Document:

Exhibit

AGREEMENT OF PURCHASE AND SALE 

THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is made as of July 22, 2016 (the “Effective Date”), by and between RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company, having an address at c/o Resource Real Estate, Inc., 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103 (“Seller”), and 37TH PARALLEL PROPERTIES INVESTMENT GROUP, LLC, a Nevada limited liability company or its permitted assigns, having an address at 1801 Bayberry Court, Suite 203, Richmond, VA 23226 (“Buyer”).

W I T N E S S E T H:
In consideration of the covenants and provisions contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:  
1.Agreement to Sell and Purchase.  Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, subject to all of the terms and conditions of this Agreement, all of Seller’s right, title and interest in and to the project commonly known as the “Villas of Henderson Pass” containing approximately 228 apartment units located at 16465 Henderson Pass, San Antonio, TX 78232 and consisting of the following (collectively, the “Property”):  
(a)
    Real Property.  All of that certain tract of land more fully described on Exhibit A to this Agreement (the “Land”) together with all improvements thereon (the “Improvements”), and all appurtenances thereto (including, without limitation, all easements, rights‐of‐way, water and mineral rights, privileges, licenses, and other rights and benefits belonging to, running with the owner of, or in any way relating to the aforesaid tract of land and all trees, shrubbery and plants); together with all rights, title and interest of Seller in and to any land lying in the bed of any street, opened or proposed, in front of or abutting or adjoining the aforesaid tract of land, and all right, title and interest of Seller in and to any unpaid award for the taking by eminent domain of any part of the aforesaid tract of land or for damage to such tract of land by reason of a change of grade of any street (collectively, the “Real Property”);   
(b)
    Personal Property.  All fixtures, furniture, equipment, supplies and other tangible and intangible personal property attached or appurtenant to, or located in or on, or used solely in connection with the Real Property, which are owned by Seller (including without limitation tenant or property data in electronic format, if available, and fixed apartment signs) excluding, however, any “Thin Client Solutions” hardware and software and any items upon which appears the “Resource Residential” logo, including without limitation, any door rugs, portable movie screens, marketing brochures and other literature (collectively, the “Personal Property”); 
(c)
    Leases.  The Seller’s interest in all leases, tenancies, licenses and other agreements for the use or occupancy of any portion of the Property in effect on the date of this Agreement and all guaranties in connection therewith (the “Leases”); and 
(d)
    Contracts.  To the extent assignable, the Seller’s interest in all leasing, service, supply and maintenance contracts relating to the Land, Improvements, or Personal Property (collectively, the 

LW:1030385.6

“Contracts”), but only to the extent Buyer elects to have such Contracts assigned to it in accordance with Section 5(c) hereof. 
2.
    Purchase Price; Deposit.  The purchase price (the “Purchase Price”) for the Property, subject to adjustments as provided in this Agreement, shall be EIGHTEEN MILLION AND 00/100 DOLLARS ($18,000,000.00), and shall be paid as follows:  
(a)
    Three Hundred Thousand and 00/100 Dollars ($300,000.00) (the “Initial Deposit”) to be paid within three (3) business days after the Effective Date in immediately available funds and delivered to Republic Title of Texas, Inc., Uptown – Commercial Division, 2626 Howell Street, 10th Floor, Dallas, TX 75204, Attention: Nancy Colaluca, Phone: (214) 855-8888, Facsimile: (972) 516-2506; Email: NColaluca@republictitle.com (“Escrow Holder” or “Title Company”).  
(b)
    If Buyer has not terminated this Agreement as provided herein, an additional deposit in the amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00) (together with the Initial Deposit and the Extension Deposit (as defined in Section 4 below), the “Deposit”) shall be paid within one (1) business day after the expiration of the Inspection Period in immediately available funds and delivered to Escrow Holder.
(c)
    The Deposit shall be held by Escrow Holder in one or more interest bearing federally‐insured money market accounts acceptable to both Seller and Buyer, or in short‐term United States Government obligations having a maturity date which is not later than the Closing Date (as hereinafter defined).  As used in this Agreement, “Deposit” shall mean and include the deposits as defined in Subsection 2(a) and 2(b) above and any interest earned thereon and shall be applied to the Purchase Price at Closing.  If requested by Escrow Holder, Buyer shall execute and deliver a Form W-9 to Escrow Holder. Failure by Buyer to deliver the Deposit as provided above shall be a material default hereunder and shall render this Agreement terminable or, alternatively, voidable at the option of the Seller.   
(d)
    The balance of the Purchase Price, as adjusted in accordance herewith, shall be paid at Closing by wire transfer of immediately available funds and delivered to Escrow Holder.
(e)
    Seller and Buyer acknowledge and agree that One Hundred and 00/100 Dollars ($100.00) (the “Independent Contract Consideration”) of the Initial Deposit shall be allocated for payment, and shall be paid, to Seller if this Agreement is terminated for any reason.  Moreover, Seller and Buyer agree and acknowledge that the Independent Contract Consideration has been bargained for and agreed as additional consideration for Seller’s execution and delivery of this Agreement and for Buyer’s rights of review, inspection and termination provided herein.  At Closing, the Independent Contract Consideration shall be deemed to be a part of the Deposit to be applied to the Purchase Price.
3.
    Disposition of Deposit; Defaults.  

2
LW:1030385.6

(a)
    Held in Escrow.  The Deposit shall be held in escrow and disbursed by Escrow Holder strictly in accordance with the terms of this Agreement.  
(b)
    Upon Default.  
(i)
    IF BUYER, WITHOUT THE RIGHT TO DO SO AND IN DEFAULT OF ITS OBLIGATIONS UNDER THIS AGREEMENT, FAILS TO COMPLETE CLOSING OR OTHERWISE DEFAULTS UNDER OR BREACHES THIS AGREEMENT, SELLER SHALL HAVE THE RIGHT TO BE PAID THE DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A BUYER DEFAULT WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.  AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT.  EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.  THE RIGHT OF SELLER TO BE PAID THE DEPOSIT SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY FOR BUYER’S FAILURE TO PURCHASE THE PROPERTY OR BREACH OF A REPRESENTATION OR WARRANTY.
(ii)
    If Seller, without the right to do so and in default of its obligations under this Agreement, fails to complete Closing or otherwise defaults under or materially breaches this Agreement, Buyer shall have the right to (A) terminate this Agreement, in which event Buyer shall be entitled to the return of the Deposit (including the Hard Deposit) as its sole and exclusive remedy and neither Seller nor Buyer shall have any further obligations under this Agreement, except those matters expressly provided in this Agreement to survive termination, or (B) institute a civil court action for specific performance (but not damages); provided that Buyer shall commence its action of specific performance against Seller within thirty (30) days after the scheduled Closing Date. UNDER NO CIRCUMSTANCES MAY BUYER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH BUYER SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS OR ITS OBLIGATIONS UNDER THIS AGREEMENT.  BUYER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN AGAINST ANY PROPERTY UNLESS AND UNTIL IT HAS FILED AN ACTION SEEKING SPECIFIC PERFORMANCE.  Notwithstanding the foregoing, if Seller's default constitutes an Intentional Seller Default (as hereinafter defined) and Buyer makes the election described in clause (B) above, then Buyer shall also have the right to sue Seller for money damages in an amount equal to the amount of the direct, third-party out-of-pocket costs and expenses actually incurred by Buyer in connection with this Agreement and the inspection, acquisition and financing of said Property up to a maximum amount of $50,000.  As used herein, "Intentional Seller Default" means any one or more of the following: (a) fraudulent misrepresentation, (b) criminal conduct (i.e. conduct that constitutes a felony under applicable law), or (c) an intentional and deliberate act of Seller taken on or after the Effective Date that is intended to result in, and does result in, Buyer's inability to consummate the transaction contemplated in this Agreement for a reason other than Buyer's default.

3
LW:1030385.6

(c)
    Upon Closing.  If Closing is completed hereunder, Escrow Holder shall pay the Deposit to Seller as a credit against the Purchase Price.  
(d)
    Upon Termination by Buyer.  If Buyer terminates this Agreement as a result of Seller’s default or pursuant to the exercise of any right of termination permitted by this Agreement (other than pursuant to Section 5(d) to which this Section shall not apply), upon the earlier to occur of:  (i) receipt by Escrow Holder of written joint instructions from Seller and Buyer or (ii) entry of a final and unappealable adjudication determining which party is entitled to receive the Deposit, the Deposit shall be distributed in accordance with such written instructions or adjudication.  
(e)
    Hard Deposit.  Notwithstanding any provision herein to the contrary, Buyer hereby acknowledges and agrees that the Initial Deposit shall be considered a “hard” deposit that is non-refundable to Buyer except as expressly set forth in this Section 3(e).  The Initial Deposit shall be paid to Seller upon any termination of this Agreement by either party; provided, however, that Buyer shall be entitled to a return of the Initial Deposit (less the Independent Contract Consideration) in the case of a termination by Buyer: (I) under Section 3(b)(ii) (Seller Default), (II) prior to expiration of the Inspection Period under Section 6(b) (Title and Survey), (III) prior to expiration of the Inspection Period if Buyer provides satisfactory evidence to Seller that a Recognized Environmental Condition (as defined in ASTM standard E1527-13) (A) exists with respect to the Property and (B) either (1) was not previously disclosed in that certain Phase I Environmental Site Assessment for the Property, dated August 25, 2003, prepared by HBC/Terracon as Report No. 96037420 (the “Existing Environmental Report”), a copy of which Existing Environmental Report Buyer hereby acknowledges and confirms having received from Seller, or (2) has materially adversely changed since being disclosed in the Existing Environmental Report, (IV) under Section 5(a) if Seller refuses to allow intrusive physical testing that prohibits environmental assessment of the Property, (V) under Section 13 (Casualty), or (VI) under Section 14 (Eminent Domain)..  This provision shall survive termination of this Agreement.
4.
    Closing.  The consummation of the purchase and sale of the Property (the “Closing”) shall take place on or before September 15, 2016 or at earlier date as mutually agreed to in writing by the parties (the “Closing Date”). The Closing shall be conducted through an escrow with the Escrow Holder, with escrow fees to be paid equally by Seller and Buyer.  IT IS AGREED THAT TIME IS OF THE ESSENCE OF THIS AGREEMENT. Notwithstanding the foregoing, solely in order to allow Buyer an additional period of time to meet or otherwise satisfy any deadlines, obligations or requirements imposed by the lender providing financing to Buyer for its acquisition of the Property hereunder, as and to the extent applicable, Buyer shall have the one (1) time option to extend the Closing Date by up to twenty (20) days, provided that at least three (3) business days prior to the then-scheduled Closing Date: (i) the option is exercised by delivery of a written extension notice to Seller, and (ii) an additional Two Hundred Thousand and 00/100 Dollars ($200,000.00) (the “Extension Deposit”) is tendered to the Escrow Agent no later than 5:00 pm (Eastern) in which case such additional $200,000 shall be deemed part of the Deposit as defined above.    Notwithstanding anything to the contrary contained herein, Buyer shall submit a loan application within fifteen (15) days of the Effective Date.     

5.
    Inspection and Title Review.

4
LW:1030385.6

(a)
    Inspection Period.  Buyer and its authorized agents and representatives shall have the right to enter upon the Land and Improvements (including all of the apartment units, but subject to the rights of tenants under the Leases and in accordance with applicable law) at all reasonable times during normal business hours to inspect and conduct reasonably necessary inspections and tests on the Property at its sole cost and expense, including, without limitation, engineering and hazardous material inspections; provided, however, any intrusive physical testing will be conducted by Buyer only after obtaining Seller’s prior written consent (provided, however, that if Seller refuses to allow intrusive physical testing in connection with any environmental assessment and Buyer terminates the Agreement due to such refusal, then Buyer shall be entitled to a refund of the Hard Deposit).  The right granted in the immediately preceding sentence may be exercised during the period commencing on the Effective Date and ending on the earlier to occur of the Closing Date or termination of this Agreement.  Buyer shall bear the cost of all inspections and tests, and Buyer shall give reasonable notice to the management of any inspection or test to be conducted on the Property. Buyer hereby indemnifies and holds Seller and the Property harmless as to all loss, property damage, bodily injury, cost or expense resulting from Buyer’s inspections and tests of the Property, including, without limitation, claims for services rendered by third parties conducting such inspections and tests.  Buyer shall also repair any damage to the Land and Improvements caused by any such entry upon the Property and inspection or examination was undertaken.  Such agreement to repair and restore, and to indemnify and hold harmless Seller shall expressly survive closing or any termination of the Agreement.  Buyer shall maintain, or shall cause its contractors to maintain, public liability and property damage insurance insuring Buyer (and naming Seller as an additional insured party) against any liability arising out of any entry or inspections of the Property or work performed about the Property pursuant to the provisions hereof and shall deliver certificates of insurance evidencing such coverage to Seller prior to any entry by Buyer or its contractors on the Property.  

