Exhibit
10.13


 


AGREEMENT
OF SALE AND PURCHASE


AND
JOINT ESCROW INSTRUCTIONS


 


WATERFORD PLACE APARTMENTS, LLC


 


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


 


ARTICLE 1



CERTAIN DEFINITIONS


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


1.1.12     “Broker” shall mean Marcus &
Millichap.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


1.1.84     “Title Company” shall mean
Chicago Title Company.


 


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


 


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


 


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


 


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


 


ARTICLE 2


 


AGREEMENT
OF PURCHASE AND SALE; PURCHASE PRICE


 


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


 


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


 


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2.3                  Deposits;
Designation of Reporting Person & Contract Consideration.


 


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


 


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


 


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


 


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


 


2.4                  Loan
Assumption.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 3



BUYER’S DUE

DILIGENCE/CONDITION OF THE PROPERTY


 


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


 


3.2                  Delivery
Period.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


15

















 


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


 


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


 


ARTICLE 4



TITLE, SURVEY & CONTRACTS


 


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


 


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


 


16

















 


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


 


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


 


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


 


17

















 


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


 


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


 


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


 


18

















 


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


 


ARTICLE 5


 


REMEDIES


 


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


 


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


 


19
















 


DAMAGES, WHICH RETENTION SHALL OPERATE TO TERMINATE THIS AGREEMENT AND
RELEASE BUYER FROM ANY AND ALL LIABILITY HEREUNDER, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT. 
THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A
FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER’S DEFAULT, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. 
AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT
IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH
EVENT.  BY PLACING THEIR INITIALS BELOW,
EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND
THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME
THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION.  THE PARTIES ACKNOWLEDGE THAT
SUCH PAYMENT OF THE DEPOSIT IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN
THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER UNDER CALIFORNIA CIVIL CODE SECTIONS
1671, 1676 AND 1677.  THE FOREGOING IS
NOT INTENDED TO LIMIT BUYER’S SURVIVING OBLIGATIONS UNDER THIS AGREEMENT
INCLUDING, WITHOUT LIMITATION, ALL OF BUYER’S INDEMNITIES IN THIS AGREEMENT.


 


	
  Initials:

  	
   

  	
  Seller

  	
  RO, SDS

  	
   

  	
  Buyer

  	
  MA

  	
   

  



 


ARTICLE 6



REPRESENTATIONS AND WARRANTIES OF SELLER


 


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


 


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


 


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


 


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


 


20

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


21

















 


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


 


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


 


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


 


6.1.13     Prohibited Persons and Transactions.  Neither Seller nor any of its
affiliates, nor, to Seller’s knowledge, any of their respective partners,
members, shareholders or other equity owners, and none of their respective
employees, officers, directors, representatives or agents is, nor will they
become, a person or entity with whom U.S. persons or entities are restricted
from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury
(including those named on OFAC’s Specially Designated and Blocked Persons List)
or under any statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action
and is not and will not engage in any dealings or transactions or be otherwise
associated with such persons or entities.


 


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


 


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


 


22

















 


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


 


ARTICLE 7



REPRESENTATIONS AND WARRANTIES OF BUYER


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


23

















 


employees,
officers, directors, representatives or agents is, nor will they become, a
person or entity with whom U.S. persons or entities are restricted from doing
business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury
(including those named on OFAC’s Specially Designated and Blocked Persons List)
or under any statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action
and is not and will not engage in any dealings or transactions or be otherwise
associated with such persons or entities.


