Exhibit
10.26


 


Gallery
at NoHo Commons


 


AGREEMENT OF SALE


 


THIS AGREEMENT, entered into as of the 12th
day of August, 2009 (the “Effective Date”), by and between BEHRINGER
HARVARD MULTIFAMILY OP I LP, a Delaware limited partnership (“Purchaser”) and SF NO HO LLC, a California limited liability company (“Seller”).


 


WITNESSETH:


 


1.             PURCHASE AND SALE.  Purchaser agrees to purchase
and Seller agrees to sell at the price (the “Purchase Price”) of Ninety-Six
Million and No/100 Dollars ($96,000,000.00), all of the following property
(collectively, the “Property”):


 


(a)           That certain parcel of real property
located in North Hollywood, California, more particularly described on Exhibit A
attached hereto (the “Land”);


 


(b)           The
personal property (the “Personal Property”) located on the Improvements
(hereinafter defined) which is used for operation and maintenance of the
apartment project and is owned by Seller, including those items set forth on Exhibit B,
which shall be transferred to Purchaser at Closing (as hereinafter defined) by
a Bill of Sale;


 


(c)           All
rights and appurtenances pertaining to the Land, including, without limitation,
any and all rights of Seller in and to all air and development rights, all
mineral rights, roads, alleys, easements, streets and ways adjacent to the
Land, rights of ingress and egress thereto, any strips and gores within or
bounding the Land and in the profits or rights or other appurtenances connected
with the beneficial use or enjoyment of the Land;


 

















 


(d)           Those
certain apartment buildings containing approximately 438 apartment units, and
the other improvements, structures and fixtures placed, constructed or
installed on the Land (collectively, the “Improvements”);


 


(e)           All of
Seller’s right, title and interest in all leases, licenses and concession
agreements (collectively, the “Leases”) covering space situated at or within
the Land and Improvements under any existing Lease occupied by tenants
(collectively, the “Tenants”) and all refundable security deposits deposited by
Tenants with respect to the Leases;


 


(f)            All of
Seller’s rights, title and interest in and to contractual rights and
intangibles with respect to the operation, maintenance, and repair of the Land
and the Improvements, including assignable service and maintenance agreements
but excluding any Master Agreements as hereafter defined (collectively, “Service
Contracts”),  utility agreements,
warranties and guaranties relating to the Property, assignable governmental
permits, licenses, certificates and approvals in connection with the ownership
of the Property (collectively, the “Licenses”), any payments due to the owner
of the Property under or pursuant to the OPA (defined below) attributable to
such owner for the period of such ownership from and after the Closing (“Future
Plan Payments”), and all development rights relating or appurtenant to the Land
or the Improvements, but specifically excluding any warranties and/or
guaranties from and/or claims against the general contractor affiliate of
Seller. As used herein, the term “Master Agreements” means agreements
pertaining to operations, services, maintenance, or repair of multiple
properties of such Seller or affiliates of such Seller;


 


(g)           Seller’s
right, title and interest, if any, to the use of the trade name “Gallery at
NoHo Commons” (the “Trade Name”) in connection with the Property;


 


(h)           The
right, if assignable, to the use of all telephone numbers used by Seller at the
Property; and


 


2

















 


(i)            Subject
to the provisions of Paragraph 6 of this Agreement, all rights to any award
made or to be made or settlement in lieu thereof for damage to the Land or
Improvements by reason of condemnation, eminent domain, exercise of police
power or change of grade of any street.


 


2.             PURCHASE PRICE.  The Purchase Price shall be
paid as follows:


 


(a)           Within two (2) business days after
Purchaser’s receipt of a fully executed electronic or hard copy of this
Agreement, the sum of $2,000,000.00 (the “Earnest Money Deposit”) delivered to
Partners Title Company (the “Escrow Agent”) by
federally wired immediately available funds to be held by the Escrow
Agent, by and in accordance with the provisions of this Agreement.  Upon deposit, this Earnest Money Deposit of
$2,000,000.00 is nonrefundable unless Seller is in default hereunder or if this
Agreement is terminated pursuant to any applicable provision of this Agreement
which provides for a refund of the Earnest Money Deposit;


 


(b)           On the Closing Date (as hereinafter defined), the balance of the
Purchase Price adjusted in accordance with the prorations by federally wired
immediately available funds delivered to the Escrow Agent’s account.


 


(c)           Seller
and Purchaser acknowledge and agree that Purchaser’s agreement to perform its
obligations under this Agreement, including the obligation to deposit the
Earnest Money, is adequate and sufficient consideration to support this
Agreement, notwithstanding Purchaser’s termination rights hereunder.  In addition to the foregoing consideration,
at the same time Purchaser makes the Earnest Money Deposit with the Escrow
Agent, Purchaser shall deliver to Seller cash in the amount of $100.00 (the “Independent
Contract Consideration”) which amount has been bargained for and agreed to as
consideration for Purchaser’s exclusive right or option to purchase the
Property, the right to inspect the Property as provided herein, and 


 


3

















 


Purchaser’s other rights and remedies herein.  The Independent Contract Consideration is in
addition to and independent of all other consideration provided in this
Agreement, and is nonrefundable in all events.


 


(d)           The
Earnest Money Deposit is non-refundable when made, (as provided in Paragraph
2(a)), except if Seller is in default hereunder or if this Agreement is
terminated pursuant to any applicable provisions contained in this Agreement
which provide for a refund of the Earnest Money Deposit.  All Earnest Money shall be
credited to the balance of the Purchase Price at Closing.  All interest on the Earnest Money
remains the sole and exclusive property of Purchaser, does not become part of
the Earnest Money, and is payable to Purchaser upon the termination (for
whatever reason) or Closing.


 


(e)           If (i) Seller
or an affiliate of Seller becomes a debtor in bankruptcy, whether voluntarily
or involuntarily, under Title 11 of the U.S. Code, as now constituted or
hereafter amended, or under any other applicable federal or state bankruptcy
law or other similar law; (ii) a trustee or receiver of any property
interest is appointed; or (iii) Seller makes an assignment for the benefit
of creditors and the Property constitutes property of the
bankruptcy estate, then for purposes of this Agreement, the rejection of this
Agreement by court order or operation of law, shall constitute a “termination”
hereunder and Purchaser shall be entitled to the return of the Earnest Money
Deposit.  Seller acknowledges that its
rights and interest in and to the Earnest Money Deposit, are limited to a right
of payment only pursuant to the terms of this Agreement and the escrow
provisions and that the Earnest Money Deposit, shall not be property of the
bankruptcy estate.


 


3.             TITLE COMMITMENT AND SURVEY


 


(a)   Attached hereto
as Exhibit E is an updated Commitment for Title Insurance Order No. 71075069-X59 dated July 16, 2009 (“Title Commitment”) for an owner’s 


 


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CLTA standard coverage title insurance policy (“Title Policy”) issued by
Chicago Title Insurance Company, with cooperation from Partners Title Company (“Title
Insurer”).  The owner’s Title Policy issued at Closing will be an ALTA 2006 owner’s
policy in the amount of the Purchase Price, dated effective as of the Closing
Date, subject only to: (i) real estate taxes and assessments not yet due
and payable; (ii) existing leases; and (iii) those title exceptions
set forth in Schedule B of the Title Commitment that are: (A) not objected
to by Purchaser within the time or manner set forth in this Agreement, or (B) after
such objection, are not timely cured (or timely agreed to be cured) by Seller
and ultimately waived by Purchaser in accordance with this Agreement.  All of the above are herein referred to as
the “Permitted Exceptions”.  Purchaser
has delivered a notice to Seller in the form of a letter dated March 19,
2009, from Purchaser’s counsel (“Purchaser’s Notice”, a copy of which is
attached hereto as Exhibit E-1) pertaining to an earlier version of the
Title Commitment dated February 13, 2009 (“Initial Title Commitment”)
which lists those title matters in the Initial Title Commitment that are not
approved by Purchaser (“Unpermitted Exceptions”).  Seller has responded to the Purchaser’s
Notice by a letter dated July 22, 2009 (“Seller’s Reply”, a copy of which
is attached hereto as Exhibit E-2) and included therewith the revised
Title Commitment attached hereto as Exhibit E issued by the Title
Company.  Purchaser issued a response
letter dated July 29, 2009 (“Purchaser’s Revised Notice”, a copy of which
is attached hereto as Exhibit E-3) setting forth Purchaser’s remaining
Unpermitted Exceptions (“Purchaser’s Updated Title Objections”) based upon
Seller’s Reply and the Title Commitment. Seller responded to Purchaser’s
Revised Notice on August 3, 2009 (“Seller’s Response”, a copy of which is
attached hereto as Exhibit E-4). 
Subject to Purchaser’s rights under Paragraph 20, Purchaser has approved all of the title exceptions set forth in Schedule B of the
Title Commitment as described in subparagraph (iii) above as modified by
Purchaser’s Notice, Purchaser’s Revised Notice, Seller’s Reply and 


 


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Seller’s Response and agrees, subject to
Purchaser’s rights under Paragraph 20 hereof, to take title to the Property
subject to those Unpermitted Exceptions as modified by Seller’s Reply and
Seller’s Response.  Seller shall be obligated to comply with the
terms of Seller’s Reply and Seller’s Response with respect to the Title
Commitment; provided, however, Seller has disclosed to Purchaser that Seller
has not caused the filtration units and filter inserts at the Property to be
inspected and maintained in accordance with the Master Covenant and Agreement
Regarding On-Site BMP Maintenance recorded as against the Property on December 14,
2004 as Document 04 3220985 (“BMP Maintenance Covenant”). Notwithstanding the
foregoing, no exceptions or liens related to financing on the Property or other
liens of a definite and ascertainable amount will be considered Permitted
Exceptions, and Seller shall Cure such items accordingly by fully paying for
such items on or prior to the Closing Date or bonding around such items (but
not by insuring over) in a manner acceptable to Purchaser in Purchaser’s sole
and absolute discretion on or prior to the Closing Date.  If any update to the Title Commitment
discloses matters which are not reflected on the Title Commitment and Purchaser
objects to the same (an “Additional Title Exception”), Purchaser shall give
notice (“Purchaser’s Additional Notice”) to Seller of such Additional Title
Exception within three (3) business days after the receipt of such
update.   Seller shall have three (3) business
days after receipt of Purchaser’s Additional Notice (the “Additional Title Cure
Period”) to either (i) have the Additional Title Exceptions removed from
the Title Commitment, or (ii) obtain a commitment from the Title Insurer
to “insure over” the Additional Title Exceptions to Purchaser’s satisfaction,
or (iii) commit to “bond over” the Additional Title Exceptions to
Purchaser’s satisfaction (collectively, “Additional Title Cure”).  If, during the Additional Title Cure Period,
Seller does not perform the Additional Title Cure or commit to perform the
Additional Title Cure all of the Additional Title Exceptions, then Purchaser
can, 


 


6

















 


within three (3) business days after the
expiration of the Additional Title Cure Period, elect to either take title to
the Property subject to such uncured Additional Title Exceptions or terminate
this Agreement and receive a full refund of the Earnest Money.  Purchaser’s failure to deliver Purchaser’s
Additional Notice shall be conclusive evidence that Purchaser has approved all
of the Additional Title Exceptions set forth in Schedule B of the updated Title
Commitment as described above, and its failure to terminate this Agreement
within three (3) business days after expiration of the Additional Title
Cure Period shall be deemed an election by Purchaser to take title to the
Property subject to the Additional Title Exceptions as modified by Seller’s
Additional Title Cure, if at all.   The
Title Commitment shall be conclusive evidence of good title as therein shown as
to all matters insured by the policy, subject only to the Permitted Exceptions.  On the Closing Date, Seller shall cause the
Title Insurer to issue the Title Policy or a “marked up” commitment in
conformity with the updated Title Commitment attached as Exhibit E hereto,
as modified in accordance with this Paragraph 3(a) and subject only to the
Permitted Exceptions, providing an irrevocable commitment by the Title Insurer
to issue the Title Policy in accordance with this Agreement.  Seller shall pay the costs of the Title
Policy.  Purchaser shall pay the
additional costs of an “extended coverage” Title Policy and any special
endorsements which Purchaser requires.


 


(b)           Purchaser
acknowledges receipt of a survey of the Property, updated January 8, 2009,
prepared by Hovell & Pilarski Engineering (the “Survey”).  Purchaser approves the Survey; provided,
however, upon execution of this Agreement by Seller and Purchaser, Purchaser
may request the surveyor to update the Survey, have it recertified to Purchaser
and the Title Company and show additional items on the Survey as noted in
Purchaser’s Notice with respect to the Survey, all of the foregoing at
Purchaser’s sole cost and expense. If the revised Survey discloses matters
which are not reflected on the Survey and 


 


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demonstrate that the Property is not in compliance with
applicable building and zoning codes (a “Survey Defect”), Purchaser shall give
notice (“Survey Defect Notice”) to Seller of such Survey Defect.  Seller shall have five (5) business days
after receipt of such Survey Defect Notice (“Survey Cure Period”) to either
cure or commit to cure (“Survey Cure”) the Survey Defects or advise Purchaser
that Seller will not cure the Survey Defects. 
If Seller fails to deliver written notice to Purchaser of its election
to either cure or not cure the Survey Defects prior to the expiration of the
Survey Cure Period, Seller will be deemed to have elected not to cure the
Survey Defects.  If Seller elects, or is
deemed to have elected, not to cure one or more of the Survey Defects, then Purchaser
shall have the right to terminate this Agreement within three (3) business days after expiration of the Survey Cure
Period and receive a full refund of
the Earnest Money Deposit.  Purchaser’s
failure to terminate this Agreement within three (3) business
days after expiration of the Survey Cure Period shall be deemed an election by
Purchaser to accept the Survey, as modified by Seller’s Survey Cure, if at all.