(b)
    Document Review.  Within three (3) business days after the Effective Date, Seller shall deliver to Buyer (or make available for inspection at the Property or make available electronically) copies of the items listed on Schedule 5(b) attached hereto and made a part hereof, but only to the extent such items are in Seller’s possession or control (such items, together with the Existing Environmental Report and the Existing Survey (previously delivered by Seller to Buyer as acknowledged herein), collectively, “Documents”); provided that Leases shall be available for inspection at the Property only.  Except as otherwise expressly set forth in this Agreement, Seller makes no representations or warranties, either express or implied, and shall have no liability with respect to the accuracy or completeness of the information, data or conclusions contained in any information provided to Buyer, and Buyer shall make its own independent inquiry regarding the economic feasibility, physical condition and environmental state of the Property during the period beginning on the Effective Date and ending at 5:00 pm (Eastern) on August 16, 2016 (the “Inspection Period”). 
(c)
    Assignment or Termination of Contracts.  Buyer shall assume all Contracts at Closing subject to this Section 5(c).  Prior to the expiration of the Inspection Period, Buyer may advise Seller in writing of any Contracts that it elects to have terminated upon Closing and Seller shall provide timely notices of termination; provided, however, that Seller shall not terminate, and Buyer expressly agrees to assume, all Contracts that are not cancellable by their terms or which cannot be terminated without cost or penalty to Seller unless Buyer agrees to pay any such penalty. At Closing, Seller shall assign and Buyer shall assume all Contracts that have not terminated as of the Closing Date, including without limitation, any remaining rights and obligations under Contracts under which the notice required to terminate such Contracts, 

5
LW:1030385.6

though delivered, will not have run prior to Closing.  Notwithstanding the foregoing, all existing agreements for management of the Property shall be terminated as of the Closing Date.
(d)
    Right of Termination.  If Buyer determines that the Property is not suitable in Buyer’s sole discretion, then Buyer may terminate this Agreement by written notice to Seller on or before 5:00 pm (Eastern) on the last day of the Inspection Period and this Agreement shall be null and void for all purposes (except for provisions that expressly survive hereunder) and the Initial Deposit shall be paid to Buyer or Seller subject to the terms in 3(e), “Hard Deposit”. In the event that Buyer does not deliver notice of termination of this Agreement prior to the expiration of the Inspection Period, Buyer shall be deemed to have waived its right to terminate under this Section 5(d) and the Deposit shall be non-refundable to Buyer except in accordance with the terms of Section 3(b)(ii) above. 
6.
    Condition of Title.  
(a)     Commitment to Insure.  Within five (5) days after the Effective Date, Seller shall deliver to Buyer a commitment from the Title Company (the “Title Commitment”) to provide at Closing a standard owner’s title insurance policy for the Property in an amount equal to the Purchase Price (the “Title Policy”), together with copies of all instruments identified as exceptions therein. The cost of the Title Policy shall be prorated as set forth in Section 8(h) below.  Additionally, Buyer hereby acknowledges and confirms that Buyer has heretofore received from Seller a copy of the most recent ALTA/ACSM survey of the Property in Seller’s possession, dated as of December 5, 2007 and prepared by John Noel Nicholls, R.P.L.S. No. 4402 on behalf of Pape-Dawson Engineers, Inc., Job No. 9439-07 (the “Existing Survey”).    Buyer, at its option and expense, may obtain a new survey, or an update of the Existing Survey of the Real Property (the “Survey”). 
(b)    During the Inspection Period, Buyer shall review title to the Real Property as disclosed by the Title Commitment and, if obtained, the Survey.  Seller shall have no obligation to cure title objections except (i) to satisfy and remove liens of an ascertainable amount affecting the Property, which liens Seller shall cause to be released at the Closing or affirmatively insured over by the Title Company, or (ii) those which Seller has agreed in writing to cure or have removed.  Seller further agrees to remove any exceptions or encumbrances to title which are created by Seller after the Effective Date of this Agreement without Buyer’s written consent.  Within five (5) business days after Buyer’s receipt of the Title Commitment, Buyer shall give Seller written notice of any objections that Buyer has to the Title Commitment (the “Objection Notice”).  Seller shall notify Buyer within five (5) days of receipt of the Objection Notice whether Seller intends to cure or satisfy Buyer’s objections.  It shall be an express condition to Buyer’s obligation to close hereunder that Seller cures or satisfies any title or survey objections it has agreed in writing to cure.  Buyer may terminate this Agreement under this Section 6(b) and receive a refund of the Deposit (including the Hard Deposit but less the Independent Contract Consideration) (i) at any time prior to the expiration of the Inspection Period or if Seller fails to remove any exceptions or encumbrances to title which are created by Seller after the Inspection Period without Buyer’s written consent, solely on account of a title objection of Buyer set forth in the Objection Notice which title objection Seller has not agreed in writing to cure, or (ii) if the Title Company revises the Title Commitment after the expiration of the Inspection Period to add or modify exceptions in a material adverse manner, if such additions or modifications are not acceptable to Buyer and are not removed by the Closing Date.  Seller shall execute at Closing an affidavit as to authority, the rights of tenants in occupancy and the status of mechanics’ liens (and sufficient to remove from the Title Policy any exception for mechanics’ liens filed against the Real Property which relate to any matters occurring prior to the Closing Date) in form acceptable to Seller as the Title Company shall require for the issuance of the Title Policy.  The Title Policy may be delivered after Closing if that is customary in the locality.   

6
LW:1030385.6

7.
    Delivery of Possession.  Actual sole and exclusive physical possession of the Property shall be given to Buyer at Closing unoccupied and free of any leases, claims to or rights of possession other than the rights of tenants under Leases by delivery of the keys to the Property and Seller’s special or limited warranty deed (the “Deed”) in the form attached hereto as Exhibit B, and Seller’s bill of sale in the form of Exhibit C to this Agreement duly executed by Seller (the “Bill of Sale”).  
8.
    Apportionments.   All property related items of income and expense, including but not limited to the following, shall be apportioned between Seller and Buyer as of 11:59 p.m. on the day prior to the Closing Date (the “Pro Ration Date”) as follows:
(a)
    Taxes.     All real estate taxes, charges, and assessments affecting the Property (collectively, “Taxes”) shall be prorated on a per diem basis as of the Pro Ration Date, applying any discount for early payment applicable as of the Pro Ration Date, and on the basis of the actual fiscal year for which such taxes are assessed, and Buyer shall assume liability for payment of Taxes accruing in the year in which Closing occurs.  In the event that the amount of Taxes for the current year is unknown at Closing, the Taxes shall be prorated based on the mill rate for taxes assessed for the immediately preceding year, taking into account the current appraised value for the Property issued by the County Appraisal District, and Buyer shall notify Seller of any necessary adjustment to such proration within thirty (30) days when correct tax figures are known, and thereafter any necessary adjustments shall be made.  Buyer hereby acknowledges and agrees that Seller has or may file appeals (the “Appeals”) with respect to the current fiscal year and also with respect to prior year(s) ad valorem property taxes applicable to the Property (the “Appealed Taxes”).  Seller shall be entitled, in Seller’s sole discretion, to continue to pursue such Appeals after the Closing Date but no settlement of any of the Appeals as to the current fiscal year shall be agreed to by Seller without the prior written consent of Buyer which shall not be unreasonably withheld or delayed. In the event that any such Appeal is successful in reducing the amount of Appealed Taxes payable with respect to prior years, Seller shall be entitled to the full amount of any rebate, refund or reduction resulting from such Appeal.  In the event that any such Appeal is successful in reducing the amount of Appealed Taxes payable with respect to the current fiscal year, Seller and Buyer shall prorate the net proceeds of any rebate, refund or reduction resulting from such Appeal relating to the current fiscal year, after payment of Seller’s third party costs incurred in connection with the Appeal. This provision shall expressly survive Closing and the recordation of the Deed.
(b)
    Rents.     Rents and other recurring income relating to the Property and collected by Seller for the month in which Closing occurs shall be deemed earned ratably on a per diem basis and shall be prorated as of the Pro Ration Date. Amounts collected by Seller prior to the date of Closing as rent for each day occurring after the Pro Ration Date and all other prepaid amounts shall be credited to the Buyer at Closing. All such amounts collected by Seller or Buyer from tenants or other payors after Closing shall be paid over and applied in the following order of priority:  (i) first, on account of rents and other sums due to Seller and Buyer (and pro‐rated between them as of the Pro Ration Date) for the month in which Closing occurs; (ii) then, on account of rents and other sums due to Buyer for the then current month; (iii) for a period of six (6) months after Closing, on account of delinquent rents and other sums due to Seller for the period prior to Closing from such tenant; and (iv) thereafter, to Buyer.
(c)
    Other. All normal and customarily proratable items including without limitation operating 

7
LW:1030385.6

expenses,  personal property taxes, minimum water and sewer rentals, payments due under the Contracts which are to be assigned to Buyer, prepaid license fees and other charges for licenses and permits for the Real Property which will remain in effect for Buyer’s benefit after Closing and municipal rubbish removal charges, shall be apportioned pro rata between Seller and Buyer on a per diem basis based upon a calendar year or month as applicable.
(d)
    Security Deposits.  The total sum of all tenant security deposits currently held by Seller, together with all interest earned thereon as of the Closing Date, shall be transferred to Buyer at Closing by operation of a credit against the Purchase Price.
(e)
    Utility Meter Readings.  Seller shall obtain readings of the water, electric, gas and other utility meters servicing the Real Property (other than meters measuring exclusively utility consumption which is to be paid in full by tenants under Leases) to a date no sooner than two (2) days prior to the Closing Date.  At or prior to Closing, Seller shall pay all charges based upon such meter readings, adjusted to include a reasonable estimate of the additional charges due for the period from the dates of the respective readings until the Closing Date.  If Seller is unable to obtain readings of any meters prior to the Closing Date, Closing shall be completed without such readings and upon the obtaining thereof, Seller shall pay the charges incurred prior to the Closing Date as reasonably determined by both Buyer and Seller based upon such readings, and at Closing, Seller shall deposit with the Title Company an amount reasonably estimated to represent the anticipated obligation of Seller under this sentence.
(f)
    RUBS.  In addition to any other prorations described in this Agreement, any ratio utility billing systems (“RUBS”) applicable to the Property, for the following categories of utilities and other reimbursements: (i) electricity, (ii) gas, (iii) water / sewer, (iv) trash, (v) pest control and (vi) other, attributable to the uncollected or trailing collections two calendar months prior to Closing will be reflected as a credit to Seller at Closing and will be calculated for closing purposes on the uncollected or trailing collections monthly periods based on the monthly average actual trailing RUBS for six months prior to Closing according to the income statements prepared by Seller and provided to Buyer.  A subsequent cash adjustment of RUBS between Seller and Buyer will be made when actual figures are available, but in all events within 90 days after the Closing Date.  Seller and Buyer each agree to provide such information as the other may reasonably request regarding RUBS and the billing, collection, and payment thereof.
(g)
    True-up.  Subsequent to the Closing, if at any time during the 30-day period following Closing the actual amount of any pro-rated items that were based upon estimations at Closing, including without limitation, utilities and other operating expenses with respect to the Property for the month in which the Closing occurs, are determined, the parties agree to adjust the proration of utilities and other operating expenses and, if necessary, to refund or repay such sums as shall be necessary to effect such adjustment.  For clarification, this Section 8(g) shall not apply to Taxes, Rents or RUBS which shall be pro-rated and paid under Sections 8(a), 8(b) and 8(f) respectively. This provision shall survive Closing and recordation of the Deed.
(h)
    Closing Costs.  Seller shall pay (i) 1⁄2 of all escrow fees; (ii) premium for a basic TLTA T-1 owner’s policy(s) of title insurance; and (iii) all of Seller’s legal costs and expenses. Buyer shall pay (i) 

8
LW:1030385.6

title premiums for any endorsements to the owner’s policy of title insurance, together with all costs and premiums relating to any loan policy of title insurance and endorsements for the benefit of Buyer’s lender, if any (ii) cost of the Survey, (iii) 1⁄2 of all escrow fees, (iv) all other closing and recording costs with respect to the conveyance of the Property, (v) all costs, fees, recordation taxes and assessments with respect to any financing, and (vi) Buyer’s legal costs and expenses. All other costs and expenses incurred in connection with the transaction contemplated hereby and not specifically allocated herein shall be paid by the party incurring the same. It is contemplated by the parties that no realty transfer taxes, including without limitation, any state or local transfer taxes or recordation charges, will be due as a result of this transaction
(i)
    Up Front Payments.  Any one-time inducement payments or other non-refundable fees, royalties or other payments made or paid to the owner of the Property under any Contract assumed by Buyer at Closing, including, but not limited to, any payments made to the owner of the Property under any cable agreement (“Up Front Payments”),  shall not be apportioned pro rata between Seller and Buyer and Buyer shall not receive any credit from Seller at closing for any portion of any One-Time Payment attributable or allocable to any period of time from and after Closing.   Any Up Front Payments received by Seller within the 12-month period prior to Closing shall be prorated.
(j)
    Any credit due to Buyer pursuant to Section 8 shall be applied as a credit against the Purchase Price, and any credit due to Seller pursuant to Section 8 shall be paid by Buyer to Seller at Closing as an addition to the Purchase Price.  
9.
    Property Condition.  THE PROPERTY IS BEING SOLD IN AN “AS IS,” “WHERE IS” CONDITION AND “WITH ALL FAULTS” AS OF THE EFFECTIVE DATE, SUBJECT TO NORMAL WEAR AND TEAR AND DAMAGE BY FIRE OR OTHER CASUALTY AS SET FORTH HEREIN.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, AND NO RESPONSIBILITY HAS BEEN OR IS ASSUMED AND/OR UNDERTAKEN BY SELLER OR BY ANY PARTNER, OFFICER, DIRECTOR, PERSON, FIRM, AGENT, ATTORNEY OR REPRESENTATIVE ACTING OR PURPORTING TO ACT ON BEHALF OF SELLER AS TO, CONCERNING OR WITH RESPECT TO (I) THE CONDITION OR STATE OF REPAIR OF THE PROPERTY; (II) THE COMPLIANCE OR NONCOMPLIANCE OF THE PROPERTY WITH ANY APPLICABLE LAWS, REGULATIONS OR ORDINANCES (INCLUDING, WITHOUT LIMITATION, ANY APPLICABLE ZONING, BUILDING, HANDICAPPED ACCESSIBILITY, OR DEVELOPMENT LAWS, CODES, RULES AND REGULATIONS); THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY; (III) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED WITHIN THE PROPERTY; (IV) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON; (V) THE VALUE, EXPENSE OF OPERATION, OR INCOME POTENTIAL OF THE PROPERTY; (VI) ANY OTHER FACT OR CONDITION  WHICH HAS OR MIGHT AFFECT THE PROPERTY OR THE CONDITION, STATE OF REPAIR, COMPLIANCE, VALUE, EXPENSE OF OPERATION OR INCOME POTENTIAL OF THE PROPERTY OR ANY PORTION THEREOF; OR (VII) WHETHER 

9
LW:1030385.6

THE PROPERTY CONTAINS ASBESTOS OR ANY OTHER HARMFUL, HAZARDOUS OR TOXIC SUBSTANCES OR PERTAINING TO THE EXTENT, LOCATION OR NATURE OF SAME, OR THE CONDITION OF THE PROPERTY, INCLUDING WITHOUT LIMITATION, WATER, SOIL, AND GEOLOGY.  THE PARTIES AGREE THAT ALL UNDERSTANDINGS AND AGREEMENTS HERETOFORE MADE BETWEEN THEM OR THEIR RESPECTIVE AGENTS OR REPRESENTATIVES ARE MERGED IN THIS AGREEMENT AND THE EXHIBITS HERETO ANNEXED, WHICH ALONE FULLY AND COMPLETELY EXPRESS THEIR AGREEMENT.  BUYER SHALL NOT RELY UPON ANY STATEMENT OR REPRESENTATION BY OR ON BEHALF OF SELLER UNLESS SUCH STATEMENT OR REPRESENTATION IS SPECIFICALLY SET FORTH IN THIS AGREEMENT.
BUYER WAIVES AND RELEASES SELLER FROM ANY PRESENT OR FUTURE CLAIMS ARISING FROM OR RELATING TO THE PRESENCE OR ALLEGED PRESENCE OF ASBESTOS, OR ANY OTHR HARMFUL, HAZARDOUS OR TOXIC SUBSTANCES IN, ON, UNDER OR ABOUT THE PROPERTY INCLUDING, WITHOUT LIMITATION, ANY CLAIMS UNDER OR ON ACCOUNT OF (I) THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS THE SAME MAY HAVE BEEN OR MAY BE AMENDED FROM TIME TO TIME; (II) ANY OTHER FEDERAL, STATE OR LOCAL LAW, ORDINANCE, RULE OR REGULATION, NOW OR HEREAFTER IN EFFECT, THAT DEALS WITH OR OTHERWISE IN ANY MANNER RELATES TO ENVIRONMENTAL MATTERS OF ANY KIND; OR (III) THIS AGREEMENT OR THE COMMON LAW.  THE TERMS AND PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE CLOSING HEREUNDER.

