Contract of Sale - Deer Creek (NJ)



Exhibit
10.43

 

PURCHASE
AND SALE CONTRACT

BETWEEN

ANGELES
INCOME PROPERTIES, LTD. II,

a California limited partnership

AS
SELLER

AND

LIGHTHOUSE
PROPERTY INVESTMENTS, LLC,

a New Jersey limited liability company

AS
PURCHASER

DEER
CREEK APARTMENTS
305 Deer Creek Drive
Plainsboro, New Jersey
08536




TABLE OF CONTENTS

Page

	
 
	
ARTICLE
I
	
DEFINED
TERMS
	
1

	
 
	
ARTICLE
II
	
PURCHASE
AND SALE, PURCHASE PRICE & DEPOSIT
	
2

	
 
	
2.1
	
Purchase
and Sale
	
2

	
 
	
2.2
	
Purchase
Price and Deposit
	
2

	
 
	
2.3
	
Escrow
Provisions Regarding Deposit
	
3

	
 
	
ARTICLE
III
	
FEASIBILITY
PERIOD
	
5

	
 
	
3.1
	
Feasibility
Period
	
5

	
 
	
3.2
	
Expiration
of Feasibility Period
	
5

	
 
	
3.3
	
Conduct
of Investigation
	
6

	
 
	
3.4
	
Purchaser
Indemnification
	
6

	
 
	
3.5
	
Property
Materials
	
7

	
 
	
3.6
	
Property
Contracts
	
9

	
 
	
ARTICLE
IV
	
TITLE
	
11

	
 
	
4.1
	
Title
Documents
	
11

	
 
	
4.2
	
Survey
	
11

	
 
	
4.3
	
Intentionally
Omitted
	
11

	
 
	
4.4
	
Permitted
Exceptions
	
12

	
 
	
4.5
	
Purchaser’s
Rights in Respect of Seller’s Inability to Remove
	
 

	
 
	
 
	
Title
Exceptions
	
13

	
 
	
4.6
	
Subsequently
Disclosed Exceptions
	
14

	
 
	
4.7
	
Assumed
Encumbrances
	
  15

	
 
	
4.8
	
Purchaser
Financing
	
22

	
 
	
4.9
	
Housing
Assistance Program Vouchers
	
22

	
 
	
ARTICLE
V
	
CLOSING
	
23

	
 
	
5.1
	
Closing
Date
	
23

	
 
	
5.2
	
Seller
Closing Deliveries
	
24

	
 
	
5.3
	
Purchaser
Closing Deliveries
	
26

	
 
	
5.4
	
Closing
Prorations and Adjustments
	
27

	
 
	
5.5
	
Post
Closing Adjustments
	
34

	
 
	
ARTICLE
VI
	
REPRESENTATIONS
AND WARRANTIES OF SELLER AND
	
 

	
 
	
 
	
PURCHASER
	
34

	
 
	
6.1
	
Seller’s
Representations
	
34

	
 
	
6.2
	
AS-IS
	
37

	
 
	
6.3
	
Survival
of Seller’s Representations
	
39

	
 
	
6.4
	
Definition
of Seller’s Knowledge
	
40

	
 
	
6.5
	
Representations
and Warranties of Purchaser
	
40

	
 
	
ARTICLE
VII
	
OPERATION
OF THE PROPERTY
	
42

	
 
	
7.1
	
Leases
and Property Contracts
	
42

	
 
	
7.2
	
General
Operation of Property
	
43

	
 
	
7.3
	
Liens
	
43

	
 
	
7.4
	
Tax
Appeals
	
43

	
 
	
7.5
	
Rent
Ready Condition
	
44

	
 
	
7.6
	
Existing
Loans
	
44

	
 
	
ARTICLE
VIII
	
CONDITIONS
PRECEDENT TO CLOSING
	
44

	
 
	
8.1
	
Purchaser’s
Conditions to Closing
	
44

	
 
	
8.2
	
Seller’s
Conditions to Closing
	
46

	
 
	
ARTICLE
IX
	
BROKERAGE
	
48

	
 
	
9.1
	
Indemnity
	
48

	
 
	
9.2
	
Broker
Commission
	
48

	
 
	
ARTICLE
X
	
DEFAULTS
AND REMEDIES
	
49

	
 
	
10.1
	
Purchaser
Default
	
49

	
 
	
10.2
	
Seller
Default
	
50

	
 
	
ARTICLE
XI
	
RISK
OF LOSS OR CASUALTY
	
52

	
 
	
11.1
	
Major
Damage
	
52

	
 
	
11.2
	
Minor
Damage
	
52

	
 
	
11.3
	
Closing
	
52

	
 
	
11.4
	
Repairs
	
53

	
 
	
ARTICLE
XII
	
EMINENT
DOMAIN
	
53

	
 
	
12.1
	
Eminent
Domain
	
53

	
 
	
ARTICLE
XIII
	
MISCELLANEOUS
	
54

	
 
	
13.1
	
Binding
Effect of Contract
	
54

	
 
	
13.2
	
Exhibits
and Schedules
	
54

	
 
	
13.3
	
Assignability
	
54

	
 
	
13.4
	
Captions
	
55

	
 
	
13.5
	
Number
and Gender of Words
	
55

	
 
	
13.6
	
Notices
	
55

	
 
	
13.7
	
Governing
Law and Venue
	
59

	
 
	
13.8
	
Entire
Agreement
	
59

	
 
	
13.9
	
Amendments
	
59

	
 
	
13.10
	
Severability
	
59

	
 
	
13.11
	
Multiple
Counterparts/Facsimile Signatures
	
60

	
 
	
13.12
	
Construction
	
60

	
 
	
13.13
	
Confidentiality
	
60

	
 
	
13.14
	
Time
of the Essence
	
61

	
 
	
13.15
	
Waiver
	
61

	
 
	
13.16
	
Attorneys’
Fees
	
61

	
 
	
13.17
	
Time
Zone/Time Periods
	
61

	
 
	
13.18
	
1031
Exchange
	
62

	
 
	
13.19
	
No
Personal Liability of Officers, Trustees or Directors of
	
 

	
 
	
 
	
Seller’s
Partners
	
62

	
 
	
13.20
	
No
Exclusive Negotiations
	
62

	
 
	
13.21
	
ADA
Disclosure
	
63

	
 
	
13.22
	
No
Recording
	
63

	
 
	
13.23
	
Relationship
of Parties
	
63

	
 
	
13.24
	
Dispute
Resolution
	
64

	
 
	
13.25
	
AIMCO
Marks
	
65

	
 
	
13.26
	
Intentionally
Omitted
	
65

	
 
	
13.27
	
Survival
	
65

	
 
	
13.28
	
Multiple
Purchasers
	
65

	
 
	
13.29
	
New
Jersey Tax Indemnity
	
66

	
ARTICLE
XIV
	
LEAD-BASED
PAINT DISCLOSURE
	
66

	
 
	
14.1
	
Disclosure
	
66

	
 
	
14.2
	
Consent
Agreement
	
66

								


 

 


EXHIBITS AND SCHEDULES

 

EXHIBITS

 

Exhibit
A                     
Description of Land

Exhibit
B                     
Form of Deed

Exhibit
C                     
Form of Bill of Sale

Exhibit
D                     
Form of General Assignment

Exhibit
E                      
Form of Lease Assignment

Exhibit
F                      
Form of Vendor Termination Notice

Exhibit
G                     
Form of Tenant Notice Letters

Exhibit
H                     
Lead Paint Disclosure

 

 

SCHEDULES

 

Schedule
1                  
Defined Terms

Schedule
2      
            List of
Excluded Permits

Schedule
3      
            Excluded
Fixtures and Tangible Personal Property

Schedule
4                  
List of Materials

Schedule
5                  
Certain Permitted Exceptions

Schedule
6                  
Specific AIMCO Provisions

 

 

 




PURCHASE AND SALE CONTRACT

THIS
PURCHASE AND SALE CONTRACT (this “Contract”) is entered
into as of the 5th day of August, 2009 (the “Effective
Date”), by and between ANGELES INCOME PROPERTIES, LTD. II, a
California limited partnership, having an address at 4582 South Ulster Street
Parkway, Suite 1100, Denver, Colorado 80237 (“Seller”), and
LIGHTHOUSE PROPERTY INVESTMENTS, LLC, a New Jersey limited liability
company, having a principal address at 2 Executive Drive, Suite 470, Fort Lee,
NJ 07024 (“Purchaser”).

NOW,
THEREFORE, in consideration of mutual covenants set forth herein, Seller and
Purchaser hereby agree as follows:

RECITALS

A.                
Seller owns the real estate located in Middlesex County, New Jersey, as
more particularly described in Exhibit A attached hereto and made a part
hereof, and the improvements thereon, commonly known as Deer Creek.

B.                
Purchaser desires to purchase, and Seller desires to sell, such land,
improvements and certain associated property, on the terms and conditions set
forth below.

ARTICLE I
DEFINED
TERMS

Unless
otherwise defined herein, any term with its initial letter capitalized in this
Contract shall have the meaning set forth in Schedule 1 attached hereto
and made a part hereof.

