Document:

exv10w1

 

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered
into as of the 20th day of February, 2004 (the “Effective Date”) by and between
TRIVEST RESIDENTIAL LLC (“Purchaser”), and SM REAL ESTATE FUND VII, LTD.
(“Seller”).

1.

SALE OF PROPERTY

     1.1.     Upon the terms and conditions hereinafter set forth, Seller shall
sell to Purchaser and Purchaser shall purchase from Seller that certain
apartment complex located in San Antonio, Texas, and containing, in the
aggregate, 198 units and related improvements, and commonly known as Fifth
Avenue Apartments, including all of the following described property
(collectively, the “Property”):

          (a)     The real property located in Bexar County, Texas, and being more
particularly described on EXHIBIT A attached hereto and incorporated
herein by this reference, together with all rights and appurtenances
pertaining to such real estate, including, without limitation, any and
all rights of Seller, if any, in and to adjacent roads, alleys,
easements, streets and ways (collectively, the “Land”);

          (b)     All improvements, structures and fixtures placed, constructed or
installed on the Land (collectively, the
“Improvements”);

          (c)     All (i) mechanical systems and the fixtures and equipment
related thereto comprising part of or attached to or located upon the
Improvements, including, but not limited to, electrical systems, plumbing
systems, heating systems, air conditioning systems, (ii) carpets, drapes,
blinds and other furnishings owned by Seller and comprising a part of or
attached to or located upon the Improvements, (iii) appliances owned by
Seller; (iv) maintenance equipment, supplies and tools owned by Seller
and used in connection with the Improvements; and (v) other machinery,
equipment, fixtures, supplies (including marketing supplies) and personal
property of every kind and character owned by Seller and located in or on
or used in connection with the Land or the Improvements or the operations
thereon (collectively, the “Personal Property”);

          (d)     Landlord’s interest in all leases, lease commitments and all
other rental agreements (collectively, the “Leases”) with tenants
occupying space situated in the Improvements or otherwise having rights
with regard to use of the Land or the Improvements, and all security
deposits or like payments, if any, paid by tenants in connection with
such Leases;

          (e)     Seller’s interest in all (i) brokerage or tenant locator
contracts, (ii) cable or subscription television agreements, (iii)
maintenance, repair, service and pest control contracts (including but
not limited to janitorial, landscaping and laundry agreements), and (iv)
all other contracts pursuant to which services (other than property
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services) or goods are provided to the Property, to the extent the
same are assignable by Seller and are assumed by Purchaser as
contemplated by Section 3.4 hereof (collectively, the “Service
Contracts”);

          (f)     Seller’s interest in all furniture, fixture and equipment
leases, to the extent the same are assignable by Seller and are assumed
by Purchaser as contemplated by Section 3.4 hereof (the “Personalty
Leases”);

          (g)     All intangible property owned by Seller or in which Seller has
an interest, if any, in connection with any of the Land or Improvements
or the operations thereon including, without limitation, Seller’s
interest in all warranties and guaranties relating to the Land, the
Improvements or the Personal Property, to the extent same are assignable,
and all site plans, surveys, plans and specifications and floor plans (to
the extent Seller owns and has rights to transfer such property) in
Seller’s possession or in the possession of Seller’s leasing and
management agents, of the Property and which relate to the Land, the
Improvements or the Personal Property, and the right to the use thereof,
including but not limited to Seller’s rights, if any, under transferable
business licenses, governmental permits or approvals, and the right to
the use of (without warranty as to exclusivity or otherwise) any
telephone numbers, listings, promotional material, domain names, trade
names (including the trade name “Fifth Avenue Apartments” (the “Trade
Name”)), and other property employed in connection with the Land or the
Improvements or the operations thereon (collectively, the “Intangible
Property”).

2.

PURCHASE PRICE

     2.1.     The purchase price (the “Purchase Price”) for the Property shall be
EIGHT MILLION ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($8,150,000.00),
payable at Closing (as hereinafter defined) as follows:

          (a)     Purchaser shall assume the indebtedness outstanding under the
Loan Documents on the Closing Date; and

          (b)     Purchaser shall pay the balance of the Purchase Price (i.e., the
excess of the Purchase Price over the total indebtedness outstanding
under the Loan Documents on the Closing Date) at Closing in certified
funds or by wire transfer.

     2.2.     Upon the full execution and delivery of this Agreement by Seller and
Purchaser, Purchaser shall deliver to the office of Chicago Title Insurance
Company, 2001 Bryan Street, Suite 1700, Dallas, Texas 75201-3012, Attn: Ted
Darby (the “Escrow Agent” and “Title Company”), the sum of ONE HUNDRED THOUSAND
AND NO/100 DOLLARS ($100,000.00) (the “Deposit”). The Deposit shall be held by
Escrow Agent in escrow in an interest-bearing, federally-insured deposit
account. At Closing, the Deposit shall either be credited against the Purchase
Price or returned by Escrow Agent to Purchaser (upon Purchaser’s payment to
Seller of the full Purchase Price, less any prorations made pursuant to this
Agreement). In either

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event, Purchaser shall be entitled to any interest earned on the Deposit,
as long as Purchaser has not defaulted under this Agreement, in which case such
interest shall be payable to Seller. In the event this Agreement is terminated
in accordance with the express terms hereof, the Deposit and all other funds
held by Escrow Agent shall be returned to the parties pursuant to the terms of
this Agreement.

     2.3.     Purchaser and Seller acknowledge and agree that the obligation of
Seller to sell the Property and the obligation of Purchaser to acquire the
Property is contingent upon Seller’s assignment and Purchaser’s assumption of
all of the rights and obligations of Seller under the Loan Documents
(collectively, the “Loan Documents”), including all outstanding principal and
all accrued interest thereon, which Loan Documents were executed in connection
with a loan in the original principal amount of $6,400,000.00 made by General
Electric Capital Corporation (“GECC”) to Seller, which loan is evidenced by a
promissory note dated December 3, 1998 executed by Seller payable to the order
of GECC, and which loan has been subsequently assigned by GECC to Norwest Bank
Minnesota, National Association, as trustee for the registered holders of DLJ
Commercial Mortgage Corp., Commercial Mortgage Pass-Through Certificates,
Series 1999-CG1 (“Trustee”).

