EXECUTION

PURCHASE AND SALE AGREEMENT

        AGREEMENT dated as of December 9, 2004, between BRH Westchester, L.L.C.,
a Delaware limited liability company, in its capacity as the sole general
partner (“General Partner”) of BRI Westchester Limited Partnership, a Maryland
limited partnership (the “Partnership”), and BRI OP Limited Partnership, a
Delaware limited partnership, in its capacity as the sole limited partner
(“Limited Partner”) of the Partnership (General Partner and Limited Partner are
referred to collectively as “Seller”), all with an address of c/o Berkshire
Realty Holdings, L.P., One Beacon Street, Suite 1550, Boston, Massachusetts
02108, Attention: Stephen C. Parthum, Telecopier No. 617-646-2377, and BIR
Westchester, L.L.C., a Delaware limited liability company, or its permitted
designee (“GP Buyer”) and Berkshire Income Realty-OP, L.P., a Delaware limited
partnership, or its permitted designee (“LP Buyer”) (GP Buyer and LP Buyer are
referred to collectively as “Buyer”), both with an address of One Beacon Street,
Suite 1550, Boston, Massachusetts 02108, Attention: Stephen J. Zaleski,
Telecopier No. 627-556-1472.

        WHEREAS, General Partner is the sole owner of the entire one percent
(1%) general partnership interest (the “GP Interest”) in the Partnership and
Limited Partner is the sole owner of the entire ninety-nine percent (99%)
limited partnership interest (the “LP Interest”) in the Partnership (the GP
Interest and LP Interest are referred to collectively as the “Interests”); and

        WHEREAS, the Partnership is the owner of the following:

    (a)        that certain tract or parcel of land located in Silver Spring,
Montgomery County, Maryland, more particularly described in Schedule A attached
hereto (the “Land”);

    (b)        the three hundred forty-five (345) unit apartment complex,
commonly known as Westchester West Apartments, which contains related
improvements, facilities, amenities, structures, driveways and walkways, all of
which have been constructed on the Land (collectively, the “Improvements”);

    (c)        all right, title and interest of the Partnership in and to any
alleys, strips or gores adjoining the Land, and any easements, rights-of-way or
other interests in, on, under or to, any land, highway, street, road,
right-of-way or avenue, open or proposed, in, on, under, across, in front of,
abutting or adjoining the Land, and all right, title and interest of the
Partnership in and to any awards for damage thereto by reason of a change of
grade thereof;

    (d)        the accessions, appurtenant rights, privileges, appurtenances and
all the estate and rights of the Partnership in and to the Land and the
Improvements, as applicable, or otherwise appertaining to any of the property
described in the immediately preceding clauses (a), (b) and/or (c);

    (e)        the personal property owned or leased by the Partnership and
located on or in or used solely in connection with the Land and Improvements,
including, without limitation, the personal property listed in Schedule B
attached hereto, but expressly excluding all computer equipment, computer
software and computer hardware (but not the data pertaining to the operation of
the Property) and excluding the personal property listed on Schedule B-1
attached hereto (collectively, the “Personal Property”); and

    (f)        all of landlord’s interest in the Leases (as hereinafter defined)
and any refundable security deposits held by the Partnership thereunder and all
of the Partnership’s interest in any intangible property now or hereafter, owned
by the Partnership and used solely in connection with the Land, Improvements and
Personal Property, including, without limitation, all of the names under which
the Real Property is being operated, excluding the “Berkshire” name, and, to the
extent owned by and in the possession and control of the Partnership: the plans
and specifications, all architectural and engineering studies, reports, drawings
and prints relating to the Property, all warranties relating to the Real
Property or the Personal Property, all Service Contracts (as hereinafter
defined) to the extent Buyer agrees to assume the same as provided below, all
licenses, permits and other written authorizations, if any, relating to the
zoning, land use, operating, ownership, construction and maintenance of the
Property, all copyrights, logos, designs, trademarks, service marks, but
excluding the Berkshire trademark, and all goodwill associated with the Property
and such names and marks, all tenant files and other files and records related
to the management and operation of the Property, the telephone numbers utilized
in the operation and management of the Property and all claims and causes of
action arising out of or in connection with the Property (other than claims
solely related to the Partnership’s ownership of the Property, including claims
for delinquent rent for periods prior to the month in which the Closing occurs,
unless otherwise specifically provided below), excluding the right, title and
interest of any website or domain names maintained by the Partnership or the
Partnership’s property manager with respect to the Property.

        All of the items described in subparagraphs (a), (b), (c), (d), (e) and
(f) above are collectively the “Property”;

        NOW, THEREFORE, in consideration of the mutual undertakings and
covenants herein contained, Seller and Buyer hereby covenant and agree as
follows:

SECTION 1

SALE OF PROPERTY AND ACCEPTABLE TITLE

1.01 Agreement to Buy and to Sell; Property. Seller shall sell to Buyer, and
Buyer shall purchase from Seller, the Property, by means of an assignment of the
Interests, at the price and upon the terms and conditions set forth in this
Agreement. At the Closing, General Partner shall assign, transfer and deliver
the GP Interest to GP Buyer, or its designee, as provided in Section 16.01
hereof, and Limited Partner shall assign, transfer and deliver the LP Interest
to LP Buyer, or its designee, as provided in Section 16.01 hereof, in each case
by an Assignment and Assumption of Partnership Interest in form mutually
agreeable to Buyer and Seller (the “Assignment of Partnership Interest”).

1.02 Title. Buyer’s obligation to accept title to the Interests shall be
conditioned upon the Partnership then holding good and clear record and
marketable fee simple title to the Property as evidenced by LandAmerica Title
Insurance Corporation (the “Title Insurer”) issuing its ALTA Owner’s Form B
Title Insurance Policy dated as of Closing showing the Partnership in title,
subject only to the Permitted Exceptions (as hereinafter defined).

        The Title Insurer has prepared, and Seller has furnished Buyer with a
Commitment For Title Insurance for an ALTA Owner’s Form B Title Insurance Policy
and legible copies of all instruments and plans mentioned therein as exceptions
to title (all of such items are hereinafter collectively referred to as the
“Commitment”). The Commitment shall be in the amount of the Purchase Price (as
defined in Section 2.01 hereof). Should such Commitment contain any title
exceptions which are not acceptable to Buyer, in its sole discretion, Buyer
shall, prior to the expiration of the Inspection Period (as hereinafter
defined), notify Seller if any such exceptions are unacceptable. If Buyer fails
to so notify Seller of any unacceptable exceptions as described above, the
exceptions set forth in Schedule B of the Commitment shall be deemed accepted by
Buyer and included as the “Permitted Exceptions”. If any exceptions are
unacceptable to Buyer and Buyer timely notifies Seller in writing of such fact
as above provided, Seller, in Seller’s sole discretion, shall have thirty (30)
days from the date Seller receives notice (the “Cure Period”) of such
unacceptable exceptions to remove or cure such exceptions, except with respect
to the Monetary Liens (as hereinafter defined) which Seller shall remove or cure
at Closing with the proceeds from the Purchase Price. Seller shall be deemed to
have given notice to Buyer that Seller refuses to cure any unacceptable
exceptions, which Seller may so do in its sole discretion, unless Seller, within
ten (10) days after receipt of notice from Buyer, shall notify Buyer in writing
that Seller will attempt to cure such unacceptable exceptions. If Seller
notifies Buyer that Seller will attempt to cure such unacceptable exceptions,
Seller shall use diligent efforts to attempt such cure. If, after diligent
efforts, Seller fails or if Seller refuses to cure said unacceptable exceptions
within the ten (10) day period after receipt of notice from Buyer, Buyer may
(a) terminate this Agreement on or before the Closing Date, or (b) if Buyer
fails to so terminate within the time provided, Buyer shall be deemed to have
waived such exceptions and accept title subject thereto, in which event there
shall be no reduction in the Purchase Price. Notwithstanding the foregoing,
Seller, at its cost, shall be obligated to cure or remove by Closing (i) all
mortgages and deeds of trust against the Property, and (ii) any other liens that
can be removed by the payment of a sum certain; provided, however, that the
monetary amounts required to remove the liens do not in the aggregate exceed One
Hundred Thousand and 00/100 Dollars ($100,000.00) (collectively, the “Monetary
Liens”).