ARTICLE II
PURCHASE AND
SALE, PURCHASE PRICE & DEPOSIT

2.1       Purchase and
Sale.

 
Seller agrees to sell and convey the Property to Purchaser and Purchaser agrees
to purchase the Property from Seller, all in accordance with the terms and
conditions set forth in this Contract.

2.2       Purchase Price and
Deposit.

 
The total purchase price (“Purchase Price”) for the Property shall
be an amount equal to Twenty-Seven Million Eight Hundred Ten Thousand
Four Hundred Fifteen and 00/100 ($27,810,415.00) Dollars, payable by Purchaser,
as follows:

2.2.1    Within one (1) Business Day after the
execution of this Contract, Purchaser shall deliver to First American Title
Insurance Company of New York, 633 Third Avenue, New York, New York 10017,
Attention: Linda J. Isaacson, Telephone: 212-850-0664, Facsimile: 212-331-1467,
lisaacson@firstam.com (“Escrow Agent”) an initial deposit (the
“Initial Deposit”) of $250,000 by wire transfer of immediately
available funds (“Good Funds”).

2.2.2    Within two
(2) Business Days after the expiration of the Feasibility Period, Purchaser
shall deliver to Escrow Agent an additional deposit (the “Additional
Deposit”) of $250,000 by wire transfer of Good Funds.

2.2.3    At the Closing, subject to the
occurrence of the Loan Assumption and Release, Purchaser shall receive a credit
against the Purchase Price in the amount of the outstanding principal balance of
the Note, together with all accrued but unpaid interest (if any) thereon, as of
the Closing Date (the “Loan Balance”).

2.2.4    The balance of the Purchase Price for
the Property shall be paid to and received by Escrow Agent by wire transfer of
Good Funds no later than 3:00 p.m. on the Closing Date.

2.3       Escrow Provisions
Regarding Deposit.

2.3.1   
Escrow Agent shall hold the Deposit and make delivery of the Deposit to the
party entitled thereto under the terms of this Contract.  Escrow Agent
shall invest the Deposit in such short-term, high-grade securities,
interest-bearing bank accounts, money market funds or accounts, bank
certificates of deposit or bank repurchase contracts as Escrow Agent, in its
discretion, deems suitable, and all interest and income thereon shall become
part of the Deposit and shall be remitted to the party entitled to the Deposit
pursuant to this Contract.

2.3.2   
Escrow Agent shall hold the Deposit until the earlier occurrence of (i) the
Closing Date, at which time the Deposit shall be applied against the Purchase
Price, or released to Seller pursuant to Section 10.1,
or (ii) the date on which Escrow Agent shall be authorized to disburse the
Deposit as set forth in Section 2.3.3.  The tax
identification numbers of the parties shall be furnished to Escrow Agent upon
request.

2.3.3    If prior to the Closing Date either
party makes a written demand upon Escrow Agent for payment of the Deposit,
Escrow Agent shall give written notice to the other party of such demand. 
If Escrow Agent does not receive a written objection from the other party to the
proposed payment within 5 Business Days after the giving of such notice, Escrow
Agent is hereby authorized to make such payment.  If Escrow Agent does
receive such written objection within such 5-Business Day period, Escrow Agent
shall continue to hold such amount until otherwise directed by written
instructions from the parties to this Contract or a final judgment or
arbitrator’s decision.  However, Escrow Agent shall have the right at any
time to deliver the Deposit and interest thereon, if any, with a court of
competent jurisdiction in the state in which the Property is located. 
Escrow Agent shall give written notice of such deposit to Seller and
Purchaser.  Upon such deposit, Escrow Agent shall be relieved and
discharged of all further obligations and responsibilities hereunder.  Any
return of the Deposit to Purchaser provided for in this Contract shall be
subject to Purchaser’s obligations set forth in
Section 3.5.2.

2.3.4    The parties acknowledge that Escrow
Agent is acting solely as a stakeholder at their request and for their
convenience, and that Escrow Agent shall not be deemed to be the agent of either
of the parties for any act or omission on its part unless taken or suffered in
bad faith in willful disregard of this Contract or involving gross
negligence.  Seller and Purchaser jointly and severally shall indemnify and
hold Escrow Agent harmless from and against all costs, claims and expenses,
including reasonable attorney’s fees, incurred in connection with the
performance of Escrow Agent’s duties hereunder, except with respect to actions
or omissions taken or suffered by Escrow Agent in bad faith, in willful
disregard of this Contract or involving gross negligence on the part of the
Escrow Agent.

2.3.5   
The parties shall deliver to Escrow Agent an executed copy of this
Contract.  Escrow Agent shall execute the signature page for Escrow Agent
attached hereto which shall confirm Escrow Agent’s agreement to comply with the
terms of Seller’s closing instruction letter delivered at Closing and the
provisions of this Section 2.3.

2.3.6    Escrow Agent, as the person
responsible for closing the transaction within the meaning of
Section 6045(e)(2)(A) of the Internal Revenue Code of 1986, as amended (the
“Code”), shall file all necessary information, reports, returns,
and statements regarding the transaction required by the Code including, but not
limited to, the tax reports required pursuant to Section 6045 of the
Code.  Further, Escrow Agent agrees to indemnify and hold Purchaser,
Seller, and their respective attorneys and brokers harmless from and against any
Losses resulting from Escrow Agent’s failure to file the reports Escrow Agent is
required to file pursuant to this section.

ARTICLE III
FEASIBILITY
PERIOD

3.1       Feasibility
Period.

 
Subject to the terms of Sections 3.3 and
3.4 and the rights of Tenants under the Leases, from the Effective
Date to and including September 4, 2009 (the “Feasibility
Period”), Purchaser, and its agents, contractors, engineers, surveyors,
attorneys, and employees (collectively, “Consultants”) shall, at
no cost or expense to Seller, have the right from time to time to enter onto the
Property to conduct and make any and all customary studies, tests, examinations,
inquiries, inspections and investigations of or concerning the Property, review
the Materials and otherwise confirm any and all matters which Purchaser may
reasonably desire to confirm with respect to the Property and Purchaser’s
intended use thereof (collectively, the “Inspections”).

3.2       Expiration of
Feasibility Period.

 
If any of the matters in Section 3.1 or any other title
or survey matters are unsatisfactory to Purchaser for any reason, or for no
reason whatsoever, in Purchaser’s sole and absolute discretion, then Purchaser
shall have the right to terminate this Contract by giving written notice to that
effect to Seller and Escrow Agent no later than 5:00 p.m. on or before the date
of expiration of the Feasibility Period.  If Purchaser provides such
notice, this Contract shall terminate and be of no further force and effect
subject to and except for the Survival Provisions, and Escrow Agent shall return
the Initial Deposit to Purchaser.  If Purchaser fails
to provide Seller with written notice of termination prior to the expiration of
the Feasibility Period, Purchaser’s right to terminate under this
Section 3.2 shall be permanently waived and this
Contract shall remain in full force and effect, the Deposit shall be
non-refundable, and Purchaser’s obligation to purchase the Property shall be
conditional only as provided in Section 8.1.

3.3       Conduct of
Investigation.

 
Purchaser shall not permit any mechanics’ or materialmen’s liens or any other
liens to attach to the Property by reason of the performance of any work or the
purchase of any materials by Purchaser or any other party in connection with any
Inspections conducted by or for Purchaser.  Purchaser shall give reasonable
advance notice to Seller prior to any entry onto the Property and shall permit
Seller to have a representative present during all Inspections conducted at the
Property.  Purchaser shall take all reasonable actions and implement all
protections necessary to ensure that all actions taken in connection with the
Inspections, and all equipment, materials and substances generated, used or
brought onto the Property pose no material threat to the safety of persons,
property or the environment.

3.4       Purchaser
Indemnification.

3.4.1    Purchaser shall indemnify, hold
harmless and, if requested by Seller (in Seller’s sole discretion), defend (with
counsel approved by Seller) Seller, together with Seller’s affiliates, parent
and subsidiary entities, successors, assigns, partners, managers, members,
employees, officers, directors, trustees, shareholders, counsel,
representatives, agents, Property Manager, Designated Employees, and AIMCO
(collectively, including Seller, “Seller’s Indemnified Parties”),
from and against any and all damages, mechanics’ liens, materialmen’s liens,
liabilities, penalties, interest, losses, demands, actions, causes of action,
claims, costs and expenses (including reasonable attorneys’ fees, including the
cost of in-house counsel and appeals) (collectively, “Losses”)
arising from or related to Purchaser’s or its Consultants’ entry onto the
Property, and any Inspections or other acts by Purchaser or Purchaser’s
Consultants with respect to the Property during the Feasibility Period or
otherwise.

