c) If a petition in bankruptcy or insolvency, or for reorganization, or
for the appointment of a receiver or trustee of all or a portion of its
property, is filed against the subject party (or any of its Affiliates), in any
court, pursuant to any statute of the United States or of any State, and such
proceeding is not dismissed within thirty (30) days following the commencement
thereof.

     “Delivered Bond Documents” shall mean that portion of the Bond Documents
required to be delivered by Seller to Buyer under Item 15 of Exhibit “L.”

     “Earnest Money” is defined in Section 302.

     “Encumbrance” shall mean any mortgage, deed to secure debt, deed of trust,
restrictive covenant, statutory lien, conditional sales contract, contract
retaining title, security agreement, security interest, contract of sale,
lease, license, easement, contract for deed, option to purchase or lease, or
any other right to possession or control of the Property or the rents or
proceeds of the Property.

     “Escrow Agent” shall mean the company identified as Escrow Agent on
Exhibit “M”.

     “Gables Period” shall mean the period during which GTP or Seller has owned
the Property.

     “Government Authority” shall mean each municipal, county, state and
federal government agency, authority, department, division, court and official
having jurisdiction over the subject matter, as well as all boards of fire
underwriters, property owners associations, tax districts, community
improvement districts and other similar quasi-governmental entities.

     “Improvements” shall mean any and all buildings, structures, driveways,
parking areas, hardscaped areas, landscaped areas (including clearing, grading,
excavation and other site work associated therewith), paved areas, fences,
signs, site fixtures and other physical improvements from time to time, both
now and hereafter, located, constructed, installed or placed on, or attached or
affixed to, the Land.

     “Land” shall mean the land described in Exhibit “A”.

25

 

     “Leases” is defined in Exhibit “F”.

     “Legal Requirement” shall mean each applicable law, statute, code, act,
ordinance, order, judgment, decree, injunction, rule, regulation, bylaw and
other requirement of each Government Authority.

     “Mortgage Taxes” shall mean all taxes, assessments, levies, impositions
and other charges of any nature levied, assessed or imposed by any Government
Authority on any mortgage loan or Encumbrance on the Property.

     “Other Intangible Property” is defined in Exhibit “F”.

     “Permitted Title Exceptions” shall mean those matters described in Exhibit
“B”.

     “Person” shall mean any natural or artificial legal entity whatsoever,
including any individual, general partnership, limited partnership, limited
liability partnership, limited liability limited partnership, limited liability
company, unincorporated association, sole proprietorship, corporation, trust,
business trust, real estate investment trust, or joint venture.

     “Private Covenant” shall mean each instrument, agreement, covenant,
restriction, indenture, loan agreement, promissory note, or Encumbrance that
creates any private legal right, privilege, immunity, duty, liability or
obligation.

     “Property” shall mean the Land, Improvements, Tangible Personalty, Leases,
Service Agreements, and Other Intangible Property.

     “Proration Date” shall mean 12:01 a.m. on Closing Date.

     “Purchase Price” is defined in Article 3.

     “Rents” is defined in Exhibit “F”.

     “Service Agreements” shall mean each and every maintenance, construction,
advertising, management, leasing, franchising, employment, union, leasing
commission, or utilities agreement or other agreement relating to the Property
or otherwise affecting the Property or arising out of their ownership or
operation.

     “State” shall mean the state in which the Land is located.

     “Substitution of Credit Enhancement” shall mean the provision of a new
credit enhancement instrument to undertake all credit enhancement obligations
under the Bond Documents from and after Closing Date by a credit enhancer to be
provided by Buyer, subject to all requirements and procedures in, and the
payment by Buyer of all costs under, the Bond Documents.

26

 

     “Tangible Personalty” is defined in Exhibit “F”.

     “Taxes and Assessments” shall mean all taxes, assessments, levies,
impositions and other charges of any nature levied, assessed or imposed on the
Property or the ownership or use of the Property by any Government Authority or
pursuant to any Private Covenant, both general and special, ordinary and
extraordinary, recurring and nonrecurring, foreseen and unforeseen, payable in
installments and not payable in installments, including all real property and
personal property ad valorem taxes, assessments, excises, permit and impact
fees, sanitary sewer and water taxes and rents, and all charges levied,
assessed or imposed in lieu of or in addition to any of the foregoing.

     “Tenants” shall mean all tenants under the Leases.

     “Title Company” shall mean the Escrow Agent.

Article 21. — Offer And Acceptance.