 


(c)           Purchaser
shall pay for any additional work which Purchaser requires, except for those
matters that Seller timely cures or commits to cure as provided herein.


 


(d)           If Purchaser
terminates this Agreement pursuant to subparagraph (a) or (b) under
this Paragraph 3, then the Earnest Money Deposit shall be returned to the
Purchaser and this Agreement shall be terminated, and except as specifically
provided for elsewhere in this Agreement, neither party shall have any further
obligation or liability hereunder.


 


(e)           Notwithstanding
the foregoing, in no event will either of the following be deemed a Permitted
Exception: (i) any title matter (whether an Unpermitted Title Exception or
an Additional Title Exception) to which Purchaser objects in accordance with
the terms of this Agreement that Seller Cures or commits to Cure, or as
otherwise set forth in Paragraph 20 hereof (unless expressly waived thereafter
by Purchaser hereunder); or (ii) any Survey Defect 


 


8

















 


that Seller cures or commits to cure in accordance
herewith; provided, however, Purchaser shall accept all Unpermitted Exceptions
and all Survey Defects that have been Cured.


 


4.     CONDITION OF TITLE/CONVEYANCE.  Seller agrees to convey fee simple title to the Property by Grant Deed (“Deed”)
in recordable form subject only to the Permitted Exceptions.  If Seller is unable to convey title to the
Property subject only to the Permitted Exceptions because of the existence of
an additional title exception not shown on the Title Commitment (“New Exception”),
then Purchaser can elect to take title to the Property subject to the New
Exception or terminate this Agreement and receive a full refund of the Earnest
Money Deposit.  If Purchaser elects to
terminate this Agreement pursuant to this Paragraph, then the Earnest Money
Deposit shall be delivered to the Purchaser and except as specifically provided
for elsewhere in this Agreement, neither party shall have any further
obligation or liability hereunder. 
Notwithstanding the aforesaid, all liens of a definite ascertainable
amount which are New or Unpermitted Exceptions shall be fully paid for by Seller
at or before Closing or bonded around by Seller (but not insured over) at or
before Closing in a manner acceptable to the Title Insurer to remove the same
from the Title Commitment.  Purchaser’s
election to terminate under this Paragraph 4 is not intended to limit any
remedy to which Purchaser may be entitled to under this Agreement, including
(without limitation) any remedy for a Seller default.


 


5.     PAYMENT OF CLOSING COSTS. Seller shall pay: (a) the
costs of the transfer taxes or documentary stamps to be paid with reference to
the recording of the Deed, if any; and (b) any costs associated with
Seller’s financing on the Property, including prepayment fees and per diem
interest.  Purchaser shall pay the
closing costs with reference to any loan which Purchaser obtains.  Purchaser and Seller shall equally share the
Escrow Agent’s escrow fees.  Each party
shall pay its attorney’s fees and other legal costs in connection with this
Agreement (subject to the express limitations herein).  All other costs not expressly addressed in
this Paragraph 5 or 


 


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elsewhere in this Agreement will be the responsibility
of the party typically responsible for such costs in a transaction in the
county where the Property is located.


 


6.             DAMAGE, CASUALTY AND CONDEMNATION.


 


(a)   The risk of loss or damage
to the Property by fire or other casualty prior to Closing is borne by Seller;
provided that the disposition of the Property following a fire or casualty
shall be governed by this Paragraph 6. 
Seller shall give Purchaser prompt notice of any destruction of any part
of the Property or the commencement of any condemnation proceedings against the
Property between the date of this Agreement and the Closing Date.  If the Property suffers damage as a result of
any insured casualty prior to the Closing Date and can be repaired or restored
for $250,000 or less, then Seller shall commence the repair or restoration in a
expeditious manner, pursuant to construction, repair and restoration contracts
approved in advance  by Purchaser, in
Purchaser’s commercially reasonable judgment (“Repair Contracts”) (except no
such advance approval shall be required in the case of an emergency, as
determined by Seller in its commercially reasonable judgment, that requires
prompt repair or restoration by Seller, provided Seller provides copies of such
Repair Contracts to Purchaser promptly after obtaining the same) and the
Closing will occur with no reduction in the Purchase Price, provided that, with
respect to such damage that has not been repaired or restored, at Closing: (i) Seller
shall assign to Purchaser all proceeds of property insurance payable to Seller,
less any amounts paid by Seller to repair, restore, or clean up the Property; (ii) Purchaser
will receive a credit against the Purchase Price equal to the amount of any
deductible under Seller’s property insurance policy; (iii) Purchaser shall
accept the Property and remaining Improvements in their damaged state; (iv) Seller
has no further obligation to repair or restore any damaged or destroyed
portions of the Property; and (v) Seller will assign to Purchaser all of
Seller’s rights, title and interest under the Repair Contracts, pursuant to an
assignment document


 


10
















 


in substantially the same form as the assignment of Service Contracts
contemplated by this Agreement.  If the
cost of repair or restoration exceeds $250,000, then Purchaser can elect to
either: (a) terminate this Agreement within seven (7) business days after
receipt of written notice of the cost to repair or restore such casualty and receive a full refund of the Earnest Money
Deposit; or (b) proceed to Closing with no reduction in the
Purchase Price and at Closing: (i) Seller shall assign to Purchaser all
proceeds of property insurance payable to Seller, less any amounts paid by
Seller to repair, restore, or clean up the Property; (ii) Purchaser will
receive a credit against the Purchase Price equal to the amount of any
deductible under Seller’s property insurance policy; (iii) Purchaser shall
accept the Property and remaining Improvements in their damaged state; and (iv) Seller
has no further obligation to repair or restore any damaged or destroyed
portions of the Property.


 


(b)   If condemnation proceedings
(“Proceedings”) are instituted against the Property and Purchaser, in its
commercially reasonable judgment, determines that such  proceedings would have a material adverse
impact on the Property, then Purchaser can elect to either take the Property
subject to the Proceedings along with an assignment of Seller’s interest in the
Proceedings or terminate this Agreement and
receive a full refund of the Earnest Money Deposit.  If Purchaser elects to terminate this
Agreement, it shall be by notice to the Seller within fifteen (15) business
days after Seller notifies Purchaser of the Proceedings and Purchaser shall receive a full refund of the Earnest Money Deposit.  If Proceedings are instituted against the
Property and Purchaser does not have the option to terminate this Agreement as
provided above, then at Closing, Purchaser will take an assignment of Seller’s
interest in the Proceedings.


 


(c)   If the
Agreement is terminated pursuant to this Paragraph, then the Earnest Money
Deposit shall be delivered to the Purchaser and except as specifically provided for 


 


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elsewhere in this Agreement, neither party shall
have any further obligation or liability hereunder.


 


7.             AS-IS CONDITION.


 


(a)   Except as may
be specifically set forth in this Agreement or in any document executed by
Seller in connection with the Closing (the “Closing Documents”), Purchaser is not
relying on Seller having made any inquiry as to the condition of the Property
or the Leases, and except as may be specifically set forth in this Agreement or
in any of the Closing Documents, Purchaser acknowledges and agrees that it will
be purchasing the Property based solely upon its inspection and investigations
of the Property and that Purchaser will be purchasing the Property “AS IS” and “WITH
ALL FAULTS” based upon the condition of the Property as of the date of this
Agreement, subject to reasonable wear and tear and, subject to the provisions
of Paragraph 6, loss by fire or other
casualty or condemnation from the date of this Agreement until the Closing
Date.  Without limiting the foregoing,
Purchaser acknowledges that, except as may otherwise be specifically set forth
in Paragraph 18 or elsewhere in this
Agreement or in any of the Closing Documents, neither Seller nor its
consultants, brokers or agents have made any other representations or
warranties of any kind upon which Purchaser is relying as to any matters
concerning the Property, including, but not limited to, any implied warranty as
to the quality of the construction of the Property or its fitness for use as an
apartment project, the condition of the Land or any of the Improvements,
whether or not the Property is subject to airport corridor noise, the existence
or nonexistence of asbestos, lead in water, lead in paint, radon, underground
or above ground storage tanks, petroleum, toxic waste or any Hazardous
Materials or Hazardous Substances (as such terms are defined below), whether
or not the Property is affected by the Natural Hazard Laws (as such term is
defined below), the Tenants of the Property or the Leases affecting the Property, 


 


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economic projections or market studies
concerning the Property, any development rights, taxes, assessments under authority of the Mello Roos
Community Facilities Act of 1982 or similar legislation, bonds, covenants, conditions and restrictions affecting the Property,
water or water rights, topography, drainage, soil, subsoil of the Property, the
utilities serving the Property or any zoning, environmental or building laws, rules or
regulations affecting the Property. 
Except as may be specifically set forth in this Agreement or in any of
the Closing Documents, Seller makes no representation that the Property
complies with Title III of the Americans With Disabilities Act, the Fair
Housing Act of 1968 as amended, the
California Health and Safety Code Section 25249-6, California Proposition
65, the California Fair Employment and Housing Act as amended or any fire codes, building codes or health codes. Except as may be
specifically set forth in this Agreement or in any of the Closing Documents,
Purchaser hereby releases Seller, which release shall also inure to the benefit
of any member, manager, or partner of Seller, FF Development L.P., FF
Properties L.P. and their affiliates (collectively referred to herein as the “Related
Parties”) from any and all liability in connection with any claims (including
but not limited to all health and medical claims) which Purchaser may have against
Seller or any of the Related Parties, and Purchaser hereby agrees not to assert
any claims (except as specifically set forth in this Agreement or in any of the
Closing Documents), for damage, loss, compensation, contribution, cost recovery
or otherwise, against Seller or any of the Related Parties, whether in tort,
contract, or otherwise, relating directly or indirectly to the condition of the
Property, including without limitation (i) claims relating to the
existence of asbestos; (ii) claims attributable to indoor air quality
issues, releases from building material and furnishings, releases from
cleaning, repairing, or decorating activities, and the operation of heating and
cooling systems and humidifiers; or (iii) claims relating to Hazardous
Materials or Hazardous Substances on, or environmental conditions of, the
Property, or arising under the 


 


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Environmental Laws (as such term is
hereinafter defined), or relating in any way to the quality of the indoor or
outdoor environment at the Property including methane gas or any of its
derivatives; or (iv) claims relating to mold, fungus, bacteria and/or
other biological growth or biological growth factors, or any other type of
indoor contaminants that may exist on the Property; or (v) claims relating
to latent or patent construction defects or any implied warranty as to fitness
for use as an apartment project; or (vi) claims related to Natural Hazard Laws; or (vii) claims relating to the failure of Seller to disclose any
information relating to the Property, except as may otherwise be expressly set
forth in Paragraph 18 or elsewhere in this Agreement. 
Notwithstanding anything to the contrary contained herein, Purchaser’s
waivers and releases contained in this Agreement shall not apply to, and
nothing contained in this Paragraph 7(a) shall constitute a waiver or
release by Purchaser with respect to, (A) any claims arising out of Seller’s
fraud, (B) any claims arising out of any breach of Seller’s representations,
warranties, covenants or obligations specifically set forth in Paragraph 18 or
elsewhere in this Agreement or in any of the Closing Documents, (C) any
claims made or asserted against Purchaser by any third party (including,
without limitation, any applicable governing local, state or federal authority
or agency) to the extent that such claims arise out of or in connection with
any Hazardous Materials or Hazardous Substances actually brought, placed or
released in, on, under or about the Land or the Improvements by Seller or its
Related Parties or their respective agents, employees or contractors, or (D) any
claims made or asserted against Purchaser by any third party for personal
injury or property damage sustained prior to the Closing Date that arise out of
or result from occurrences on all or any portion of the Land or the
Improvements prior to the Closing Date, but only to the extent such claims do
not arise or result from the negligence or willful misconduct of Purchaser or
its agents, employees or contractors.  As
used in this paragraph the term “affiliates” means, with respect to Seller or
any manager, member or partner 


 


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of Seller, any other entity or person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with Seller or any manager, member or
partner of Seller.  As used in the
previous sentence, “control” means the possession, directly or indirectly, of
the power to cause the direction of the management of Seller or any manager,
member or partner of Seller, whether through voting securities, by contract,
family relationship or otherwise.  This
release shall forever survive the Closing and the delivery and recording of the
Deed.  As used herein, the term “Natural Hazard Laws” means
Government Code Sections 8589.4; 8589.3; Government Code Section 51183.5
(Fire Hazard Severity Zone); Public Resource Code Section 2621.9
(Earthquake Fault Zone); Public Resource Code Section 2694 (Seismic Hazard
Zone); and Public Resource Code Section 4136 (Wildland Area). As used herein, the term “Hazardous Materials” or “Hazardous
Substances” means (i) hazardous wastes, hazardous materials, hazardous
substances, hazardous constituents, toxic substances or related materials,
whether solids, liquids or gases, including but not limited to substances
defined as “hazardous wastes,” “hazardous materials,” “hazardous substances,” “toxic
substances,” “pollutants,” “contaminants,” “radioactive materials”, “toxic
pollutants”, or other similar designations in, or otherwise subject to
regulation under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (“CERCLA”), 42 U.S.C. § 9601 et seq.; the Toxic Substance Control Act (“TSCA”), 15 U.S.C. § 2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1802; the
Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 9601, et seq.; the Clean Water Act (“CWA”), 33 U.S.C. § 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Clean Air Act (“CAA”), 42 U.S.C. § 7401 et seq.; [the California Water Resources
Control Board; any Regional Water Quality Control Board; the California Air
Resources Board; Cal/OSHA Standards Board Division of Occupational Safety and
Health; the California Department of Food and Agriculture; 


 


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the California
Department of Health Services; and in any
permits, licenses, approvals, plans, rules, regulations or ordinances adopted,
or other criteria and guidelines promulgated pursuant to the preceding laws or
other similar federal, state or local laws, regulations, rules or
ordinances now or hereafter in effect relating to environmental matters
(collectively the “Environmental Laws”); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulation or ordinance, including any Environmental Law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined
petroleum products, (C) waste oil, (D) waste aviation
or motor vehicle fuel and their byproducts, (E) asbestos, (F) lead
in water, paint or elsewhere, (G) radon, (H) Polychlorinated
Biphenyls (PCB’s), (I) ureaformaldehyde, (J) volatile
organic compounds (VOC), (K) total petroleum hydrocarbons (TPH), (L) benzene
derivative (BTEX), (M) petroleum byproducts and (N) methane
gas or any of its derivatives.  With respect to Purchaser’s
release set forth in this Paragraph 7(a), Purchaser
also hereby specifically waives the provisions of Section 1542 of the
California Civil Code which provide:


 


“A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”


 


Purchaser hereby specifically acknowledges
that Purchaser has carefully reviewed this subsection, and discussed its import
with legal counsel, is fully aware of its consequences, and that the provisions
of this subsection are a material part of this Agreement.