1.03 Survey. Seller has furnished Buyer with a copy of the most recent as-built
survey of the Property in Seller’s possession (the “Prior Survey”), and on or
before the expiration of the Inspection Period, Buyer may obtain a current
as-built survey (the “New Survey”) of the Land and the Improvements by a
registered land surveyor.

        Should the Prior Survey contain any encumbrances, encroachments or other
survey defects (collectively, the “Prior Survey Matters”) which are not
acceptable to Buyer in its sole discretion, Buyer shall prior to the expiration
of the Inspection Period, notify Seller if any such Prior Survey Matters are
unacceptable. In addition, if Buyer otherwise obtains a New Survey, should the
New Survey contain any encumbrances, encroachments or other survey defects which
do not appear on the Prior Survey (collectively, “New Survey Matters”) and which
are not acceptable to Buyer in its sole discretion, Buyer shall, prior to the
expiration of the Inspection Period, notify Seller if any such New Survey
Matters are unacceptable. (The Prior Survey Matters and the New Survey Matters
are referred to collectively as “Survey Matters”). If Buyer does not obtain a
New Survey or if Buyer fails to notify Seller of any unacceptable Prior Survey
Matters during the time period as described above, all Survey Matters shall be
deemed accepted by Buyer. If any Survey Matters are unacceptable to Buyer and
Buyer timely notifies Seller in writing of such fact as above provided, Seller,
in Seller’s sole discretion, shall have thirty (30) days from the date Seller
receives notice of such unacceptable Survey Matters to cure such Survey Matters.
Seller shall be deemed to have given notice to Buyer that Seller refuses to cure
any unacceptable Survey Matters, which Seller may so do in its sole discretion,
unless Seller, within ten (10) days after receipt of notice from Buyer, shall
notify Buyer in writing that Seller will attempt to cure such unacceptable
Survey Matters. If, after diligent efforts, Seller fails or refuses to cure said
unacceptable Survey Matters within the time period provided, Buyer may
(a) terminate this Agreement on or before the Closing Date, or (b) if Buyer
fails to so terminate, Buyer shall be deemed to waive such Survey Matters and
accept title subject thereto, in which event there shall be no reduction in the
Purchase Price.

SECTION 2

PURCHASE PRICE, ACCEPTABLE FUNDS,

DEPOSIT AND ESCROW OF DEPOSIT

2.01 Purchase Price. The purchase price (“Purchase Price”) to be paid by Buyer
to Seller for the Interests is Thirty-Nine Million Two Hundred Fifty Thousand
and 00/100 Dollars ($39,250,000.00) subject to the prorations and adjustments as
hereinafter provided in this Agreement. The Purchase Price shall be paid one
percent (1%) by the GP Buyer and ninety-nine percent (99%) by the LP Buyer and
shall be allocated one percent (1%) to the General Partner and ninety-nine
percent (99%) to the Limited Partner in consideration for the sale of the GP
Interest and the LP Interest respectively.

2.02 Payment of Monies. All monies payable under this Agreement, unless
otherwise specified in this Agreement, shall be paid by wire transfer.

2.03 Payment of Purchase Price. At the consummation of the transaction
contemplated hereby, the Purchase Price shall be paid by Buyer by wire transfer
of immediately available federal funds, transferred to the order or account of
Seller or such other person as Seller may designate in writing.

2.04 No Deposit. Buyer shall not be required to make an earnest money deposit
hereunder prior to the payment of the Purchase Price at Closing.

SECTION 3

THE CLOSING

        Except as otherwise provided in this Agreement, the delivery of all
documents necessary for the closing of this transaction pursuant to this
Agreement (the “Closing”) shall take place through LandAmerica Financial
Commercial Services, Inc. (the “Escrow Agent”) by mail at its offices at
LandAmerica, 150 Federal Street, Suite 200, Boston, Massachusetts 02110, or such
other place as Seller and Buyer shall mutually agree, at 10:00 A.M. local time
on December 29, 2004 (the “Original Closing Date”), or such earlier date or
place as Buyer and Seller shall mutually agree in writing. Closing shall be
conducted through a so-called “New York style” escrow administered by Escrow
Agent. It is agreed that time is of the essence of this Agreement.

SECTION 4

--------------------------------------------------------------------------------

SELLER’S PRE-CLOSING DELIVERIES

        Seller shall furnish to Buyer, within seven (7) days after the date
hereof, for inspection and approval by Buyer the following:

4.01 Leases. Seller shall provide Buyer with access on-site to the originals of
all leases and related lease files. 4.02 Taxes. A copy of 2003 and 2004 (if
available) real estate and personal property tax statements for the Property.

4.03 Current Rent Roll. A current rent roll for the Property, attached hereto as
Schedule C, listing for each of the apartment units in the Improvements:
apartment number, unit type, unit status, tenant name, commencement and
termination dates, market rent, lease rent, security deposits and details of any
concessions and schedule of rental delinquencies in such form as is prepared by
Seller in the ordinary course of business (the “Rent Roll”).

4.04 Service Contracts. Copies of all service, maintenance, supply and
management contracts affecting the use, ownership, maintenance and/or operation
of the Property.

4.05 Utility Bills. A detailed report of all utility bills (gas, electric, water
and sewer) relating to the Property for the immediately prior twelve (12) month
period.

4.06 Personal Property. A current inventory of all Personal Property, including
all tangible personal property owned by Seller and located on or used in
connection with the Property.

4.07 Plans. All existing plans and specifications, if any, with respect to the
Property. 4.08 Environmental Reports. Copies of all environmental report in
Seller's or the Partnership's possession or control since the date of Seller's
acquisition of the Property. 4.09 Operating Statements. Copies of the Operating
Statements (unaudited) for the Property for 2003 and 2004 year to date. 4.10
Permits. Copies of all certificates of occupancy (if any) and other permits and
licenses (if any) in the possession of Seller.

4.11 Litigation. A listing of all pending or threatened litigation against
Seller or the management company with respect to claims regarding or related to
the Property.

4.12 Partnership Agreement. A copy of the Partnership Agreement and all
amendments thereto of the Partnership.

SECTION 5

--------------------------------------------------------------------------------

REPRESENTATIONS AND WARRANTIES OF SELLER

        Seller represents and warrants to Buyer as follows:

5.01 Ownership. General Partner is the sole owner of the GP Interest. Limited
Partner is the sole owner of the LP Interest. Neither General Partner nor
Limited Partner has pledged, hypothecated or otherwise encumbered the GP
Interest or the LP Interest. The Partnership is the sole owner of the Property.
The execution and delivery of the Assignment of Partnership Interests by Seller
will be sufficient to transfer ownership of all of the Partnership Interests to
Buyer. Upon delivery by Seller of the Assignment of Partnership Interests, Buyer
will own all the Partnership Interests free and clear of all liens, claims,
encumbrances, pledges, security interests, or rights of others of any nature
whatsoever. The Partnership does not own any other assets except the Property.
The Partnership has not owned any real property other than the Property nor has
the Partnership conducted any business other than business related to the
ownership and operation of the Property.