BUYER ACKNOWLEDGES THAT BUYER IS A SOPHISTICATED BUYER WHO IS FAMILIAR WITH THIS TYPE OF PROPERTY.  BUYER IS ACQUIRING THE PROPERTY “AS IS,” “WHERE IS” AND “WITH ALL FAULTS,” IN ITS PRESENT STATE AND CONDITION, WITHOUT REPRESENTATION OR WARRANTY BY SELLER OR ANY OF ITS REPRESENTATIVES OR AGENTS AS TO ANY MATTERS WHATSOEVER EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT, AND TO THE MAXIMUM EXTENT PERMITTED BY LAW, NO PATENT OR LATENT CONDITION AFFECTING THE PROPERTY IN ANY WAY, WHETHER OR NOT KNOWN OR DISCOVERABLE OR HEREAFTER DISCOVERED, SHALL AFFECT BUYER’S OBLIGATIONS HEREUNDER, NOR SHALL ANY SUCH CONDITION GIVE RISE TO ANY RIGHT OF DAMAGES, RESCISSION OR OTHERWISE AGAINST SELLER.

10.
    Representations and Warranties of Seller.  Except, in all cases, for any fact, information or condition disclosed in the Documents, Title Commitment, Existing Survey, Survey, Existing Environmental Report, Contracts, or which is otherwise known to Buyer prior to Closing, Seller makes the following representations and warranties to Buyer, which representations and warranties are true and correct as of the date of this Agreement (the “Seller Representations”):  
(a)
    Seller is a limited liability company, duly formed, validly existing and in good standing under the laws of the State of Delaware, with all legal power and authority to undertake, observe and perform all of Seller’s agreements and obligations hereunder.
(b)
    Seller has full power, authority and legal right to execute, deliver and comply with this Agreement, and all actions of the Seller and other authorizations necessary or appropriate for the 

10
LW:1030385.6

execution and delivery of and compliance with this Agreement have been taken or obtained and this Agreement constitutes the valid and legally binding obligation of the Seller enforceable against it in accordance with its terms; and the individual executing this Agreement and each of the documents executed in connection herewith on behalf of the Seller has the power and authority to do so.  This Agreement and all documents executed by Seller that are to be delivered to Buyer at Closing (i) are, or at the time of Closing will be, duly authorized, executed and delivered by Seller, and (ii) do not, and at the time of Closing will not, violate any provision of any agreement or judicial order to which Seller is a party; and
(c)
    No consents are required to be obtained from, and no filings are required to be made with, any governmental authority or third party in connection with the execution and delivery of this Agreement by Seller or the consummation by Seller of the transactions contemplated hereby.
(d)
    Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.
(e)
    To Seller’s knowledge, the rent roll attached hereto as Exhibit “D” is, and all rent rolls provided to Buyer hereunder shall be, true, correct and genuine in all material respects as of the date shown thereon.

(f)
    To Seller’s knowledge, Seller has not received written notice of any material default under any of the Contracts that will not be terminated on the Closing Date.

(g)    To Seller’s knowledge, prior to the Effective Date, Seller has not received written notice of any action, suit, violation, arbitration, administrative or judicial proceeding, or unsatisfied order or judgment against Seller which pertains directly to the Property or the transaction contemplated by this Agreement, which in either case, if adversely determined, would have a material adverse effect on the use, operation or value of the Property.  

(hi)     To Seller’s knowledge, prior to the Effective Date, Seller has not received written notice of any pending condemnation proceedings relating to the Property.

(i)    To Seller’s knowledge, prior to the Effective Date, Seller has not received any written notice from Seller’s current insurance carrier of any defects or inadequacies in or on the Property or any part or component thereof that would materially and adversely affect the insurability of the Property or cause any material increase in the premiums for insurance for the Property, that have not been cured or repaired.

(j)    Seller is solvent, has not made a general assignment for the benefit of its creditors, and has not admitted in writing its inability to pay its debts as they become due, nor has Seller filed, nor does it contemplate the filing of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or any other proceeding for the relief of debtors in general, nor has any such proceeding been instituted by or against Seller, nor is any such proceeding to Seller’s knowledge threatened or contemplated.  The sale of the Property will not render Seller insolvent.  

11
LW:1030385.6

(k)    Copies of all Contracts which have been or will be delivered by Seller to Buyer are true, correct and complete in all material respects and include any material amendments or modifications thereto.  

(l)    Seller has no employees which Purchaser shall be obligated to employ following the Closing.
        
Seller and Buyer agree that Seller’s Representations shall survive Closing for a period of nine (9) months (the “Survival Period”) and Seller shall have no liability after the Survival Period with respect to any of the Seller Representations contained herein.  Any representations or warranties made to “Seller’s knowledge” shall not be deemed to imply any duty of inquiry.  Buyer hereby waives any right Buyer may have to commence any action(s) to enforce any alleged breach and/or violation of any representations of Seller as set forth in this Agreement or to seek damages in connection therewith in the event that Buyer obtains actual knowledge of any such alleged breach and/or violation prior to Closing and fails to give Seller notice thereof before the Closing Date or proceeds to Closing with such knowledge.

11.
    Representations and Warranties of Buyer.  Buyer, to induce Seller to enter into this Agreement and to complete Closing, makes the following representations and warranties to Seller, which representations and warranties are true and correct as of the date of this Agreement, and shall be true and correct at and as of the Closing Date in all respects as though such representations and warranties were made both at and, as of the date of this Agreement, and except as otherwise set forth herein, at and as of the Closing Date.  
(a)
    Buyer is a limited liability company, duly formed, validly existing and in good standing under the laws of the State of Nevada with all legal power and authority to undertake, observe and perform all of Buyer’s agreements and obligations hereunder.
(b)
    Buyer has full power, authority and legal right to execute, deliver and comply with this Agreement, and all actions of the Buyer and other authorizations necessary or appropriate for the execution and delivery of and compliance with this Agreement have been taken or obtained and this Agreement constitutes the valid and legally binding obligation of the Buyer enforceable against it in accordance with its terms; and the individual executing this Agreement and each of the documents executed in connection herewith on behalf of the Buyer has the power and authority to do so.  This Agreement and all documents executed by Buyer that are to be delivered to Seller at Closing (i) are, or at the time of Closing will be, duly authorized, executed and delivered by Buyer, and (ii) do not, and at the time of Closing will not, violate any provision of any agreement or judicial order to which Buyer is a party.
(c)
    No consents are required to be obtained from, and no filings are required to be made with, any governmental authority or third party in connection with the execution and delivery of this Agreement by Buyer or the consummation by Buyer of the transactions contemplated hereby.
(d)
    Neither Buyer nor any of its affiliates is, nor will they become, a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset 

12
LW:1030385.6

Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) or other governmental action and does not, to its actual knowledge, engage in any dealings or transactions or be otherwise associated with such persons or entities.
(e)
    Buyer acknowledges that the Property may be subject to the federal Americans With Disabilities Act (the "ADA") and the federal Fair Housing Act (the "FHA").  The ADA requires, among other matters, that tenants and/or owners of "public accommodations" remove barriers in order to make the Property accessible to disabled persons and provide auxiliary aids and services for hearing, vision or speech impaired persons.  Seller makes no warranty, representation or guarantee of any type or kind with respect to the Property's compliance with the ADA or the FHA (or any similar state or local law), and Seller expressly disclaims any such representation except as expressly provided herein. Buyer acknowledges that it is solely responsible for determining whether the Property complies with the ADA and the FHA.  The provisions of this Section 11(e) shall survive indefinitely the Closing or earlier termination of this Agreement and shall not be merged into the Deed or other closing documents.
(f)
    It is expressly acknowledged by Buyer that, notwithstanding anything to the contrary contained herein, this transaction is not subject to any financing contingency and no financing for this transaction shall be provided by Seller.
(g)
    Buyer is a sophisticated and experienced Buyer of commercial properties including without limitation, apartment projects, and has participated in and is familiar with the acquisition, redevelopment, ownership, management, and operation of real estate projects similar to the Property.  Buyer has or will have under the terms of this Agreement adequate opportunity to complete and will have completed all physical, financial, legal and regulatory investigations and examinations relating to the Property that it deems necessary.
12.
    Operations Prior to Closing.  Between the date of the execution of this Agreement and Closing:  
(a)
    Operations and Management.  During the pendency of this Agreement, Seller shall carry on its business and activities relating to the Property, substantially in the same manner as it did before the Effective Date.  Seller shall maintain the physical condition of the Property in substantially its current condition, reasonable wear and tear and damage by fire and other casualty excepted. This obligation shall include an obligation to make ready all units becoming vacant more than 5 business days prior to Closing, failing which Buyer shall be entitled to a credit against the Purchase Price equal to $750.00 per unit not so made ready.
(b)
    Compliance with Obligations.  Seller shall comply in all material respects with the obligations of Seller under the Leases, the Contracts and all other agreements and contractual arrangements by which Seller and/or the Property are bound or affected.  Seller shall maintain its current insurance policy in full force and effect and shall pay all required premiums and other charges. 

13
LW:1030385.6

(c)
    New Contracts; New Leases.    Seller shall not enter into any contract for or on behalf of or affecting the Property which cannot be terminated upon no more than thirty (30) days’ prior notice or without charge, cost, penalty or premium, and, after expiration of the Inspection Period, shall not renew, fail to give a notice which, in the absence of which, will result in an automatic renewal of, modify, cancel or terminate any Contracts except in accordance with notices given by Buyer under Section 5(c).  Notwithstanding anything to the contrary set forth herein, Seller may enter into new leases or renewal leases for all or any portion of the Property in accordance with its current leasing parameters and procedures.
(d)
    Updated Due Diligence.  Upon written request, Seller shall provide Buyer with updated rent rolls, financials, aged receivables, and delinquency reports; provided, however, (i) updates shall not be requested more frequently than once per month, (ii) rent rolls and delinquency reports shall be updated by the 15th of each month, and (iii) financials and aged receivables shall be available by the 25th of each month until Closing.
13.
    Casualty.  
(a)
    Destruction.   If at any time prior to the Closing Date any portion of the Property should sustain damage by fire or other casualty (a “Casualty”), Seller shall promptly give written notice not later than three (3) business days after the Casualty (“Casualty Notice”) thereof to Buyer, which notice shall include Seller’s estimate of the time and cost necessary to repair or remedy the damage caused by such Casualty.  If the Property is the subject of a Casualty which is material, Buyer shall have the right, at its sole option, of terminating this Agreement (by written notice to Seller and Escrow Holder given within ten (10) business days after receipt of the Casualty Notice from Seller) and Buyer shall be entitled to a refund of the Deposit (including the Hard Deposit).  For purposes hereof, a “material” Casualty is one where the cost of restoring the Improvements to their condition prior to the Casualty will equal or exceed $1,000,000.  If Buyer does not terminate this Agreement, the proceeds of any insurance with respect to the Property paid to Seller between the date of this Agreement and the Closing Date shall be paid over to Buyer at the time of Closing (less any amount expended by Seller under Section 13(b) below) and all unpaid claims and rights in connection with losses to the Property shall be assigned to Buyer at Closing with the written consent of the insurer, and the amount of the deductible required to be paid under the Seller’s applicable insurance policy or policies will be paid to Buyer, without in any manner affecting the Purchase Price.  
(b)
    Repairs.  If the Property is the subject of a Casualty, but Buyer does not terminate this Agreement pursuant to the provisions of Section 13(a) above, then Seller shall cause all temporary repairs to be made to the Property as shall be required to prevent further deterioration and damage to the Property prior to the Closing Date. Seller shall have the right to be reimbursed from the proceeds of any insurance with respect to the Property paid between the date of this Agreement and the Closing Date for the actual cost of all such repairs made pursuant to this Section 13(b).  Except for the obligation of Seller to repair the Property set forth in this Section 13(b), Seller shall have no other obligation to repair any Casualty, damage or destruction in the event Buyer does not elect to terminate this Agreement pursuant to the provisions of Section 13(a), and in such event, Buyer shall accept the Property at Closing as damaged or destroyed by the Casualty.  