     2.4.     Within five (5) business days from the Effective Date, Purchaser
shall make written application to GECC and/or Trustee, as applicable, for
approval of Purchaser’s assumption of the Loan Documents, and shall provide a
copy of such application to Seller. Purchaser shall use diligent and good
faith efforts to obtain all consents and approvals from GECC and/or Trustee,
which are necessary in order (i) for Seller to assign and Purchaser to assume
all of the rights and obligations of Seller under the Loan Documents on the
terms set forth below, and (ii) to release Seller from any liability under the
Loan Documents (herein collectively called the “Approval”), all at Purchaser’s
sole cost and expense. Seller shall cooperate in good faith, at no cost to
Seller, with Purchaser’s efforts to obtain the Approval from GECC and/or
Trustee. The Approval must allow Purchaser to assume all of Seller’s rights
and obligations under the Loan Documents (i) on the same terms as are reflected
in the Loan Documents (e.g., no increase in the interest rate and no additional
costs other than those set forth below), except that the transfer restrictions
contained therein must be modified to permit transfers of interests in the
entities owning interests in the Purchaser in a manner similar to that approved
by GECC on a previous $5,120,000.00 loan assumed by an affiliate of Purchaser,
TriVest Bitters LP, and (ii) with no expense to Purchaser other than the
payment of a loan assumption fee not to exceed one percent (1%) of the current
principal balance of the Loan, a $5,000 loan application fee, fees for any
third party reports, GECC’s attorney’s fees, and any other normal and customary
fees payable in connection with a loan assumption transaction. In the event
that Purchaser is unable to obtain the Approval from GECC and/or Trustee on or
before 5:00 p.m. on the Closing Date, then either Seller or Purchaser may, in
its sole discretion, terminate this Agreement by written notice to the other
party and the Deposit shall be returned to the Purchaser.

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3.

PROPERTY SURVEY, TITLE COMMITMENT AND INSPECTIONS

     3.1.     Within five (5) business days from the date of this Agreement, Seller
shall deliver to Purchaser a current title commitment (the “Title Commitment”)
showing the state of title to the Property. All exceptions appearing in the
Title Commitment to which Purchaser does not object, or which are deemed waived
and accepted by Purchaser shall be deemed included in the term “Permitted
Exceptions”; provided, however, that as to those exceptions to which Purchaser
does object, if Seller modifies any such exception to Purchaser’s satisfaction,
then such exception, as so modified, shall be deemed included in the term
“Permitted Exceptions.”

     3.2.     Seller shall also provide Purchaser within five (5) business days
from the date of this Agreement with a boundary survey of the Property dated
November 24, 1998 prepared and certified by a registered land surveyor (the
“Property Survey”). Purchaser may cause an updated Property Survey to be
prepared at Purchaser’s sole cost and expense. In the event (i) the Property
Survey shows any easement, right-of-way, encroachment, conflict, protrusion or
other matter affecting the Property that is unacceptable to Purchaser, or (ii)
any exceptions appear in the Title Commitment other than the standard printed
exceptions set forth in the standard Texas form of Commitment for Title
Insurance, that are unacceptable to Purchaser, Purchaser shall have until 5:00
p.m., Dallas, Texas time, on the tenth (10th) business day before the end of
the Inspection Period to notify Seller in writing of such facts and the reasons
therefor (“Purchaser’s Objections”). Upon the expiration of said ten (10)
business day period, except for Purchaser’s Objections if same are timely
raised, Purchaser shall be deemed to have accepted the form and substance of
the Property Survey (as revised), all matters shown thereon, all exceptions to
Title Commitment and other items shown thereon. Notwithstanding anything to
the contrary contained herein, other than the last sentence of this section,
Seller shall have no obligations to take any steps or bring any action or
proceeding or otherwise to incur any effort or expense whatsoever to eliminate
or modify any of the Purchaser’s Objections. In the event Seller is unable or
unwilling to eliminate or modify all of Purchaser’s Objections to the
reasonable satisfaction of Purchaser, Purchaser may (as its sole and exclusive
remedy) terminate this Agreement by delivering notice thereof in writing to
Seller on or before the expiration of the Inspection Period. Notwithstanding
anything to the contrary contained herein, Seller shall cause to be released on
or before Closing (i) all liens filed against the Property (other than liens
evidenced by the Loan Documents securing obligations that Purchaser has
expressly agreed to assume under the terms of this Agreement), (ii) all items
Seller agrees to cure in any written response to Purchaser’s Objections, and
(iii) any exceptions to title (excluding the Time Warner Contract, which
Purchaser has knowledge) created by Seller and not reflected on a Title
Commitment delivered to Purchaser prior to the expiration of the Inspection
Period.

     3.3.     Within five (5) business days from the date of this Agreement, Seller
shall, at Seller’s sole cost and expense, furnish Purchaser with or make
available to Purchaser at the Property, the following, to the extent that the
same are in the current possession of Seller or Seller’s leasing and management
agent(s) (collectively, the “Due Diligence Documents”):

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          (a)     A true, correct and complete list and copies of all Service
Contracts, all documents pertaining to Personalty Leases and all
warranties and guaranties relating to the Property, or any part thereof;

          (b)     A true, correct and complete tenant rent roll for the
Improvements (the “Rent Roll”). Seller shall make available, for
inspection by Purchaser during the Inspection Period, true, correct and
complete copies of all existing tenant leases covering portions of the
Property;

          (c)     Copy of the last environmental report prepared relating to the
Property in Seller’s possession;

          (d)     Copies of all Loan Documents;

          (e)     Operating Statements (herein so called) for the Property for the
last two (2) calendar years, together with year-to-date operating
statements (if available) and management company budget for the current
year;

          (f)     Copies of 2002 and 2003 tax bills;

          (g)     Copies of insurance certificates currently in effect for the
Property;

          (h)     Copies of year-to-date inspection reports for 2004, if any;

          (i)     Inventory of Personal Property;

          (j)     Current list of personnel;

          (k)     Insurance loss history for the past five (5) years for both
property and casualty losses and liability;

          (l)     Copies of all licenses and permits in effect to allow Seller to
operate the Property;

          (m)     Copies of all utility bills for the past two years (house and
vacancies);

          (n)     Summary of all capital improvements completed during the last
two years, and any documentation and\or bids for any proposed capital
improvements or replacements; and

          (o)     Copies of any documents relating to the Homeowners Association,
if applicable.