 


	
   

  	
  Purchaser’s
  Initials

  	
      /s/
  MA

  



 


16

















 


(b)           Seller
has provided to Purchaser certain unaudited historical financial information
regarding the Property relating to certain periods of time in which Seller
owned the Property.  Except as may be
otherwise specifically set forth elsewhere in this Agreement or in any of the
Closing Documents, Seller makes no representation or warranty that such material
is complete or accurate or that Purchaser will achieve similar financial or
other results with respect to the operations of the Property, it being
acknowledged by Purchaser that Seller’s operation of the Property and
allocations of revenues or expenses may be vastly different than Purchaser may
be able to attain.  Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate and further that Purchaser has relied upon its own investigation and
inquiry with respect to the operation of the Property and releases Seller and
the Related Parties from any liability with respect to such historical
information.


 


	
   

  	
  Purchaser’s
  Initials

  	
      /s/
  MA

  



 


8.             CLOSING.


 


(a)           The
closing (“Closing”) of this transaction shall be on the date that is ten (10) business
days after the date on which Seller has provided Purchaser with a copy of both
the OPA Assignment executed by the Community Redevelopment Agency of the City
of Los Angeles (“CRA”), and the MTA Assignment executed by the Los Angeles
County Metropolitan  Transportation
Authority (“MTA”), as set forth more fully
in Paragraph 20(b) of this Agreement, whichever is the last to occur
(“Closing Date”), at which time Seller
shall deliver possession of the Property to Purchaser; provided, however, the
Closing Date shall not be earlier than August 13, 2009 or later than October 30,
2009.  There will be a “pre-closing” on
the first business day immediately preceding the Closing Date (“Pre-Closing
Date”) through the office of the Title Insurer. Receipt of the executed OPA
Assignment and the MTA 


 


17

















 


Assignment are conditions precedent to the Closing, as
set forth more fully in Paragraph 20(b) of this Agreement.


 


9.             CLOSING DOCUMENTS.


 


(a)           On or
before the Closing Date, Purchaser shall deliver to Escrow Agent the balance of
the Purchase Price plus or minus prorations, in accordance with the closing
statement prepared by Escrow Agent.


 


(b)           On the
Closing Date, Seller shall deliver to Purchaser possession of the Property; all
keys used in connection with the Property; original Leases in Seller’s
possession or control (and copies of each Lease for which an original is not
delivered), copies of the Tenants Lease files (which will be available at the
Property); originals of the Service Contracts to the extent
retained by Purchaser (and copies of each Service Contract for which an
original was not retained by Purchaser), licenses, occupancy agreements, lease
commission agreements, permits, and other agreements executed by Seller
affecting the Property; and originals of all Licenses in Seller’s possession or control (and copies of each License for which
an original is not delivered).


 


(c)           On or
before the Pre-Closing Date, Seller and Purchaser (where applicable) shall
deliver to Escrow Agent or the other party, as applicable, executed originals
of the following:


 


(i)            the Deed (in the form of Exhibit F attached hereto) executed by
Seller subject only to the Permitted Exceptions and those Unpermitted
Exceptions waived by Purchaser, if any;


 


(ii)           the Bill of Sale (in the form of Exhibit G attached hereto) which
shall be executed by Seller and Purchaser;


 


18

















 


(iii)          a closing statement prepared by the Escrow Agent (the closing statement
can be sent by facsimile and no original is required);


 


(iv)          an assignment and assumption of all Service Contracts (in the form of Exhibit H
attached hereto) which shall be executed by Seller and Purchaser;


 


(v)           an assignment and assumption of all Leases and security deposits (in the
form of Exhibit I attached hereto) which shall be executed by Seller and
Purchaser;


 


(vi)          an updated rent roll, dated no earlier than three (3) business days
prior to Closing, certified by Seller as true and correct;


 


(vii)         a
notice to the tenants of the transfer of title and the assumption by Purchaser
of the landlord’s obligations under the Leases and the obligation to refund the
security deposits (in the form of Exhibit J attached hereto), which shall
be executed by Seller and Purchaser;


 


(viii)        a
non-foreign affidavit (in the form of Exhibit K attached hereto), executed
by Seller;


 


(ix)           California Form 593-C;


 


(x)            an assignment of intangible property (in the form of Exhibit L
attached hereto), which shall be executed by Seller and Purchaser;


 


(xi)           an assignment of those warranties and guaranties
from the subcontractors relating to the construction of the Improvements (in the form of Exhibit M attached hereto);


 


(xii)          an assignment of all additional assignable warranties
or guaranties in connection with the Property and all assignable governmental permits, licenses, certificates and approvals
covering the buildings and the Personal Property situated on 


 


19

















 


the Property, but excluding any warranties and/or
guaranties from the general contractor affiliate of Seller (in the form of Exhibit M-1
attached hereto), which shall be executed by Seller and Purchaser;


 


(xiii)         the
Prohibition Against Condominium Conversion Agreement in the form of Exhibit S,
which shall be executed by Seller and Purchaser;


 


(xiv)        the
OPA Assignment as further described in Paragraph 20(b) hereof which shall
be executed by Seller, Purchaser and the CRA;


 


(xv)         an
assignment and assumption of the Greenway License Agreement, executed by
Seller, Purchaser and the MTA, and any consent required by the MTA, as set
forth more fully in Paragraph 20(b) hereof (in the form of Exhibit Y
attached hereto);


 


(xvi)        a reaffirmation of the
representations and warranties, executed by Seller;


 


(xvii)       evidence of the termination
of the property management agreement;


 


(xviii)      evidence satisfactory to
Purchaser, in its commercially reasonable judgment, that any leases to
employees who will not be retained by Purchaser or Purchaser’s management
company have been amended to contain current “market” terms that are consistent
in all material respects with the terms of new resident Leases;


 


(xix)         originals of the following
if they are in Seller’s possession or control (or copies to the extent
originals are not in Seller’s possession or control): Licenses, leasing
commission agreements, permits, plans, warranties, and Service Contracts;


 


20
















 


(xx)          such other documents executed by Seller and/or Purchaser as may be
reasonably required by the Title Insurer, including a Gap Indemnity from
Seller, in order to consummate the transaction as set forth in this Agreement.


 


(d)           At the
Closing on the Closing Date, the Escrow Agent shall deliver the Purchase Price
to the Seller in accordance with the closing statement and closing instructions
of the Purchaser; provided, however that in no event shall any closing
instructions or funding by any lender include any condition which requires that
any documents be recorded as a pre-condition to funding.  The Closing will be deemed to have occurred
with respect to Purchaser or Seller (as applicable) if such party has: (i) complied
with all of its obligations in connection with the Closing; and (ii) provided
Escrow Agent with authorization to record the necessary documents and fund the
transaction at or before 5:00 p.m. Central Time on the Closing Date.


 


(e)           If as
of the Closing Date (i) Seller shall have complied with all of its
obligations in connection with the Closing and shall have authorized funding of
the transaction, and (ii) the Title Insurance Company is irrevocably
committed to issue the Owner’s Title Policy subject only to the receipt of
sufficient funds to close or authorization to disburse, then if the transaction
has not funded (by wire transfer of the Purchase Price to Seller) on or before
5:00 p.m. Central Time on the Closing Date, Purchaser shall be in default
hereunder and the Escrow Agent shall deliver the Earnest Money to Seller.


 


10.           SELLER’S RIGHT TO CURE.  If on or prior
to the Closing Date, Purchaser discovers that any representation or warranty of
Seller is untrue or misleading in any material respect or that Seller is in
default under this Agreement or that Seller has failed to perform a required
covenant (collectively, a “Breach”), then Purchaser shall give Seller notice of
such Breach (“Purchaser’s Notice”), or an event that with the passage of time
or notice, would be considered a default hereunder; provided, however,
Purchaser’s failure to give such notice is not 


 


21

















 


a
default by Purchaser.  Upon receipt of
Purchaser’s Notice, Seller shall have the right to cure such Breach within ten
days after receipt of such notice (or, if earlier, the Closing Date).   If Seller is unable to timely cure the
Breach, then Seller shall so notify Purchaser (“Seller’s Notice”).  In the event of such an uncured Breach
(regardless of whether Seller’s Notice is delivered), Purchaser can either
waive the Breach or, upon notice to Seller and to the Escrow Agent, terminate
this Agreement and seek any other remedy to which Purchaser is entitled
hereunder.  In such event, the Earnest
Money Deposit shall be returned to
the Purchaser and except as specifically provided for elsewhere in this
Agreement, neither party shall have any further obligation or liability
hereunder.


 


11.           DEFAULT BY PURCHASER.  ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO SECURE THE TIMELY PERFORMANCE
BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS UNDER THIS AGREEMENT.  IN THE EVENT OF ANY UNCURED
DEFAULT OF THE PURCHASER UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER MAY,
UPON NOTICE TO PURCHASER, TERMINATE THIS AGREEMENT AND RETAIN ALL OF THE
EARNEST MONEY AS SELLER’S SOLE AND EXCLUSIVE RIGHT TO DAMAGES OR ANY OTHER
REMEDY AND PURCHASER SHALL HAVE NO FURTHER RIGHTS TO PURCHASE THE
PROPERTY.  FOR PURPOSES OF THIS SECTION,
AN “UNCURED DEFAULT” IS ANY DEFAULT OR BREACH UNDER THIS AGREEMENT THAT IS NOT
CURED BY PURCHASER WITHIN TEN (10) DAYS AFTER WRITTEN NOTICE FROM SELLER
TO PURCHASER AND ESCROW AGENT WHICH SPECIFIES DETAILS OF SUCH DEFAULT, EXCEPT
FOR THE FAILURE OF PURCHASER TO MAKE WHEN DUE HEREUNDER ANY PAYMENT OF EARNEST
MONEY OR OF THE PURCHASE PRICE, OR FAILURE OF PURCHASER TO CLOSE UNDER THIS
AGREEMENT ON THE CLOSING DATE FOR ANY REASON 


 


22

















 


(OTHER
THAN A SELLER DEFAULT THAT HAS NOT BEEN CURED WITHIN ANY APPLICABLE CURE PERIOD
UNDER THIS AGREEMENT), NONE OF WHICH ARE ELIGIBLE TO BE CURED.  THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL
DAMAGES, IN THE EVENT OF AN UNCURED DEFAULT BY PURCHASER, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE,
BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY
HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF
SELLER’S DAMAGES.