 


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


 


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


 


7.2                  Buyer’s Independent Investigation.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


24

















 


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


 


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


 


25

















 


Buyer: MA


 


7.3                  Buyer’s Release of Seller; Indemnity.


 


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


 


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


 


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


 


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


 


	
  Buyer’s Initials:

  	
  MA

  	
   

  



 


26

















 


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


 


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


 


ARTICLE 8



LEASES; MAINTENANCE OF PROPERTY


 


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


 


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


 


27

















 


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


 


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


 


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


 


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


 


28

















 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 9


 


CLOSING
AND CONDITIONS


 


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


 


29

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


30
















 


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


 


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


 


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


 


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


 


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


 


9.4                  Closing.


 


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


 


31

















 


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


 


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


 


9.5                  Seller’s
Closing Documents and Other Items.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


32

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


33

















 


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


 


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


 


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


 


9.7                  Prorations and Closing Costs.


 


9.7.1       Prorations.


 


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


 


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


 


34

















 


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


 


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


 


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


 


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


 


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


 


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


 


35

















 


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


 


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


 


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


 


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


 


36

















 


ARTICLE 10


 


MISCELLANEOUS


 


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


 


10.2                Risk of Loss and Insurance Proceeds.


 


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


 


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


 


37

















 


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


 


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


 


	
  If to Seller:

  	
   

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



  
	
  With copies to:

  	
   

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



  
	
  and to:

  	
   

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



  
	
  If to Buyer:

  	
   

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



  
	
  with Copies to:

  	
   

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



  



 


38

















 


	
   

  	
   

  	
  Facsimile: (214) 849-9823

  
	
   

  	
   

  	
  E-mail: abbott@rabbottpc.com

  
	
   

  	
   

  	
   

  
	
  If to Escrow Agent:

  	
   

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

  



 


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


 


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


 


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


 


39

















 


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


 


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


 


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


 


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


 


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


 


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


 


40
















 


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


 


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


 


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


 


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


 


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


 


41

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


42

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


43

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


44

















 


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


 


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


 


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


 


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


 


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


 


	
   

  	
  RO, SDS

  	
   

  	
  Seller’s Initials

  	
  MA

  	
   

  	
  Buyer’s Initials

  



 


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


 


45

















 


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


 


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


 


46

















 


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


 


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


 


47

















 


[Signature
Page To Follow]


 


48

















 


 


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


 


	
  SELLER:

  	
  WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Shea
  Properties Management Co., Inc.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kirk Roloff

  
	
   

  	
   

  	
  Name:

  	
  Kirk
  Roloff

  
	
   

  	
   

  	
  Its:

  	
  Assistant
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Stephen D. Stambaugh

  
	
   

  	
   

  	
  Name:

  	
  Stephen
  D. Stambaugh

  
	
   

  	
   

  	
  Its:

  	
  Assistant
  Secretary

  



 


[Signature Page Continued On Following Page]


 


49

















 


	
  BUYER:

  	
  BEHRINGER HARVARD MULTIFAMILY OP I LP, a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BHMF, Inc., a Delaware corporation,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark T. Alfieri

  
	
   

  	
   

  	
   

  	
  Mark T. Alfieri

  
	
   

  	
   

  	
   

  	
  Chief Operating Officer

  



 


50

















 


ESCROW AGENT:


 


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


 


	
   

  	
  PARTNERS TITLE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carol Gonzales

  
	
   

  	
  Name:

  	
  Carol Gonzales

  
	
   

  	
  Title:

  	
  Escrow Officer

  



 


51
















 


EXHIBIT
A


 


Description of Land


 


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


 


PARCEL
1:


 


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


 


RESERVING
THEREFROM MECHANICAL CHASE EASEMENTS AS SHOWN ON THE PLAN.


 


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


 


PARCEL
2:


 


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


 


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


 


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


 


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


 


(D)
ALL EASEMENTS AS DEFINED IN THE DECLARATION. 


 


PARCEL
3:


 


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


 


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


 


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


 

















 


EXHIBIT
B


 


List of Contracts


 


Waterford
Apartments


Dublin, CA


 


	
  Property Contract

  	
   

  	
  Term

  	
   

  	
  Terminable

  	
   

  	
  Notes

  	
   

  
	
  1

  	
  Cable Contract - Comcast

  	
   

  	
  10/25/2007

  	
   

  	
  2/20/2019

  	
   

  	
   

  	
   

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

  	
   

  
	
  2

  	
  ISTA (Utility Agreement)

  	
   

  	
  5/10/2001

  	
   

  	
  Ongoing

  	
   

  	
  P

  	
   

  	
  30 day written notice.