3.4.2    Notwithstanding anything in this
Contract to the contrary, Purchaser shall not be permitted to perform any
invasive tests on the Property without Seller’s prior written consent, which
consent may be withheld in Seller’s sole discretion.  Further, Seller shall
have the right, without limitation, to disapprove any and all entries, surveys,
tests (including, without limitation, a Phase II environmental study of the
Property), investigations and other matters that in Seller’s reasonable judgment
could result in any injury to the Property or breach of any contract, or expose
Seller to any Losses or violation of applicable law, or otherwise adversely
affect the Property or Seller’s interest therein.  Purchaser shall use
reasonable efforts to minimize disruption to Tenants in connection with
Purchaser’s or its Consultants’ activities pursuant to this Section.  No
consent by Seller to any such activity shall be deemed to constitute a waiver by
Seller or assumption of liability or risk by Seller.  Purchaser hereby
agrees to restore, at Purchaser’s sole cost and expense, the Property to the
same condition existing immediately prior to Purchaser’s exercise of its rights
pursuant to this Article III.  Purchaser
agrees that its third party consultants shall maintain (a) casualty insurance
and commercial general liability insurance with coverages of not less than
$1,000,000.00 for injury or death to any one person and $3,000,000.00 for injury
or death to more than one person and $1,000,000.00 with respect to property
damage, and (b) worker’s compensation insurance for all of their respective
employees in accordance with the law of the state in which the Property is
located.  Purchaser shall deliver proof of the insurance coverage required
pursuant to this Section 3.4.2 to Seller (in the form
of a certificate of insurance) prior to Purchaser’s Consultants’ entry onto the
Property.

3.5       Property
Materials.

3.5.1    Within 5 Business Days after the
Effective Date, and to the extent the same exist and are in Seller’s possession
or reasonable control (subject to Section 3.5.2) and
have not been heretofore provided by Seller to Purchaser, Seller agrees to make
the documents set forth on Schedule 4 (together with any
other documents or information provided by Seller or its agents to Purchaser
with respect to the Property, the “Materials”) available at the
Property for review and copying by Purchaser at Purchaser’s sole cost and
expense.  In the alternative, at Seller’s option and within the foregoing
time period, Seller may deliver some or all of the Materials to Purchaser, or
make the same available to Purchaser on a secure web site (Purchaser agrees that
any item to be delivered by Seller under this Contract shall be deemed delivered
to the extent available to Purchaser on such secured web site).  To the
extent that Purchaser determines that any of the Materials have not been made
available or delivered to Purchaser pursuant to this
Section 3.5.1, Purchaser shall notify Seller and Seller
shall use commercially reasonable efforts to deliver the same to Purchaser
within 5 Business Days after such notification is received by Seller; provided,
however, that under no circumstances will the Feasibility Period be extended and
Purchaser’s sole remedy will be to terminate this Contract pursuant to
Section 3.2.  Additionally, Seller shall make
available to Purchaser additional rent rolls or rent arrears information, as
Purchaser may reasonably request from time to time, to the extent reasonably
available to Seller.

3.5.2    In providing the Materials to
Purchaser, other than Seller’s Representations, Seller makes no representation
or warranty, express, written, oral, statutory, or implied, and all such
representations and warranties are hereby expressly excluded and
disclaimed.  All Materials are provided for informational purposes only
and, together with all Third-Party Reports, shall be returned by Purchaser to
Seller (or the destruction thereof shall be certified in writing by Purchaser to
Seller) as a condition to return of the Deposit to Purchaser if this Contract is
terminated for any reason.  Recognizing that the Materials delivered or
made available by Seller pursuant to this Contract may not be complete or
constitute all of such documents which are in Seller’s possession or control,
but are those that are readily and reasonably available to Seller, Purchaser
shall not in any way be entitled to rely upon the completeness or accuracy of
the Materials and will instead in all instances rely exclusively on its own
Inspections and Consultants with respect to all
matters which it deems relevant to its decision to acquire, own and operate the
Property.

3.5.3    In addition to the items set forth on
Schedule 4, no later than 5 Business Days after the
Effective Date, Seller shall deliver to Purchaser (or otherwise make available
to Purchaser as provided under Section 3.5.1) the most
recent rent roll for the Property, which rent roll is that which Seller uses in
the ordinary course of operating the Property (the “Rent
Roll”).  Seller makes no representations or warranties regarding
the Rent Roll other than the express representation set forth in
Section 6.1.5.

3.5.4    In addition to the items set forth on
Schedule 4, no later than 5 Business Days after the
Effective Date, and to the extent same have not been heretofore provided by
Seller to Purchaser, Seller shall deliver to Purchaser (or otherwise make
available to Purchaser as provided under Section 3.5.1)
a list of all current Property Contracts (the “Property Contracts
List”).  Seller makes no representations or warranties regarding
the Property Contracts List other than the express representations set forth in
Section 6.1.6.

3.6       Property
Contracts.

 
On or before September 18, 2009, Purchaser may deliver written notice to Seller
(the “Property Contracts Notice”) specifying any Property
Contracts which Purchaser desires to terminate at the Closing (the
“Terminated Contracts”); provided that (a) the effective date of
such termination on or after Closing shall be subject to the express terms of
such Terminated Contracts, (b) if any such Property Contract cannot by its terms
be terminated at Closing, it shall be assumed by Purchaser and not be a
Terminated Contract, and (c) to the extent that any such Terminated Contract
requires payment of a penalty, premium, or damages, including liquidated
damages, for cancellation, Purchaser shall be solely responsible for the payment
of any such cancellation fees, penalties, or damages, including liquidated
damages.  If Purchaser fails to deliver the Property Contracts Notice on or
before September 18, 2009, then there shall be no Terminated Contracts and
Purchaser shall assume all Property Contracts at the Closing.  If Purchaser
delivers the Property Contracts Notice to Seller on or before September 18,
2009, then simultaneously therewith, Purchaser shall deliver to Seller a vendor
termination notice (in the form attached hereto as Exhibit F) for
each Terminated Contract informing the vendor(s) of the termination of such
Terminated Contract as of the Closing Date (subject to any delay in the
effectiveness of such termination pursuant to the express terms of each
applicable Terminated Contract) (the “Vendor Terminations”). 
Seller shall sign the Vendor Terminations prepared by Purchaser, and deliver
them to all applicable vendors.  To the extent that any Property Contract
to be assigned to Purchaser requires vendor consent, then, prior to the Closing,
Purchaser may attempt to obtain from each applicable vendor a consent (each a
“Required Assignment Consent”) to such assignment.  Purchaser
shall indemnify, hold harmless and, if requested by Seller (in Seller’s sole
discretion), defend (with counsel approved by Seller) Seller’s Indemnified
Parties from and against any and all Losses arising from or related to
Purchaser’s failure to obtain any Required Assignment Consent.

ARTICLE IV
TITLE

4.1       Title
Documents.

 
Purchaser acknowledges that, prior to the Effective Date, Purchaser has received
from Escrow Agent a commitment for owner’s title insurance with regard to the
Property and designated by Escrow Agent as file no. 3020-385501NJ11
(“Title Commitment”) to provide an American Land Title Association
owner’s title insurance policy for the Property, using the current policy jacket
customarily provided by the Escrow Agent, in an amount equal to the Purchase
Price (the “Title Policy”), together with copies of all
instruments identified as exceptions therein (together with the Title
Commitment, referred to herein as the “Title Documents”). 
Purchaser shall have the right to elect by written notice to Seller, which
written notice shall be received by Seller at least twenty (20) days prior to
the Closing Date, to designate Kensington Vanguard National Land Services to
provide title insurance, along with the Escrow Agent and on a co-insurance basis
in an amount of up to 50% of the Purchase Price for the purposes of the Title
Policy (collectively, the “Co-Insurer”); provided however that
Escrow Agent shall be the lead insurer.  The Escrow Agent and the
Co-Insurer shall herein collectively be called the “Title
Insurer.”  Seller shall be responsible for payment of the base
premium for the Title Policy in an amount not to exceed $57,255.  Purchaser
shall be solely responsible for all other costs relating to the procurement of
the Title Commitment, the Title Policy, and any requested endorsements.

4.2       Survey.

 
Purchaser may, at its sole cost and expense, order a survey of the Property
either before or after the Effective Date (the “Survey”).

4.3       Intentionally
Omitted.

 

4.4       Permitted
Exceptions.

 
The Deed delivered pursuant to this Contract shall be subject to the following,
all of which shall be deemed “Permitted Exceptions”:

4.4.1   
(a) All matters set forth on Schedule 5 to this Contract, (b) any matters
shown on the Survey or an exception for any matters that a survey of the
Property would show, (c) except for mortgage documents (other than the Assumed
Encumbrances), the title exceptions that Title Insurer shall be willing to omit
as exceptions to coverage with respect to such Title Policy, and omit as
exceptions to coverage with respect to any lender’s mortgage insurance policy,
(d) the standard exception regarding the rights of parties in possession, which
shall be limited to those parties in possession pursuant to the Leases, and (e)
any exceptions and matters that are approved, waived or deemed to have been
approved or waived by Purchaser under this Contract.

4.4.2   
The standard exception pertaining to taxes, which shall be limited to taxes and
assessments payable in the year in which the Closing occurs, for which
adjustments are made, and subsequent taxes and assessments;

4.4.3   
All Leases either existing as of the Effective Date or permitted under this
Contract;

4.4.4   
The Assumed Encumbrances;

4.4.5    Applicable zoning and governmental
regulations and ordinances; and

4.4.6   
Any defects in or objections to title to the Property, or title exceptions or
encumbrances, arising by, through or under Purchaser.

Notwithstanding
the foregoing, any exception in the Title Policy for unpaid water/sewer liens
shall not be a Permitted Exception.