 


	
  Seller’s Initials

  	
      /s/ GAB

  	
   

  	
  Purchaser’s Initials

  	
      /s/ MA

  



 


12.        SELLER’S DEFAULT.  IN THE EVENT OF AN UNCURED DEFAULT BY SELLER, PURCHASER’S SOLE REMEDY
SHALL BE THE RIGHT TO (A) COLLECT ACTUAL DAMAGES FROM SELLER NOT TO EXCEED
$250,000.00 AND THE RETURN OF THE EARNEST MONEY DEPOSIT, AND THIS AGREEMENT SHALL TERMINATE AND EXCEPT AS
SPECIFICALLY PROVIDED FOR ELSEWHERE IN THIS AGREEMENT, NEITHER PARTY SHALL HAVE
ANY FURTHER OBLIGATION OR LIABILITY TO EACH OTHER AT LAW OR IN EQUITY; OR (B) SUE
FOR SPECIFIC PERFORMANCE OF ALL OF SELLER’S OBLIGATIONS HEREUNDER (AND SELLER
HEREBY ACKNOWLEDGES THAT NO OTHER REMEDY AVAILABLE TO PURCHASER HEREUNDER SHALL
BE CONSTRUED OR INTERPRETED AS AN ADEQUATE LEGAL REMEDY THAT WOULD PRECLUDE
PURCHASER FROM PURSUING AN ACTION FOR SPECIFIC PERFORMANCE OF THIS
AGREEMENT).  FOR PURPOSES OF THIS SECTION,
AN UNCURED DEFAULT IS ANY DEFAULT OR BREACH UNDER THIS AGREEMENT THAT IS NOT
CURED BY SELLER WITHIN TEN (10) DAYS AFTER WRITTEN NOTICE FROM PURCHASER
TO SELLER AND ESCROW AGENT WHICH 


 


23

















 


SPECIFIES THE DETAILS OF SUCH DEFAULT, EXCEPT FOR THE FAILURE OF SELLER
TO CLOSE UNDER THIS AGREEMENT ON THE CLOSING DATE FOR ANY REASON OTHER THAN A
PURCHASER DEFAULT THAT HAS NOT BEEN CURED WITHIN ANY APPLICABLE CURE PERIOD
UNDER THIS AGREEMENT.


 


	
  Seller’s Initials

  	
      /s/ GAB

  	
   

  	
  Purchaser’s Initials

  	
      /s/ MA

  



 


13.        (a)              PRORATIONS. Rents actually
collected for the calendar month in which the Closing occurs (exclusive of
Delinquent Rent, as hereinafter defined, but including prepaid rents covering a
period subsequent to Closing); water and other utility charges; fuels; prepaid
revenues and expenses covering a period subsequent to Closing (including
payments made to Seller arising out of or related to the OPA (defined below),
the Redevelopment Plan (defined below) or any affordable housing regulations);
real and personal property taxes (“Property Taxes”); and other similar revenue
and expense items shall be adjusted ratably as of 11:59 P.M. Pacific Time
on the Closing Date (“Proration Date”), and credited or debited to the balance
of the cash due at Closing. All regular and
supplemental taxes and assessments attributable to the period prior to the
Closing Date shall be the responsibility of Seller. All regular and
supplemental taxes and assessments attributable to the period after the Closing
Date shall be the responsibility of Purchaser. If the amount of any of the items to be prorated
is not then ascertainable, the adjustment thereof shall be on the basis of the
most recent ascertainable data.  With
respect to Property Taxes, if Closing occurs before the current fiscal year’s
tax bills are available, the proration will be based upon the previous fiscal
year’s tax bill and the proration shall be readjusted and settled by Seller and
Purchaser within ten (10) business days after such tax bill is issued. If special assessments have been levied against
the Property for improvements, then the amount of any installments which are
attributable to periods on or prior to the Closing Date shall be paid by the
Seller; and the amount of installments which are attributable to periods 


 


24

















 


after the Closing Date shall be paid by the
Purchaser.  If any charges, expenses or
other items to be prorated hereunder are unavailable on the Closing Date, a
readjustment will be made within ten (10) business days following the
availability of accurate bills and figures.


 


(b)           DELINQUENT RENTS.  If, as of the Closing Date, basic rent is in arrears (“Delinquent Rent”),
then rents collected by Purchaser shall first be applied to rents currently due
to Purchaser and then to Delinquent Rent. 
Purchaser shall deliver Seller’s pro rata share within 10 days of
Purchaser’s receipt of that Delinquent Rent.  With respect to Delinquent Rent not more than
60 days delinquent as of the Closing Date, Purchaser shall make an attempt to
collect same for Seller’s benefit after the Closing in the usual course of the
operation of the Property (but Purchaser is not required to incur any expense
in the collection effort).  Purchaser’s
obligation to remit Delinquent Rent payments to Seller terminates 90 days after
the Closing.  Nothing contained herein
requires Purchaser to institute any lawsuit or other collection procedure to
collect Delinquent Rents, and Seller shall, as of the Closing Date, abandon all
efforts to collect Delinquent Rents.


 


(c)           SECURITY DEPOSITS.  The full
amount of the security deposits (and interest thereon if required by law) for
the return of which Purchaser or any subsequent owner of the Property could be
held accountable or responsible on or after the Closing Date will, at Closing,
be paid to Purchaser by Seller and assumed by Purchaser.


 


This Paragraph 13 of this Agreement shall survive the
Closing and the delivery and recording of the Deed.


 


14.           RECORDING.  This Agreement shall not be
recorded and the act of recording by Purchaser shall be an act of default
hereunder by Purchaser and shall be subject to the provisions of Paragraph 11.


 


25

















 


15.           ASSIGNMENT.  The Purchaser may not assign its interest in this Agreement without the
prior written consent of the Seller. 
Notwithstanding the foregoing, Purchaser may, upon notice to Seller
within five (5) business days after the Effective Date, assign its rights
under this Agreement to (a) any affiliate of Purchaser, or (b) any
entity in which Purchaser, or the principals thereof, have control as defined
herein, provided that in each instance Purchaser shall remain liable for
Purchaser’s obligations under this Agreement. 
For purposes of this Paragraph, an “affiliate” means (i) an entity
that controls, is controlled by, or is under common control, with the entity in
question, (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.  Except as provided above, any other
assignment or transfer of, or attempt to assign or transfer, Purchaser’s
interest in this Agreement shall be an act of default hereunder by Purchaser
and subject to the provisions of Paragraph 11.


 


16.           BROKER. The parties hereto acknowledge that Multi Housing Capital Advisors (“Broker”)
is the only real estate broker involved in this transaction.  The foregoing does not apply to any fee which
may be paid by Seller to any affiliate of Seller or FF Properties L.P. or an
exclusive broker engaged by an affiliate of Seller as a result of this transaction
(collectively, an “Affiliate Broker”). 
Seller agrees to pay Broker a commission or fee (“Fee”) pursuant to an
agreement between Seller and Broker. 
Purchaser agrees to indemnify, defend and hold harmless the Seller and
any member, partner or affiliate or parent of Seller, and all shareholders,
employees, officers and directors of Seller or Seller’s partner(s), or
member(s), or parent or affiliate (each of the above is individually referred
to as a “Seller Indemnitee”) from all claims, including attorneys’ fees and
costs incurred by a Seller Indemnitee as a result of anyone’s claiming by or
through Purchaser any fee, commission or compensation on account of this 


 


26

















 


Agreement, its negotiation or the sale hereby
contemplated other than the Fee payable by Seller to Broker.  Purchaser does now and shall at all times
consent to a Seller Indemnitee’s selection of defense counsel.  Seller agrees to indemnify, defend and hold
harmless the Purchaser and all shareholders, employees, officers and directors
of Purchaser or Purchaser’s parent or affiliate (each of the above is
individually referred to as a “Purchaser Indemnitee”) from all claims,
including attorneys’ fees and costs incurred by a Purchaser Indemnitee as a
result of anyone’s claiming by or through Seller any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated, including (without limitation) any claims by Broker or an
Affiliate Broker.  Seller does now and
shall at all times consent to a Purchaser Indemnitee’s selection of defense
counsel.  Notwithstanding anything
contained in this Agreement to the contrary, the provisions of this Paragraph
shall forever survive the Closing and delivery of the Deed or earlier
termination of this Agreement.


 


17.           DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL
PERIOD.


 


(a)           Seller
has heretofore delivered originals or copies of the following documents to the
extent in Seller’s possession or control or otherwise reasonably available to
Seller (collectively the “Documents”):


 


(i)            Copies of the latest construction drawings for the Improvements.


 


(ii)           Copies of all certificates of occupancy.


 


(iii)          Copies of any third party environmental and seismic or soils (as
applicable) reports relating to the Property.


 


(iv)          Copies of the most recent real estate and personal property tax bills.


 


(v)           Copies of all Service Contracts pertaining to the Property and a schedule
listing all such Service Contracts.


 


27

















 


(vi)          A schedule listing all Personal Property.


 


(vii)         True,
correct and complete copies of any Leases and licenses which are located at the
Property for Purchaser’s review.


 


(viii)        A
current rent roll (“Rent Roll”), certified by Seller to be true and correct in
all materials respects as of the date thereof.


 


(ix)           If available, unaudited income and expense statements of operations
(hereinafter referred to as the “Financial Statements”) for the Property for
the prior calendar year and the latest available current calendar year.


 


(x)            Such other non-confidential documents as Purchaser may have requested.


 


(b)           Purchaser and its representatives and consultants have had the
opportunity to inspect, test and conduct due diligence at the Property prior to
the date of this Agreement.  Accordingly,
upon execution of this Agreement, it is deemed that Purchaser (i) has
approved the Documents and the condition of the Property, (ii) has acknowledged and agreed that, prior to purchase,
Purchaser has been given adequate access to inspect the Property, including the
opportunity to conduct invasive testing to discover any patent or latent
defects in or on the Property, examine the books and records relating to the
Property; conduct interviews or take any other necessary steps to fully and
adequately discover any and all latent or patent defects with the Property, (iii) has
acknowledged that it has the full and complete knowledge necessary to purchase
the Property, or has chosen not to obtain the full and complete knowledge,
although provided with the opportunity by Seller, (iv) has conducted, or
had the opportunity to conduct, sufficient examination of the building,
building envelope, building systems, building grounds, building components and
surrounding conditions including but not limited to soils, and (v) has had the opportunity to
independently evaluate and investigate whether any or all of such 


 


28

















 


Natural Hazard Laws affect the
Property.   The foregoing
acknowledgements (a) shall not be construed to limit the representations
and warranties of Seller contained in this Agreement or the Closing Documents,
and (b) are subject to the provisions of Paragraphs 3 and 4 hereof
pertaining to the Title Commitment and Survey.


 


	
   

  	
   

  	
   

  	
  Purchaser’s Initials

  	
      /s/ MA

  



 


(c)           Upon
not less than 48 hours notice to the Seller, the Purchaser shall nonetheless
have the right to visit and inspect the Property during normal business hours,
provided, however, that notwithstanding any provision of this Agreement to the
contrary, (i) except if Seller is in breach of its representations and
warranties set forth in Paragraph 18(b) of this Agreement, any visitation
or inspection of the Property shall be for be for informational purposes only
and shall not be or lead to a condition of Purchaser’s obligation to close
under this Agreement, and (ii) Purchaser may not conduct or permit to be
conducted any physical tests or inspections of the Property of any nature
whatsoever without Seller’s prior written consent.  Purchaser shall maintain public liability
insurance policies (in an amount of combined single limit coverage of not less
than $1,000,000) insuring against claims arising as a result of damage or
injury caused by the visitations or inspections of the Property being conducted
by Purchaser naming Seller and FF Properties L.P. as additional insureds.  Prior to any visitation or inspections,
Purchaser shall deliver to Seller a certificate of insurance evidencing the
existence of the aforesaid policies, however, Purchaser’s failure to deliver
said certificate of insurance to Seller shall not in any way waive Purchaser’s
obligation to maintain said public liability policies in accordance with the
terms of the previous sentence. 
Purchaser agrees to indemnify, defend, protect and hold Seller, its
partners, members, shareholders, affiliates, officers, managers, employees,
trustees and beneficiaries, and FF Properties L.P. and the respective
successors and assigns of each of the foregoing (“Indemnified Parties”)
harmless from any and 


 


29

















 


all loss, costs, including attorneys’ fees, liability or
damages which any of the Indemnified Parties may incur or suffer as a result of
damage or injury caused by Purchaser’s 
or its engineers, architects, employees, contractors and agents presence
at the Property or conducting its inspection of the Property including the
entry of Purchaser, its employees or agents and its lender onto the Property,
including without limitation, liability for mechanic’s liens, but
specifically excluding any damage or injury caused by: (i) the negligent
acts or omissions of Seller or its Indemnified Parties; or (ii) the mere
discovery of conditions on the Property.   The right of Purchaser to inspect shall
include, subject to the limitations set forth above, the right to inspect the
apartment units (collectively, the “Units”); provided, however, in no event
shall Purchaser, without being accompanied by a representative of Seller, (i) contact
any Tenant of the Property or (ii) enter any Unit whether or not occupied
by a Tenant.  Seller shall have the
right, at its option, to cause a representative of Seller to be present at all
on-site inspections, reviews and examinations conducted hereunder.  Purchaser shall use commercially reasonable
efforts to keep all information or data received or discovered in connection
with any of the inspections, reviews or examinations strictly confidential;
provided, however, Purchaser’s confidentiality obligations in this sentence
shall be further limited by the terms of Paragraph 35 of this Agreement. Notwithstanding anything contained in this
Agreement to the contrary, Purchaser’s indemnity obligations under this
Paragraph shall forever survive the Closing and delivery and recording of the
Deed or the earlier termination of this Agreement.


 


(d)           Purchaser
acknowledges that it is a sophisticated and experienced purchaser of real
estate; that numerous apartment complexes contain mold; water damage, fungi, bacteria
and/or other biological growth or biological growth factors; and that the
Property may contain mold, water damage, fungi, bacteria, and/or other
biological growth or biological growth factors which Purchaser may not have
discovered during its inspection of the Property.


 


30
















 


Purchaser agrees that in purchasing the Property from
the Seller, it is assuming the risk (subject to the representations and
warranties of Seller contained in this Agreement and the Closing Documents)
that the Property may contain mold, water damage, fungi, bacteria, and/or other
biological growth or biological growth factors even as a result of a patent or
latent construction defect.