14
LW:1030385.6

14.
    Eminent Domain.  If any condemnation or eminent domain (a “Taking”) affects all or any part of the Property prior to Closing, or if any proceeding for a Taking is commenced prior to Closing, or if notice of the contemplated commencement of a Taking is given prior to Closing, Seller shall deliver written notice of such Taking to Buyer and Buyer, to the extent such Taking is material, shall have the right, at its sole option, of terminating this Agreement (by written notice to Seller within ten (10) days after receipt by Buyer of written notice from Seller of the Taking and Buyer shall be entitled to a refund of the Deposit (including the Hard Deposit). For purposes hereof, a “material” Taking shall mean a Taking of all or any portion of the Property which causes (i) a reduction in the area of the Land of ten (10%) or more, (ii) a reduction in the number of parking spaces available at the Property that causes the Property to violate local zoning codes or ordinances, (iii) a adverse  effect on the ingress and egress to and from the Property that results in the material interference with access to the Property, or (iv) a material reduction in the gross income that it is anticipated will be generated at the Property that results in Buyer’s inability to finance the Property . If Buyer does not terminate this Agreement, the Purchase Price shall be reduced by the total of any awards or damages received by Seller, and Seller shall, at Closing, be deemed to have assigned to Buyer all of Seller’s right, title and interest in and to any awards or damages to which Seller may have become entitled or may thereafter be entitled by reason of any exercise of the power of eminent domain or condemnation with respect to or for the Taking of the Property or any portion thereof.  
15.
    Items to be Delivered at Closing.  
(a)
    By Seller.  At Closing, Seller shall deliver to Buyer the following:  
(i)
    Deed.  The Deed;
(ii)
    Bill of Sale.  The Bill of Sale for the transfer of the Personal Property;
(iii)
    Assignments of Leases and Contracts.  Assignments in the form of Exhibit E and Exhibit F, respectively, of Seller’s interest in the Leases and the Contracts (to the extent not required to be terminated before Closing) to be assigned to Buyer, assigning to Buyer or Buyer’s assignee all of the lessor’s and Seller’s rights, title and interest in the Leases and such Contracts;
(iv)
    Keys.  All keys, security cards and security codes to the Property in Seller’s possession;
(v)
    Title Company Affidavits.  Such affidavits reasonably required by the Title Company to delete the so-called “standard exceptions” (other than the standard survey exceptions) and date the Title Policy no earlier than the date of Closing;
(vi)
    Updated Rent Roll.  A rent roll in the form of Exhibit D of the rents and other charges and payments due from tenants under the Leases, including without limitation any which are in arrears, all dated as of the Closing Date and certified by Seller as true and correct to the best of Seller’s knowledge;

15
LW:1030385.6

(vii)
    State Forms. Any forms required by the County or State in connection with the conveyance of the Property and the recordation of the Deed;
(viii)
    Plans and Specifications.  To the extent in Seller’s possession, all plans and specifications for the improvements which constitute a part of the Property and all alterations and additions thereto, and project manuals for the Property;
(ix)
    Books and Records.  Duplicate copies of all books, records and operating reports in Seller’s possession which are necessary to insure continuity of operation of the Property;
(x)
    FIRPTA.  If Seller is not a foreign person or entity within the meaning of Sections 1445 and 7701 of the IRS Code, a form as required by Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”) in the form attached as Exhibit G hereto; and
(xi)
    Tenant Notice Letter.  A letter to the tenants of the Property indicating that the Property has been sold to Buyer and directing that all future rental payments be sent to Buyer in the form attached as Exhibit H hereto (the “Tenant Notice Letter”); and
(xii)
    Resolutions; Title Company Affidavits, Etc.  Resolutions and certificates as required to evidence good standing and the due authorization of the execution and performance of this Agreement and the documents to be delivered pursuant hereto together with all affidavits, indemnities and other agreements required by the Title Company; and  
(xiii)
    Other Documents.  Any other documents required to be delivered pursuant to any other provisions of this Agreement.  
(b)
    By Buyer.  At Closing, Buyer shall deliver to Seller the following:  
(i)
    Purchase Price.  The balance of the Purchase Price; 
(ii)
    Assumption Agreements.  Assumption agreements, in the form of Exhibit E and Exhibit F respectively, of the Leases and of the Contracts to be assigned to Buyer, duly executed and acknowledged by Buyer;
(iii)
    Tenant Notice Letter.  A counterpart to the Tenant Notice Letter duly executed by Buyer;
(iv)
    Resolutions; Title Company Affidavits, Etc.  Resolutions and certificates as required to evidence good standing and the due authorization of the execution and performance of this Agreement and the 

16
LW:1030385.6

documents to be delivered pursuant hereto together with all affidavits, indemnities and other agreements required by the Title Company; and  
(v)
    Other Documents.  Any other document required to be delivered pursuant to any other provisions of this Agreement.  
16.
    Brokerage.  Buyer and Seller represent and warrant to the other that it has dealt with no broker, finder or other intermediary in connection with this sale other than Berkadia (“Broker”).  Seller agrees to pay all brokerage commissions due to Broker in connection herewith.  Buyer and Seller each agree to indemnify, defend and hold the other harmless from and against all claims, demands, causes of action, loss, damages, liabilities costs and expenses (including without limitation attorneys’ fees and court costs) which the indemnified party may incur arising by reason of the above representation being false.
17.    Indemnity.  Buyer agrees to indemnify, defend and hold harmless Seller from and against, and to reimburse Seller with respect to, any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including without limitation reasonable attorney’s fees and court costs) asserted against or incurred by Seller by reason of or arising out of any Lease, Contract, claim for damages or any other claim with respect to or accruing on or after the Closing Date.  Seller agrees to indemnify, defend and hold harmless Buyer from and against, and to reimburse Buyer with respect to, any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including without limitation reasonable attorney’s fees and court costs) asserted against or incurred by Buyer by reason of or arising out of any Lease, Contract, claim for damages or any other claim accruing prior to the Closing Date.  The provisions of this Section 17 shall survive Closing and recordation of the Deed.

1.
    Confidentiality.   Buyer shall not disclose any Confidential Information (as defined below) to any party other than (a) persons within Buyer’s organization, Buyer’s affiliates, persons who may invest in, or co-purchase with Buyer, or person with which Buyer has contracted, including attorneys, accountants, appraisers, engineers, environmental consultants and other professionals engaged for this contemplated transaction who are advised of the confidential nature of the Confidential Information, (b) potential lenders and agents of potential lenders who are advised of the terms of this Agreement related to the Confidentiality Information, (c) as necessary to consummate the terms of this Agreement or any financing relating thereto,  and (d) subject to the last sentence of this paragraph, as required by law or court order.  “Confidential Information” means the terms of this Agreement and all due diligence information (including the Documents) provided to Buyer by Seller other than information of public record or generally known to the public.  Buyer will destroy any electronic or paper documents constituting the Confidential Information, or return it to Seller if appropriate, if the Closing does not occur or this Agreement is terminated by Buyer or Seller before Closing.  The confidentiality provisions of this Section 18 shall not apply to any disclosures made by Buyer as required by law, by court order, or in connection with any subpoena served upon Buyer; provided Buyer shall provide Seller with written notice before making any such disclosure.  Buyer’s obligations under this Section 18 shall survive termination of this Agreement.

Seller shall at all times keep the terms of this Agreement confidential, except (i) to the extent necessary to comply with applicable laws and regulations (including, without limitation, as may be required by law, by court order, or in connection with any subpoena served upon Seller) and (ii) for consultation with Seller’s legal counsel or accountants.  Any such disclosure by Seller to third parties 

17
LW:1030385.6

shall indicate that the information is confidential and should be so treated by the third party.  No press release or other public disclosure may be made by Seller or any of its agents concerning this Agreement without the prior written consent of Buyer.  Seller’s obligations under this Section 18 shall survive termination of this Agreement.

2.
    No Other Representations.  Buyer acknowledges that neither Seller nor anyone acting, or purporting to act, on behalf of Seller, has, except as expressly set forth in this Agreement, made any representation or warranty with respect to the Property.
3.
    Assignability.  Buyer shall not have the right to assign its interest in this Agreement without Seller’s advance written consent, which consent may be withheld in Seller’s sole and absolute discretion.  Buyer hereby agrees that any assignment by Buyer, if consented to by Seller, shall not relieve Buyer of its obligations and liabilities hereunder.  Additionally, it shall be a condition of any such assignment that the assignee assumes, in a written instrument delivered to Seller (in form and content reasonably acceptable to Seller), all obligations of Buyer hereunder.  Seller’s approval of any assignment of Buyer’s interest in this Agreement shall not constitute a waiver of Seller’s right to approve any subsequent assignments.
Notwithstanding the terms of this Paragraph 20, Buyer shall have the right to assign its rights and obligations under this Agreement to an affiliate of Buyer.  Buyer’s right to assign this Agreement shall be subject to execution by Buyer and the assignee of a form of assignment agreement which provides that Buyer is not released from its obligations under this Agreement and the assignee assumes the obligation of Buyer under this Agreement.  Buyer shall give notice of any such proposed assignment to Seller not less than five (5) business days prior to the scheduled the Closing Date.  Upon such assignment, the assignee shall succeed to all of the rights of Buyer under this Agreement (including without limitation Buyer’s rights with respect to the Deposit) and shall assume all of Buyer’s obligations under the Agreement.  No such assignment shall relieve Buyer of any liability under the Agreement in the event of a default by Buyer or its assignee.

4.
    Notices.  
(a)
    All notices, demands, requests or other communications from each party to the other required or permitted under the term of this Agreement shall be in writing and, unless and until otherwise specified in a written notice by the party to whom notice is intended to be given, shall be sent to the parties at the following respective addresses:  
if intended for Buyer:        37th Parallel Properties Investment Group, LLC
1801 Bayberry Court, Suite 203
Richmond, VA 23226
Attn:  Dan Chamberlain
Facsimile No.:  866.715.1215
Email: dchamberlain@37parallel.com

With a copy to:            Kim Lawrence 
5720 LBJ Freeway, Suite 470
Dallas, TX 75240

18
LW:1030385.6

Facsimile No. 469-916.9799
Email: kim@kimlawrencepc.com
                             
if intended for Seller:        RRE Villas Holdings, LLC
c/o Resource Real Estate, Inc.
1845 Walnut Street, 18th Floor
Philadelphia, PA 19103
Attn:  Luke Perl, Transaction Manager
Facsimile No.:  (215) 761-0452
Email: LPerl@Resourcerei.com 

With a copy to:            Resource Real Estate, Inc.
1845 Walnut Street, 18th Floor
Philadelphia, PA 19103
Attn:  Shelle Weisbaum, General Counsel
Facsimile No.:  (215) 761-0452
Email: sweisbaum@resourcerei.com

And with a copy to:        Ledgewood, P.C.
Two Commerce Square
2001 Market Street, Suite 3400
Philadelphia, PA 19103
Attn: Stacy C. Bedwick, Esquire
Facsimile No.: (215) 735-2513
Email: sbedwick@ledgewood.com      
         
Notices may be given on behalf of any party by its legal counsel.
(b)
    Each such notice, demand, request or other communication shall be deemed to have been properly given for all purposes if (i) delivered by a nationally recognized overnight courier service for next business day delivery, to its addressee at such party’s address as set forth above or (ii) delivered via facsimile transmission to the facsimile number listed above or via electronic mail to the email address listed above, provided, however, that if such communication is given via facsimile transmission or email, reasonable evidence of delivery shall be provided by the transmitting party upon request.  
(c)
    Each such notice, demand or request shall be deemed to have been given upon the earlier of (i) actual receipt or refusal by the addressee or (ii) delivery thereof.  
5.
    Additional Escrow Provisions.
(e)
    Deposit.  Title Company agrees to deposit the Deposit in an interest bearing account, subject to the receipt from Buyer of a form W-9 for the purposes of investing said funds and to hold and disburse said funds, and any interest earned thereon, as hereinafter provided.  Upon written notification from Seller or Buyer in accordance with the terms of this Agreement, Title Company shall release the funds in accordance with and pursuant to the written instructions.  In the event of a dispute between any of the 

19
LW:1030385.6

parties hereto sufficient in the sole discretion of Title Company to justify its doing so, Title Company shall be entitled to tender unto the registry or custody of any court of competent jurisdiction all money or property in its hands held under the terms of this Agreement, together with such legal pleading as it deems appropriate, and thereupon be discharged.
(f)
    Escrow Holder.  Seller and Buyer covenant and agree that in performing any of its duties under this Agreement, Title Company shall not be liable for any loss, costs or damage which it may incur as a result of serving as Escrow Holder hereunder, except for any loss, costs or damage arising out of its willful default or gross negligence.  Accordingly, Title Company shall not incur any liability with respect to (i) any action taken or omitted to be taken in good faith upon advice of its counsel given with respect to any questions relating to its duties and responsibilities, or (ii) to any action taken or omitted to be taken in reliance upon any document, including any written notice of instruction provided for in this Agreement, not only as to its due execution and the validity and effectiveness of its provisions, but also to the truth and accuracy of any information contained therein, which Title Company shall in good faith believe to be genuine, to have been signed or presented by a proper person or persons and to conform with the provisions of this Agreement.
(g)
    Indemnity.  Seller and Buyer hereby agree to indemnify and hold harmless Title Company against any and all losses, claims, damages, liabilities and expenses, including without limitation, reasonable costs of investigation and attorneys' fees and disbursements which may be imposed upon or incurred by Title Company in connection with its serving as Escrow Holder hereunder, except for any loss, costs or damage arising out of its willful default, gross negligence or failure to adhere to the terms or conditions of this Agreement.  The provisions of this Section shall survive termination of this Agreement.
6.
    Miscellaneous.  
(a)
    Entire Agreement; Governing Law.  This Agreement contains the entire understanding of the parties with respect to the subject matter hereof, supersedes all prior or other negotiations, representations, understandings and agreements of, by or among the parties, express or implied, oral or written, which are fully merged herein.  The express terms of this Agreement control and supersede any course of performance and/or customary practice inconsistent with any such terms.  Any agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of this Agreement unless such agreement is in writing and signed by the party against whom enforcement of such change, modification, discharge or abandonment is sought.  This Agreement shall be governed by and construed under the laws of the State where the Real Property is located.
(b)
    Liability. Notwithstanding anything to the contrary contained herein, Seller’s shareholders, partners, members, the partners or members of such partners or members, the shareholders of such partners or members, and the trustees, officers, directors, employees, agents and security holders of Seller and the partners or members of Seller assume no personal liability for any obligations entered into on behalf of Seller and its individual assets shall not be subject to any claims of any person relating to such obligations.  The foregoing shall govern any direct and indirect obligations of Seller under this Agreement.  This provision shall expressly survive Closing and recordation of the Deed or termination of this Agreement.