     3.4.     If at any time prior to 5:00 p.m. Dallas, Texas time on March 22,
2004 (the “Inspection Period”), Purchaser is not satisfied with the Property
for any reason, Purchaser may, in its sole discretion, terminate this Agreement
by written notice to Seller and receive a refund of the Deposit. If Purchaser
does not elect to terminate this Agreement during the Inspection Period, it
shall be deemed to have waived its right to terminate this Agreement

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pursuant to this Section, and all contingencies to Closing shall be deemed
approved and waived by Purchaser at the expiration of the Inspection Period,
with the exception of Purchaser obtaining the Approval. If Purchaser notifies
Seller in writing within the Inspection Period of Purchaser’s election to
terminate any Service Contract or Personalty Lease, Seller will attempt after
the end of the Inspection Period to terminate such Service Contract or
Personalty Lease, as the case may be. However, if the terms of such Service
Contract or Personalty Lease prohibit termination by the Closing Date or
require a termination fee or premium, Purchaser will either agree in writing to
assume such Service Contract or Personalty Lease, as the case may be, or pay
any required termination fee or premium. If Purchaser terminates this
Agreement pursuant to this provision or Section 3.2 or fails to purchase the
Property due to a default by Purchaser hereunder, Purchaser shall return to
Seller the Due Diligence Documents delivered to Purchaser under Section 3.3
above and destroy all copies made.

     3.5.     Purchaser may, from the date hereof until Closing, make such
inspections, tests and investigations of the Property (including environmental
tests) and such examinations of the books, records, leasing files, contracts,
agreements and other instruments of Seller relating to the Property as
Purchaser deems necessary or advisable and Seller shall give those persons
inspecting the Property at Purchaser’s request reasonable access to the
Property located thereon, which access shall not unreasonably interfere with
tenants in possession. Prior to conducting any invasive testing or
investigation, including, without limitation, borings and physical samplings,
at the Property, Purchaser shall at least three (3) business days prior to the
scheduled commencement thereof provide Seller with a written request to conduct
such testing or investigation. Such request shall include a description of the
scope of work required for such testing or investigation, how Purchaser shall
conduct such testing or investigation and certificates of insurance for the
persons or entities who shall be performing such testing or investigation.
Seller shall not unreasonably withhold or delay its approval of such request.
If Seller approves such request, all such testing or investigation shall be
conducted in the presence of a representative of Seller if Seller chooses to
have a representative present at the scheduled time. The cost of the
inspections, tests, investigations and interviews undertaken by Purchaser shall
be borne solely by Purchaser and Purchaser shall indemnify and hold Seller
harmless from and against any and all loss, costs and expense, including
reasonable attorneys’ fees, for the costs of such inspections, tests and
investigations and for damage to persons or property caused by Purchaser’s
inspection, testing and investigation of the Property. The indemnities
contained in this Section 3.5 shall survive Closing or the earlier termination
of this Agreement for a period of twelve (12) months. The right of access to
the Property granted hereby shall in no way be construed as giving Purchaser
possession of or any legal or equitable title to the Property prior to Closing.

     3.6.     Intentionally Omitted.

4.

REPRESENTATIONS, WARRANTIES AND COVENANTS

     4.1.     Seller represents and warrants to Purchaser as follows (which
representations and warranties shall be true and correct as of the date hereof
and as of the date of Closing):

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          (a)     Seller owns title to the Land and Improvements in fee simple.
At Closing, Seller will convey or cause to be conveyed to Purchaser good
and marketable fee simple title to the Property, subject only to the
Permitted Exceptions.

          (b)     Seller has duly and validly authorized and executed this
Agreement, and has full right, title, power and authority to enter into
this Agreement and to carry out all of its terms, none of which will
result in any breach or constitute default under any agreement or other
instrument, other than the Loan Documents, pending the execution of any
consents and agreements regarding this Agreement and the Purchaser’s
assumption of Seller’s rights and obligations under the Loan Documents as
required hereunder, to which Seller is a party or by which Seller or the
Property might be bound.

          (c)     There are no existing or pending litigation actions, suits,
proceedings or claims with respect to any aspect of the Property nor, to
Seller’s knowledge, have any such actions, suits, proceedings or claims
been threatened or asserted.

          (d)     Seller is not a “foreign person” within the meaning of the
Internal Revenue Code of 1986, as amended (hereinafter the “Code”),
Sections 1445 and 7701.

          (e)     To Seller’s current, actual knowledge, the Rent Roll and
Operating Statements delivered to Purchaser in accordance with Sections
3.3, 4.2(b) and 6.1 are true and correct in all material respects.

          (f) To Seller’s knowledge, GECC has not notified Seller of any
default under the Loan Documents, Seller has not defaulted in making any
payments due under the Loan Documents, and there are no material defaults
under the Loan Documents.

          (g)     Seller has in force a policy or policies of insurance insuring
the Property against “all perils,” for the full replacement cost of the
Property.

     4.2.     From the Effective Date until the Closing Date or earlier termination
of this Agreement, Seller shall:

          (a)     continue to operate the Property in the ordinary course of
Seller’s business, which shall include renting units to qualified
residents at Seller’s normal and customary rental rates (provided that
“free rent” and similar concessions shall not exceed one month of rent on
a 12 or 13 month lease, all of which shall be applied in the first month
of the lease or prorated over the term of the lease);

          (b)     provide Purchaser once a month with a current Operating
Statement and Rent Roll for the Property;

          (c)     cause any leasing commissions with respect to Tenant Leases
entered into prior to Closing to be fully discharged prior to Closing so
that Purchaser shall not be obligated for any such commissions from and
after the Closing Date;

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          (d)     not enter into any written or oral service contract or other
agreement with respect to the Property that will not be fully performed
by Seller on or before the Closing Date, or that will not be cancellable
by Purchaser without liability, penalty or premium upon no greater than
thirty (30) days notice, without the prior written consent of Purchaser,
which shall not be unreasonably withheld or delayed;

