Exhibit 10.13

 

AGREEMENT OF SALE AND PURCHASE

AND JOINT ESCROW INSTRUCTIONS

 

WATERFORD PLACE APARTMENTS, LLC

 

THIS AGREEMENT OF SALE AND PURCHASE AND JOINT ESCROW INSTRUCTIONS (this
“Agreement”), dated as of May 29, 2009 (the “Agreement Date”), is between
WATERFORD PLACE APARTMENTS, LLC, a California limited liability company
(“Seller”), and BEHRINGER HARVARD MULTIFAMILY OP I LP, a Delaware limited
partnership (“Buyer”).

 

ARTICLE 1

CERTAIN DEFINITIONS

 

1.1                  Definitions.  The parties hereby agree that the following
terms shall have the meanings hereinafter set forth, such definitions to be
applicable equally to the singular and plural forms, and to the masculine and
feminine forms, of such terms:

 

1.1.1       “AAA” shall have the meaning ascribed in Section 10.22.2.

 

1.1.2       “Additional Deposit” shall have the meaning ascribed in Section 2.3.

 

1.1.3       “Affiliate”, except as set forth in Section 10.4 with respect to an
“affiliate of Buyer”, shall mean any person or entity that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with Buyer or Seller, as the case may be.  For the purposes
of this definition, “control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract, or
otherwise, and the terms “controlling” and “controlled” have the meanings
correlative to the foregoing.

 

1.1.4       “Agreement Date” shall have the meaning ascribed in the introductory
paragraph of this Agreement.

 

1.1.5       “Application Deadline” shall have the meaning ascribed in
Section 2.4.1.

 

1.1.6       “Approved Contract” shall have the meaning ascribed in Section 4.6.

 

1.1.7       “Assignment and Assumption of Contracts” shall have the meaning
ascribed in Section 9.5.1(d).

 

1.1.8       “Assignment and Assumption of Leases” shall have the meaning
ascribed in Section 9.5.1(c).

 

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1.1.9       “Assumption Approval Deadline” shall have the meaning ascribed in
Section 2.4.2.

 

1.1.10     “Assumption Documents” shall have the meaning ascribed in
Section 9.5.1(g).

 

1.1.11     “Bill of Sale” shall have the meaning ascribed in Section 9.5.1(b).

 

1.1.12     “Broker” shall mean Marcus & Millichap.

 

1.1.13     “Broker’s Commission” shall have the meaning ascribed in Section 9.8.

 

1.1.14     “Buyer’s Conditions Precedent” shall have the meaning ascribed in
Section 9.3.

 

1.1.15     “Certificate of Insurance” shall have the meaning ascribed in
Section 3.4.

 

1.1.16     “Closing” shall have the meaning ascribed in Section 9.4.1.

 

1.1.17     “Closing Date” shall mean the date set forth in Section 9.4.1.

 

1.1.18     “Closing Statement” shall have the meaning ascribed in
Section 9.7.1(a).

 

1.1.19     “Code” shall have the meaning ascribed in Section 5.4.

 

1.1.20     “Commissions” shall mean all commissions, referral or locator fees,
payments and obligations of Seller or the Property Manager to make payments to
third party leasing agents, leasing brokers or other parties (not affiliated
with the Property Manager) with respect to the leasing of all or any of the
Property, whether such agreements are contained in a Lease or in any separate
Commission Agreement.

 

1.1.21     “Commission Agreements” shall mean all written agreements and
documents entered into by Seller or the Property Manager to pay Commissions that
are not contained in a Lease, together with all amendments thereto or
modifications thereof.

 

1.1.22     “Computer Equipment” means all word processing and computing
equipment including, without limitation, all CPUs, monitors, printers, hubs,
switches, firewalls, networking equipment and modems unless specifically listed
on attached Exhibit I.

 

1.1.23     “Contracts” shall mean the service contracts described in Exhibit B
and all other service contracts entered into by Seller after the Effective Date
with respect to the Property in accordance with Section 8.3.

 

1.1.24     “Covenant Running With The Land” shall have the meaning ascribed in
Section 10.23.

 

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1.1.25     “Deed” shall have the meaning ascribed in Section 9.5.1(a).

 

1.1.26     “Deposit” shall have the meaning ascribed in Section 2.3.

 

1.1.27     “Deposit Date” shall have the meaning ascribed in Section 2.3.

 

1.1.28     “Disapproval Notice” shall have the meaning ascribed in Section 3.8.

 

1.1.29     “Disclosure Items” shall have the meaning ascribed in Section 6.1.

 

1.1.30     “Dispute” shall have the meaning ascribed in Section 10.22.

 

1.1.31     “Due Diligence” shall have the meaning ascribed in Section 3.1.

 

1.1.32     “Due Diligence Items” shall have the meaning ascribed in Section 3.2.

 

1.1.33     “Due Diligence Period” shall mean the time period provided for in
Section 3.1 of this Agreement.

 

1.1.34     “Effective Date” shall mean the first date on which Escrow Agent has
in its possession a fully executed original or copy of this Agreement.  Escrow
Agent shall promptly notify Buyer and Seller in writing of the Effective Date.

 

1.1.35     “Environmental Laws” means all Federal, state and local environmental
laws, rules, statutes, directives, binding written interpretations, binding
written policies, ordinances and regulations issued by any Governmental Entity
and in effect as of the date of this Agreement with respect to or which
otherwise pertain to or affect the Real Property or the Improvements, or any
portion thereof, the use, ownership, occupancy or operation of the Real Property
or the Improvements, or any portion thereof, or any owner of the Real Property,
and as same have been amended, modified or supplemented from time to time prior
to the date of this Agreement, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601
et seq.), the Hazardous Substances Transportation Act (49 U.S.C. § 1802 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.),
the Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Safe Drinking
Water Act (42 U.S.C. § 300f et seq.), the Clean Air Act (42 U.S.C. § 7401 et
seq.), the Solid Waste Disposal Act (42 U.S.C. § 6901 et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the Emergency Planning and
Community Right-to-Know Act of 1986 (42 U.S.C. § 11001 et seq.), the Radon and
Indoor Air Quality Research Act (42 U.S.C. § 7401 note, et seq.), the Superfund
Amendment Reauthorization Act of 1986 (42 U.S.C. § 9601 et seq.), comparable
state and local laws, and any and all rules and regulations which have become
effective prior to the date of this Agreement under any and all of the
aforementioned laws.

 

1.1.36     “Escrow Agent” shall mean Partners Title Company, Houston, Texas.

 

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1.1.37     “Excluded Materials” shall have the meaning ascribed in
Section 3.2.3.

 

1.1.38     “Extended Assumption Approval Deadline” shall have the meaning
ascribed in Section 2.4.2.

 

1.1.39     “Fixtures” shall mean the fixtures that are located at and affixed to
any of the Improvements as of the Closing Date, but specifically excluding any
fixtures owned by any of the Tenants.

 

1.1.40     “Governmental Entity” means the various governmental and quasi-
governmental bodies or agencies having jurisdiction over Seller, the Real
Property or any portion thereof.

 

1.1.41     “Hazardous Materials” means any pollutants, contaminants, hazardous
or toxic substances, materials or wastes (including petroleum, petroleum
by-products, radon, asbestos and asbestos containing materials, polychlorinated
biphenyls (“PCBs”), PCB-containing equipment, radioactive elements, infectious
agents, and urea formaldehyde), as such terms are used in any Environmental Laws
(excluding solvents, cleaning fluids and other lawful substances used in the
ordinary operation and maintenance of the Real Property, to the extent in closed
containers).

 

1.1.42     “Improvements” shall mean all buildings, structures and improvements
located on the Land not owned by a Tenant or any other third party including,
without, limitation, three hundred ninety (390) apartment units.

 

1.1.43     “Indemnitor” shall have the meaning ascribed in Section 7.3.4.

 

1.1.44     “Initial Deposit” shall have the meaning ascribed in Section 2.3.1.

 

1.1.45     “Land” shall mean that certain parcel or parcels of land and
appurtenances thereto located at 4800 Tassajara Road, Dublin, California, and
more particularly described on Exhibit A, including Seller’s right, title and
interest, if any, in and to all rights-of-way, open or proposed streets (public
or private), alleys, easements, strips or gores of land adjacent thereto.  The
Land expressly excludes the ground floor retail condominiums and the common
areas, if any, as described in the condominium plan attached as Exhibit A to The
Waterford Place Condominiums Declaration of Restrictions Recorded November 3,
2003 as Series No. 2003653881 of the Official Records of Alameda County.

 

1.1.46     “Laws” shall mean all applicable federal, state or local statutes,
ordinances, codes, regulations, decrees, orders, laws, rulings, judgment or
other governmental or judicial requirements affecting the Property.

 

1.1.47     “Leases” shall mean all unexpired leases, subleases, occupancy
agreements, and any other agreements, including all modifications or amendments
thereto, for the use, possession, or occupancy of any portion of the Property as
of the Closing Date.

 

1.1.48     “Lender” shall have the meaning ascribed in Section 2.2.

 

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1.1.49     “Licensee Parties” shall mean those authorized agents, contractors,
consultants and representatives of Buyer who shall inspect, investigate, test or
evaluate the Property on behalf of Buyer in accordance with this Agreement.

 

1.1.50     “Licenses and Permits” shall mean, collectively, to the extent
assignable, all licenses, permits, approvals, certificates of occupancy,
dedications, subdivision maps and entitlements now or hereafter issued, approved
or granted by any Governmental Entity in connection with the Real Property,
together with all renewals and modifications thereof.

 

1.1.51     “Liens” shall have the meaning ascribed in Section 4.2.

 

1.1.52     “Loan” shall have the meaning ascribed in Section 2.2.

 

1.1.53     “Loan Documents” shall have the meaning ascribed in Section 2.2.

 

1.1.54     “Losses” means claims, actions, causes of action, suits, proceedings,
costs, expenses (including, without limitation, reasonable attorneys’ fees and
costs), liabilities, damages, demands, rights and/or liens of any type, whether
known or unknown, direct or indirect, absolute or contingent.

 

1.1.55     “New Leases” or “New Lease” shall mean, collectively, or singularly,
any Lease entered into after the Effective Date and before the Closing Date.

 

1.1.56     “Non-Terminable Contract” shall have the meaning ascribed in
Section 4.6.

 

1.1.57     “Permitted Exceptions” shall mean and include all of the following: 
(a) applicable zoning and building ordinances and land use regulations; (b) such
state of facts as would be disclosed by a physical inspection of the Property;
(c) the lien of taxes and assessments not yet due and payable (it being agreed
by Buyer and Seller that if any tax or assessment is levied or assessed with
respect to the Property after the date hereof and the owner of the Property has
the election to pay such tax or assessment either immediately or under a payment
plan with interest, Seller may elect to pay under a payment plan, which election
shall be binding on Buyer); (d) any exclusions from coverage set forth in the
jacket of any Owner’s Policy of Title Insurance, but excluding all specific
title exceptions in Schedules B and C of the Title Commitment on any standard
printed exceptions in the Title Commitment; (e) any exceptions caused by Buyer,
any Licensee Parties and their respective agents, representatives or employees;
(f) such other exceptions as the Title Company shall commit to insure over,
without any additional cost to Buyer, whether such insurance is made available
in consideration of payment, bonding, indemnity of Seller or otherwise; (g) the
rights of the Tenants under the Leases, as tenants only; (h) the Covenant
Running With The Land; and (i) any matters deemed to constitute Permitted
Exceptions under Section 4.2 hereof.

 

1.1.58     “Permitted Outside Parties” shall have the meaning ascribed in
Section 3.7.

 

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1.1.59     “Personal Property” shall mean all of the right, title, and interest
of Seller in and to the tangible personal property, which is located at and used
exclusively in connection with the Property as of the Closing Date a specific
list thereof as of the Effective Date being attached hereto as Exhibit I, but
specifically excluding (a) any personal property owned, financed or leased by
any Tenant under any Lease, (b) the Computer Equipment, (c) any tangible
personal property owned by the Property Manager, and (d) any tangible personal
property owned by a third party.  Personal Property shall not include the
Excluded Materials.

 

1.1.60     “Pre-Effective Date Leases” or “Pre-Effective Date Lease” shall mean,
collectively, or singularly, any Lease in effect as of the Effective Date.

 

1.1.61     “Private Restrictions” shall mean (as they may exist from time to
time) any and all covenants, conditions and restrictions, private agreements,
easements, and any other recorded documents or instruments affecting the use of
the Property.

 

1.1.62     “Property” shall mean the Land, the Improvements, the Personal
Property, the Leases, the Approved Contracts, and to the extent transferable,
all of Seller’s right, title and interest in and to all tangible and intangible
assets of any nature relating to the Property, including without limitation,
(a) all warranties upon the Improvements or the Personal Property, (b) rights to
any plans, specifications, engineering studies, reports, drawings, and prints
relating to the construction, reconstruction, modification, and alteration of
Improvements, (c) all works of art, graphic designs, and other intellectual or
intangible property owned and used by Seller exclusively in connection with the
Property, including any trade name associated with the Improvements, (d) all
claims and causes of action arising out of or in connection with the Property
after the Closing Date, and (e) the Licenses and Permits.

 

1.1.63     “Property Manager” shall mean those individuals or entities which
manage the Property.

 

1.1.64     “Proration Items” shall have the meaning ascribed in
Section 9.7.1(a).

 

1.1.65     “Proration Time” shall have the meaning ascribed in Section 9.7.1(a).

 

1.1.66     “Purchase Price” shall have the meaning ascribed in Section 2.2.

 

1.1.67     “Reimbursable Lease Expenses” shall mean any Commissions and locator
fees payable pursuant to a Commission Agreement or a Lease or a New Lease with
respect to Tenants who are scheduled to take occupancy after Closing.

 

1.1.68     “Rent Roll” shall have the meaning ascribed in Section 3.2.1.

 

1.1.69     “Rent” or “Rents” shall mean and include fixed monthly rentals,
additional rentals, escalation rentals, retroactive rentals, all administrative
charges, utility charges, vending machine receipts and other sums and charges
payable by Tenants under the Leases.

 

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1.1.70     “Replacement Guarantor” shall have the meaning ascribed in
Section 2.4.1.

 

1.1.71     “Reporting Person” shall have the meaning ascribed in Section 5.4.

 

1.1.72     “Representative” shall have the meaning ascribed in Section 10.22.1.

 

1.1.73     “Seller Guarantors” shall have the meaning ascribed in Section 2.4.1.

 

1.1.74     “Servicer” shall have the meaning ascribed in Section 2.3.

 

1.1.75     “Shopping Center” shall have the meaning ascribed in Section 10.23.

 

1.1.76     “Survey” shall have the meaning ascribed in Section 4.4 and means an
ALTA/ACSM survey of the Land prepared by a surveyor licensed by the State of
California.

 

1.1.77     “Survey Objections” shall have the meaning ascribed in Section 4.4.

 

1.1.78     “Tenant” or “Tenants” means all persons or entities occupying or
entitled to possession of any portion of the Real Property pursuant to the
Lease, including tenants, subtenants, and licensees.

 

1.1.79     “Tenant Deposit” means all refundable deposits (whether cash or
non-cash and whether designated as security or otherwise) paid or deposited by a
Tenant to Seller, as landlord, or any other person on Seller’s behalf pursuant
to a Lease (together with any interest which has accrued thereon as required by
the terms of such Lease, but only to the extent such interest has accrued for
the account of the respective Tenant or as required by law).

 

1.1.80     “Tenant Notice” shall have the meaning ascribed in Section 9.5.1(f).

 

1.1.81     “Title Commitment” shall have the meaning ascribed in Section 4.1.

 

1.1.82     “Title Commitment Update” shall have the meaning ascribed in
Section 4.3.

 

1.1.83     “Title Commitment Update Review Period” shall have the meaning
ascribed in Section 4.3.

 

1.1.84     “Title Company” shall mean Chicago Title Company.

 

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1.1.85     “Title Documents” shall have the meaning ascribed in Section 4.1.

 

1.1.86     “Title Objections” shall have the meaning ascribed in Section 4.2.

 

1.1.87     “Title Policy” shall have the meaning ascribed in Section 4.5.

 

1.2                  Rules of Construction.  Article and Section captions used
in this Agreement are for convenience only and shall not affect the construction
of this Agreement.  All references to “Article” or “Sections” without reference
to a document other than this Agreement, are intended to designate articles and
sections of this Agreement, and the words “herein,” “hereof,” “hereunder,” and
other words of similar import refer to this Agreement as a whole and not to any
particular Article or Section, unless specifically designated otherwise.  The
use of the term “including” shall mean in all cases “including but not limited
to,” unless specifically designated otherwise.  No rules of construction against
the drafter of this Agreement shall apply in any interpretation or enforcement
of this Agreement, any documents or certificates executed pursuant hereto, or
any provisions of any of the foregoing.  Any deletion of language from this
Agreement prior to its execution by Buyer and Seller shall not be construed to
raise any presumption, canon of construction or implication, including, without
limitation, any implication that the parties intended thereby to state the
converse of the deleted language.

 

ARTICLE 2

 

AGREEMENT OF PURCHASE AND SALE; PURCHASE PRICE

 

2.1                  Agreement of Purchase and Sale.  Seller agrees to sell,
transfer, assign and convey to Buyer, and Buyer agrees to purchase, accept and
assume subject to the terms and conditions stated herein, all of Seller’s right,
title and interest in and to the Property.

 

2.2                  Purchase Price.  Buyer shall pay Seller the purchase price
of EIGHTY MILLION DOLLARS ($80,000,000.00) (“Purchase Price”) at Closing in cash
or other immediately available federal funds.  Notwithstanding the foregoing, a
portion of the Purchase Price shall be paid by Buyer’s assumption of, and
agreement to pay and perform, the obligations of Seller under the loan documents
(the “Loan Documents”) evidencing two loans (the “Loans”) from Deutsche Bank
Berkshire Mortgage, Inc. (together with its successors and assigns, “Lender”) to
Seller in the original principal amounts of FIFTY TWO MILLION DOLLARS
($52,000,000.00) and THIRTEEN MILLION TWO HUNDRED FORTY-FIVE DOLLARS
($13,245,000.00) having an approximate unpaid balance of FORTY-SEVEN MILLION
FIVE HUNDRED TWENTY-THREE THOUSAND AND TWELVE DOLLARS ($47,523,012.00) and
THIRTEEN MILLION FORTY-NINE THOUSAND FOUR HUNDRED EIGHTY-THREE DOLLARS
($13,049,483.00), respectively.  The Loans are serviced by a service (the
“Servicer”).  The balance of the Purchase Price and such other funds as may be
necessary to pay Buyer’s expenses hereunder, subject to closing adjustments,
shall be deposited with the Escrow Agent no later than one (1) business day
prior to the Closing Date in accordance with this Agreement and paid to Seller
upon satisfaction of all conditions precedent to the Closing as described
herein.

 

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2.3                  Deposits; Designation of Reporting Person & Contract
Consideration.

 

2.3.1       Deposits.  Within two (2) business days after the Effective Date
(the “Deposit Date”), Buyer shall deposit via wire transfer the sum of SEVEN
HUNDRED FIFTY THOUSAND DOLLARS ($750,000.00) in immediately available U.S. funds
as a deposit (the “Initial Deposit”) with Escrow Agent whose address is as
indicated in Section 10.3, below.  By 5:00 p.m. Pacific Time on the last day of
the Due Diligence Period, Buyer shall deposit with Escrow Agent via wire
transfer an additional ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($1,250,000.00) (the “Additional Deposit”) in immediately available funds.  The
Initial Deposit and the Additional Deposit shall be referred to herein
collectively as the “Deposit”.  If Buyer fails to make the Initial Deposit on or
before 5:00 p.m. Pacific Time on the Deposit Date or make the Additional Deposit
on or before 5:00 p.m. Pacific Time on the last day of the Due Diligence Period,
then this Agreement shall terminate and shall be of no further force and effect
and the parties shall have no further obligations to one another except to the
extent expressly stated otherwise herein.  If and when made, the Deposit shall
be held by Escrow Agent in accordance with Section 2.3.2, below, and, once made,
shall be non-refundable in all instances except (a) if Buyer elects to terminate
this Agreement on or before the end of the Due Diligence Period in accordance
with the terms and conditions of Section 3.6, (b) if the Closing fails to occur
solely as a result of a material default by Seller hereunder that is not cured
within all applicable notice and cure periods, and (c) as otherwise expressly
stated otherwise in this Agreement, including specifically Section 2.4.2 hereof.

 

2.3.2       Deposit Instructions.  The Escrow Agent shall invest the amount in
escrow, including without limitation the Deposit, in accounts which are
federally insured or which invest solely in government securities and shall be
applied in accordance with the terms of this Agreement.  Interest earned on the
Deposit shall be considered part of the Deposit and shall be deemed to have been
earned by, and constitute income of, Buyer.