 


(e)           Purchaser
agrees to restore any damage to the Property which may arise as a result of
Purchaser’s inspection of the Property.


 


(f)            Purchaser shall not
expressly request any governmental agency, governmental authority, governmental
department or governmental employee to inspect any portion of the
Property.  Seller acknowledges and
agrees, for purposes of this subparagraph (e), that Purchaser will not be
deemed to have expressly requested such an inspection if, as a result of
Purchaser’s mere request for information from a governmental authority or
department, such an inspection is carried out.


 


18.           SELLER’S REPRESENTATIONS, WARRANTIES AND COVENANTS


 


(a)           Any
reference in this Paragraph 18 or elsewhere in this Agreement to Seller’s
knowledge or to the best of Seller’s knowledge shall only mean such actual (and
not constructive or imputed) knowledge of Gino Barra, Shannyn Henkel and Stacy
Wells, who shall not have any duty to make any inquiry of any kind with respect
to such matters.  Seller represents and
warrants that the parties listed above are the parties with the most knowledge
regarding the representations and warranties in this Paragraph 18.  Any knowledge of Seller’s agents, servants or
employees (other than knowledge of Gino Barra, Shannyn Henkel and Stacy Wells)
shall not be construed or imputed to Seller or its constituent entities or
their owners.


 


(b)           Subject
to the limitations set forth in subparagraph (a) above, Seller hereby
makes the following representations, warranties and covenants:


 


31

















 


(i)            Seller has not received written notice from any governmental authority
that the present use and occupancy of the Property do not conform with
applicable building and zoning laws.


 


(ii)           To Seller’s knowledge, except as may be set forth on the tax bills and
the Title Commitment, there are presently no pending, and Seller has received
no written notice of, special assessments of any nature with respect to the
Property or any part thereof, nor has Seller received any written notice of any
special assessments being contemplated.


 


(iii)          The Rent Roll attached hereto as Exhibit O is true and accurate in
all material respects as of the date and time thereof and will be updated and
certified as of the Closing Date and, except as set forth in the Leases, no
tenant is entitled to any concession, allowance, rebate or refund.


 


(iv)          Seller has furnished Purchaser with a complete and accurate report of
aged rent delinquencies as of the date and time of such report.


 


(v)           There are no leases, tenancies, licenses, or other rights of occupancy or
use for any portion of the Property other than the Service Contracts, and
except as set forth in the Rent Roll as of the date and time of such reports.


 


(vi)          The Leases are valid and in full force and effect, and, except as set
forth on the Rent Roll or list of aged rent delinquencies, as of the date and
time of such Rent Roll and rent delinquency report, each Tenant is in actual
possession of the leased unit or space and is not in default of its obligation
to pay rent or other obligations.


 


(vii)         The
Leases made available for review by Purchaser are true and correct copies of
the actual Leases in Seller’s possession or control and are the complete
written documentation of the agreement between the Seller and each of the
Tenants.


 


32

















 


(viii)        Except
for those claims identified on Exhibit V hereto (if any), no tenant has
asserted a claim of which Seller has written notice that could adversely affect
the right of landlord to collect rent from the tenant, and no notice of default
or breach on the part of landlord under any of the Leases has been received by
Seller; provided, however, that claims asserted by any tenant after the
Effective Date of this Agreement shall be disclosed to Purchaser, within 2
business days after Seller’s knowledge thereof, pursuant to Paragraph 18
(c)(xii) of this Agreement and shall not be deemed a default by Seller unless
Seller fails to disclose the same.


 


(ix)           Except as set forth on the Rent Roll or any prepaid rent report or
delinquency report now or hereafter provided to Purchaser from time to time, no
tenant under any Lease has prepaid rent or other charges for more than the
current month.  The amount to be paid to
or credited to Purchaser at Closing for security deposits will constitute the full
amount of the security deposits for the return of which Purchaser or any
subsequent owner of the Property could be held accountable or responsible after
the Closing Date.


 


(x)            Seller has not received written notice of any pending litigation, and to
Seller’s knowledge, there is no threatened litigation, affecting title to the
Property, except as may be set forth on Exhibit P attached hereto, the
liability for which shall be retained by Seller subsequent to Closing, and for
which Seller agrees to indemnify and hold Purchaser harmless.  The provisions and obligations of this
subparagraph (x) shall survive the Closing.


 


(xi)           There is no pending and, to Seller’s knowledge, no threatened
condemnation or similar proceeding affecting the Property.


 


33

















 


(xii)          The existing casualty insurance for the Property is for full replacement
value.


 


(xiii)         This
Agreement has been duly authorized and executed on behalf of Seller and
constitutes a valid and binding agreement, enforceable in accordance with its
terms.  Seller has obtained (or will
obtain prior to Closing) all consents, releases and permissions and given all
required notifications, related to the transactions herein contemplated.


 


(xiv)        Seller
does not have any employees on site at the Property.


 


(xv)         To Seller’s
knowledge, the Financial Statements delivered to Purchaser by Seller are true
and correct copies (in all material respects) of the Financial Statements which
Seller or its affiliate relies upon for the purposes of operating the Property,
reporting to its investors and filing Federal income tax statements.


 


(xvi)        Seller
has all required licenses, permits, authorizations, consents, certificates, and
approvals required for operation of the Property by Seller.


 


(xvii)       The
Property is connected with and has water, sewage disposal, telephone, gas and
electrical services.


 


(xviii)      To
Seller’s knowledge, all of the books, records, information, data, and other
items supplied by Seller to Purchaser, excluding any of the foregoing that have
been prepared by third parties, are true and correct in all material respects.


 


(xix)         There
are no unpaid charges, debts, liabilities, claims or obligations arising from
the ownership or operation of the Property that could give rise to any mechanic’s
or other statutory lien against the Property for which Purchaser would be
responsible, except as shown, if at all, on the Title Commitment (which shall
be cured by Seller in accordance with this Agreement) or on Exhibit T
hereto, in each case, the 


 


34

















 


liability for which shall be retained by Seller
subsequent to Closing, and for which Seller agrees to indemnify and hold
Purchaser harmless.  The provisions and
obligations of this subparagraph (xix) shall survive the Closing.


 


(xx)          To Seller’s knowledge, the Property is not in violation of any applicable
Environmental Law.  Further, to Seller’s
knowledge, Seller has not received written notice from any governmental
authority that it is in violation of any applicable Environmental Law.


 


(xxi)         To
Seller’s knowledge: (A) there is no active remediation in excess of
$25,000 for the occurrence of mold, water damage, fungi, bacteria or other
biological growth or biological growth factors at the Property; provided,
however, notwithstanding any provision in this Agreement or any Closing
Documents to the contrary, new remediation activities in excess of $25,000 for
any single occurrence that commence after the Effective Date of this Agreement
shall be disclosed to Purchaser pursuant to Paragraph 18(c)(xiii) of this
Agreement and shall not be deemed a default by Seller unless Seller fails to
disclose the same; and (B) there has been no prior remediation in excess
of $25,000 for the occurrence of mold, fungi, bacteria or other biological
growth or biological growth factors at the Property.


 


(xxii)        Attached
hereto as Exhibit Q is a list of all current Service Contracts relating to
the management, maintenance, leasing or operation of the Property and any
Master Agreements that will be terminated at Closing to the extent pertaining
to the Property.


 


(xxiii)       Seller
has obtained and properly recorded of record a Release of Construction
Covenants and Quitclaim (Certificate of Completion) executed by the CRA 


 


35

















 


pertaining to the Property, in accordance with
the OPA (defined below) and the OPA Documents (defined below) (the “Release of
Construction Covenants”).


 


(xxiv)       Seller
has received the final certificate of occupancy (the “Final Certificate of
Occupancy”) for the Property from the City of Los Angeles.


 


(xxv)        To
Seller’s knowledge, Seller has complied in all material respects with all
requirements of the following to the extent they apply to the Property: (A) the
Owner Participation Agreement dated as of December, 2001 (as supplemented and
amended, the “OPA”), between the CRA and SL NO HO, LLC (“Original Developer”)
and (B) all documents arising out of or related to the OPA, including
(without limitation) the First Implementation Agreement to Owner Participation
Agreement and the Second Implementation to Owner Participation Agreement
(collectively, the “OPA Documents”).


 


(xxvi)       To
Seller’s knowledge, there is no outstanding default or breach of the OPA or OPA
Documents by Seller or the CRA and there are no facts or circumstances that,
with the passage of time or giving of notice or both, will result in a default
or breach of the OPA or OPA Documents by Seller or the CRA.


 


(xxvii)      To
Seller’s knowledge, Seller has complied in all material respects with all requirements
of the following to the extent they apply to the Property: (A) the
Redevelopment Plan for the North Hollywood Redevelopment Project, dated August 15,
1979 and approved on February 21, 1979 (as supplemented and amended, the “Redevelopment
Plan”); and (B) all documents arising out of or relating to the
Redevelopment Plan (the “Plan Documents”).


 


(xxviii)     To
Seller’s knowledge (a) there is no outstanding default or breach of the
Redevelopment Plan or the Plan Documents by Seller or the CRA applicable to the
Property, and (b) there are no facts or circumstances that, with the
passage of time or 


 


36

















 


giving of notice or both, will result in a
default or breach of the Redevelopment Plan or Plan Documents by Seller or the
CRA applicable to the Property.


 


(xxix)       To Seller’s knowledge,
Seller has provided Purchaser with true and correct copies of all material
documents in Seller’s possession or control relating to the rights and
obligations of Seller under the OPA or any other matters materially affecting
the Property under the OPA, the Redevelopment Plan or the affordable housing
regulations that govern the Property.


 


(xxx)        To
Seller’s knowledge, Seller has complied in all material respects with all
requirements of those documents of record reflected by the Title Commitment or
hereafter reflected by any update to the Title Commitment (collectively, the “Title
Documents”), except that Seller has not caused the filtration units and filter
inserts at the Property to be inspected and maintained in accordance with the
BMP Maintenance Covenant as set forth more fully in Paragraph 3 of this
Agreement, and except as set forth on Exhibit P hereto.


 


(xxxi)       To
Seller’s knowledge, there is no outstanding default or breach of the Title
Documents by Seller and there are no facts or circumstances that, with the
passage of time or giving of notice or both, will result in a default or breach
of the Title Documents by Seller, except as set forth on Exhibit P hereto.


 


(xxxii)      To Seller’s
knowledge, (A) the schedule attached to this Agreement as Exhibit W
and incorporated herein by reference discloses all of the payments previously
received by Seller in connection with the OPA and the Redevelopment Plan (the “Past
Plan Payments”); and (B)  the
schedule  attached
to this  Agreement
as Exhibit W-1  and
incorporated  herein
by reference  discloses
Housing Subsidy Payments due the owner of the Property
calculated by the CRA in accordance  with the calculations set
forth in Section II of Attachment 8 to the OPA, as amended by 


 


37

















 


the Section 6 of the Second Implementation Agreement dated as of December 12,
2003, and (C) the owner of the Property is eligible to receive repayment of a
portion of the HUD Loan attributable to the Property during such owner’s period
of ownership as determined in accordance with and subject to the OPA, including
Section I.A. of Attachment 8 to the OPA, as amended by Section 22 of
the Second Implementation Agreement dated as of December 12, 2003.


 


(xxxiii)     To
Seller’s knowledge, the reports listed on Exhibit R attached hereto are
the only environmental, soil and pre-development geotechnical reports in Seller’s
possession or control pertaining to the Property; provided, however, Seller makes no representation or warranty that such reports are
accurate or complete.


 


(xxxiv)     To
Seller’s knowledge, the reports listed on Exhibit R-1 attached hereto are
the only third party property condition assessment reports in Seller’s possession
or control for the Property compiled subsequent to the issuance of the
certificate of occupancy; provided, however, Seller makes no representation or warranty that such reports are
accurate or complete.


 


(c)           Seller
hereby covenants that prior to the Closing:


 


(i)            At all times from the Effective Date to the Closing Date, Seller shall
maintain in force all existing fire and extended coverage insurance policies
and comprehensive general liability insurance policies covering the Property.


 


(ii)           Seller shall operate, lease and manage the Property (or to cause its
property manager to do so) in at least the same manner that Seller (or its
property manager, as the case may be) has heretofore operated, leased and
managed the Property (wear and tear, and casualty excepted).  Seller shall not enter into Leases with a
term longer than eighteen (18) months, and at no time will there be more than
an aggregate 


 


38

















 


total of fifteen (15) Leases with original terms
shorter than six (6) months.  Seller
shall not modify, terminate, assign or amend existing Leases or provide new
incentives to new or existing tenants that are inconsistent in any material
respect with the rent and concession guidelines attached hereto as Exhibit X
without Purchaser’s prior written consent, which may be withheld in its
commercially reasonable discretion.


 


(iii)          Seller will not, without the prior written consent of Purchaser, which
consent shall not be unreasonably withheld, delayed or conditioned, permit any
material structural modifications or additions to the Property.


 


(iv)          Seller will not remove any Personal Property, unless it is replaced by
similar personal property of at least equal value.


 


(v)           Seller will not enter into
any new Service Contracts that are not terminable upon thirty (30) days prior
notice, and without premium or penalty, or enter into any contracts related to
the Property whereby Seller or an affiliate receives any prepaid or up-front
fees.


