Exhibit 10.21


 




 





 


PURCHASE AND SALE
AGREEMENT


 


 


FAIR OAKS PENDERBROOK
APARTMENTS L.L.C.,


 


Seller


 


and


 


 


COMSTOCK HOMES, INC.


 


 


Purchaser


 


 


	
  Premises:

  	
  Penderbrook Apartments

  
	
   

  	
  Fairfax, Virginia

  
	
   

  	
   

  
	
  Date:

  	
  As of November 9, 2004

  



 




 





 





















 


TABLE OF CONTENTS


 


	
  1

  	
  Definitions And Usage

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  Agreement
  Of Purchase And Sale; Conveyancing Instruments

  	
   

  
	
   

  	
   

  	
   

  
	
  3

  	
  Purchase Price

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
  5

  	
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  6

  	
  Representations Of
  The Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
  7

  	
  Representations Of
  The Seller

  	
   

  
	
   

  	
   

  	
   

  
	
  8

  	
  Purchaser’s Due Diligence

  	
   

  
	
   

  	
   

  	
   

  
	
  9

  	
  Operation
  Of The Buildings And Other Improvements

  	
   

  
	
   

  	
   

  	
   

  
	
  10

  	
  Environmental
  Liabilities

  	
   

  
	
   

  	
   

  	
   

  
	
  11

  	
  Closing Documentation

  	
   

  
	
   

  	
   

  	
   

  
	
  12

  	
  Closing
  Adjustments; Closing Costs; And Transfer Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  13

  	
  Risk Of Loss

  	
   

  
	
   

  	
   

  	
   

  
	
  14

  	
  Escrow

  	
   

  
	
   

  	
   

  	
   

  
	
  15

  	
  Default; Conditions
  To Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  16

  	
  No Assignment

  	
   

  
	
   

  	
   

  	
   

  
	
  17

  	
  Brokers

  	
   

  
	
   

  	
   

  	
   

  
	
  18

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  19

  	
  Exchange Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  20

  	
  Miscellaneous

  	
   

  



 





















 


PURCHASE AND SALE AGREEMENT made as of the 9th day of
November, 2004, between FAIR OAKS PENDERBROOK APARTMENTS L.L.C., a limited
liability company organized and existing under the laws of the State of
Delaware having its principal office c/o W&M Properties, L.L.C., 60 East 42nd
Street, New York, New York 10165; and COMSTOCK Homes, Inc., a corporation
organized and existing under the laws of the Commonwealth of Virginia having
its principal office at 11465 Sunset Hills Road, Suite 510, Reston, Virginia
20190.


 


W  I
T  N  E  S  S  E  T  H


 


In consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:


 


1.     Definitions
and Usage.


 


1.01         The following terms used herein shall
have the meanings hereinafter ascribed to them:


 


(a)   “Acceptable Title” shall mean such title to
the fee simple to the Premises as any reputable title insurance company
licensed to conduct business in the Commonwealth of Virginia would be willing
to insure (without an extra risk premium) in a fee owner’s title insurance
policy without exception other than the Permitted Title Exceptions.


 


(b)    “Buildings” shall mean the buildings
situated on the Premises.


 


(c)   “Buildings and other Improvements” shall mean
the Buildings, structures, parking lots, and all other physical improvements
constructed on any portion of the Premises.


 


(d)   “Business Days” shall mean all days,
excluding Saturdays, Sundays, and all days observed by the courts of the
Commonwealth of Virginia sitting in Fairfax County as legal holidays.


 


(e)   “Closing” shall mean the settlement
conference at which the conveyance of the Property by the Seller to the
Purchaser shall be made pursuant to the terms and provisions of this Agreement.


 


(f)    “Closing Date” shall mean the date on which
the Closing shall occur as specified in Article 5 of this Agreement.


 


(g)   “Contract Deposit” shall mean the sums
deposited with the Escrow Agent pursuant to paragraphs (a) and (b) of Section
3.02 and 5.01 hereof.


 


(h)   “Contract Period” shall mean the period from
the date of this Agreement through the Closing Date, inclusive.


 


(i)    “Contracts” shall mean any and all service
contracts and cable service and telecom agreements to which the Real Property
or any portion thereof, the Seller or the Seller’s managing agent may be
subject, affecting any portion of the Real Property.  Contracts do not include the Seller’s
management agreement with the Seller’s managing agent.


 


(j)    “Conveyancing Instruments” shall mean the
deed, assignments, and bill of sale referred to in Sections 2.02 through 2.06
hereof.


 





















 


(k)   “Cure Amount” shall mean one hundred thousand
and no/100 ($100,000.00) dollars.


 


(l)    “Damage or destruction” shall have the
meaning ascribed in paragraph (a) of Section 13.01.


 


(m)  “Due Diligence Fee” shall mean seventy-five
thousand and no/100 ($75,000.00) dollars payable pursuant to section 8.01
hereof.


 


(n)   “Due Diligence Period” shall mean the period
specified in the first sentence of Section 8.01.


 


(o)   “Eastdil” shall mean Eastdil Realty Company,
L.L.C.


 


(p)   “Environmental Laws” shall mean all (and
“Environmental Law” shall mean any of the) federal, state and municipal laws,
statutes, codes and ordinances, now or hereafter enacted or promulgated,
pertaining to (i) the production, generation, release, discharge, emission,
disposal, transportation, containment or storage, clean-up or remediation of
any condition involving any Hazardous Substance, (ii) the licensing or
permitting of any of the activities referred to in clause (i) or (iii) the
regulation of any of such activities or any Hazardous Activity; including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
42 U.S.C. §§ 9601 et seq., as amended by the
Superfund Amendments and Reauthorization Act of 1986; the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq.;
the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; the
Clean Water Act, 33 U.S.C. §§ 1251 et seq.; the
National Environmental Policy Act, 42 U.S.C. § 4321; the Hazardous Materials
Transportation Act of 1975, 49 U.S.C. §§ 1801-1812; the Toxic Substances
Control Act, 15 U.S.C. §§ 2601 et seq.; the
Refuse Act, 33 U.S.C. §§ 401 et seq.; any
state or municipal environmental protection or environmental conservation
statute or ordinance; or any law amending or superseding any of the foregoing;
and any law of like or similar import to any of the foregoing, and the rules
and regulations promulgated pursuant to such laws, statutes, codes and
ordinances and all executive, administrative and judicial orders and decrees
issued in connection with the enforcement of the foregoing, whether foreseen or
unforeseen, ordinary or extraordinary, whether applying retroactively or
prospectively.


 


(q)   “ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended the Employee Retirement Income Security
Act of 1974, as amended.


 


(r)    “Escrow Agent” shall mean Premier Title
Insurance Company.


 


(s)   “Escrow Fund” shall mean the sum of (i) the
Contract Deposit and (ii) any and all interest and dividends that may be earned
on or paid with respect to the Contract Deposit.


 


(t)    “Hazardous Activity” shall mean any
activity, process, procedure or undertaking, whether occurring before, on or
after the date hereof, which directly or indirectly (i) produces, generates or
creates any Hazardous Substance; (ii) causes or results (or threatens to cause
or result) in the release of any Hazardous Substance into the environment
(including the air, ground water, watercourses or water systems); (iii)
involves the production, generation, release, discharge, emission, disposal,
transportation or storage, clean-up or remediation of any Hazardous Substance;
or (iv) causes or tends to cause the Real Property or any portion to become a
hazardous waste treatment, storage or disposal facility within the meaning of
any Environmental Law.


 


(u)   “Hazardous Condition” shall mean any
condition which would be the basis for (i) any claim for damages, clean-up
costs, remediation costs, fines or penalties under any Environmental Law or
applicable common law or (ii) the imposition of any lien on any property
pursuant to any Environmental Law.


 


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(v)   “Hazardous Substance” shall mean any
hazardous substance as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq.,
as amended by the Superfund Amendments and Reauthorization Act of 1986;
hazardous waste as defined in the Resource Conservation and Recovery Act of
1976, 42 U.S.C. §§ 6901 et seq., as any
of the foregoing may be amended or superseded; oil; petroleum products,
derivatives, compounds or mixtures; minerals, including asbestos; chemicals;
gasoline; medical waste; polychlorinated 
biphenyls (pcb’s); methane; radon; radioactive material, volatile
hydrocarbons; or other material, whether naturally occurring, man-made or the
by-product of any process, which is toxic, harmful or hazardous or acutely
hazardous to the environment or public health or safety; or any other substance
the existence of which on or at any property would be the basis for a claim for
damages, clean-up costs or remediation costs, fine, penalty or lien under any
Environmental Law or applicable common law.


 


(w)  “Insubstantial damage or destruction” shall
have the meaning ascribed in paragraph (b) of Section 13.01.


 


(x)    “Intangibles” shall mean, to the extent
under the control of the Seller and transferable by their terms, any and all
(a) permits, licenses, approvals, utility rights, development rights,
guaranties, warranties, security codes, access codes, post office boxes,
telephone exchange numbers and systems (including “800” and “888” numbers for
the Premises), (b) copyrights, trademarks, service marks, trade logos and other
marks and trade names, all domain names and the content of all web pages
relating solely to the ownership, use, operation and management of the
Premises, including without limitation, the right to use the name
“Penderbrook”, (c) existing surveys, blueprints, drawings, plans and
specifications for or with respect to the Premises or any part thereof in the
Seller’s possession or control; and (d) tenant lists and marketing, promotional
and advertising drawings, brochures, booklets, manuals and other materials
concerning the Property or any part thereof, including electronic versions
thereof.


 


(y)   “Intended Use” shall mean the use of the
Buildings and other Improvements for the uses permitted by the Certificate(s)
of Compliance or Occupancy or Residential Use Permits issued for the Buildings
and other Improvements in effect on the date of this Agreement or for
condominium ownership of the residential apartment units.


 


(z)    “Leases” shall mean all leases, subleases,
licenses, and other occupancy agreements affecting the Premises.


 


(aa)  “Permitted Title Exceptions” shall mean the
following, to the extent that any one or more of the same pertain to any
portion of the Real Property:


 


(i)        the title exceptions referred to in
Schedule B annexed hereto and made part hereof;


 


(ii)       real estate taxes, unpaid installments of
assessments, water and sewer charges, which are or may become liens upon the
Real Property and which are not due and payable as of the Closing Date;


 


(iii)      any state of facts shown on that certain
survey of the Real Property dated November 19, 1995 prepared by Dewberry &
Davis (the “Survey”) and any subsequent state of facts that an accurate survey
of the Real Property would reveal, provided that such subsequent state of facts
does not prevent the Intended Use of the Buildings and other Improvements or
render title unmarketable;


 


(iv)      the Leases and the rights of tenants
thereunder as tenants only;


 


(v)       zoning resolutions, ordinances and
regulations and other statutes, codes and regulations regulating the use and
occupancy of real estate, including building, fire and safety codes,
Environmental Laws, and the Federal Fair Housing Act and any state or municipal
equivalent;


 


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(vi)      standard exclusions to coverage and
conditions to such coverage set forth in a standard ALTA owner’s title
insurance policy customarily used in Virginia without endorsement as would be
issued on the Closing Date by any reputable title insurance company licensed to
conduct business in the Commonwealth of Virginia.