  	
   

  
	
  3

  	
  Patrol Services - Night Private Security Inc.

  	
   

  	
  10/23/2008

  	
   

  	
  12/31/2009

  	
   

  	
  P

  	
   

  	
  Cancel upon sale or 30 day written notice.

  	
   

  
	
  4

  	
  Fitness Maintenance - Fitguard

  	
   

  	
  10/31/2008

  	
   

  	
  12/31/2009

  	
   

  	
  P

  	
   

  	
  Cancel upon sale or 30 day written notice.

  	
   

  
	
  5

  	
  Landscape - Valley Crest

  	
   

  	
   

  	
   

  	
  MTM

  	
   

  	
  P

  	
   

  	
  Cancel with 30 day written notice.

  	
   

  
	
  6

  	
  Pest Control - Terminix

  	
   

  	
  8/1/2008

  	
   

  	
  12/31/2009

  	
   

  	
  P

  	
   

  	
  Cancel with 30 day written notice.

  	
   

  
	
  7

  	
  Pool Service - Dave’s Pools Service

  	
   

  	
  1/15/2009

  	
   

  	
  12/31/2009

  	
   

  	
  P

  	
   

  	
  Cancel with 30 day written notice.

  	
   

  
	
  8

  	
  Turnover - PS2

  	
   

  	
  1/22/2009

  	
   

  	
  12/31/2009

  	
   

  	
  P

  	
   

  	
  Cancel with 30 day written notice.

  	
   

  
	
  9

  	
  Apartment Guide

  	
   

  	
  11/7/2008

  	
   

  	
  10/9/2009

  	
   

  	
  P

  	
   

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

  	
   

  
	
  10

  	
  For Rent Magazine

  	
   

  	
  4/30/2008

  	
   

  	
  MTM

  	
   

  	
  P

  	
   

  	
  Cancel with 30 day written notice.

  	
   

  
	
  11

  	
  Move.com

  	
   

  	
  5/15/2007

  	
   

  	
  MTM

  	
   

  	
  P

  	
   

  	
  Cancelable at any time.

  	
   

  
	
  12

  	
  Apartments.com

  	
   

  	
  11/1/2008

  	
   

  	
  4/30/2009

  	
   

  	
  P

  	
   

  	
  Cancel with 30 day written notice.

  	
   

  
	
  13

  	
  Copier - Rabbit

  	
   

  	
  4/30/2009

  	
   

  	
  4/30/2010

  	
   

  	
   

  	
   

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

  	
   

  
	
  14

  	
  Master Agreement: Lead Tracking Solutions

  	
   

  	
  1/21/2008

  	
   

  	
  1/20/2009

  	
   

  	
  P

  	
   

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

  	
   

  
	
  15

  	
  Master Agreement: CORT

  	
   

  	
  4/19/2007

  	
   

  	
  4/19/2008

  	
   

  	
  P

  	
   

  	
  Cancel with 7 day written notice.

  	
   

  
	
  16

  	
  Master Agreement: Rent.com

  	
   

  	
  Ongoing

  	
   

  	
  Ongoing

  	
   

  	
  P

  	
   

  	
  Cancel with 30 days notice.

  	
   

  
	
  17

  	
  Master Agreement: Vaultware

  	
   

  	
  1/1/2009

  	
   

  	
  12/31/2009

  	
   

  	
  P

  	
   

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

  	
   

  



 
















 


EXHIBIT C


 


Form of Grant Deed


 


RECORDING REQUESTED BY AND


WHEN RECORDED RETURN TO:


 


 


 


 


 


MAIL TAX STATEMENTS TO:


 


 


 


 


 


	
  APN:

  	
   

  
	
  The undersigned grantor declares:

  	
   

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

  	
   

  



 


GRANT DEED


 


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


 


THIS PROPERTY IS CONVEYED
TO GRANTEE SUBJECT TO:


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


[Signature Page To Follow]


 

















 


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


 


	
  GRANTOR:

  	
  WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Shea
  Properties Management Co., Inc.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  



 
















 


Exhibit A to Grant Deed


 


Legal Description


 


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


 


PARCEL
1:


 


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


 


RESERVING
THEREFROM MECHANICAL CHASE EASEMENTS AS SHOWN ON THE PLAN.