 


(vi)          Seller shall deliver updates
of the following reports to Purchaser on a weekly basis (except for the reports
in (d) and (e) which shall be provided on a monthly basis):


 


a)             Rent Roll;


 


b)            aged rent delinquency report;


 


c)             weekly leasing activity report;


 


d)            current month and year-to-date operating statements;
and


 


e)             trailing 12-month operating statements in column
format.


 


39

















 


(vii)         Seller shall deliver to
Purchaser, within a reasonable time after receipt thereof, copies of written
notices which Seller has received with reference to any pending or threatened
litigation affecting the Property.


 


(viii)        Each
apartment unit will contain a working range/oven, refrigerator, dishwasher,
garbage disposal, and microwave; provided, however that if any unit does not
contain such working items, Seller will provide a credit to Purchaser at the
Closing for the amount of the replacement of such nonworking or missing item
with a new item of similar quality and utility or, if commercially reasonable
to repair such item, the amount of such repair.


 


(ix)           Each vacant apartment unit
in the Property that is vacant five (5) days or more prior to the Closing
Date must be in a “made ready” rentable condition on the Closing Date.  To the extent any applicable unit is not in “made
ready” rentable condition on the Closing Date, Purchaser will receive a credit
against the Purchase Price at Closing in the amount of $750.00 to put the unit
in a “made ready” rentable condition; provided, however, Seller shall only be
entitled to provide Purchaser with such a credit with respect to five (5) applicable
units, and Seller must place all additional units in “made ready” rentable
condition as of the Closing Date.


 


(x)            At Closing, Seller shall (a) terminate
the employer/employee relationship of all employees providing services to the
Property (b) convert any below market leases to employees who will not be
retained by Purchaser or Purchaser’s management company to “market” leases with
terms and conditions similar to terms and conditions of non-employee leases
that are consistent in all material respects with the terms of new non-employee
resident Leases, (c) cause all management agreements covering the Property
to be terminated as of the Closing Date, and (d) cooperate with


 


40
















 


Purchaser in facilitating any discussions Purchaser or its affiliates
may have with all management personnel with respect to the potential hire of
the personnel by Purchaser’s affiliated management company.  Additionally, prior to Closing, Seller shall
cause the management personnel to cooperate with Purchaser’s management company
in the transition of the management of the Property.


 


(xi)           From the Effective Date
through the Closing Date, Seller shall not create any additional encumbrances
on the Property, without the prior written consent of Purchaser, to be given or
withheld in Purchaser’s sole and absolute discretion.


 


(xii)          In
addition to any claim or notice identified on Exhibit V hereto, Seller
will, prior to Closing, but in any event within 2 business days after Seller’s
knowledge thereof, notify Purchaser of any claim asserted by a tenant of which
Seller has written notice that could adversely affect the right of landlord to
collect rent from such tenant, and of any written notice of default or breach
on the part of landlord under any of the Leases (collectively, a “Tenant Claim”).


 


(xiii)         Seller
will, prior to Closing, notify Purchaser of any remediation activities with
respect to mold, water damage, fungi, bacteria or other biological growth or
biological growth factors at the Property.


 


(xiv)        Seller shall terminate all
Master Agreements, to the extent they affect the Property, effective as of the
Closing;


 


(d)           Purchaser’s right to make a
claim against Seller for a breach of an indemnity (except for Seller’s
indemnity for a brokerage commission), representation, warranty or covenant
under this Agreement or the Exhibits attached hereto (“Claim”) shall expire on
the one year anniversary of the Closing and delivery of the Deed (“Survival
Date”).  As to any Claim, Purchaser must:
(i) notify Seller of the existence of the Claim in question (“Claim 


 


41

















 


Notice”);
and (ii) if not otherwise resolved, then Purchaser may, at its option,
institute legal proceedings in a court of competent jurisdiction within one (1) year
after the Survival Date (“Judicial Proceedings Date”).  Any Claim for which a Claim Notice is not
delivered by Purchaser to Seller on or prior to the Survival Date or for which
legal proceedings are not instituted on or prior to the Judicial Proceedings
Date, then such Claim shall be deemed to have been waived by Purchaser and
rendered null and void and of no further force or effect.  Seller’s total liability in the aggregate for
all Claims shall not exceed One Million ($1,000,000.00) Dollars.  Seller shall not be liable for any Claim(s) until
the aggregate of all Claims exceeds Twenty Thousand ($20,000.00) Dollars.  The
terms and limitations placed upon Seller in this Paragraph 18(d) shall
apply notwithstanding anything to the contrary in this Agreement.  Fairfield California Housing Fund LLC (“FCHF”)
irrevocably and absolutely guarantees to Purchaser the timely payment in
full for all amounts due and payable to Purchaser in connection with a Claim
(subject to the aggregate limitation on liability of $1,000,000 set forth
above).  FCHF represents and warrants that FCHF, as an affiliate of Seller, derives substantial benefit in
consideration for the foregoing guaranty.


 


19.           COMPLIANCE WITH OFAC.


 


To the best of the knowledge of Purchaser,
without any duty to make diligent inquiry, Purchaser represents and warrants
that (a) Purchaser is currently in compliance with the regulations of
the Office of Foreign Asset Control, Department of the Treasury (“OFAC”)
(including those named on the OFAC’s Specially Designated and Blocked Persons
List) and any statute, executive order (including the September 24, 2001,
Executive Order No. 13224 Blocking Property and Prohibiting Transactions
with Persons Who Commit, Threaten to Commit or Support Terrorism (the “Executive
Order”)), or other governmental action relating thereto; and (b) Purchaser
is not, and will not be, a person with whom Seller is restricted from
doing business 


 


42

















 


under the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (USA Patriot Act), H. R. 3152, Public Law 107-56, and the Executive
Order and the regulations promulgated thereunder and including persons and
entities named on the OFAC Specially Designated Nations and Blocked Persons
List.  If Purchaser obtains knowledge
that Purchaser has become listed on the Lists or has been indicted, arraigned,
or custodially detained on charges involving money laundering or predicate
crimes to money laundering, Purchaser shall immediately notify Seller and in
such event, Seller shall have the right to terminate this Contract without
penalty or liability to Seller immediately upon delivery of written notice
thereof to Purchaser.  In such event the
Earnest Money Deposit shall be
returned to Purchaser.


 


To the best of the knowledge of Seller,
without any duty to make diligent inquiry, Seller represents and warrants that (a) Seller
is currently in compliance with the regulations of OFAC (including those
named on the OFAC’s Specially Designated and Blocked Persons List) and any
statute, Executive Order, or other governmental action relating thereto; and (b) Seller
is not, and will not be, a person with whom Seller is restricted from
doing business under the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA
Patriot Act), H. R. 3152, Public Law 107-56, and the Executive Order and the
regulations promulgated thereunder and including persons and entities named on
the OFAC Specially Designated Nations and Blocked Persons List. If Seller
obtains knowledge that Seller has become listed on the Lists or has been
indicted, arraigned, or custodially detained on charges involving money
laundering or predicate crimes to money laundering, Seller shall immediately
notify Purchaser and in such event, Purchaser shall have the right to terminate
this Contract without penalty or liability to Purchaser immediately upon
delivery of written notice thereof to Seller. 
In such event the Earnest Money Deposit
shall be returned to Purchaser.


 


43

















 


20.           CONDITIONS PRECEDENT TO CLOSING.


 


(a)           In
addition to any conditions provided in other provisions of this Agreement,
Purchaser’s obligation to purchase the Property is and shall be conditioned on
the following (each a “Closing Condition”):


 


(i)            That at no time prior to the Closing shall any of the following have been
done by or against or with respect to Seller or an affiliate of Seller and, as
a result thereof, Seller cannot perform its obligations under this Agreement
(collectively, an “Insolvency Event”): (i) the commencement of a case
under Title 11 of the U.S. Code, as now constituted or hereafter amended, or
under any other applicable federal or state bankruptcy law or other similar
law; (ii) the appointment of a trustee or receiver of any property
interest; or (iii) an assignment for the benefit of creditors.


 


(ii)           On the Closing Date, there shall not be any uncured Unpermitted Exception
or any violation of law, ordinance, order or requirement relating to the
Property which is imposed in writing and delivered to Seller by any
governmental authority relating to the Property, which is not remedied by
Seller.


 


(iii)          If the transaction contemplated hereby shall require authorization or
approval of any governmental agency having jurisdiction, all such
authorizations and approvals shall have been obtained and shall be in full
force and effect on and as of the Closing Date. 
If such authorizations and approvals shall not have been obtained on or
prior to the last day for Closing hereinabove provided, the Closing Date may be
deferred, at the election of either party, for an additional period of time,
not to exceed 30 days, as shall be necessary to obtain any authorizations or
approvals not then obtained.


 


44

















 


(iv)          There shall be no more than five (5) Tenant Claims, or any number of
Tenant Claims in excess of $25,000 in the aggregate, outstanding at Closing
that have not been cured by Seller.


 


(v)           There shall be no active remediation activities at the Property in an
amount more than $25,000 for any single occurrence with respect to mold, water
damage, fungi, bacteria or other biological growth or biological growth factors
at the Property.


 


(vi)          Occupancy of
the apartment units within the Improvements (model units shall be considered
unoccupied and units occupied by employees shall be considered occupied for
purposes of the occupancy calculation) shall be no less than 85% as of the
Closing Date.


 


(vii)         Schedule B-II exception numbers 15-18 in the Title
Commitment shall have been released of record on or before the Closing Date.


 


(viii)        Seller shall, prior to the Closing Date, (1) have
caused the filtration units and filter
inserts to be inspected by a licensed third party inspector and an inspection
report issued by such inspector indicating that the filtration units and filter
inserts referred to in the BMP Maintenance Covenant are in operating condition
and not disclosing any corrective actions that must be undertaken pursuant to
the protocol set forth in the BMP Maintenance Covenant, unless such corrective
actions, if any, have been satisfied prior to the Closing Date, and (2) provide
Purchaser with a copy of such inspection report and all maintenance records in
connection with the filtration units and filter inserts, pursuant to the BMP
Maintenance Covenant.


 


(b)           Seller’s and Purchaser’s
obligation to close under this Agreement are conditioned upon the following (“Additional
Closing Conditions”):


 


45

















 


(i)            The CRA shall have approved for execution, and
executed and delivered to the Escrow Agent for Closing, a Partial Assignment of
Owner Participation Agreement and Consent to Assignment (“OPA Assignment”) of
the OPA, in substantially the same form as the form attached hereto as Exhibit U,
which is hereby approved by Seller and Purchaser, subject to modification as
required by the CRA.  Seller and
Purchaser covenant and agree to cooperate in good faith to diligently resolve
any changes to the OPA Assignment required by the CRA, and Seller further covenants
to use best efforts to obtain the approval and execution of the OPA Assignment,
in the form attached hereto (as required to be modified by the CRA), by the CRA
prior to the Closing Date; and


 


(ii)           The MTA shall have approved for execution, and
executed and delivered to the Escrow Agent for Closing, an assignment and
assumption of the Greenways License Agreement (“MTA Licensee Agreement”)
between the Seller and Purchaser substantially in the form of Exhibit Y
hereto (the “MTA Assignment”), which is substantially the same form as the Assignment
and Assumption of the Greenway License Agreement and MTA Consent dated July 1,
2008 between Seller and CRA, a copy of which Seller has provided to Purchaser,
and Seller further covenants to use best efforts to obtain the approval and
execution of the MTA Assignment by the MTA prior to the Closing Date.


 


(c)           If there is a failure of a
Closing Condition, Purchaser can either (i) waive such failure and close
this transaction, or (ii) notify Seller in writing that Purchaser has
elected to terminate this Agreement and obtain a return of the Earnest Money Deposit (which notice shall specify the
details of such failure); provided, however, that a termination by Purchaser
for a failure of a Closing Condition shall not become effective until the time
and date scheduled for 


 


46

















 


Closing,
and then only if the Closing Condition shall not have been satisfied by such
time and date.  In event of termination
for a failure of a Closing Condition, Purchaser shall receive a full refund of
the Earnest Money Deposit, and
except as may be specifically set forth elsewhere in this Agreement, neither
party shall have any further liability hereunder; provided, however, an
Insolvency Event shall not be deemed a Seller default under any provision of
this Agreement, including without limitation, Paragraph 18(b)(xiii) hereof.


 


(d)           Notwithstanding
any provision hereof to the contrary, if despite the cooperation and good faith
efforts of the Seller and Purchaser to satisfy the Additional Closing
Conditions, the same have not been satisfied as of the October 15, 2009,
then either party may terminate this Agreement by written notice to the other
party on or before the October 16, 2009, whereupon the Earnest Money Deposit shall be returned to Purchaser
and neither party shall have any further obligations under this Agreement.


 


(e)           A failure of
any Closing Condition or Additional Closing Condition under this Paragraph 20
shall not limit or supersede any remedy to which either party is otherwise
entitled under this Agreement, including (without limitation) any remedy for a
default or breach.


 


21.           ENVIRONMENTAL AND  OTHER  REPORTS.  Seller has delivered to
Purchaser at Purchaser’s request the environmental and other reports (the “Reports”)
listed on Exhibit R and Exhibit R-1. Except for Seller
representations and warranties contained in this Agreement or the Closing
Documents, Purchaser hereby releases Seller from any liability whatsoever with
respect to the Reports, including, without limitation, the matters set forth in
the Reports or the accuracy and/or completeness of the Reports.