 

2.3.3       Designation of Reporting Person.  In order to assure compliance with
the requirements of Section 6045 of the Internal Revenue Code of 1986, as
amended (for purposes of this Section 2.3.3, the “Code”), and any related
reporting requirements of the Code, Seller and Buyer hereby designate Escrow
Agent as the person to be responsible for all information reporting under
Section 6045(e) of the Code (the “Reporting Person”).  In connection with the
foregoing appointment, Seller and Buyer hereby agree: (a) to provide to the
Reporting Person all information and certifications regarding such party, as
reasonably requested by the Reporting Person or otherwise required to be
provided by a party to the transaction described herein under Section 6045 of
the Code; and (b) to provide to the Reporting Person such party’s taxpayer
identification number and a statement (on Internal Revenue Service Form W-9 or
an acceptable substitute form, or on any other form the applicable current or
future Code sections and regulations might require and/or any form requested by
the Reporting Person), signed under penalties of perjury, stating that the
taxpayer identification number supplied by such party to the Reporting Person is
correct.  Each party hereto agrees to retain this Agreement for not less than
four years from the end of the calendar year in which the Closing occurred, and
to produce it to the Internal Revenue Service upon a valid request therefor.

 

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2.3.4       Contract Consideration.  Notwithstanding anything in this Agreement
to the contrary, in any event where the Deposit, or any part thereof, is to be
returned to Buyer, ONE HUNDRED DOLLARS ($100.00) thereof shall be paid by Escrow
Agent to Seller as consideration for the rights and privileges granted to Buyer
herein thus making this Agreement the valid and binding obligation of Buyer and
Seller even though Buyer may have certain unilateral termination rights during
certain periods under this Agreement.

 

2.4                  Loan Assumption.

 

2.4.1       Application for Loan Assumption.  Within five (5) business days
after Seller has provided Buyer the request forms and requirements from Lender
for the Loan Assumption (the “Application Deadline”), Buyer shall apply, in good
faith, to the Lender for approval of the assignment by Seller, and assumption by
Buyer, of Seller’s interest in the Loan.  Buyer and Seller agree to use
commercially reasonable efforts to cooperate with each other in connection with
said application process and each party shall submit to Lender any information
reasonably requested by Lender to complete and approve said application by the
Assumption Approval Deadline (as hereinafter defined).  Buyer agrees that Buyer
shall pay any required loan assumption review fee to the Lender as and when
required by the Lender and/or Servicer in accordance with the Loan Documents. 
Seller has informed Buyer that certain Affiliates of Seller (each a “Seller
Guarantor”) have provided certain standard non-recourse carve-out guaranties
and/or environmental indemnities to the Lender with respect to the Loan and that
Lender will require Buyer to provide a financially responsible person or entity
to provide a substantially similar guaranty and indemnity (a “Replacement
Guarantor”).  Buyer agrees that Buyer will offer a Replacement Guarantor who
shall, in Lender’s sole discretion, satisfy the financial conditions currently
required to be maintained by the applicable Seller Guarantor(s) pursuant to the
Loan Documents.  Notwithstanding anything to the contrary contained herein,
provided that Seller and Buyer shall have satisfied its obligations under this
Section 2.4, the failure of Lender to approve the assignment and assumption of
the Loan by the Assumption Approval Deadline shall not constitute a default by
either Seller or Buyer.

 

2.4.2       Certain Condition Precedent Regarding Loan Assumption.  Without
limitation to any of the conditions precedent set forth in this Agreement, it
shall be a condition to Buyer’s and Seller’s obligation to close the purchase
and sale of the Property that the Lender shall have approved, in writing, the
assumption of the Loan by Buyer and the release of Seller and Seller Guarantor
and approval of Buyer’s Replacement Guarantor within thirty (30) days of the
Effective Date (the “Assumption Approval Deadline”).  If Lender fails to approve
the assumption of the Loan, the release of Seller and Seller Guarantor and
approval of Buyer’s Replacement Guarantor by Buyer on or before 5:00 p.m.
Pacific Time on the Assumption Approval Deadline, then either Buyer or Seller,
in their sole and absolute discretion, may extend the Assumption Approval
Deadline for ten (10) additional days (the “Extended Assumption Approval
Deadline”) by notice in writing to the other party prior to the expiration of
the Assumption Approval Deadline; provided, however, that if Lender fails to
approve the assumption of the Loan by Buyer, the release of Seller and the
Seller Guarantor and approval of Buyer’s replacement Guarantor on or before
5:00 p.m. Pacific Time on the Extended Assumption Approval Deadline, then either
Buyer or Seller may thereafter terminate this Agreement by delivering written
notice to the other at any time after the expiration of the Extended Assumption
Approval Deadline; provided, however, that if the Lender approves

 

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Buyer’s assumption of the Loan before the delivery of such termination notice,
then such termination notice shall be null and void.  In the event of such
termination the Deposit shall be returned to Buyer so long as the Buyer is not
otherwise in material default hereunder and the parties shall have no further
liability to each other except as set forth herein.

 

2.4.3       Closing of Loan Assumption.  Upon Lender’s approval of Buyer’s
assumption of the Loan, Seller and Buyer agree to execute such documentation as
may be reasonably required by Lender pursuant to and in accordance with the
terms of the Loan Documents and to take all other steps necessary to promptly
close the loan assumption on the Closing Date, the completion of which shall
include Lender’s release of Seller and the Seller Guarantor from future
liability with respect to the Loan.  Concurrent with the Closing of the
assumption of the Loan and provided the Lender shall agree, all reserve accounts
maintained by such Lender on behalf of Seller in connection with the Loan, if
any,  shall be assigned by Seller to Buyer at the Closing and Seller shall
receive a credit at Closing equal to the amounts so assigned.  If the Lender
shall not so agree to the assignment and assumption of existing reserves at
Closing as aforesaid, such reserves shall not be assigned to or assumed by Buyer
and Seller shall not receive a credit therefor at Closing, and if required by
Lender, Buyer shall establish replacement reserves in the amounts reasonably
required by Lender but such amounts shall not be in excess of the amounts
currently required by the Loan Documents, and if Lender requires such additional
reserves, Buyer shall have no obligation to agree thereto and such requirement
shall be deemed to be a “material change” in the Loan Documents as contemplated
in Section 9.4.1 hereof, and Buyer shall upon Seller’s request and expense,
reasonably cooperate with Seller’s efforts to recover such Seller reserves from
Lender.  All costs and fees of assuming the Loan shall be at Buyer’s sole cost
and expense and Buyer shall pay all assumption deposit fees, application fees,
review processing fees, legal fees, and loan assumption fees when charged by the
Lender and/or Servicer in accordance with the terms of the applicable Loan
Documents in connection with the assumption thereof.

 

2.4.4       Materiality.  The provisions of this Section 2.4 are material and
included as a material portion of the consideration given by Buyer to Seller in
exchange for Seller’s agreement to enter into and perform under this Agreement

 

2.5                  General Assumption.  As additional consideration for the
purchase and sale of the Property, at Closing Buyer will: (a) assume and perform
(i) all of the covenants and obligations of Seller, Seller’s predecessors in
title and Seller’s Affiliates pursuant to the Leases and Approved Contracts
(including, without limitation, those relating to any Deposits) which arise on
or after the Closing Date, and (ii) all obligations under the Leases and
Approved Contracts relating to the physical and environmental condition of the
Property arising on or after the Closing Date; and (b) assume and agree to
discharge, perform and comply with each and every liability, duty, covenant,
debt or obligation of Seller or any of its Affiliates resulting from, arising
out of, or in any way related to any Licenses and Permits and arising on or
after the Closing Date.  By closing under this Agreement, Buyer hereby
indemnifies, defends, and holds Seller, Seller’s Affiliates and their respective
partners, members, shareholders, officers, directors, managers, employees and
agents harmless from and against any and all claims, liens, damages, demands,
causes of action, liabilities, lawsuits, judgments, losses, costs and expenses
(including but not limited to reasonable attorneys’ fees and expenses) asserted
against or incurred by Seller

 

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and arising out of the failure of Buyer to perform its obligations pursuant to
this Section 2.5.  The provisions of this Section 2.5 shall survive the Closing.

 

ARTICLE 3

BUYER’S DUE
DILIGENCE/CONDITION OF THE PROPERTY

 

3.1                  Buyer’s Inspections and Due Diligence.  Buyer acknowledges
that commencing on the Effective Date and continuing until June 22, 2009 (which
will expire at 5:00 p.m. Pacific Time) on such date (the period of time from the
Effective Date until such time shall be referred to herein as the “Due Diligence
Period”), Buyer shall conduct its examinations, inspections, testing, studies
and investigations of the Property, review information regarding the Property
and such documents applicable to the Property, including, without limitation,
the documents that Seller delivers or makes available, as set forth in
Section 3.2 below (collectively, the “Due Diligence”).  Except for any
limitations as may be imposed by this Article 3 below, Buyer may conduct such
due diligence activities, inspections, and studies of the Property as it deems
necessary or appropriate, and examine and investigate to its full satisfaction
all facts, circumstances, and matters relating to the Property (including the
physical condition and use, availability and adequacy of utilities, access,
zoning, compliance with applicable laws, environmental conditions, accessibility
matters, engineering and structural matters), title and survey matters, and any
other matters it deems necessary or appropriate for purposes of consummating
this transaction.  The Due Diligence shall be at Buyer’s sole cost and expense.

 

3.2                  Delivery Period.

 

3.2.1       Due Diligence Items.  To the extent Seller has not already done so,
within three (3) business days of the Effective Date, Seller shall deliver to
Buyer for the following: (i) the most recent rent roll statement (the “Rent
Roll”) with respect to the Property prepared by Seller, in the form and
containing such information as maintained by Seller from time to time;
(ii) copies of all Contracts (including any Commission Agreements); and
(iii) copies of any of the following items pertaining to the Property to the
extent they exist and are in Seller’s or Property Manager’s possession: plans
and specifications; “as-built” plans and specifications; structural, seismic or
geological investigations and/or reports prepared by third parties;
environmental investigations and/or reports prepared by third parties;
warranties; income and expense statements for the prior three (3) years; current
tax bill, and the Licenses and Permits (collectively, the “Deliverable Due
Diligence Items”).  Seller shall also make available to Buyer for inspection at
Seller’s primary office, the primary office of the Property Manager or the
Property Managers on-site office the following:  (i) copies of all Leases
referenced on the Rent Roll and copies of any subleases or amendments relating
thereto and Tenant correspondence in Seller’s possession; (ii) maintenance and
renovations records; and (iii) subject to Section 3.2.3 hereof, all other
information relating to the operation of the Property (collectively, the “Other
Due Diligence Items”).  The Deliverable Due Diligence Items and Other Due
Diligence Items are all collectively referred to herein as the “Due Diligence
Items”.

 

3.2.2       No Warranty.  Buyer acknowledges that many of the Due Diligence
Items were prepared by third parties other than Seller.  Buyer further
acknowledges

 

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and agrees that (a) except as specifically set forth in this Agreement, neither
Seller nor any of Seller’s respective agents, employees, contractors or any
other party has made any warranty or representation regarding the truth,
accuracy or completeness of the Due Diligence Items or the source(s), and
(b) Seller has not undertaken any independent investigation as to the truth,
accuracy or completeness of the Due Diligence Items, and Seller is providing the
Due Diligence Items or making the Due Diligence Items available to Buyer solely
as an accommodation to Buyer.  Buyer acknowledges that the Due Diligence Items
are subject to the confidentiality provisions of Section 3.5 below.

 

3.2.3       Excluded Materials.  Notwithstanding any terms to the contrary in
this Agreement, (a) Seller shall not be obligated or otherwise required to
furnish or make available to Buyer any of the following (collectively, “Excluded
Materials”):  (i) any appraisals or other economic evaluations of, or
projections with respect to, all or any portion of the Property, including,
without limitation, budgets, prepared by or on behalf of Seller or any Affiliate
of Seller or any other party, (ii) any documents, materials or information which
are subject to attorney/client, work product or similar privilege, which
constitute attorney communications with respect to the purchase of the Property
by Seller, (iii) any information which Seller, in good faith, considers
proprietary and not related to the operation of the Property, and (iv) any
information which is subject to any other confidentiality obligations; (b) Due
Diligence Items shall not include any Excluded Materials; and (c) Seller shall
have no obligation or liability of any kind to Buyer as a result of Seller not
furnishing or making available to Buyer the Excluded Materials.

 

3.3                  Site Visits.  During the pendency of this Agreement, Buyer
and its Licensee Parties shall have reasonable access to the Property at agreed
upon times for agreed upon purposes on at least one (1) business day prior
notice to Seller.  Such notice shall describe the scope of the Due Diligence
Buyer intends to conduct during Buyer’s access to the Property.  Seller shall
have the right to have a representative present during any visits to or
inspections of the Property or any meetings or discussions with any Tenant by
Buyer or any Licensee Parties or any Governmental Entity.  Buyer will conduct
its Due Diligence in a manner so as to minimize, to the extent reasonably
possible to do so, any interference with the operations and occupancy of the
Property and to minimize, to the extent reasonably possible to do so, any
disturbance to Tenants.  Buyer will not enter the Property or contact any
leasing agents or the Property Manager of the Property or any Governmental
Entity without Seller’s prior written consent, which consent shall not be
unreasonably withheld or delayed.  Neither Buyer nor any Licensee Parties may
contact any Tenants or make any inquiries of such Tenants including, without
limitation, those which in any way relate to the Property, without Seller’s
prior written consent which consent may be withheld in Seller’s sole and
absolute discretion.  In the event Buyer desires to conduct any physically
intrusive Due Diligence, such as sampling of soils, other media, building
materials, or the like, Buyer will identify in writing exactly what procedures
Buyer desires to perform and request Seller’s express written consent.  Seller
may withhold or condition consent to any physically intrusive Due Diligence in
Seller’s sole and absolute discretion.  Upon receipt of Seller’s written
consent, Buyer and all Licensee Parties shall, in performing such Due Diligence,
comply with any agreed upon procedures and with any and all Laws including,
without limitation, any Environmental Laws.

 

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3.4                  Insurance Requirements.  As a condition precedent to any
entry onto the Property by Buyer or any Licensee Parties prior to the Closing,
Buyer or any such Licensee Parties shall carry worker’s compensation insurance
in compliance with applicable law, liability insurance covering bodily injury,
property damage, with a combined single limit of $2,000,000, and automobile
liability insurance in an amount not less than $1,000,000.00 covering all
automobile and equipment owners and/or operated by Buyer and any Licensee
Parties in connection with the license granted herein.  The liability policies
described herein shall name Seller and those reasonably designated by Seller as
an additional insured.  All such insurance shall: (a) be primary and no
insurance of Seller or any of the additional insured shall be called upon to
contribute to a loss and (b) not be cancelled or materially modified without
first giving Seller thirty (30) days’ advance written notice of cancellation or
material modification.  Before entering the Property pursuant to this
Section 3.4, Buyer shall deliver copies of the policies or certificates of
insurance issued by the insurance carrier(s) to Seller demonstrating compliance
with the terms of this Section.  In the event that, during the Due Diligence
Period or at any other time during the pendency of this Agreement that Buyer or
any Licensee Parties are entering the Property, Buyer or any Licensee Parties
fail to procure or maintain the insurance requirements as set forth in this
Section or such insurance is modified such that it does not provide coverage to
Seller and its additional insured as required herein, Seller shall have the
right upon twenty-four (24) hours notice to immediately terminate this Agreement
by written notice to Buyer whereupon Buyer shall immediately cease all
operations on the Property and promptly remove all Licensee Parties from the
Property (unless the subject insurance requirements are satisfied and evidence
thereof delivered to Seller before the expiration of said twenty-four (24) hour
notice) and the Deposit shall be promptly returned to Buyer.

 

3.5                  Restoration; No Liens.  Buyer shall promptly pay when due
the costs of all entry and inspections and examinations done with regard to the
Property and repair and/or restore the Property to the condition in which the
same were found before any such entry upon the Property and inspection or
examination was undertaken.  Buyer shall not permit any mechanics’ or other
liens to be filed against the Property as a result of labor or materials
furnished in connection with its Due Diligence.  If any such lien is filed
against the Property as a result of the activities of Buyer or any Licensee
Parties, then within ten (10) days after receipt of written demand from Seller
or any other notice of such lien, Buyer shall either cause the same to be
discharged of record by payment of the claim or posting of a bond, or will take
such other action as may be reasonably acceptable to protect Seller, Seller’s
Affiliates and the Property from any loss or damage arising from such lien.  In
the event Buyer fails to release any lien by payment, bond or otherwise as set
forth herein, Seller may pay such amounts necessary to cause the release of the
lien and Buyer shall promptly reimburse Seller one hundred percent (100%) of the
amount so paid, in addition to Seller’s other costs (including, but not limited
to attorneys’ fees) necessary to discharge the lien(s)).  Buyer’s obligations
under this Section 3.5 shall expressly survive the Closing or, if the purchase
and sale is not consummated, any termination of this Agreement.  The provisions
of this Section 3.5 shall survive the Closing or, if the purchase and sale is
not consummated, any termination of this Agreement.

 

3.6                  Due Diligence Indemnity.  Buyer shall defend, protect,
indemnify, and hold harmless Seller, Seller’s Affiliates and their respective
partners, shareholders, members, officers, directors, employees and agents, as
applicable, and the Property Manager from and against all Losses (whether
arising out of injury or death to persons or damage to the Property or

 

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otherwise) including, but not limited to, costs of remediation, restoration and
other similar activities, mechanic’s and materialmen’s liens and attorneys’
fees, arising out of or in connection with Buyer’s Due Diligence, Buyer’s breach
of its obligations under Section 3.7 or Buyer’s or any Licensee Parties’ entry
upon the Property; provided, however, that Buyer shall have no obligations under
this Section 3.6 to the extent the Losses are caused solely by the negligence or
willful misconduct of Seller, Seller’s Affiliates, Seller’s partners,
shareholders, members, officers, directors, employees and agents, as applicable,
and/or the Property Manager or result from the mere discovery by Buyer of
pre-existing conditions at the Property and the Buyer promptly notifies Seller
in writing of such discovery.  The provisions of this Section 3.6 shall survive
the Closing or, if the purchase and sale is not consummated, any termination of
this Agreement.

 

3.7                  Confidentiality.  Buyer agrees that any information
obtained by Buyer or its Affiliates or their respective attorneys, partners,
accountants, brokers, property management companies, third party consultants,
lenders or investors (collectively, for purposes of this Section 3.7, the
“Permitted Outside Parties”) in the conduct of its Due Diligence shall be
treated as confidential pursuant to Section 10.11 of this Agreement and shall be
used only to evaluate the acquisition of the Property from Seller.  Buyer
further agrees that within its organization, or as to the Permitted Outside
Parties, the Due Diligence Items and all other information obtained by Buyer
pursuant to its Due Diligence will be disclosed and exhibited only to those
persons within Buyer’s organization or to those Permitted Outside Parties who
are involved in determining the feasibility of Buyer’s acquisition of the
Property.  Buyer further acknowledges that the Due Diligence Items, all
information relating to the leasing arrangements between Seller and any Tenant
or prospective tenants, and all other information obtained by Buyer pursuant to
its Due Diligence are proprietary and confidential in nature.  Buyer agrees not
to divulge the contents of such Due Diligence Items or any other information
except in strict accordance with this Section 3.7 and Section 10.11 of this
Agreement.  In permitting Buyer and the Permitted Outside Parties to review the
Due Diligence Items and other information to assist Buyer, Seller has not waived
any privilege or claim of confidentiality with respect thereto, and no third
party benefits or relationships of any kind, either express or implied, have
been offered, intended or created by Seller and any such claims are expressly
rejected by Seller and waived by Buyer and the Permitted Outside Parties, for
whom, by its execution of this Agreement, Buyer is acting as an agent with
regard to such waiver.  The provisions of this Section 3.7 shall survive the
Closing or, if the purchase and sale is not consummated, any termination of this
Agreement.

 

3.8                  Due Diligence Period.  Unless Buyer delivers to Seller and
Escrow Agent written notice terminating this Agreement on or before the end of
the Due Diligence Period which notice may be for any reason, or no reason, (the
“Disapproval Notice”), this Agreement shall continue in full force and effect. 
If Buyer fails to give Seller the Disapproval Notice, then Buyer shall be deemed
to have approved all of the matters described in Sections 3.1 and 3.2.  If Buyer
timely elects to terminate its obligations hereunder as described above, then
Buyer shall be entitled to the immediate return of the Deposit and Buyer shall
return all Due Diligence Items to Seller and provide to Seller, promptly after
receipt of a request from Seller, originals of all third party reports, studies
and appraisals relating to the Property in its possession, without
representation or warranty and at no cost to Seller.  The foregoing obligation
shall survive any termination of this Agreement.  Subject to the terms of this
Agreement, provided that Buyer has not delivered the Disapproval Notice, Buyer,
after the expiration of the

 

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Due Diligence Period, may continue to conduct further physical Due Diligence or
other examinations, inspections, tests, studies and investigations regarding the
Property; provided, however, that except as otherwise expressly provided in
Sections 5.1 and 10.2.2, in no event shall Buyer have any right to terminate or
otherwise modify its obligations hereunder after the end of the Due Diligence
Period as a result of any such further Due Diligence or other examinations,
inspections, tests, studies or investigations regarding the Property, and the
provisions of this Article 3, including, without limitation, the indemnification
provisions, shall continue to apply.

 

3.9                  Delivery of Buyer’s Due Diligence Materials.  Buyer agrees
that if Buyer terminates this Agreement for any reason permitted hereunder,
including Buyer’s disapproval of its Due Diligence within the Due Diligence
Period, then Buyer shall, at Seller’s request and at no cost to Seller, assign
to Seller all of its rights, interest and title to copies of all third party
drafts and final surveys, environmental site assessments, appraisals,
examinations, inspections, tests, studies and investigations of the Property or
any other similar documents or materials applicable to the Property, obtained by
Buyer during the Due Diligence Period (collectively, “Buyer’s Due Diligence
Materials”).  Buyer’s obligations under this Section shall expressly survive the
termination and/or expiration of this Agreement.