     This document shall become binding only upon the execution and delivery of
this Agreement by both Seller and Buyer. Upon full execution and delivery
hereof, as described above, Seller shall forward a fully executed counterpart
of this Agreement to Escrow Agent, together with a request that Escrow Agent
execute and deliver to Seller and Buyer an original Acceptance of Escrow Agent
substantially in the form of Exhibit “M”.

Article 22. — Code Section 1031 Exchange.

     2201. Buyer previously has: (a) conveyed its interest in certain real
property (the “Relinquished Property”)
to              (“Qualified Intermediary”) as the
first part of a non-simultaneous exchange of the Relinquished Property for one
or more parcels of real property (“Replacement Property”) under Code Section
1031; and (b) notified Qualified Intermediary that he has selected the Property
as Replacement Property and elected to exchange his interest in the
Relinquished Property for an interest in the Property.

     2202. As contemplated by this Agreement, Buyer shall accomplish the
exchange by acquiring all of the Membership Interests of the Project LLC, which
by the terms of this Agreement shall acquire the Property. Therefore, upon
Closing, the Project LLC will own the Replacement Property and will be a
limited liability company with a single member and, in accordance with Internal
Revenue Service Revenue Ruling 99-6, will be disregarded as an entity for tax
purposes, so that Buyer will be deemed to own and hold the assets of the
Project LLC, including the Replacement Property.

     2203. In order for Buyer to complete said exchange, it may assign its
rights under this Agreement to Qualified Intermediary, provided that: (a)
Neither Seller nor GTP shall incur any liabilities, expenses or costs as a
result or in connection with the exchange; (b)the exchange shall not delay the
Closing Date; (c) Buyer shall indemnify, protect, defend and hold Seller and
GTP harmless from and against any claim, demand, obligation, cost, damage,
liability, judgment or

27

 

expense (including reasonable attorneys’ fees, charges and disbursements)
arising out of or in connection with the exchange; (d) Neither Seller nor GTP
makes any representation or warranty as to the qualification of the exchange
under Section 1031 of the Code; (e) the exchange and the assignment to
Qualified Intermediary shall be solely for federal, state and local income
taxes purposes and shall not relieve Buyer from any representations,
warranties, covenants, obligations or liabilities otherwise imposed under this
Agreement; and (f) Qualified Intermediary shall not be required to take title
to the Replacement Property or the Membership Interests of the Project LLC in
connection with the exchange.

[EXECUTIONS BEGIN ON THE NEXT PAGE.]

28

 

     SIGNED, SEALED AND DELIVERED to be effective as of the 3rd day of
September, 2004, which shall be the “Contract Date.”

	 	 	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	GABLES REALTY LIMITED

PARTNERSHIP, a Delaware limited

Partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Gables GP, Inc., a Texas corporation,

its sole general partner
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	By:
	 	/s/ Dennis Ranosek	 	 	 	 
	

	 	 	 	 	 	
 	 	 	 	 
	

	 	 	 	 	 	Dennis Rainosek,

Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	GABLES GP, INC., a Texas corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	By:
	 	/s/ Dennis Ranosek	 	 	 	 
	

	 	 	 	 	 	
 	 	 	 	 
	

	 	 	 	 	 	Dennis Rainosek,

Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	GTP:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	GABLES-TENNESSEE PROPERTIES,

L.L.C., a Tennessee limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Gables Realty Limited Partnership,

a Delaware limited partnership, Member
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	By:
	 	Gables GP, Inc., a Texas corporation,

its sole general partner	 	 	 	 

	 	 	 	 	 
	

	 	By:
	 	/s/ Dennis Rainosek
	 

	 	 	 	

	

	 	 	 	Dennis Rainosek,
	

	 	 	 	Vice President

29

 

[EXECUTIONS CONTINUED FROM THE PREVIOUS PAGE.]

	 	 	 	 	 	 	 	 	 
	 	 	BUYER:
	 
	 	 	 	 	 	 	 	 
	 	 	AMERCIA FIRST APARTMENT INVESTORS,

INC., a Maryland corporation,
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:
	 	/s/ Joseph N. Grego	 	 
	

	 	 	 	 	 	
 	 	 
	

	 	 	 	 	 	    Joseph N. Grego, President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	FEIN: 47-0858301

30exv10w1

 

Exhibit 10.1

[FORM]

HOLLY LOGISTIC SERVICES, L.L.C.

DIRECTOR

RESTRICTED UNIT AGREEMENT

UNDER THE HOLLY ENERGY PARTNERS, L.P.

LONG-TERM INCENTIVE PLAN

     This Restricted Unit Agreement (the “Agreement”) is made and entered into
by and between HOLLY LOGISTIC SERVICES, L.L.C. (the “Company”), and
____________________ (the “Director”). This Agreement is entered into as
of the _____________ day of __________________, _________(the “Date of Grant”).