 


(bb) “Personal Property” shall mean to the extent
located at the Premises and owned by the Seller, all items of personal
property, including, without limitation, the following: refrigerators, stoves,
ovens, ranges, dishwashers, clothes washers and dryers, air conditioning units,
light fixtures, mirrors, fixtures, computers, computer software applications,
licenses and programs that are transferable by their terms, boilers, and the
supplies (not consumed prior to Closing), office machines and apparatus,
Intangibles, and the items referred to on Schedule H annexed hereto and made
part hereof, which Personal Property is to be conveyed in their “as is”
condition on the Closing Date to the Purchaser.


 


(cc) “Premises” shall mean the land described by
metes and bounds in Schedule A annexed hereto and made part hereof.


 


(dd) “Property” shall mean (i) the fee simple estate
in the Premises, (ii) the Real Property, (iii) all right, title and interest of
the Seller, if any, in and to the land lying in the bed of each street or
highway in front of or adjoining the Premises to the center line of such street
or highway, (iv) the Leases and the rents therefrom from and after the Closing
Date, (v) any unpaid award for any Taking by eminent domain or any damage to
the Premises by the change of grade of any street or highway, (vi) the ways,
easements, rights, privileges, and appurtenances in and to the Premises, and
(vii) the Personal Property.  The
Property specifically excludes all claims and causes of action of Seller against
former and current tenants of the Buildings.


 


(ee) “Purchase Price” shall mean the aggregate sum
payable by the Purchaser to the Seller as specified in Section 3.01 of this
Agreement in consideration of the conveyances of the Property to be made by the
Seller pursuant to Article 2 hereof.


 


(ff)   “Purchaser” shall mean Comstock Homes, Inc.


 


(gg) “Real Property” shall mean the Premises and the
Buildings and other Improvements.


 


(hh) “Seller” shall mean Fair Oaks Penderbrook
Apartments L.L.C.


 


(ii)   “Substantial damage or destruction” shall
have the meaning ascribed in paragraph (c) of Section 13.01.


 


(jj)   “Taking” shall have the meaning ascribed in
paragraph (d) of Section 13.01.


 


1.02         The words “herein,” “hereof,” “hereto,”
“hereunder” and variants thereof shall be interpreted as being references to
this Agreement as a whole and not merely the clause, paragraph, Section or
Article in which such word appears. 
Lists following words such as 
“include” and “including” shall be deemed to be examples only and not
exhaustive of all possible items of similar nature that could otherwise have
been set forth and the words “include” and “including” shall be read to mean
“to include or including, without limiting the generality of the foregoing.”


 


1.03         Where any representation made herein by
the Seller is made “to the best of the Seller’s knowledge,” it is understood
and agreed that such representation is made based solely upon the actual
knowledge, without investigation, of the person who is, on the date hereof, the
manager of the Real Property.


 


1.04         Wherever appropriate in this Agreement,
personal pronouns shall be deemed to include the other genders and the singular
or plural of any defined term or other word shall, as the context may require,
be deemed to include, as the case may be, either the plural or the
singular.  All Article,


 


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Section, Schedule and Exhibit references set forth herein shall, unless
the context otherwise specifically requires, be deemed references to the
Articles, Sections, Schedules, and Exhibits of this Agreement.


 


2.     Agreement of Purchase and Sale; Conveyancing Instruments.


 


2.01         The Seller shall sell and the Purchaser
shall purchase the Property upon the terms and subject to the conditions
hereinafter set forth.


 


2.02         The Seller shall on the Closing Date
convey and the Purchaser shall accept Acceptable Title to the Real Property by
a special warranty deed in the form annexed hereto and made part hereof as
Exhibit 1.


 


2.03         The Seller shall on the Closing Date
assign without representation or warranty (except as set forth herein) to the
Purchaser all of the Seller’s right title and interest in and to the Leases,
and the Purchaser shall accept the same and assume all of the Seller’s
obligations under the Leases, by an assignment and assumption agreement in the
form annexed hereto and made part hereof as Exhibit 2.


 


2.04         The Seller shall on the Closing Date
convey to the Purchaser the Personal Property, in its “as is” condition on such
day, by a bill of sale in the form annexed hereto and made part hereof as
Exhibit 3.


 


2.05         The Seller shall on the Closing Date
assign without representation or warranty (except as set forth herein) to the
Purchaser all of the Seller’s right, title and interest under each of the
Contracts, and the Purchaser shall accept the same and assume all of the
Seller’s obligations under the Contracts, by an assignment and assumption
agreement in the form annexed hereto and made part hereof as Exhibit 4.


 


2.06         The Seller shall on the Closing Date
assign without representation or warranty (except as set forth herein) to the
Purchaser all of the Seller’s right, title and interest under each transferable
license and permit in the Seller’s possession for the use and operation of any
items constituting Intangibles, and any equipment and apparatus for the
Buildings and other Improvements, and the Purchaser shall accept the same and
assume all of the Seller’s obligations under such licenses and permits, by an
assignment and assumption agreement in the form annexed hereto and made part
hereof as Exhibit 5.


 


3.     Purchase
Price.


 


3.01         The Purchase Price to be paid by the
Purchaser to the Seller for the Property is seventy-five million and no/100
($75,000,000.00) dollars.


 


3.02         The Purchase Price shall be paid by the
Purchaser to the Seller in the lawful currency of the United States of America,
as follows:


 


(a)   Four hundred twenty-five thousand and no/100
($425,000.00) dollars within one (1) business day after the execution of this
Agreement by Seller and Purchaser by immediately available funds wired to the
Escrow Agent’s designated account in accordance with wiring instructions
provided by the Escrow Agent, time being of the essence;


 


(b)    Five hundred thousand and no/100
($500,000.00) dollars upon the expiration of the Due Diligence Period by
immediately available funds wired to the Escrow Agent’s designated account in
accordance with wiring instructions provided by the Escrow Agent, time being of
the essence; and


 


(c)   The balance of the Purchase Price (as
adjusted pursuant to Article 12 hereof) upon the Closing on the Closing Date by
federal funds wired to the Escrow Agent and then to one or more accounts
designated by the Seller two (2) Business Days prior to the Closing Date.  Notwithstanding anything herein set forth to
the contrary, the Due Diligence Fee shall be applied to the payment of this
portion of the Purchase Price.


 


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3.03         If the Purchaser shall fail to make the
payment (or deliver a permitted letter of credit in lieu thereof) pursuant to
paragraph (b) of Section 3.02 within two (2) Business Days following notice
from the Seller that the Purchaser failed to make such payment or three (3)
Business Days following the due date of such payment, whichever is earlier, the
same shall constitute a default of the Purchaser hereunder, and the Seller may
terminate this Agreement and retain any Escrow Fund as liquidated damages.


 


3.04         No portion of the Purchase Price has
been allocated to any Personal Property that may be conveyed pursuant hereto.  If any governmental authority shall assess
any sales tax (or similar tax) in connection with the conveyance of such
Personal Property, the Purchaser shall pay such tax and any interest or
penalties or both which may be payable with respect to the same and indemnify
and hold the Seller harmless for any such taxes, interest and penalties which
the Seller may become obligated to pay. 
The obligations of the Purchaser pursuant to this Section 3.04 shall
survive the Closing.


 


3.05         The Seller may use any portion of the
proceeds of the Purchase Price at the Closing to satisfy and discharge any lien
or other title defect affecting the Real Property or any other, property,
estate or interest to be conveyed pursuant hereto.


 


3.06         Funds wired in connection with the
Closing (including the Contract Deposit) by the Escrow Agent and the Seller’s
designated recipient shall be unable to confirm receipt of such funds by 2:00
p.m. Eastern Standard Time, then there shall be added to (and deemed to be
included in the definition of) the Purchase Price a sum equal to the product
which results from multiplying (i) the amount of the Purchase Price by (ii)
0.00023 by (ii) the number of days (including the Closing Date) from the
Closing Date to the first Business Day when such funds have been received by
the Seller and the Seller’s designated recipient.  No conveyance to be made by the Seller
pursuant hereto shall be deemed effective until the entire Purchase Price shall
have been received by the Seller and the Seller’s designated recipient(s)
thereof and such receipt has been confirmed by the Seller or the Seller’s
recipient(s), as the case may be.


 


3.07         For the purposes hereof, the term
“immediately available funds” shall mean United States dollars, which require
no further clearance to be invested immediately by the Seller and earn interest
thereon from the time of such investment. 
Notwithstanding anything herein set forth to the contrary, the Purchaser
may, in lieu of the payments under paragraph (a) or paragraph (b) of Section
3.02 or both of them, deliver to the Escrow Agent one or more irrevocable,
unconditional letters of credit payable on sight issued (or confirmed for
payment) by Branch Banking and Trust Company or another New York Clearinghouse
Association member bank having capital and surplus of at least $10 billion,
payable to the Seller as the sole beneficiary. 
Any such letter of credit shall be payable upon presentation of only
said letter of credit and a sight draft and shall have an expiry date not
earlier than November 9, 2005.


 


4.     Title.


 


4.01         The Purchaser shall promptly order a
title report of the Real Property from a national title insurance company
licensed to do business in the Commonwealth of Virginia or such company’s
agent.  The Purchaser shall promptly inform
the Seller and its counsel of any title defect (including any defect disclosed
by a survey of the Premises) not among the Permitted Title Exceptions after
learning of the same and deliver a copy of such title report (and any survey
prepared on behalf of or obtained by the Purchaser) to the Seller promptly
after the receipt of the same, but not later than the last day of the Due
Diligence Period.  If the Purchaser shall
fail to notify the Seller and its counsel of the existence of any title
exception or defect not among the Permitted Title Exceptions by the expiration
of the Due Diligence Period, then objection to such title exceptions and
defects shall be deemed to have been waived by the Purchaser, and such title
exceptions and defects shall be deemed to be Permitted Title Exceptions.  If any title exception or defect not among
the Permitted Title Exceptions shall arise after the Due Diligence Period, the
Purchaser shall notify the Seller thereof within two (2) Business Days of the
Purchaser’s becoming aware of the same or such title exceptions and defects
shall likewise be deemed to have been waived by the Purchaser and such title
exceptions and defects shall be deemed to be Permitted Title Exceptions.


 


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4.02         The Seller shall not be obligated to
cure any title defect or to remove any exception to title not among the
Permitted Title Exceptions (including any violation noted or issued, of any
building, fire, safety, Environmental Law, or other law, code, ordinance or
regulation affecting the Real Property), if the aggregate cost of curing all
such title defects and removing such exceptions not among the Permitted Title
Exceptions (including any violation noted or issued, of any building, fire,
safety, Environmental Law or other law, code, ordinance or regulation affecting
the Real Property) shall exceed the Cure Amount, except that the Seller shall
cause any mortgage (or deed of trust) of the Real Property securing
indebtedness for borrowed money, and any judgment against the Seller and
mechanics’ or other statutory liens, encumbering the Real Property to be
discharged of record irrespective of the amount.  If the Seller elects to cure any title defect
or to remove any exception to title not among the Permitted Title Exceptions
(including any violations noted or issued, of any or all building, fire, safety
and other laws, codes, ordinances and regulations affecting the Real Property),
(which election shall be made by the Seller within five (5) Business Days after
receipt of the Purchaser’s objections), it shall be entitled to adjourn the
Closing Date for up to sixty (60) days to attempt to cure such defect or remove
such exception.  Notwithstanding anything
herein contained to the contrary, the Seller shall not be obligated to
institute or prosecute any legal proceeding to cure or discharge any title
defect or exception to title.