 

ARTICLE 4

TITLE, SURVEY & CONTRACTS

 

4.1                  Title to Real Property.  Buyer shall obtain (a) a
preliminary report or commitment to issue an owner’s policy of title insurance
with respect to the Property issued by the Title Company (the “Title
Commitment”), and (b) copies of all recorded documents referred to on Schedule B
of the Title Commitment as exceptions to coverage (the “Title Documents”). 
Buyer shall instruct Escrow Agent to deliver a copy of the Title Commitment and
the Title Documents to Seller concurrent with its delivery of the same to Buyer.

 

4.2                  Certain Exceptions to Title.  Buyer shall have the right to
object in writing to any title matters that are not Permitted Exceptions and
that are disclosed in the Title Commitment (herein collectively called “Liens”)
on or before the tenth (10th) day prior to the expiration of the Due Diligence
Period.  Buyer’s failure to disapprove the Liens in writing within such period
shall constitute Buyer’s approval of all such Liens.  All such Liens which are
timely objected to by Buyer shall be herein collectively called the “Title
Objections”.  Seller, in its sole and absolute discretion, may elect (but shall
not be obligated) to remove or cause to be removed, or insured over, at its
expense, any Title Objections, and shall be entitled to a reasonable adjournment
of the Closing for the purpose of such removal, which removal will be deemed
effected by, among other things, the issuance of title insurance reasonably
acceptable to Buyer eliminating or insuring against the effect of the Title
Objections.  Seller shall notify Buyer in writing within five (5) days after
receipt of Buyer’s notice of Title Objections (the “Title Cure Period”), whether
Seller elects to remove the same.  If Seller is unable to remove or endorse over
any Title Objections prior to the expiration of the Title Cure Period, or if
Seller elects not to remove one or more Title Objections by the expiration of
the Title Cure Period, Buyer may elect, as its sole and exclusive remedy
therefore, to either (a) terminate this Agreement on or before the end of the
Due Diligence Period, in which event the Deposit shall be paid to Buyer and,

 

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thereafter, the parties shall have no further rights or obligations hereunder
except for those obligations which expressly survive the termination of this
Agreement, or (b) waive, in writing, such Title Objections, in which event such
Title Objections shall be deemed additional “Permitted Exceptions” and the
Closing shall occur as herein provided without any reduction of or credit
against the Purchase Price.  If before the end of the Due Diligence Period,
Buyer elects to proceed with the transaction contemplated herein, then Buyer
shall be deemed to have elected to waive those Title Objections Seller elected
not to remove or endorse over and its right to terminate this Agreement pursuant
to this Section 4.2.  Notwithstanding the foregoing, Seller shall be obligated
at Closing to cause the release of the Liens of any financing obtained by Seller
which is secured by the Property other than the Loans.

 

4.3                  Additional Exceptions.  In the event the Title Commitment
is amended or updated after the expiration of the Due Diligence Period (each, a
“Title Commitment Update”), Buyer shall furnish Seller with a written statement
of approval or objections to any matter first raised in a Title Commitment
Update that affects title to the Real Property and that was not caused by Buyer
or any Licensee Parties within five (5) business days after its receipt of such
Title Commitment Update together with a legible copy of each new exception
raised therein (each, a “Title Commitment Update Review Period”).  Should Buyer
fail to notify Seller in writing of any objections to any matter first disclosed
in a Title Commitment Update prior to the expiration of the applicable Title
Commitment Update Review Period, as applicable, Buyer shall be deemed to have
approved such matters whereupon they shall become Permitted Exceptions. If,
however, Buyer objects to such new exception, then Seller shall have until
5:00 p.m. Pacific Time on the fifth (5th) business day after Seller’s receipt of
Buyer’s written objection in which to notify Buyer, in Seller’s sole discretion,
either (a) that Seller will remove the new disapproved exception(s) prior to the
Close of Escrow and, thereafter, Seller shall be entitled to a reasonable
adjournment of the Closing for the purpose of such removal, which removal will
be deemed effected by, among other things, the issuance of title insurance
reasonably acceptable to Buyer eliminating or insuring against the effect of the
Title Objections, or (b) that Seller will not remove the new disapproved
exception(s).  If Seller does not elect to do either (a) or (b), such silence
shall be conclusively deemed to constitute Seller’s election not to remove any
new exception(s) disapproved by Buyer.  If Seller elects not to remove any new
disapproved exception(s), whether by giving notice thereof or by failing to give
notice, then Buyer shall have until 5:00 p.m. Pacific Time on the fifth (5th)
business day after Seller’s election (or deemed election) not to cure the
disapproved exception in which to elect (y) to terminate this Agreement by
written notice to Seller and Escrow Holder or (z) to waive in writing Buyer’s
previous disapproval of (and thereby accept) any items that Seller does not
elect to remove.  Buyer’s failure to terminate this Agreement by delivering
written notice of such election on or before 5:00 p.m. Pacific Time on the fifth
(5th) business day after Seller’s election or deemed election not to remove the
new disapproved exception shall be deemed to constitute Buyer’s irrevocable
election to waive Buyer’s previous disapproval whereupon the disapproved
exception shall become a Permitted Exception.  If, however, Buyer does elect to
terminate this Agreement, then this Agreement shall so terminate, the Deposit
shall be returned to Buyer and neither party shall have any further obligations
to the other hereunder except to the extent any such obligation expressly
survives the termination of this Agreement.

 

4.4                  Survey Objections.  Buyer shall have the right to obtain a
new survey or an update of any survey provided by Seller (the “Survey”) at its
sole cost and expense. 

 

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Promptly upon receipt of the Survey, Buyer, at its sole cost and expense, shall
deliver a copy to Seller and to Escrow Agent.  No later than ten (10) days prior
to the expiration of the Due Diligence Period, Buyer shall have the right to
notify Seller, in writing, of any matters disclosed on the Survey that are not
Permitted Exceptions and that affect Buyer’s title to the Property.  Buyer’s
failure to obtain the Survey or disapprove any matters disclosed by the Survey
on or before such time shall constitute Buyer’s approval of the matters
disclosed by the Survey or matters that would have been disclosed had Buyer
obtained a Survey.  All such matters which are timely objected to by Buyer shall
be herein collectively called the “Survey Objections”.  Seller, in its sole and
absolute discretion, may within five (5) days of receipt of Buyer’s notice of
Survey Objection elect (but shall not be obligated) to remove or cause to be
removed, or insured over, at its expense, any Survey Objections, and shall be
entitled to a reasonable adjournment of the Closing for the purpose of such
removal, which removal will be deemed effected by, among other things, the
issuance of title insurance reasonably acceptable to Buyer eliminating or
insuring against the effect of the Survey Objections.  Seller shall notify Buyer
in writing within five (5) days after receipt of Buyer’s notice of Survey
Objections (the “Survey Cure Period”), if any, whether Seller elects to cure the
same.  If Seller is unable to cure or endorse over any Survey Objections prior
to the expiration of the Survey Cure Period, or if Seller elects not to remove
one or more Survey Objections, Buyer may elect, as its sole and exclusive remedy
therefore, to either (a) terminate this Agreement by giving written notice to
Seller and Escrow Agent on or before the end of the Due Diligence Period, in
which event the Deposit shall be paid to Buyer and, thereafter, the parties
shall have no further rights or obligations hereunder except for those
obligations which expressly survive the termination of this Agreement, or
(b) waive, in writing, such Survey Objections, in which event the Closing shall
occur as herein provided without any reduction of or credit against the Purchase
Price.  If before the end of the Due Diligence Period, Buyer elects to proceed
with the transaction contemplated herein, then Buyer shall be deemed to have
elected to waive those Survey Objections Seller elected not to cure and its
right to terminate this Agreement pursuant to this Section 4.4.

 

4.5                  Title Insurance.  At Closing, the Title Company shall issue
to Buyer or be irrevocably committed to issue to Buyer a CLTA standard coverage
form title policy (the “Title Policy”) in the amount of the Purchase Price,
insuring that fee simple title to the Land is vested in Buyer subject only to
the Permitted Exceptions.  Buyer shall be entitled to request that the Title
Company provide ALTA extended coverage and/or such endorsements (or amendments)
to the Title Policy as Buyer may reasonably require and/or increased liability
as Buyer may reasonably require, provided that the same shall (a) be at no cost
to Seller, (b) impose no additional liability on Seller, (c) not be a condition
to the Closing and, accordingly, if Buyer is unable to obtain any of the
foregoing, Buyer shall nevertheless be obligated to proceed to close the
transaction contemplated by this Agreement without reduction of or set off
against the Purchase Price, and (d) the Closing shall not be delayed as a result
of Buyer’s request.

 

4.6                  Contracts.  On or before the tenth (10th) day prior to the
expiration of the Due Diligence Period, Buyer shall have the right to
disapprove, by written notice to Seller, any of the Contracts that are not
terminable upon thirty (30) days or less prior notice.  If Buyer desires to have
any Contract terminated that is not expressly terminable upon thirty (30) days’
or less notice (any, a “Non-Terminable Contract”), then Buyer shall notify
Seller in writing of any such Non-Terminable Contract that it desires to have
terminated.  Within five (5) days following receipt of any such Buyer notice,
Seller shall notify Buyer in writing whether Seller, in

 

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its sole and absolute discretion, is willing to terminate such Non-Terminable
Contract.  If Seller notifies Buyer that it is unwilling to terminate any such
Non-Terminable Contracts, then Buyer shall have the right, until the expiration
of the Due Diligence Period, either to waive in writing its prior disapproval of
the corresponding Non-Terminable Contract(s) or to terminate this Agreement by
giving written notice to Seller and Escrow Holder as Buyer’s sole and exclusive
remedy, in which event the Deposit shall be returned to Buyer.  If Buyer fails
to waive any such prior disapproval and does not terminate this Agreement before
the expiration of the Due Diligence Period, then Buyer shall be deemed to have
waived its prior disapproval of the corresponding Non-Terminable Contract(s). 
All of the Contracts which are either terminable on thirty (30) days or less
notice or which are not disapproved by Buyer, or with respect to which Buyer’s
initial disapproval is waived or deemed to be waived hereunder, are referred to
herein as the “Approved Contracts.”

 

ARTICLE 5

 

REMEDIES

 

5.1                  Permitted Termination; Seller Default.  If the sale of the
Property is not consummated due to the permitted termination of this Agreement
by Buyer as herein expressly provided, then the Deposit shall be returned to
Buyer and Buyer will have no liability hereunder except as otherwise expressly
stated in this Agreement.  If the sale of the Property is not consummated due
solely to Seller’s material default hereunder that is not cured within all
applicable notice and cure periods, then Buyer shall have the right, to elect,
as its sole and exclusive remedy, to (a) terminate this Agreement by written
notice to Seller, promptly after which the Deposit shall be returned to Buyer,
(b) waive the default and proceed to close the transaction contemplated herein,
or (c) provided that all of the conditions to Seller’s obligations to close have
been satisfied and so long as Buyer is not then in default of any of its
material obligations under this Agreement, seek specific performance of Seller’s
obligations under this Agreement and record and maintain against the Property a
notice of lis pendens in accordance with applicable law if Buyer further
satisfies and continues to satisfy each of the following obligations: (i) Buyer
shall have reasonably demonstrated that it is prepared to deliver into escrow
all funds required by this Agreement in order for the Closing to occur, Buyer
shall have deposited all funds required by this Agreement in order for the
Closing to occur, and Buyer shall be ready and willing in all other respects to
close escrow in accordance with the terms and conditions of this Agreement; and
(ii) Buyer shall have filed an action for specific performance (a “Specific
Performance Action”) within sixty (60) days of the date the Closing was to have
occurred.  Notwithstanding anything to the contrary contained herein, Seller
shall not be deemed in default unless and until Buyer provides Seller with
written notice of such default and Seller fails to cure such default within five
(5) business days of its receipt of such written notice.

 

5.2                  Buyer Default; Liquidated Damages.  IF THE SALE IS NOT
CONSUMMATED DUE TO ANY DEFAULT BY BUYER HEREUNDER AND BUYER FAILS TO CURE SUCH
BREACH WITHIN FIVE (5) BUSINESS DAYS AFTER BUYER’S RECEIPT OF WRITTEN NOTICE
FROM SELLER SPECIFYING SUCH BREACH (PROVIDED, HOWEVER, THAT THE FOREGOING NOTICE
AND CURE RIGHTS SHALL NOT APPLY TO BUYER’S FAILURE TO CLOSE ON THE CLOSING
DATE), THEN SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED

 

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DAMAGES, WHICH RETENTION SHALL OPERATE TO TERMINATE THIS AGREEMENT AND RELEASE
BUYER FROM ANY AND ALL LIABILITY HEREUNDER, EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS AGREEMENT.  THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL
DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER’S
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.  BY
PLACING THEIR INITIALS BELOW, 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 PARTIES ACKNOWLEDGE THAT SUCH PAYMENT OF
THE DEPOSIT IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF
CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO SELLER UNDER CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND
1677.  THE FOREGOING IS NOT INTENDED TO LIMIT BUYER’S SURVIVING OBLIGATIONS
UNDER THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, ALL OF BUYER’S INDEMNITIES
IN THIS AGREEMENT.

 

Initials:

 

Seller

RO, SDS

 

Buyer

MA

 

 

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF SELLER

 

6.1                  Representations and Warranties of Seller.  Subject to the
provisions of this Agreement including, without limitation, Sections 6.2, 6.3,
and Article 7, Seller makes the following representations and warranties with
respect to the Property:

 

6.1.1       Status.  Seller is a limited liability company organized or formed,
validly existing and in good standing under the laws of the State of California.

 

6.1.2       Authority.  The execution and delivery of this Agreement and the
performance of Seller’s obligations hereunder have been or will be duly
authorized by all necessary action on the part of Seller, and this Agreement
constitutes the legal, valid and binding obligation of Seller, subject to
equitable principles and principles governing creditors’ rights generally.

 

6.1.3       Non-Contravention.  The execution and delivery of this Agreement by
Seller and the consummation by Seller of the transactions contemplated hereby
will not, to Seller’s knowledge (i) violate any Laws or (ii) conflict with,
result in a breach of, or constitute a default under the organizational
documents of Seller, any note or other evidence of indebtedness, any mortgage,
deed of trust or indenture, or any lease or other material agreement

 

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or instrument to which Seller is a party or by which Seller may be bound and, in
either case, that would have a material and adverse affect on Seller’s ability
to consummate the transactions contemplated by this Agreement.

 

6.1.4       Non-Foreign Entity.  Seller is not a “foreign person” or “foreign
corporation” as those terms are defined in the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.

 

6.1.5       Consents.  No consent, waiver, approval or authorization is required
from any person or entity (that has not already been obtained or will be
obtained) in connection with the execution and delivery of this Agreement by
Seller or the performance by Seller of the transactions contemplated hereby.

 

6.1.6       Leases.  To Seller’s knowledge, true, correct and complete copies of
the Leases in Property Manager’s files have been or will be delivered or made
available to Buyer in accordance with Section 3.2.1 above.  Except as set forth
in the Rent Roll or otherwise disclosed to Buyer by Seller in writing prior to
the expiration of the Due Diligence Period, to Seller’s knowledge, the Leases
listed on the Rent Roll are in full force and effect as of the date set forth on
the Rent Roll.  To Seller’s knowledge, Seller has not received written notice of
any uncured default of Seller, as landlord, under any Lease.  Except as may be
set forth in the Rent Roll or otherwise disclosed to Buyer by Seller in writing
prior to the expiration of the Due Diligence Period, to Seller’s knowledge, no
Tenant has paid any rent, fees, or other charges for more than one month in
advance.  Seller is the landlord under each of the Leases and, except for the
security interests granted in connection with the Loans encumbering the
Property, has not assigned, mortgaged, pledged or otherwise encumbered any of
its rights or interests under the Leases.

 

6.1.7       Contracts.  To Seller’s knowledge, there are no Contracts except for
the Contracts specifically designated in Exhibit B attached hereto.  To Seller’s
knowledge, true, correct and complete copies of the Contracts in Property
Manager’s files have been or will be delivered to Buyer in accordance with
Section 3.2.1, above.  To Seller’s knowledge, Seller has not received written
notice of any uncured default of Seller under any Contracts.

 

6.1.8       Notice of Violation.  Except as may be disclosed in the Due
Diligence Items, to Seller’s knowledge, Seller has not received written notice
from any Governmental Entity having jurisdiction over the Property that the
Property is in violation of any Law regulating the operation or use thereof.

 

6.1.9       Litigation.  To Seller’s knowledge, there is no legal action, suit,
proceeding or claim affecting Seller or the Land, Improvements or Personal
Property or any portion thereof relating to or arising out of the ownership,
operation, use or occupancy of the Property being prosecuted in any court or by
or before any federal, state, county or municipal department, commission, board,
bureau or agency or other Governmental Entity.

 

6.1.10     Special Assessments.  To Seller’s knowledge and except as may
otherwise be disclosed by the Due Diligence Items or the Title Documents, Seller
has received

 

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no written notice of any pending improvement liens or special assessments to be
made against the Property by any governmental authority.

 

6.1.11     No Contracts.  Except for this Agreement, there are no options,
contracts or other obligations outstanding for the sale, exchange or transfer of
the Property or any portion thereof or the business operated thereon.

 

6.1.12     Environmental Issues.  To Seller’s knowledge, Seller has not received
any written notice from any Governmental Entity that there is a presence,
release, threat of release, placement on or in the Property, of any Hazardous
Materials in violation of any Laws.

 

6.1.13     Prohibited Persons and Transactions.  Neither Seller nor any of its
affiliates, nor, to Seller’s knowledge, any of their respective partners,
members, shareholders or other equity owners, and none of their respective
employees, officers, directors, representatives or agents 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 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 is not and will not engage in any
dealings or transactions or be otherwise associated with such persons or
entities.

 

6.2                  Seller’s Knowledge.  For purposes of this Agreement and any
document delivered at Closing, whenever the phrase “to Seller’s knowledge,” or
the “knowledge” of Seller or words of similar import are used, they shall be
deemed to refer to facts within the actual knowledge only of Steve Gilmore and
Gina Costantino, the representatives or employees of the Seller who are most
knowledgeable as to the status of the Property of Seller and no others, as of
the Effective Date, without duty of inquiry whatsoever.  Buyer acknowledges that
the individual named above is named solely for the purpose of defining and
narrowing the scope of Seller’s knowledge and not for the purpose of imposing
any liability on or creating any duties running from such individuals to Buyer. 
Buyer covenants that it will bring no action of any kind against such
individual, any shareholder, partner or member of Seller related to or arising
out of these representations and warranties.

 

6.3                  Seller’s Maximum Aggregate Liability.  Notwithstanding any
provision to the contrary contained in this Agreement or any documents executed
by Seller pursuant hereto or in connection herewith, the representations and
warranties of Seller set forth in Section 6.1, together with Seller’s liability
for any breach of any of Seller’s interim operating covenants under Article 8,
shall survive the Closing and not be merged into the deed for a period of nine
(9) months.  Buyer shall have no right to bring any action against Seller as a
result of any untruth or inaccuracy of such representations and warranties, or
any such breach, unless (a) Buyer serves a written claim on Seller within such
nine (9) month period, (b) Buyer commences and serves an action against Seller
within thirty (30) days after Buyer gives such notice, and (c) the aggregate
amount of all liability and losses arising out of any such untruth or
inaccuracy, or any such breach, exceeds $25,000.  In addition, in no event shall
Seller’s liability for all such breaches exceed, in the aggregate, $800,000. 
Seller shall have no liability with respect to any of

 

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Seller’s representations, warranties and covenants herein if, prior to the
Closing, Buyer has actual knowledge of any breach of a representation, warranty
or covenant of Seller herein, or Buyer obtains actual knowledge (from whatever
source, including, without limitation, any of the Due Diligence Items, as a
result of Buyer’s Due Diligence, the inclusion of any information in or written
disclosure by Seller or Seller’s agents and employees) that contradicts any of
Seller’s representations and warranties herein, and Buyer nevertheless
consummates the transaction contemplated by this Agreement.  The provisions of
this Section 6.3 shall expressly survive the Close of Escrow and shall not
merger into the Deed or any of the other closing documents hereunder.

 

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF BUYER

 

7.1                  Buyer’s Representations and Warranties.  Buyer represents
and warrants to Seller the following:

 

7.1.1       Status.  Buyer is a limited partnership organized or formed, validly
existing and in good standing under the laws of the State of Delaware and has,
or will have at Closing, the authority to transact business in the State of
California.

 

7.1.2       Authority.  The execution and delivery of this Agreement and the
performance of Buyer’s obligations hereunder have been or will be duly
authorized by all necessary action on the part of Buyer and this Agreement
constitutes the legal, valid and binding obligation of Buyer, subject to
equitable principles and principles governing creditors’ rights generally.

 

7.1.3       Non-Contravention.  The execution and delivery of this Agreement by
Buyer and the consummation by Buyer of the transactions contemplated hereby will
not, to Buyer’s knowledge, violate any Law or conflict with, result in a breach
of, or constitute a default under the organizational documents of Buyer, any
note or other evidence of indebtedness, any mortgage, deed of trust or
indenture, or any lease or other material agreement or instrument to which Buyer
is a party or by which it is bound and, in either case, that would have a
material and adverse affect on Buyer’s ability to consummate the transaction
contemplated by this Agreement.