5.02 Authority. GP Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. LP Seller
is a limited partnership duly organized and validly existing and in good
standing under the laws of the State of Delaware. The Seller is authorized to
make representations and warranties on behalf of the Partnership and has the
authority to cause the Partnership to fully perform and comply with any
obligations of the Partnership under this Agreement. The Partnership is a
limited partnership duly organized, validly existing, and in good standing under
the laws of the State of Maryland and is qualified to transact business in the
State of Maryland. A true and correct copy of the Certificate of Limited
Partnership and the Limited Partnership Agreement and all amendments thereto of
the Partnership is attached hereto as Schedule D. The Partnership has fully
power and authority to own, lease and operate the Property and to carry on its
business as it is now being conducted. The individual(s) entering into this
Agreement on behalf of Seller have been authorized, empowered and directed by
Seller to execute and deliver this Agreement to Buyer and to bind Seller to the
terms and conditions of this Agreement.

5.03 Interests. The Interests are duly authorized, validly issued, fully paid,
nonassessable and free and clear of all liens and encumbrances of any nature.
Neither Seller nor the Partnership has or is bound by any (a) outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for it to issue, deliver or sell, or cause to be issued,
delivered or sold, any partnership interest or any other equity security of the
Partnership, or (b) securities convertible into, exchangeable for, or
representing the right to subscribe for, purchase or otherwise receive, any
partnership interest or any other equity security of the Partnership, or
obligating it to grant, extend or enter into any such subscriptions, options,
warrants, calls, commitments or agreements. Seller has at all times treated the
Partnership as a partnership or disregarded entity for federal income tax
purposes, and will not make any election to treat the Partnership as other than
a partnership or disregarded entity.

        As used in this Agreement, or in any other agreement, document,
certificate or instrument delivered by Seller to Buyer, the phrase “to Seller’s
actual knowledge”, “to the best of Seller’s knowledge” or any similar phrase
shall mean the actual, not constructive or imputed, knowledge of Stephen C.
Parthum, Vice President of Asset Management, but without any obligation to make
any independent investigation of the matters being represented and warranted, or
to make any inquiry of any other persons, or to search or examine any files,
records, books, correspondence and the like.

        Buyer agrees to inform Seller promptly in writing if it discovers that
any representation or warranty of Seller is inaccurate in any material respect,
or if it believes that Seller has failed to deliver to Buyer any document or
material which it is obligated to deliver hereunder.

        If Buyer notifies Seller prior to Closing that any representation or
warranty made in Section 5 is not true and correct in any material respect and
Seller fails to cure or remedy the same prior to Closing, Buyer may either (a)
terminate this Agreement, and neither party shall have further rights or
obligations pursuant to this Agreement, except for Buyer’s obligation to repair
any damage to the Property and to indemnify Seller as set forth in Section 6.01;
or (b) waive any such representation or warranty and close the transaction
without any reduction in the Purchase Price.

        If subsequent to Closing Buyer notifies Seller within three (3) months
after Closing that Buyer discovered post-closing that any representation or
warranty made in Section 5 was not true and correct in any material respect and
specifying the breach with particularity, subject to the limitations set forth
in Section 16.02, Buyer shall have available all remedies at law or in equity as
a consequence thereof. If Buyer does not notify Seller of the breach of any of
its representations and warranties set forth in this Section 5 and institute a
lawsuit therefor in a court of competent jurisdiction within three (3) months
after the Closing, Buyer shall be deemed to have waived all of its rights to
claim and sue for any breach by Seller of any of its representations and
warranties made in this Section 5.

SECTION 6

INSPECTION PERIOD; ACCESS; PURCHASE “AS IS”

6.01 During the Inspection Period, Buyer, its agents and representatives, shall
be entitled to enter upon the Property (as coordinated through the Partnership’s
property manager), including all leased areas, upon reasonable prior notice to
Seller, to perform inspections and tests of the Property, including surveys,
environmental studies, examinations and tests of all structural and mechanical
systems within the Improvements, and to examine the books and records of the
Partnership and Seller and the Partnership’s property manager relating to the
Property. Before entering upon the Property, Buyer shall furnish to Seller
evidence of general liability insurance coverage in such amounts and insuring
against such risks as are commercially reasonable. Notwithstanding the
foregoing, Buyer shall not be permitted to interfere unreasonably with the
Partnership’s operations at the Property or interfere with any tenant’s
occupancy at the Property, and the scheduling of any inspections shall take into
account the timing and availability of access to tenants’ premises, pursuant to
tenants’ rights under the Leases or otherwise. If Buyer wishes to engage in any
testing which will damage or disturb any portion of the Property, Buyer shall
obtain Seller’s prior consent thereto, which shall not be unreasonably withheld.
Without limiting the generality of the foregoing, Seller’s written approval
(which, notwithstanding the foregoing, may be granted, withheld or conditioned
in Seller’s sole discretion) shall be required prior to any testing or sampling
of surface or subsurface soils, surface water, or groundwater in or about the
Improvements in connection with Buyer’s environmental due diligence. Buyer shall
repair any damage to the Property proximately caused by any such tests or
investigations, and indemnify Seller and the Partnership from any and all
liabilities, claims, costs and expenses proximately caused thereby. The
foregoing indemnification shall survive Closing or the termination of this
Agreement.

6.02 The term “Inspection Period,” as used herein, shall mean the period ending
at 5:00 p.m. Boston time on [December 17, 2004]. Buyer shall have the right to
terminate this Agreement, in its sole discretion, by giving written notice of
such election to Seller on any day prior to and including the final day of the
Inspection Period, in which event the Deposit shall be returned forthwith to
Buyer and, except as expressly set forth herein, neither party shall have any
further liability or obligation to the other hereunder. In the absence of such
written notice, the contingency provided for in this Section 6.02 shall no
longer be applicable, Buyer shall be deemed to have waived its right to
terminate hereunder and this Agreement shall continue in full force and effect.

6.03 IT IS UNDERSTOOD AND AGREED THAT NEITHER SELLER NOR ANY OTHER PERSON IS
MAKING AND HAS AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR
CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PARTNERSHIP (EXCEPT TO THE
EXTENT EXPRESSLY PROVIDED HEREIN), THE INTERESTS OR THE PROPERTY, INCLUDING, BUT
NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, THE STATE OF TITLE OF THE
PROPERTY OR ITS FINANCIAL STATE.

        BUYER, FOR ITSELF AND ITS SUCCESSORS, ASSIGNS AND AFFILIATES,
ACKNOWLEDGES AND AGREES THAT ASSIGNMENT OF THE INTERESTS IS BEING MADE “AS IS,
WHERE IS, WITH ALL FAULTS” WITH RESPECT TO THE INTERESTS AND THAT UPON CLOSING
SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY “AS
IS, WHERE IS, WITH ALL FAULTS”. BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND
SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES,
GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PROPERTY, THE PARTNERSHIP OR THE INTERESTS OR RELATING THERETO (INCLUDING
SPECIFICALLY, WITHOUT LIMITATION, ANY PROSPECTUS DISTRIBUTED WITH RESPECT TO THE
PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGERS OF THE PROPERTY, OR ANY REAL
ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO
WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING.