          (e)     advise Purchaser promptly of any litigation, arbitration, or
administrative hearing before any governmental agency concerning or
affecting the Property that is instituted or threatened after the date
hereof;

          (f)     promptly provide Purchaser with copies of any notices concerning
the Property that Seller receives from any appraisal districts, taxing
authorities or any governmental agency having jurisdiction over the
Property;

          (g)     maintain in full force and effect “all perils” property
insurance for full replacement cost of the Property;

          (h)     not offer the Property for sale to any other person, not enter
into or continue negotiations with any other person concerning the sale
of the Property, not sell, assign, or convey any right, title, or
interest whatsoever in or to the Property, and not create or permit to
exist any lien, encumbrance, or charge against the Property (other than
indebtedness that Purchaser has agreed in this Agreement to assume)
without promptly discharging the same; and

          (i)     make all payments due under the Loan Documents on or before the
due date therefor, comply with all of the other provisions of the Loan
Documents, promptly provide Purchaser with copies all notices or other
correspondence received from or sent to the Lender by Seller, and not
modify or agree to the modification of any of the Loan Documents without
Purchaser’s written consent, which shall not be unreasonably withheld or
delayed.

     4.3.     Seller shall indemnify Purchaser, its successors and assigns,
against, and shall hold Purchaser, its successors and assigns, harmless from,
any and all costs, expenses, or actual damages, including reasonable attorneys’
fees, which Purchaser may incur because of any breach of any of the
representations, warranties or covenants herein contained, whether prior to or
after Closing, subject to Section 9.1 hereof.

     4.4.     Purchaser represents and warrants to Seller as follows (which
representations and warranties shall be true and correct as of the date hereof
and as of the Closing Date):

          (a)     Purchaser has duly and validly authorized and executed this
Agreement, and it has full right, title, power and authority to enter
into this Agreement and to carry out all of its terms; and

          (b)     The execution and delivery by Purchaser and consummation of the
transaction provided for herein (i) will be pursuant to proper legal
authority of

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Purchaser’s entity as to the transaction provided for herein, (ii)
will not violate the organizational documents of Purchaser, (iii) do not
require any approval or consent of any trustee or holders of any of its
debt, and (iv) do not contravene any existing governmental requirement
applicable to or binding on Purchaser or any of its property.

     4.5.     Purchaser shall indemnify Seller, its successors and assigns,
against, and shall hold Seller, its successors and assigns, harmless from, any
costs, expenses, or actual damages, including reasonable attorneys’ fees, which
Seller may incur because of any breach of the representations and warranties
herein contained, whether prior to or after Closing, subject to Section 9.1
hereof.

5.

CONDITIONS

     5.1.     The obligations of Purchaser to consummate the transaction
contemplated hereby are subject to the following conditions which, if not
fulfilled by Closing or as otherwise provided herein, shall entitle Purchaser,
at its option, to terminate the Agreement and receive a refund of the Deposit:

          (a)     The transaction contemplated under this Agreement to be effected
on the Closing Date shall not be restrained or prohibited by any
injunction or order or judgment rendered by any court or other
governmental agency of competent jurisdiction and no proceeding shall
have been instituted and be pending in which any creditor of Seller or
any other person seeks to restrain such transaction or otherwise to
attach any of the Property; provided, however, that any such proceeding
or action contemplated by this Section 5.1(a) shall not be brought by,
through or under Purchaser;

          (b)     Seller has timely complied with its obligations hereunder; and

          (c)     All warranties and representations made by Seller herein are and
remain truthful in all material respects.

     5.2.     The obligations of Seller to consummate the transaction contemplated
hereby are subject to the following conditions:

          (a)     Purchaser has timely complied with its obligations hereunder;
and

          (b)     All warranties and representations made by Purchaser herein are
and remain truthful in all material respects.

     5.3.     The obligation of both Seller and Purchaser to consummate the
transaction contemplated by this Agreement is also subject to Purchaser
obtaining the Approval, and the return of the Deposit and any other funds held
by Escrow Agent upon Purchaser’s failure to obtain the Approval within the time
periods prescribed by this Agreement shall be governed by the provisions of
this Agreement.

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6.

CLOSING

     6.1.     Closing shall be held in escrow on the thirtieth (30th) day after the
expiration of the Inspection Period (the “Closing Date” or “Closing”), unless
otherwise agreed in writing between the parties. Closing shall be held at the
offices of the Title Company, or at such other location as may be acceptable to
Seller and Purchaser.

       (a)     At Closing, Seller shall deliver to Purchaser the items
specified herein and the following documents and Instruments, duly
executed and acknowledged:

            (i)     Two originals of a Special Warranty Deed dated as of the
Closing Date, conveying the Land and the Improvements to Purchaser
subject only to the Permitted Exceptions, in the form of EXHIBIT B
attached hereto;

            (ii)   An original Bill of Sale and Blanket Assignment
conveying and assigning to Purchaser the property described therein
all free and clear of any liens or encumbrances except the
Permitted Exceptions, in the form of EXHIBIT C attached hereto;

            (iii)  Original Tenant notice letters, dated the date of
Closing, containing Seller’s authorization to the tenants of the
Property for payment of rental directly to Purchaser or Purchaser’s
managing agent in the form of EXHIBIT D attached hereto;

            (iv)   An original executed proration letter in the form of
EXHIBIT E attached hereto;

            (v)     A Rent Roll for the Property, certified by Seller to the
best of its knowledge to be true, complete and correct in all
material respects as of the Closing Date;

            (vi)   Evidence acceptable to Purchaser and the Title Company,
authorizing the consummation by Seller of the purchase and sale
transaction contemplated hereby and the execution and delivery of
the closing documents on behalf of Seller;

            (vii)  An executed Certification for Form 1099-S and an
executed certificate with respect to Seller’s non-foreign status
sufficient to comply with the requirements of Section 1445 of the
Internal Revenue Code, and all regulations applicable thereto;

            (viii) All other documents or things reasonably required to be
delivered by the Title Company to evidence Seller’s ability to
transfer the Property to Purchaser and to cause the Title Company
to issue the owner’s title policy to Purchaser subject only to the
Permitted Exceptions;

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            (ix)   An original Assignment and Assumption Agreement in form
acceptable to Seller, Purchaser and Trustee whereby Seller assigns
and Purchaser assumes all of Seller’s rights and obligations under
the Loan Documents arising on or after the Closing Date, including
without limitation, all of Seller’s rights and interests in and to
all reserve accounts and all other accounts maintained under the
terms of the Loan Documents.