20
LW:1030385.6

(c)
    Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, personal representatives, successors and assigns.  
(d)
    Provisions Separable.  The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other provision may be invalid or unenforceable in whole or in part.  
(e)
    Gender, etc.  Words used in this Agreement, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate.  
(f)
    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Agreement shall be binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected on this Agreement as the signatories.  Electronically transmitted counterparts of this Agreement or signature pages hereof shall have the same force and effect as originals.
(g)
    Exhibits.  All exhibits attached to this Agreement are incorporated by reference into and made a part of this Agreement.  
(h)
    No Waiver.  Neither the failure nor any delay on the part of either party to this Agreement to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of any such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.  
(i)
    Headings.  The headings incorporated in this Agreement are for convenience in reference only, are not a part of this Agreement and do not in any way limit or add to the terms and provisions of this Agreement.  
(j)
    Interpretation.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative or counsel drafted such provision.  
(k)
    Time.  TIME IS OF THE ESSENCE OF THIS AGREEMENT.  In computing the number of days for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the final day of any time period provided in this Agreement shall end on a Saturday, Sunday or legal holiday, then the final day shall extend to 5:00 p.m. Eastern time of the next full business day.  For the purposes of this Section, the term “holiday” shall mean a day other than a 

21
LW:1030385.6

Saturday or Sunday on which banks are closed in the state in which the Real Property is located and the term “business day” shall mean a day other than Saturday, Sunday or holiday.
(l)
    Attorney’s Fees.  In connection with any litigation arising out of this Agreement, the prevailing party shall be entitled to recover all costs incurred, including reasonable attorney’s fees. For purposes of this Agreement, “prevailing party” shall include, without limitation, a party obtaining substantially the relief sought, whether by compromise, settlement or otherwise.
(m)
    No Recording of Agreement.  Neither Seller nor Buyer shall cause or permit this Agreement to be filed of record in any office or place of public record and, if Buyer or Seller shall fail to comply with the terms hereof by recording or attempting to record the same, such act shall not operate to bind or cloud title to the Real Property.
(n)
    Negotiations.  During the term of this Agreement, Seller shall not have the right at to solicit backup offers and enter into discussions, negotiations, or any other communications concerning or related to the sale of the Property with any third party.
(o)
    WAIVER OF JURY TRIAL.  BUYER WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALING OF THE BUYER AND SELLER IN RESPECT OF THIS AGREEMENT OR RELATED TRANSACTIONS, IN EACH CASE WHETHER NOW EXISTING OR LATER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.  BUYER AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION  WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT SELLER MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF BUYER TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

    (p) 1031 Exchange.   Buyer or Seller may desire to exchange, for other property of like kind and qualifying use within the meaning of Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, fee title in the Project.  Each of Buyer and Seller expressly reserves the right to assign its rights, but not its obligations, hereunder to a Qualified Intermediary as provided in Treasury Reg. §1.1031(k)-1(g)(4) on or before Closing and each party hereby agrees to fully cooperate with the other party, at no cost to such party, in the furtherance of any such like-kind exchange pursuant to Code §1031 contemplated by either party hereto.

    (q) Reporting Person. Each of Seller and Buyer hereby designate the Escrow Holder as the “Reporting Person” as such term is utilized in Section 6045 of the Internal Revenue Code of 1986, as amended, and regulations thereunder. Seller agrees to provide the Title Company with such information as may be required for the Escrow Holder to file a Form 1099 or other required form relative to the Closing with the Internal Revenue Service. A copy of the filed Form 1099 or other filed form shall be provided to Seller and Buyer simultaneously with its being provided to the Internal Revenue Service.

22
LW:1030385.6

24. Texas Disclosures.   By its signature to this Agreement, Buyer hereby acknowledges its receipt of the following notices at or before the execution of this Agreement: 
(a)
    Notice Regarding Possible Liability for Additional Taxes.  If for the current ad valorem tax year the taxable value of the Property that is the subject of this Agreement is determined by a special appraisal method that allows for appraisal of the Property at less than its market value, the Buyer may not be allowed to qualify the Property for that special appraisal in a subsequent tax year and the Property may then be appraised at its full market value.  In addition, the transfer of the Property or a subsequent change in the use of the Property may result in the imposition of an additional tax plus interest as a penalty for the transfer or the change in the use of the Property.  The taxable value of the Property and the applicable method of appraisal for the current tax year is public information and may be obtained from the Bexar County Appraisal District.
(b)
    Notice Regarding Possible Annexation.  If the Property that is the subject of this Agreement is located outside the limits of a municipality, the Property may now or later be included in the extraterritorial jurisdiction of a municipality and may now or later be subject to annexation by the municipality.  Each municipality maintains a map that depicts its boundaries and extraterritorial jurisdiction.  To determine if the Property is located within a municipality's extraterritorial jurisdiction or is likely to be located within a municipality's extraterritorial jurisdiction, contact all municipalities located in the general proximity of the Property for further information.
(c)
    Property Located in a Certificated Service Area of a Utility Service Provider.  The Property that you are about to purchase may be located in a certificated water or sewer service area, which is authorized by law to provide water or sewer service to the properties in the certificated area.  If the Property is located in a certificated area there may be special costs or charges that you will be required to pay before you can receive water or sewer service.  There may be a period required to construct lines or other facilities necessary to provide water or sewer service to the Property.  You are advised to determine if the Property is in a certificated area and contact the utility service provider to determine the cost that you will be required to pay and the period, if any, that is required to provide water or sewer service to the Property.
(d)
    Notice Regarding District.  If the Property is situated in a utility or other statutorily created district providing water, sewer, drainage, or flood control facilities and services, Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fees of the district before final execution of this Agreement.
(e)
    Notice Regarding Coastal Property.  If the Property adjoins or shares a common boundary with the tidally influenced submerged lands of the state, Section 33.135, Texas Natural Resources Code, requires a notice regarding coastal area property to be included as part of this Agreement.
(f)
    Lead Disclosure.  If apartments or other residential units are on the Property and the units were built before 1978, federal law requires a lead-based paint and hazard disclosure statement to be made part of this Agreement.

23
LW:1030385.6

(g)
    Mold Remediation.  Section 1958.154, Texas Occupations Code, requires Seller to provide Buyer a copy of any mold remediation certificate issued for the Property during the five (5) years preceding the date the Seller sells the Property.

                                 [SIGNATURES CONTAINED ON FOLLOWING PAGE]

IN WITNESS WHEREOF, intending to be legally bound, the parties have executed this Agreement as a sealed instrument as of the day and year first above written.  

 
SELLER:

RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company

By: RCP Villas Manager, LLC, a Delaware limited liability company, its manager

By: _________________________________
Name:
Title:

BUYER:

37TH PARALLEL PROPERTIES INVESTMENT GROUP, LLC, a Nevada limited liability company

By: _________________________________
Name:
Title:

Taxpayer ID Number:  ____________________

24
LW:1030385.6

JOINDER OF ESCROW HOLDER

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, the Escrow Holder named in the annexed Agreement, hereby agrees to be bound by the provisions of the annexed Agreement relating to the holding and disbursement of all monies paid to the undersigned in escrow, and to disburse such sums strictly in accordance with the terms of the Agreement.  

Intending to be legally bound, the undersigned has caused this Joinder to be executed by its duly authorized representative the ____day of July, 2016.

REPUBLIC TITLE OF TEXAS, INC.

By:_________________________
Name:
Title: 

EXHIBIT A

[LEGAL DESCRIPTION OF REAL PROPERTY]

FIELD NOTES
FOR

A 9.154 acre, or 398,736 square feet, more or less, tract of land situated within Lots 94 and 95, Block 8 of the Rancho Mesa Subdivision, Unit-2C as recorded in Volume 9509, Pages 125-126 of the Deed and Plat Records of Bexar County, Texas, in New City Block (N.C.B.) 16129 of the City of San Antonio, Bexar County, Texas, being the same as property described in the title commitment referenced on the survey, and being more particularly described by metes and bounds as follows:
		
	BEGINNING:
	At a found iron rod in the southwest right-of-way line of Henderson Pass, a 60-foot wide right-of-way, at the north corner of said Lot 94, the east corner of a 72-foot wide drainage right-of-way, as recorded with the plat of Thousand Oaks, Unit-17 in Volume 9400, Page 128 of the Deed and Plat Records of Bexar County, Texas and the north corner of this tract;

		
	THENCE:
	Continuing along said right-of-way line of Henderson Pass as follows:

S 59°53’00” E, a distance of 158.16 feet to a found iron rod for a point of curvature;

With said curve to the right, having a radius of 570.00, a central angle of 38°43’47”, a chord bearing and distance of S 40°31’06” E, 378.00 feet and an arc length of 385.30 feet to a set 1⁄2" iron rod with yellow cap marked "Pape-Dawson" for a point of tangency;

S 21°09’13” E, a distance of 23.38 feet to a set 1⁄2" iron rod with yellow cap marked "Pape-Dawson" for a point of curvature;

With said curve to the left having a radius of 181.37 feet, a central angle of 15°17’15”, a chord bearing and distance of S 28°47’50” E, 48.25 feet and an arc length of 48.39 feet to a set “x” in concrete for a point of reverse curvature; and

With said curve to the right, having a radius of 1294.97 feet, a central angle of 10°13’34”, a chord bearing and distance of S 31°19’41” E, 230.82 feet and an arc length of 231.12 feet to a found iron rod for the northeast corner of Lot 96, Rancho Mesa Subdivision Unit-2C as recorded in Volume 9517, Page 25 of the Deed and Plat Records of Bexar County, Texas and the east corner of this tract;

		
	THENCE:
	S 61°46’35” W, departing from said right-of-way line, along and with the common line between Lot 94 and said Lot 96, a distance of 496.22 feet to a found iron rod for the south corner of this tract;

		
	THENCE:
	N 45°17’29” W, a distance of 169.80 feet to a found iron rod;

		
	THENCE:
	N 52°13’29” W, a distance of 120.86 feet to a found railroad spike;

		
	THENCE:
	N 62°15’28” W, a distance of 18.27 feet to a found railroad spike;

A-1
LW:1030385.6

		
	THENCE:
	N 39°38’32” W, a distance of 38.16 feet to a found railroad spike;

		
	THENCE:
	N 27°21’14” W, a distance of 28.58 feet to a found railroad spike;

		
	THENCE:
	N 04°42’24” E, a distance of 57.19 feet to a found railroad spike on the common line between said Lots 94 and 95;

		
	THENCE:
	N 63°13’34” W, along said common line, a distance of 24.08 feet to a set 1⁄2" iron rod with yellow cap marked "Pape-Dawson";

		
	THENCE:
	N 58°52’49” W, departing from said common line, a distance of 156.53 feet to a found iron rod in the southeast line of a drainage easement as recorded with the plat of Thousand Oaks, Unit-4 in Volume 6900, Page 113 and Volume 7100, Pages 248-252 of the said Deed and Plat Records of Bexar County, Texas for the west corner of this tract being N 35°30’24” E, a distance of 12.00 feet from the west corner of said Lot 94;

		
	THENCE:
	N 35°30’24” E, along and with said drainage easement and the northwest line of said Lot 94, a distance of 358.67 feet to a found iron rod in the southeast line of the aforementioned 72-foot wide drainage right-of-way;

		
	THENCE:
	Along and with said drainage right-of-way and the northwest line of said Lot 94, the following:

N 23°14’26” E, a distance of 7.42 feet to a found iron rod;

		
	THENCE:
	N 35°24’30” E, a distance of 194.26 feet to the POINT OF BEGINNING and containing 9.154 acres, in the City of San Antonio, Bexar County, Texas.  The above having been described in accordance with a survey prepared by Pape-Dawson Engineers, Inc.

		
	Prepared by:
	Pape-Dawson Engineers, Inc.

		
	Job No.:
	9439-07

		
	Date:
	December 12, 2007

		
	Revised:
	December 26, 2007.

		
	Doc. Id.:
	N:\Survey07\7-9500\9439-07\Word\fn9439-07.doc

A-2
LW:1030385.6

EXHIBIT B

When recorded, return to: 
 
                     
                     
                     
Attention:                  

NOTICE OF CONFIDENTIALITY RIGHTS:  IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:  YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

SPECIAL WARRANTY DEED

RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company (“Grantor”), whose address is c/o Resource Real Estate, Inc., 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) paid to Grantor and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, has GRANTED, BARGAINED, SOLD and CONVEYED and does hereby GRANT, BARGAIN, SELL and CONVEY unto                 , a                  (“Grantee”), whose address is ___________________________________, that certain tract of land situated in Bexar County, Texas, as more fully described on Exhibit A attached hereto and made a part hereof for all purposes, together with (a) all improvements located thereon, (b) all rights, benefits, privileges, easements, tenements, hereditaments and appurtenances there unto belonging or in any wise, pertaining thereto, and (c) all of Grantor’s right, title and interest in and to adjacent strips, gores, streets, roads, alleys and rights-of-way (said land, improvements, rights, benefits, privileges, easements, tenements, hereditaments, appurtenances and interests being hereinafter referred to as the “Real Property”).
This conveyance is made and accepted subject to all matters set out herein above and in Exhibit B, attached hereto and incorporated herein by reference (“Permitted Exceptions”) but only to the extent the Permitted Exceptions are valid, existing and affect the Real Property.
TO HAVE AND TO HOLD the Real Property, together with all rights and appurtenances pertaining thereto, unto Grantee and Grantee’s successors and assigns forever, and Grantor does hereby bind itself and its successors and assigns to WARRANT and FOREVER DEFEND, all and singular, subject to the Permitted Exceptions, the Real Property unto Grantee and Grantee’s successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof by, through or under Grantor, but not otherwise.
All ad valorem taxes for the year in which the conveyance occurs have been prorated between Grantor and Grantee and Grantee shall be obligated to pay same.

LW:1030385.6

DATED effective as of the ___ day of ________, 2016.

GRANTOR:

RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company

By:  RCP Villas Manager, LLC, a Delaware limited liability company, its manager

By:__________________________ 
Name:
Title:

Acknowledgment

STATE OF                 §
§
COUNTY OF                 §

BEFORE ME, the undersigned, a Notary Public in and for said County and State, on this day personally appeared ______________, known to me to be the _______________ of RCP Villas Manager, LLC, a Delaware limited liability company, manager of RRE Villas Holdings, LLC, the limited liability company that executed the foregoing instrument, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the said limited liability company, and that he/she executed the same as the act of such limited liability company for the purposes and consideration therein expressed and in the capacity therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this _____ day of ___________, 2016.