 


4.03         If the Seller shall have notified the
Purchaser of the Seller’s unwillingness or inability to cure title defects or
remove exceptions not among the Permitted Title Exceptions or among those title
exceptions that the Seller has agreed to discharge pursuant to Section 4.02
hereof, because the cost of curing such title defects or removing such
exceptions will exceed the Cure Amount, or if, as of the Closing Date (as the
same may have been adjourned as provided in this Agreement), the Seller is
unable to convey Acceptable Title to the fee simple of the Premises to the
Purchaser, then the Purchaser may, upon notice to the Seller, terminate this
Agreement.  The Purchaser may elect to
consummate this transaction subject to such title defects or exceptions upon
all of the terms and provisions and subject to all of the conditions set forth
in this Agreement (except the obligation of the Seller to convey Acceptable
Title) by giving notice to the Seller within five (5) Business Days after the
effective date of the Seller’s notice. 
If the Purchaser shall elect to consummate this transaction as provided
in the Purchaser’s notice, the Seller shall convey the Property to the
Purchaser without diminution of the Purchase Price, subject to the Permitted
Title Exceptions and such additional title exceptions as the Seller shall have
elected not to cure or remove except that Purchaser shall be entitled to a
credit against the Purchase Price equal to the Cure Amount and subject to the
Seller’s obligations to satisfy mortgages and liens pursuant to Section
4.02.  If the Purchaser shall have
elected to terminate this Agreement pursuant to this Section 4.03 and such
election shall not have been canceled as provided above in this Section 4.03,
then the Seller and the Purchaser shall instruct the Escrow Agent to disburse
the Escrow Fund to the Purchaser, and no party shall have any further rights or
obligations hereunder.  Such rights to
terminate this Agreement and to receive the Escrow Fund shall be the
Purchaser’s sole remedies if the Seller is unwilling or unable to cure or
remove any such title defect or exception.


 


5.    
Closing.


 


5.01         The Closing shall take place on
December 29, 2004.  The Purchaser may
adjourn the Closing once until not later than January 14, 2004 by (i) the
depositing with the Escrow Agent not later than December 27, 2004, the sum of
five hundred thousand and no/100 ($500,000.00) dollars (or a letter of credit
conforming to the requirements of Section 3.07), which sum shall be added to
the Contract Deposit and applied, upon Closing, to the Purchase Price, and (ii)
giving the Seller notice of such adjournment simultaneously with making such deposit.


 


5.02         The Seller and the Purchaser shall
endeavor to agree upon preliminary estimates of the closing adjustments and
prorations to be made in accord with Article 12 hereof at least three (3)
Business Days prior to the Closing Date and the final adjustments and
prorations not less than one (1) Business Day prior to the Closing Date.  At least one (1) Business Day prior to the
Closing Date the Seller and the Purchaser shall deliver to the Escrow Agent the
documents to be executed and delivered at the Closing pursuant to Article 11
hereof and the balance of the Purchase Price (as adjusted pursuant to Article
12).  Upon confirmation by the Escrow
Agent that it is prepared to issue an owner’s form of title insurance policy to
the Purchaser insuring Acceptable Title to the Purchaser and all other
conditions precedent to its


 


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disbursement of the Purchase Price, the Escrow Agent shall wire the
entire Purchase Price (as so adjusted) and all other moneys that the Escrow
Agent is holding in immediately available funds to the Seller and its
designees, if any.  Upon confirmation by
the Seller that the funds have been received, the Escrow Agent shall then
distribute the documents it is holding to the applicable parties and issue the
Purchaser’s title insurance policy.


 


6.     Representations of the Purchaser.


 


6.01         The Purchaser represents and warrants
to the Seller that:


 


(a)   THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT HAS BEEN NEGOTIATED BETWEEN THE SELLER AND THE PURCHASER.  THIS AGREEMENT REFLECTS THE MUTUAL AGREEMENT
OF THE SELLER AND THE PURCHASER, AND THE PURCHASER HAS CONDUCTED OR SHALL
CONDUCT ITS OWN INDEPENDENT EXAMINATION OF THE PROPERTY.  OTHER THAN THE MATTERS SPECIFICALLY
REPRESENTED HEREIN, BY WHICH ALL OF THE FOLLOWING PROVISIONS OF THIS PARAGRAPH
ARE LIMITED, THE PURCHASER HAS NOT RELIED UPON AND SHALL NOT RELY UPON ANY
REPRESENTATION OR WARRANTY OF THE SELLER OR ANY OF THE SELLER’S AGENTS OR
REPRESENTATIVES NOT SPECIFICALLY SET FORTH HEREIN, AND THE PURCHASER HEREBY
ACKNOWLEDGES THAT EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, NO SUCH
REPRESENTATION HAS BEEN MADE.  THE
PURCHASER ACKNOWLEDGES AND AGREES THAT EXCEPT AS SPECIFICALLY SET FORTH IN THIS
AGREEMENT, BY EXECUTING THIS AGREEMENT THE SELLER SPECIFICALLY DISCLAIMS, AND
NEITHER IT NOR ANY OF ITS AFFILIATES NOR ANY OTHER PERSON IS MAKING, ANY
REPRESENTATION, WARRANTY OR ASSURANCE WHATSOEVER TO THE PURCHASER, AND NO
WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EITHER EXPRESS OR IMPLIED,
EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, ARE MADE BY THE SELLER OR
RELIED UPON BY THE PURCHASER WITH RESPECT TO THE STATUS OF TITLE TO OR THE
MAINTENANCE, REPAIR, CONDITION, DESIGN OR MARKETABILITY OF ANY OF THE PROPERTY
INCLUDING (I) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (II) ANY
IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (III) ANY
IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS,
(IV) ANY RIGHTS OF PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF
CONSIDERATION, (V) ANY CLAIM BY PURCHASER FOR DAMAGES BECAUSE OF DEFECTS,
WHETHER KNOWN OR UNKNOWN, WITH RESPECT TO THE BUILDINGS AND OTHER IMPROVEMENTS
OR THE PERSONAL PROPERTY, (VI) THE FINANCIAL CONDITION OR PROSPECTS OF THE REAL
PROPERTY, AND (VII) THE COMPLIANCE OR LACK THEREOF OF ANY OF THE BUILDINGS OR
THE OTHER IMPROVEMENTS WITH GOVERNMENTAL REGULATIONS, IT BEING THE EXPRESS
INTENTION OF THE SELLER AND THE PURCHASER THAT, EXCEPT AS EXPRESSLY SET FORTH
IN THIS AGREEMENT, THE PROPERTY SHALL BE CONVEYED AND TRANSFERRED TO THE
PURCHASER IN ITS PRESENT CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS”,
WITH ALL FAULTS.  The Purchaser is a
knowledgeable, experienced and sophisticated purchaser of real estate, and it
is relying solely on its own expertise and that of Purchaser’s consultants in
purchasing the Property.  Prior to the
date hereof and during the Due Diligence Period, the Purchaser has conducted or
shall conduct such inspections, investigations and other independent
examinations of the Property and related matters as the Purchaser deemed or
deems necessary, including but not limited to the physical and environmental
conditions thereof, and shall rely upon same and not upon any statements of the
Seller (excluding the limited matters specifically represented by the Seller
herein) or of any member officer, director, employee, agent or attorney of the
Seller.  The Purchaser acknowledges that
all information obtained by the Purchaser was or shall be obtained from a variety
of sources, and the Seller shall not be deemed to have represented or warranted
the completeness, truth, or accuracy of any of the documents or other such
information heretofore or hereafter furnished to the Purchaser.  Upon Closing, the Purchaser will assume the
risk that adverse matters, including, but not limited to,


 


9





















 


adverse
physical and environmental conditions, that may not have been revealed by the
Purchaser’s inspections and investigations. 
The Purchaser further acknowledges and agrees that there are no oral
agreements, warranties or representations, collateral to or affecting the
Property, by the Seller, any agent of the Seller or any third party, except as
specifically set forth herein.  The Seller
is not liable or bound in any manner by any oral or written statements,
representations, collateral to or relating to the Property, by the Seller, any
agent of the Seller or any third party, except to the extent specifically
provided herein.  The Seller is not
liable or bound in any manner by any oral or written statements,
representations or information pertaining to the Property furnished by any real
estate broker, agent, employee, servant or other person, unless the same are
specifically set forth or referred to herein. 
The Purchaser acknowledges that the Purchase Price reflects the “as is,
where is” nature of this sale and any faults, liabilities, defects or other
adverse matters that may be associated with the Property.  The Purchaser (with the Purchaser’s counsel)
as fully reviewed the disclaimers and waivers set forth in this Agreement and
understands the significance and effect thereof.  The Purchaser acknowledges and agrees that
the disclaimers and other agreements set forth herein are an integral part of
this Agreement, and that the Seller would not have agreed to sell the Property
to the Purchaser for the Purchase Price without this disclaimer and other
agreements set forth in this Agreement. 
The terms and conditions of this paragraph (a) shall expressly survive
the Closing, shall not merge with the provisions of any Conveyancing
Instruments or other documents delivered in connection with the sale of the
Property and shall be deemed to be incorporated into the deed conveying title
to the Real Property.


 


(b)   Neither the Seller nor any broker or other
person purporting to represent or speak on behalf of the Seller has made any
representation respecting the financial condition or position of the Real
Property or the Seller, any projected income from the Real Property, the
marketability of the same, the state of the real estate market or any other
matter respecting the financial or economic viability of the Real Property,
except as may be specifically set forth in the Schedules hereto.


 


(c)   The Purchaser is not relying upon any
statements made by or on behalf of the Seller concerning (i) the condition or
operation or maintenance of the Real Property, or (ii) any other matter
concerning any of the Property, not specifically stated in the body of this
Agreement or in any Schedule hereto.


 


(d)   The Purchaser is not and shall not be as of
the Closing Date an employee benefit plan as defined in Section 3(30) of ERISA,
which is subject to Title I of ERISA, nor a plan as defined in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, and the assets of
the Purchaser shall not constitute “plan assets” of one or more of such plans
within the meaning of Department of Labor Regulation Section 2510.3-101.


 


(e)   The persons executing this Agreement on
behalf of the Purchaser have been duly authorized to do so by the appropriate
governing or managing authority of the Purchaser, and this Agreement
constitutes the valid and binding obligation of the Purchaser, enforceable in
accordance with its terms.


 


6.02         Each of the representations and
warranties made by the Purchaser in Section 6.01 is material and may only be
waived by the Seller and only by means of a writing signed by it.


 


7.     Representations of the Seller.


 


7.01         The Seller represents and warrants to
the Purchaser, that on the date hereof:


 


(a)   The persons executing this Agreement on
behalf of the Seller have been duly authorized to do so by the appropriate
governing or managing authority of the Seller, and this Agreement constitutes
the valid and binding obligation of the Seller, enforceable in accordance with
its terms.


 


(b)   The information with respect to the Real
Property set forth in the following Schedules annexed hereto and made part
hereof is, as of the date hereof, true and complete information


 


10





















 


respecting each of the sets of matters referred to in such Schedules:
Schedules C (current rent roll of the Building), Schedule D (Contracts),
Schedule F (employees of the Buildings), Schedule G (insurance coverage for the
Buildings and Other Improvements), Schedule H (Personal Property as of the date
thereon set forth), Schedule I (unpaid costs of improvements and allowances
owed to Tenants under Leases), and Schedule J (unpaid commissions owed to brokers
in connection with Leases).  Schedule E
has been intentionally omitted.