        BUYER REPRESENTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL CONDUCT
PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED
TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY
OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE
EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY
HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY
SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER
OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO. UPON CLOSING, BUYER SHALL
ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION
DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN
REVEALED BY BUYER’S INVESTIGATIONS, AND EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT AS TO ANY PROVISION THAT SHALL EXPRESSLY SURVIVE CLOSING, BUYER, UPON
CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND
SELLER’S AFFILIATED ENTITIES AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES AND AGENTS (COLLECTIVELY, “SELLER AFFILIATES”)) FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF
ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS’ FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR
UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER’S
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON
OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL
CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS,
OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY, THE
PARTNERSHIP OR THE INTERESTS AND BUYER HEREBY COVENANTS NOT TO SUE SELLER AND/OR
ANY SELLER AFFILIATES ON THE BASIS OF ANY OF THE FOREGOING MATTERS.

        THE PROVISIONS OF THIS SECTION SHALL SURVIVE CLOSING OR ANY TERMINATION
OF THIS AGREEMENT.

6.04 Buyer waives any rights or claims it may have against Seller or any Seller
Affiliates in connection with the presence of, or any loss, cost or damage
associated with, Hazardous Materials (as hereinafter defined) in, on, above or
beneath the Property or emanating therefrom. If at any time after the Closing,
any third party or any governmental agency seeks to hold Buyer responsible for
any loss, cost or damage arising from any Hazardous Materials in, on, above or
beneath the Property or for the violation of any Hazardous Materials Laws, Buyer
agrees that it shall not (a) implead Seller, (b) bring a contribution action or
similar action against Seller, or (c) attempt in any way to hold Seller
responsible with respect to any such matter. The provisions of this Section 6.04
shall survive the Closing. As used herein, “Hazardous Materials” shall mean and
include, but shall not be limited to any petroleum product, all hazardous or
toxic substances, wastes or substances and any substances or organisms
(including mold or fungi) which because of their quantitated concentration,
chemical, or active, flammable, explosive, infectious or other characteristics,
constitute or may reasonably be expected to constitute or contribute to a danger
or hazard to the health, safety or welfare of the general public or any
occupants of the Building or to the environment, including, without limitation,
any hazardous or toxic waste or substances which are included under or regulated
by any applicable law or regulation (whether now exiting or hereafter enacted or
promulgated, as they may be amended from time to time) including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (“CERCLA”), 42 U.S.C. §9601 et seq.; the Toxic Substance
Control Act (“TSCAS”), 15 U.S.C. §2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. §1802; the Resource Conservation and Recovery Act
(“RCRA”), 42 U.S.C. §9601, et seq.; the Clean Water Act (“CWA”), 33 U.S.C. §1251
et seq.; the Safe Drinking Water Act, 42 U.S.C. §300f et seq.; the Clean Air Act
(“CAA”), 42 U.S.C. §7401 et seq., the Federal Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq., similar state laws and regulations adopted
thereunder (collectively, “Hazardous Materials Laws”). The provisions of this
Section shall survive Closing or any termination of this Agreement.

6.05 Chapter 53A Condition. Seller has informed Buyer of the requirements of
Chapter 53A of the Montgomery County Code (“Chapter 53A”). Buyer shall use
reasonable efforts until December 22, 2004 (the “Approval Period”) to obtain
final written approval by the Montgomery County Department of Housing and
Community Affairs (the “Department”) of a non-conversion rental agreement for
the Property to be entered into by the Partnership at Closing which satisfies
the requirements of Section 53A-5 (the “Rental Agreement”) so as to permit the
sale contemplated by this Agreement without providing any right of first refusal
under Section 53A-4. To that end, Buyer shall promptly submit a proposed Rental
Agreement and all other information requested by the Department to allow an
expeditious review and approval by the Department. Seller shall cooperate with
Buyer’s efforts to obtain approval of the Rental Agreement; provided Seller
shall not be obligated to incur any cost, expense or liability. Buyer shall
provide Seller with copies of all proposed Rental Agreements submitted to and
correspondence to and from the Department. Seller shall be permitted to
participate in all meetings between Buyer and the Department. If after having
made diligent, good faith efforts, Buyer is unable to obtain approval by the
Department of a Rental Agreement on terms acceptable to Buyer, in its sole
discretion, on or before the expiration of the Approval Period, unless Buyer and
Seller mutually agree in writing to extend the Approval Period, then either
Buyer or Seller may terminate this Agreement by written notice given to the
other party at any time thereafter prior to Closing, whereupon this Agreement
shall terminate, and thereafter this Agreement shall be void and without
recourse to all parties except for provisions which are expressly stated to
survive termination of this Agreement; provided, further Buyer shall not be
liable or responsible to Seller for damages arising from Buyer’s inability to
obtain the approval of a Rental Agreement. If Buyer obtains the approval by the
Department of a Rental Agreement on terms acceptable to Buyer, Buyer shall, at
or prior Closing, enter into the Rental Agreement and shall obtain a certificate
of compliance (a “Certificate of Compliance”) from the Department pursuant to
Section 53A-7 for recordation at Closing.

SECTION 7

INSURANCE

7.01 Maintenance of Insurance. Until the Closing, the Partnership shall maintain
its present insurance on the Property which insurance in respect of fire and
casualty shall be covered by a standard All-Risk Policy in the amounts as
currently insured. Subject to the provisions of Section 7.02, the risk of loss
in and to the Property shall remain vested in Seller until the Closing. Buyer
will obtain its own insurance on the Property at Closing.

7.02 Casualty or Condemnation. If prior to the Closing, the Improvements or any
material portion thereof (having a replacement cost equal to or in excess of
Five Hundred Thousand and 00/100 Dollars ($500,000.00)) are damaged or destroyed
by fire or casualty, or any material part of the Property is taken by eminent
domain by any governmental entity, then Buyer shall have the option, exercisable
by written notice given to Seller at or prior to the Closing, to terminate this
Agreement, whereupon all obligations of all parties hereto shall cease, and this
Agreement shall be void and without recourse to the parties hereto except for
provisions which are expressly stated to survive such termination. If Buyer does
not elect to terminate this Agreement or if such damage or destruction or taking
has a replacement cost or is in an amount of less than $500,000.00, Buyer shall
proceed with the purchase of the Property without reduction or offset of the
Purchase Price, and in such case, unless Seller shall have previously restored
the Property to its condition prior to the occurrence of any such damage or
destruction, Seller shall pay over or assign to Buyer all amounts received or
due from, and all claims against, any insurance company (including business
interruption and rental loss insurance proceeds to the extent related to any
period after the Closing Date) or governmental entity as a result of such
destruction or taking, and Buyer shall be entitled to a credit against the
Purchase Price equal to the deductible amount, if applicable, under Seller’s
insurance policy.