 

7.1.4       Consents.  No consent, waiver, approval or authorization is required
from any person or entity (that has not already been obtained or will be
obtained) in connection with the execution and delivery of this Agreement by
Buyer or the performance by Buyer of the transactions contemplated hereby.

 

7.1.5       Solvency.  Buyer will not be rendered insolvent in connection with,
or as a result of, the performance by Buyer of its obligations hereunder or the
consummation of the transactions contemplated hereby.

 

7.1.6       Prohibited Persons and Transactions.  Neither Buyer nor any of its
affiliates, nor, to Buyer’s knowledge without any duty to make diligent inquiry,
any of their respective partners, members, shareholders or other equity owners,
and none of their respective

 

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employees, officers, directors, representatives or agents 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 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 is not and will not engage in any
dealings or transactions or be otherwise associated with such persons or
entities.

 

7.1.7       Sophisticated Buyer.  Buyer is an experienced purchaser, owner and
operator of multi-family housing communities and is familiar with the kinds of
legal, economic and other issues that typically impact one’s ability to own and
operate such communities.

 

Seller covenants that it will bring no action of any kind against any
individual, shareholder, partner or member of Buyer related to, or arising out
of, these representations and warranties.

 

7.2                  Buyer’s Independent Investigation.

 

7.2.1       Investigations.  By its election not to deliver the Disapproval
Notice, Buyer represents and warrants that it has been given a full opportunity
to inspect and investigate each and every aspect of the Property, either
independently or through agents of Buyer’s choosing, including, without
limitation:

 

(a)           All matters relating to title, together with all governmental and
other legal requirements such as taxes, assessments, zoning, accessibility, rent
control, use permit requirements, and building codes;

 

(b)           The physical condition and aspects of the Property, including,
without limitation, the interior, the exterior, the square footage within the
Improvements, the structure, the paving, the utilities, and all other physical
and functional aspects of the Property, including, without limitation, any
seismic or retrofitting requirements and an examination for the presence or
absence of Hazardous Materials, which shall be performed or arranged by Buyer at
Buyer’s sole expense;

 

(c)           Any easements and/or access rights affecting the Property;

 

(d)           The Leases and all matters in connection therewith;

 

(e)           The Contracts, the Licenses and Permits, the Commission Agreements
and any other documents or agreements of significance affecting the Property;
and

 

(f)            All other matters of material significance affecting the Property
or delivered to Buyer by Seller in accordance with Article 3 of this Agreement.

 

7.2.2       AS-IS SALE.  EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES
OF SELLER UNDER SECTION 6.1,

 

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ABOVE, BUYER ACKNOWLEDGES AND AGREES THAT NEITHER SELLER, NOR ANYONE ACTING FOR
OR ON BEHALF OF SELLER INCLUDING, WITHOUT LIMITATION, BROKER, HAS MADE ANY
REPRESENTATIONS, WARRANTIES, OR PROMISES TO BUYER, OR TO ANYONE ACTING FOR OR ON
BEHALF OF BUYER, CONCERNING ANY ASPECT OF THE PROPERTY INCLUDING, WITHOUT
LIMITATION, (A) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY,
INCORPORATED INTO THE PROPERTY; (B) COMPLIANCE WITH TITLE III OF THE AMERICANS
WITH DISABILITIES ACT OF 1990 AND ALL SIMILAR STATE AND LOCAL ACCESSIBILITY
LAWS; (C) COMPLIANCE WITH THE FAIR HOUSING ACT AND ALL SIMILAR STATE AND LOCAL
LAWS; (D) COMPLIANCE WITH ANY “SOFT STORY” RETROFIT STANDARDS; (E) COMPLIANCE
WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES,
REGULATION, ORDERS OR REQUIREMENTS, INCLUDING, WITHOUT LIMITATION, CALIFORNIA
HEALTH & SAFETY CODE, THE FEDERAL WATER POLLUTION CONTROL ACT, THE FEDERAL
RESOURCE CONSERVATION AND RECOVERY ACT, THE U.S. ENVIRONMENTAL PROTECTION AGENCY
REGULATIONS AT 40 C.F.R., PART 261, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE RESOURCE CONSERVATION
AND RECOVERY ACT OF 1976, THE CLEAN WATER ACT, THE SAFE DRINKING WATER ACT, THE
HAZARDOUS MATERIALS TRANSPORTATION ACT, THE TOXIC SUBSTANCE CONTROL ACT, AND
REGULATIONS PROMULGATED UNDER ANY OF THE FOREGOING; (F) THE PRESENCE OR ABSENCE
OF HAZARDOUS MATERIALS OR MOLD AT, ON, UNDER, OR ADJACENT TO THE PROPERTY;
(G) THE CONTENT, COMPLETENESS OR ACCURACY OF THE DUE DILIGENCE ITEMS, TITLE
COMMITMENT, SURVEY OR UPDATED SURVEY; (H) THE SIZE AND/OR DIMENSIONS OF ANY OF
THE IMPROVEMENTS, AND (I) THE CONFORMITY OF THE IMPROVEMENTS TO ANY PLANS OR
SPECIFICATIONS FOR THE PROPERTY, INCLUDING ANY PLANS AND SPECIFICATIONS THAT
MAY HAVE BEEN OR MAY BE PROVIDED TO BUYER.  BUYER FURTHER ACKNOWLEDGES AND
AGREES THAT THE PROPERTY WILL BE INDEPENDENTLY INVESTIGATED BY BUYER TO ITS FULL
SATISFACTION PRIOR TO EXPIRATION OF THE DUE DILIGENCE PERIOD, OR THAT BUYER WILL
TERMINATE THIS AGREEMENT AS PROVIDED ABOVE, THAT BUYER WILL BE ACQUIRING THE
PROPERTY BASED SOLELY UPON AND IN RELIANCE ON ITS OWN INSPECTIONS, EVALUATIONS,
ANALYSES AND CONCLUSIONS, AND THAT SUBJECT TO SELLER’S EXPRESS OBLIGATIONS
HEREUNDER, BUYER WILL BE ACQUIRING THE PROPERTY IN ITS “AS-IS” CONDITION AND
STATE OF REPAIR INCLUSIVE OF ALL FAULTS AND DEFECTS, WHETHER KNOWN OR UNKNOWN,
AS MAY EXIST AS OF THE CLOSING, AND BUYER EXPRESSLY ASSUMES THE RISK THAT
ADVERSE PHYSICAL, ENVIRONMENTAL, FINANCIAL, LEGAL AND OTHER CONDITIONS MAY NOT
BE REVEALED BY BUYER’S INSPECTION OF THE PROPERTY.

 

BY INITIALING BELOW, THE BUYER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE
MEANING AND SIGNIFICANCE OF THIS SECTION 7.2.2 AND AGREES TO THE TERMS SET FORTH
HEREIN.

 

25

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Buyer: MA

 

7.3                  Buyer’s Release of Seller; Indemnity.

 

7.3.1       Seller Released From Liability.  Seller is hereby released from all
responsibility and liability to Buyer regarding the condition (including,
without limitation, its physical condition and its compliance with applicable
laws, and the presence in the soil, air, structures and surface and subsurface
waters, of Hazardous Materials or substances that have been or may in the future
be determined to be toxic, hazardous, undesirable or subject to regulation and
that may need to be specially treated, handled and/or removed from the Property
under current or future federal, state and local laws, regulations or
guidelines), valuation, salability or utility of the Property, or its
suitability for any purpose whatsoever except to the extent that such
responsibility or liability is the result of the material inaccuracy (if any) of
Seller’s representations under Section 6.1 hereof.

 

7.3.2       Buyer’s Waiver of Objections.  Buyer acknowledges that its failure
to deliver the Disapproval Notice shall constitute Buyer’s representation and
warranty to Seller that, prior to the expiration of the Due Diligence Period, it
will have inspected the Property, observed its physical characteristics and
existing conditions and had, or will have, the opportunity to conduct such
investigation and study on and of said Property and adjacent areas as it deemed
necessary, and subject to Seller’s responsibility for any breach of the
warranties and representations contained in Section 6.1 of this Agreement,
hereby waives any and all objections to, claims, causes of action or complaints
(including but not limited to actions based on federal, state or common law and
any private right of action under CERCLA, RCRA or any other state and federal
law to which the Property is or may be subject) regarding physical
characteristics and existing conditions, including without limitation structural
and geologic conditions, subsurface soil and water conditions and solid and
hazardous waste and Hazardous Materials on, under, adjacent to or otherwise
affecting the Property.  Buyer further hereby assumes the risk of changes in
applicable laws and regulations including, without limitation, those relating to
past, present and future environmental conditions on the Property, and subject
to Seller’s specific representations and warranties contained in Section 6.1 of
this Agreement, the risk that adverse physical characteristics and conditions,
including without limitation the presence of Hazardous Materials or other
contaminants, may not be revealed by its investigation.

 

7.3.3       Civil Code Section 1542 Waiver.  In connection with the releases and
waivers set forth in this Section 7.3, Buyer, on behalf of itself, its
successors, assigns and successors-in-interest and such other persons and
entities, waives the benefit of California Civil Code Section 1542, which
provides as follows:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his settlement with the
debtor.”

 

Buyer’s Initials:

MA

 

 

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7.3.4       Indemnity.  Subject to Section 6.1 hereof, Buyer and its successors
and assigns (the “Indemnitor”) agree to indemnify, protect, defend and hold
Seller, Seller’s Affiliates and each of their respective members, partners,
shareholders, officers, directors, managers, employees and agents harmless from
any and all Losses, including without limitation suits and claims brought by
third parties related to, or in any way connected to the condition of the
Property arising from events occurring subsequent to Closing, including, without
limitation, (a) the presence of Hazardous Materials thereon, (b) the matters
released by Buyer above, (c) Buyer’s use, ownership, development, and sale of
the Property, and (d) any claims or demands asserted or alleged by any
purchasers or tenants from Buyer of any portion of the Property or any
successors or assigns of any such persons.  In addition, Indemnitor agrees to
indemnify, protect, defend and hold Seller, Seller’s Affiliates and each of
their respective members, partners, shareholders, officers, directors, managers,
employees and agents harmless from any and all Losses, including suits and
claims brought by third parties, related to, arising from or in any way
connected to any inaccuracy in or breach of any representations or warranties of
Buyer under this Agreement, or any breach or default by Buyer under the
provisions of this Agreement that state that they are to survive the Closing or
the earlier termination of this Agreement.  Indemnitor’s obligations under this
Section shall survive the Closing and the delivery of the Deed.

 

7.3.5       Survival.  The foregoing waivers, releases and indemnities by Buyer
shall survive either (a) the Closing and the recordation of the Deed, and shall
not be deemed merged into the Deed upon its recordation, or (b) any termination
of this Agreement.

 

ARTICLE 8

LEASES; MAINTENANCE OF PROPERTY

 

From the date hereof until the Closing, and except as otherwise consented to or
approved by Buyer, Seller covenants and agrees with Buyer as follows:

 

8.1                  New Leases; Lease Modifications.  After the Effective Date
and prior to the end of the Due Diligence Period, Seller, in its sole
discretion, and without Buyer’s consent shall have the right to enter into any
New Lease or amend, modify and/or extend any New Lease or any Pre-Effective Date
Lease it deems advisable.  Seller shall provide Buyer with notice thereof and an
executed copy of any such New Lease or amendment, modification or extension
promptly after the execution and delivery thereof, but in no event later than
the next to last day of the Due Diligence Period.  Buyer’s sole remedy in the
event any New Lease is executed or if any New Lease or Pre-Effective Date Lease
is amended, modified or extended by Seller after the Effective Date and prior to
the end of the Due Diligence Period shall be to terminate this Agreement on or
before the end of the Due Diligence Period in accordance with Section 3.8.  No
later than one (1) business day prior to the expiration of the Due Diligence
Period, Seller shall provide Buyer with its then-current rent and concession
schedule (the “Lease Guidelines”).  The Lease Guidelines shall be in the form of
Exhibit J attached hereto and incorporated herein.  Provided that Buyer does not
elect to terminate this Agreement on or before the expiration of the Due
Diligence Period, after the end of the Due Diligence Period Seller shall not
enter into a New Lease unless such New Lease is on Seller’s standard residential
lease form and in compliance with the Lease Guidelines unless Seller has
obtained Buyer consent in accordance with Section 8.4

 

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below; modify or amend any Pre-Effective Date Lease or any New Lease entered
into prior to the end of the Due Diligence Period except pursuant to the
exercise by a Tenant of a renewal, extension or other right contained in such
Tenant’s Lease; consent to any assignment or sublease in connection with any
Pre-Effective Date Lease or New Lease; or remove a Tenant under any
Pre-Effective Date Lease or New Lease, whether by summary proceedings or
otherwise, except by reason of a default of the Tenant under the subject
Pre-Effective Lease or New Lease.

 

8.2                  Lease Expenses.  At Closing, Buyer shall reimburse Seller
for any and all Reimbursable Lease Expenses to the extent that the same have
been paid by Seller prior to Closing.  In addition, at Closing, Buyer shall
assume Seller’s obligations to pay, when due (whether on a stated due date or by
acceleration) any Reimbursable Lease Expenses unpaid as of the Closing, and
Buyer hereby agrees to indemnify, defend and hold Seller harmless from and
against any and all claims for such Reimbursable Lease Expenses which remain
unpaid for any reason at the time of Closing, which obligations of Buyer shall
survive the Closing and shall not be merged therein.  Each party shall make
available to the other all Commission Agreements, records, bills, vouchers and
other data in such party’s control verifying Reimbursable Lease Expenses and the
payment thereof.

 

8.3                  Lease Enforcement.  Subject to the provisions of
Section 8.1 above, prior to the Closing Date, Seller shall have the right, but
not the obligation, to enforce the rights and remedies of the landlord under any
Pre-Effective Date Lease or New Lease, by summary proceedings or otherwise
(including, without limitation, the right to remove any Tenant), and to apply
all or any portion of any Tenant Deposits then held by Seller toward any loss or
damage incurred by Seller by reason of any defaults by Tenants, and the exercise
of any such rights or remedies shall not affect the obligations of Buyer under
this Agreement in any manner or entitle Buyer to a reduction in, or credit or
allowance against, the Purchase Price or give rise to any other claim on the
part of Buyer.

 

8.4                  Certain Interim Operating Covenants.  Seller covenants to
Buyer that Seller will operate the Property, from the Effective Date until
Closing or earlier termination of this Agreement as follows:  (i) continue to
operate, manage and maintain the Property in a good and workmanlike manner in
the ordinary course of Seller’s business and substantially in accordance with
Seller’s present practice, and will keep the Improvements and Personal Property
in good order and operating condition, subject to ordinary wear and tear and
further subject to Section 10.2 and cause all necessary repairs, renewals and
replacements to be promptly made which are required by the terms of the Leases;
(ii) maintain property insurance on the Property which is at least equivalent in
all material respects to the insurance policies covering the Property as of the
Effective Date; (iii) not enter into any new contract for the provision of goods
or services to or with respect to the Property other than in the ordinary course
of business or that is to terminate upon the Closing, or renew, extend, modify
or replace any of the Contracts unless such contract is an Approved Contract, is
a contract terminable as of the Closing Date or Buyer consents thereto in
writing, which approval shall not be unreasonably withheld, delayed or
conditioned; ((iv) advise Buyer promptly of any change in any applicable laws,
regulations, restrictions, rulings, or orders that might have a material adverse
change on the value or use of the Property by Buyer of which Seller obtains
written notice after the Effective Date and also advise Buyer promptly of any
litigation, arbitration or administrative hearing concerning or affecting the
Property which would have a material adverse effect on the value or use of the

 

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Property of which Seller obtains written notice after the Effective Date;
(v) subject to the prorations prescribed herein, cause to be paid all trade
accounts, costs and expenses of operation and maintenance of the Property
incurred and accruing or due prior to Closing; (vi) not knowingly take any
action, which action would have the effect of materially violating any of the
representations and warranties of Seller set forth in Section 6.1 of the
Agreement unless such action is required by any applicable Laws; (vii) without
the prior written consent of Buyer, not remove any equipment forming a part of
the Property except such as is replaced by Seller by an article of substantially
equal suitability and value, free and clear of any lien or security interest;
and (viii) if any apartment unit is vacated more than five business (5) days
prior to Closing, then prior to Closing return such unit to rentable condition
in accordance with Seller’s customary cleaning, painting, and repair standards
for vacant units (the condition of such an apartment unit after cleaning is
referred to herein as a “Rent Ready Condition”); provided if Seller fails to
return any such vacated unit to a Rent Ready Condition prior to Closing, or a
unit is vacated within five (5) business days of Closing and Seller fails to
return such unit to Rent Ready Condition by Closing, then at Closing Seller
shall credit Buyer an amount equal to the reasonably estimated cost to return
each such unit to a Rent Ready Condition, up to, but not to exceed, $1000.  In
addition, Seller shall terminate any leasing and/or management agreement with
the Property Manager or any affiliate of Seller with respect to the Property
effective as of the Closing Date and pay any and all costs and expenses of
termination thereof.

 

8.5                  Actions Prohibited.  Provided that Buyer elects not to
terminate this Agreement on or before the expiration of the Due Diligence
Period, then from and after the expiration of the Due Diligence Period Seller
shall not, without the prior written approval of Buyer:

 

8.5.1       make any material structural alterations or additions to the
Property except as (a) in the ordinary course of operating the Property,
(b) required for maintenance and repair which are required by the terms of the
Leases, (c) required by any of the Leases or the Contracts or (d) required by
this Agreement;

 

8.5.2       sell, transfer adversely encumber or adversely change the status of
title of all or any portion of the Property;

 

8.5.3       change or attempt to change, directly or indirectly, the current
zoning of the Land in a manner materially adverse to it; or

 

8.5.4       cancel, amend or modify, in a manner materially adverse to the
Property, any License or Permit held by Seller with respect to the Property or
any part thereof which would be binding upon Buyer after the Closing.

 

ARTICLE 9

 

CLOSING AND CONDITIONS

 

9.1                  Escrow Instructions.  Upon execution of this Agreement, the
parties hereto shall deposit two executed counterparts of this Agreement with
the Escrow Agent, and this Agreement shall serve as escrow instructions to the
Escrow Agent as the escrow holder for

 

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consummation of the purchase and sale contemplated hereby.  Seller and Buyer
agree to execute such reasonable additional and supplementary escrow
instructions as may be appropriate to enable the Escrow Agent to comply with the
terms of this Agreement; provided, however, that in the event of any conflict
between the provisions of this Agreement and any supplementary escrow
instructions, the terms of this Agreement shall control.

 

9.2                  Seller’s Conditions to Closing.  The Closing and Seller’s
obligations with respect to the transaction contemplated by this Agreement are
subject to the timely satisfaction or written waiver by the respective dates
designated below of the following conditions precedent for Seller’s benefit (the
“Seller Conditions Precedent”).

 

9.2.1       Buyer’s Deliveries.  On or before the Closing Date, Buyer shall have
delivered to Escrow Holder all of the funds and documents as provided in
Section 9.6 hereof.

 

9.2.2       Representations and Warranties.  All representations and warranties
of Buyer contained in this Agreement shall be true and correct in all material
respects as of the date made and as of the Closing Date with the same effect as
if those representations and warranties were made at and as of the Closing Date.

 

9.2.3       Performance.  As of the Closing Date, Buyer shall not be in material
default in the performance of any material covenant or agreement to be performed
by Buyer under this Agreement.

 

9.2.4       Loan Assumption.  Lender shall have agreed, by the Assumption
Approval Deadline, to consent to the assignment of Seller’s interest in the Loan
to Buyer and to release the Seller and Seller Guarantors from future liability
with respect to the Loan.

 

Neither Buyer nor Seller shall willfully or in bad faith act or fail to act for
the purpose of permitting any of Seller’s Conditions Precedent to fail.  Except
as otherwise provided herein, if any of the foregoing Seller Conditions
Precedent are not satisfied by the respective dates designated hereunder for any
reason other than a default by Seller or Buyer hereunder, this Agreement shall
terminate, the Deposit shall be returned to Buyer and, neither party shall have
any further rights or obligations under this Agreement except for those which
this Agreement expressly provides shall survive any termination.  Seller shall
have the right to waive any of the Seller Conditions Precedent, and the election
by Seller to proceed with the Closing shall be deemed Seller’s waiver of any
unsatisfied Seller Conditions Precedent to the extent any such Seller
Condition(s) Precedent has(have) not been previously satisfied or waived.

 

9.3                  Buyer’s Conditions to Closing.  The Closing and Buyer’s
obligation to consummate the transaction contemplated by this Agreement are
subject to the timely satisfaction or written waiver by the respective dates
designated below of the following conditions precedent for Buyer’s benefit (the
“Buyer Conditions Precedent”):

 

9.3.1       Seller’s Deliveries.  On or before the Closing Date, Seller shall
have delivered to Escrow Agent the documents described in Section 9.5.1 below.

 

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9.3.2       Representations and Warranties.  All representations and warranties
of Seller contained in Article 6 of this Agreement shall be true and correct in
all material respects as of the date made and, subject to the provisions of this
Agreement, shall remain true and correct in all material respects as of the
Closing Date and remade as of the Closing Date.

 

9.3.3       Performance.  As of the Closing Date, Seller shall not be in
material default in the performance of any material covenant or agreement to be
performed by Seller under this Agreement beyond all applicable notice and cure
periods.