 


47

















 


22.           ORGANIZATIONAL DOCUMENTS.  At least three (3) business
days prior to the Closing Date, Purchaser and Seller will provide Title Insurer
with copies of their respective organizational documents as required by Title
Insurer.


 


23.           TIME OF ESSENCE.  Time is of the essence of this
Agreement.


 


24.           NOTICES.  Any notice or demand which
either party hereto is required or may desire to give or deliver to or make
upon the other party shall be in writing and may be personally delivered or
given or made by overnight courier such as Federal Express or by facsimile or
made by United States registered or certified mail addressed as follows:


 


	
  TO SELLER:

  	
  Fairfield Residential LLC

  
	
   

  	
  5510 Morehouse Drive

  
	
   

  	
  Suite 200

  
	
   

  	
  San Diego, California 92121

  
	
   

  	
  Attn: Gino A. Barra

  
	
   

  	
  858/457-2123

  
	
   

  	
  858/457-3982 (FAX)

  
	
   

  	
  E-mail: gbarra@ffres.com

  
	
   

  	
   

  
	
  with a copy to:

  	
  Meltzer, Purtill &
  Stelle LLC

  
	
   

  	
  1515 East Woodfield Road

  
	
   

  	
  Second Floor

  
	
   

  	
  Schaumburg, Illinois
  60173-5431

  
	
   

  	
  Attn: Michael J. Wolfe

  
	
   

  	
  847/330-6052

  
	
   

  	
  847/330-1231 (Fax)

  
	
   

  	
  E-mail: mwolfe@mpslaw.com

  
	
   

  	
   

  
	
  TO PURCHASER:

  	
  Behringer Harvard Multifamily
  OP I LP

  
	
   

  	
  15601 Dallas Parkway,
  Suite 600

  
	
   

  	
  Addison, Texas 75001

  
	
   

  	
  Attention: Mark Alfieri

  
	
   

  	
  469/341-2471

  
	
   

  	
  214/655-1610 (FAX)

  
	
   

  	
  Email: malfieri@bhfunds.com

  
	
   

  	
   

  
	
  with a copy to:

  	
  Munsch Hardt Kopf &
  Harr, P.C.

  
	
   

  	
  3800 Lincoln Plaza

  
	
   

  	
  500 N. Akard

  
	
   

  	
  Dallas, Texas 75201

  
	
   

  	
  Attention: Gregg Cleveland

  
	
   

  	
  214/855-7537

  



 


48

















 


	
   

  	
  214/978-4364 (FAX)

  
	
   

  	
  Email: gcleveland@munsch.com

  



 


subject to the right of either party to designate a
different address for itself by notice similarly given.  Any notice or demand so given shall be deemed
to be delivered or made on the next business day if sent by overnight courier,
or on the same day if sent by facsimile and confirmation of sending is
generated before the close of business (5 p.m. Pacific time), or the next
day if sent by facsimile and confirmation is generated after the close of
business, or on the 4th business day after the same is deposited in the United
States Mail as registered or certified matter, addressed as above provided,
with postage thereon fully prepaid.  Any
such notice, demand or document not given, delivered or made by registered or
certified mail or by overnight courier or by facsimile as aforesaid shall be
deemed to be given, delivered or made upon receipt of the same by the party to
whom the same is to be given, delivered or made.  Copies of all notices shall be served upon
the Escrow Agent.


 


25.           EXECUTION OF AGREEMENT.  The parties hereto will each
execute three (3) copies of this Agreement and forward them to the Escrow
Agent.  Seller’s three (3) executed
copies of this Agreement will be accompanied with a direction to deliver a
fully executed copy of this Agreement to the Purchaser and to the Seller.


 


26.           GOVERNING LAW.  The provisions of this
Agreement shall be governed by the laws of the state in which the Property is
located.


 


27.           ENTIRE AGREEMENT.  This Agreement constitutes the
entire agreement between the parties and supersedes all other negotiations,
understandings and representations made by and between the parties and the
agents, servants and employees.


 


49

















 


28.           COUNTERPARTS.  This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument.


 


29.           CAPTIONS.  Paragraph titles or captions
contained herein are inserted as a matter of convenience and for reference, and
in no way define, limit, extend or describe the scope of this Agreement or any
provision hereof.


 


30.           NON-BUSINESS DAYS.  Whenever action must be taken
(including the giving of notice of the delivery of documents) under this
Agreement during a certain period of time (or by a particular date) that ends
(or occurs) on a non-business day, then such period (or date) shall be extended
until the immediately following business day. 
As used herein, “business day” means any day other than a Saturday,
Sunday or federal holiday.


 


31.           SEVERABILITY.  If any term or provision of
this Agreement or the application thereof to any person or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each such term and provision of this Agreement shall be
valid and be enforced to the fullest extent permitted by law.


 


32.           NO WAIVER.  No waiver by a party of any
breach of this Agreement or of any warranty or representation hereunder by the
other party shall be deemed to be a waiver of any other breach by such other
party (whether preceding or succeeding and whether or not of the same or
similar nature), and no acceptance of payment or performance by a party after
any breach by the other party shall be deemed to be a waiver of any breach of
this Agreement or of any representation or warranty hereunder by such other
party, whether or not the first party knows of such breach at the time it
accepts such payment or performance.  No
failure or delay by


 


50
















 


a party to exercise any right it may have by
reason of the default of the other party shall operate as a waiver of default
or modification of this Agreement or shall prevent the exercise of any right by
the first party while the other party continues to be so in default.


 


33.           ATTORNEYS’ FEES.  In the event either party
commences legal proceedings against the other party pursuant to any right to do
so under this Agreement, then the prevailing party shall be entitled to recover
reasonable attorneys’ fees and costs.


 


34.           TAX DEFERRED EXCHANGE.  Purchaser and Seller may use
the Property in connection with a 1031 or 1033 tax deferred exchange (“Exchange”).  The parties agree to cooperate with each
other and will execute such documents as may reasonably be required by each
other in order to effectuate an Exchange, provided that no later then five (5) business
days prior to the Closing Date, the party (“Exchange Party”) seeking to
effectuate an Exchange, delivers to the other party (“Cooperating Party”)
copies of all of the documents which the Cooperating Party is required to
execute in order to effectuate an Exchange. 
The Cooperating Party will not assume any liability or cost in
connection with an Exchange and the Closing will not be delayed in order to
effectuate an Exchange.  Either party’s
inability to obtain any benefits for an Exchange under Sections 1031 or 1033 of
I.R.C. will not relieve such party of any of its obligations under this
Agreement.


 


35.           CONFIDENTIALITY.  Purchaser and
Seller each hereby agree to use commercially reasonable efforts to keep the
terms and conditions of this Agreement and any information obtained with
reference to the Property, including but not limited to the Reports,
confidential, provided that the parties may reveal such information regarding
the terms and provisions of this Agreement: (a) as may be necessary in
their reasonable discretion to comply with the provisions of this Agreement; (b) in
the ordinary course of business; or (c) to parties (or their employees,
agents, due diligence analysts or other representatives) from or through whom 


 


51

















 


Purchaser
or its affiliates (as defined in Paragraph 15) are or may receive debt or
equity capital or other investment.  Further, Purchaser shall be permitted
to disclose such information as may be recommended by Purchaser’s legal counsel
in order to comply with all financing, reporting, securities laws and other
legal requirements applicable to Purchaser, including any required disclosures
to the Securities and Exchange Commission. 
Notwithstanding anything to the contrary contained herein, any duty of
confidentiality set forth in this Agreement shall terminate upon Closing.


 


36.           RESTRICTION ON CONVERSION OF THE PROPERTY TO
CONDOMINIUM.  Purchaser represents that it is purchasing the
Property as an apartment rental project and agrees not to convert the Property
to condominiums prior to December 31, 2018.  Purchaser acknowledges that Seller is relying
on this representation as partial consideration of the Purchase Price, and on
the Closing Date will execute the Prohibition Against Condominium Conversion
Agreement attached hereto as Exhibit S (the “Condominium Agreement”) which
will be recorded in conjunction with the recordation of the Deed.


 


37.           SURVIVAL OF INDEMNIFICATION.  Notwithstanding anything
contained in this Agreement to the contrary, subject to the limitations set
forth in Paragraph 18(d) hereof, all of Purchaser’s, Seller’s and FCHF’s indemnity obligations
contained in this Agreement and the Exhibits attached hereto shall forever
survive the Closing and the delivery and recording of the Deed or the earlier
termination of this Agreement.


 


38.           MISCELLANEOUS PROVISIONS.  This Agreement shall not be construed more strictly against any party
merely by virtue of the fact that the same has been prepared by such party or
its counsel, it being recognized that each party hereto has contributed
substantially and materially to the preparation of this Agreement, 


 


52

















 


and that each party hereto
acknowledges and waives any claim contesting the existence and the adequacy of
the consideration given by the other parties hereto in entering into this
Agreement.Except as to those obligations which specifically survive the
Closing, all of Seller’s other obligations hereunder shall merge with the Deed.


 


39.           BACK-UP OFFERS.  Seller will discontinue
marketing the Property for sale but may accept back-up offers for the Property
provided they are subject and subordinate to this Agreement between Purchaser
and Seller.


 


40.           MTA ASSUMPTION OF RISK,
RELEASE AND WAIVER.  To the
maximum extent allowed by law, Purchaser and any and all successors, heirs and
assigns of such Purchaser (individually and collectively, “Releasing Party”)
hereby assumes, for the benefit of the Los Angeles County Metropolitan
Transportation Authority (the “MTA”) any and all risk of loss, damage or injury
of any kind to any person or property (including, without limitation, the
improvements located on the Property) and any other property of, or under the
control or custody of, the Releasing Party, which is located on or within the
Property, resulting from MTA’s normal and customary operation, use,
maintenance, repair, restoration or construction of a transit corridor and
various modes of transportation on the transit corridor, including without
limitation, buses, light rail cars and/or trains (the “Assumed Transit
Proximity Risks”) including, without limitation, loss, damage or injury of any
kind caused by bus exhaust, bus, light rail cars or train use, noise or, vibration; provided, however, that the
foregoing assumption of risk shall not apply to (and the Assumed Transit
Proximity Risks shall not include) any claims to the extent of the intentional
misconduct or gross negligence of the MTA. 
The term “MTA” as used
herein shall include: (i) any transit company validly operating buses or
trains or other modes of transportation within the transit corridor, (ii) any
other persons or companies employed, retained or engaged by MTA for such
purpose, and (iii) MTA’s successors and assigns.  Releasing Party, on behalf of 


 


53

















 


itself
and its officers, directors, affiliates, employees, agents, independent contractors
and subcontractors and anyone directly employed by Releasing Party at the
Property or for whose acts at the Property Releasing Party is liable
(collectively, “Personnel”), as a material part of the consideration for this
Agreement, hereby releases and waives all claims and demands against MTA for
any loss, damage or injury of Releasing Party and/or its Personnel arising out
of an Assumed Transit Proximity Risk. Without limiting the generality of the
foregoing:


 


THE UNDERSIGNED ACKNOWLEDGES THAT IT HAS BEEN
ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS 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 FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR.”


 


THE UNDERSIGNED, BEING AWARE OF THIS CODE SECTION,
HEREBY EXPRESSLY WAIVES ANY RIGHTS IT MAY HAVE AGAINST THE RELEASED
PARTIES THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT.


 


	
  Purchaser’s
  Initials

  	
      /s/ MA

  	
   

  	
  Seller’s
  Initials

  	
      /s/ GAB

  



 


The
provisions of this Paragraph shall forever survive the delivery and recording
of the Deed.


 


41.           NONDISCRIMINATION AND
NONSEGREGATION.  Purchaser
acknowledges and agrees that there shall be no discrimination against or
segregation of, any person, or group of 


 


54

















 


persons
on account of race, color, creed, religion, sex, sexual preference/orientation,
age, disability, medical condition, Acquired Immune Deficiency Syndrome (AIDS)
acquired or perceived, retaliation for having filed a discrimination complaint,
marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the
Purchaser or any person claiming under or through Purchaser establish or permit
any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the land.


 


42.           RIGHT
TO AUDIT.  At Purchaser’s request, at any time before
Closing or within three (3) years after Closing, and without cost or
expense to Seller, Seller shall provide to Purchaser’s designated independent
auditor reasonable access to the books and records of the Property to the
extent in Seller’s possession, and all related information in Seller’s
possession regarding the period for which Purchaser is required to have the
Property audited under the regulations of the Securities and Exchange
Commission.  Purchaser agrees to
indemnify and hold harmless Seller from any claim, damage, loss, or liability to
which Seller is at any time subjected by any person who is not a party to this
Agreement as a result of Seller’s compliance with this Paragraph, except to the
extent any such claim, damage, loss, or liability arises from Seller’s fraud or
intentional misrepresentation.  The
provisions of this Paragraph shall survive the Closing or any earlier
termination of this Agreement.