SECTION 8

SELLER’S OBLIGATIONS PRIOR TO CLOSING

        Seller covenants that between the date of this Agreement and the
Closing:

8.01 No Lease Amendments. The Partnership shall not, without Buyer’s prior
written consent (a) enter into any new lease for an apartment unit with a
first-time tenant unless the lease is for a period of no more than one year and
the rent shall be not less than the current market rent then being charged by
the Partnership for comparable apartments; or (b) enter into, amend, renew or
extend any Lease for an apartment unit with an existing tenant unless the lease
is for a period of not more than one year and that the rent for the amended,
renewal or extension term shall not be less than the current market rent then
being charged by the Partnership for comparable apartments; or (c) terminate any
Lease except by reason of a default by the tenant thereunder or by reason of the
provisions contained in the Lease or otherwise in accordance with the
Partnership’s prior practices.

8.02 Continuation of Service Contracts. The Partnership shall not modify or
amend any Service Contract or enter into any new service contract for the
Property, without the prior written consent of Buyer which consent shall not be
unreasonably withheld or delayed provided such contract is terminable without
penalty by the then owner of the Property upon not more than thirty (30) days’
notice.

8.03 Replacement of Personal Property. No personal property included as part of
the Property shall be removed from the Property unless the same is replaced with
similar items of at least equal quality prior to the Closing.

8.04 Tax Procedure. Seller shall not withdraw, settle or otherwise compromise
any protest or reduction proceeding affecting real estate taxes assessed against
the Property for any fiscal period in which the Closing is to occur or any
subsequent fiscal period without the prior written consent of Buyer. Real estate
tax refunds and credits received after the Closing which are attributable (a) to
any fiscal period prior to the fiscal tax year during which the Closing occurs,
or (b) to the fiscal tax year during which the Closing occurs shall be
apportioned between Seller and Buyer, after deducting the expenses of collection
thereof, based upon the relative time periods each owns the Property, which
obligation shall survive the Closing.

8.05 Access. Seller shall allow Buyer or Buyer’s representatives access to the
Property, the Leases and other documents required to be delivered under this
Agreement upon reasonable prior notice at reasonable times; provided Buyer
agrees that the original leases and all other original documents shall remain
on-site at the Property.

8.06 Condition of Apartment Units. At the time of Closing, Seller shall cause
all apartment units in the Property which have been vacant for seven (7) days or
more to be in a market rent-ready condition (i.e., as necessary, painted,
cleaned, carpeted, with all appliances in working condition) in accordance with
Seller’s customary practices. With respect to each apartment unit that has been
vacant for seven (7) days or more prior to Closing that is not in a market
rent-ready condition at the time of Closing, Buyer, as its sole remedy, shall
receive a credit against the Purchase Price in the sum of Five Hundred and
00/100 Dollars ($500.00).

8.07 Termination of Contracts. During the Inspection Period, Buyer shall notify
Seller which Service Contracts Buyer wishes to assume at Closing and which
Service Contracts Buyer wants terminated at Closing (the “Rejected Contracts”);
provided, however, that Buyer shall be obligated to assume, and Seller shall
have no obligation to terminate, any Service Contract which cannot be terminated
by Seller (with either written notice and/or payment of a termination fee). As
to the Rejected Contracts, at Closing, Seller shall give notice of termination
as to such Rejected Contracts so designated by Buyer, and Buyer will assume all
other Service Contracts from the date of the Closing.

SECTION 9

SELLER’S CLOSING OBLIGATIONS

9.01 Closing, Deliveries and Obligations. At the Closing, Seller shall deliver
the following to Buyer:

(a)     Assignment. The Assignment of Partnership Interests, in form reasonably
satisfactory to Buyer’s and Seller’s counsel, duly executed, which conveys the
GP Interest to GP Buyer and the LP Interest to LP Buyer.

(b)     Amendment to Partnership Agreement. An amendment to the Partnership
Agreement of the Partnership (the ” Partnership Agreement Amendment”), in form
reasonably satisfactory to Buyer’s and Seller’s counsel, duly executed by Buyer
and Seller, pursuant to which General Partner and Limited Partner shall
withdraw, and GP Buyer and LP Buyer shall be admitted, as the sole general
partner and limited partner, respectively, of the Partnership, and General
Partner and Limited Partner and the Partnership shall mutually release all
claims against each other.

(c)     Legal Existence. A certificate from the Maryland Secretary of State
confirming that the Partnership is legally existing and in good standing.

(d)     UCC Search. A Uniform Commercial Code lien search for Seller and the
Partnership, indicating that the Partnership Interests of Seller and the
Partnership are unencumbered by any security interest thereon and federal and
state searches for Seller and the Partnership indicating the absence of any
bankruptcy proceeding, federal or state tax lien, suits (other than as disclosed
on Schedule E) and unsatisfied judgments.

(e)     Lease Records. Original copies of all Leases, and related documents in
the possession or under the control of Seller or the Partnership. Such records
shall include a schedule of all cash security deposits and a check to Buyer or
credit against the Purchase Price in the amount of such security deposits held
by Seller at the Closing under the Leases together with appropriate instruments
of transfer or assignment with respect to any lease securities which are other
than cash and a schedule updating the Rent Roll and setting forth all arrears in
rents and all prepayments of rents.

(f)     Permits. Seller shall deliver, to the extent in the possession of Seller
or the Partnership: original copies of all certificates, licenses, permits,
authorizations and approvals issued for or with respect to the Property by
governmental authorities having jurisdiction, except that photocopies may be
substituted if the originals are posted at the Property.

(g)     Title Affidavits. Such affidavits as the Title Insurer may reasonably
require in order to omit from its title insurance policy all exceptions, other
than Permitted Exceptions, for (i) parties in possession other than under the
rights to possession granted under the Leases; and (ii) mechanics’ liens, and to
provide a non-imputation endorsement to its title insurance policy, as well as a
Gap Indemnity Agreement.

(h)     Files. Seller shall make all of its files and records relating to the
Property available to Buyer at the Property upon reasonable prior notice for
copying, which obligation shall survive the Closing.

(i)     Notices of Sales. Sufficient letters, executed by Seller, advising the
tenants under the Leases of the sale of the Property to Buyer and directing that
all rents and other payments thereafter becoming due under the Leases be sent to
Buyer or as Buyer may direct.

(j)     Non-Foreign Affidavit. Seller shall execute and deliver to Buyer and
Buyer’s counsel, at Closing such evidence as may be reasonably required by Buyer
to show compliance by Seller with the Foreign Investment and Real Property Tax
Act, IRC Section 1445(b)(2), as amended.

(k)     Rent Roll. Seller shall deliver a current Rent Roll, certified to be
true, complete and accurate.

(l)     Management Agreement Termination. A termination of the existing
management agreement, executed by the property manager.

(m)     Authority. Evidence of the existence, organization and authority of
Seller and the Partnership and the authority of the persons executing documents
on behalf of Seller reasonably satisfactory to Buyer and Title Insurer, together
with certified copies of the operating agreement of the Partnership and evidence
that the Partnership is qualified to do business in the State of Maryland.

9.02 Seller’s Expenses. Seller shall pay its own counsel fees and pay one-half
(½) of: (a) all transfer taxes, deed stamps, state excise tax, sales tax and
documentary stamps relating to the sale transaction (if any); (b) title
insurance premiums for a standard owner’s title insurance policy with extended
coverage over the standard exceptions (where available); and (c) any escrow
fees.