 


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


 


PARCEL
2:


 


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


 


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


 


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


 


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


 


(D)
ALL EASEMENTS AS DEFINED IN THE DECLARATION.


 


PARCEL
3:


 


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


 


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


 


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


 
















 


STATEMENT OF TAX DUE AND
REQUEST THAT TAX DECLARATION

NOT BE MADE A PART OF THE PERMANENT RECORD

IN THE OFFICE OF THE COUNTY RECORDER

(PURSUANT TO SECTION 11932 REVENUE AND TAXATION CODE)


 


	
  TO:

  	
  Recorder

  
	
   

  	
  County
  of Alameda

  



 


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


 


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


 


Grantee:                                            ,
a                                            


 


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


 


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


 


	
  o

  	
  Computed
  on full value of property conveyed.

  
	
   

  	
   

  
	
  x

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

  



 


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


 


	
   

  	
  WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Shea
  Properties Management Co., Inc.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  



 

















 




	
  STATE
  OF CALIFORNIA

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.

  
	
  COUNTY
  OF

  	
  )

  	
   

  






 


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


 


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


 


Witness
my hand and official seal.


 


 


	
   

  	
   

  



Notary
Public


 

















 


EXHIBIT D


 


Form of Bill of Sale


 


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


 


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


 


[Signature Page To Follow]


 

















 


Dated this
              
day of
                                        ,
200 .


 


	
  SELLER:

  	
  WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Shea
  Properties Management Co., Inc.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BUYER:

  	
   

  
	
   

  	
  a(n)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


EXHIBIT E


 


Form of Assignment and Assumption of Leases


 


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


 


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


 


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


 


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


 


ACCORDINGLY, the parties hereby
agree as follows:


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


[Signature Page To Follow]


 

















 


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


 


	
  ASSIGNOR:

  	
  WATERFORD PLACE APARTMENTS, LLC, a California limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Shea
  Properties Management Co., Inc.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ASSIGNEE:

  	
   

  
	
   

  	
  a(n)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 
















 


Exhibit A to Assignment and Assumption of Leases


 


Description of Real Property


 


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


 


PARCEL
1:


 


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


 


RESERVING
THEREFROM MECHANICAL CHASE EASEMENTS AS SHOWN ON THE PLAN.


 


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


 


PARCEL
2:


 


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


 


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


 


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


 


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


 


(D)
ALL EASEMENTS AS DEFINED IN THE DECLARATION.


 


PARCEL
3:


 


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


 


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


 


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


 
















 


Schedule 1 to Assignment and
Assumption of Leases




List of Leases


 

















 


EXHIBIT F


 


Form of Assignment and
Assumption of Contracts

Warranties and Guaranties, Licenses
and Permits and Other Intangible Property


 


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


 


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


 


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


 


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


 


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


 


ACCORDINGLY, the parties hereby
agree as follows:


 


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


 


(a)                                  the Contracts;


 


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


 


(c)                                  the Licenses and Permits.


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


[Signature Page To Follow]


 

















 


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


 


	
  ASSIGNOR:

  	
  WATERFORD PLACE APARTMENTS, LLC, a California limited liability company  

  
	
   

  	
   

  
	
   

  	
  By:
  

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

  
	
   

  	
  Its:
  

  	
  Manager
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
   

  
	
   

  	
   

  	
  Its:
  

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
   

  
	
   

  	
   

  	
  Its:
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ASSIGNEE:

  	
   

  
	
   

  	
  a(n) 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
							



 
















 


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


Licenses and Permits and Other Intangible Property


 


Description of Real Property


 


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


 


PARCEL
1:


 


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


 


RESERVING
THEREFROM MECHANICAL CHASE EASEMENTS AS SHOWN ON THE PLAN.


 


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


 


PARCEL
2:


 


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


 


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


 


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


 


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


 


(D)
ALL EASEMENTS AS DEFINED IN THE DECLARATION.