       (b)     On or before Closing, Purchaser shall do the following:

            (i)     Deposit with the Escrow Agent the balance of the Purchase
Price set forth in Section 2.1 hereof for disbursement upon
consummation of the Closing pursuant to a closing statement to be
prepared by the Escrow Agent and agreed upon by Seller and
Purchaser;

            (ii)   Provide evidence, acceptable to Seller and the Title
Company, authorizing the consummation by Purchaser of the purchase
and sale transaction contemplated hereby and the execution and
delivery of the closing documents on behalf of Purchaser;

            (iii)  Execute an original of the Bill of Sale and Blanket
Assignment in the form of EXHIBIT C attached hereto;

            (iv)   Execute originals of the tenant notice letters in the
form of EXHIBIT D attached hereto;

            (v)     Execute an original of the proration letter in the form of
EXHIBIT E attached hereto; and

            (vi)   Execute originals of the Assignment and Assumption
Agreement identified in subsection (b)(xii) above.

       (c)     At Closing, Seller and Purchaser shall execute and deliver such
other instruments and documents as may be necessary in order to complete
Closing of the transaction contemplated hereunder, the form and content
of which shall be acceptable to Seller and Purchaser.

       (d)     If, prior to Closing, Purchaser is unable to obtain the
Approval, Purchaser may deliver a written request to Seller at least five
(5) business days prior to the Closing Date, which requests a 30-day
extension (the “Extension”) to the Closing for the sole purpose of
obtaining such Approval. Within one (1) business day after the delivery
of such request to Seller, Purchaser shall deposit an additional amount
equal to EIGHTY-ONE THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($81,500.00)
with Escrow Agent as an additional escrow deposit. If by 5:00 p.m.,
Dallas, Texas time on the fifteenth (15th) day of the Extension,
Purchaser has not obtained the Approval, either party may terminate this
Agreement by written notice to the other party and Escrow Agent, and upon
receipt of said termination notice, Escrow Agent shall immediately
deliver the Deposit and all other funds held in escrow (including the
$81,500.00) to

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Purchaser. If by 5:00 p.m., Dallas, Texas time on the thirtieth
(30th) day of the Extension, Purchaser has not obtained the Approval,
either party may terminate this Agreement by written notice to the other
party and Escrow Agent, and upon receipt of said termination notice,
Escrow Agent shall immediately deliver the Deposit and all other funds
held in escrow (including the $81,500.00) to Seller. If this Agreement
is not terminated as provided in this Section 6.1(d), the parties shall
close the transaction contemplated by this Agreement on the earlier of
(i) the fifteenth (15th) day after receipt of the Approval during the
Extension period by either Seller or Purchaser, and (ii) the fifteenth
(15th) day following the expiration of the Extension.

     6.2.     At Closing, Seller shall provide Purchaser with the originals, to the
extent available, of all documents, copies of which were provided or made
available to Purchaser pursuant to Section 3.3 hereof, as well as all other
tenant records (applications, credit checks, correspondence, etc.) and
maintenance records, and shall also provide Purchaser with all keys to the
Property. The records to be delivered to Purchaser shall include Seller’s and
Seller’s management company’s electronic records containing the information set
forth in the Rent Roll. Seller shall cooperate and shall cause its management
company to cooperate with Purchaser in downloading the electronic files into
Purchaser’s management system. One week prior to Closing, Seller shall “make
ready” for occupancy fifty percent (50%) of any apartment units that are vacant
on the date that is seven (7) days prior to Closing (as it may be extended
pursuant the Extension) in accordance with Seller’s normal and customary
practices.

     6.3.     Seller shall pay the cost of the Owner’s Policy of Title Insurance
provided for above, except Purchaser shall pay the cost of the “shortages in
area” modification and the cost of any endorsements. Purchaser shall pay (i)
the cost of updating the Property Survey, (ii) escrow fees, including
recordation fees, and (iii) any termination fees or other fees in connection
with the assumption of the Loan Documents. All recording fees and expenses
payable in connection with the sale contemplated by this Agreement, all
transfer taxes, if any, payable in connection with the sale contemplated by
this Agreement, and all fees and expenses of the Escrow Agent in connection
with its service as escrow agent hereunder shall be shared equally by Purchaser
and Seller. Each party shall pay its own attorney’s fees. All other closing
costs not specifically addressed in this Agreement shall be paid by the parties
in accordance with local Bexar County, Texas custom.

     6.4.     All (i) security and other deposits and (ii) advance or prepaid
rentals paid by tenants shall be itemized by Seller and such amount shall be
credited to Purchaser at Closing.

7.

PRORATIONS

     7.1.     At Closing and at certain times subsequent to Closing, prorations
shall be made in accordance with the proration letter attached hereto as
EXHIBIT E.

12

 

8.

POSSESSION

     8.1.     Purchaser shall be entitled to full and exclusive possession of the
Property at Closing, subject only to the Permitted Exceptions and the rights of
tenants in possession pursuant to leases delivered to Purchaser at Closing.

9.

SURVIVAL

     9.1.     All warranties, representations, covenants, obligations and
agreements contained in this Agreement shall survive the execution and delivery
of this Agreement and shall survive Closing hereunder; provided however, that
except as otherwise specifically provided in this Agreement, the parties waive
their right to sue for any breach of a warranty, representation, covenant,
obligation or agreement contained in this Agreement or to pursue any
indemnification relating thereto (i) which accrues more than six (6) months
following Closing or (ii) as to which written notice has not been given on or
before the six (6) month anniversary of Closing.

10.