9.03 Post-Closing Tax Matters. As a result of the Closing, the Partnership shall
terminate for federal income tax purposes and its tax year shall close on the
Closing Date. The Seller shall prepare and timely file any federal or state tax
or information returns due after Closing that are required to be filed by or on
behalf of the Partnership with respect to all tax years or periods ending on or
prior to the Closing Date and Seller shall pay any tax liability due thereunder.
The Seller shall prepare and timely file the terminating tax returns for the
Partnership resulting from the consummation of the transactions contemplated
under this Agreement. The Buyer shall assist the Seller in obtaining any data
and information required to permit the Seller to prepare such returns or to
respond to any audits or assessments for the periods covered by such returns.

SECTION 10

BUYER’S CLOSING OBLIGATIONS

      At the Closing, Buyer shall:

10.01 Payment of Purchase Price. Deliver to Seller the Purchase Price, as
adjusted for (i) apportionments under Section 11, and (ii) any adjustments
thereto required pursuant to the express provisions this Agreement.

10.02 Assignment and Amendment. Deliver to Seller the Assignment of Partnership
Interests and the Partnership Agreement Amendment duly executed by GP Buyer and
LP Buyer.

10.03 Other Documents. Deliver any other documents required by this Agreement to
be delivered by Buyer.

10.04 Buyer’s Expenses. Pay its own counsel fees, pay all costs relating to (a)
all title insurance endorsements required by Buyer; (b) all survey update costs;
(c) any mortgage financing obtained by Buyer (including all transfer taxes, deed
stamps, documentary stamps, lender title policy costs and recording costs
relating thereto); and (d) all recording costs; and pay one-half (½) of: (i) all
transfer taxes, deed stamps, state excise tax, sales tax and documentary stamps
relating to the sale transaction (if any); (ii) title insurance premiums for the
standard owner’s title insurance policy; and (iii) any escrow fees.

10.05 Buyer Conditions to Closing. Buyer’s obligation to proceed to Closing
shall be conditioned upon the occurrence of the following additional conditions,
provided that Buyer may, in its sole discretion, elect to waive any failure of
any of the following conditions:

(a)     All of Seller’s representations and warranties contained herein shall be
true and correct in all material respects on the Closing Date; and

(b)     Except as set forth on Schedule E, and except for tenant collection
actions, if any, and tort claims, if any, which are covered by insurance, there
shall exist no pending or threatened actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened against
Seller that would materially and adversely affect the operation or value of the
Property or Seller’s ability to perform its obligations under this Agreement or
that seeks to restrain or prohibit, or obtain damages on a discovery order.

SECTION 11

APPORTIONMENTS AND ADJUSTMENTS TO PURCHASE PRICE

11.01 The following apportionments shall be made between the parties at the
Closing as of the close of the business day prior to the Closing:

(a)     Buyer shall receive from Seller a credit for any rent and other income
under Leases collected by Seller before Closing that applies to any period after
Closing. Uncollected rent and other uncollected income shall not be prorated at
Closing. After Closing, Buyer shall apply all rent and income collected by Buyer
from a tenant, first to such tenants current monthly rental, then to the month
in which Closing occurred, and then to arrearages in the reverse order in which
they were due, remitting promptly to Seller, any balance properly allocable to
Seller’s period of ownership. Buyer shall bill and use commercially reasonable
efforts to collect such rent arrearages in the ordinary course of business, but
shall not be obligated to engage a collection agency or take legal action to
collect any rent arrearages. Any rent or other income received by Seller after
Closing which are owed to Buyer shall be remitted to Buyer promptly after
receipt for allocation and disbursement as provided herein;

(b)     security deposits and any interest for which the Partnership is
obligated to pay tenants; it is the intent of the parties that all refundable
security deposits shown on the Rent Roll shall be transferred by Seller to Buyer
at Closing; provided, however, all non-refundable tenant fees such as cleaning
fees, redecorating fees and pet fees shall be retained by Seller. On the
Closing, Buyer shall in writing acknowledge receipt of and expressly assume all
Seller’s financial and custodial obligations with respect to all such security
deposits, it being the intent and purpose of this provision that, at Closing,
Seller will be relieved of all fiduciary and custodial obligations, and that
Buyer will assume all such obligations and be directly accountable to the
residents of the Property with respect to all such security deposits; provided
however, Seller shall indemnify and hold Buyer harmless from all liabilities
relating to the security deposits transferred to Buyer for the period prior to
the Closing;

(c)     there shall be no adjustment for wages, vacation pay, pension and
welfare benefits and other fringe benefits of all persons employed by Seller or
the Partnership at the Property; it being the intent of the parties that
simultaneously with the Closing, the Partnership shall terminate any existing
management agreement and Buyer shall have no liability or obligation with
respect to any employee of Seller or the Partnership or its management company
prior to Closing;

(d)     real estate taxes, personal property taxes, water charges and sewer
charges, if any, on the basis of the most recent billing period, as reflected on
the actual invoices/bills issued by the appropriate taxing authority;

(e)     Seller shall receive a credit for utility deposits for any utility
accounts which are transferred to Buyer; and

(f)     prepayments paid by Seller under assigned Service Contracts, provided
there shall be no adjustment or proration for any initial inducement payments
made to Seller by providers of telephone, cable television, internet or similar
service providers.

        If the Closing shall occur before a new tax rate or new assessed
valuation is fixed for the fiscal period in which Closing occurs, the
apportionment of taxes at the Closing shall be upon the basis of the tax rate or
assessed valuation for the preceding period, as applicable. Promptly after the
new tax rate or new assessed valuation is fixed, the apportionment of taxes
shall be recomputed. Any discrepancy resulting from such recomputation and any
errors or omissions in computing apportionments at the Closing shall be promptly
corrected, which obligation shall survive the Closing. If any operating expenses
or other prorations cannot conclusively be determined as of the date of Closing,
then the same shall be adjusted at Closing based upon the most recently issued
bills thus far and shall be re-adjusted within sixty (60) days after the Closing
occurs.

SECTION 12

FAILURE TO PERFORM

12.01 Buyer’s Election. If Seller is unable to satisfy all of Seller’s
obligations as set forth in this Agreement, Buyer shall have the right to elect,
in its sole discretion, at the Closing, to accept such title as Seller can
deliver to the Property in its then condition by assignment of the Interests and
to pay therefor the Purchase Price without reduction or offset, except as
expressly provided in Section 1.02, in which case Seller shall convey such title
for such price.

12.02 Seller’s Default. If at the Closing, Seller is unable to satisfy all of
Seller’s obligations as set forth in this Agreement, and Buyer does not elect to
take title as provided in Section 12.01, Seller shall be in default under this
Agreement and Buyer shall have the right to terminate this Agreement. In
addition to the foregoing, if Buyer desires to purchase the Interests in
accordance with the terms of this Agreement and Seller intentionally refuses to
perform Seller’s obligations hereunder, Buyer, at its option, and as Buyer’s
sole and exclusive remedy, shall have the right to compel specific performance
by Seller hereunder (and recover Buyer’s reasonable attorneys’ fees and costs in
connection with Buyer’s specific performance action).

12.03 Buyer’s Default. If at the Closing, Buyer is unable to satisfy all of
Buyer’s obligations as set forth in this Agreement, Buyer shall be in default
under this Agreement and Seller shall have the right to terminate this
Agreement.

12.04 Cure. If either Buyer or Seller fails to perform any of their respective
obligations under this Agreement (excluding the closing obligations under
Sections 9 and 10 hereof), the non-defaulting party shall give written notice to
the defaulting party specifying such default and, except as to defaults which
occur as of Closing, the defaulting party shall not be in default under this
Agreement unless the defaulting party fails to cure such default within five (5)
days after the delivery by the non-defaulting party of said written notice.
Notwithstanding anything in the foregoing sentence to the contrary, if either
party is in default of their respective closing obligations under Sections 9 and
10 hereof, the non-defaulting party shall not be required to deliver notice and
the defaulting party shall not be entitled to a cure period with respect to a
default of any closing obligation under said Sections.