 


(c)   The Seller has not received notice of
violation of any zoning, building, fire or safety code, Environmental Law, the
Federal Fair Housing Act or any state or municipal equivalent, or other
applicable law that has not been discharged.


 


(d)   To the best of the Seller’s knowledge, it is
not in material breach of any Lease and it has not received notice from any
tenant of such a material breach that has not been cured;


 


(e)   It has not received notice of any material
breach of any material obligation to any third party under any of the documents
listed among the Permitted Title Exceptions or under any Contract that has not
been cured.


 


(f)    No real estate tax contests are pending.


 


(g)   No apartment units comprising the Property
are occupied by persons other than bona fide
tenants, and no employees of Seller or its property manager are in possession
of any apartments, except two employees under Leases that provide that any such
Lease may be terminated upon ten (10) days’ notice if the relevant employee’s
employment is terminated.


 


7.02         The Seller shall update and revise each
of the Schedules referred to in paragraph (b) of Section 7.01 so that the same
shall be accurate as of a date not earlier later than two (2) Business Days
preceding the Closing Date, but no such updated and revised Schedule shall be
deemed to be a representation (or contain representations) which shall survive
the delivery of the Conveyancing Instruments at the Closing except as provided
in Section 7.08 hereof.


 


7.03         No representation is made with respect
to the existence of any Lease, tenancy, or Contract on the Closing Date, and
the existence of any of the foregoing on the Closing Date is not a condition
precedent to the Purchaser’s obligation to consummate this transaction.  Notwithstanding the foregoing, the updated
rent roll shall be true, correct and complete as of the date made.


 


7.04         A representation of the Seller shall be
deemed untrue or incomplete only if (i) the Purchaser did not know that such
representation is untrue, (ii) such representation is factually untrue and
(iii) such representation is material. 
Notwithstanding the provisions of the preceding sentence, if the
Purchaser shall discover any of the Seller’s representations to be untrue
factually, the Purchaser shall give the Seller notice thereof promptly after
discovering such fact and the Seller shall have the opportunity (not to exceed
thirty (30) days) to correct any such untrue factual representation.  If the Seller is able to correct such
conditions that made the representation untrue factually so that it is true as
of the date of such correction, the representation shall be deemed true as if
made accurately on the date hereof.  If
the Purchaser fails to afford the Seller the opportunity to correct such
condition, then the Purchaser shall be deemed to have waived any rights and
remedies arising by reason of such untrue representation.


 


7.05         Subject to the terms and provisions of
Section 7.04, the Purchaser’s sole right and remedy arising by reason of any
untrue or incomplete representation discovered by the Purchaser prior to
Closing shall be to terminate this Agreement and have the Escrow Fund paid to
the Purchaser together with the Purchaser’s reasonable costs of due diligence
up to $75,000.


 


7.06         All of the Seller’s representations
hereunder shall be deemed merged in the Conveyancing Instruments and shall not
survive the conveyances of the Property to the Purchaser, except as provided in
Section 7.07.  The acceptance by the
Purchaser of the Conveyancing Instruments by the Purchaser shall constitute
conclusive proof that the Seller shall have performed all of its obligations
under


 


11





















 


this Agreement and shall have no further or continuing obligations or
liabilities to the Purchaser arising under or by virtue of this Agreement or
out of the transactions contemplated by the parties hereto, except as may be
expressly set forth in this Agreement or the closing documents.


 


7.07         The Seller’s representations set forth
in Section 7.01 shall survive the Closing for one hundred eighty (180)
days.  Following the Closing, if any such
representation shall prove to be untrue or incomplete as defined in Section
7.04, the Purchaser may commence an action for the actual damages suffered
thereby, provided that such action shall have been commenced within such
180-day period, time being of the essence.


 


8.     Purchaser’s
Due Diligence.


 


8.01         In consideration of the Purchaser simultaneously
herewith depositing with the Escrow Agent the Due Diligence Fee (which shall be
payable to the Seller in accordance with Sections 3.02, 8.03, and 14.01),
commencing on the date of this Agreement and expiring on December 1, 2004 or
such earlier date as the Purchaser shall have waived its rights to terminate
this Agreement under Section 8.03 (which right shall conclusively be deemed to
have been waived by making the Contract Deposit pursuant to paragraph (b) of
Section 3.02) (the “Due Diligence Period”), the Purchaser (and the Purchaser’s
accountants, engineers and other consultants) may, subject to the terms and
provisions of this Article 8 and upon at least two Business Days’ notice to the
Seller,  (i) subject to the rights of
tenants of the Premises, enter upon the Real Property for the purpose of making
such inspections and surveys thereof as the Purchaser may desire, (ii) review
the Leases and (iii) inspect, during regular business hours at the offices of
the managing agent of the Real Property, the Contracts and the other books and
records of such managing agent relating to the operation, leasing and
maintenance of the Real Property. 
Nothing in this Section 8.01 shall be construed to permit the Purchaser
or any other person on behalf of the Purchaser to inspect or review any (x)
income tax returns or files relating to income taxes of the Seller or any
partner, officer, member, agent or other principal of the Seller or (y)
reports, correspondence, memoranda or compendia of information prepared by
counsel for the Seller which may be the subject of any privilege or by any
other persons in contemplation of litigation or any other official proceeding
or hearing, except real estate tax certiorari (or
equivalent) proceedings.  The Seller
reserves the right to have one or more representatives present at any such
inspection, test, examination or walk-through of the Real Property and at any
examination of the Leases, Contracts or books and records.  No test or physical penetration of any
portion of the Real Property may be conducted without the prior approval of the
Seller, which approval shall not be unreasonably withheld.  The Purchaser shall maintain and deliver to
Seller certificates of comprehensive liability and property damage insurance in
a coverage amount of not less than one million ($1,000,000) dollars per occurrence and underwritten by a carrier reasonably
acceptable to the Seller, naming the Seller, its members and managing agent as
insureds against any damage, injury, expenses and other liabilities which the
undersigned may incur arising out of any negligence or misconduct by any of the
Purchaser’s representatives while present at the Real Property to perform any
activity permitted under this Section 8.01. 
The Purchaser shall promptly pay the Seller the Seller’s cost to repair
any damage to any Buildings and other Improvements caused by or resulting from
activities associated with such representatives (excluding, however, conditions
merely discovered by the Purchaser) and restore the damaged property to its
condition immediately prior to such activities and shall indemnify Seller
against any related costs.   During the
Due Diligence Period, the Seller shall make available to the Purchaser and its
representatives copies of the Leases, the Contracts, such Certificate(s) of
Compliance or Occupancy and Residential Use Permits for the Buildings and other
Improvements as are in the possession of the Seller and its managing agent, the
most recent real estate tax bills for the Real Property, such plans and
drawings of the Buildings and other Improvements as are in the possession of
the Seller and its managing agent and, subject to the foregoing provisions of
this Section 8.01, such other books and records of the Property, including,
without limitation, the items set forth in Schedule K attached hereto,
as are in the possession of the Seller and its managing agent.


 


8.02         (a)   All
information respecting the Real Property obtained pursuant to Section 8.01 or
other source not in the public domain prior to the Closing by the Purchaser or
any other person acting on behalf of the Purchaser shall be held in the
strictest confidence and shall not be revealed to any person (other than
persons retained or employed by Purchaser, the Purchaser’s consultants and
lenders, who have a


 


12





















 


need to know such information) except pursuant to subpoena or court or
other competent authority’s order.  If
the Purchaser or any person acting on behalf of the Purchaser shall be made the
subject of a subpoena or the order of any court or other competent authority’s
directing the Purchaser or such other person to divulge any such information,
the Purchaser shall notify the Seller of such subpoena or order promptly after
being served with the same to permit the Seller to contest such subpoena or
court order or to seek such other protective relief as the Seller may deem
desirable.  The Purchaser shall instruct
each person to whom the Purchaser imparts any such information about the Real
Property pursuant to this Article 8 to be bound by the terms and provisions of
this Section 8.02.


 


(b)   All duly
authorized representatives of the Purchaser who may participate in the
Purchaser’s inspections and other due diligence shall be instructed by the Purchaser
to be bound by the terms and provisions of this Section 8.02.


 


(c)   Provided
that the Seller is not in material breach of this Agreement and the Purchaser
has terminated this Agreement in accord with Section 8.03, the Purchaser shall
deliver to the Seller, promptly after receipt by the Purchaser, copies of all
title abstracts and reports, surveys, inspection and test reports and
environmental and engineering reports with respect to the Real Property that
may be prepared for the Purchaser by third-party engineers, providers,
consultants or contractors.  All such
copies shall be delivered without representation or warranty and may not be
relied upon by the Seller.


 


(d)   The
Purchaser shall not request any governmental authority to inspect any portion
of the Real Property but the Purchaser may request from appropriate agencies
information concerning zoning, compliance with codes or other ordinances and
certificates of occupancy.


 


8.03         The Purchaser may terminate this
Agreement for any reason on or before the expiration of the Due Diligence
Period, time being of the essence, by giving the Seller notice of such
termination, time being of the essence. 
If the Purchaser shall so terminate this Agreement pursuant to this Section
8.03 and the Seller shall not have made an untrue or incomplete representation
(as defined in Section 7.04) or other breach or default hereunder which shall
have formed the basis of such termination, then the Purchaser shall direct the
Escrow Agent to disburse the Due Diligence Fee of seventy-five thousand and
no/100 ($75,000.00) dollars to the Seller in consideration of the Seller’s
having removed the Property from the market for the duration of the Due
Diligence Period and the balance of the Escrow Fund to the Purchaser (without
the requirement of obtaining consent of the Seller and notwithstanding contrary
instruction from the Seller) and neither party shall have any further
obligation or claim against the other arising out of this Agreement (except for
such claims as the Seller may have by reason of any covenant or condition set
forth in Sections 8.01 or 8.02).  If the
Purchaser shall not have given such notice of termination in a timely manner
under this Section 8.03, then the right to terminate this Agreement pursuant to
this Section 8.03 shall be deemed waived for all purposes, the right to
terminate this Agreement pursuant to this Section 8.03 shall be of no force or
effect, and the balance of the Contract Deposit (as specified in paragraph (b)
of Section 3.02) hereof shall be unconditionally due and payable.  If this Agreement is not terminated pursuant
to this Section 8.03, the Contract Deposit shall not be refundable to the
Purchaser for any reason not specifically set forth herein.


 


8.04         Pursuant to the provisions of Section
8.01 and 8.02, the Purchaser may inspect the Real Property during the Contract
Period subsequent to the Due Diligence Period.


 


9.     Operation of the Buildings and Other Improvements.


 


        During the Contract Period, the Seller shall (i) continue to
manage, maintain, repair and operate the Real Property in accordance with the
Seller’s customary practices, including, evicting tenants, making repairs,
hiring and firing employees, entering into, modifying, and terminating Leases
and Contracts, and applying security deposits under the Leases as permitted
thereunder (provided, however, that without Purchaser’s prior written consent,
Seller shall not enter into any Lease with a term in excess of one (1) year or
with renewal options in favor of the tenant thereunder); (ii) not apply
security deposits, except in connection with evicting a tenant or with respect
of a tenant who has vacated his apartment; (ii) operate the Real Property in
accordance with applicable laws; (iv) not enter into Contracts to which the


 


13





















 


Purchaser shall be subject following the Closing, (v) operate the Real
Property in accord with applicable laws and (vi) not enter into Leases except
at arms-length, at fair market rents for terms customary in the market, on the
Seller’s standard form of lease.  The
Seller shall maintain insurance coverage for the Buildings and other
Improvements comparable to the insurance referred to on Schedule G hereto.