COMMISSIONS

     10.1.   Seller and Purchaser each warrant and represent to each other that
no realtor, broker, finder, or other intermediary has been involved with or
employed by such party in connection with the transaction contemplated by this
Agreement other than O’Boyle Properties, Inc., whose commission will be paid by
Seller, if, but only if, Closing occurs hereunder. Seller and Purchaser agree
to indemnify, hold harmless and defend the other from and against claims, loss,
liability, cost and expense (including reasonable attorneys’ fees at or before
the trial level and any appellate proceedings) arising out of any claim made by
any other realtor, broker, finder, or any other intermediary who claims to have
been engaged, contracted or utilized by the indemnifying party in connection
with the transaction which is the subject matter of this Agreement. This
indemnification shall survive Closing or any termination of this Agreement and
shall not expire as set forth in Article 9 hereof.

11.

FURTHER INSTRUMENTS

     11.1.   Seller will, whenever reasonably requested by Purchaser, and
Purchaser will, whenever reasonably requested by Seller, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any and all
conveyances, assignments and all other instruments and documents as may be
reasonably necessary in order to complete the transaction herein provided and
to carry out the intent and purposes of this Agreement.

13

 

12.

TERMINATION AND REMEDIES

     12.1.   If prior to or at Closing Seller defaults hereunder and fails to
perform any of the covenants or agreements contained herein which are to be
performed by Seller, or if any warranty or representation made by Seller is not
true and correct in all material respects, Purchaser may, as its sole remedy,
either (i) seek specific performance by Seller, or (ii) terminate this
Agreement and receive an immediate refund of the Deposit from Escrow Agent,
together with a reimbursement by Seller of Purchaser’s actual expenses incurred
during the Inspection Period, not to exceed $15,000. Seller shall have no
obligation to reimburse such costs, however, until Seller has received from
Purchaser copies of all invoices for expenses incurred or expenditures made
during the Inspection Period.

     12.2.   If prior to or at Closing Purchaser defaults hereunder and fails to
perform any of the covenants or agreements contained herein which are to be
performed by Purchaser, or if any warranty or representations made by Purchaser
are not true and correct in all material respects, then Purchaser shall forfeit
the Deposit and any other funds held by Escrow Agent, together with any
interest earned thereon, to Seller, as Seller’s sole and exclusive remedy, as
liquidated damages, due to the inconvenience of ascertaining and measuring
actual damages, and the uncertainty thereof.

13.

RISK OF LOSS

     13.1.   Condemnation. If, prior to the Closing, action is initiated to take
any of the Property by eminent domain proceedings or by deed in lieu thereof,
Purchaser may either at or prior to Closing (a) terminate this Agreement, or
(b) consummate the Closing, in which latter event all of Seller’s assignable
right, title and interest in and to the award of the condemning authority shall
be assigned to Purchaser at the Closing and there shall be no reduction in the
Purchase Price.

     13.2.   Casualty. Except as provided in Sections 3.5 and 18 of this
Agreement, and unless such casualty is caused by Purchaser or its agents or
representatives, Seller assumes all risks and liability for damage to or injury
occurring to the Property by fire, storm, accident, or any other casualty or
cause until the Closing has been consummated. If the Property, or any part
thereof, suffers any damage in excess of $100,000.00 prior to the Closing from
fire or other casualty, which Seller, at its sole option, does not elect to
repair, Purchaser may either at or prior to Closing (a) terminate this
Agreement, or (b) consummate the Closing, in which latter event all of Seller’s
right, title and interest in and to the proceeds of any insurance covering such
damage (less an amount equal to any expenses and costs incurred by Seller to
repair or restore the Property and any portion of such proceeds paid or to be
paid on account of the loss of rents or other income from the Property for the
period prior to and including the Closing Date, all of which shall be payable
to Seller), to the extent the amount of such insurance does not exceed the
Purchase Price, shall be assigned to Purchaser at the Closing. If the
Property, or any part

14

 

thereof, suffers any damage less than $100,000.00 prior to the Closing,
Purchaser agrees that it will consummate the Closing and accept the assignment
of the proceeds of any insurance covering such damage plus an amount equal to
Seller’s deductible under its insurance policy and there shall be no reduction
in the Purchase Price.

     13.3.   The provisions of this Article 13 shall control the rights and
duties of the parties, in lieu of any contrary provisions of law.

14.

ENTIRE AGREEMENT

     14.1.   This Agreement (including any exhibits and schedules attached
hereto) contains the entire agreement between the undersigned parties with
respect to the Property. No modification or amendment of this Agreement shall
be of any force or effect unless made in writing and executed by Purchaser and
Seller. Any waiver of a provision of this Agreement by a party must be in
writing. Further, the prevailing party in litigation between the parties shall
be entitled to recover, as a part of its judgment, reasonable attorneys’ fees,
costs and expenses.

15.

NO ASSUMPTION

     15.1.   Purchaser is not and is not to be deemed to be, a successor of any
Seller, it being understood that Purchaser is acquiring only the Property; and
it is expressly understood and agreed that, except as may otherwise be
expressly agreed to by Purchaser elsewhere in this Agreement and in the
documents delivered at Closing and except with respect to the Property,
Purchaser has not and does not hereby assume or agree to assume any liability
whatsoever of Seller.

16.

NOTICES

     16.1.   Any notice, request, demand, instruction or other communication to
be given to either party hereunder, except those required to be delivered at
Closing, shall be in writing, and shall be deemed to be delivered (a) upon
receipt, if delivered by facsimile (with written confirmation received by the
sender) or if hand delivered, (b) on the first business day after having been
timely delivered to a national overnight air courier service, or (c) three (3)
business days after deposit in registered or certified mail, return receipt
requested, addressed as follows:

	 	 	 
	If to Seller:

	 	SM Real Estate Fund VII, Ltd.
	

	 	5520 LBJ Freeway, Ste. 500
	

	 	Dallas, Texas 75240
	

	 	Attention: Richard Hoffmann
	

	 	Telephone: (972) 404-7121
	

	 	Facsimile: (972) 404-7154

15

 

	 	 	 
	with a copy to:

	 	Elizabeth E. Bonesio, Esq.
	