SECTION 13

BROKERAGE FEES

        Seller and Buyer mutually represent and warrant that CB Richard Ellis
(“Broker”) is the only broker with whom they have dealt in connection with this
purchase and sale and that neither Seller nor Buyer knows of any other broker
who has claimed or may have the right to claim a commission in connection with
this purchase and sale. The commission of the Broker shall be paid by Seller
pursuant to a separate agreement, but Seller shall be obligated to pay such
commission only if, as and when the transaction is consummated and the Purchase
Price is paid and not otherwise. In any event, Buyer shall have no obligation to
pay a brokerage commission to Broker or any other broker. Seller and Buyer shall
indemnify and defend each other against any costs, claims or expenses, including
attorneys’ fees, arising out of the breach on their respective parts of any
representations, warranties or agreements contained in this Section. Buyer
acknowledges and agrees that Broker is not authorized by Seller to make, and
Broker has not at any time made, any representation or warranty of any kind or
character, express or implied, with respect to Seller, the Partnership or the
Property. The representations and obligations under this Section shall survive
the Closing without any limitation and Buyer to be provided with release from
Broker or, if the Closing does not occur, the termination of this Agreement. In
the event of Closing, Buyer shall be provided with a release of the Partnership
and Buyer from Broker.

SECTION 14

NOTICES

        All notices under this Agreement shall be in writing and shall be
delivered personally or shall be sent by Federal Express or other comparable
overnight delivery courier, addressed as set forth at the beginning of this
Agreement or by telecopier to the telecopier number as set forth at the
beginning of this Agreement. Notices shall be deemed effective when so
delivered. Copies of all such notices to Buyer shall be sent to Richard A.
Toelke, Esq., Bingham McCutchen, LLP, 150 Federal Street, Boston, Massachusetts
02110, Telecopier No. 617-951-8736, and to Scott D. Spelfogel, Senior Vice
President and General Counsel, The Berkshire Group, One Beacon Street, Suite
1500, Boston, Massachusetts 02108, Telecopier No. 617-556-1408, and copies of
all such notices to Seller shall be sent to Joel H. Sirkin, Esq., Wilmer Cutler
Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109,
Telecopier No. 617-526-5000.

SECTION 15

LIMITATIONS ON SURVIVAL

15.01 Representations and Warranties. Except as otherwise expressly provided in
this Agreement, no representations or warranties of Seller set forth in this
Agreement shall survive the Closing, and no action based thereon shall be
commenced after Closing. The representations and warranties of Seller set forth
in Section 5 shall survive until three (3) months after the Closing, and no
action based thereon shall be commenced more than three (3) months after the
Closing.

15.02 Merger. The delivery of the Assignment of Interests by Seller, and the
acceptance thereof by Buyer, shall be deemed the full performance and discharge
of each and every obligation on the part of Seller to be performed hereunder and
shall be merged in the delivery and acceptance of the Assignment of Interests,
except as provided in Section 15.01 and except for such other obligations of
Seller which are expressly provided herein to survive the Closing.

SECTION 16

MISCELLANEOUS PROVISIONS

16.01 Assignment. GP Buyer and LP Buyer shall be entitled to assign this
Agreement and its rights hereunder to a corporation, general partnership,
limited partnership, limited liability company or other lawful entity entitled
to do business in the state in which the Property is located provided such
entity, either shall be (a) controlled by, controlling or under the common
control with Buyer, or (b) an entity in which Buyer or its principals or
affiliates shall have management control (“Assignee”). In the event of such an
assignment of this Agreement to Assignee (i) Buyer shall notify Seller promptly,
(ii) Buyer and Assignee shall be, jointly and severally, liable under this
Agreement from and after such assignment, (iii) Assignee shall assume all
obligations of Buyer under this Agreement, and (iv) from and after any such
assignment the term “Buyer” shall be deemed to mean the Assignee under any such
assignment.

16.02 Limitation of Seller’s Liability. Except as otherwise provided in Section
15.10, no shareholders, partners or members of Seller, nor any of its or their
respective officers, directors, agents, employees, heirs, successors or assigns
shall have any personal liability of any kind or nature for or by reason of any
matter or thing whatsoever under, in connection with, arising out of or in any
way related to this Agreement and the transactions contemplated herein, and
Buyer hereby waives for itself and anyone who may claim by, through or under
Buyer any and all rights to sue or recover on account of any such alleged
personal liability.

        Notwithstanding anything set forth in this Agreement to the contrary,
Buyer agrees that post-Closing Seller shall have no liability to Buyer for any
breach of Seller’s covenants, agreements, representations or warranties
hereunder or under any other agreement, document, certificate or instrument
delivered by Seller to Buyer unless the valid claims for all such breaches
collectively aggregate more than Twenty-Five Thousand Dollars ($25,000.00), in
which event the full amount of such valid claims shall be actionable, up to the
cap set forth in the following sentence. Further, Buyer agrees that any recovery
against Seller for any breach of Seller’s covenants, agreements, representations
and warranties hereunder or under any other agreement, document, certificate or
instrument delivered by Seller to Buyer, or under any law applicable to the
Property or this transaction, shall be limited to Buyer’s actual damages not in
excess of Three Hundred Ninety-Two Thousand Five Hundred and 00/100 Dollars
($392,500.00) in the aggregate and that in no event shall Buyer be entitled to
seek or obtain any other damages of any kind, including, without limitation,
consequential, indirect or punitive damages.

16.03 Integration. This Agreement embodies and constitutes the entire
understanding between the parties with respect to the transaction contemplated
herein, and all prior agreements, understandings, representations and
statements, oral or written, are merged into this Agreement. Neither this
Agreement nor any provision hereof may be waived, modified, amended, discharged
or terminated except by an instrument signed by the party against whom the
enforcement of such waiver, modification, amendment, discharge or termination is
sought, and then only to the extent set forth in such instrument.

16.04 Governing Law. This Agreement shall be governed by, and construed in
accordance with the laws of the state in which the Property is located.

16.05 Captions. The captions in this Agreement are inserted for convenience of
reference only and in no way define, describe or limit the scope or intent of
this Agreement or any of the provisions hereof.

16.06 Bind and Inure. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.

16.07 Drafts. This Agreement shall not be binding or effective until properly
executed and delivered by both Seller and Buyer. The delivery by Buyer to Seller
of an executed counterpart of this Agreement shall constitute an offer which may
be accepted by the delivery to Buyer of a duly executed counterpart of this
Agreement and the satisfaction of all conditions under which such offer is made,
but such offer may be revoked by Buyer by written notice given at any time prior
to such acceptance and satisfaction.

16.08 Number and Gender. As used in this Agreement, the masculine shall include
the feminine and neuter, the singular shall include the plural and the plural
shall include the singular, as the context may require.

16.09 Attachments. If the provisions of any schedule or rider to this Agreement
are inconsistent with the provisions of this Agreement, the provisions of such
schedule or rider shall prevail. The Schedules attached are hereby incorporated
as integral parts of this Agreement.