 


10.  Environmental Liabilities.


 


10.01       Except in connection with the Seller’s
breach of an express representation or warranty set forth herein, the Purchaser
hereby waives any claim against the Seller, its partners, employees, and agents
and affiliates arising out of any Hazardous Activity conducted or any Hazardous
Substance or Hazardous Condition existing at, in or about the Real Property;
provided, however, that such waiver shall not extend to third party claims for
which the Purchaser may be liable as a result of any act or failure to act on
the part of the Seller.


 


10.02       From and after the Closing, the Purchaser
shall indemnify and hold the Seller, its partners, employees and agents and
affiliates harmless against any cost, claim, or liability (including attorneys’
fees) arising by virtue of the existence at any time of any Hazardous Activity
conducted at or any Hazardous Substance or Hazardous Condition first arising or
occurring at, in or about the Real Property from and after the Closing Date
caused or suffered by the Purchaser.


 


10.03       The obligations of the Purchaser pursuant
to this Article 10 shall survive the delivery of the Conveyancing Instruments
at the Closing.


 


11.  Closing
Documentation.


 


11.01       At the Closing, the Seller shall deliver
to the Purchaser:


 


(a)   the deed as heretofore described in Section
2.02;


 


(b)   an assignment and assumption agreement as
heretofore described in Section 2.03 with respect to each of the Leases which
shall provide that the Purchaser is assuming all of the obligations of the
Seller under the Leases from and after the Closing Date;


 


(c)   a bill of sale, for any Personal Property
being conveyed incidental to the Real Property as heretofore described in
Section 2.04;


 


(d)   an assignment and assumption agreement as
heretofore described in Section 2.05 of the Contracts which shall provide that
the Purchaser is assuming all of the obligations of the Seller under the
Contracts (including any obligations to union personnel and other persons who
may be beneficiaries under any such agreements) from and after the Closing
Date;


 


(e)   an assignment and assumption agreement as
heretofore described in Section 2.06 of the licenses and permits and other
items constituting Intangibles which shall provide that the Purchaser is
assuming all of the obligations of the Seller under such licenses and permits from
and after the Closing Date;


 


(f)    updated and revised Schedules pursuant to
Section 7.02 hereof;


 


(g)   such instruction manuals, warranties and
guarantees with respect to the Building’s systems, equipment and apparatus as
are in possession of the Seller or the Seller’s managing agent;


 


(h)   all Leases and tenants files in the
possession of the Seller or its managing agent as then are in effect;


 


14





















 


(i)    the Contracts in the possession of the
Seller or its managing agent as then are in effect;


 


(j)    any licenses and permits referred to herein
and on any Schedule, the items referred to on Schedule H, and other items of
Intangibles in the possession or control of the seller or its managing agent as
then are in effect;


 


(k)   letters addressed to each of the tenants
under the Leases, including statements to the effect that their respective
security deposits under the Leases have been delivered to and received by the
Purchaser (and containing such other statements and information as may be
required pursuant to law to relieve the Seller of further liability for the
maintenance and return of the security deposits under the Leases);


 


(l)    letters addressed to service providers
informing them of either (i) the assumption of their Contracts by the Purchaser
or (ii) the termination of their Contracts, provided, however, that the
Contracts designated as “Cannot be Cancelled” on Schedule D shall be assumed by
the Purchaser;


 


(m)  the Building’s managing agent’s records
(excluding those deemed to be confidential by reason of any privilege asserted
by the Seller) pertaining to the operation of the Building;


 


(n)   any and all plans, specifications, and
drawings of the Buildings and other Improvements as are in the possession or
control of the Seller or its managing agent;


 


(o)   a certification to the effect that the Seller
is not a “foreign person” as defined in the Foreign Investment in Real Property
Tax Act;


 


(p)   evidence of the authority of the Seller to
consummate this transaction and proof of its legal subsistence as an entity as
reasonable required by the Purchaser’s title insurance company;


 


(q)   an updated rent roll certified as accurate as
of the Closing Date by the Seller;


 


(r)    records and correspondence in the possession
of the Seller or the Seller’s managing agent in respect of the Contracts being
assumed by the Purchaser;


 


(s)   a certification that the representations and
warranties made in Section 7.01 (as updated pursuant to Section 7.02) are true
and complete as of the Closing Date;


 


(t)    evidence of the termination of the
management agreement between the Seller and its managing agent;


 


(u)   evidence of payment of Eastdil’s commission
or Eastdil’s written agreement not to look to the Purchaser for payment of
Eastdil’s commission; and


 


(v)   a customary owner’s affidavit in favor of the
title insurance company insuring the Purchaser’s title (but no such affidavit
shall impose liability upon the Purchaser for events or acts occurring after
the Closing).


 


11.02       At the Closing, the Purchaser shall, as
applicable, deliver or execute and deliver to the Seller:


 


(a)   the balance of the Purchase Price as adjusted
for net closing adjustments between the Seller and the Purchaser as hereinafter
provided;


 


(b)   the agreement of assignment and assumption of
the Leases as heretofore described in Section 2.03;


 


15





















 


(c)   the aforesaid assignment and assumption
agreement of the Contracts as heretofore described in Section 2.05;


 


(d)   the aforesaid assignment and assumption
agreement of the licenses and permits as heretofore described in Section 2.06;


 


(e)   the letters heretofore described in paragraph
(k) of Section 11.01; and


 


(f)    evidence of the authority of the Purchaser
to consummate this transaction and proof of its legal subsistence as an entity
as reasonably required by the Purchaser’s title insurance company.


 


11.03.   Each of the parties
shall execute such transfer tax and other tax returns incidental to this
transaction as required by law and such other title affidavits documents as may
be reasonably required to consummate the transactions under this Agreement in
accordance with its Terms.


 


12.  Closing Adjustments; Closing Costs; and Transfer Taxes.


 


12.01       Subject to the terms and provisions of
Section 12.02 and Section 12.03, the following items shall be adjusted at the
Closing as of 11:59 p.m. of the day immediately preceding the Closing Date and
the net amount of such closing adjustments shall be applied, as the case may
be, as a credit to or debit against the balance of the Purchase Price payable
at the Closing:


 


(a)   real estate taxes, assessments, vault fees,
if any, and any other ad valorem
taxes, provided that if a final bill for any of such real estate taxes,
assessments, vault fees, or other ad valorem
taxes has not been rendered as of the Closing Date for the then current or any
prior fiscal period, then the adjustment for such real estate tax, assessment,
vault fee or other ad valorem tax
shall be made on the basis of the then available tax bills for the then most
recent period, and such taxes and other items shall be prorated after the
Closing when such final tax bill has been rendered and any amount owed by
reason of such proration shall be paid promptly by the applicable party;


 


(b)   water charges and sewer rents (to the extent
feasible, the Seller shall supply meter readings as close as possible to the
Closing Date or if there are no such meters, then adjustments shall be based on
the most recent bills therefor), to be reconciled, if necessary, after the
Closing when bills for the period since the most recent meter readings or bills
have been issued;


 


(c)   special district impositions, if any;


 


(d)   Contract fees or charges and fees and charges
with respect to the Intangibles, if any;


 


(e)   license and permit fees for the licenses and
permits being assigned and assumed as herein provided;


 


(f)    rents and other charges under the Leases
(based on actual collections with no adjustment for concessions or abatements),
provided that rents received by the Seller or the Purchaser following the
Closing shall first be applied (and adjusted) to the month in which the Closing
occurs, then to the then current month, and then to all periods following the
then current month.  The Purchaser shall
collect, report semi-annually through and including the first anniversary of
the Closing Date, in writing to Seller, and hold in trust for the Seller’s
benefit any such rents received after the Closing that are payable to the
Seller hereunder.


 


(g)   gas and other fuel (if applicable) pursuant
to a reading of the supplier of the same not earlier than forty-eight (48)
hours prior to the Closing Date;


 


(h)   electricity charges based upon the last
available electrical reading;


 


16





















 


(i)    any other utilities including electricity
services (to the extent feasible, the Seller shall supply meter readings as
close as possible to the Closing Date or if there are no such meters, then
adjustments shall be based on the most recent bills therefor), to be
reconciled, if necessary, after the Closing when bills for the period since the
most recent meter readings or bills have been issued;


 


(j)    all assessments and charges under the
agreements recorded in Deed Book 6808 page 1706, Deed Book 6836 page 1792, Deed
Book 6912 page 1925, and any amendments thereto entered into prior to the
Closing Date, provided that any refund due to the Seller thereunder shall be
credited to it at the Closing and Seller’s rights to such refund shall be
assigned to the Purchaser; and


 


(k)   If adjusted pursuant to customary practice,
Fairfax County Business, Professional and Occupation Tax for the (fiscal) year
in which the Closing occurs.


 


12.02       To the extent that any rent or other
charge or any other matter to be adjusted or apportioned at the Closing is
based upon estimates or if complete information is not available at the Closing
to make the final calculations as of the Closing Date or any rent or charge
under any of the Leases is not payable by the tenants as of such date, then the
Purchaser shall pay to the Seller that portion of such rents or charges
applicable to all periods through the Closing Date (as are then calculable and,
if not so calculable, then estimated based upon the most recent information
available), provided, that if the Seller shall have collected any such rents,
charges and other matters for any period occurring on and after the Closing
Date, the Seller shall credit the Purchaser with the amount thereof.  If the information necessary to compute any
closing adjustment is not available at the Closing or if any adjustment is
based upon an estimate, then such adjustment shall be made as promptly as
feasible following the Closing.


 


12.03       If either party shall discover any error
in the computation of any closing adjustment, such error shall be corrected
promptly following notification thereof by the discovering party to the other
(provided, that such notification shall be given within thirty (30) days
following the discovery thereof but not later than one (1) year following the
Closing Date), and an appropriate payment to correct the same shall then be
made.


 


12.04       If, at Closing, any then tenant of the
Real Property, is delinquent in the payment of rent payable for any period
expiring prior to the month in which the Closing occurs, the Purchaser shall
purchase and the Seller shall sell, without representation or warranty, the
Seller’s claims for such delinquencies for one-half (1/2) of the amount thereof
(but the Purchaser’s maximum payment therefor shall not exceed ten thousand and
no/100 ($10,000.00) dollars).


 


12.05       [Intentionally deleted].


 


12.06       At the Closing, the Purchaser shall
assume any unpaid tenant referral fees (not to exceed $1,500), of which the
Seller represents that as of the date hereof there are none.  The Seller shall, upon the Closing, terminate
all utility company accounts and seek the return of all utility deposits the
Seller shall have made with the utility companies and agencies servicing the
Real Property.  The Purchaser shall open
new accounts in its own name with the appropriate utility companies and
agencies and shall indemnify the Seller for all liabilities sustained by the
Seller for third party claims arising out of any failure of the Purchaser to
open any such account timely.  This obligation
shall survive the Closing.