 

4.5       Purchaser’s Rights in
Respect of Seller’s Inability to Remove Title Exceptions.

4.5.1   
If Seller shall be unable to cause title to the Property to be subject only to
the Permitted Exceptions, and Purchaser shall not, prior to the Closing Date,
give notice to Seller that Purchaser is willing to waive objection to each title
exception which is not a Permitted Exception and close this transaction without
abatement of the Purchase Price, credit or allowance of any kind or any claim or
right of action against Seller for damages or otherwise, then Seller shall have
the right, at Seller’s sole election, to either (1) take such action as Seller
shall deem advisable to discharge each such title exception which is not a
Permitted Exception or (2) terminate this Contract.  If Seller shall elect
to take action to discharge each such title exception which is not a Permitted
Exception, including pursuant to Section 4.6 below, then Seller shall be
entitled to one or more adjournments of the scheduled Closing Date set forth in
Section 5.1 for a period not to exceed thirty (30) days in the aggregate, and
the Closing shall be adjourned to a date specified by Seller on at least five
(5) Business Days’ notice not beyond such thirty (30) day period.  
If, for any reason whatsoever, excluding willful default, Seller shall not have
succeeded in discharging each such title exception at the expiration of such
adjournment(s) and if Purchaser shall not, prior to the expiration of the last
of such adjournments, give notice to Seller that Purchaser is willing to waive
objection to each such title exception and to close this transaction without
abatement of the Purchase Price, credit or allowance of any kind or any claim or
right of action against Seller for damages or otherwise, then this Contract
shall be deemed to be terminated as of the last date to which the Closing Date
was adjourned by Seller pursuant to this Section 4.5.  No action taken by
Seller to discharge, or attempt to discharge, any purported title exception
shall be an admission that any such purported title exception is not a Permitted
Exception.  If Seller elects to proceed under (2) above, Purchaser shall
have the further right, by notice to be given within three (3) Business Days
after Seller elects to terminate, to cancel such termination, waive the
objection, and close title subject thereto without any adjustment to the
Purchase Price.  

4.5.2   
Seller shall be obligated to cure all title defects which can be cured solely by
the payment of a liquidated sum up to an aggregate sum of $525,000
(“Liquidated Sum Title Exceptions”).  If the aggregate cost
to cure such Liquidated Sum Title Exceptions exceeds $525,000 and Seller
notifies Purchaser that Seller does not intend to cure such Liquidated Sum Title
Exceptions (by bonding the lien or causing the Title
Insurer to omit as an exception to title insurance coverage or otherwise insure
against collection against the Property), then Purchaser may terminate this
Contract by written notice delivered to Seller within 7 Business Days after
Purchaser receives such notice from Seller.  If Purchaser timely so elects
to terminate this Contract, then the Deposit shall be promptly returned to
Purchaser, Purchaser may recover from Seller, as Purchaser’s sole remedy, its
direct and actual out-of-pocket expenses and costs (documented by paid invoices
to third parties) in connection with this transaction, which expenses and costs
shall not exceed $50,000 in the aggregate and this Contract shall be of no
further force or effect, except for those provisions which expressly survive
termination of this Contract.

4.6       Subsequently
Disclosed Exceptions.

 
If at any time after the expiration of the Feasibility Period, any update to the
Title Commitment discloses any additional item that affects title to the
Property which was not disclosed on any version of or update to the Title
Commitment delivered to Purchaser during the Feasibility Period (the “New
Exception”), Purchaser shall have a period of 5 days from the date of
its receipt of such update (the “New Exception Review Period”) to
review and notify Seller in writing of Purchaser’s approval or disapproval of
the New Exception.  If Purchaser disapproves of the New Exception, then
Seller may, in Seller’s sole discretion, notify Purchaser as to whether it is
willing to cure (or cause the Title Insurer to omit as an exception to title
insurance coverage or otherwise insure against collection against the Property)
the New Exception.  If Seller elects to cure the New Exception (or to cause
the Title Insurer to omit the New Exception as an exception to title insurance
coverage as permitted hereunder, then Seller shall be entitled to reasonable
adjournments of the Closing Date to cure the New Exception.  If Seller
fails to deliver a notice to Purchaser within 3 days after the expiration of the
New Exception Review Period, then Seller shall be deemed to have elected not to
cure the New Exception.  If Purchaser is dissatisfied with Seller’s
response, or lack thereof, then Purchaser may, as its exclusive remedy elect to
either:  (i) terminate this Contract, in which event the Deposit shall be
promptly returned to Purchaser or (ii) waive the New Exception and proceed with
the transactions contemplated by this Contract, in which event Purchaser shall
be deemed to have approved the New Exception.  If Purchaser fails to notify
Seller of its election to terminate this Contract within 6 days after Seller has
notified Purchaser that Seller has elected not to cure the New Exception, then
Purchaser shall be deemed to have elected to approve and irrevocably waive any
objections to the New Exception.

4.7       Assumed
Encumbrances.

4.7.1    Purchaser recognizes and agrees that
the Property is encumbered by three separate loans (the “Loans”)
made to Seller by (a) GMAC Commercial Mortgage Bank and secured by an Amended
and Restated Multifamily Mortgage, Assignment of Rents and Security Agreement
dated as of September 1, 2005 and recorded September 27, 2005 in Mortgage Book
10962, Page 435 (the “First Mortgage”) and evidenced by that
certain Amended and Restated Multifamily Note dated as of September 1, 2005 in
the original principal amount of $12,321,361.00 (the “First
Note”), (b) GMAC Commercial Mortgage Bank and secured by an Multifamily
Mortgage, Assignment of Rents and Security Agreement dated as of September 1,
2005 and recorded September 27, 2005 as Mortgage Book
10962, Page 511 (the “Second Mortgage”) and evidenced by that
certain Multifamily Note dated as of September 1, 2005 in the original principal
amount of $3,800,000.00 (the “Second Note”) and (c) Capmark Bank
and secured by that certain Multifamily Mortgage, Assignment of Rents and
Security Agreement dated as of August 31, 2007 and recorded on September 14,
2007 as Mortgage Book 12611, Page 692 (the “Third Mortgage”) and
evidenced by that certain Multifamily Note dated as of August 31, 2007 in the
original principal amount of $7,750,000.00 (the “Third
Note”).  Within 5 days after the Effective Date, Seller agrees that
it will make available to Purchaser (in the same manner in which Seller is
permitted to make the Materials available to Purchaser under
Section 3.5.1) copies of the Assumed Loan Documents
which are in Seller’s possession or reasonable control (subject to
Section 3.5.2).

4.7.2    Purchaser agrees that, at the
Closing, (a) Purchaser shall assume Seller’s obligations under the Notes and all
of the other Assumed Loan Documents and accept title to the Property subject to
the Assumed Encumbrances, and (b) the Lenders shall release Seller, as
well as any guarantors and other obligated parties under the Assumed Loan
Documents, from all post-closing obligations under the Assumed Loan Documents
(and any related guarantees or letters of credit), including, without
limitation, any obligation to make payments of principal and interest under the
Notes (collectively, the foregoing (a) and (b) referred to herein as the
“Loan Assumption and Release”).

4.7.2.1
Purchaser acknowledges and agrees that (a) certain of the provisions of the
Assumed Loan Documents may have been negotiated for the exclusive benefit of
Seller, AIMCO or their respective affiliates (such provisions, which are
referenced on Schedule 6 hereto are herein called the “Specific
AIMCO Provisions”), and (b) unless the Lenders otherwise agree in each
Lender’s sole and arbitrary discretion, Purchaser will not be permitted to
assume the benefit of the Specific AIMCO Provisions and the same shall be of no
further force or effect from and after the Closing Date.

4.7.2.2
Notwithstanding anything contained in this Contract to the contrary, Purchaser
shall not be obligated to assume Seller’s obligations under the Assumed
Encumbrances if, as a condition to the issuance of the Loan Assumption and
Release, (a) Lenders require any change to the interest rate, maturity date
and/or amortization period under any of the Loans or (b) Lenders require any
other material modifications to the terms of the Assumed Loan Documents that are
not acceptable to Purchaser, other than (i) the deletion of one or
more of the Specific AIMCO Provisions as provided above, (ii) imposing customary
escrows for taxes and/or insurance in monthly amounts that do not exceed
1/12th of the reasonably estimated annual taxes and insurance
premiums for the Property ((ii) is herein called the “Required Loan Fund
Amounts”) or (iii) standard types of ministerial requirements, such as
production of title reports.  The provisions of this Section 4.7.2.2
shall survive the Closing. 

4.7.3    Seller and Purchaser agree that if,
as a condition to the issuance of the Loan Assumption and Release, any one or
more of the Lenders requires a partial prepayment of the principal portion of
one or more of the Loans (the aggregate amount by which the outstanding
principal balance of the Loans is required to be prepaid is herein called the
“Principal Paydown Amount”), then Purchaser shall notify Seller of
the Principal Paydown Amount and the aggregate principal balance of the Loans
(after giving effect to the Principal Paydown Amount) that Lender is willing to
assign at Closing (the “Reduced Principal
Amount”):

4.7.3.1
If the Reduced Principal Amount is equal to or greater than $20,625,000, then at
Closing Purchaser shall partially prepay the Loans in the Principal Paydown
Amount.