W I T N E S S E T H:

     WHEREAS, the Company has adopted the HOLLY ENERGY PARTNERS, L.P. LONG-TERM
INCENTIVE PLAN (the “Plan”) to attract, retain and motivate employees,
directors and consultants; and

     WHEREAS, the grant to the Director of restricted units of HOLLY ENERGY
PARTNERS, L.P. (the “Partnership”) as part of the Director’s compensation for
service as a member of the Board of Directors of the Company (the “Board”) was
authorized by resolution of the Board on August 4, 2004.

     NOW, THEREFORE, in consideration of the Director’s agreement to serve as a
member of the Board, the Director and the Company agree as follows:

          1. Grant. The Company hereby grants to the Director as of the Date
of Grant an award of
           Units (as defined in the Plan), subject to the
terms and conditions set forth in this Agreement, including, without
limitation, those described in Section 5 (the “Restricted Units”).

          2. Restricted Units. The Company shall obtain the Units (as defined
in the Plan) subject to this Agreement and cause such Units to be held
for the Director in book entry form by the Partnership’s transfer agent
with a notation that the Units are subject to restrictions. The Director
hereby agrees that the Restricted Units shall be held subject to
restrictions as provided in the Agreement until the restrictions on such
Restricted Units expire or the Restricted Units are forfeited as provided
in Section 4 of this Agreement. The Director hereby agrees that if part
or all of the Restricted Units are forfeited pursuant to this Agreement,
the Company shall have the right to direct the Partnership’s transfer
agent to cancel such forfeited Restricted Units or, at the Company’s
election, transfer such Restricted Units to the Company or to any
designee of the Company.

          3. Rights of Director. Effective as of the Date of Grant, the
Director is a unit holder with respect to all of the Restricted Units
granted to him pursuant to Section 1 and has all of the rights of a unit
holder with respect to all such Restricted Units, including the

1

 

right to receive all distributions paid with respect to such
Restricted Units and any right to vote with respect to such Restricted
Units; provided, however, that such Restricted Units shall be subject to
the restrictions hereinafter described, including, without limitation,
those described in Section 5.

          4. Forfeiture and Expiration of Restrictions.

                  (a) The Director shall forfeit to the Company all of the
Restricted Units immediately and without any payment to the
Director whatsoever if the Director ceases to be a member of the
Board before          ,        (the “Vesting Date”), for any reason,
other than death, total and permanent disability, or retirement, as
provided in Section 4(b) below. On and after such date, all such
Restricted Units shall be fully vested and nonforfeitable (“Vested
Units”).

                  (b) In the event of the Director’s death, total and
permanent disability, as determined by the Compensation Committee
of the Board (the “Committee”) in its sole discretion, or
retirement, in accordance with any retirement policy of the Company
regarding Board members, before lapse of all restrictions pursuant
to Section 4(a) above, the Director shall be vested with a number
of the Restricted Units equal to the number of Restricted Units
specified in Section 1 times the percentage that the number of days
from          ,
       to the date of death, disability or
retirement bears to        days and any remaining Restricted Units
shall be forfeited; provided, however, that any fractional units
will be forfeited to the Company. The Director or his designated
beneficiary or estate will have no right to any Restricted Units
that remain subject to restrictions, and those Restricted Units
will be forfeited.

                  (c) In the event of a Change in Control before lapse of all
restrictions pursuant to Section 4(a) above, all restrictions
described in Section 5 shall lapse and the Restricted Units will
become Vested Units and the Company shall deliver the Vested Units
to the Director as soon as practicable thereafter. For purposes of
this Agreement, a “Change in Control” shall occur if:

                          (i) Any “Person” (as defined in Section 4(d)(i) below),
other than (1) Holly Corporation (“Holly”) or any of its
wholly-owned subsidiaries, (2) HEP Logistics Holdings, L.P.
(the “General Partner”), the Partnership, the Company or any
of their subsidiaries, (3) a trustee or other fiduciary
holding securities under an employee benefit plan of Holly,
the Partnership, the Company or any of their “Affiliates” (as
defined in Section 4(d)(iv) below), (4) an underwriter
temporarily holding securities pursuant to an offering of
such securities, or (5) an entity owned, directly or
indirectly, by the holders of the voting securities of Holly,
the Company, the General Partner or the Partnership in
substantially the same proportions as their ownership in
Holly, the Company, the General Partner or the Partnership,
respectively, is or becomes the “Beneficial Owner” (as
defined in Section 4(d)(ii) below), directly or indirectly,
of securities of Holly, the Company, the General Partner or
the Partnership (not including

2

 

in the securities beneficially owned by such Person any
securities acquired directly from Holly, the General Partner,
the Partnership, the Company or their Affiliates)
representing more than forty percent (40%) of the combined
voting power of Holly’s, the Company’s, the General Partner’s
or the Partnership’s then outstanding securities, excluding
any Person who becomes such a Beneficial Owner in connection
with a transaction described in Section 4(c)(iii)(A) below.