 

9.3.4       Title Policy.  As of the Closing Date, the Title Company shall have
issued or irrevocably committed to issue the Title Policy to Buyer as provided
in Section 4.4 above.

 

9.3.5       Loan Assumption.  Lender shall have agreed as reflected in (a) and
(b) in Section 9.4.1 below, by the Assumption Approval Deadline, to consent to
the assignment of Seller’s interest in the Loan to Buyer.

 

Neither Buyer nor Seller shall willfully or in bad faith act or fail to act for
the purpose of permitting any of the Buyer Conditions Precedent to fail.  If any
of the Buyer Conditions Precedent set forth in this Agreement are not timely
satisfied for any reason other than a default by Seller or Buyer hereunder, this
Agreement shall terminate, the Deposit shall be returned to Buyer and neither
party shall have any further rights or obligations under this Agreement with
respect to the Property except for those which this Agreement expressly provides
shall survive any termination.  Notwithstanding the foregoing, Buyer shall have
the right to waive, in its sole and absolute discretion, any of the Buyer
Conditions Precedent, and the election by Buyer to proceed with the Closing with
the actual knowledge that a Buyer Condition Precedent has not been satisfied,
shall be deemed Buyer’s waiver of such Buyer Condition Precedent to the extent
any such Buyer Condition Precedent has not been previously satisfied or waived.

 

9.4                  Closing.

 

9.4.1       The closing hereunder (“Closing”) shall be held and delivery of all
items to be made at the Closing under the terms of this Agreement shall be made
through escrow at Escrow Agent’s office on the tenth (10th) business day after
(a) the receipt by Buyer and Seller of Lender’s approval of the assumption of
the Loan by Buyer and the release of the Seller and Seller Guarantors and
(b) Lender, Buyer and Seller have agreed on the terms and conditions of the
documents and instruments necessary to cause Buyer to assume the Loan and Lender
to release the Seller and Seller Guarantors (the “Closing Date”); provided,
however, that Buyer and Seller agree to use good faith efforts to agree on the
terms and conditions of such documents and instruments as soon as reasonably
practicable but Buyer shall not be required to agree to any material change in
Buyer’s reasonable discretion in the terms and conditions in the Loan
Documents.  Except as otherwise expressly provided in this Agreement, such date
may not be extended without the prior written approval of both Seller and
Buyer.  If the Closing has not occurred by ten (10) business days after the
Assumption Approval Deadline, then either party, so long as such party is not
then in material default of this Agreement beyond all applicable notice and cure
periods, if any, shall have the right to terminate this Agreement by delivering
written

 

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notice to the other party.  If this Agreement is so terminated, then the Deposit
shall be returned to Buyer if Buyer is not then in default hereof and neither
party shall have any liability to the other hereunder except to extent otherwise
expressly stated herein.

 

9.4.2       No later than 3:00 p.m. Pacific Time on the business day prior to
the Closing Date, Buyer shall deposit in escrow with the Escrow Agent the
Purchase Price (subject to adjustments described in Section 9.7), together with
all other costs and amounts to be paid by Buyer at the Closing pursuant to the
terms of this Agreement, by Federal Reserve wire transfer of immediately
available funds to an account to be designated by the Escrow Agent.  On the
Closing Date,  Buyer will cause the Escrow Agent to (i) pay to Seller by Federal
Reserve wire transfer of immediately available funds to an account designated by
Seller, the Purchase Price (subject to adjustments described in Section 9.7 or
otherwise hereunder), less any costs or other amounts to be paid by Seller at
Closing pursuant to the terms of this Agreement, and (ii) pay all appropriate
payees the other costs and amounts to be paid by Buyer at Closing pursuant to
the terms of this Agreement and  Seller will direct the Escrow Agent to pay to
the appropriate payees out of the proceeds of Closing payable to Seller, all
costs and amounts to be paid by Seller at Closing pursuant to the terms of this
Agreement as set forth on the Closing Statement.

 

9.5                  Seller’s Closing Documents and Other Items.

 

9.5.1       Not later than 3:00  p.m. Pacific Time, on the business day prior to
the Closing Date, Seller shall deposit into escrow the following items:

 

(a)           A duly executed and acknowledged Grant Deed in the form attached
hereto as Exhibit C (the “Deed”);

 

(b)           Two duly executed counterparts of a Bill of Sale in the form
attached hereto as Exhibit D (the “Bill of Sale”);

 

(c)           Two (2) duly executed counterparts of an Assignment and Assumption
of Leases in the form attached hereto as Exhibit E (the “Assignment and
Assumption of Leases”);

 

(d)           Two (2) duly executed counterparts of an Assignment and Assumption
of Contracts, Warranties and Guaranties, Licenses and Permits and Other
Intangible Property in the form attached hereto as Exhibit F (the “Assignment
and Assumption of Contracts”);

 

(e)           One (1) duly executed and acknowledged counterpart of the Covenant
Running With The Land.

 

(f)            An affidavit pursuant to Section l445(b)(2) of the Code, and on
which Buyer is entitled to rely, stating that Seller is not a “foreign person”
within the meaning of Section l445(f)(3) of the Code and a California 597-W
Certificate;

 

(g)           A generic notice addressed to the Tenants and signed by Seller in
the form attached hereto as Exhibit G (the “Tenant Notice”)that shall disclose
that the Property has been sold to Buyer and that, after the Closing, all rents
should be paid to Buyer;

 

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(h)           With respect to the assumption by Buyer of the Loan, such
documents, instruments and certificates required by Lender pursuant to the Loan
Documents (the “Assumption Documents”) to be delivered by Seller, any Seller
Guarantor or any Affiliate of the foregoing;

 

(i)            If applicable, duly completed and signed real estate transfer tax
declarations;

 

(j)            Such other documents as may be reasonably required by the Title
Company or as may be agreed upon by Seller and Buyer to consummate the purchase
of the Property as contemplated by this Agreement; and

 

(k)           Two (2) duly executed counterparts of the Closing Statement.

 

9.5.2       Seller’s Post Closing Deliveries.  As soon after the Closing as is
reasonably possible, Seller shall deliver to the offices of Buyer’s property
manager: all originals of the Leases and Approved Contacts (or copies if no
originals are available) and receipts for Tenant Deposits; all keys, if any,
used in the operation of the Property; and, if in Seller’s possession, a copy of
any “as-built” plans and specifications of the Improvements.  Seller shall
remove from the Property prior to the Closing all Computer Equipment, all active
delinquency files (excluding only those for current residents), all incident
reports and all employment files.

 

9.6                  Buyer’s Closing Documents and Other Items.  At or before
Closing, Buyer shall deposit into escrow the following items:

 

9.6.1       The balance of the Purchase Price and such additional funds as are
necessary to close this transaction;

 

9.6.2       Two (2) duly executed counterparts of the Bill of Sale;

 

9.6.3       Two (2) duly executed counterparts of the Assignment and Assumption
of Leases;

 

9.6.4       Two (2) duly executed counterparts of the Assignment and Assumption
of Contract;

 

9.6.5       One (1) duly executed and acknowledged counterpart of the Covenant
Running With The Land.

 

9.6.6       With respect to the assumption by Buyer of the Loan, such Assumption
Documents to be delivered by Buyer and/or any Replacement Guarantor.

 

9.6.7       Documentation to establish to Seller’s and Escrow Holder’s
reasonable satisfaction the due authority of Buyer’s acquisition of the Property
and Buyer’s delivery of the documents required to be delivered by Buyer pursuant
to this Agreement including, but not limited to, the organizational documents of
Buyer, as they may have been amended from time to time, resolutions of Buyer and
incumbency certificates of Buyer;

 

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9.6.8       If applicable, duly completed and signed real estate transfer tax
declarations;

 

9.6.9       Such other documents as may be reasonably required by the Title
Company or as may be agreed upon by Seller and Buyer to consummate the purchase
of the Property as contemplated by this Agreement; and

 

9.6.10     Two (2) duly executed counterparts of the Closing Statement.

 

9.7                  Prorations and Closing Costs.

 

9.7.1       Prorations.

 

(a)           Seller and Buyer agree to adjust, as of 11:59 p.m. on the day
immediately preceding the Closing Date (the “Proration Time”) on the then
applicable six (6) month real property tax billing period, the following
(collectively, the “Proration Items”):  real estate and personal property taxes
and assessments (subject to the terms of Section 9.7.1(b) below), utility bills
(except as hereinafter provided), and collected Rents (subject to the terms of
Section 9.7.1(b) below) payable by the owner of the Property.  Seller will be
charged and credited for the amounts of all of the Proration Items relating to
the period up to and including the Proration Time, and Buyer will be charged and
credited for all of the Proration Items relating to the period after the
Proration Time. Such preliminary estimated Closing prorations shall be set forth
on a preliminary closing statement to be prepared by Seller and submitted to
Buyer for Buyer’s approval prior to the Closing Date (the “Closing Statement”). 
The Closing Statement, once agreed upon, shall be signed by Buyer and Seller and
delivered to the Escrow Agent for purposes of making the preliminary proration
adjustment at Closing subject to the final cash settlement provided for below. 
The preliminary proration shall be paid at Closing by Buyer to Seller (if the
preliminary prorations result in a net credit to Seller) or by Seller to Buyer
(if the preliminary prorations result in a net credit to Buyer) by increasing or
reducing the cash to be delivered by Buyer in payment of the Purchase Price at
the Closing.  If the actual amounts of the Proration Items are not known as of
the Proration Time, the prorations will be made at Closing on the basis of the
best evidence then available; thereafter, when actual figures are received (not
to exceed 120 days after closing), re-prorations will be made on the basis of
the actual figures, and a final cash settlement will be made between Seller and
Buyer.  No prorations will be made in relation to insurance premiums, and
Seller’s insurance policies will not be assigned to Buyer.  The provisions of
this Section 9.7.1(a) will survive the Closing for a period of twelve (12)
months.

 

(b)           Buyer will receive a credit on the Closing Statement for the
prorated amount (as of the Proration Time) of all Rent previously paid to or
collected by Seller and attributable to any period following the Proration
Time.  Rents are “Delinquent” when they were due prior to the Closing Date, and
payment thereof has not been made on or before the Closing Date.  Delinquent
Rents will not be prorated.  All sums collected by Buyer from and after Closing
from each Tenant will be applied first to current amounts owed by such Tenant
and then to Delinquent Rent owed by such Tenant to the extent not previously
collected by Seller.  Buyer shall deliver to Seller all Delinquent Rent
collected hereunder on a monthly basis within five (5) days of the end of each
calendar month. Buyer shall not have an exclusive right to collect

 

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any sums due Seller from Tenant under the Leases and Seller hereby retains the
right to collect any sums due Seller from Tenants under the Leases for any sums
due Seller for period attributable to Seller’s ownership of the Property;
provided, however, Seller shall not be permitted to commence or pursue any legal
proceedings including eviction against any current Tenant.  The provisions of
this Section 9.7.1(b) will survive the Closing.

 

(c)           All ad valorem real estate and personal property taxes with
respect to the Property shall be prorated as of the Proration Time on a cash
basis for the calendar year in which the Closing occurs, regardless of the year
for which such taxes are assessed.

 

(d)           Water, gas, steam, electricity and other public utility charges
will be paid by the Seller to the utility company to the Closing Date.  The
Seller shall arrange for a final reading of all utility meters (covering gas,
water, steam and electricity) as of the Closing.  To the extent required by the
applicable utility company to maintain continuity of service to the Property,
Seller and Buyer shall jointly execute a letter to each of such utility
companies advising such utility companies of the termination of the Seller’s
responsibility for such charges for utilities furnished to the Property as of
the date of the Closing and commencement of the Buyer’s responsibilities
therefor from and after such date.  If a bill is obtained from any such utility
company as of the Closing, then Seller shall pay such bill on or before the
Closing.  If such bill shall not have been obtained on or before the Closing,
then Seller shall, upon receipt of such bill, pay all such utility charges as
evidenced by such bill or bills pertaining to the period prior to the Closing,
and the Buyer shall pay all such utility charges pertaining to the period
thereafter.  Any bill which shall be rendered which shall cover a period both
before and after the date of Closing shall be apportioned between the Buyer and
the Seller as of the Closing.  Seller will be entitled to all deposits presently
in effect with the utility providers, and Buyer will be obligated to make its
own arrangements for deposits with the utility providers.

 

(e)           Revenues (but not up-front payments), if any, arising out of
telephone booths, vending machines, washing machines or other income-producing
agreements shall be adjusted and prorated on an if, as and when collected
basis.  Without limiting the foregoing, Buyer expressly acknowledges and agrees
that the unit fee paid up-front by Comcast of California/Colorado/Texas/
Washington, Inc. (“Comcast”) under that certain Service Agreement by and between
Seller and Comcast dated October 25, 2007 shall not be prorated.

 

(f)            Buyer shall receive a credit against the Purchase Price at
Closing for all Tenant Deposits then outstanding under the Leases and for all
Rent paid in advance (to the extent not prorated as set forth in (b) above).  As
of the Closing, Buyer shall assume Seller’s obligations related to the Tenant
Deposits.  Buyer shall indemnify, defend, and hold Seller harmless from and
against all demands and claims made by Tenants arising out of the transfer or
disposition of such Tenant Deposits transferred to Buyer.  The provisions of
this Section 9.7.1(f) shall expressly survive the Closing.

 

(g)           Buyer shall receive a credit against the Purchase Price at Closing
for all payments due or owing under any Approved Contracts for periods prior to
the Closing Date, which amounts shall be prorated as of the Proration Time.  If
Seller has paid any

 

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amounts under any Approved Contracts for periods after the Proration Time, Buyer
shall pay such amounts to Seller at Closing in addition to the Purchase Price.

 

(h)           Seller shall receive a credit for any and all Reimbursable Lease
Expenses as set forth in Section 8.2 of this Agreement, to the extent that the
same have been paid by Seller prior to Closing.  Each party shall make available
to the other all Commission Agreements, records, bills, vouchers and other data
in such party’s control verifying Reimbursable Lease Expenses and the payment
thereof.

 

9.7.2       Closing Costs.  Seller shall pay (a) the county transfer taxes, and
(b) costs and charges customarily charged to sellers in accordance with common
escrow practices in the county in which the Property is located, other than
those costs and charges specifically required to be paid by Buyer hereunder. 
Buyer shall pay (a) the premium associated with the issuance of the Title Policy
including, without limitation, the premium of any extended coverage, any
coverage in excess of the Purchase Price and all endorsements Buyer may require
in accordance with Section 4.4, (b) Escrow Agent’s costs and fees, (c) the
recording fees required in connection with the transfer of the Property to
Buyer, and (d) any additional costs and charges customarily charged to buyers in
accordance with common escrow practices in the county in which the Property is
located, other than those costs and charges specifically required to be paid by
Seller hereunder.

 

9.8                  Broker.  Buyer hereby represents and warrants to Seller
that (a) Broker is only representing Seller in this transaction, (b) it did not
employ or use any broker or finder to arrange or bring about this transaction,
and (c) there are no claims or rights for brokerage commissions or finder’s fees
in connection with the transactions contemplated by this Agreement, other than
the commission (“Broker’s Commission”) required to be paid by Seller to Broker
pursuant to a separate agreement between Seller and Broker.  Seller hereby
represents and warrants to Buyer that Seller has not employed any broker with
respect to this transaction, other than Broker, and Seller shall only pay the
Broker’s Commission.  If any person brings a claim for a commission or finder’s
fee based upon any contact, dealings, or communication with Buyer in connection
with the transactions contemplated by this Agreement, other than Broker, then
Buyer shall defend Seller from such claim, and shall indemnify Seller and hold
Seller harmless from any and all costs, damages, claims, liabilities, or
expenses (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Seller with respect to the claim. If any person
brings a claim for a commission or finder’s fee against Seller based upon any
contact, dealings, or communication with Seller in connection with the
transactions contemplated by this Agreement, other than Broker, then Seller
shall defend Buyer from such claim, and shall indemnify Buyer and hold Buyer
harmless from any and all costs, damages, claims, liabilities, or expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
incurred by Buyer with respect to the claim.  The provisions of this Section 9.8
shall survive the Closing or, if the purchase and sale is not consummated, any
termination of this Agreement.

 

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ARTICLE 10

 

MISCELLANEOUS

 

10.1                Amendment and Modification.  This Agreement may be amended,
modified, or supplemented only by a written agreement signed by Buyer and
Seller.

 

10.2                Risk of Loss and Insurance Proceeds.

 

10.2.1     Minor Loss.  Buyer shall be bound to purchase the Property for the
full Purchase Price as required by the terms hereof, without regard to the
occurrence or effect of any damage to the Property or destruction of any
improvements thereon or condemnation of any portion of the Property, provided
that: (a) the cost to repair any such damage or destruction, or the diminution
in the value of the remaining Property as a result of a partial condemnation,
equals $500,000 or less, and (b) upon the Closing, there shall be a credit
against the Purchase Price due hereunder equal to the amount of any insurance
proceeds (other than business interruption or rental loss insurance applicable
to the period prior to Closing) or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
insurance deductible, less any sums expended by Seller directly toward the
restoration or repair of the Property.  If the proceeds or awards have not been
collected as of the Closing, then such proceeds (including business interruption
or rental loss insurance of Seller which would be applicable to any period
subsequent to Closing) or awards shall be assigned to Buyer, except to the
extent needed to reimburse Seller for sums expended prior to the Closing to
repair or restore the Property, without a reduction of the Purchase Price.

 

10.2.2     Major Loss.  If the amount of the damage or destruction or
condemnation as specified above exceeds $500,000, then Buyer may at its option,
to be exercised by written notice to Seller within ten (10) business days of
Seller’s notice of the occurrence of the damage or destruction or the
commencement of condemnation proceedings, terminate this Agreement.  Buyer’s
failure to elect to terminate this Agreement within said ten (10) business day
period shall be deemed an election by Buyer to consummate this purchase and sale
transaction.  If Buyer elects to terminate this Agreement within such ten
(10) business day period, the Deposit shall be returned to Buyer and neither
party shall have any further rights or obligations hereunder except as expressly
provided elsewhere in this Agreement.  If Buyer elects or is deemed to have
elected to proceed with the purchase, then upon the Closing, there shall be a
credit against the Purchase Price due hereunder equal to the amount of any
insurance proceeds (other than business interruption or rental loss insurance
applicable to the period prior to Closing) or condemnation awards collected by
Seller as a result of any such damage or destruction or condemnation, plus the
amount of any insurance deductible, less any sums expended by Seller directly
toward the restoration or repair of the Property.  If the proceeds or awards
have not been collected as of the Closing, then such proceeds (including
business interruption or rental loss insurance of Seller which would be
applicable to any period subsequent to Closing) or awards shall be assigned to
Buyer, except to the extent needed to reimburse Seller for sums expended prior
to the Closing to repair or restore the Property, without a reduction to the
Purchase Price.

 

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10.2.3     Insurance Proceeds Assignment.  With respect to the requirement of
Seller under Sections 10.2.1 and 10.2.2 above, to assign to Buyer the right to
receive insurance awards and payments to be due Seller, Seller agrees that in
the event that Seller’s insurance carrier(s) do not permit assignment thereof to
Buyer, Seller agrees to request and obtain from the insurance carrier(s) a
“policy endorsement” whereby Buyer shall be added as a “loss payee” under the
Seller’s policies effective as of the Closing Date.  Thereafter, Seller shall
use its good faith efforts to promptly pursue on behalf of Buyer and for Buyer’s
benefit such unpaid awards and payments including any payments under business
interruption or rental loss insurance applicable to any period subsequent to
Closing.

 

10.3                Notices.  All notices required or permitted hereunder shall
be in writing and shall be served on the parties at the following address:

 

If to Seller:

 

Waterford Apartments, LLC
c/o Shea Properties
130 Vantis, Ste. 200
Aliso Viejo, CA 92656
Attn: Kirk Roloff
Facsimile: (949) 389-7434
E-mail: kirk.roloff@sheaproperties.com

With copies to:

 

Waterford Apartments, LLC
c/o Shea Properties
130 Vantis, Ste. 200
Aliso Viejo, CA 92656
Attn: Julia Guizan, Esq.
Facsimile: (949) 389-7466
E-mail: julie.guizan@jfshea.com

and to:

 

Miller Starr Regalia
1331 N. California Blvd., Fifth Flr.
Walnut Creek, CA 94596
Attn: Hans Lapping, Esq.
Facsimile: (925) 933-4126
E-mail: hl@msrlegal.com

If to Buyer:

 

Behringer Harvard Multifamily OP I LP
15601 Dallas Parkway, #600
Addison, Texas 75001
Attn: Mark T. Alfieri, Senior Vice President
Facsimile: (214) 655-1610
E-mail: malfieri@behringerharvard.com

with Copies to:

 

Robert L. Abbott PC
2828 Routh Street, Suite 500
Dallas, Texas 75201
Attn: Robert L. Abbott, Esq.