__________________________________________
Notary Public 

My Commission Expires:______________

Exhibit A – Legal Description
Exhibit B -  Permitted Exceptions

LW:1030385.6

EXHIBIT A TO DEED

FIELD NOTES
FOR

A 9.154 acre, or 398,736 square feet, more or less, tract of land situated within Lots 94 and 95, Block 8 of the Rancho Mesa Subdivision, Unit-2C as recorded in Volume 9509, Pages 125-126 of the Deed and Plat Records of Bexar County, Texas, in New City Block (N.C.B.) 16129 of the City of San Antonio, Bexar County, Texas, being the same as property described in the title commitment referenced on the survey, and being more particularly described by metes and bounds as follows:
		
	BEGINNING:
	At a found iron rod in the southwest right-of-way line of Henderson Pass, a 60-foot wide right-of-way, at the north corner of said Lot 94, the east corner of a 72-foot wide drainage right-of-way, as recorded with the plat of Thousand Oaks, Unit-17 in Volume 9400, Page 128 of the Deed and Plat Records of Bexar County, Texas and the north corner of this tract;

		
	THENCE:
	Continuing along said right-of-way line of Henderson Pass as follows:

S 59°53’00” E, a distance of 158.16 feet to a found iron rod for a point of curvature;

With said curve to the right, having a radius of 570.00, a central angle of 38°43’47”, a chord bearing and distance of S 40°31’06” E, 378.00 feet and an arc length of 385.30 feet to a set 1⁄2" iron rod with yellow cap marked "Pape-Dawson" for a point of tangency;

S 21°09’13” E, a distance of 23.38 feet to a set 1⁄2" iron rod with yellow cap marked "Pape-Dawson" for a point of curvature;

With said curve to the left having a radius of 181.37 feet, a central angle of 15°17’15”, a chord bearing and distance of S 28°47’50” E, 48.25 feet and an arc length of 48.39 feet to a set “x” in concrete for a point of reverse curvature; and

With said curve to the right, having a radius of 1294.97 feet, a central angle of 10°13’34”, a chord bearing and distance of S 31°19’41” E, 230.82 feet and an arc length of 231.12 feet to a found iron rod for the northeast corner of Lot 96, Rancho Mesa Subdivision Unit-2C as recorded in Volume 9517, Page 25 of the Deed and Plat Records of Bexar County, Texas and the east corner of this tract;

		
	THENCE:
	S 61°46’35” W, departing from said right-of-way line, along and with the common line between Lot 94 and said Lot 96, a distance of 496.22 feet to a found iron rod for the south corner of this tract;

		
	THENCE:
	N 45°17’29” W, a distance of 169.80 feet to a found iron rod;

		
	THENCE:
	N 52°13’29” W, a distance of 120.86 feet to a found railroad spike;

		
	THENCE:
	N 62°15’28” W, a distance of 18.27 feet to a found railroad spike;

		
	THENCE:
	N 39°38’32” W, a distance of 38.16 feet to a found railroad spike;

LW:1030385.6

		
	THENCE:
	N 27°21’14” W, a distance of 28.58 feet to a found railroad spike;

		
	THENCE:
	N 04°42’24” E, a distance of 57.19 feet to a found railroad spike on the common line between said Lots 94 and 95;

		
	THENCE:
	N 63°13’34” W, along said common line, a distance of 24.08 feet to a set 1⁄2" iron rod with yellow cap marked "Pape-Dawson";

		
	THENCE:
	N 58°52’49” W, departing from said common line, a distance of 156.53 feet to a found iron rod in the southeast line of a drainage easement as recorded with the plat of Thousand Oaks, Unit-4 in Volume 6900, Page 113 and Volume 7100, Pages 248-252 of the said Deed and Plat Records of Bexar County, Texas for the west corner of this tract being N 35°30’24” E, a distance of 12.00 feet from the west corner of said Lot 94;

		
	THENCE:
	N 35°30’24” E, along and with said drainage easement and the northwest line of said Lot 94, a distance of 358.67 feet to a found iron rod in the southeast line of the aforementioned 72-foot wide drainage right-of-way;

		
	THENCE:
	Along and with said drainage right-of-way and the northwest line of said Lot 94, the following:

N 23°14’26” E, a distance of 7.42 feet to a found iron rod;

		
	THENCE:
	N 35°24’30” E, a distance of 194.26 feet to the POINT OF BEGINNING and containing 9.154 acres, in the City of San Antonio, Bexar County, Texas.  The above having been described in accordance with a survey prepared by Pape-Dawson Engineers, Inc.

		
	Prepared by:
	Pape-Dawson Engineers, Inc.

		
	Job No.:
	9439-07

		
	Date:
	December 12, 2007

		
	Revised:
	December 26, 2007.

		
	Doc. Id.:
	N:\Survey07\7-9500\9439-07\Word\fn9439-07.doc

LW:1030385.6

EXHIBIT B TO DEED

PERMITTED EXCEPTIONS

EXHIBIT C

BILL OF SALE AND ASSIGNMENT
THIS BILL OF SALE AND ASSIGNMENT (the “Assignment”) is made as of _________________, 2016, by RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company (“Seller”), in favor of ___________________, a ________________ (“Buyer”).

RECITALS
A.    Pursuant to a certain Agreement of Purchase and Sale, dated as of July __, 2016 (the “Agreement of Sale”), Seller has agreed to sell to Buyer, upon the terms, provisions and conditions set forth therein, certain property commonly known as the Villas of Henderson Pass located at 16465 Henderson Pass, San Antonio, TX 78232, all as more particularly described in the Agreement of Sale (the “Property”).

B.    In connection with the sale and purchase of the Property, Seller desires to sell, assign and transfer to Buyer all of Seller’s right, title and interest in and to the Personal Property identified and as defined in the Agreement of Sale, all upon the terms, covenants and conditions set forth in this instrument.  

NOW THEREFORE, for an in consideration of Ten Dollars ($10.00), the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, Seller hereby agrees as follows:

1.    Definitions.  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given such terms in the Agreement of Sale.

2.Transfer and Assignment.  Seller hereby sells, transfers, assigns, delivers and conveys to Buyer, its successors and assigns, all of Seller's right, title and interest in, to and under the Personal Property.

3.Representations and Warranties of Seller.  Seller hereby represents and warrants to Buyer as follows:

(i)    Seller is the sole owner and holder of the Personal Property; and

(ii)    Seller has the power, authority and right to execute and deliver this Assignment and to sell, transfer, assign, deliver and convey the Personal Property.

4.AS IS, WHERE IS. THE PERSONAL PROPERTY IS BEING CONVEYED “AS IS”, “WHERE IS”, AND “WITH ALL FAULTS” AS OF THE DATE OF THIS ASSIGNMENT, WITHOUT ANY REPRESENTATION OR WARRANTY WHATSOEVER AS TO ITS CONDITON, FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED.  SELLER SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST OR PRESENT, THERETO.   BUYER IS HEREBY THUS ACQUIRING THE PERSONAL PROPERTY BASED SOLEY UPON BUYER’S OWN INDEPENDENT INVESTIGATIONS AND INSPECTION OF THAT PROPERTY AND NOT IN RELIANCE UPON ANY INFORMATION PROVIDED BY SELLER OR SELLER’S AGENTS OR CONTRACTORS.

LW:1030385.6

5.Absolute Transfer.  It is the intention of Seller to transfer absolute title of the Personal Property to Buyer, its successors and assigns, free of any equity of redemption by Seller or its successors and assigns

6.Binding Effect.  This Assignment shall be binding upon and inure to the benefit of Seller and Buyer and their respective heirs, personal representatives, successors and assigns.  

IN WITNESS WHEREOF, intending to be legally bound, Seller has caused this Bill of Sale and Assignment to be executed by its duly authorized officer on the day and year first above written.  

   SELLER:

RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company

By: RCP Villas Manager, LLC, a Delaware limited liability company, its manager

By:_________________________ 
Name:
Title:

C-2
LW:1030385.6

EXHIBIT D

[RENT ROLL]

SEE ATTACHED

D-1
LW:1030385.6

 
EXHIBIT E

ASSIGNMENT AND ASSUMPTION OF LEASES

THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) is made and entered into as of __________, 2016, by and between RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company (“Assignor”), and _________________, a __________________ (“Assignee”).

RECITALS

A.    Pursuant to a certain Agreement of Purchase and Sale, dated as of July __, 2016 (the “Agreement of Sale”), Assignor has agreed to sell to Assignee, upon the terms, provisions and conditions set forth therein, certain property commonly known as the Villas of Henderson Pass located at 16465 Henderson Pass, San Antonio, TX 78232, all as more particularly described in the Agreement of Sale (the “Property”)

B.    In connection with the sale and purchase of the Property, Assignor desires to assign to Assignee all tenant leases encumbering the Property and Assignee desires to accept said assignment and assume the obligations of Assignor under said leases, all upon the terms, covenants and conditions set forth in this instrument.  

NOW, THEREFORE, in consideration of the purchase price paid by Assignee to Assignor for the Property, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee covenant and agree as follows:  

1.    Assignment.  Assignor hereby assigns, transfers and sets over unto Assignee all of Assignor’s right, title and interest in and to (collectively, the “Assigned Interests”) (a) the leases set forth on the rent roll attached hereto as Exhibit A and made a part of this Assignment and any other lease, license or right of occupancy affecting the Property, together with all amendments, extensions, and other modifications thereto (the “Leases”), (b) any and all rights of Assignor and the lessor under the Leases to collect rents, additional rents, escrow or security deposits, fees, income, charges, and profits now or hereafter arising thereunder, and (c) any guarantees of any Leases, to have and to hold the same unto Assignee, its successors and assigns.  

     2.    Assumption.  Assignee accepts said assignment and assumes all obligations of Assignor on the part of the lessor/landlord under the Leases first arising or accruing on or after the date of this Assignment.  

3.    Indemnification by Assignor.  Assignor agrees to indemnify, defend and hold Assignee harmless from and against any claim, demand, cause of action, charge, judgment, damage, liability, cost or expense (including, without limitation, reasonable attorney’s fees and legal costs) (a) arising out of the Assigned Interests in connection with events occurring at any time during Assignor’s ownership of the Property, or (b) arising out of any claim by any tenant arising prior to the date of this Assignment with respect to any security deposit but only to the extent of the amount of such security deposit and interest thereon not transferred by Assignor to Assignee.  

E-1
LW:1030385.6

4.    Indemnification by Assignee.  Assignee agrees to indemnify, defend and hold Assignor harmless from and against any claim, demand, cause of action, charge, judgment, damage, liability, cost or expense (including, without limitation, reasonable attorneys’ fees and legal costs) arising out of the Assigned Interests in connection with events occurring on or after the date of this Assignment or arising out of any claim by any tenant arising on or after the date of this Assignment with respect to its security deposit but only to the extent of the amount of such security deposit and interest thereon transferred by Assignor to Assignee and not returned to such tenant by Assignee.  

5.     Counterparts.  This Assignment may be executed and delivered in any number of counterparts, each of which so executed and delivered shall be deemed to be an original and all of which shall constitute one and the same instrument.  For purposes of this Assignment, any signature transmitted by e-mail (in pdf format) shall be considered to have the same legal and binding effect as any original signature.
6.    Binding Effect.  This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective heirs, personal representatives, successors and assigns.   

IN WITNESS WHEREOF, intending to be legally bound, the parties have caused this Assignment and Assumption of Leases to be executed by their duly authorized officers on the day and year first above written.  

   ASSIGNOR:  

RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company

By: RCP Villas Manager, LLC, a Delaware limited liability company, its manager

By: ________________________
Name:
Title:

                         ASSIGNEE:

[_______________________]

By: ________________________ 
Name:
Title:

Exhibit A – rent roll

E-2
LW:1030385.6

EXHIBIT F

ASSIGNMENT AND ASSUMPTION OF CONTRACTS

THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this “Assignment”) is made and entered into as of __________ 2016, by and between RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company (“Assignor”) and _________________, a __________________ (“Assignee”).

R E C I T A L S:

A.    Pursuant to a certain Agreement of Purchase and Sale, dated as of July __, 2016 (the “Agreement of Sale”), Assignor has agreed to sell to Assignee, upon the terms, provisions and conditions set forth therein, certain property commonly known as the Villas of Henderson Pass located at 16465 Henderson Pass, San Antonio, TX 78232, all as more particularly described in the Agreement of Sale (hereinafter “Property”).

B.    In connection with the sale and purchase of the Property, Assignor desires to assign to Assignee all of Assignor’s right, title and interest in and to those agreements set forth on Exhibit A attached to and made a part of this Assignment (collectively, the “Contracts”) and Assignee desires to accept said assignment and assume the obligations of Assignor under the Contracts, all upon the terms, covenants and conditions set forth in this instrument.   

NOW, THEREFORE, in consideration of the purchase price paid by Assignor to Assignee for the Property and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee covenant and agree as follows:  

1.    Assignment.  Assignor hereby assigns, transfers and sets over to Assignee all of Assignor’s right, title and interest in and to the Contracts.  Assignor agrees to pay and perform all terms, covenants, conditions, agreements and obligations to be kept and performed under the Contracts to the date of this Assignment, together with such other obligations of Assignor concerning the Contracts set forth in the Agreement of Sale. 

2.    Assumption.  Assignee accepts said assignment and assumes all obligations of Assignor under the Contracts arising or accruing on or after the date of this Assignment.  

3.    Indemnification by Assignor.  Assignor agrees to indemnify, defend and hold Assignee harmless from and against any claim, demand, cause of action, charge, judgment, damage, liability, cost or expense (including, without limitation, reasonable attorneys’ fees and legal costs) arising out of the Contracts in connection with events occurring prior to the date of this Assignment.  

4.    Indemnification by Assignee.  Assignee agrees to indemnify, defend and hold Assignor harmless from and against any claim, demand, cause of action, charge, judgment, damage, liability, cost or expense (including, without limitation, reasonable attorneys’ fees and legal costs) arising out of the Contracts in connection with events occurring on or after the date of this Assignment.  

5.     Counterparts.  This Assignment may be executed and delivered in any number of counterparts, each of which so executed and delivered shall be deemed to be an original and all of which shall constitute one and the same instrument.  For purposes of this Assignment, any signature transmitted by e-mail (in pdf format) shall be considered to have the same legal and binding effect as any original signature.
6.    Binding Effect.  This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective heirs, personal representatives, successors and assigns.

IN WITNESS WHEREOF, intending to be legally bound, Assignor and Assignee have caused this Assignment and Assumption of Contracts to be executed by their duly authorized officers on the day and year first above written.  