 


12.07       At the Closing, the Seller shall, (i)
credit the Purchaser with the amounts of security deposits and interest thereon
and (ii) assign to the Purchaser at the Closing all non-cash security deposits
under the Leases.  If any of such
security deposits shall be in the form of certificates of deposit, letters of
credit or other non-cash instruments, the Purchaser shall bear any transfer
fees that may be levied in connection with any such assignment.  For the purposes of this Section 12.07, the
amount of any such security deposits (whether in cash or other form) shall be
that amount still retained by the Seller after applying, in accordance with
Section 9.01, any such security deposit under the relevant Lease and retention by
the Seller of any portion of interest earned on any security deposit, which
under law a landlord under any lease may retain as a service fee or otherwise.


 


17





















 


12.08       The Seller shall pay the State Grantor’s
Tax imposed upon the conveyance of the Real Property by the Commonwealth of
Virginia and one-half (1/2) of any fee charged by the Escrow Agent for its
services pursuant to any provision of this Agreement.


 


12.09       The Purchaser shall pay the following
expenses with respect to the conveyance of The Property pursuant to this
Agreement.


 


(a)   premiums for its owner’s title insurance
policy, any endorsements thereto, and any lender’s title insurance policy;


 


(b)   the cost of obtaining any update to any
existing survey or a new survey of the Real Property;


 


(c)   any taxes imposed upon debt instruments
imposed by the Commonwealth of Virginia or any political subdivision thereof
and all fees and other charges payable to any lender to the Purchaser;


 


(d)   all other State and County transfer taxes;


 


(e)   one-half (1/2) of any fees charged by the
Escrow Agent for its services pursuant to any provision of this Agreement; and


 


(f)  any transfer and/or license fees associated
with software applications, licenses, and programs to be conveyed to the
Purchaser pursuant hereto.


 


12.10       Each party hereto shall bear its own
attorney’s legal charges with respect to the transactions to be consummated
pursuant hereto.


 


12.11       The obligations of the parties under this
Article 12 shall survive the Closing.


 


13.          Risk
of Loss.


 


13.01       For
the purposes of this Article 13, the following terms used herein shall have the
meanings ascribed to them:


 


(a)   “Damage or destruction” shall mean any damage
to or the destruction in whole or in part of any of the Buildings and other
Improvements on the Premises;


 


(b)   “Insubstantial damage or destruction” shall
mean any damage or destruction the estimated cost of repair or restoration made
in good faith by any independent contractor retained by the Seller does not
exceed $1,000,000.


 


(c)   “Substantial damage or destruction” shall
mean any damage or destruction the estimated cost of repair or restoration made
in good faith by any independent contractor retained by the Seller exceeds
$1,000,000.


 


(d)   “Taking” shall mean the vesting of title of
any estate or interest in any portion of the Real Property in any governmental
or quasi-governmental authority or any
other person or entity by virtue of the exercise of the power of eminent
domain.


 


13.02       If
there shall occur prior to the Closing any insubstantial damage or any Taking
of a portion of the Real Property the estimated value of which (as determined
by the Seller’s casualty insurer) does not exceed $1,000,000, or, in the case
of a Taking, does not result in (i) the loss of reasonable access to the
Premises, (ii) the loss of any apartment unit or parking spaces, or (iii) that
would cause the Real Property to be non-conforming under any applicable zoning
or land use law, ordinance, permit, or approval so that it could not be
converted to condominium ownership, this Agreement shall continue in full force


 


18





















 


and effect and the Purchaser shall receive an assignment of all of the
Seller’s right, title and interest to the insurance proceeds or condemnation
award, as applicable, to be paid (or theretofore paid) accruing to the owner of
the Premises for such damage or Taking, plus a credit against the Purchase
Price in amount equal to Seller’s deductible. 
Notwithstanding the foregoing, if the Seller’s insurance company has not
admitted liability by the Closing Date for an amount to restore any
insubstantial damage or destruction, the Seller may adjourn the Closing for up
to sixty (60) days to obtain the insurance company’s agreement to cover such
loss and if at the expiration of such 60-day period, such agreement has not
been obtained and the Seller has not agreed to reduce the Purchase Price by the
estimated value of such loss, the Purchaser may elect, by notice given within ten
(10) Business Days after the expiration of such 60-day period, to consummate
this transaction without diminution of the Purchase Price (except for the
amount of any insurance deductible) or terminate this Agreement.  If the insurer has agreed to liability for
such loss or if the Seller shall have agreed to reduce the Purchase Price by
such amount, this Agreement shall not be terminated.  If the Purchaser does not timely make any
election under this Section 13.02 a right to which it is granted, then this Agreement
shall be deemed terminated.  Upon a
termination of this Agreement pursuant to this Section 13.02, the Escrow Fund
shall be paid to the Purchaser as its exclusive remedy.


 


                        13.03       If there shall occur prior to the Closing
any substantial damage or any Taking of a portion of the Real Property the
estimated value of which (as determined by the Seller’s casualty insurer)
exceeds $1,000,000, or, in the case of a Taking, results in (i) the loss of
reasonable access to the Premises, (ii) the loss of any apartment unit or
parking spaces, or (iii) that would cause the Real Property to be
non-conforming under any applicable zoning or land use law, ordinance, permit,
or approval so that it could not be converted to condominium ownership, then
the Purchaser may elect to (i) terminate this Agreement by giving notice of
such election to the Seller within ten (10) Business Days after receiving
notice of such event (with the estimate of the value of such loss), whereupon
this Agreement shall be terminated and the Seller and the Purchaser shall
instruct the Escrow Agent to disburse the Escrow Fund to the Purchaser or (ii)
accept an assignment of the Seller’s insurance proceeds payable on account of
such damage or destruction and purchase the Property in accordance with the
terms hereof without diminution of the Purchase Price, except the amount of any
deductible under the Seller’s insurance policy, which shall be credited to the
Purchaser.  Notwithstanding the
provisions of the preceding sentence, the Seller may negate any such notice of
termination in the case of a substantial damage or destruction by giving the
Purchaser notice of the Seller’s intent to restore or replace the portions of
the Property so damaged or destroyed and if such portions of the Property are
restored or replaced by the Closing Date (which the Seller may adjourn up to
sixty (60) days to effect), then the Property shall be conveyed in accordance
with the terms hereof without diminution of the Purchase Price.  If such restoration or replacement is not
completed by the Closing Date (as the same may have been adjourned), then the
Purchaser may terminate this Agreement and, as its sole remedy, either (a)
receive payment of the Escrow Fund or (b) purchase the Property in accordance
with the terms of this Agreement without diminution of the Purchase Price
(except for insurance deductibles) and with Seller’s assignment of all
insurance proceeds with respect to such damage or destruction.


 


14.  Escrow.


 


14.01       (a)   The Escrow Agent shall deposit the Contract
Deposit in an interest-bearing account with a bank or other institution
reasonably satisfactory to the Seller and the Purchaser, but the Escrow Agent
shall be under no duty to maximize the rate of return on the Escrow Fund or to
insure against any reduction in the value of the Escrow Fund by reason of any
loss in value of any security in which the Escrow Fund is invested.  Any decrease in the value of the Escrow Fund
shall be at the Purchaser’s risk.


 


(b)   If the
Property is conveyed to the Purchaser in accordance with the terms of this
Agreement or if this Agreement shall be terminated for any reason other than
the default of the Seller, Seller’s inability (through no fault of the
Purchaser) or unwillingness to convey the Property to the Purchaser in accordance
with the terms of this Agreement or the Purchaser’s termination hereof pursuant
to Section 8.03, then the Escrow Fund and Due Diligence Fee shall be disbursed
to the Seller, except that any interest earned on the Contract Deposit shall be
disbursed to the Purchaser.  If the
Property is not conveyed to the Purchaser in accordance with the terms of this
Agreement and this Agreement shall be terminated due to the default of the
Seller or its inability (through no fault of the Purchaser) or unwillingness to
convey


 


19





















 


Acceptable Title to the Real Property or if the Purchaser terminates
this Agreement pursuant to Section 8.03, then the Escrow Fund shall be
disbursed to the Purchaser. 
Notwithstanding the foregoing, if the Purchaser shall have delivered one
or more letters of credit pursuant to Section 3.07, then at Closing, the
Purchaser shall pay to the Seller in immediately available funds the principal
amount(s) of such letter(s) of credit and the letter(s) of credit shall be
returned to the Purchaser.


 


(c)   Prior to
delivering the Escrow Fund to the Seller or the Purchaser pursuant to paragraph
(b) above (except at the Closing or pursuant to Section 8.03), the Escrow Agent
shall deliver to the Seller and the Purchaser notice of the Escrow Agent’s
intention to deliver the Escrow Fund. 
If, within five (5) Business Days after tendering such notice, the
Escrow Agent shall not have received a notice from either party instructing the
Escrow Agent not to deliver the Escrow Fund as specified in the Escrow Agent’s
notice, the Escrow Agent shall deliver the Escrow Fund to the party so
specified.  If, however, the Escrow Agent
receives within such five (5) Business Day period written instructions from
either party that the Escrow Agent should not so deliver the Escrow Fund, the
Escrow Agent shall continue to hold the Escrow Fund (subject to the Escrow
Agent’s right to commence an action by way of interpleader, in which case the
Escrow Fund shall be delivered to the Clerk of the Supreme Court of the State
of New York, New York County) until it receives a notice executed by the Seller
and the Purchaser instructing the Agent to whom the Escrow Fund should be
disbursed or delivery of a copy of any final judicial order to the Escrow
Agent, whereupon the Escrow Agent shall disburse the Escrow Fund as provided in
such joint instructions or order.  The
Seller and the Purchaser hereby agree to submit themselves to the jurisdiction
of the courts of the State of New York sitting in New York County, and service
upon them may be effected by the Escrow Agent in any way provided by
statute.  If the Escrow Fund (or portion
thereof) is represented by one or more letters of credit, and the Escrow fund
is to continue to be held by the Escrow Agent is not authorized to release the
Escrow Fund, then the Purchaser shall substitute cash in lieu of such letter(s)
of credit within five (5) Business Days of notice to do so again by the
Purchaser and if cash is not so substituted, then the Escrow Agent shall
forthwith, and hereby is irrevocably instructed to, deliver the letter(s) of
credit to the Seller.


 


14.02       (a)   The Escrow Agent has agreed not to charge a
fee for performing its duties hereunder. 
The Seller and the Purchaser shall jointly and severally indemnify and
hold the Escrow Agent harmless from all expenses, including legal fees and
charges (including legal fees and charges at the Escrow Agent’s standard fees
and charges if the Escrow Agent shall elect to represent itself, either with or
without outside counsel) and other liabilities incurred by the Escrow Agent
arising out of this Agreement, except to the extent that such expenses or
liabilities result from the Escrow Agent’s willful misconduct.  The provisions of this Article 14 shall
survive the delivery of the Conveyancing Instruments at the Closing or the
termination of this Agreement.


 


(b)   The Escrow
Agent may resign upon ten (10) days’ prior notice to each of the Seller and the
Purchaser and (i) depositing the Escrow Fund with the Clerk of the County of
Fairfax, Virginia or (ii) transferring the Escrow Fund to a bank or other
institution acceptable to the Seller and the Purchaser which shall have assumed
in writing the obligations of the Escrow Agent pursuant to this Agreement.  Upon the effective date of such resignation,
the Escrow Agent shall have no further obligations arising hereunder and shall
be released from all liability arising out of this Agreement, except its
willful misapplication of any portion of the Escrow Fund.