 

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Facsimile: (214) 849-9823

 

 

E-mail: abbott@rabbottpc.com

 

 

 

If to Escrow Agent:

 

Partners Title Company
712 Main Street, Suite 2000E
Houston, Texas 77002-3218
Attn: Reno Hartfiel, Executive VP / General Counsel
Facsimile: (713) 238-9199

 

Any such notices may be sent by (a) certified mail, return receipt requested, in
which case notice shall be deemed delivered five (5) business days after
deposit, postage prepaid in the U.S. mail, (b) a nationally recognized overnight
courier, in which case notice shall be deemed delivered one (1) business day
after deposit for next business day delivery with such courier, (c) facsimile
transmission, in which case notice shall be deemed delivered upon electronic
verification that transmission to recipient was completed, (d) electronic mail
transmission, in which case notice shall be deemed delivered upon transmission
so long as the sender does not receive a notification of a delivery error and,
provided, further, that a copy of such transmission is concurrently sent to the
recipients by another of the methods for notice set forth above.  The above
addresses, facsimile numbers and e-mail addresses may be changed by written
notice to the other party; provided that no notice of a change of address or
facsimile number shall be effective until actual receipt of such notice.

 

10.4                Assignment.  Buyer shall not have the right to assign this
Agreement, without the prior written consent of Seller which consent Seller may
withhold in its sole and absolute discretion.  Notwithstanding the foregoing or
any other provision hereof, Buyer may assign, upon written notice to Seller
(a) its interests herein to an affiliate of Buyer, or (b) any entity in which
Buyer, or the principals thereof, have control as defined herein, or (c) its
rights (but not obligations) herein to any party which is not an Affiliate for
the purposes of effectuating an exchange of properties under Section 1031 of the
Code, provided that any such assignment does not relieve Buyer of its
obligations hereunder.  For purposes of this Section 10.4, an “affiliate of
Buyer” means (i) any entity that controls, is controlled by, or is under common
control, with the entity in question, or (ii) any investment program or any of
its affiliates, sponsored by Behringer Harvard Holdings, LLC.  The term
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of an entity, whether
through the ownership of voting securities or otherwise.  This Agreement will be
binding upon and inure to the benefit of Seller and Buyer and their respective
successors and permitted assigns, and no other party will be conferred any
rights by virtue of this Agreement or be entitled to enforce any of the
provisions hereof.  Whenever a reference is made in this Agreement to Seller or
Buyer, such reference will include the successors and permitted assigns of such
party under this Agreement.

 

10.5                Governing Law and Consent to Jurisdiction.  THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS OR CHOICE OF

 

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LAWS.  ANY ACTION ARISING OUT OF THIS AGREEMENT MUST BE COMMENCED BY BUYER OR
SELLER IN THE STATE COURTS OF THE STATE OF CALIFORNIA OR IN U.S. FEDERAL COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA AND EACH PARTY HEREBY CONSENTS TO THE
JURISDICTION OF THE ABOVE COURTS IN ANY SUCH ACTION AND TO THE LAYING OF VENUE
IN THE STATE OF CALIFORNIA.  ANY PROCESS IN ANY SUCH ACTION SHALL BE DULY SERVED
IF MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO THE PARTIES AT THEIR
RESPECTIVE ADDRESS DESCRIBED IN SECTION 10.3 HEREOF.

 

10.6                Counterparts.  This Agreement may be executed in two or more
fully or partially executed counterparts, each of which will be deemed an
original binding the signer thereof against the other signing parties, but all
counterparts together will constitute one and the same instrument.

 

10.7                Exhibits; Entire Agreement.  The parties agree that all
exhibits and schedules attached hereto are incorporated herein. The parties
further agree that this Agreement and all other documents furnished or to be
furnished pursuant to the provisions hereof embody the entire agreement and
understanding of the parties hereto as to the subject matter contained herein. 
There are no restrictions, promises, representations, warranties, covenants, or
undertakings other than those expressly set forth or referred to in such
documents.  This Agreement and such documents supersede all prior agreements and
understandings among the parties with respect to the subject matter hereof.

 

10.8                Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any jurisdiction will, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement, or affecting the validity or enforceability of any of the terms or
provisions of this Agreement.

 

10.9                Attorney Fees.  If any action is brought by any party to
this Agreement to enforce or interpret its terms or provisions, the prevailing
Party will be entitled to reasonable attorneys’ fees and costs incurred in
connection with such action prior to and at trial and on any appeal therefrom. 
Except as expressly provided in this Agreement, each party to this Agreement
will be responsible for, and will pay, all of its own fees and expenses,
including those of its counsel and accountants, incurred in the negotiation,
preparation, and consummation of this Agreement and the transaction contemplated
hereunder including, without limitation, in the case of Buyer, all third-party
engineering and environmental review costs and all other Due Diligence costs.

 

10.10              Waiver of Consequential and Punitive Damages. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN NO EVENT SHALL
EITHER SELLER OR BUYER OR ANY AFFILIATE OF SELLER OR BUYER OR THEIR RESPECTIVE
MEMBERS, PARTNERS, SHAREHOLDERS, DIRECTORS, OFFICERS, MANAGERS, EMPLOYEES OR
AGENTS BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES
(INCLUDING BUT NOT LIMITED TO DAMAGES FOR LOST PROFITS AND LOSS OF BUSINESS
INFORMATION) ARISING OUT OF THE TRANSACTION CONTEMPLATED

 

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HEREIN, EVEN IF SELLER OR BUYER OR ANY SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

10.11              Confidential Information; Confidentiality.  The parties
acknowledge that the transaction described herein is of a confidential nature
and, prior to Closing, shall not be disclosed except (a) with the prior written
consent of Seller (which consent may be withheld in Seller’s sole and absolute
discretion), (b) to the extent that such document or information is or becomes
publicly available other than the result of Buyer’s breach of this Agreement,
(c) to the Permitted Outside Parties; (d) as may be necessary for Buyer or
Buyer’s representatives to comply with applicable laws, including, without
limitation, governmental regulatory, disclosure (including SEC rules), tax and
reporting requirements, to comply with other requirements of regulatory and
supervisory authorities and self-regulatory organizations having jurisdiction
over Buyer or Buyer’s representatives; or to comply with regulatory or judicial
processes; or (e) as may be necessary in order to assume the Loan.  Except as
set forth above, no party shall make any public disclosure of the specific terms
of this Agreement.  In connection with the negotiation of this Agreement and the
preparation for the consummation of the transactions contemplated hereby, each
party acknowledges that it will have access to confidential information relating
to the other party.  Each party shall treat such information as confidential,
preserve the confidentiality thereof, and not duplicate or use such information,
except to Permitted Outside Parties in connection with the transactions
contemplated hereby.  In the event of the termination of this Agreement for any
reason whatsoever, Buyer shall return to Seller, all documents relating to
Seller, the Property or the transactions contemplated by this Agreement
including, without limitation, the Due Diligence Items, work papers, engineering
and environmental studies and reports and all other materials (including all
copies thereof obtained from Seller in connection with the transactions
contemplated hereby), and each party shall use its best efforts, including
instructing its employees and others who have had access to such information, to
keep confidential and not to use any such information.  Except as required by
applicable law, neither party shall issue any press release or make any
statement to the media in violation of the above restrictions without the other
party’s consent, which consent shall not be unreasonably withheld.  The
provisions of this Section shall survive the Closing or, if the purchase and
sale is not consummated, any termination of this Agreement.

 

10.12              No Joint Venture.  Nothing set forth in this Agreement shall
be construed to create a joint venture between Buyer and Seller.

 

10.13              Limited Liability.  Neither the members, managers, employees
nor agents of Seller, nor the shareholders, officers, directors, employees or
agents of any of them shall be liable under this Agreement and all parties
hereto shall look solely to the assets of Seller for the payment of any claim or
the performance of any obligation by Seller.

 

10.14              Governmental Approvals. Nothing contained in this Agreement
shall be construed as authorizing Buyer to apply for a zone change, variance,
subdivision maps, lot line adjustment, condominium conversions or other
discretionary governmental act, approval or permit with respect to the Property
prior to the Close of Escrow, and Buyer agrees not to do so without Seller’s
prior written approval, which approval may be withheld in Seller’s sole and
absolute discretion.  Buyer agrees not to submit any reports, studies or other
documents, including, without limitation, plans and specifications, impact
statements for water, sewage,

 

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drainage or traffic, environmental review forms, or energy conservation
checklists to any governmental agency, or any amendment or modification to any
such instruments or documents prior to the Close of Escrow unless first approved
by Seller, which approval Seller may withhold in Seller’s sole discretion. 
Buyer’s obligation to purchase the Property shall not be subject to or
conditioned upon Buyer’s obtaining any variances, zoning amendments, subdivision
maps, lot line adjustment, or other discretionary governmental act, approval or
permit.

 

10.15              Time of Essence.  Time is of the essence of this Agreement.

 

10.16              No Waiver.  No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver, nor
shall a waiver in any instance constitute a waiver in any subsequent instance. 
No waiver shall be binding unless executed in writing by the party making the
waiver.

 

10.17              Counting of Days.  Unless otherwise expressly specified in
this Agreement, in computing any period of time described in this Agreement, the
day of the act or event after which the designated period of time begins to run
is not to be included and the last day of the period so computed is to be
included, unless such last day is a Saturday, Sunday or legal holiday under the
laws of the State in which the Property is located, in which event the period
shall run until the end of the next day which is neither a Saturday, Sunday or
legal holiday.  The final day of any such period shall be deemed to end at
5:00 p.m. Pacific Time.

 

10.18              Electronic Signatures.  Signatures to this Agreement, any
amendment hereof and any notice given hereunder, transmitted by telecopy or
electronic mail shall be valid and effective to bind the party so signing.  Each
party agrees to promptly deliver an execution original of this Agreement (and
any amendment hereto) with its actual signature to the other party, but a
failure to do so shall not affect the enforceability of this Agreement (or any
amendment hereto), it being expressly agreed that each party to this Agreement
shall be bound by its own telecopied or e-mailed signature and shall accept the
telecopied or e-mailed signature of the other party to this Agreement.

 

10.19              No Reservation of Property.  The preparation and/or delivery
of unsigned drafts of this Agreement shall not create any legally binding rights
in the Property and/or obligations of the parties, and Buyer and Seller
acknowledge that this Agreement shall be of no effect until it is duly executed
by both Buyer and Seller.

 

10.20              Natural Hazard Disclosure.  Buyer and Seller acknowledge that
Seller may be required to disclose if the property lies within the following
natural hazard areas or zones:  (i) a special flood hazard area designated by
the Federal Emergency Management Agency (California Civil Code
Section 1103(c)(1)); (ii) an area of potential flooding (California Government
Code Section 8589.4); (iii) a very high fire hazard severity zone (California
Government Code Section 51178 et seq.); (iv) a wild land area that may contain
substantial forest fire risks and hazards (Public Resources Code Section 4135;
(v) earthquake fault zone (Public Resources Code Section 2622); or (vi) a
seismic hazard zone (Public Resources Code Section 2696) (sometimes all of the
preceding are herein collectively called the “Natural Hazard Matters”). 
Accordingly, Seller shall no later than ten (10) days prior to the expiration

 

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of the Due Diligence Period provide Buyer with a natural hazard disclosure
report (the “Natural Hazard Disclosure Statement”) prepared by a professional
consulting firm (the “Natural Hazard Expert”) relating to the Property.  Buyer
expressly acknowledges and agrees that (a) the Natural Hazard Disclosure
Statement prepared by the Natural Hazard Expert will fully and completely
discharge Seller from its disclosure obligations referred to herein, if and to
the extent any such obligations exist, (b) for the purpose of this Agreement,
the provisions of Civil Code section 1103.4 regarding non-liability of Seller
for errors or omissions not within its personal knowledge shall be deemed to
apply, and (c) the Natural Hazard Expert shall be deemed to be an expert,
dealing with matters within the scope of its expertise with respect to the
examination and written report regarding the natural hazards referred to above. 
Buyer agrees to provide Seller with a written acknowledgment of its receipt of
the Natural Hazard Disclosure Statement.

 

10.21              Third Party Beneficiaries.  This Agreement is not intended to
give or confer any benefits, rights, privileges, claims, actions, or remedies to
any person or entity as a third party beneficiary or otherwise.

 

10.22              Resolution of Disputes.  With the exception of a Specific
Performance Action, any dispute, controversy or claim arising out of or relating
to this Agreement, including any dispute relating to interpretation of or
performance under this Agreement (“Dispute”), shall be resolved in the manner
set forth in this Section, which shall be in lieu of any form of litigation in
any court, and the parties specifically waive, to the fullest extent permitted
under Applicable Law, any right to a jury trial of any Dispute between them.

 

10.22.1  Negotiation.  The parties will attempt in good faith to resolve the
Dispute promptly by negotiations between senior representatives of the parties
who have authority to settle the Dispute (each a “Representative”).

 

10.22.2  Mediation.  If the Representatives are unable to resolve the Dispute
through negotiation, the parties agree first to try in good faith to resolve the
dispute by mediation administered by the American Arbitration Association
(“AAA”) under its Commercial Mediation Procedures then in effect before
resorting to arbitration pursuant to Section 10.22.3, below.

 

10.22.3  Judicial Reference.  In the event the Representatives are not able to
resolve the Dispute within 30 days following the date one party first notifies
the other party of the Dispute in writing, then the Dispute shall be resolved by
general judicial reference pursuant to Code of Civil Procedure Sections 638 and
641 through 645.1, or any successor statutes thereto, and as modified or as
otherwise provided in this Section.  Subject to the limitations set forth in
this Section, the general referee shall have the authority to try all issues,
whether of fact or law, and to report a statement of decision to the court.  The
referee shall be the only trier of fact or law in the reference proceeding, and
shall have no authority to further refer any issues of fact or law to any other
party, without the mutual consent of all parties to the judicial reference
proceeding.

 

(a)           Place.  The proceedings shall be heard in Orange County,
California.

 

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(b)           Referee.  The referee shall be a retired judge with experience in
relevant real estate matters.  The referee shall not have any relationship to
the parties to the Dispute or interest in the Property.  The parties to the
Dispute participating in the judicial reference shall meet to select the referee
within ten (10) days after service of the Notice of Dispute or initial complaint
on all defendants named therein.  Any dispute regarding the selection of the
referee shall be promptly resolved by the judge to whom the matter is assigned,
or if there is none, to the presiding judge of the Superior Court of Orange
County who shall select the referee.

 

(c)           Commencement and Timing of Proceeding.  The referee shall promptly
commence the proceeding at the earliest convenient date in light of all of the
facts and circumstances and shall conduct the proceeding without undue delay.

 

(d)           Pre-hearing Conferences.  The referee may require one or more
pre-hearing conferences.

 

(e)           Discovery.  The parties to the judicial reference proceeding shall
be entitled only to limited discovery, consisting of the exchange between such
parties of only the following matters:  (i) witness lists; (ii) expert witness
designations; (iii) expert witness reports; (iv) exhibits; (v) reports of
testing or inspections of the property subject to the Dispute, including but not
limited to, destructive or invasive testing; and (vi) trial briefs.  Any other
discovery provided for in the California Code of Civil Procedure shall be
permitted by the referee upon a showing of good cause or based on the mutual
agreement of the parties to the judicial reference proceeding.  The referee
shall oversee discovery and may enforce all discovery orders in the same manner
as any trial court judge

 

(f)            Motions.  The referee shall have the power to hear and dispose of
motions, including motions relating to provisional remedies, demurrers, motions
to dismiss, motions for judgment on the pleadings and summary adjudication
motions, in the same manner as a trial court judge, except the referee shall
also have the power to adjudicate summarily issues of fact or law including the
availability of remedies, whether or not the issue adjudicated could dispose of
an entire cause of action or defense.  Notwithstanding the foregoing, if prior
to the selection of the referee as provided herein, any provisional remedies are
sought by the parties to the Dispute, such relief may be sought in the Superior
Court of Orange County, California.

 

(g)           Rules of Law.  The referee shall apply the laws of the State of
California except as expressly provided herein including the rules of evidence,
unless expressly waived by all parties to the judicial reference proceeding.

 

(h)           Record.  A stenographic record of the hearing shall be made,
provided that the record shall remain confidential except as may be necessary
for post-hearing motions and any appeals.

 

(i)            Statement of Decision.  The referee’s statement of decision shall
contain findings of fact and conclusions of law to the extent required by law if
the case were tried to a judge.  The decision of the referee shall stand as the
decision of the court,

 

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and upon filing of the statement of decision with the clerk of the court,
judgment may be entered thereon in the same manner as if the Dispute had been
tried by the court.

 

(j)            Post-hearing Motions.  The referee shall have the authority to
rule on all post-hearing motions in the same manner as a trial judge.

 

(k)           Appeals.  The decision of the referee shall be subject to appeal
in the same manner as if the Dispute had been tried by the court.

 

(l)            Expenses.  The fees and costs of the referee in any judicial
reference proceeding hereunder shall be shared equally by the parties to the
judicial reference proceeding, subject to Section 10.9.

 

WAIVER OF LEGAL RIGHTS.  BY INITIALING IN THE SPACE BELOW, THE PARTIES
ACKNOWLEDGE AND AGREE TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED OR
DESCRIBED IN THIS ARTICLE DECIDED BY JUDICIAL REFERENCE AS PROVIDED UNDER
CALIFORNIA LAW AND THAT THEY ARE WAIVING ANY RIGHTS THEY MAY POSSESS TO HAVE THE
DISPUTE LITIGATED IN A COURT OR BY JURY TRIAL.  THE PARTIES FURTHER ACKNOWLEDGE
AND AGREE THAT THEY ARE WAIVING THEIR JUDICIAL RIGHTS TO DISCOVERY EXCEPT TO THE
EXTENT SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THIS ARTICLE.  IF EITHER PARTY
REFUSES TO SUBMIT TO JUDICIAL REFERENCE AFTER EXECUTION OF THIS AGREEMENT AND
INITIALING BELOW, SUCH PARTY MAY BE COMPELLED TO PROCEED WITH JUDICIAL REFERENCE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.  EACH PARTY’S
AGREEMENT TO THIS ARTICLE IS VOLUNTARY.  THE PARTIES HAVE READ AND UNDERSTAND
THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED
OR DESCRIBED IN THIS ARTICLE TO JUDICIAL REFERENCE.

 

 

RO, SDS

 

Seller’s Initials

MA

 

Buyer’s Initials

 

10.23              Covenant of Cooperation; Mixed Use Project.  Buyer expressly
acknowledges and agrees that (a) the Property is part of a larger mixed-use
project that includes the Property and a retail shopping center (the “Shopping
Center”); (b) no later than upon the Close of Escrow, the Property and the
Shopping Center will be owned by different parties; (c) in addition to the
rights-of-ways, easements, rights, obligations and other matters affecting the
Property and the Shopping Center that are disclosed in the Title Documents, the
owners of the

 

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Property and the Shopping Center may, from time-to-time, need to grant one
another additional easements, rights-of-ways, rights etc. to ensure access to
certain portions of the Property and/or the Shopping Center (e.g. the roof of
the Property) and the proper and equitable management and ownership of each
asset; (d) Buyer covenants that Buyer will grant Seller and its successor and
assigns such easements and rights-of-way and make such accommodations as may
from time-to-time be reasonably necessary; provided, however, that no such
grants or accommodations shall (i) have a material adverse effect on the value
of the Property, or (ii) materially interfere with the use of the Property as a
residential community, and (e) the foregoing covenant shall run with the Land
and shall be evidenced by a covenant recorded against the Land at the Closing
(the “Covenant Running With The Land”) which covenant shall be in the form of
Exhibit H which shall be negotiated in good faith on the terms and conditions
described herein and if agreed upon shall be attached hereto as an amendment to
this Agreement prior to the expiration of the Due Diligence Period.  In the
event that the parties have not agreed upon such Exhibit by the expiration of
the Due Diligence Period, either party by notice to the other shall have the
right to terminate this Agreement in which event the Deposit shall be returned
to Buyer and the parties shall have no further obligation to one another except
as set forth herein.  Buyer agrees that its obligations hereunder shall
expressly survive the Closing and the delivery of the Deed.  Moreover, Buyer
acknowledges and agrees that its breach of the terms and conditions of this
Section 10.23 will constitute immediate and irreparable damage to the Seller and
its successors and assigns, which cannot be fully and adequately compensated in
money damages and which will warrant preliminary and other injunctive relief, an
order for specific performance, and other equitable relief.  In connection with
the foregoing, Buyer further agrees that no bond or other security shall be
required in obtaining such equitable relief and Buyer hereby consents to the
issuance of such injunction and to the ordering of specific performance.  Buyer
acknowledges that Seller’s remedies hereunder are cumulative and other action
may be taken and remedies enforced against it in the event of a breach of this
Section.