 


PARCEL
3:


 


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


 


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


 


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


 
















 


Schedule 1 to Assignment and
Assumption of Contracts, Warranties and Guaranties,

Licenses and Permits and Other Intangible Property


 


List of Contracts


 

















 


EXHIBIT G


 


Notice to Tenants


 


Residents of Waterford Place Apartments


4800 Tassajara Road


Dublin, California 94568


 


Dear Residents:


 


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


 


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


 


 


 


 


 


Very truly yours,


 


	
  WATERFORD PLACE APARTMENTS, LLC, a California limited liability company  

  	
   

  
	
   

  	
   

  
	
  By:
  

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

  	
   

  
	
  Its:

  	
  Manager
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
   

  	
   

  
	
   

  	
  Its:
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  



 

















 


EXHIBIT H


 


Covenant Running With The
Land


 


[To Be Agreed Upon During
The Due Diligence Period]


 

















 


EXHIBIT I


 


Personal Property


 


May 14, 2009


 


Front
Office/Lobby;


2
Leasing Desk Workstations


2
Task Chairs


2
Computers


4
Armless Guest Chairs


1
Ottoman


1
Sofa


1
Coffee Table


1
Large Side Table


1
Accent Chair


2
Arm Chairs


3
Large Pictures


1
Property Layout Picture


1
Large Arial Picture of Dublin


1
Set of Window treatments


2
Ceramic Urns


2
Glass Hurricane Candle Holders with Candles


4
Large Trees with Baskets


7
Small Plants with Baskets


1
Hand Painted Silk Chandelier


2
Silver trays and Stands


2
Horse Figurines


2
Ceramic Art


2
Sofa Pillows


2
Chair Pillows


2
Knit Caddies


2
Area Rugs


1
Tray


1
Decorative Mesh Trunk


28
Books


2
Large Black Urns


 

















 


Private
Offices (3);


3
Valances


9
Large Pictures


3
Desks


3
Task Chairs


3
Computers


2
Credenzas


1
Large Filing Cabinet


6
Armless Guest Chairs


 


Kitchen/Copy
Room;


2
Valances


1
Small Dining Table


3
Dining Chairs


1
Copy Machine/Scanner/Fax


1
Keysafe


1
Safe


1
Refrigerator


1
Microwave


1
Dishwasher


1
Small Oven (Otis Spunkmeyer)


1
Computer (gate system)


1
Coffee Maker


1
Framed Corkboard


Misc
Office Supplies


 

















 


1
Bedroom Model;


 


Living
room/Dining Room


2
(pairs) Drapery Panels on rod


1
Dining Table


2
Dining Chairs with Cushions


1
Planter


1
Adirondak Art


1
Black Rice Bucket with magazines


1
Sofa with Pillows


1
Lounge Chair with Cushion and Pillow


1
End Table


1
Cocktail Table


1
Media Cabinet


2
Barstools


1
Floor Lamp


2
tabel lamps


1
Large Flower Art


1
Large Bevel Mirror


1
Small Mirror


Misc.
Books


1
Black Frame


1
Hammered Frame


Stack
of Books


Daffodils
in a Pot


1
Hurricane with Candle


Stack
of Cocktail Books


2
Black Boxes


 


Kitchen


Rug
and grabber


Green
Palecheck Box


Green
Ceramic Bowl Set-Up


Jar
with Limes and Lemons


Cook
Book in Stand


Juicer
Tray Set-Up


London
Sign


Vintage
Fan


 

















 


1 Bedroom
Model Cont...


 


Deck


Bistro
table  with Two Chairs


Green
Lantern


 


Bathroom


Tub
Treatment


Door
Art


Small
Purse with Wash and Brush


Black
Towel with Tea Towel


Stack
Towels with Tea Towels


Rug
and Grabber


Silver
Mirror in Stand


Black
Tray Set-Up


 