 


(h)   The Escrow Agent shall have no liability for
its failure to perform any obligation hereunder, except arising by reason of
its willful misconduct.  Notwithstanding
the foregoing, the Escrow Agent is hereby released from liability for any act
performed or omitted to be performed in good faith in its performance of its
duties hereunder.  The Escrow Agent shall
not be required to inquire into the authority of any person purporting to give
a notice on behalf of the Seller or the Purchaser and may assume that all
signatures are genuine.  It is understood
and agreed that the persons and firms referred to in Article 18 as counsel for
each of the Seller and the Purchaser are authorized to give notices to the
Escrow Agent pursuant to this Article 14.


 


(i)    The Seller and the Purchaser acknowledge
that the Escrow Agent is acting solely as a stakeholder hereunder and not the
agent of either party in connection with its escrow obligations


 


20





















 


hereunder.  The escrow created
hereunder and the obligations of the Escrow Agent as an escrow agent hereunder
are for the benefit of the parties to this Agreement only, and no other person
shall have any rights hereunder nor shall the Escrow Agent have any obligations
or duties to any other person other than a party to this Agreement by reason or
arising out of this Article 14.


 


14.03       The Escrow Agent is executing this
Agreement solely for the purpose of agreeing to the terms of this Article 14,
Section 7.08, and Section 8.03.  The
provisions of Section 14.02 shall apply to the conduct of the Escrow Agent
pursuant to Section 7.08 and Section 8.03.


 


14.04       The Escrow Agent shall be a beneficiary
of the terms of this Article 14.


 


15.  Default; Conditions to Closing.


 


15.01       If the Purchaser shall default hereunder,
the parties agree that the Seller shall sustain damages that shall be difficult
or impossible to measure.  The parties
agree that the Seller shall retain the Escrow Fund as liquidated damages as its
exclusive remedy if the Purchaser defaults hereunder and that such amount
represents a fair and reasonable estimation of the damages to Seller from such
default.


 


15.02       If the Seller shall be unable to perform
(i.e., fails to perform for reasons
beyond the Seller’s control) any of its material obligations hereunder or if
any representation made by the Seller, subject to the foregoing provisions of
Article 7, shall be proven to be untrue and incomplete (as understood pursuant
to Article 7), the Purchaser’s sole remedy shall be to terminate this Agreement
and be paid the proceeds in the Escrow Fund, the cost of the Purchaser’s
examination of title at the rate imposed by the Purchaser’s title insurance
company for performing such examination without issuing a title insurance
policy and up to $75,000 for the costs of the Purchaser’s due diligence.  If the Seller shall default (i.e., willfully and intentionally fails to perform
notwithstanding that it is within the Seller’s power to do so) in its
obligation hereunder to convey the Property as herein required, the Purchaser’s
sole remedy shall be (i) to bring an action for specific performance or (ii) at
Purchaser’s election, to receive the sum of five hundred thousand  ($500,000) dollars as liquidated damages (it
being difficult or impossible to measure the Purchaser’s damage and such amount
representing a fair and reasonable estimation of the Purchaser’s damages from
such a default) and the return of the Escrow Fund.  The Purchaser hereby waives the right to
attach or lien any property (real or personal) of the Seller or to file a lis pendens (or equivalent attachment) against any portion
of the Real Property, the Personal Property, or any other asset of the Seller,
for any purpose under this Agreement, including any enforcement of any right or
remedy arising out of any claimed breach of this Agreement by the Seller,
except in connection with any proper action for specific performance permitted
hereunder.


 


15.03       The obligation of the Purchaser to
consummate the transaction hereunder shall be subject to the fulfillment on or
before the Closing Date of all of the following conditions, any or all of which
may be waived by the Purchaser in its sole discretion:


 


(a)   The Seller shall have delivered to the
Purchaser all of the items required to be delivered to the Purchaser pursuant
to the terms of this Agreement, including but not limited to, those provided
for in Section 4.2 hereof;


 


(b)   All of the representations and warranties of
the Seller contained in this Agreement shall be true in all material respects
(but shall be deemed to have been made on the Closing Date with appropriate
modifications permitted under this Agreement);


 


(c)   The Seller shall have performed and observed,
in all material respects, all covenants and agreements of this Agreement to be
performed and observed by the Seller as of the Closing Date, including, without
limitation, conveying to the Purchaser Acceptable Title to the Real Property;


 


(d)   No material change has occurred in (i) the
zoning designation applicable to the Real Property or (ii) the status of any
approval, license or permit applicable to the Real Property; and


 


21





















 


(e)   No governmental action (such as but not
limited to the imposition of a sewer or water moratorium or permit allocation scheme)
shall have been taken, by any applicable governmental authority, which would
prevent the occupancy or use of the apartments or condominium units comprising
or to comprise the Real Property.


 


15.04       The obligation of the Seller to
consummate the transaction hereunder shall be subject to the fulfillment on or
before the Closing Date of all of the following conditions, any or all of which
may be waived by the Seller in its sole discretion:


 


(a)   The Seller
shall have received the Purchase Price as adjusted as provided herein, pursuant
to and payable in the manner provided for in this Agreement;


 


(b)   The
Purchaser shall have delivered to the Seller all of the items required to be
delivered to the Seller pursuant to the terms of this Agreement;


 


(c)   All of the
representations and warranties of the Purchaser contained in this Agreement
shall be true and correct in all material respects as of the Closing Date as if
made on the Closing Date; and


 


(d)   The
Purchaser shall have performed and observed, in all material respects, all
covenants and agreements of this Agreement to be performed and observed by the
Purchaser as of the Closing Date.


 


15.05       Except in connection with (a) a failure
to tender (i) funds required hereunder or (ii) documents required hereunder for
Closing or (b) where a cure period is already provided for herein, neither
party shall be in breach or default hereunder, nor shall the remedies in this
Section 15 be exercised by either party, until written notice of the alleged
breach or default has been provided to the other party, and such party has
failed to cure such breach or default within five (5) days; provided, however,
that if the alleged breach or default is of a nature that it cannot be cured by
exercise of reasonable diligence within such five (5) day period, then the
foregoing cure period shall be extended for the period of time reasonably
necessary to cure such alleged breach or default not to exceed sixty (60) days.


 


16.  No
Assignment.


 


Neither this
Agreement nor any of the rights or obligations of the Purchaser under this
Agreement may be assigned by the Purchaser to any party not affiliated with the
Purchaser without the prior written consent of the Seller.  The transfer, directly or indirectly, of the
record or beneficial ownership of a majority of the equity interests of the
Purchaser, whether in a single transaction or a series of transactions shall
constitute an assignment of this Agreement.


 


17.  Brokers.


 


The Seller and the
Purchaser hereby each mutually represents and warrants to the other that
Eastdil is the sole broker instrumental in negotiating and/or effecting this
Agreement.  The Seller agrees to pay any
commission Eastdil may have earned pursuant to separate agreements between the
Seller and Eastdil.  The Purchaser shall
indemnify and hold the Seller harmless from and against any claim, action,
cause of action or other liability or expense (including, without limitation,
attorneys’ fees) that the Seller may incur by reason of any claim for a
commission in connection herewith by any person or entity other than Eastdil
with whom the Purchaser may have dealt. 
The provisions of this Article 17 shall not constitute a third-party
beneficiary contract.  The provisions of
this Article 17 shall survive the Closing or the sooner termination of this
Agreement.


 


18.  Notices.


 


All notices and
other communications required to be given under this Agreement shall be in
writing, signed by the party (or such party’s counsel) serving the notice or
other communication, and sent by reputable overnight courier service (such as
Federal Express, DHL, United Parcel Service) or facsimile transmission, to the
address of the party to whom given as set forth below or to such other address
as either


 


22





















 


party may designate in writing in the manner herein prescribed, and all
such notices and other communications shall be deemed effective on (i) the
Business Day following such notice as communication having been delivered to
such overnight courier or (ii) upon the receipt of a facsimile transmission,
provided that such transmission is received by 5:00 p.m. (local time at such
addressee’s office) at the addressee’s offices as set forth below and if not so
received, shall be effective as of the Business Day next following the
successful transmission thereof. 
Addresses (offices) to which notices shall be sent are as follows:


 


To the Seller:


 


Fair Oaks
Penderbrook Apartments L.L.C.


c/o W&M
Properties, L.L.C.


60 East 42nd
Street


New York, New
York  10165-0015


Attention:  Vincent M. Sultana


Telefax
Number:  (212) 986-7679


 


with a copy to
counsel:


 


Wien & Malkin
LLP


60 East 42nd
Street – 48th Floor


New York, New
York  10165-0015


Attention:  Jack K. Feirman


Telefax
Number:  (212) 986-8795


 


To the Purchaser:


 


Comstock Penderbrook,
L.C.


c/o Comstock
Homes, Inc.


11465 Sunset Hills
Road, Suite 510


Reston, Virginia
20190


Attention:  Christopher Clemente


Telefax
Number:  (703) 760-1520


 


with a copy to:


 


Comstock
Penderbrook, L.C.


c/o Comstock
Homes, Inc.


11465 Sunset Hills
Road, Suite 510


Reston, Virginia
20190


Attention:  Jubal Thompson, Esq.


Telefax
Number:  (703) 760-1520


 


with a copy to
counsel:


 


Hunton &
Williams, LLP


1751 Pinnacle
Drive, Suite 1700


McLean, Virginia
22102


Attention:  Sean H. Curtin, Esq.


Telefax
Number:  (703) 714-7410


 


23





















 


To the Escrow
Agent:


 


8221
Old Courthouse Road


Suite
300


Vienna,
Virginia 22182


Attention:
Julie Grant


Telefax
Number:  (      )
          -            


 


19.  Exchange
Provisions.


 


19.01       The Seller intends, for the benefit of
the Seller, that the conveyance of the Real Property may be a part of a tax
deferred exchange pursuant to §1031 of the Internal Revenue Code of 1986, as
amended, and the Regulations promulgated thereunder, at no cost to the Purchaser.  In connection with such tax deferred
exchange, the Seller shall have the right to assign the right, title and
interest of the Seller in and to this Agreement to a “qualified intermediary”
(as defined in Reg. §1.1031(k)-1(g)(4)(iii)). 
If the Seller shall so assign this Agreement, the Purchase Price (or any
portion as prescribed by the Seller) shall be paid to such qualified
intermediary.


 


19.02       The Purchaser shall cooperate with the
Seller in connection with effecting such tax-deferred exchange and shall
execute such documents (including an assignment of this Agreement) as the
Seller, the Seller’s counsel, the qualified intermediary, and such qualified
intermediary’s counsel (or any of them) shall deem necessary or desirable to
consummate such exchange transaction; provided that (i) the Purchaser shall be
reimbursed by the Seller for any costs and expenses which the Purchaser would
not otherwise have incurred but for its participation in such exchange program
by reason of this Section; (ii) the Purchaser shall not be required to incur
any liability, risk, cost or expense in connection with the exchange including,
but not limited to, attorneys’ fees and recordation costs, or taking title to
any property; (iii) the exchange does not delay Closing; and (iv) any
assignment of this Agreement to the qualified intermediary is done pursuant to
a written agreement, which expressly permits the Purchaser to pursue the
original Seller hereunder for defaults and breaches hereunder.  The Seller shall indemnify and hold the
Purchaser harmless from and against all costs, expenses, and liabilities that
the Purchaser may incur by reason of its participation in such exchange
program.