 

10.24              Prohibition of Condominium Conversion.  Buyer represents,
warrants and covenants to Seller that, to the fullest extent permitted by law,
Buyer shall not, for a period of ten (10) years from August 1, 2003, the date of
completion of construction of the Improvements (the “Completion Date”), convert
the Property into condominiums or similar forms of subdivided ownership.  In
connection with the foregoing, Buyer further agrees that (a) the prohibition
against condominium conversions is reasonable under the circumstances existing
as of the Effective Date, (b) if Buyer sells or otherwise transfers the Property
within ten (10) years of the Completion Date, then Buyer shall notify its buyer
in writing of this restriction and include a similar prohibition against
condominium conversions in any purchase and sale or similar agreement to so
transfer the Property, (c) Buyer shall indemnify, defend, protect and hold
Seller and its Affiliates harmless, from any and all Losses resulting from
Buyer’s breach of the representation, warranty and covenant contained in this
Section 10.24, (d) without in any way limiting the materiality of the other
provisions of this Agreement, the provisions of this Section 10.24 are material
and included as a material portion of the consideration given by Buyer to Seller
in exchange for Seller’s performance under this Agreement, (e) Buyer
acknowledges that Seller has given Buyer material concessions regarding this
transaction in exchange for Buyer agreeing to the provisions of this
Section 10.24, and (f) Buyer’s obligations under this Section 10.24 shall
expressly survive the Closing and the deliver of the Deed.  In addition, Buyer
acknowledges and agrees that its breach of the terms and conditions of this
Section 10.24 will constitute immediate and irreparable damage to the Seller,
which cannot be fully and adequately

 

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compensated in money damages and which will warrant preliminary and other
injunctive relief, an order for specific performance, and other equitable
relief.  In connection with the foregoing, Buyer further agrees that no bond or
other security shall be required in obtaining such equitable relief and Buyer
hereby consent to the remedy of an injunction or specific performance to the
extent Seller is entitled thereto.  Buyer acknowledges that Seller’s remedies
hereunder are cumulative and other action may be taken and remedies enforced
against it in the event of a breach of this Section.  At the Closing, Buyer and
Seller shall record a memorandum of agreement (the “Memorandum”).

 

10.25              Rule 3-14 Audit.  Seller acknowledges that under Rule 3-14 of
Regulation S-X, Buyer is required to obtain certain information in connection
with reports Buyer is required to file with the Securities and Exchange
Commission.  Accordingly, subject to the terms and conditions of this
Section 10.25, Seller agrees to use commercially reasonable efforts to cooperate
with Buyer’s auditors in the preparation of such audited financial statements. 
In furtherance of the foregoing, (a) Seller shall, during normal business hours
and upon not less than three (3) business days’ prior written notice, allow
Buyer’s auditors reasonable access to such books and records maintained by
Seller and Property Manager exclusively in respect of the Property solely to the
extent necessary to prepare and file such audited financial statements in
compliance with Rule 3-14 of Regulation S-X; and (b) if Seller has audited
financial statements with respect to the Property, Seller shall provide Buyer’s
auditors with a copy of such audited financial statements; provided, however,
that Buyer expressly acknowledges and agrees that if Seller does not have
audited financial statements with respect to the Property, Seller shall be under
no obligation to cause such audited financial statements to be prepared. 
Seller’s obligation to cooperate shall survive the Closing for a period of one
(1) year.  In consideration of the foregoing, Buyer agrees that Buyer shall
indemnify, defend, protect and hold harmless Seller, Property Manager and their
respective Affiliates, partners, shareholders, members, officers, directors,
managers, agents, and employees from and against any and all Losses of any kind
or nature, arising out of or in any way connected with Seller’s provision of the
materials required by this Section 10.25, including without limitation lawsuits
by shareholders or regulators or any other persons whatsoever.  Notwithstanding
anything to the contrary contained herein, Seller shall only be obligated to
provide to Buyer Seller’s accounting information at the Property level, and
shall not be obligated to provide any information concerning Seller’s capital
structure or debt or any of the following: (i) information contained in Seller’s
credit reports, credit authorizations, credit or financial analyses or
projections, investment analyses, account summaries or other documents prepared
solely for Seller’s internal purposes and not directly related to the operation
of the Property, including any valuation documents and information regarding the
value of the Property and the price paid by Seller therefor; (ii) material which
is subject to attorney-client privilege or which is attorney work product;
(iii) sales contracts, appraisal reports, letters or loan matters;
(iv) financial statements or information relating to Seller or any Affiliate of
Seller other than those at the Property level; (v) Seller’s tax returns; or
(vi) material which Seller is legally or contractually required to maintain as
confidential.  Notwithstanding anything to the contrary set forth herein, Buyer
expressly agrees that Seller’s delivery of any information under this
Section 10.25 (X) shall be subject to the terms and conditions of Section 10.11,
above; (Y) does not in any manner increase any liability of Seller under this
Agreement, or (Z) obviate or waive the “AS IS” provisions of Section 7.2.2,
above.  Subject to the terms of this Section 10.25, Seller’s and Buyer’s
respective obligation under this Section 10.25 shall expressly survive the
Closing and the delivery of the Deed.

 

47

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[Signature Page To Follow]

 

48

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

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the Agreement Date.

 

SELLER:

WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

 

 

 

By:

Shea Properties Management Co., Inc.,

 

 

a Delaware corporation

 

Its:

Manager

 

 

 

 

 

By:

/s/ Kirk Roloff

 

 

Name:

Kirk Roloff

 

 

Its:

Assistant Secretary

 

 

 

 

 

 

By:

/s/ Stephen D. Stambaugh

 

 

Name:

Stephen D. Stambaugh

 

 

Its:

Assistant Secretary

 

[Signature Page Continued On Following Page]

 

49

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

 

BUYER:

BEHRINGER HARVARD MULTIFAMILY OP I LP, a Delaware limited partnership

 

 

 

By:

BHMF, Inc., a Delaware corporation,

 

 

its general partner

 

 

 

 

 

By:

/s/ Mark T. Alfieri

 

 

 

Mark T. Alfieri

 

 

 

Chief Operating Officer

 

50

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

 

ESCROW AGENT:

 

The Escrow Agent is executing this Agreement to evidence its agreement to hold
the Deposit and act as escrow agent in accordance with the terms and conditions
of this Agreement.  Escrow Agent certifies that it is in possession of a fully
executed counterpart original or copy of the Agreement this 29th day of May,
2009 and that this date shall be deemed the “Effective Date” for purposes of
this Agreement.

 

 

PARTNERS TITLE COMPANY

 

 

 

 

 

By:

/s/ Carol Gonzales

 

Name:

Carol Gonzales

 

Title:

Escrow Officer

 

51

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

 

EXHIBIT A

 

Description of Land

 

Real property in the City of Dublin, County of Alameda, State of California,
described as follows:

 

PARCEL 1:

 

CONDOMINIUM UNIT 1 OF PARCEL 1 OF PARCEL MAP 8187, FILED NOVEMBER 3, 2003, IN
BOOK 274 OF PARCEL MAPS, PAGES 10 AND 11, OFFICIAL RECORDS, AS SUCH UNIT IS
SHOWN ON THE CONDOMINIUM PLAN (“PLAN”) ATTACHED AS EXHIBIT “A” TO THE WATERFORD
PLACE CONDOMINIUMS DECLARATION OF RESTRICTIONS (“DECLARATION”) RECORDED NOVEMBER
3, 2003, SERIES NO. 2003653881, OFFICIAL RECORDS.

 

RESERVING THEREFROM MECHANICAL CHASE EASEMENTS AS SHOWN ON THE PLAN.

 

FURTHER RESERVING THEREFROM EASEMENTS FOR ENCROACHMENT, UTILITY, ROOF AND
MAINTENANCE, AS DEFINED IN SECTIONS 2.4, 2.5 AND 2.6 OF THE DECLARATION.

 

PARCEL 2:

 

AN UNDIVIDED 97% INTEREST AS TENANT IN COMMON IN AND TO THE COMMON AREA LYING
WITHIN SAID PARCEL 1 OF PARCEL MAP 8187 AS SHOWN ON THE PLAN AND DEFINED IN THE
DECLARATION, EXCEPTING AND RESERVING THEREFROM THE FOLLOWING:

 

(A) ALL CONDOMINIUM UNITS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION.

 

(B) EXCLUSIVE USE COMMON AREAS FOR POSSESSION, USE AND ENJOYMENT OF THOSE AREAS
DESIGNATED ON THE PLAN AND DEFINED IN THE DECLARATION.

 

(C) NON-EXCLUSIVE EASEMENTS FOR USE, ENJOYMENT, INGRESS, EGRESS AND SUPPORT IN
AND TO THE COMMON AREA AS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION.

 

(D) ALL EASEMENTS AS DEFINED IN THE DECLARATION.

 

PARCEL 3:

 

(A) NON-EXCLUSIVE EASEMENTS FOR USE, ENJOYMENT, INGRESS, EGRESS AND SUPPORT IN
AND TO THE COMMON AREA, AS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION,
FOR THE BENEFIT OF PARCEL 1 HEREINABOVE.

 

(B) NON-EXCLUSIVE EASEMENTS FOR ENCROACHMENT AND UTILITY, ALONG WITH A
MAINTENANCE EASEMENT DEFINED IN THE DECLARATION.

 

APN: 986-0017-014 and 986-0017-018

 

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

 

EXHIBIT B

 

List of Contracts

 

Waterford Apartments

Dublin, CA

 

Property Contract

 

Term

 

Terminable

 

Notes

 

1

Cable Contract - Comcast

 

10/25/2007

 

2/20/2019

 

 

 

No cancelation. Default must be cured. 90 day auto renewal.

 

2

ISTA (Utility Agreement)

 

5/10/2001

 

Ongoing

 

P

 

30 day written notice.

 

3

Patrol Services - Night Private Security Inc.

 

10/23/2008

 

12/31/2009

 

P

 

Cancel upon sale or 30 day written notice.

 

4

Fitness Maintenance - Fitguard

 

10/31/2008

 

12/31/2009

 

P

 

Cancel upon sale or 30 day written notice.

 

5

Landscape - Valley Crest

 

 

 

MTM

 

P

 

Cancel with 30 day written notice.

 

6

Pest Control - Terminix

 

8/1/2008

 

12/31/2009

 

P

 

Cancel with 30 day written notice.

 

7

Pool Service - Dave’s Pools Service

 

1/15/2009

 

12/31/2009

 

P

 

Cancel with 30 day written notice.

 

8

Turnover - PS2

 

1/22/2009

 

12/31/2009

 

P

 

Cancel with 30 day written notice.

 

9

Apartment Guide

 

11/7/2008

 

10/9/2009

 

P

 

45 day written notice if change in ownership. MTM @ expiration.

 

10

For Rent Magazine

 

4/30/2008

 

MTM

 

P

 

Cancel with 30 day written notice.

 

11

Move.com

 

5/15/2007

 

MTM

 

P

 

Cancelable at any time.

 

12

Apartments.com

 

11/1/2008

 

4/30/2009

 

P

 

Cancel with 30 day written notice.

 

13

Copier - Rabbit

 

4/30/2009

 

4/30/2010

 

 

 

Automatic renewal for one year. Cancel in writing 30 days prior to expiration
date.

 

14

Master Agreement: Lead Tracking Solutions

 

1/21/2008

 

1/20/2009

 

P

 

Cancel with 60 day written notice if property is sold. Lapsed.

 

15

Master Agreement: CORT

 

4/19/2007

 

4/19/2008

 

P

 

Cancel with 7 day written notice.

 

16

Master Agreement: Rent.com

 

Ongoing

 

Ongoing

 

P

 

Cancel with 30 days notice.

 

17

Master Agreement: Vaultware

 

1/1/2009

 

12/31/2009

 

P

 

Right to terminate at any time. Must pay full annual license fee upon
termination.

 

 

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

 

EXHIBIT C

 

Form of Grant Deed

 

RECORDING REQUESTED BY AND

WHEN RECORDED RETURN TO:

 

 

 

 

 

MAIL TAX STATEMENTS TO:

 

 

 

 

 

APN:

 

The undersigned grantor declares:

 

Documentary Transfer Tax not shown pursuant to Section 11932 of the Revenue and
Taxation Code, as amended.

 

 

GRANT DEED

 

FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, WATERFORD
PLACE APARTMENTS, LLC, a California limited liability company, does hereby GRANT
to                                               , a(n)
                                       , all of that certain real property in
the City of Dublin, County of Alameda, State of California, as more particularly
described in Exhibit A attached hereto and made a part hereof, and all
improvements thereon (the “Property”).

 

THIS PROPERTY IS CONVEYED TO GRANTEE SUBJECT TO:

 

(A) All liens, leases, encumbrances, easements, covenants, conditions and
restrictions and other matters of record or otherwise known to Grantee,
including any and all matters shown on any subdivision or parcel map or maps
affecting the Property;

 

(B) All exceptions appearing in a certain policy of title insurance for the
Property issued to the Grantee as of the date hereof;

 

(C) All matters which are or would be revealed or disclosed in any survey or
physical inspection of the Property;

 

(D) Interests of tenants in possession as tenants only under lease agreements;
and

 

(E) A lien not yet delinquent for taxes for real property and personal property,
and any general or special assessments against the Property, as well as any lien
not yet delinquent for

 

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

 

supplemental taxes assessed pursuant to Chapter 3.5, commencing with Section 75,
of the California Revenue and Taxation Code.

 

[Signature Page To Follow]

 

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

 

IN WITNESS WHEREOF, Grantor has caused this instrument to be executed on this
         day of                 , 200 .

 

GRANTOR:

WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

 

 

 

By:

Shea Properties Management Co., Inc.,

 

 

a Delaware corporation

 

Its:

Manager

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

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

 

Exhibit A to Grant Deed

 

Legal Description

 

Real property in the City of Dublin, County of Alameda, State of California,
described as follows:

 

PARCEL 1:

 

CONDOMINIUM UNIT 1 OF PARCEL 1 OF PARCEL MAP 8187, FILED NOVEMBER 3, 2003, IN
BOOK 274 OF PARCEL MAPS, PAGES 10 AND 11, OFFICIAL RECORDS, AS SUCH UNIT IS
SHOWN ON THE CONDOMINIUM PLAN (“PLAN”) ATTACHED AS EXHIBIT “A” TO THE WATERFORD
PLACE CONDOMINIUMS DECLARATION OF RESTRICTIONS (“DECLARATION”) RECORDED NOVEMBER
3, 2003, SERIES NO. 2003653881, OFFICIAL RECORDS.

 

RESERVING THEREFROM MECHANICAL CHASE EASEMENTS AS SHOWN ON THE PLAN.

 

FURTHER RESERVING THEREFROM EASEMENTS FOR ENCROACHMENT, UTILITY, ROOF AND
MAINTENANCE, AS DEFINED IN SECTIONS 2.4, 2.5 AND 2.6 OF THE DECLARATION.

 

PARCEL 2:

 

AN UNDIVIDED 97% INTEREST AS TENANT IN COMMON IN AND TO THE COMMON AREA LYING
WITHIN SAID PARCEL 1 OF PARCEL MAP 8187 AS SHOWN ON THE PLAN AND DEFINED IN THE
DECLARATION, EXCEPTING AND RESERVING THEREFROM THE FOLLOWING:

 

(A) ALL CONDOMINIUM UNITS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION.

 

(B) EXCLUSIVE USE COMMON AREAS FOR POSSESSION, USE AND ENJOYMENT OF THOSE AREAS
DESIGNATED ON THE PLAN AND DEFINED IN THE DECLARATION.

 

(C) NON-EXCLUSIVE EASEMENTS FOR USE, ENJOYMENT, INGRESS, EGRESS AND SUPPORT IN
AND TO THE COMMON AREA AS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION.

 

(D) ALL EASEMENTS AS DEFINED IN THE DECLARATION.

 

PARCEL 3:

 

(A) NON-EXCLUSIVE EASEMENTS FOR USE, ENJOYMENT, INGRESS, EGRESS AND SUPPORT IN
AND TO THE COMMON AREA, AS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION,
FOR THE BENEFIT OF PARCEL 1 HEREINABOVE.

 

(B) NON-EXCLUSIVE EASEMENTS FOR ENCROACHMENT AND UTILITY, ALONG WITH A
MAINTENANCE EASEMENT DEFINED IN THE DECLARATION.

 

APN: 986-0017-014 and 986-0017-018

 

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

 

STATEMENT OF TAX DUE AND REQUEST THAT TAX DECLARATION
NOT BE MADE A PART OF THE PERMANENT RECORD
IN THE OFFICE OF THE COUNTY RECORDER
(PURSUANT TO SECTION 11932 REVENUE AND TAXATION CODE)

 

TO:

Recorder

 

County of Alameda

 

Request is hereby made in accordance with the provisions of the Documentary
Transfer Tax Act that the amount of the tax due not be shown on the original
document which names:

 

Grantor:                                                     WATERFORD PLACE
APARTMENTS, LLC, a California limited liability company

 

Grantee:                                            ,
a                                            

 

The property described in the accompanying document is located in the City of
Dublin, APN No:                                                     .

 

The amount of tax due on the accompanying document is $                      .

 

o

Computed on full value of property conveyed.

 

 

x

Computed on full value, less liens and encumbrances remaining at the time of
sale.

 

I declare under penalty of perjury under the laws of the State of California
that the foregoing is true and correct.

 

 

WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

 

 

 

By:

Shea Properties Management Co., Inc.,

 

 

a Delaware corporation

 

Its:

Manager

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

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

 

STATE OF CALIFORNIA

)

 

 

)

ss.

COUNTY OF

)

 

 

On                              , 2009 before me,
                              , Notary Public, personally appeared
                                                                                        ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

Witness my hand and official seal.

 

 

 

 

Notary Public

 

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

 

EXHIBIT D

 

Form of Bill of Sale

 

For good and valuable consideration, the receipt of which is hereby
acknowledged, WATERFORD PLACE APARTMENTS, LLC, a California limited liability
company (“Seller”), does hereby sell, transfer, and convey to
                                            ,
a(n)                                        (“Buyer”) any and all Personal
Property (as defined in the Purchase Agreement (as hereinafter defined)).

 

Seller has executed this Bill of Sale and BARGAINED, SOLD, TRANSFERRED, CONVEYED
and ASSIGNED the Personal Property and Buyer has accepted this Bill of Sale and
purchased the Personal Property AS IS AND WHEREVER LOCATED, WITH ALL FAULTS AND
WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF WHATSOEVER NATURE, EXPRESS,
IMPLIED, OR STATUTORY, EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT OF SALE
AND PURCHASE AND JOINT ESCROW INSTRUCTIONS BETWEEN SELLER AND BUYER, DATED AS OF
                                        , 2009 (the “PURCHASE AGREEMENT”) AND
THE WARRANTIES SET FORTH HEREIN, IT BEING THE INTENTION OF SELLER AND BUYER TO
EXPRESSLY NEGATE AND EXCLUDE ALL WARRANTIES WHATSOEVER, INCLUDING BUT NOT
LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY
PARTICULAR PURPOSE, ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR
SAMPLES OF MATERIALS, ANY RIGHTS OF BUYER UNDER APPROPRIATE STATUTES TO CLAIM
DIMINUTION OF CONSIDERATION, ANY CLAIM BY BUYER FOR DAMAGES BECAUSE OF DEFECTS,
WHETHER KNOWN OR UNKNOWN WITH RESPECT TO THE PERSONAL PROPERTY, WARRANTIES
CREATED BY AFFIRMATION OF FACT OR PROMISE AND ANY OTHER WARRANTIES CONTAINED IN
OR CREATED BY THE UNIFORM COMMERCIAL CODE AS NOW OR HEREAFTER IN EFFECT IN THE
STATE IN WHICH THE PERSONAL PROPERTY IS LOCATED, OR CONTAINED IN OR CREATED BY
ANY OTHER LAW.

 

[Signature Page To Follow]

 

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

 

Dated this                day of                                         , 200 .

 

SELLER:

WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

 

 

 

By:

Shea Properties Management Co., Inc.,

 

 

a Delaware corporation

 

Its:

Manager

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

BUYER:

 

 

a(n)

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

EXHIBIT E

 

Form of Assignment and Assumption of Leases

 

THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) dated as of
                                , 200   , is between WATERFORD PLACE APARTMENTS,
LLC, a California limited liability company (“Assignor”), and
                                        ,
a(n)                                    (“Assignee”).

 

A.            Assignor is the lessor under certain leases executed with respect
to that certain apartment and retail complex known as Waterford Place
Apartments, Dublin, California, and more particularly described in Exhibit A
attached hereto (the “Property”), which leases (the “Leases”) are described in
the current Rent Roll attached hereto as Schedule 1, which Assignor by its
execution hereof hereby certifies to Assignee to be true, complete and correct
in all material respects as of the date thereof.

 

B.            Assignor and Assignee entered into an Agreement of Sale and
Purchase and Joint Escrow Instructions dated as of                             ,
2009 (the “Purchase Agreement”), pursuant to which Assignee agreed to purchase
the Property from Assignor and Assignor agreed to sell the Property to Assignee,
on the terms and conditions contained therein.

 

C.            Assignor desires to assign its interest as lessor in the Leases to
Assignee, and Assignee desires to accept the assignment thereof, on the terms
and conditions below.

 

ACCORDINGLY, the parties hereby agree as follows:

 

1.             Assignor hereby assigns to Assignee all of its right, title, and
interest in and to the Leases, and Assignee hereby accepts such assignment and
(a) assumes all of the lessor’s obligations under the Leases arising from and
after the date hereof, and (b) assumes all obligations under the Leases relating
to the physical and environmental condition of the Property arising on or after
the date hereof.

 

2.             In the event of any dispute between Assignor and Assignee arising
out of the obligations of the parties under this Assignment or concerning the
meaning or interpretation of any provision contained herein, the losing party
shall pay the sole prevailing party’s costs and expenses of such dispute,
including, without limitation, reasonable attorneys’ fees and costs.

 

3.             Any rental and other payments under the Leases shall be prorated
between the parties as provided in the Purchase Agreement.

 

4.             The covenants, agreements, representations, warranties,
indemnities and limitations provided in this Assignment with respect to the
property conveyed hereunder (including, without limitation, the limitations of
liability provided in the Purchase Agreement), are hereby incorporated herein by
this reference as if herein set out in full and shall insure to the benefit of
and shall be binding upon Buyer and Seller and their respective successors and
assigns.