                          (ii) The individuals who as of the Date of Grant
constitute the Board of Directors of Holly (the “Holly
Board”) and any “New Director” (as defined in Section
4(d)(iii) below) cease for any reason to constitute a
majority of the Holly Board.

                          (iii) There is consummated a merger or consolidation of
Holly, the Company, the General Partner or the Partnership
with any other entity, except if:

                                        (A) the merger or consolidation results in the
voting securities of Holly, the Company, the General
Partner or the Partnership outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity or any parent
thereof) at least sixty percent (60%) of the combined
voting power of the voting securities of Holly, the
Company, the General Partner or the Partnership, as
applicable, or such surviving entity or any parent
thereof outstanding immediately after such merger or
consolidation; or

                                        (B) the merger or consolidation is effected to
implement a recapitalization of Holly, the Company, the
General Partner or the Partnership (or similar
transaction) in which no Person is or becomes the
Beneficial Owner, directly, or indirectly, of
securities of Holly, the Company, the General Partner
or the Partnership, as applicable, (not including in
the securities beneficially owned by such Person any
securities acquired directly from Holly, the Company,
the General Partner or the Partnership or their
Affiliates other than in connection with the
acquisition by Holly, the Company, the General Partner
or the Partnership or their Affiliates of a business)
representing more than forty percent (40%) of the
combined voting power of Holly’s, the Company’s, the
General Partner’s or the Partnership’s, as applicable,
then outstanding securities.

                          (iv) The holders of the voting securities of Holly, the
Company, the General Partner or the Partnership approve a
plan of complete liquidation or dissolution of Holly, the
Company, the General Partner or the Partnership, as
applicable, or an agreement for the sale or disposition

3

 

by Holly, the Company, the General Partner or the
Partnership of all or substantially all of Holly’s, the
Company’s, the General Partner’s or the Partnership’s assets,
as applicable, other than a sale or disposition by Holly, the
Company, the General Partner or the Partnership of all or
substantially all of Holly’s, the Company’s, the General
Partner’s or the Partnership’s assets, as applicable, to an
entity at least sixty percent (60%) of the combined voting
power of the voting securities of which is owned by the
direct or indirect holders of the voting securities of Holly,
the Company, the General Partner or the Partnership, as
applicable, in substantially the same proportions as their
ownership of Holly, the Company, the General Partner or the
Partnership, as applicable, immediately prior to such sale.

(d) Definitions. For purposes of Section 4(c) above,

                          (i) “Person” shall have the meaning given in section
3(a)(9) of the Securities Exchange Act of 1934 (the “1934
Act”) as modified and used in sections 13(d) and 14(d) of the
1934 Act.

                          (ii) “Beneficial Owner” shall have the meaning provided
in Rule 13d-3 under the 1934 Act.

                          (iii) “New Director” shall mean an individual whose
election by the Holly Board, or nomination for election by
holders of the voting securities of Holly, was approved by a
vote of at least two-thirds (2/3) of the directors then still
in office who either were directors as of the Date of Grant
or whose election or nomination for election was previously
so approved or recommended. However, “New Director” shall
not include a director whose initial assumption of office is
in connection with an actual or threatened election contest,
including but not limited to a consent solicitation relating
to the election of directors of Holly.

                          (iv) “Affiliate” shall have the meaning set forth in
Rule 12b-2 promulgated under section 12 of the 1934 Act.

               5. Limitations on Transfer. The Director agrees that he shall not
dispose of (meaning, without limitation, sell, transfer, pledge,
exchange, hypothecate or otherwise dispose of) prior to the Vesting Date
any Restricted Units hereby acquired. Any attempted disposition of the
Restricted Units in violation of the preceding sentence shall be null and
void. Notwithstanding the foregoing, part or all of the Restricted Units
or rights under this Agreement may be transferred to a spouse pursuant to
a domestic relations order issued by a court of competent jurisdiction;
provided, however, that such Restricted Units shall continue to be held
pursuant to Section 2 of this Agreement, and the transferee under the
domestic relations order shall agree that the Restricted Units so
transferred shall continue to be subject to the terms of this Agreement,
including forfeiture in accordance with Sections 4(a) and (b) of this
Agreement.