   ASSIGNOR:  

RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company

By: RCP Villas Manager, LLC, a Delaware limited liability company, its manager

By: _____________________ 
Name:
Title:

                         ASSIGNEE:

[________________]

By: _____________________ 
Name:
Title:

Exhibit A – list of contracts

F-1
LW:1030385.6

EXHIBIT G

FIRPTA 

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person.  For U.S. tax purposes (including section 1445), the undersigned “Transferor” which is the owner, directly or indirectly of all of the membership interests of RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company, which has legal title to a U.S. real property interest under local law, will be the actual transferor of the property for U.S. tax purposes and not the disregarded entity.  To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by Transferor, the undersigned hereby certifies as follows:

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

		
	2.
	Transferor is not a disregarded entity, as defined in Treas. Reg. § 1.1445-2(b)(2)(iii);

		
	3.
	Transferor’s U.S. taxpayer identification number is _____________________; and 

		
	4.
	Transferor’s office address is 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103.

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

Under penalties of perjury, the undersigned, in the capacity set forth below, hereby declares that he has examined this instrument and to the best of his knowledge and belief it is true, correct, and complete, and the undersigned further declares that he has the authority to sign this document in such capacity.  

TRANSFEROR:

RESOURCE REAL ESTATE INVESTORS 6, LP,  a Delaware limited partnership

By: Resource Capital Partners, Inc., a Delaware corporation, its general partner

By: _________________________ 
Name:
Title:

Dated: _________________, 2016

EXHIBIT H
NOTICE TO TENANTS
_________, 2016
PERSONAL DELIVERY 
Residents of the Villas of Henderson Pass
16465 Henderson Pass
San Antonio, TX 78232  
 
Dear Resident:

Notice is hereby given to the tenants of the Villas of Henderson Pass (the “Property”) that the current owner of the Property (the “Seller”), has sold the Property to ____________(“Buyer”), effective as of this date.  Buyer has assumed all of the obligations of Seller, as landlord under your lease, including any obligations with respect to your security deposit.  Buyer acknowledges that it has received and is responsible for your security deposit in the amount listed on the Addendum hereto, which security deposit has been transferred to Buyer, less any amounts applied by Seller listed on the Addendum attached hereto.  Any pending claims by Seller against your security deposit are also described on the Addendum attached hereto.  Buyer is now your landlord and all future rent payments under your lease shall be made to Buyer.
In the event that your rent payments are made to Seller via an ACH, other automatic debit system, or the WIPS program, such payments shall be rejected as of the date hereof and you should make alternative arrangements with Buyer for the payment of your rent.
Buyer’s address for purposes of your lease is as follows:
___________________
___________________ 
Attn: _______________ 

All future rental payments should be hand delivered to the on-site rental office.  
Sincerely,

SELLER:

RRE VILLAS HOLDINGS, LLC, a Delaware limited liability company

By: RCP Villas Manager, LLC, a Delaware limited liability company, its manager

By:____________________________
Name:
Title:

G-1
LW:1030385.6

BUYER:

[_________________]

            
By:______________________________
Name:
Title:

ADDENDUM

Tenant:  ____________________

Unit No.:  ___________________

Original Security Deposit Amount:  $___________

Amount of Security Deposit Previously Applied:  $____________

Existing Security Deposit Amount Being Transferred: $__________

                     
SCHEDULE 5(b)

[DOCUMENTS]

To the extent in Seller’s possession or control:

		
	1.
	Real and personal property tax bills and assessed value for the prior 2 years and year-to-date

		
	2.
	Copies of any warranty agreements which Seller may have been covering the Property

		
	3.
	Copies of all Contracts

		
	4.
	Monthly Rent Rolls, aged receivables, and delinquency reports for the prior twelve months, and current Rent Roll of existing tenants and unexpired tenant leases (to include names of lessee/resident, lease rent, move-in data, lease expiration date, any security deposits),. 

		
	5.
	Year to date financials for 2016 and prior 3  years

		
	6.
	Operating account bank statements for prior 3 years and YTD

		
	7.
	Operating income and expense detail for the prior three (3) years and year-to-date  and Historical occupancy reports for the prior three (3) years

		
	8.
	Details of any financial arrangements with apartment brokers, locators, etc.

		
	9.
	Copies of current insurance certificates and to the extent in Seller's possession, insurance loss runs for the prior three (3) years.

		
	10.
	Copy of Seller’s current Owner’s Policy of title insurance

		
	11.
	Copies of all rental agreements, lease files, and any addenda (available for review at on site management offices).

		
	12.
	List of capital improvements made in the last three (3) years the cost of which exceed ($5,000) together with copies of any transferrable guaranties in connection therewith

		
	13.
	To the extent in Seller's possession, permits (other than certificates of occupancy).

		
	14.
	Copies of all utility bills for the prior 24 months

		
	15.
	Copies of all maintenance records for the past three (3) years [available on-site]

		
	16.
	List of personal property, including, but not limited to furniture, fixtures, and equipment used in the normal operation of the properties that will be transferred to the Purchaser.

		
	17.
	Current payroll Exhibits showing employee names, hourly rates, salaries, benefits, etc. (to be delivered after the expiration of the Due Diligence Period provided the Agreement has not been terminated).

		
	18.
	Plans, specifications, floor plans, as-built drawings and building permits for all improvements on the properties.

		
	19.
	Access to all tenant correspondence.[available on-site]

		
	20.
	Site plans.

		
	21.
	ALTA surveys.

		
	22.
	Environmental reports including any results of radon testing/presence. [received by Buyer]

		
	23.
	Certificates of Occupancy.

H-1
LW:1030385.6Exhibit 10.3

 

Basic Credit Line Contract

 

Reference: Xing Yin Shen Longgang credit
zi (2016) No. 0650 

Creditor: Industrial Bank Co., Ltd., Shenzhen
Longgang Branch 

Address: NO.113, Parkland, Longxiang Road,
Longgang town, Shenzhen 

Legal Representative / CEO: Xiaoxia Wen 

Contact: Liang Lili 

Address: NO.113,Parkland, Longxiang Road,
Longgang town, Shenzhen 

	Postal Code:518172	Fax:
	Tel: 	Fax:

 

Debtor: Springpower Technology (Shenzhen)
Co., Ltd. 

Address:
Building A, Chaoshun Industrial Zone, Renmin Street, Danhu, Guanlan Road, Baoan, Shenzhen 

Legal Representative / CEO: Pan Dangyu 

Contact: Pan Dangyu 

Address: Building A, Chaoshun Industrial
Zone, Renmin Street, Danhu, Guanlan Road, Baoan, Shenzhen 

	Postal Code:518172	Fax:
	Tel: 	Fax:

 

Contract signed at: Industrial Bank Building,
Industrial Bank Co., Ltd. Shenzhen Branch, futian, shenzhen

 

Important Prompt

 

For protecting your rights and interests,
please read, check and confirm the following items carefully before signing:

 

1. You have the
right to sign this contract or you have been given sufficient authority legally.

 

2. You have read
and understood this contract carefully and sufficiently, and have paid attention on assuming, exempting or

limiting responsibilities
of Industrial Bank Co., Ltd., and the content with bold font.

 

3. Your company
and you understand the meaning of this contract and the relevant legal consequences, and agree to accept these provisions.

 

4. The contract
provided by Industrial Bank Co., Ltd. is a model contract. There is space for modifying, supplementing and deleting.

 

5. If you have
further questions on this contract, please consult Industrial Bank Co., Ltd.

 

After application, creditor agrees to provide
a basic credit line to debtor. To clarify the rights and obligations of both parties, and abide by credit, the contracting parties
sign this contract agreed together according to relevant state laws and regulations.

 

     

     

    

 

Clause 1 Definitions and interpretation

 

Except agreed in writing by the contracting
parties, the following words in this contract will be explained as follows:

 

1. Basic credit
line: based on comprehensive evaluation of management and risk of debtor, creditor will decide the maximum amount of comprehensive
financing principal of debtor, including but not limited local foreign currency, various trade financing (issuing letter of credit,
trust receipt, packing loan, export bill purchase, export bill purchase under collection and advanced against inward documentary
bills, etc.) bank acceptance bill, notes discounted, notes repo, guarantee (including independent guarantee, demand guarantee,
standby letter of credit, etc.) and so on.

 

2. Valid period
of credit line is one uninterrupted period, during which the debtor can conduct business transactions stipulated under the basic
credit line, with creditor’s consent. The basic credit line expires when the valid period of credit ends.

 

3. Balance: creditor
will manage and control the balance of various businesses of debtor. The balance is the sum of used credit line, including undue
balance and expired outstanding balance, as follows:

 

(1) Undue balance: the sum of undue outstanding
debts which are used by debtor according to this contract.

(2) The due unpaid
balance is the debt principal balance that the Creditor granted the Debtor, or is entitled for to perform certain legal responsibilities,
but remained unpaid at the expiry date.

 

4. Macro contract:
Basic credit line contract, which is signed by creditor and debtor.

Sub-contract:
the specific business contract signed by two parties voluntarily. This contract is the macro contract of any sub-contracts, any
sub-contract is an inalienable part of this contract, and has the same legal effect.

 

5. Principal
debt: debt principal, interest and expense resulting from conducting various business transactions under this contract applied
by debtor, including but not limited local foreign currency, various trade financing (such as issuing letter of credit, trust receipt,
packing loan, export bill purchase, export bill purchase under collection and advanced against inward documentary bills, etc.)
bank acceptance bill, notes discounted, notes repo, guarantee (including independent guarantee, demand guarantee, standby letter
of credit, etc.) and so on. (Including principal, interest, punitive interest, compound interest, liquidated damages, damage awards,
expenses for realizing financial claim, etc.)

 

Expenses for realizing a financial claim:
the money which creditor spends for realizing a financial claim by litigation, arbitration, etc. such as court (arbitration) costs,
attorneys’ fees, traveling fees, execution fees, maintenance costs, and other necessary costs for realizing a financial claim.

 

6. Important
transaction which is mentioned in clause 8 (including but not limited): anything which might have a bad effect on the basic organization
of debtor’s company, changes of stockholders, contingent liabilities, cash flows, profitability, core business secrets, important
assets, significant claims and debts, repayment ability, other transactions which are considered as significant transactions by
creditor and/or debtor.

 

7. Important
transaction which is mentioned in clause 8 (including but not limited): anything which may have bad effect on executives’
operational capability, employment and termination of core staff, core business secrets, core competence, basic organization, legality,
stability, development, profitability, repayment ability, other things which are considered as significant things by creditor and/or
debtor.

 

     

     

    

 

8. Workday mentioned
in this contract refers to a banking day. If the drawdown date or the repayment date is on a legal holiday, then it is delayed
to the first working day after the holiday.

 

Clause 2 Credit Line

 

1. The maximum amount of basic credit line
is RMB (in words) FIFTY MILLION YUAN ONLY. If debtor uses foreign currency in specific business, the foreign currency will be converted
to RMB according to the exchange rate announced by creditor on the date when the applicable sub-contract is signed, and will be
included in credit line.

 

2. Decomposition
of credit line

 

(1) Working capital
loan: RMB 20,000,000

(2) Bank acceptance:
RMB50,000,000

(3) Standby letter
of credit: RMB 50,000,000

 

3. If the Debtor
repays the used line of credit within valid period of credit line, the equivalent amount of credit line recovers automatically.

 

4. The financing
balance should not be more than RMB 50,000,000, including all debts used by debtor according to this contract, and the single credit
line cannot be more than RMB 50,000,000.

 

Clause 3 Valid Period and Adjustment
of Credit Line

 

1. Valid period
of credit line under this contract is from Oct 28th 2016 to Oct 28th 2017.

 

2. This contract
is not the definite obligation of creditor, in any circumstance, creditor has the right to adjust or cancel the credit line and
valid period under this contract partly or completely without the consent of debtor. Foregoing “any circumstance” includes
but not limited following situations:

 

(1) debtor has
significant operational difficulties and risks;

(2) debtor has
significant changes in ownership or contingent debt;

(3) debtor has
significant changesin its operational mechanism (including but not limited discrete, merger, termination, etc.);

(4) debtor gets
hit with credit downgrade and which increasesrisk of repayment;

(5) the situation
and conditions of one transaction, which Debtor works on, have significant changes;

(6) the statements
and commitments of debtor mentioned in clause 7 become invalid;

(7) other creditors
think it is necessary to change, adjustment or canceldebtor’s credit line.

 

3. If debtor
needs to increase temporary the credit line because of a change of situation or special project, debtor can apply for special credit
line from creditor, which can only be used for special project, and should not be used as cycle.

 

Clause 4 Repayment and adjustment of
advance in cash and receipt under different credit line

 

Creditor has
the right to use the funds received under one or more of the lines to repay the advanced money which is used according to this
contract, without the consent of debtor and guarantor.

 

Clause 5 Guarantee Measures

 

1. The following contracts are guarantee
contracts of this contract and sub-contracts.

 

(1)REF: Xing
Yin Shen Longgang credit (guarantee) zi (2016) No. 0650

 

     

     

    

 

"Maximum Amount Guaranty Contract"
(the name of the contract), guarantor: Shenzhen Highpower Technology Co Ltd, mode: guarantee;

(2) REF: Xing
Yin Shen Longgang credit (guarantee) zi (2016) No. 0650A "Maximum Amount Guaranty Contract" (the name of the contract),
guarantor: Dangyu Pan, mode: guarantee;

 

2. Before the signing of guarantee contracts
and completing the guarantee procedures, creditor has the right to refuse handling an application for using the credit line under
this contract, and providing the loans under this contract and sub-contracts.

 

3. The maximum
guarantee for all debts under the credit line should be provided by the above guarantors (guarantor, mortgagor or pledger), except
as agreed by creditor, debtor and guarantor.

 

4. If following
things happen to the guarantor under this contract, creditor has the right to take measures according to clause 9 of this contract.

 

(1) Guarantor
violates the maximum guarantee contract; a deterioration of guarantor’s credit position; or other things, which may damage
guarantee ability happen;

(2) Mortgager
violates the maximum mortgage contract; damages mortgage intentionally; the value of mortgage might has been reduced obviously;
or other things which damage the hypothecation of creditor;

(3) Pledger violates
the maximum pledge contract; the value of pledge has been reduced obviously; or the right of pledge has to be cashed in advance;
or other things which damage the pledge of creditor.

 

Clause 6 The Rights and Obligations
of Creditor

 

1. During credit period, if the accumulated
total balance used by debtor is less than the maximum capital limit, creditor will review a loan application which is within the
limit from debtor.The application will be accepted if it meets each of the conditions and requirements requested by creditor. If
Creditor is unable to make a substantive examination because of debtor or any other reasons, it should not constitute a defense.
Debtor and guarantor give up considering it as a defense.

 

2. Creditor has
the right to acquire the accounting statements and other operational information of debtor.Debtor should provide its marketing
plan, investment plan and demand for funds.Creditor will keep debtor’s business secret.