 

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

 

5.             This Assignment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

 

6.             This Assignment shall be governed and construed in accordance
with the internal laws of the State of California without reference to its
choice of law or conflict of law provisions.

 

7.             This Assignment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

 

[Signature Page To Follow]

 

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

 

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment the day
and year first above written.

 

ASSIGNOR:

WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

 

 

 

By:

Shea Properties Management Co., Inc.,

 

 

a Delaware corporation

 

Its:

Manager

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

ASSIGNEE:

 

 

a(n)

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

Exhibit A to Assignment and Assumption of Leases

 

Description of Real Property

 

Real property in the City of Dublin, County of Alameda, State of California,
described as follows:

 

PARCEL 1:

 

CONDOMINIUM UNIT 1 OF PARCEL 1 OF PARCEL MAP 8187, FILED NOVEMBER 3, 2003, IN
BOOK 274 OF PARCEL MAPS, PAGES 10 AND 11, OFFICIAL RECORDS, AS SUCH UNIT IS
SHOWN ON THE CONDOMINIUM PLAN (“PLAN”) ATTACHED AS EXHIBIT “A” TO THE WATERFORD
PLACE CONDOMINIUMS DECLARATION OF RESTRICTIONS (“DECLARATION”) RECORDED NOVEMBER
3, 2003, SERIES NO. 2003653881, OFFICIAL RECORDS.

 

RESERVING THEREFROM MECHANICAL CHASE EASEMENTS AS SHOWN ON THE PLAN.

 

FURTHER RESERVING THEREFROM EASEMENTS FOR ENCROACHMENT, UTILITY, ROOF AND
MAINTENANCE, AS DEFINED IN SECTIONS 2.4, 2.5 AND 2.6 OF THE DECLARATION.

 

PARCEL 2:

 

AN UNDIVIDED 97% INTEREST AS TENANT IN COMMON IN AND TO THE COMMON AREA LYING
WITHIN SAID PARCEL 1 OF PARCEL MAP 8187 AS SHOWN ON THE PLAN AND DEFINED IN THE
DECLARATION, EXCEPTING AND RESERVING THEREFROM THE FOLLOWING:

 

(A) ALL CONDOMINIUM UNITS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION.

 

(B) EXCLUSIVE USE COMMON AREAS FOR POSSESSION, USE AND ENJOYMENT OF THOSE AREAS
DESIGNATED ON THE PLAN AND DEFINED IN THE DECLARATION.

 

(C) NON-EXCLUSIVE EASEMENTS FOR USE, ENJOYMENT, INGRESS, EGRESS AND SUPPORT IN
AND TO THE COMMON AREA AS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION.

 

(D) ALL EASEMENTS AS DEFINED IN THE DECLARATION.

 

PARCEL 3:

 

(A) NON-EXCLUSIVE EASEMENTS FOR USE, ENJOYMENT, INGRESS, EGRESS AND SUPPORT IN
AND TO THE COMMON AREA, AS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION,
FOR THE BENEFIT OF PARCEL 1 HEREINABOVE.

 

(B) NON-EXCLUSIVE EASEMENTS FOR ENCROACHMENT AND UTILITY, ALONG WITH A
MAINTENANCE EASEMENT DEFINED IN THE DECLARATION.

 

APN: 986-0017-014 and 986-0017-018

 

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

 

Schedule 1 to Assignment and Assumption of Leases

List of Leases

 

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

 

EXHIBIT F

 

Form of Assignment and Assumption of Contracts
Warranties and Guaranties, Licenses and Permits and Other Intangible Property

 

THIS ASSIGNMENT AND ASSUMPTION (this “Assignment”) dated as of
                                    , 200 , is between WATERFORD PLACE
APARTMENTS, LLC, a California limited liability company (“Assignor”), and
                                      , a(n)                                   
(“Assignee”).

 

A.                                    Assignor owns certain apartment and retail
complex commonly known as Waterford Place Apartments, Dublin, California, and
more particularly described in Exhibit A attached hereto (the “Property”).

 

B.                                    Assignor has entered into certain
contracts which are more particularly described in Schedule l attached hereto
(the “Contracts”), which affect the Property.

 

C.                                    Assignor and Assignee entered into an
Agreement of Sale and Purchase and Joint Escrow Instructions dated as of
                                  , 2009 (the “Purchase Agreement”), pursuant to
which Assignee agreed to purchase the Property from Assignor and Assignor agreed
to sell the Property to Assignee, on the terms and conditions contained therein.

 

D.                                    Assignor desires to assign to Assignee its
interest, if any, and to the extent assignable, in (a) the Contracts,
(b) certain warranties, guaranties, and intangible personal property with
respect to the Property, and (c) all licenses, permits, approvals, certificates
of occupancy, dedications, subdivision maps and entitlements now or hereafter
issued, approved or granted by any governmental entity in connection with the
Property (the “Licenses and Permits”), and Assignee desires to accept the
assignment thereof, on the terms and conditions below.

 

ACCORDINGLY, the parties hereby agree as follows:

 

1.                                      Assignor hereby assigns to Assignee all
of Assignor’s right, title, and interest, if any, in and to the following, from
and after the date hereof, to the extent the same are assignable:

 

(a)                                  the Contracts;

 

(b)                                 any warranties and guaranties (“Warranties
and Guaranties”) made by or received from any third party with respect to any
improvements owned by Assignor on the Property; and

 

(c)                                  the Licenses and Permits.

 

2.                                      Assignee hereby accepts the foregoing
assignment by Assignor and assumes all of the Assignor’s obligations under
(a) the Contracts arising from and after the date hereof, (b) the Contracts
relating to the physical and environmental condition of the Property arising on
or after the date hereof, (c) the Warranties and Guaranties on or after the date
hereof, and (d) the Licenses and Permits arising on or after the date hereof.

 

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

 

3.                                      In the event of any dispute between
Assignor and Assignee arising out of the obligations of the parties under this
Assignment or concerning the meaning or interpretation of any provision
contained herein, the losing party shall pay the sole prevailing party’s costs
and expenses of such dispute, including, without limitation, reasonable
attorneys’ fees and costs.

 

4.                                      The covenants, agreements,
representations, warranties, indemnities and limitations provided in this
Assignment with respect to the property conveyed hereunder (including, without
limitation, the limitations of liability provided in the Purchase Agreement),
are hereby incorporated herein by this reference as if herein set out in full
and shall insure to the benefit of and shall be binding upon Buyer and Seller
and their respective successors and assigns.

 

5.                                      This Assignment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

6.                                      This Assignment shall be governed and
construed in accordance with the internal laws of the State of California
without reference to its choice of law or conflict of law provisions.

 

7.                                      This Assignment may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.

 

[Signature Page To Follow]

 

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IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement the day
and year first above written.

 

ASSIGNOR:

WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

 

 

 

By:

Shea Properties Management Co., Inc., a Delaware corporation

 

Its:

Manager

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

ASSIGNEE:

 

 

a(n)

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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Exhibit A to Assignment and Assumption of Contracts, Warranties and Guaranties,

Licenses and Permits and Other Intangible Property

 

Description of Real Property

 

Real property in the City of Dublin, County of Alameda, State of California,
described as follows:

 

PARCEL 1:

 

CONDOMINIUM UNIT 1 OF PARCEL 1 OF PARCEL MAP 8187, FILED NOVEMBER 3, 2003, IN
BOOK 274 OF PARCEL MAPS, PAGES 10 AND 11, OFFICIAL RECORDS, AS SUCH UNIT IS
SHOWN ON THE CONDOMINIUM PLAN (“PLAN”) ATTACHED AS EXHIBIT “A” TO THE WATERFORD
PLACE CONDOMINIUMS DECLARATION OF RESTRICTIONS (“DECLARATION”) RECORDED NOVEMBER
3, 2003, SERIES NO. 2003653881, OFFICIAL RECORDS.

 

RESERVING THEREFROM MECHANICAL CHASE EASEMENTS AS SHOWN ON THE PLAN.

 

FURTHER RESERVING THEREFROM EASEMENTS FOR ENCROACHMENT, UTILITY, ROOF AND
MAINTENANCE, AS DEFINED IN SECTIONS 2.4, 2.5 AND 2.6 OF THE DECLARATION.

 

PARCEL 2:

 

AN UNDIVIDED 97% INTEREST AS TENANT IN COMMON IN AND TO THE COMMON AREA LYING
WITHIN SAID PARCEL 1 OF PARCEL MAP 8187 AS SHOWN ON THE PLAN AND DEFINED IN THE
DECLARATION, EXCEPTING AND RESERVING THEREFROM THE FOLLOWING:

 

(A) ALL CONDOMINIUM UNITS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION.

 

(B) EXCLUSIVE USE COMMON AREAS FOR POSSESSION, USE AND ENJOYMENT OF THOSE AREAS
DESIGNATED ON THE PLAN AND DEFINED IN THE DECLARATION.

 

(C) NON-EXCLUSIVE EASEMENTS FOR USE, ENJOYMENT, INGRESS, EGRESS AND SUPPORT IN
AND TO THE COMMON AREA AS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION.

 

(D) ALL EASEMENTS AS DEFINED IN THE DECLARATION.

 

PARCEL 3:

 

(A) NON-EXCLUSIVE EASEMENTS FOR USE, ENJOYMENT, INGRESS, EGRESS AND SUPPORT IN
AND TO THE COMMON AREA, AS SHOWN ON THE PLAN AND DESCRIBED IN THE DECLARATION,
FOR THE BENEFIT OF PARCEL 1 HEREINABOVE.

 

(B) NON-EXCLUSIVE EASEMENTS FOR ENCROACHMENT AND UTILITY, ALONG WITH A
MAINTENANCE EASEMENT DEFINED IN THE DECLARATION.

 

APN: 986-0017-014 and 986-0017-018

 

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Schedule 1 to Assignment and Assumption of Contracts, Warranties and Guaranties,
Licenses and Permits and Other Intangible Property

 

List of Contracts

 

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

 

EXHIBIT G

 

Notice to Tenants

 

Residents of Waterford Place Apartments

4800 Tassajara Road

Dublin, California 94568

 

Dear Residents:

 

Notice is hereby given to the residents and tenants of Waterford Place
Apartments (the “Property”) that Waterford Place Apartments, LLC, the current
owner of the Property, has sold the Property to
                                                         (“Purchaser”) effective
                            .  Purchaser has assumed all of the obligations of
landlord under your lease arising after such date, including any obligations
with respect to your security deposit, if any, which have been transferred to
Purchaser.

 

You are further notified that all rental payments and inquires under your lease
shall hereafter be directed or paid to the following account, at the address
below:

 

 

 

 

 

Very truly yours,

 

WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

 

 

 

By:

Shea Properties Management Co., Inc., a Delaware corporation

 

Its:

Manager

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

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

 

EXHIBIT H

 

Covenant Running With The Land

 

[To Be Agreed Upon During The Due Diligence Period]

 

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

 

EXHIBIT I

 

Personal Property

 

May 14, 2009

 

Front Office/Lobby;

2 Leasing Desk Workstations

2 Task Chairs

2 Computers

4 Armless Guest Chairs

1 Ottoman

1 Sofa

1 Coffee Table

1 Large Side Table

1 Accent Chair

2 Arm Chairs

3 Large Pictures

1 Property Layout Picture

1 Large Arial Picture of Dublin

1 Set of Window treatments

2 Ceramic Urns

2 Glass Hurricane Candle Holders with Candles

4 Large Trees with Baskets

7 Small Plants with Baskets

1 Hand Painted Silk Chandelier

2 Silver trays and Stands

2 Horse Figurines

2 Ceramic Art

2 Sofa Pillows

2 Chair Pillows

2 Knit Caddies

2 Area Rugs

1 Tray

1 Decorative Mesh Trunk

28 Books

2 Large Black Urns

 

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

 

Private Offices (3);

3 Valances

9 Large Pictures

3 Desks

3 Task Chairs

3 Computers

2 Credenzas

1 Large Filing Cabinet

6 Armless Guest Chairs

 

Kitchen/Copy Room;

2 Valances

1 Small Dining Table

3 Dining Chairs

1 Copy Machine/Scanner/Fax

1 Keysafe

1 Safe

1 Refrigerator

1 Microwave

1 Dishwasher

1 Small Oven (Otis Spunkmeyer)

1 Computer (gate system)

1 Coffee Maker

1 Framed Corkboard

Misc Office Supplies

 

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

 

1 Bedroom Model;

 

Living room/Dining Room

2 (pairs) Drapery Panels on rod

1 Dining Table

2 Dining Chairs with Cushions

1 Planter

1 Adirondak Art

1 Black Rice Bucket with magazines

1 Sofa with Pillows

1 Lounge Chair with Cushion and Pillow

1 End Table

1 Cocktail Table

1 Media Cabinet

2 Barstools

1 Floor Lamp

2 tabel lamps

1 Large Flower Art

1 Large Bevel Mirror

1 Small Mirror

Misc. Books

1 Black Frame

1 Hammered Frame

Stack of Books

Daffodils in a Pot

1 Hurricane with Candle

Stack of Cocktail Books

2 Black Boxes

 

Kitchen

Rug and grabber

Green Palecheck Box

Green Ceramic Bowl Set-Up

Jar with Limes and Lemons

Cook Book in Stand

Juicer Tray Set-Up

London Sign

Vintage Fan

 

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

 

1 Bedroom Model Cont…

 

Deck

Bistro table  with Two Chairs

Green Lantern

 

Bathroom

Tub Treatment

Door Art

Small Purse with Wash and Brush

Black Towel with Tea Towel

Stack Towels with Tea Towels

Rug and Grabber

Silver Mirror in Stand

Black Tray Set-Up

 

Bedroom

Queen bed

Dresser

2 Night Stands

Pair of panels on Rod

Large Art

Peg Rack with Hat

Large Mirror

2 Table Lamps

Nickel Desk lamp

Queen Bedding

Duster

Bedcap

Back Shams

Front Shams

Accent Pillow

Misc Books

Frame

Covered Jar

2 Pins

2 Black Boxes

Clock

 

Bedroom Closet

Garden Boots

Wicker Hat Boxes (set of three)

Bucket with Towels and Thermos

Basket with Towels

 

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

 

2 Bedroom Model;

 

Living Room/Dining Room

Sofa

End table

Cocktail table

Dining Chairs

Fabric for Chair Seats

Dining Table Base with Glass Top

Pillows for Sofa (three)

Lounge Chair with Pillows and Cushions

Media Cabinet

Floor Lamp

2 Table Lamps

4 Floral Art

Framed Mirror

Large Floral Framed Mirror

Mirror Sconces

2 pair Window treatments — Panels

Small Bicycle

French Mirror

White planter

Iron Obelisk

2 Grass patches

2 Cocktail Books

Misc. Books

Venetian Frame

Fleur De Lys

4 Dining Set-Ups

 

Kitchen

2 Stools with Seat Covers

3x5 Rug with Grabber

Pair of ceramic Roosters

Wicker food Cover and Mat

Tray Set-Up with Jars and Apples

Framed Art

Wood Iron and Tray Set-Up

Metal Floral Plate and Stand

2 Counter Set-Ups

 

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

 

2 Bedroom Model Cont…

 

Deck

Glider

Table and Lantern

 

Laundry

Jar with Clothes Pins

Chapes Elyse Sign

Basket with Towels

Stack of Towels

 

Bath Two

Pair of Fleur De Lys

Mirror

Chair Art

Tub treatment

Rug with Grabber

Wire Bath Container filled

Bath Lotion with Wash

Antique Jars

Yellow Organic Vase with Hydrangeas

Towels for Bar

 

Bedroom # 2

Queen bed

Chest

2 Night Stands

2 Panels on Rod

3 Table Lamps

Golf Course Art

Floral Art

Queen Bedding

Comforter

Sheet

Duster

Black Shams

Front Shams

Accent Pillow

Basket with Throw and Book

2 Frames

Mercury Glass Vase

Misc Books

Silver Loving Cup

Jar with Sheus

Silver Clock

 

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

 

2 Bedroom Model Cont…

 

Bedroom #2 Closet

Tennis Outfit with hangers

Tennis bag with towel

Large Jar with Tennis Balls

Golf Balls

Tennis Racquet

 

Master Bedroom

Queen Bed

Dresser

Console/Desk

Skirted table with Glass

Large Mirror

Desk Chair with Pillow

Black and White Art (set of three)

2 Table Lamps

Wall Sconce

Prop Laptop

Frame

Candle with Clouche

Drapery Panel on Rod (1 pair)

Queen Bedding

Duster

Comforter

Black Shams

Front Shams

Accent Pillows

Yellow Glass jars

French Mirror

Misc Books

Frame

 

Master Bath

Black and White Art

Runner with grabber

Tub treatment

Silver Bath Tower with Misc Accessories

3 Bath Jars

Loofa with Wash

2 Canvas bags

Robe with Hangers

Slippers

Teak Stool

 

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

 

Business Center;

1 Computer

2 Task Chairs

1 Copy machine

1 Printer

1 Typewriter

1 Fax Machine

2 Pictures

Misc Supplies

1 Valance

 

Conference Room;

1 Large Conference Table

1 Drop Down Projector Screen

1 Television

8 Conference Room Chairs

3 Large Pictures

2 Large Ceramic Urns

1 White Board with Stand

1 Conference Phone

2 Sets of Window Treatments

 

Media Room;

1 Large Screen TV

12 Chairs

9 Small Round Tables

2 Large Pictures

 

Concierge Office;

 

3 Task Chairs

2 Computers

1 Picture

1 Shelf Unit

Misc Movies/DVD’s

1 Folding table

3 Folding Chairs

2 Shelving Units

1 Dry-cleaning Rack

1 Vacuum

 

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

 

Clubhouse;

 

2 Brown Sofas

4 Armchairs

1 Round Table

1 Round End Table

2 Barstools

1 Upholstered Bench

2 Credenzas

4 Chrome Lamps

1 Glass Lamp

4 Pairs Gold Drapes

2 Gold Window Treatments

5 Large Pictures

1 Large Silver Bowl

1 Ceramic Snail

2 White Platter & Black Stand

4 Cooking Trays

4 Plastic Juice Containers

1 Fry pan and Lid

2 Pots

1 Wood Tray

2 White Vases

1 Strainer

2 Measuring Cups

1 Square basket with Books

2 Leather Bowls

6 Small Plants and Baskets

5 Large Trees and Baskets

1 Stainless Dishwasher

1 Stove Gas Top

1 Stainless Side by Side Refrigerator

1 Stainless Microwave

1 Stainless Oven

 

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

 

Gym Equipment;

2 Flexdeck Life Fitness 9100 Treadmills

1 Flexdeck Treadmill with LCD Screen

1 Life cycle 9500 HR

1 Seated Leg Curl

1 Leg Extension

1 Seated Leg Press

1 Life Fitness Weight Machine (Double Pulley System)

1 Life Fitness Squat/bench Press Machine

3 Workout Benches

3 Cardio Elliptical Machines (9500HR)

1 Cardio Elliptical machine with LCD Screen (93xi)

20 Free Weights ranging from 5 lbs to 50 lbs

7 Equipment Mats

 

Pool;

1 Pool

1 Large Spa

24 Lounge Chairs

24 Chairs

6 Large Tables

5 Umbrellas

11 Small Tables

4Trash Cans

Net Pole

Life Saver

 

Appliances;

391 Refrigerators

391 Microwaves

392 Water Heaters

42 Stackable Washer/Dryer Units

353 Washers

351 Dryers

392 Stoves

392 Dishwashers

393 Garbage Disposals

 

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

 

Tools & Euipment:

1 Key Cutting Machine

6 2-Way Radio

1 Multi Function Center

1 Windows 2000

1 3 Speed Turbo Air Dryer

1 Shop Vacuum

1 Manifold gauge set w/ 36” hose

1 6.0 CFM Vacuum Pump 1/3 h.p.

1 Extractor Recovery Unit

1 Powered Drain Cleaner

2 Ladder 4 Feet

1 Ladder 6 Feet

1 Shampoo Carpet Cleaner

1 Refrigerator 5 c.u. Feet

1 Microwave Oven

1 Tug

2 EZ-GO TXT

3 EZ-GO Textron Charger

1 275 HP 8 gls Air Compressor

1 Ladder 4 Feet

1 Reciprocating Saw

1 Power Blower

1 Carpet Knee Kicker

1 3/8” Maxim Drill 120 V

1 Sweeper Washer

1 Stripping Pain Machine

1 Power Washer

1 Paint Sprayer

 

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EXHIBIT J

 

Lease Guidelines

 

WATERFORD PRICING - (TBD)

 

NO APPLICATION FEE!

 

 

 

SF

 

UNITS
AVAILABLE

 

PRICE

 

CONCESSION *

 

NET EFFECTIVE

 

JUNIOR, ONE BATH

 

 

 

 

 

 

 

 

 

 

 

Ashford (41 units)

 

599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ONE BEDROOM, ONE BATH

 

 

 

 

 

 

 

 

 

 

 

BALLYMORE (114 units)

 

708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CARLTON (40 units)

 

807

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DUBLIN (34 units)

 

922

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TWO BEDROOM, TWO BATH

 

 

 

 

 

 

 

 

 

 

 

ENNIS (34 units)

 

1040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FRESHFORD (100)

 

1097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GLENMORE (27)

 

1367

 

 

 

 

 

 

 

 

 

 

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* Concessions listed are for 12 month lease terms ONLY (7-11 mo get half)

 

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