	 	Locke Liddell & Sapp LLP
	

	 	2200 Ross Avenue, Suite 2200
	

	 	Dallas, Texas 75201
	

	 	Telephone: (214) 740-8619
	

	 	Facsimile: (214) 756-8619
	 
	 	 
	If to Purchaser:

	 	TriVest Residential LLC
	

	 	14185 Dallas Parkway, Ste. 880
	

	 	Dallas, Texas 75254
	

	 	Attention: Ray Sperring
	

	 	Telephone: (972) 448-5838
	

	 	Facsimile: (972) 448-5858
	 
	 	 
	with a copy to:

	 	J. Cullen Aderhold, Esq.
	

	 	McGuire, Craddock & Strother, P.C.
	

	 	500 N. Akard Street, Suite 3550
	

	 	Dallas, Texas 75201
	

	 	Telephone: (214) 954-6888
	

	 	Facsimile: (214) 954-6868
	 
	 	 
	If to Escrow Agent:

	 	Chicago Title Insurance Company
	

	 	2001 Bryan Street, Suite 1700
	

	 	Dallas, Texas 75201-3012
	

	 	Attention: Ted Darby
	

	 	Telephone: (214) 965-1666
	

	 	Facsimile: (214) 965-1671

17.

MISCELLANEOUS

     17.1.   This Agreement may be executed in any number of counterparts which
together shall constitute the agreement of the parties. The article headings
herein contained are for purposes of identification only and shall not be
considered in construing this Agreement.

     17.2.   This Agreement, and the rights and obligations hereunder, may not be
assigned by Purchaser without the prior written consent of Seller except to an
entity controlled by TriVest Partners LP. A permitted assignment of this
Agreement by Purchaser shall not release Purchaser from its obligations
hereunder.

     17.3.   Whenever any determination is to be made or action is to be taken on
a date specified in this Agreement, if such date shall fall on a Saturday,
Sunday or legal holiday under the laws of the state in which the Property is
located, then in such event said date shall be

16

 

extended to the next business day which is not a Saturday, Sunday or legal
holiday. All references in this Agreement to “the date hereof,” “the date of
this Agreement,” or similar references shall be deemed to refer to the later of
the two (2) dates on which this Agreement has been signed by Seller and
Purchaser, as indicated by their signatures below, which date shall be the date
of final execution and agreement by the parties hereto.

     17.4.   If any term, covenant or condition of this Agreement, or the
application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application
of such term, covenant or condition to other persons or circumstances, shall
not be affected thereby, and each term, covenant or condition of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.

     17.5.   This Agreement and the terms and provisions hereof shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, executors, personal representative, successors and assigns whenever the
context so requires or admits.

     17.6.   This Agreement shall be construed and enforced in accordance with
the laws of the State of Texas, without giving effect to the conflict of laws
provisions thereof.

     17.7.   The Title Company is hereby designated as the “Reporting Person”
pursuant to Section 6045 of the Code and the regulations promulgated
thereunder.

     17.8.   The following exhibits have been attached to this Agreement and
incorporated herein by reference:

	 	 	 	 	 
	EXHIBIT A

	 	–
	 	Description of Property
	EXHIBIT B

	 	–
	 	Form of Special Warranty Deed
	EXHIBIT C

	 	–
	 	Bill of Sale and Blanket Assignment
	EXHIBIT D

	 	–
	 	Tenant Notice Letter
	EXHIBIT E

	 	–
	 	Proration Letter

     17.9.   Purchaser is acquiring only the property of Seller and is not the
successor of Seller. Purchaser does not assume or agree to pay, or indemnify
Seller or any other person or entity against, any liability, obligation or
expense of Seller relating to the Property, except, and only to the extent, if
any, expressly provided for herein or in the documents executed at Closing.

18.

NO REPRESENTATIONS OR WARRANTIES

BY SELLER; ACCEPTANCE OF PROPERTY

     18.1.   Disclaimer. EXCEPT AS EXPRESSLY PROVIDED ELSEWHERE IN THIS
AGREEMENT, PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES NOT
MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES
(OTHER THAN THE SPECIAL WARRANTY OF TITLE

17

 

AS SET OUT IN THE DEED AND THE BILL OF SALE), PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS
OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR
WITH RESPECT TO (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, (B) THE INCOME TO
BE DERIVED FROM THE PROPERTY, (C) THE SUITABILITY OF THE PROPERTY FOR ANY AND
ALL ACTIVITIES AND USES WHICH PURCHASER OR ANY TENANT MAY CONDUCT THEREON, (D)
THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E)
THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OF THE PROPERTY, (F) THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY, (G) THE
MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY, OR (H)
COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS,
RULES, REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON
THE PROPERTY OF HAZARDOUS MATERIALS (AS DEFINED BELOW) OR (I) ANY OTHER MATTER
WITH RESPECT TO THE PROPERTY. ADDITIONALLY, NO PERSON ACTING ON BEHALF OF
SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF OF PURCHASER ACKNOWLEDGES
THAT NO PERSON HAS MADE, ANY REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY,
GUARANTY OR PROMISE REGARDING THE PROPERTY OR THE TRANSACTION CONTEMPLATED
HEREIN, OTHER THAN AS SET FORTH IN THIS AGREEMENT; AND NO SUCH REPRESENTATION,
WARRANTY, AGREEMENT, GUARANTY, STATEMENT OR PROMISE IF ANY, MADE BY ANY PERSON
ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING UPON SELLER UNLESS
EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER IS RELYING
SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND THE REPRESENTATIONS SET
FORTH IN THIS AGREEMENT AND NOT ON ANY OTHER INFORMATION PROVIDED OR TO BE
PROVIDED BY SELLER AND AGREES TO ACCEPT THE PROPERTY AT THE CLOSING AND WAIVE
ALL OBJECTIONS OR CLAIMS AGAINST SELLER (INCLUDING, BUT NOT LIMITED TO, ANY
RIGHT OR CLAIM OF CONTRIBUTION) ARISING FROM OR RELATED TO THE PROPERTY OR TO
ANY HAZARDOUS MATERIALS ON THE PROPERTY. PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE
PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE
ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO
REPRESENTATIONS AS TO THE ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH
INFORMATION, OTHER THAN AS SET FORTH IN THIS AGREEMENT. SELLER IS NOT LIABLE
OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENT, REPRESENTATION OR
INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY
ANY REAL ESTATE BROKER, CONTRACTOR, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON.
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED
BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN

18

 

IS MADE ON AN “AS IS” CONDITION AND BASIS WITH ALL FAULTS. IT IS
UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR
NEGOTIATION TO REFLECT THAT ALL OF THE PROPERTY IS SOLD BY SELLER AND PURCHASED
BY PURCHASER SUBJECT TO THE FOREGOING. THE PROVISIONS OF THIS SECTION 18 SHALL
SURVIVE THE CLOSING OR ANY TERMINATION HEREOF.