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               6. Nontransferability of Agreement. This Agreement and all rights
under this Agreement shall not be transferable by the Director during his
life other than by will or pursuant to applicable laws of descent and
distribution. Any rights and privileges of the Director in connection
herewith shall not be transferred, assigned, pledged or hypothecated by
the Director or by any other person or persons, in any way, whether by
operation of law, or otherwise, and shall not be subject to execution,
attachment, garnishment or similar process. In the event of any such
occurrence, the Restricted Units shall automatically be forfeited.
Notwithstanding the foregoing, all or some of the Restricted Units or
rights under this Agreement may be transferred to a spouse pursuant to a
domestic relations order issued by a court of competent jurisdiction,
subject to the limitations on such transfer described in Section 5.

               7. Adjustment of Restricted Units. The number of Restricted Units
granted to the Director pursuant to this Agreement shall be adjusted to
reflect distributions of the Partnership paid in units, unit splits or
other changes in the capital structure of the Partnership, all in
accordance with the Plan. All provisions of this Agreement shall be
applicable to such new or additional or different units or securities
distributed or issued pursuant to the Plan to the same extent that such
provisions are applicable to the units with respect to which they were
distributed or issued. In the event that the outstanding Units (as
defined in the Plan) of the Partnership are exchanged for a different
number or kind of units or other securities, or if additional, new or
different units are distributed with respect to the Units (as defined in
the Plan) through merger, consolidation, or sale of all or substantially
all of the assets of the Partnership, each remaining unit subject to this
Agreement shall have substituted for it a like number and kind of units
or shares of new or replacement securities as determined in the sole
discretion of the Committee, subject to the terms and provisions of the
Plan.

               8. Delivery of Vested Units. No Vested Units shall be delivered
pursuant to this Agreement until the approval of any governmental
authority required in connection with this Agreement, or the issuance of
Vested Units hereunder, has been received by the Company. The Committee
will delay delivery of Vested Units until the restrictions of Section 5
lapse.

               9. Securities Act. The Company shall have the right, but not the
obligation, to cause the Restricted Units to be registered under the
appropriate rules and regulations of the Securities and Exchange
Commission. The Company shall not be required to deliver any Vested
Units hereunder if, in the opinion of counsel for the Company, such
delivery would violate the Securities Act of 1933 or any other applicable
federal or state securities laws or regulations.

               10. Definitions; Copy of Plan. To the extent not specifically
provided herein, all terms used in this Agreement shall have the same
meanings ascribed to them in the Plan. By the execution of this
Agreement, the Director acknowledges receipt of a copy of the Plan. If
any provision of this Agreement is held to be illegal, invalid or
unenforceable under any applicable law, then such provision will be
deemed to be modified to the minimum extent necessary to render it legal,
valid and enforceable; and if such provision cannot be so modified, then
this Agreement will be construed as if not

5

 

containing the provision held to be invalid, and the rights and
obligations of the parties will be construed and enforced accordingly.

               11. Administration. This Agreement shall at all times be subject to
the terms and conditions of the Plan. The Committee shall have sole and
complete discretion with respect to all matters reserved to it by the
Plan and decisions of the majority of the Committee with respect thereto
and this Agreement shall be final and binding upon the Director and the
Company. In the event of any conflict between the terms and conditions
of this Agreement and the Plan, the provisions of the Plan shall control.

               12. Continuation as Director. This Agreement shall not be construed
to confer upon the Director any right to continue to serve as a member of
the Board.

               13. Governing Law. This Agreement shall be interpreted and
administered under the laws of the State of Texas, without giving effect
to any conflict of laws provisions.

               14. Amendments. This Agreement may be amended only by a written
agreement executed by the Company and the Director. Any such amendment
shall be made only upon the mutual consent of the parties, which consent
(of either party) may be withheld for any reason.

               15. No Liability for Good Faith Determinations. The General
Partner, the Partnership, the Company, Holly and the members of the
Committee, the Board and the Holly Board shall not be liable for any act,
omission or determination taken or made in good faith with respect to
this Agreement or the Restricted Units granted hereunder.

               16. No Guarantee of Interests. The Board, the Holly Board, the
General Partner, the Partnership, Holly and the Company do not guarantee
the Units (as defined in the Plan) from loss or depreciation.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its officer thereunto duly authorized, and the Director has set his hand as
of the date and year first above written.

	 	 	 
	

	 	HOLLY LOGISTIC SERVICES, L.L.C.
	 
	 	 
	

	 	By:
	

	 	

	 
	 	 
	

	 	

	

	 	Director

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