Bedroom


Queen
bed


Dresser


2
Night Stands


Pair
of panels on Rod


Large
Art


Peg
Rack with Hat


Large
Mirror


2
Table Lamps


Nickel
Desk lamp


Queen
Bedding


Duster


Bedcap


Back
Shams


Front
Shams


Accent
Pillow


Misc
Books


Frame


Covered
Jar


2
Pins


2
Black Boxes


Clock


 


Bedroom
Closet


Garden
Boots


Wicker
Hat Boxes (set of three)


Bucket
with Towels and Thermos


Basket
with Towels


 

















 


2
Bedroom Model;


 


Living
Room/Dining Room


Sofa


End
table


Cocktail
table


Dining
Chairs


Fabric
for Chair Seats


Dining
Table Base with Glass Top


Pillows
for Sofa (three)


Lounge
Chair with Pillows and Cushions


Media
Cabinet


Floor
Lamp


2
Table Lamps


4
Floral Art


Framed
Mirror


Large
Floral Framed Mirror


Mirror
Sconces


2
pair Window treatments — Panels


Small
Bicycle


French
Mirror


White
planter


Iron
Obelisk


2
Grass patches


2
Cocktail Books


Misc.
Books


Venetian
Frame


Fleur
De Lys


4
Dining Set-Ups


 


Kitchen


2
Stools with Seat Covers


3x5
Rug with Grabber


Pair
of ceramic Roosters


Wicker
food Cover and Mat


Tray
Set-Up with Jars and Apples


Framed
Art


Wood
Iron and Tray Set-Up


Metal
Floral Plate and Stand


2
Counter Set-Ups


 

















 


2
Bedroom Model Cont...


 


Deck


Glider


Table
and Lantern


 


Laundry


Jar
with Clothes Pins


Chapes
Elyse Sign


Basket
with Towels


Stack
of Towels


 


Bath
Two


Pair
of Fleur De Lys


Mirror


Chair
Art


Tub
treatment


Rug
with Grabber


Wire
Bath Container filled


Bath
Lotion with Wash


Antique
Jars


Yellow
Organic Vase with Hydrangeas


Towels
for Bar


 


Bedroom
# 2


Queen
bed


Chest


2
Night Stands


2
Panels on Rod


3
Table Lamps


Golf
Course Art


Floral
Art


Queen
Bedding


Comforter


Sheet


Duster


Black
Shams


Front
Shams


Accent
Pillow


Basket
with Throw and Book


2
Frames


Mercury
Glass Vase


Misc
Books


Silver
Loving Cup


Jar
with Sheus


Silver
Clock


 

















 


2
Bedroom Model Cont...


 


Bedroom
#2 Closet


Tennis
Outfit with hangers


Tennis
bag with towel


Large
Jar with Tennis Balls


Golf
Balls


Tennis
Racquet


 


Master
Bedroom


Queen
Bed


Dresser


Console/Desk


Skirted
table with Glass


Large
Mirror


Desk
Chair with Pillow


Black
and White Art (set of three)


2
Table Lamps


Wall
Sconce


Prop
Laptop


Frame


Candle
with Clouche


Drapery
Panel on Rod (1 pair)


Queen
Bedding


Duster


Comforter


Black
Shams


Front
Shams


Accent
Pillows


Yellow
Glass jars


French
Mirror


Misc
Books


Frame


 


Master
Bath


Black
and White Art


Runner
with grabber


Tub
treatment


Silver
Bath Tower with Misc Accessories


3
Bath Jars


Loofa
with Wash


2
Canvas bags


Robe
with Hangers


Slippers


Teak
Stool


 

















 


Business
Center;


1
Computer


2
Task Chairs


1
Copy machine


1
Printer


1
Typewriter


1
Fax Machine


2
Pictures


Misc
Supplies


1
Valance


 


Conference
Room;


1
Large Conference Table


1
Drop Down Projector Screen


1
Television


8
Conference Room Chairs


3
Large Pictures


2
Large Ceramic Urns


1
White Board with Stand


1
Conference Phone


2
Sets of Window Treatments


 


Media
Room;


1
Large Screen TV


12
Chairs


9
Small Round Tables


2
Large Pictures


 


Concierge
Office;


 