4.7.3.2
If the Reduced Principal Amount is less than $20,625,000, then within ten (10)
days after Purchaser notifies Seller of the Reduced Principal Amount, Seller
shall notify Purchaser as to whether or not Seller agrees to pay the portion of
the Principal Paydown Amount necessary to reduce the aggregate principal balance
of the Loans from $20,625,000 to the required Reduced Principal Amount
(“Seller’s Reduced Principal Notice”).  If Seller agrees to
so pay such amount, then at Closing, Seller shall grant Purchaser a credit for
such amount.  If Seller does not agree to so pay any such amount, then
Purchaser shall deliver a written notice to Seller (“Purchaser’s Reduced
Principal Notice”) within ten (10) days of receipt of Seller’s Reduced
Principal Notice, whereby Purchaser shall either (a) agree to pay the entire
Principal Paydown Amount or (b) terminate this Contract.  If, in
Purchaser’s Reduced Principal Notice, Purchaser agrees to accept the assignment
of the loans at the Reduced Principal Amount, then at Closing Purchaser shall
pay the entire Principal Paydown Amount so required by the Lenders.  If, in
Purchaser’s Reduced Principal Notice, Purchaser elects to terminate this
Contract, then the Deposit shall be promptly returned to Purchaser, Purchaser
shall be reimbursed for its direct and actual out-of-pocket expenses and costs
(documented by invoices from third parties) in connection with this transaction
(which reimbursement shall not exceed $50,000 in aggregate) and this Contract
shall be of no further force or effect, except for the Survival Provisions.

4.7.4   
If, in connection with any required partial prepayment of the Loans, a
prepayment penalty or premium (including any yield maintenance premium) is due
to one or more of the Lender(s) (the "Prepayment Penalty"), then
Purchaser shall promptly notify Seller of the amount of the Prepayment
Penalty.  

4.7.4.1
If the Prepayment Penalty is equal to or less than $200,000, then at Closing (a)
Purchaser shall pay the first $100,000 of the Prepayment Penalty (i.e., $1 to
$100,000) and (b) Seller shall pay the next $100,000 of the Prepayment Penalty (i.e., $100,001 to $200,000).  If
not obtained by Purchaser in connection with the Loan Assumption and Release,
then Seller shall provide Purchaser with Seller’s good faith estimate of the
Prepayment Penalty not later than fifteen (15) days prior to the Closing
Date.

4.7.4.2
If the Prepayment Penalty exceeds $200,000, then within ten (10) days after
Purchaser notifies Seller of the amount of the Prepayment Penalty, Seller shall
notify Purchaser as to whether or not Seller agrees to pay that portion of the
Prepayment Penalty that exceeds $200,000 ("Seller's Prepayment Penalty
Notice").  If, in Seller's Prepayment Penalty Notice, Seller agrees
to pay the portion of the Prepayment Penalty that exceeds $200,000, then at
Closing Seller shall pay (in addition to the sums payable by Seller under
Section 4.7.2.2 above) the portion of the Prepayment Penalty that exceeds
$200,000.  If, in Seller's Prepayment Penalty Notice, Seller does not agree
to pay the portion of the Prepayment Penalty that exceeds $200,000, then
Purchaser shall deliver a written notice to Seller ("Purchaser's
Prepayment Penalty Notice") within 10 days after receipt of Seller's
Prepayment Penalty Notice, whereby Purchaser shall either (a) agree to pay that
portion of the Prepayment Penalty that exceeds $200,000 or (b) terminate this
Contract.   If, in Purchaser's Prepayment Penalty Notice, Purchaser
agrees to pay the portion of the Prepayment Penalty that exceeds $200,000, then
at Closing Purchaser shall pay (in addition to the sums payable by Purchaser
under Section 4.7.2.2 above) the portion of the Prepayment Penalty that
exceeds $200,000.  If, in Purchaser's Prepayment Penalty Notice, Purchaser
elects to terminate this Contract, then the Deposit shall be promptly returned
to Purchaser and this Contract shall be of no further force or effect, except
for the Survival Provisions.

4.7.5    Purchaser further acknowledges that
the Assumed Loan Documents require the satisfaction by Purchaser of certain
requirements as set forth therein to allow for the Loan Assumption and
Release.  Accordingly, Purchaser, at its sole cost and expense and within
15 days after the Effective Date (the “Loan Assumption Application
Submittal Deadline”), shall satisfy the requirements set forth in the
Assumed Loan Documents to allow for the Loan Assumption and Release, including,
without limitation, submitting a substantially complete application to each of
the Lenders for assumption of the Loans together with all documents and
information required in connection therewith (collectively, the “Loan
Assumption Application”).  Purchaser agrees to notify Seller that
the Loan Assumption Application has been submitted to Lenders, promptly after
such submission.  Purchaser acknowledges and agrees that Purchaser is
solely responsible for the preparation and submittal of the Loan Assumption
Application, including the collection of all materials, documents, certificates,
financials, signatures, and other items required to be submitted to Lenders in
connection with the Loan Assumption Application, except that, upon Purchaser’s
or Lenders’ request to Seller, which request shall specify which Property-related documents are to be delivered to Lenders by
Seller, Seller shall deliver any Property-related documents to Lenders, to the
extent (a) not previously delivered to Purchaser, (b) that the same exist and
(c) such Property-related documents are in Seller’s possession or reasonable
control.

4.7.6   
Purchaser shall comply with each Lender’s assumption guidelines in connection
with the Loan Assumption and Release and, if required by such Lender, Purchaser
shall cause such other person or entity reasonably acceptable to such Lender, to
execute and deliver a customary “non-recourse carve-out” guaranty and customary
environmental indemnity, in substantially the same form as the existing
“non-recourse carve-out” guaranty and environmental indemnity (excluding the
Specific AIMCO Provisions), in favor of Lenders.  Purchaser shall be
responsible at its sole cost and expense for correcting and re-submitting any
deficiencies noted by Lenders in connection with the Loan Assumption Application
within a reasonable amount of time after notification from a Lender of such
deficiency.  Purchaser also shall provide Seller with a copy of any
correspondence from a Lender with respect to the Loan Assumption Application no
later than 3 Business Days after receipt of such correspondence from such
Lender.

4.7.7    Purchaser shall pay all fees and
expenses (including, without limitation, all servicing fees and charges, title
fees, endorsement fees, and other fees to release Seller of all liability under
the Loans) imposed or charged by any of the Lenders or their counsel (such fees
and expenses collectively being referred to as the “Lender
Fees”), in connection with the Loan Assumption Application and the Loan
Assumption and Release, except for the assumption fees up to 1% of the amount of
the Loans, which will be paid by Seller on behalf of Purchaser.  If the
Lender Fees exceed $59,000 (excluding the 1% assumption fee being paid by
Seller), and Seller does not agree to pay the excess, then Purchaser shall have
the right to terminate this Contract.  In the event of such termination,
the Deposit shall be promptly returned to Purchaser and this Contract shall be
of no further force or effect, except for those provisions which expressly
survive termination of this Contract.

4.7.8   
Seller shall assign all of its right, title and interest in and to all reserves,
impounds and other accounts held by Lenders in connection with the Loans, and at
Closing, Purchaser shall pay to Seller an amount equal to the balance of such
reserves, impounds and accounts so assigned.

4.7.9   
Purchaser agrees promptly to deliver to each Lender all documents and
information required by the Assumed Loan Documents, and such other information
or documentation as a Lender reasonably may request, including, without
limitation, financial statements, income tax returns and other financial
information for Purchaser and any required guarantor.  Seller agrees that
it will cooperate with Purchaser and Lenders, at no cost or expense to Seller,
in connection with Purchaser’s application to each Lender for approval of the
Loan Assumption and Release, including, upon Purchaser’s or Lenders’ specific
request therefor to Seller, delivering any
Property-related documents to Lenders, to the extent (a) not previously
delivered to Purchaser, (b) that such Property-related documents exist and (c)
that such Property-related documents are in Seller’s possession or reasonable
control.

4.7.10 
If required by a Lender, Purchaser shall promptly order a Phase I Environmental
study and/or a Property Condition Assessment Report (prepared by an
environmental engineer/engineering company reasonably acceptable to the Lender
requiring such study or report), and covenants that such Phase I Environmental
study and Property Condition Assessment Report shall be delivered to Seller and
Lenders prior to the Closing Date.

4.8       Purchaser
Financing .

 
Except as otherwise provided in Section 4.7 above with respect to the
Loan Assumption and Release, Purchaser assumes full responsibility to obtain the
funds required for settlement, and Purchaser’s acquisition of such funds shall
not be a contingency to the Closing.