     18.2.   Hazardous Materials. “Hazardous Materials” shall mean any substance
which is or contains (i) any “hazardous substance” as now or hereafter defined
in §101(14) of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amend (42 U.S.C. §9601 et seq.) (“CERCLA”) or any
regulations promulgated under CERCLA; (ii) any “hazardous waste” as now or
hereafter defined in the Resource Conservation and Recovery Act (42 U.S.C.
§6901 et seq.) (“RCRA”) or regulations promulgated under RCRA; (iii) any
substance regulated by the Toxic Substances Control Act (15 U.S.C. §2601 et
seq.); (iv) gasoline, diesel fuel, or other petroleum hydrocarbons; (v)
asbestos and asbestos containing materials, in any form, whether friable or non
friable; (vi) polychlorinated biphenyls; (vii) radon gas; and (viii) any
additional substances or materials which are now or hereafter classified or
considered to be hazardous or toxic under Environmental Requirements (as
hereinafter defined) or the common law, or any other applicable laws relating
to the Property. Hazardous Materials shall include, without limitation, any
substance, the presence of which on the Property, (A) requires reporting,
investigation or remediation under Environmental Requirements; (B) causes or
threatens to cause a nuisance on the Property or adjacent property or poses or
threatens to pose a hazard to the health or safety of persons on the Property
or adjacent property; or (C) which, if it emanated or migrated from the
Property, could constitute a trespass.

     18.3.   Environmental Requirements. “Environmental Requirements” shall mean
all laws, ordinances, statutes, codes, rules, regulations, agreements,
judgments, orders, and decrees, now or hereafter enacted, promulgated, or
amended, of the United States, the states, the counties, the cities, or any
other political subdivisions in which the Property is located, and any other
political subdivision, agency or instrumentality exercising jurisdiction over
the owner of the Property, the Property, or the use of the Property, relating
to pollution, the protection or regulation of human health, natural resources,
or the environment, or the emission, discharge, release or threatened release
of pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or waste or Hazardous Materials into the environment (including,
without limitation, ambient air, surface water, ground water or land or soil).

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

19

 

     IN WITNESS WHEREOF, the undersigned parties have caused this Purchase and
Sale Agreement to be executed as of the date first written above.

	 	 	 	 	 
	 

	 	SELLER:
	 
	 	 	 	 
	

	 	S/M REAL ESTATE FUND VII, LTD.
	 
	 	 	 	 
	

	 	S/M 7 APARTMENT INVESTOR, INC.,

             a general partner
	 
	 	 	 	 
	

	 	By:
	 	/s/ Richard Hoffman
	

	 	 	

	

	 	Name:
	 	Richard Hoffman
	

	 	Title:
	 	President
	 
	 	 	 	 
	

	 	Date:
	 	Feb., 20, 2004
	 
	 	 	 	 
	

	 	PURCHASER:
	 
	 	 	 	 
	

	 	TRIVEST RESIDENTIAL LLC
	 
	 	 	 	 
	

	 	By:
	 	/s/ Dean Lontos
	

	 	 	
 
	

	 	Name:
	 	Dean Lontos
	

	 	Title:
	 	Manager
	 
	 	 	 	 
	

	 	Date:
	 	Feb. 20, 2004

 

 

     The undersigned hereby accepts this Purchase and Sale Agreement and agrees
to perform the functions of Escrow Agent hereunder. The undersigned further
assumes the duties of the “Reporting Person” as described in Section 6045 of
the Code and the regulations promulgated thereunder.

	 	 	 	 	 
	 	ESCROW AGENT:

CHICAGO TITLE INSURANCE COMPANY

 	 
	 	By:  	    /s/ Kay Starkey
 	 
	 	 	Name:  	Kay Starkey 	 
	 	 	Title:  	Commercial Escrow Officer 	 

 

 

	 	 	 	 	 

EXHIBIT A

DESCRIPTION OF PROPERTY

Lot 2, Block 1, New City Block 17151, Los Cedros Subdivision, an addition to
the City of San Antonio, Bexar County, Texas according to the map or plat
thereof, recorded in Volume 9300, Page 233, Deed and Plat Records of Bexar
County, Texas.exv10w2

 

Exhibit 10.2

FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT

     THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is
made and entered into this 22nd day of March, 2004, by and between SM REAL
ESTATE FUND VII, LTD., a Texas limited partnership (“Seller”), and TRIVEST
RESIDENTIAL LLC, a Texas limited liability company (“Purchaser”).

RECITALS

     A.     Purchaser and Seller have previously entered into that certain Purchase
and Sale Agreement dated February 20, 2004 (the “Original Contract”),
pertaining to certain land and improvements thereon located in San Antonio,
Bexar County, Texas and locally known as the Fifth Avenue Apartments (the
“Property”); and

     B.     The parties desire to amend the Original Contract as set forth below.

     NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as
follows:

     1.     The Purchase Price will be reduced by $85,000.00 (i.e., to
$8,065,000.00).

     2.     All terms capitalized but not defined herein will have the meanings
ascribed to them in the Original Contract.

     3.     Except as expressly modified by this Amendment, the terms and
conditions of the Original Contract will remain in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date set forth above.

	 	 	 	 	 
	SELLER: 	S/M REAL ESTATE FUND VII, LTD.,

a Texas limited partnership

 	 
	 	By:  	SM7 Apartment Investors, Inc.
 	 
	 	 	a Texas Corporation, General Partner 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                         /s/ Richard Hoffman
 	 
	 	 	Richard Hoffmann, President 	 
	 	 	 	 
	 

	 	 	 	 	 
	PURCHASER: 	TRIVEST RESIDENTIAL LLC,

a Texas limited liability company

 	 
	 	By:  	/s/ Dean Lontos
 	 
	 	 	Dean Lontos, Manager

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