3
Task Chairs


2
Computers


1
Picture


1
Shelf Unit


Misc
Movies/DVD’s


1
Folding table


3
Folding Chairs


2
Shelving Units


1
Dry-cleaning Rack


1
Vacuum


 

















 


Clubhouse;


 


2
Brown Sofas


4
Armchairs


1
Round Table


1
Round End Table


2
Barstools


1
Upholstered Bench


2
Credenzas


4
Chrome Lamps


1
Glass Lamp


4
Pairs Gold Drapes


2
Gold Window Treatments


5
Large Pictures


1
Large Silver Bowl


1
Ceramic Snail


2
White Platter & Black Stand


4
Cooking Trays


4
Plastic Juice Containers


1
Fry pan and Lid


2
Pots


1
Wood Tray


2
White Vases


1
Strainer


2
Measuring Cups


1
Square basket with Books


2
Leather Bowls


6
Small Plants and Baskets


5
Large Trees and Baskets


1
Stainless Dishwasher


1
Stove Gas Top


1
Stainless Side by Side Refrigerator


1
Stainless Microwave


1
Stainless Oven


 

















 


Gym
Equipment;


2
Flexdeck Life Fitness 9100 Treadmills


1
Flexdeck Treadmill with LCD Screen


1
Life cycle 9500 HR


1
Seated Leg Curl


1
Leg Extension


1
Seated Leg Press


1
Life Fitness Weight Machine (Double Pulley System)


1
Life Fitness Squat/bench Press Machine


3
Workout Benches


3
Cardio Elliptical Machines (9500HR)


1
Cardio Elliptical machine with LCD Screen (93xi)


20
Free Weights ranging from 5 lbs to 50 lbs


7
Equipment Mats


 


Pool;


1
Pool


1
Large Spa


24
Lounge Chairs


24
Chairs


6
Large Tables


5
Umbrellas


11
Small Tables


4Trash
Cans


Net
Pole


Life
Saver


 


Appliances;


391
Refrigerators


391
Microwaves


392
Water Heaters


42
Stackable Washer/Dryer Units


353
Washers


351
Dryers


392
Stoves


392
Dishwashers


393
Garbage Disposals


 

















 


Tools &
Euipment:


1
Key Cutting Machine


6
2-Way Radio


1
Multi Function Center


1
Windows 2000


1
3 Speed Turbo Air Dryer


1
Shop Vacuum


1
Manifold gauge set w/ 36” hose


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


1
Extractor Recovery Unit


1
Powered Drain Cleaner


2
Ladder 4 Feet


1
Ladder 6 Feet


1
Shampoo Carpet Cleaner


1
Refrigerator 5 c.u. Feet


1
Microwave Oven


1
Tug


2
EZ-GO TXT


3
EZ-GO Textron Charger


1
275 HP 8 gls Air Compressor


1
Ladder 4 Feet


1
Reciprocating Saw


1
Power Blower


1
Carpet Knee Kicker


1
3/8” Maxim Drill 120 V


1
Sweeper Washer


1
Stripping Pain Machine


1
Power Washer


1
Paint Sprayer


 
















 


EXHIBIT J


 


Lease Guidelines


 


WATERFORD PRICING - (TBD)


 


NO APPLICATION FEE!


 


	
   

  	
   

  	
  SF

  	
   

  	
  UNITS

  AVAILABLE

  	
   

  	
  PRICE

  	
   

  	
  CONCESSION *

  	
   

  	
  NET EFFECTIVE

  	
   

  
	
  JUNIOR,
  ONE BATH

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ashford
  (41 units)

  	
   

  	
  599

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ONE BEDROOM, ONE BATH

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BALLYMORE
  (114 units)

  	
   

  	
  708

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CARLTON
  (40 units)

  	
   

  	
  807

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DUBLIN
  (34 units)

  	
   

  	
  922

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TWO  BEDROOM, TWO BATH

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ENNIS
  (34 units)

  	
   

  	
  1040

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FRESHFORD
  (100)

  	
   

  	
  1097

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GLENMORE
  (27)

  	
   

  	
  1367

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






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