4.9       Housing
Assistance Program Vouchers.

4.1.1.1.1                     
Purchaser acknowledges that the HAP Voucher Contract(s) require(s) the
satisfaction by Purchaser of certain requirements as set forth therein and
established by the Housing Authority to allow for the HAP Voucher Assumption.
Purchaser agrees that, at the Closing, either (a) Purchaser shall assume
all obligations under the HAP Voucher Contracts and accept title to the Property
subject to the same, or (b) the existing HAP Voucher Contracts shall be
terminated, and Purchaser shall enter into replacement HAP Voucher Contracts
which are acceptable to the Housing Authority (collectively, the foregoing (a)
and (b) referred to herein as the "HAP Voucher Assumption"). 
Purchaser shall indemnify and hold the Seller and the Seller’s Indemnified
Parties harmless from and against any and all claims, losses, damages, and
expenses (including reasonable attorneys’ fees) that may be incurred by Seller
and/or any of the Seller’s Indemnified Parties in connection with Purchaser’s
assumption of the HAP Voucher Contracts or the failure of Purchaser to enter
into a replacement HAP Voucher Contracts as aforesaid, or otherwise arising as a
result of Purchaser’s performance of, or failure to perform, under the HAP
Voucher Contracts from and after the Closing Date.  Seller shall indemnify
and hold  Purchaser harmless from and against any and all claims, losses,
damages, and expenses (including reasonable attorneys’ fees) arising as a result
of Seller’s performance of, or failure to perform, under the HAP Voucher
Contracts prior to the Closing Date.  The terms and provisions of this
Section shall survive the Closing.

ARTICLE V
CLOSING

5.1       Closing
Date.  

5.1.1   
The Closing shall occur on the earlier to occur of (a) thirty (30) days after
the Lenders’ approval of the Loan Assumption and Release and (b) October 19, 2009 (the “Closing Date”)
through an escrow with Escrow Agent, whereby Seller, Purchaser and their
attorneys need not be physically present at the Closing and may deliver
documents by overnight air courier or other means.

5.1.2    If Purchaser obtains the Lenders’
approval of the Loan Assumption and Release on or after September 21, 2009 but
before October 19, 2009, then the Closing Date shall be extended to be
the date which is thirty (30) days after the Purchaser’s receipt of the Lenders’
approval of the Loan Assumption and Release.

5.1.3   
Purchaser shall have the one-time right, by delivering written notice
(“Purchaser’s Adjournment Notice”) to Seller not later than five
(5) Business Days prior to the then scheduled Closing Date, to adjourn the
Closing Date to a Business Day not later than thirty (30) days after the then
scheduled Closing Date, provided that Purchaser shall, concurrently with the
delivery of Purchaser’s Adjournment Notice, deliver to Escrow Agent an
additional deposit of $136,250 (the “Adjournment Deposit”). 
The Adjournment Deposit shall be deemed part of the Deposit.

5.1.4   
If required in order to comply with the requirements of Section 8.2.6,
then, upon notice given to Purchaser at least five (5) Business Days before the
then scheduled Closing Date, Seller may extend the Closing Date to a date not
later than thirty (30) days following the Closing Date specified in the first
sentence of Section 5.1.1 above. 

5.2       Seller Closing
Deliveries.

 
No later than 1 Business Day prior to the Closing Date, Seller shall deliver to
Escrow Agent, each of the following items:

5.2.1    Deed (the “Deed”) in
the form attached as Exhibit B to Purchaser, subject to the
Permitted Exceptions.

5.2.2   
A Bill of Sale in the form attached as Exhibit C.

5.2.3    A General Assignment in the form
attached as Exhibit D (the “General Assignment”).

5.2.4    An Assignment of Leases and Security
Deposits in the form attached as Exhibit E (the “Leases
Assignment”).

5.2.5   
Seller’s closing statement.

5.2.6   
A customary title affidavit or an indemnity form reasonably acceptable to
Seller, which is sufficient to enable Title Insurer to delete the standard
pre-printed exceptions to the title insurance policy to be issued pursuant to
the Title Commitment and other standard exceptions.

5.2.7   
A certification of Seller’s non-foreign status pursuant to Section 1445 of
the Internal Revenue Code of 1986, as amended.

5.2.8   
Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Seller’s
authority to consummate this transaction.

5.2.9    An updated
Rent Roll effective as of a date no more than 3 Business Days prior to the
Closing Date; provided, however, that the content of such updated Rent Roll
shall in no event expand or modify the conditions to Purchaser’s obligation to
close as specified under Section 8.1.

5.2.10  An updated Property Contracts List effective as
of a date no more than 3 Business Days prior to the Closing Date; provided,
however, that the content of such updated Property Contracts List shall in no
event expand or modify the conditions to Purchaser’s obligation to close as
specified under Section 8.1.

5.2.11 
Notification letters to all Tenants prepared by Purchaser and executed by Seller
in the form attached hereto as Exhibit G, which shall be delivered to all
Tenants by Purchaser immediately after the Closing.

5.2.12 
State of New Jersey Form RTF-1, Affidavit for Consideration for Use by Seller,
executed by Seller.

5.2.13 
State of New Jersey Form GIT/REP-3, Seller’s Residency
Certification/Exemption.

5.2.14 
Such other documents as are reasonably necessary to consummate the transactions
herein contemplated in accordance with the terms of the Contract.

5.3       Purchaser Closing
Deliveries.

 
No later than 1 Business Day prior to the Closing Date (except for the balance
of the Purchase Price which is to be delivered at the time specified in
Section 2.2.4), Purchaser shall deliver to the Escrow
Agent (for disbursement to Seller upon the Closing) the following items:

5.3.1    The full Purchase Price (with credit
for the Deposit and, if applicable, the Loan Balance), plus or minus the
adjustments or prorations required by this Contract.

5.3.2   
A title affidavit or an indemnity form (pertaining to Purchaser’s activity on
the Property prior to Closing), reasonably acceptable to Purchaser, which is
sufficient to enable Title Insurer to delete the standard pre-printed exceptions
to the title insurance policy to be issued pursuant to the Title
Commitment.

5.3.3   
Any declaration or other statement which may be required to be submitted to the
local assessor.

5.3.4   
Purchaser’s closing statement.

5.3.5   
A countersigned counterpart of the General Assignment.

5.3.6   
A countersigned counterpart of the Leases Assignment.

5.3.7    Notification letters to all Tenants
prepared and executed by Purchaser in the form attached hereto as Exhibit
G, which shall be delivered to all Tenants by Purchaser immediately after
Closing.

5.3.8   
Any cancellation fees or penalties due to any vendor under any Terminated
Contract as a result of the termination thereof.

5.3.9   
Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Purchaser’s
authority to consummate this transaction.

5.3.10  All documents, instruments, guaranties, Lender
Fees, Required Loan Fund Amounts, and other items or funds required by the
Lenders to cause the Loan Assumption and Release, as required
hereunder.

5.3.11 
State of New Jersey Form RTF-1, Affidavit for Consideration for Use by Seller,
executed by Purchaser.

5.3.12 
Such other documents as are reasonably necessary to consummate the transactions
herein contemplated in accordance with the terms of the Contract.

5.4       Closing Prorations
and Adjustments.

5.4.1    General.  All
normal and customarily proratable items, including, without limitation,
collected rents, operating expenses, personal property taxes, other operating
expenses and fees, shall be prorated as of the day after the Closing Date,
Seller being charged or credited, as appropriate, for all of same attributable
to the period up to the day after the Closing Date (and credited for any amounts
paid by Seller attributable to the period on or after the day after the Closing
Date, if assumed by Purchaser) and Purchaser being responsible for, and credited
or charged, as the case may be, for all of the same attributable to the period
on and after the day after the Closing Date.  Seller shall prepare a
proration schedule (the “Proration Schedule”) of the adjustments
described in this Section 5.4 prior to
Closing.

5.4.2    Operating
Expenses.  All of the operating, maintenance, taxes (other than
real estate taxes), and other expenses incurred in operating the Property that
Seller customarily pays, and any other costs incurred in the ordinary course of
business for the management and operation of the Property, shall be prorated on
an accrual basis.  Seller shall pay all such expenses that accrue prior to
the day after the Closing Date and Purchaser shall pay all such expenses that
accrue from and after the day after the Closing Date.

5.4.3   
Utilities.  The final readings and final billings for utilities
will be made if possible as of the day after Closing Date, in which case Seller
shall pay all such bills as of such date and no proration shall be made at the
Closing with respect to utility bills.  Otherwise, a proration shall be
made based upon the parties’ reasonable good faith estimate.  Seller shall
be entitled to the return of any deposit(s) posted by it
with any utility company, and Seller shall notify each utility company serving
the Property to terminate Seller’s account, effective as of the day after the
Closing Date.

5.4.4   
Real Estate Taxes.  Any real estate ad valorem or similar taxes for
the Property, or any installment of assessments payable in installments which
installment is payable in the calendar year of Closing, shall be prorated to the
date after the day of Closing, based upon actual days involved.  The
proration of real property taxes or installments of assessments shall be based
upon the assessed valuation and tax rate figures (assuming payment at the
earliest time to allow for the maximum possible discount) for the year in which
the Closing occurs to the extent the same are available; provided, however, that
in the event that actual figures (whether for the assessed value of the Property
or for the tax rate) for the year of Closing are not available at the Closing
Date, the proration shall be made using figures from the preceding year
(assuming payment at the earliest time to allow for the maximum possible
discount).  The proration of real property taxes or installments of
assessments shall be final and not subject to re-adjustment after Closing.

5.4.5   
Property Contracts.  Purchaser shall assume at Closing the
obligations under the Property Contracts assumed by Purchaser; however,
operating expenses shall be prorated under
Section 5.4.2.