 

3. In order to
achieve the purpose of financing under this contract, the debtor should provide a full, effective guarantee, which is recognized
by creditor. If debtor or guarantor violates the contract, creditor has the right to seize any form of assets of the Debtor or
Guarantor that the Creditor possesses

 

Clause 7 Representations and Commitments
of Debtor

 

Debtor makes the following representations
and commitments voluntarily, and assumes legal responsibility for the reality of the content.

 

1. Debtor is
a legal representative, which is established according to the laws of People’s Republic of China, with full capacity for
civil conduct. Debtor promises to provide related information requested by creditor.

 

2. Debtor can
perform all obligations and responsibilities under this contract, and will assume the repayment responsibility in any conditions.

 

3. Debtor has
the right to sign this contract, and has acquired all legal approvals and authorities.

 

     

     

    

 

4. Signing this
contract is allowed by debtor’s articles of association, internal decisions and resolutions of shareholders and board of
directors. This contract will not conflict with the articles of association, internal decisions and resolutions of shareholders
and board of directors and policies of debtor.

 

5. Signing and performing
this contract is the true willing decision of debtor. Signing and performing the above contract will not violate the laws and regulations,
rules and agreements which can limit debtor. This contract is legal and enforceable, and if this contract become invalid because
debtor does not have full capacity to sign this contract, debtor should repay all losses of creditor.

 

6. All documents,
financial statements and other information, which are provided by debtor under this contract, are true, complete, accurate and
effective.

 

7. Debtor agrees
that bank business under this contract is limited to the regulations, conventions and practices of creditor, and the power of interpretation
belongs to creditor.

 

8. Debtor cannot
change its equity structure or major executives without written consent of creditor.

 

9. If debtor
does not perform obligations according to this contract and sub-contract, debtor grants creditor the right to obtain relevant money
from any account which is opened in creditor by debtor.

 

10. In any transactions
after signing this contract, if the debtor submits any documents related to a specific transaction to creditor for auditing, debtor
promises all documents are true.Creditor neither participates in nor knows the essence of transaction, and will not take any responsibility.

 

11. The debtor
confirms it has no further litigation, arbitration, or administrative litigation in property, liquidation or issues with going
out of business, except situations which have been disclosure in writing to creditor.

 

12. If creditor
is involved in litigation, arbitration or another dispute because of performing the obligations under this contract,the litigation
or arbitration fees, legal fees and other expenses of creditor will be borne by the debtor.

 

13. All settlement
businesses under this contract should be handled through the settlement account open in creditor.

 

14. The debtor
provides full, effective or other appropriate acceptable guarantee approved by the creditor. For the house mortgage, if the house
will be removed, the debtor shall promptly inform the creditor to fulfill obligations; if mortgage houses were demolished, the
creditor has the right to require the debtor to pay off the debt in advance, or reset the mortgage and sign a new security agreement.
During the loss of the original guarantee and the new mortgage registration has not been completed, the debtor should provide the
secured party as guarantees; For the way of compensation to compensate for the demolition of real estate, the creditor will be
responsible for requesting relocation compensation as guarantee through the opening margin accounts or certificates of deposit
, etc.

 

Clause 8 Debtor has the obligation to
disclosure significant transactions and events to creditor.

 

1. Debtor should
inform creditor of significant transactions and events of debtor in writing timely.

 

2. If debtor
is a group company, debtor should inform creditor of its related transactions which are more than 10% of creditor’s net assets,
including but not limited to :

 

(1) the relationship
of the parties in the transaction;

(2) transactions
and transaction properties;

(3) the amount
of transaction and relevant proportion;

(4) pricing policy.

 

3. During valid
period of this contract, stock transfers, reorganizations, mergers, discrete, shareholding reforms, joint ventures, cooperations,
joint operations, contracts, leases, business scope, change of registered capital, major asset transfers, contingent liabilities,
or anything which may affect debtor’s ability to assume responsibility should be reported to creditor in writing 30 days
in advance.

 

     

     

    

 

4. A termination
of business, going out of business, bankruptcy, dissolution, cancellation of business license, deterioration of financial situation
or involvment in a major business dispute, or anything may affect debtor’s ability to assume responsibility should be reported
to creditor in 7 days by writingfrom the date the above thing took place.

 

5. When debtor
becomes involveed in major litigation or arbitration with any third party, or any other significant thing which may affect debtor’s
ability to assume responsibility occurs, creditor should be notified in writing within 7 days from the date debtor receives relevant
notice.

 

6. The debtor
promises that it will not use its legal dispute with a third party to damage creditor’s rights.

 

Clause 9 Default and default Liability

 

1. After this
contract comes into force, the creditor and the debtor should perform the obligations as agreed in the contract. If any one party
fails to perform or not completely fulfill its obligations of this contract, it should bear the corresponding liability for breach
the contract.

 

2. If any of
the following situations occur, creditor has the right to terminate the unused credit line under this contract, and ask the debtor
to repay all financing, payable interest and other expenses under this contract immediately.The date the creditor asks the debtor
to repay the money is the advanced expiration date:

 

(1) any information
provided by debtor or the statements and commitments stated in clause 7 of this contract are false, inaccurate, incomplete or misleading;

(2) deterioration
of debtor’s credit status and obvious weakening of repayment ability (including contingent liability);

(3) the cross
default agreed in clause 10 of this contract occurs to the debtor, the affiliated enterprise of the debtor, the guarantor, or the
affiliated enterprise of the guarantor;

(4) the debtor
violates the obligations agreed to in a sub-contract of this contract;

(5) the debtor
fails to repay the principal, interest and expenses of one financing under this contract on schedule;

(6) the debtor
stops repaying its own debt, or cannot repay due debt;

(7) stopping
doing business, going out of business, being announced bankruptcy, dissolution, cancellation of business license, involving in
major business dispute, and deterioration of finance condition and so on;

(8) other thing which
may damage creditor’s right.

 

 3. If the debtor
defaults, creditor has the right to take one or more following measures:

 

(1) suspending or reducing the sum of financing,
until cancelling all agreed line of financing;

(2) announcing
complete or part of debtor’s debt expirein advance;

(3) terminating
this contract, and asking debtor to repay all debt and pay relevant expenses;

(4) the debtor
should pay punitive interest for overdue debt;

(5) the debtor
should pay punitive interest for misappropriation of the loan;

(6) requiring
the debtor to pay full compensation for losses.

 

     

     

    

 

Clause 10 the cross-defaulting

 

If one of the following events occurs to
the debtor or affiliated enterprises of the debtor, and the guarantor or the affiliated enterprises of the guarantor, it will be
considered that debtor default as well, the creditor have the right to recover loan in advance according to this contract or its
sub-contract, and require the debtor to be liable for breach of contract according to the contract:

 

(1)
any loan, financing or debt defaults or may default, or be called for repayment in advance;

(2)
any guarantee or similar obligation fails to be performed or might fail;

(3)
the non-performance or violation of the relevant debt guarantee and other similar obligations of legal document or contract or
might;

(4)
failure to repay due debts or borrowing/financing;

(5)
be declared bankrupt by the legal procedure or may be so declared;

(6)
other situations that endanger the safety of the money under this contract.

 

 Clause 11
the continuity of obligation

 

All obligations
of the debtor under this contract have the same effect on its heir apparent, agent, receiver, orassignee, even after a merger,
reorganization, or change of name.

 

Clause 12 accelerated maturity terms
of principal and interest

 

The debtor and
the guarantor agree that once the debtor fails to perform the statements and commitments of Clause 7, or the debtor fails to perform
any obligation under this contract, the creditor has the right to decide that any other obligations include all outstanding principal,
interest (including punitive interest and compound interest) and relevant expenses become due immediately.

 

Clause 13 The Priority Right of Subrogation
Arrangement

 

The debtor
states herein, once the debtor defaults or is unable to repay due principal, interest and fees, and doesnot have enough property
to repay advanced money to creditor,creditor has the right of subrogation on any claim, accounts receivable and other property
rights of the debtor. The debtor and the guarantor are willing to give up the defense to creditor according to article 28 of “Guarantee
Law”.

 

Clause 14 Offset Arrangement

 

1. If the debtor
or the guarantor fail to repay maturing debt or pay the debt upon early maturity, the creditor has the right to directly withhold
money on any account of the debtor to repay the debt. If the currency in the debtor’s account is different from the currency
of principal debt, the withholding money will be calculated on the rate of withholding day.

 

2. Creditor’s
rights under this contract will not be offset by any reason or any third party’s offset right.

 

3. Creditor’s
rights under this contract will not be offset by any offset right of the debtor, the guarantor or any third party.

 

Clause
15 Applicable Law, Jurisdiction and Dispute Resolution

 

1. Signing,
effectiveness, performance, termination, interpretation and dispute settlement of this contract is applicable for the laws of People’s
Republic of China.

 

2. For any dispute
of this contract, the debtor and the creditor should resolve through friendly negotiations. If negotiation fails, both parties
agree to solve by the following section (2) way:

 

(2) Applying for arbitration to the Shenzhen
Arbitration Commission, resolving the dispute by applicable rules of the Arbitration Commission, the arbitration award is final
and binding on both parties. The site selection is in Shenzhen.

 

     

     

    

 

3. In the dispute
period, the provisions which are not involved in the dispute still should be carried out according to this contract.

 

Clause 16 Files, Communications and
Notifications

 

1. Any
documents, communications and notifications under this contract will be sent to each partyaccording to the address, phone number
or other contact methods on the cover of this contract.

 

2. If the contact
method of one party changed, the other party should be informed immediately, otherwise the party which does not inform its change
to the other must bear full responsibility for all the consequences.

 

3. Any documents,
communications and notifications are sent according to above address, shall be deemed to arrive on the following dates:

 

(1) by post (including
speed post, ordinary letter, registered mail), it will be deemed to arrive on the sending day after five working days;

(2) by facsimile
or other electronic communication, it will be deemed to arrive on sending day;

(3) by personal
service, the date of signing is deemed to be arriving date.

 

Notifications by the way of website, online
banking, telephone banking or business outlets announcement should be deemed to arrive on day. The creditor does not need to borne
any responsibility for any transmission errors, omissions, or delays of mail, fax, telephone or any other communication system.

 

4. The two sides
agree that the seal of the office seal, financial seal, contract seal, receive seal and credit seal is the effective seal for the
documents, communications and notifications. All staff of the debtor have right to receive files, communications and notifications.

 

Clause 17 Effectiveness, Modification
of This Contract and Other Matters

 

1. The contract will take
effect from the date of signature or stamp of both parties.

 

2. During the
effective period of this contract, the creditor’s giving to the debtor and the guarantor ofany tolerance, forgiveness, or
delay to use the rights and interests, shall not damage, impact or limit the creditor to share the rights and interests in accordance
with relevant laws and regulations and this contract, or be deemed giving up the rights and interests, also do not affect the debtor
to borne any obligation under this contract.

 

3. As a result
of national laws and regulations or regulatory policy change, which leads to loan obligations of the creditor under this contract
not conforming to the laws and regulations or regulatory requirements, the creditor has the right to unilaterally terminate the
contract, announceall of the loan is due in advance, and the debtor should pay off the loan immediately.

 

4. If the creditor
cannot issue the loan or pay on time because of force majeure, the failure of communication or network, or the failure of creditor’s
system, the creditor does not assume any responsibility, but should promptly notifythe debtor.

 

5. The creditor
shall have the right to authorize or entrust other branches of industrial bank to perform rights and obligations under this contract
(including but not limited to authorized or entrusted bank branches of other related contracts, etc.) according to the debtor’s
operation and management, or the loan under this contract as other branch’s to undertake, which is approvedby the debtor,
and without prior consent of the debtor.

 

     

     

    

 

6. The debtor
agrees that the creditor has the right to unilaterally reduce or cancel the unused loan under the contract according to the debtor’s
production and operation situation, situation of payment orcredit of other financial institutions. The creditor should notify the
debtor five working days before reduce or cancel the loans, without prior consent of the debtor.

 

7. At any time, any provision of this contract
in any way is or becomes illegal, invalid or unenforceable, the legality, validity or enforceability of other provisions under
the contract is not affected.

 

8. The heading
of this contract is just for the convenience of reading, which shall not be used for interpretation or any other purposes.

 

9. The attachment
is an integral part of this contract, and the attachment of this contract is equally valid.

 

10. This contract
is in quadruplicate, the creditor holds three copies, the debtor holds one copy, with equal legal effect.

 

Clause 18 The Notarization and Voluntarily
to Accept Compulsory Execution

 

1. The contract should
be notarized by the state notary office for if any party request notarization.

 

2. The notarized
contract have the enforcement effect, if the debtor fails to perform the debt, or the creditor realize creditor's rights according
to laws and regulations and this contract, the creditor shall have the right to directly apply the people's court with jurisdiction
for enforcement.

 

Clause 19 The Supplementary Terms and
Conditions:

 

1. The parties
of this Contract hereby confirm that their domiciles and service methods given herein are their service addresses and methods of
relevant legal documents (including but not limited arbitration application, arbitration notice, case filing notice or acceptance
notice, statement of defense, written counterclaim, evidence, notice of court session, award, mediation document, execution notice,
notice of performance within a time limit, and other legal documents during hearing and execution of arbitration).

 

Recipient: Pan Dangyu 

 

Detailed Address: Workshop Building A,
Shunchao Industrial Zone, Renmin Road, Danhu Community, Guanlan Street, Bao’an District, Shenzhen City

 

	Zip Code: 518172	Tel.: 	 
	 	 	 
	Designated Agent (if any):	Detailed Address:	 
	 	 	 
	Zip Code:	Tel.:	 

 

The parties of this Contract hereby confirm
and agree to send legal documents by personal delivery or by the following methods:

 

 ̈
Post;    ̈
 Fax, No.                       
;  ̈ E-mail, Address:
;

 

 ̈
SMS, Receiving No.:

 

The foregoing legal documents shall be
deemed as having been served (to the principal if having been served to the designated agent) once they are sent by any means to
the address given above. In case of change of any party’s service address and service method, the other party shall be timely
notified in written form. If the other party is not timely notified, such change shall be deemed invalid and the party of change
shall assume relevant responsibilities arising therefrom.

 

 

     

     

    

 

/s/ [COMPANY SEAL]

The Creditor (official seal):

The legal representative (signature):

 

The Debtor (official seal):

The legal representative (signature):

/s/ Dangyu Pan

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00268-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00268-of-00352.parquet"}]]