 


20.  Miscellaneous.


 


20.1         Confidentiality.     The Purchaser has heretofore
executed a confidentiality agreement with respect to the dissemination of
information respecting the Real Property and other matters which may be or may
have been learned in connection with the Purchaser’s extending an offer to
purchase the same and in connection with its due diligence.  Such confidentiality agreement continues to
be in full force and effect and shall remain so during the Contract Period, and
any default thereunder shall constitute a material default under this
Agreement.  In this respect, any information
not in the public domain respecting any of the Property or the Seller or its
members or agents hereafter acquired by the Purchaser or any representative of
the Purchaser by reason of any inspection of any portion of the Premises, the
Buildings and Other Improvements to any person or entity shall be deemed to be
confidential and shall not be disseminated to any person or entity without the
consent of the Seller, except as expressly permitted under paragraph (a) of
Section 8.02 prior to Closing.  The Purchaser
shall not release or suffer the release of any information regarding the
execution of this Agreement, the terms hereof or any other publicity or
information to any person, except as specifically permitted by this Agreement.  The obligations under this Section 20.01
shall survive the termination of this Agreement without the occurrence of a
Closing.


 


20.2         Captions and Headings.    
Article and Section captions and headings are inserted only
as a matter of convenience and for reference and they shall not be construed to
define, limit or describe the scope of this Agreement nor the intent of any
provision hereof.


 


20.3         Parties Bound.    
The covenants, conditions and agreements contained in this Agreement
bind and inure to the benefit of the Seller and the Purchaser and their
respective legal representatives, successors, and, except as otherwise provided
in this Lease, their assigns.


 


20.4         No Recording.     Neither
this Agreement nor any memorandum or short form hereof may be recorded.


 


24





















 


20.5         Entire Agreement.     This
Agreement contains the entire agreement between the parties and all prior
negotiations and agreements are merged into this Agreement.


 


20.6         No Oral Modifications.     This Agreement may not be changed,
modified, terminated or discharged, in whole or in part, except by a writing,
executed by the party against whom enforcement of the change, modification,
termination or discharge is to be sought.


 


20.7         Partial Invalidity.     
If any term, covenant, condition or provision of this
Agreement, or the application thereof to any person or circumstance, shall ever
be held to be invalid or unenforceable, then in each such event the remainder
of this Agreement or the application of such term, covenant, condition or
provision to any other person or any other circumstance (other than those as to
which it shall be invalid or unenforceable) shall not be thereby affected, and
each term, covenant, condition and provision hereof shall remain valid and enforceable
to the fullest extent permitted by law.


 


20.8         Submission of Agreement.    
It is understood and agreed that this Agreement is being
submitted to the Purchaser on the understanding that it shall not be considered
an offer and shall not bind the Seller in any way until (i) the Purchaser has
duly executed and delivered duplicate originals hereof to the Seller and the
Contract Deposit to the Escrow Agent and (ii) the Seller has executed and
delivered one of said originals to the Purchaser.


 


20.9         Survival of Obligations.     Notwithstanding anything herein set forth
to the contrary, the termination or cancellation of this Agreement pursuant to
any provision hereof or by operation of law shall not be construed to include
any obligation specifically stated to survive the termination or cancellation
of this Agreement.


 


20.10       Governing Law.     This Agreement shall be
construed in accordance with and governed by the laws of the Commonwealth of
Virginia without regard to the application of conflicts of laws doctrines.


 


20.11       Counterparts.     This Agreement may be executed in any
number of counterparts each of which when executed and delivered shall
constitute an original, and all such counterparts, when taken together shall be
deemed to be but one and the same Agreement.


 


20.12       Facsimile
Counterparts.     The exchange
of counterparts of this Agreement among the parties by means of facsimile
transmissions which shall contain accurate reproductions of the signatures
hereto shall constitute a valid exchange of this Agreement and it shall be
binding upon the parties hereto.


 


 


IN WITNESS
WHEREOF, the Seller and the Purchaser have respectively executed this Lease as
of the day and year first above written.


 


	
   

  	
  FAIR OAKS PENDERBROOK APARTMENTS L.L.C.

  
	
   

  	
  By:

  	
  Malkin Penderbrook L.L.C., Managing Member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter Malkin

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Peter L. Malkin

  
	
   

  	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Anthony Malkin

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Anthony E. Malkin

  
	
   

  	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Taxpayer/Employer Identification No: *******

  
						



 


25





















 


	
   

  	
  COMSTOCK HOMES, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Christopher Clemente

  	
   

  
	
   

  	
   

  	
   

  	
  Name:    Christopher Clemente

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Taxpayer/Employer Identification No: *********

  
	
   

  	
   

  
	
   

  	
  Solely as to the Article 14 and Section 8.03 escrow
  provisions:

  
	
   

  	
   

  
	
   

  	
  PREMIER TITLE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
						



 


26





















 


SCHEDULE A


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Metes and Bounds
Description of the Premises


 


 


Beginning at a point on the Easterly R/W line of West Ox Road, Route
608 said point marking the P.C. of a 55 foot radius return at the Southeasterly
intersection of the said West Ox Road and Penderbrook Drive, as dedicated in
D.B. 6613 at Pg. 963 on the land records of Fairfax County, Virginia; thence
with the said return a curve to the right whose chord is N 43° 10’ 00” E, 81.21
feet, an arc distance of 91.36 feet to a point on a Southerly R/W line of the
said Penderbrook Drive; thence with the said R/W line of the said Penderbrook
Drive the following courses: with a curve to the right whose radius is 729.95
feet (and whose chord is S 64° 26’ 02” E, 612.64 feet) an arc distance of
632.22 feet; S 39° 37’ 20” E, 395.59 feet with a curve to the left whose radius
is 576.00 feet (and whose chord is S 57° 32’ 30” E, 354.44 feet) an arc
distance of 360.29 feet to a point marking the P.C. of a 25 foot radius return
at the Southwesterly intersection of the said Penderbrook Drive and South
Penderbrook Drive; thence with the said return a curve to the right whose chord
is S 33° 24’ 42” E, 33.49 feet, an arc distance of 36.69 feet to a point on the
Westerly R/W line of the said South Penderbrook Drive; thence with the said R/W
line of South Penderbrook Drive with a curve to the left whose radius is 476.00
feet (and whose chord is S 02° 16’ 57” E, 180.35 feet) an arc distance of
181.45 feet and S 13° 12’ 10” E, 483.33 feet to a point marking the
Northeasterly corner of the Fairfax County Housing Authority; thence running
with the Northerly and Westerly lines of the property of the Fairfax County
Housing Authority the following courses: with a curve to the left whose radius
is 28.50 feet (and whose chord is N 68° 08’ 37” W, 18.32 feet) an arc distance
of 18.65 feet; with a curve to the right whose radius is 121.50 feet (and whose
chord is N 78° 32’ 30” W, 35.28 feet) an arc distance of 35.40 feet; N 70° 11’
36” W, 43.08 feet; N 84° 49’ 33” W, 73.50 feet; N 71° 38’ 22” W, 36.91 feet
with a curve to the right whose radius is 936.00 feet (and whose chord is N 67°
19’ 29” W, 93.69 feet) an arc distance of 93.72 feet and S 28° 55’ 50” W,
188.50 feet to a point on a Northerly Boundary of Penderbrook LTD.; thence with
the said Boundary of Penderbrook LTD. N 84° 32’ 18” W, 122.85 feet and with a
curve to the right whose radius is 300.00 feet (and whose cord is N 74° 16’ 20”
W, 106.93 feet) an arc distance of 107.51 feet to a point on an Easterly
Boundary of the property of the Fairfax County Board of Supervisors; thence
with the Easterly and Northerly boundaries of the said Board of Supervisors N
13° 09’ 12” W, 885.23 feet and S 62° 09’ 05” W, 236.69 feet to a point on the
aforementioned R/W line of West Ox Road; thence with the said R/W line of West
Ox Road the following courses:  with a
curve to the left whose radius is 2919.79 feet (and whose chord is N 28° 55’
18” W, 83.50 feet) and arc distance of 83.50 feet; N 29° 44’ 27” W, 251.91 feet
with a curve to the right whose radius is 899.93 feet (and whose chord is N 18°
01’ 27” W, 365.50 feet) an arc distance of 368.06 feet and N 06° 15’ 00” W,
29.66 feet to the point of beginning.


 





















 


SCHEDULE B


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Permitted Title
Exceptions


 


 


1.               Restrictive
Covenants appearing of record in Deed Book 6808 at Page 1704, Deed Book 6836 at
Page 1792 and in Deed Book 6912 at Page 1925, but omitting any restrictions
based on race, color, religion or national origin.


 


2.               Easements granted
unto Virginia Electric and Power Company by instrument recorded in Deed Book
990 at Page 507; Deed Book 6558 at Page 1013; Deed Book 6795 at Page 1752; Deed
Book 6828 at Page 987; Deed Book 6828 at Page 1023 and in Deed Book 6953 at
Page 1976.


 


3.               Easement granted
unto Fairfax County Water Authority by instrument recorded in Deed Book 6783 at
Page 718.


 


4.               Easement granted
unto Chesapeake and Potomac Telephone Company by instrument recorded in Deed
Book 6857 at Page 771.


 


5.               Easement granted
unto Fairfax County Water Authority and Fairfax County Board of Supervisors by
instrument recorded in Deed Book 6613 at Page 955.


 


6.               Easement granted
unto Fairfax County Board of Supervisors granted in Deed Book 6905 at Page 819.


 


7.               Easements and
agreements to and with Penderbrook Community Association, Inc., in Deed Book
7116 at Page 595.


 


8.               Storm water
detention agreement recorded in Deed Book 6607 at Page 1553.


 


9.               Cable service and
telecom agreements, if any.


 





















 


SCHEDULE C


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock Penderbrook,
L.C., Purchaser


 


 


Rent Roll


 


 


Rent Roll follows
this page.


 





















 


SCHEDULE D


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Contracts


 


 


Contracts follow
this page.


 





















 


SCHEDULE E


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


[Intentionally
Omitted]


 





















 


SCHEDULE F


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Employees


 


 


Schedule of Employees follows this page.


 





















 


SCHEDULE G


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Insurance Coverage
for the Buildings and other Improvements


 


 


Schedule of
Insurance follows this page.


 





















 


SCHEDULE H


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Personal Property


 


 


Schedule of
Personal Property follows this page.


 





















 


SCHEDULE I


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Unpaid Tenant
Improvement Costs


 


 


None


 





















 


SCHEDULE J


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Brokerage
Commissions Owed


 


 


None


 





















 


SCHEDULE K


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


1.               The Survey;


 


2.               Log (together with
reasonable back-up information) of all work orders and tenant complaints
relating to the Property for the past two (2) years; and


 


3.               Zoning and
residential use permits information


 





















 


EXHIBIT 1


to


Purchase and Sale
Agreement, dated as of November 9, 2004


between


Fair Oaks
Penderbrook Apartments L.L.C., Seller,


and


Comstock
Penderbrook, L.C., Purchaser


 


 


Deed to the Real
Property