16.10 LEAD PAINT DISCLOSURE. EVERY PURCHASER OF ANY INTEREST IN RESIDENTIAL REAL
PROPERTY ON WHICH A RESIDENTIAL DWELLING WAS BUILT PRIOR TO 1978 IS NOTIFIED
THAT SUCH PROPERTY MAY PRESENT EXPOSURE TO LEAD FROM LEAD-BASED PAINT THAT MAY
PLACE YOUNG CHILDREN AT RISK OF DEVELOPING LEAD POISONING. LEAD POISONING IN
YOUNG CHILDREN MAY PRODUCE PERMANENT NEUROLOGICAL DAMAGE, INCLUDING LEARNING
DISABILITIES, REDUCED INTELLIGENCE QUOTIENT, BEHAVIORAL PROBLEMS AND IMPAIRED
MEMORY. LEAD POISONING ALSO POSES A PARTICULAR RISK TO PREGNANT WOMEN. THE
SELLER OF ANY INTEREST IN RESIDENTIAL REAL PROPERTY IS REQUIRED TO PROVIDE THE
PURCHASER WITH ANY INFORMATION ON LEAD-BASED PAINT HAZARDS FROM RISK ASSESSMENTS
OR INSPECTIONS IN THE SELLER’S POSSESSION AND NOTIFY THE PURCHASER OF ANY KNOWN
LEAD-BASED PAINT HAZARDS. A RISK ASSESSMENT OR INSPECTION FOR POSSIBLE
LEAD-BASED PAINT HAZARDS IS RECOMMENDED PRIOR TO PURCHASE.

16.11 Post-Closing Audit Rights. For a period of three (3) years after the
Closing Date, upon no less than fifteen (15) days’ prior written notice, each
party agrees to make available to the other and its respective independent
accountants or attorneys, for inspection and copying, at the requesting party’s
sole cost and expense, sufficient information to prepare or amend tax returns
and/or audited financial statements and an audit letter for the Property for the
calendar years of 2001, 2002, 2003 and 2004, or for any other reasonable
purpose, which information shall include books and records for the Property,
property and operating statements, insurance policies, real estate tax records,
capital expenditures records and maintenance records of the Property, if and to
the extent that such records are in such party’s actual possession as of the
Closing Date. All such records shall be made available for inspection by the
requesting party and its independent accountants or attorneys at such location
as the party providing the records may reasonably choose.

SECTION 17

INDEMNIFICATION

17.01 Seller’s Indemnity. Notwithstanding anything to the contrary contained in
this Agreement, but subject to Section 6.04 hereof, Seller shall indemnify,
defend and hold Buyer harmless from any liability, claim, demand, loss, expense
or damage (collectively, “Loss”) that is suffered or incurred by Buyer or the
Partnership, or any of their agents, employees, officers, directors, members,
partners or contractors which both (a) arises out of a third party claim
(whether or not the subject of a legal action) or an obligation in favor of a
third party, and (b) arises out of any act or omission, occurring prior to the
Closing Date, of Seller, or the Partnership, or any of their respective agents,
employees, officers, directors, members, partners or contractors (in each case
to the extent relating to the Property or the Partnership) or otherwise arising
out of the ownership or operation of the Property prior to the Closing Date,
provided that the foregoing indemnity shall not apply with respect to which
Buyer has actual knowledge of the basis therefore as of the Closing Date.

17.02 Buyer’s Indemnity. Buyer shall indemnify, defend and hold Seller harmless
of and from any Loss that is suffered or incurred by Seller, or any of its
agents, employees, officers, directors, members, partners or contractors which
both (a) arises out of a third party claim (whether or not the subject of a
legal action) or an obligation in favor of a third party, and (b) arises out of
a third party claim based on any act or omission, occurring on or after the
Closing Date, of Buyer or the Partnership or any of their respective agents,
employees, officers, directors, members, partners or contractors or otherwise
arising out of the ownership or operation of the Property on or after the
Closing Date.

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

17.04 Survivability. The obligations of the parties under this Article shall
survive the Closing only with respect to any claims made in writing within the
three (3) month period after the Closing Date, subject to the limitation set
forth in section 16.02.

SECTION 18

MONTGOMERY COUNTY MANDATED PROVISIONS

18.01 Master Plan Disclosures.

(a)     Seller has offered the Buyer the opportunity to review the applicable
master plan and municipal land use plan for the area in which the Property is
located and any adopted amendment.

(b)     Seller has informed Buyer that amendments affecting the plan may be
pending before the County Planning Board or the County Council or a municipal
planning body.

(c)     Buyer has waived the right to review each plan and adopted amendment.

(d)     Buyer understands that, to stay informed of future changes in county or
municipal land use plans, Buyer should consult the County Planning Board and the
appropriate municipal planning body.

18.02 Water and Sewer Disclosures.

(a)     Seller has provided to the Buyer all information required by §40-10A(a)
of the Montgomery Code (or Seller has informed Buyer that Seller does not know
the information required by said §40-10A(a)), including the following: (i)
whether the Property is connected to, or has been approved for connection to, a
public water and sewer system; (ii) the source, if any, of potable water for the
Property; (iii) whether an individual sewage disposal system has been
constructed on the Property or approved or disapproved for construction; (iv)
the water and sewer service area category or categories that currently apply to
the Property, and a brief explanation of how each category affects the
availability of water and sewer service to the Property; (v) any recommendations
in the applicable master plan regarding water and sewer service to the Property;
and (vi) the status of any pending water and sewer comprehensive plan amendments
or service area category changes that would apply to the Property.

(b)     Buyer understands that, to stay informed of future changes in County or
municipal water and sewer charges, Buyer should consult the County Planning
Board, the Washington Suburban Sanitary Commission, the Department of Permitting
Services, or the Department of Environmental Protection, or any appropriate
municipal planning board or water and sewer body.

18.03 Subdivision Plat. Buyer waives the receipt of a copy of the plat of
subdivision in which the Property is located.

18.04 Airports, Heliports Disclosures. Buyer hereby acknowledges that Seller has
disclosed to Buyer the relative location of an airport or heliport, as defined
in the Montgomery County Zoning Ordinance, existing within a five-mile radius of
the Property.

18.05 Special Protection Area Disclosures. Seller has disclosed to Buyer whether
the Property is located in an area designated as a special protection area under
§19-62 of the Montgomery County Code. If the Property is located in a “special
protection area”, Buyer understands that special water quality measures and
certain restrictions on land uses and impervious surfaces may apply to the
Property.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as of the date first above written.

GP SELLER: WITNESS: BRH WESTCHESTER, L.L.C., a Delaware limited liability
company         /s/  Dan Stravinski                      By:/s/  Stephen C.
Parthum               Stephen C. Parthum, Vice President               LP
SELLER: WITNESS: BRI OP LIMITED PARTNERSHIP, a Delaware limited partnership By:
Berkshire Apartments, Inc., a Delaware corporation, its General Partner      
/s/  Dan Stravinski                      By:/s/  Stephen C.
Parthum                      Stephen C. Parthum, Vice President           GP
BUYER: WITNESS: BIR WESTCHESTER, L.L.C., a Delaware limited liability company
By:/s/  Stephen Zaleski                      Name:  Stephen
Zaleski                      /s/  Erin Walker                     
Title:  Vice-President                                   LP BUYER: WITNESS:
BERKSHIRE INCOME REALTY-OP, L.P., a Delaware limited partnership By:/s/  Stephen
Zaleski                      Name:  Stephen Zaleski                     
/s/  Erin Walker                     
Title:  Vice-President