5.4.6   
Leases.

5.4.6.1 All collected rent (whether fixed monthly rentals,
additional rentals, escalation rentals, retroactive rentals, operating cost
pass-throughs or other sums and charges payable by Tenants under the Leases),
income and expenses from any portion of the Property shall be prorated as of the
day after the Closing Date.  Purchaser shall receive all collected rent and
income attributable to dates from and after the day after the Closing
Date.  Seller shall receive all collected rent and income attributable to
dates prior to the day after the Closing Date.  Notwithstanding the
foregoing, no prorations shall be made in relation to either (a) non-delinquent
rents which have not been collected as of the Closing Date, or (b) delinquent
rents existing, if any, as of the Closing Date (the foregoing (a) and (b)
referred to herein as the “Uncollected Rents”).  In adjusting
for Uncollected Rents, no adjustments shall be made in Seller’s favor for rents
which have accrued and are unpaid as of the Closing, but Purchaser shall pay
Seller such accrued Uncollected Rents as and when collected by Purchaser. 
Purchaser agrees to bill Tenants of the Property for all Uncollected Rents and
to take reasonable actions to collect Uncollected Rents but shall not be
obligated to commence or pursue any legal actions.  Notwithstanding the
foregoing, Purchaser’s obligation to collect Uncollected Rents shall be limited
to Uncollected Rents of not more than 90 days past due, and Purchaser’s
collection of rents shall be applied, first, towards current rent due and owing under the Leases, and second, to Uncollected
Rents.  After the Closing, Seller shall continue to have the right, but not
the obligation, in its own name, to demand payment of and to collect Uncollected
Rents owed to Seller by any Tenant, which right shall include, without
limitation, the right to continue or commence legal actions or proceedings
against any Tenant and the delivery of the Leases Assignment shall not
constitute a waiver by Seller of such right; provided however, that the
foregoing right of Seller shall be limited to actions seeking monetary damages
and, in no event, shall Seller seek to evict any Tenants in any action to
collect Uncollected Rents.  Purchaser agrees to cooperate with Seller in
connection with all efforts by Seller to collect such Uncollected Rents and to
take all steps, whether before or after the Closing Date, as may be necessary to
carry out the intention of the foregoing, including, without limitation, the
delivery to Seller, within 7 days after a written request, of any relevant books
and records (including, without limitation, rent statements, receipted bills and
copies of tenant checks used in payment of such rent), the execution of any and
all consents or other documents, and the undertaking of any act reasonably
necessary for the collection of such Uncollected Rents by Seller; provided,
however, that Purchaser’s obligation to cooperate with Seller pursuant to this
sentence shall not obligate Purchaser to terminate any Tenant lease with an
existing Tenant or evict any existing Tenant from the Property. 
Notwithstanding the foregoing, if between the Effective Date and the Closing,
Seller enters into any new Lease or renews an existing Lease and such new Lease
or renewed existing Lease provides that the Tenant thereunder is entitled to one
or more rent concessions for periods after the month in which the Closing
occurs, then, at Seller’s election, either (x) such rent concession(s) shall be
spread out equally over the term of such Lease or (y) at Closing, Seller shall
give Purchaser a credit in the amount of such rent concession(s) applicable to
the portion of the Lease term which occurs after the month in which the Closing
occurs and which exceeds an amount equal to one and one-half months of
rent.

5.4.6.2 At Closing, Purchaser shall receive a credit against
the Purchase Price in an amount equal to the received and unapplied balance of
all cash (or cash equivalent) Tenant Deposits, including, but not limited to,
security, damage, pet or other refundable deposits paid by any of the Tenants to
secure their respective obligations under the Leases, together, in all cases,
with any interest payable to the Tenants thereunder as may be required by their
respective Tenant Lease or state law (the “Tenant Security Deposit
Balance”).  Any cash (or cash equivalents) held by Seller which
constitutes the Tenant Security Deposit Balance shall be retained by Seller in
exchange for the foregoing credit against the Purchase Price and shall not be
transferred by Seller pursuant to this Contract (or any of the documents
delivered at Closing), but the obligation with respect to the Tenant Security
Deposit Balance nonetheless shall be assumed by Purchaser.  The Tenant
Security Deposit Balance shall not include any
non-refundable deposits or fees paid by Tenants to Seller, either pursuant to
the Leases or otherwise.

5.4.6.3
At Closing, Purchaser shall receive a credit against the Purchase Price in an
amount equal to the sum of any rent concessions granted for periods after the
Closing as a result of a settlement between Seller, as landlord, and a tenant at
the Property for failure of Seller to perform any of its actions or obligations
as landlord under a lease (as opposed to any rent concessions granted in
connection with a new or renewed lease). 

5.4.7   
Existing Loans.

5.4.7.1
Seller shall be responsible for all principal (except for any mandatory partial
prepayment of any of the Loans pursuant to Section 4.7.3 above, unless agreed to
by Seller pursuant to Section 4.7.3.2) required to be paid under the
terms of the Notes prior to the day after the Closing Date, together with all
interest accrued under the Notes prior to the day after the Closing Date, all of
which may be a credit against the Purchase Price as provided in
Section 2.2.3.  

5.4.7.2
Subject to the terms of Section 4.7.7 above, Purchaser shall be
responsible for all Lender Fees and all other fees, penalties, interest and
other amounts due and owing under the Assumed Loan Documents as a result of the
Loan Assumption and Release, other than the assumption fees up to 1% of the
amount of the Loans, as set forth in Section 4.7.7.  If at Closing,
the assumption fees are less than $230,660, then Purchaser shall receive a
credit in the amount of the difference between $230,660 and the actual cost of
the assumption fees.  As set forth in Section 4.7.8, any existing
reserves, impounds and other accounts maintained in connection with the Loans
shall be assigned to Purchaser, and at Closing, Purchaser shall pay to Seller an
amount equal to the balance of such reserves, impounds and accounts so
assigned.  

5.4.8   
Insurance.  No proration shall be made in relation to insurance
premiums and insurance policies will not be assigned to Purchaser.  Seller
shall have the risk of loss of the Property until the Closing, after which time
the risk of loss shall pass to Purchaser and Purchaser shall be responsible for
obtaining its own insurance thereafter.

5.4.9   
Employees.  All of Seller’s and Seller’s manager’s on-site
employees shall have their employment at the Property terminated by Seller or
Seller’s manager as of the Closing Date.

5.4.10 
Closing Costs.  Purchaser shall pay the cost of (a) all recording
and filing charges in connection with the instruments by which Seller conveys
the Property (including the Deed) and all mortgage recording fees and taxes with
respect to any mortgage loan obtained by Purchaser in
connection with its purchase of the Property, (b) all premiums or fees required
to be paid by Purchaser with respect to the Title Policy pursuant to Section
4.1, and (c) any “mansion tax” payable on the transfer of the
Property to Purchaser.  Seller shall pay the (w) cost of any transfer taxes
(with the exception of any “mansion tax”), (x) the cost of recording any
instruments required to discharge any liens or encumbrances against the
Property, (y) the cost to omit any title exceptions (or otherwise cure the same)
which Seller is required to omit or cure pursuant to the terms of this Contract
and (z) the base premium for the Title Policy pursuant to Section
4.1.  Seller and Purchaser shall share equally the escrow fees of the
Title Insurer (but not any other charges or fees of the Title Insurer).

5.4.11  Intentionally omitted.

5.4.12  Possession.  Possession of
the Property, subject to the Leases, Property Contracts, other than Terminated
Contracts, and Permitted Exceptions, shall be delivered to Purchaser at the
Closing upon release from escrow of all items to be delivered by Purchaser
pursuant to Section 5.3.  To the extent reasonably
available to Seller, originals or copies of the Leases and Property Contracts,
lease files, warranties, guaranties, operating manuals, keys to the property,
and Seller’s books and records (other than proprietary information)
(collectively, “Seller’s Property-Related Files and Records”)
regarding the Property shall be made available to Purchaser at the Property
after the Closing.  Purchaser agrees, for a period of three (3) years after
the Closing (the “Records Hold Period”), to (a) provide and allow
Seller reasonable access to Seller’s Property-Related Files and Records for
purposes of inspection and copying thereof, and (b) reasonably maintain and
preserve Seller’s Property-Related Files and Records.

5.4.13 
Brokerage Commissions.  Any outstanding commissions for the rental
or lease of any apartments at the Property shall either be paid at Closing by
Seller directly to the brokers entitled to such commissions or Seller shall
grant Purchaser a credit for such commissions. 