 


43.           PAST PAYMENTS AND FUTURE PAYMENTS.


 


(a)           Purchaser shall have no
liability for nor any right, title or interest in any Past Plan Payments (as
defined herein) or any other amounts due Seller under the OPA attributable to
the period of Seller’s ownership of the Property, and on and after the Closing
Date, Purchaser shall be entitled to all Future Plan Payments (as defined
herein) attributable to 


 


55

















 


Purchaser’s period of ownership of the Property
relating to the Property.  Seller shall
have no right, title or interest in any Future Plan Payments from and after the
Closing Date, nor shall Seller have any liability to Purchaser for any failure
by Purchaser to receive any or all of such Future Plan Payments, unless the
reason that Purchaser did not receive such Future Plan Payments was also a
breach by Seller of a specific representation or warranty under this Agreement.


 


(b)           Purchaser acknowledges that Seller has not yet received, but expects to
receive, payments under the HUD Loan with respect to the tax year July 1,
2008 through June 30, 2009, which Seller anticipates to be approximately
$204,849.00 (the “2009 Payments”), which payments are not a Future Plan Payment
and is the property of Seller.  In the
event that the CRA pays any of the 2009 Payments after the Closing to
Purchaser, regardless of whether such payments are more or less than the
amounts anticipated by Seller as provided herein, Purchaser shall promptly
remit the full amount of same to Seller. 
Seller also has not received such payments with respect to the tax year July 1,
2009 through June 30, 2010, which Seller anticipates to be approximately
$208,946 (the “2010 Payments”), which payments, upon receipt by either
Purchaser or Seller (unless received prior to the Closing Date, then on the
Closing Date), are to be prorated as of the Closing Date and the Seller’s
prorated amount of the 2010 payments is also not a Future Plan Payment and is
the property of Seller. In the event that the CRA pays any of the 2010 Payments
after the Closing to Purchaser, Purchaser shall prorate the same as of the
Closing Date and promptly remit the prorated amount due Seller to Seller together
with back up documentation in support of the prorated amount.  In the event that the CRA pays any of the
2010 Payments after the Closing to Seller, Seller shall prorate the same as of
the Closing Date and promptly remit the prorated amount due Purchaser to
Purchaser together with back up documentation in support of the prorated
amount.


 


56

















 


(c)           The CRA annual subsidy payment of $1,988,276.24 for the CRA
fiscal year July 1, 2009 - June 30, 2010 (“CRA 2009/10 Payment”) is
expected to be paid by CRA on or about September 30, 2009 which payment, upon
receipt by either Purchaser or Seller (unless received prior to the Closing
Date, then on the Closing Date), is to be prorated between Seller and Purchaser
as of the Closing Date. Seller’s prorated amount of the CRA
2009/10 Payment is
not a Future Plan Payment and is the property of Seller.  In the event that the CRA pays any of the CRA
2009/10 Payment
after the Closing to Purchaser, Purchaser shall prorate the same as of the
Closing Date and promptly remit the prorated amount due Seller to Seller
together with back up documentation in support of the prorated amount. In the
event that the CRA pays any of the CRA 2009/10 Payment after the
Closing to Seller, Seller shall prorate the same as of the Closing Date and
promptly remit the prorated amount due Purchaser to Purchaser together with
back up documentation in support of the prorated amount.


 


[signature pages follow]


 


57

















 


IN WITNESS WHEREOF, the
parties hereto have put their hand and seal as of the date set forth above.


 


	
  Executed by Purchaser on

  	
   

  	
  PURCHASER:

  
	
  August 7, 2009.

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD MULTIFAMILY OP I LP, a 

  Delaware limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  BHMF Inc.,

  
	
   

  	
   

  	
   

  	
  a Delaware corporation,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Mark T. Alfieri

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Mark T. Alfieri 

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executed by Seller on

  August 12, 2009.

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  	
  SF
  NO HO LLC,

  
	
   

  	
   

  	
   

  	
  a
  California limited liability company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  FF
  CALIFORNIA HOUSING FUND LLC,

  
	
   

  	
   

  	
   

  	
   

  	
  a
  Delaware limited liability company,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  FF
  PROPERTIES, INC., a Delaware 

  corporation, its Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Gino A. Barra

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Gino
  A. Barra

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Vice
  President

  
										



 


58

















 


JOINDER SIGNATURES


 


Multi Housing Capital Advisors (“Broker”) executes this Agreement in
its capacity as a real estate broker and acknowledges that the fee or
commission (“Fee”) due to it as a result of the transaction described in this
Agreement is the amount as set forth in the
agreement between Broker and Seller.  Broker also acknowledges that
payment of the aforesaid Fee is conditioned upon the Closing and the receipt of
the Purchase Price by the Seller.  Broker
agrees to deliver a receipt to the Seller at the Closing for the Fee and a
release stating that no other fees or commissions are due to Broker from Seller
or Purchaser.


 


	
   

  	
  MULTI HOUSING CAPITAL ADVISORS

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis Palmer

  
	
   

  	
  Name:

  	
  Curtis Palmer

  
	
   

  	
  Title:

  	
  Principal

  



 


59

















 


Fairfield California Housing Fund LLC, a Delaware
limited liability company, joins in the execution of this
Agreement solely to acknowledge and consent to its obligation to guaranty of a
Claim as set forth in Paragraph 18(d) of this Agreement, and that it is
hereby bound to the terms and conditions of Paragraph 18(d) of this
Agreement for that purpose.  Fairfield California Housing Fund LLC
acknowledges and agrees that it is the owner of a direct or indirect interest
in Seller and will materially benefit from the sale of the Property.


 


 


	
   

  	
  Fairfield California Housing Fund LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  FF California Housing Fund LLC,

  
	
   

  	
   

  	
  a Delaware limited liability company,

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  FF Properties, Inc.,

  
	
   

  	
   

  	
   

  	
  a Delaware corporation,

  
	
   

  	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Gino A. Barra

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Gino A. Barra

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


60
















 


The
undersigned agrees to hold and disburse the Earnest Money Deposit in accordance
with the terms of this Agreement.


 


	
   

  	
  PARTNERS TITLE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Reno Hartfiel

  
	
   

  	
  Name:

  	
  Reno Harfiel

  
	
   

  	
  Title:

  	
  Executive
  Vice President/General Counsel

  



 


August 12,
2009.


 


61

















 


EXHIBITS


 


	
  A

  	
  -

  	
  Legal

  
	
  B

  	
  -

  	
  Personal Property

  
	
  C

  	
  -

  	
  Intentionally omitted

  
	
  D

  	
  -

  	
  Intentionally omitted

  
	
  E

  	
  -

  	
  Title
  Commitment

  
	
  E-1

  	
  -

  	
  Purchaser’s
  Notice

  
	
  E-2

  	
  -

  	
  Seller’s
  Reply

  
	
  E-3

  	
  -

  	
  Purchaser’s
  Revised Notice

  
	
  E-4

  	
  -

  	
  Seller’s
  Response

  
	
  F

  	
  -

  	
  Deed

  
	
  G

  	
  -

  	
  Bill of Sale

  
	
  H

  	
  -

  	
  Assignment and Assumption of Service Contracts

  
	
  I

  	
  -

  	
  Assignment and Assumption of Leases and Security
  Deposits

  
	
  J

  	
  -

  	
  Notice to Tenants

  
	
  K

  	
  -

  	
  Non-Foreign Affidavit

  
	
  L

  	
  -

  	
  Assignment of Intangible Property

  
	
  M

  	
  -

  	
  Assignment
  of Subcontractors’ Guaranties and Warranties

  
	
  M-1

  	
  -

  	
  Assignment of Guaranties, Warranties, Permits,
  Licenses and Approvals

  
	
  N

  	
  -

  	
  Intentionally omitted

  
	
  O

  	
  -

  	
  Rent Roll

  
	
  P

  	
  -

  	
  Litigation

  
	
  Q

  	
  -

  	
  Service Contracts

  
	
  R

  	
  -

  	
  Environmental, Soil and Pre-Development Geotechnical
  Reports

  
	
  R-1

  	
  -

  	
  Third Party Property
  Condition Assessment Reports After C/O

  
	
  S

  	
  -

  	
  Prohibition Against Condominium Conversion Agreement

  
	
  T

  	
  -

  	
  Lien Claims

  
	
  U

  	
  -

  	
  Form of
  OPA Assignment

  
	
  V

  	
  -

  	
  Schedule
  of Tenant Claims or Breaches

  
	
  W

  	
  -

  	
  Schedule
  of Payments from OPA to Seller

  
	
  W-1

  	
  -

  	
  Housing
  Subsidy Payments under OPA

  
	
  X

  	
  -

  	
  Rent
  Guidelines

  
	
  Y

  	
  -

  	
  Form of
  MTA Assignment

  



 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  PURCHASE AND SALE

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  PURCHASE PRICE

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.

  	
  TITLE COMMITMENT AND SURVEY

  	
  4

  
	
   

  	
   

  	
   

  
	
  4.

  	
  CONDITION OF TITLE/CONVEYANCE

  	
  9

  
	
   

  	
   

  	
   

  
	
  5.

  	
  PAYMENT OF CLOSING COSTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.

  	
  DAMAGE,
  CASUALTY AND CONDEMNATION

  	
  10

  
	
   

  	
   

  	
   

  
	
  7.

  	
  AS-IS CONDITION

  	
  12

  
	
   

  	
   

  	
   

  
	
  8.

  	
  CLOSING

  	
  17

  
	
   

  	
   

  	
   

  
	
  9.

  	
  CLOSING DOCUMENTS

  	
  18

  
	
   

  	
   

  	
   

  
	
  10.

  	
  SELLER’S RIGHT TO CURE

  	
  21

  
	
   

  	
   

  	
   

  
	
  11.

  	
  DEFAULT BY PURCHASER

  	
  22

  
	
   

  	
   

  	
   

  
	
  12.

  	
  SELLER’S DEFAULT

  	
  23

  
	
   

  	
   

  	
   

  
	
  13.

  	
  PRORATIONS

  	
  24

  
	
   

  	
   

  	
   

  
	
  14.

  	
  RECORDING

  	
  25

  
	
   

  	
   

  	
   

  
	
  15.

  	
  ASSIGNMENT

  	
  26

  
	
   

  	
   

  	
   

  
	
  16.

  	
  BROKER

  	
  26

  
	
   

  	
   

  	
   

  
	
  17.

  	
  DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD

  	
  27

  
	
   

  	
   

  	
   

  
	
  18.

  	
  SELLER’S REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
  31

  
	
   

  	
   

  	
   

  
	
  19.

  	
  COMPLIANCE WITH OFAC

  	
  42

  
	
   

  	
   

  	
   

  
	
  20.

  	
  CONDITIONS PRECEDENT TO CLOSING

  	
  44

  
	
   

  	
   

  	
   

  
	
  21.

  	
  ENVIRONMENTAL AND [SEISMIC OR] OTHER REPORTS

  	
  47

  
	
   

  	
   

  	
   

  
	
  22.

  	
  ORGANIZATIONAL DOCUMENTS

  	
  48

  
	
   

  	
   

  	
   

  
	
  23.

  	
  TIME OF ESSENCE

  	
  48

  
	
   

  	
   

  	
   

  
	
  24.

  	
  NOTICES

  	
  48

  
	
   

  	
   

  	
   

  
	
  25.

  	
  EXECUTION OF AGREEMENT

  	
  49

  
	
   

  	
   

  	
   

  
	
  26.

  	
  GOVERNING LAW

  	
  49

  
	
   

  	
   

  	
   

  
	
  27.

  	
  ENTIRE AGREEMENT

  	
  49

  
	
   

  	
   

  	
   

  
	
  28.

  	
  COUNTERPARTS

  	
  50

  
	
   

  	
   

  	
   

  
	
  29.

  	
  CAPTIONS

  	
  50

  
	
   

  	
   

  	
   

  
	
  30.

  	
  NON-BUSINESS DAYS

  	
  50

  
	
   

  	
   

  	
   

  
	
  31.

  	
  SEVERABILITY

  	
  50

  



 


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TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  32.

  	
  NO WAIVER

  	
  50

  
	
   

  	
   

  	
   

  
	
  33.

  	
  ATTORNEYS’ FEES

  	
  51

  
	
   

  	
   

  	
   

  
	
  34.

  	
  TAX DEFERRED EXCHANGE

  	
  51

  
	
   

  	
   

  	
   

  
	
  35.

  	
  CONFIDENTIALITY

  	
  51

  
	
   

  	
   

  	
   

  
	
  36.

  	
  RESTRICTION ON CONVERSION OF THE PROPERTY TO CONDOMINIUM

  	
  52

  
	
   

  	
   

  	
   

  
	
  37.

  	
  SURVIVAL OF INDEMNIFICATION

  	
  52

  
	
   

  	
   

  	
   

  
	
  38.

  	
  MISCELLANEOUS PROVISIONS

  	
  52

  
	
   

  	
   

  	
   

  
	
  39.

  	
  BACK-UP OFFERS

  	
  53

  
	
   

  	
   

  	
   

  
	
  40.

  	
  MTA ASSUMPTION OF RISK, RELEASE AND WAIVER

  	
  53

  
	
   

  	
   

  	
   

  
	
  41.

  	
  NONDISCRIMINATION
  AND NONSEGREGATION

  	
  54

  
	
   

  	
   

  	
   

  
	
  42.

  	
  RIGHT TO AUDIT

  	
  55

  
	
   

  	
   

  	
   

  
	
  43.

  	
  PAST PAYMENTS AND FUTURE PAYMENTS

  	
  55

  



 


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