5.5       Post Closing
Adjustments.

 
Purchaser or Seller may request that Purchaser and Seller undertake to re-adjust
any item on the Proration Schedule (or any item omitted therefrom), with the
exception of real property taxes which shall be final and not subject to
readjustment, in accordance with the provisions of
Section 5.4 of this Contract; provided, however, that
neither party shall have any obligation to re-adjust any items (a) after the
expiration of 90 days after Closing, or (b) subject to such 90-day period,
unless such items exceed $5,000.00 in magnitude (either individually or in the
aggregate).  The foregoing limitations set forth in Sections 5.5(a)
and (b) above shall not apply to rent collected by Seller applicable to
periods after the Closing or rent collected by Purchaser for periods prior to
the Closing.  Nothing contained herein shall limit the mutual indemnities
contained in the Leases Assignment.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER AND
PURCHASER

6.1       Seller’s
Representations.

 
Except, in all cases, for any fact, information or condition disclosed in the
Title Documents, the Permitted Exceptions, the Property Contracts, or the
Materials, or which is otherwise known by Purchaser prior to the Closing, Seller
represents and warrants to Purchaser the following (collectively, the
“Seller’s Representations”) as of the Effective Date and as of the
Closing Date; provided that Purchaser’s remedies if any such Seller’s
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1:

6.1.1   
Seller is validly existing and in good standing under the laws of the state of
its formation set forth in the initial paragraph of this Contract; and, subject
to Section 8.2.6 and any approvals required from
Lenders for the Loan Assumption and Release, has or at the Closing shall have
the entity power and authority to sell and convey the Property and to execute
the documents to be executed by Seller and prior to the Closing will have taken
as applicable, all corporate, partnership, limited liability company or
equivalent entity actions required for the execution and delivery of this
Contract, and the consummation of the transactions contemplated by this
Contract.  The compliance with or fulfillment of the terms and conditions
hereof will not conflict with, or result in a breach of, the terms, conditions
or provisions of, or constitute a default under, any contract to which Seller is
a party or by which Seller is otherwise bound, which conflict, breach or default
would have a material adverse affect on Seller’s ability to consummate the
transaction contemplated by this Contract or on the Property.  Subject to
Section 8.2.6, this Contract is a valid and binding
agreement against Seller in accordance with its terms;

6.1.2   
Seller is not a “foreign person,” as that term is used and defined in the
Internal Revenue Code, Section 1445, as amended;

6.1.3   
Except for (a) any actions by Seller to evict Tenants under the Leases, or (b)
any matter covered by Seller’s current insurance policy(ies), to Seller’s
knowledge, there are no material actions, proceedings, litigation or
governmental investigations or condemnation actions either pending or threatened
in writing against the Property which will adversely impact Seller’s ability to
convey the Property or which adversely affect or will adversely affect the
operations of the Property;

6.1.4   
To Seller’s knowledge, Seller has not received any written notice of any
material default by Seller under any of the Property Contracts that will not be
terminated on the Closing Date;

6.1.5    To Seller’s knowledge, the Rent Roll
(as updated pursuant to Section 5.2.9) is accurate in
all material respects; 

6.1.6    To Seller’s
knowledge, the Property Contracts List (as updated pursuant to
Section 5.2.10) is accurate in all material
respects;

6.1.7   
To Seller’s knowledge, the Materials delivered to Purchaser and that have been
prepared by Seller (as opposed to Materials prepared by any third parties) are
true and correct in all material respects, and Seller has no knowledge that any
Materials prepared by any third parties are substantially and materially
erroneous or misleading;

6.1.8   
To Seller’s knowledge, Seller has not received any written claims or complaints
from any party that the Property is not in compliance with all zoning laws;

6.1.9   
To Seller’s knowledge, Seller has performed its obligations under the Loans as
of the Effective Date and has not received any written notice of any default by
Seller under the Loans that remains uncured;

6.1.10 
To Seller’s knowledge, there are no assessments, either threatened or pending
against any part or all of the Property;

6.1.11 
To Seller’s knowledge, Seller has not received any written notice from a
governmental agency of any uncured material violations of any federal, state,
county or municipal law, ordinance, order, regulation or requirement affecting
the Property;

6.1.12 
To Seller’s knowledge, Seller has not received any written notices of complaints
of any tenants regarding any violation of any rent control or similar law. 
There is no concerted rent strike at the Property; 

6.1.13 
Seller is the owner of the Fixtures and Tangible Personal Property free and
clear of any liens or encumbrances, other than the Assumed Encumbrances; 

6.1.14 
As of the Effective Date, the outstanding principal balance due under the Loans
is as follows: [$11,908,300 under the First Note, $3,592,521 under the Second
Note and $7,565,432 under the Third Note.]

6.1.15 
To Seller’s knowledge, there are no outstanding commissions for the rental or
lease of any apartments at the Property, other than any such commissions to be
paid by Seller at or prior to the Closing; and

6.1.16 
Except as set forth in the Leases and/or the Rent Roll, no tenant is entitled to
rental concessions or abatements for any period subsequent to the Closing
Date.

6.2       AS-IS.

 
Except for Seller’s Representations, the Property is expressly purchased and
sold “AS IS,” “WHERE IS,” and “WITH ALL FAULTS.”  The Purchase Price and
the terms and conditions set forth herein are the result of arm’s-length
bargaining between entities familiar with transactions of
this kind, and said price, terms and conditions reflect the fact that Purchaser
shall have the benefit of, but is not relying upon, any information provided by
Seller or Broker or statements, representations or warranties, express or
implied, made by or enforceable directly against Seller or Broker, including,
without limitation, any relating to the value of the Property, the physical or
environmental condition of the Property, any state, federal, county or local
law, ordinance, order or permit; or the suitability, compliance or lack of
compliance of the Property with any regulation, or any other attribute or matter
of or relating to the Property (other than any covenants of title contained in
the Deed conveying the Property and Seller’s Representations).  Purchaser
agrees that Seller shall not be responsible or liable to Purchaser for any
defects, errors or omissions, or on account of any conditions affecting the
Property.  Purchaser represents and warrants that, as of the date hereof
and as of the Closing Date, it has and shall have reviewed and conducted such
independent analyses, studies (including, without limitation, environmental
studies and analyses concerning the presence of lead, asbestos, water intrusion
and/or fungal growth and any resulting damage, PCBs and radon in and about the
Property), reports, investigations and inspections as it deems appropriate in
connection with the Property.  If Seller  provides or has provided any
documents, summaries, opinions or work product of consultants, surveyors,
architects, engineers, title companies, governmental authorities or any other
person or entity with respect to the Property, including, without limitation,
the offering prepared by Broker, Purchaser and Seller agree that Seller has done
so or shall do so only for the convenience of both parties, Purchaser shall not
rely thereon and the reliance by Purchaser upon any such documents, summaries,
opinions or work product shall not create or give rise to any liability of or
against Seller’s Indemnified Parties.  Purchaser acknowledges and agrees
that no representation has been made and no responsibility is assumed by Seller
with respect to current and future applicable zoning or building code
requirements or the compliance of the Property with any other laws, rules,
ordinances or regulations, the financial earning capacity or expense history of
the Property, the continuation of contracts, continued occupancy levels of the
Property, or any part thereof, or the continued occupancy by tenants of any
Leases or, without limiting any of the foregoing, occupancy at Closing. 
Prior to Closing, Seller shall have the right, but not the obligation, to
enforce its rights against any and all Property occupants, guests or
tenants.  Purchaser agrees that the departure or removal, prior to Closing,
of any of such guests, occupants or tenants shall not be the basis for, nor
shall it give rise to, any claim on the part of Purchaser, nor shall it affect
the obligations of Purchaser under this Contract in any manner whatsoever; and
Purchaser shall close title and accept delivery of the Deed with or without such
tenants in possession and without any allowance or reduction in the Purchase
Price under this Contract.  Purchaser hereby releases Seller from any and
all claims and liabilities relating to the foregoing matters.

6.3       Survival of Seller’s
Representations.

 
Seller and Purchaser agree that Seller’s Representations shall survive Closing
for a period of 6 months (the “Survival Period”).  Seller
shall have no liability after the Survival Period with respect to Seller’s
Representations contained herein except to the extent that Purchaser has
requested arbitration against Seller during the Survival Period for breach of
any of Seller’s Representations.  Under no circumstances shall Seller be
liable to Purchaser for more than $450,000 in any individual instance or in the
aggregate for all breaches of Seller’s Representations, nor shall Purchaser be
entitled to bring any claim for a breach of Seller’s Representations unless the
claim for damages (either in the aggregate or as to any individual claim) by
Purchaser exceeds $5,000.  In the event that Seller breaches any
representation contained in Section 6.1 and Purchaser
had actual knowledge (or knowledge could have been
ascertained from the Materials) of such breach prior to the Closing Date, and
elected to close regardless, Purchaser shall be deemed to have waived any right
of recovery, and Seller shall not have any liability in connection
therewith.

6.4       Definition of
Seller’s Knowledge.

 
Any representations and warranties made “to the knowledge of Seller” shall not
be deemed to imply any duty of inquiry.  For purposes of this Contract, the
term Seller’s “knowledge” shall mean and refer only to actual knowledge
of the Designated Employees and shall not be construed to refer to the knowledge
of any other partner, officer, director, agent, employee or representative of
Seller, or any affiliate of Seller, or to impose upon such Designated Employees
any duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Designated Employees any individual
personal liability.  As used herein, the term “Designated
Employees” shall refer to Karyn Marasco who is the regional property
manager and the community manager handling this Property.

6.5       Representations and
Warranties of Purchaser.

 
For the purpose of inducing Seller to enter into this Contract and to consummate
the sale and purchase of the Property in accordance herewith, Purchaser
represents and warrants to Seller the following as of the Effective Date and as
of the Closing Date:

6.5.1   
Purchaser is a limited liability company duly organized, validly existing and in
good standing under the laws of New Jersey.

6.5.2   
Purchaser, acting through any of its or their duly empowered and authorized
officers or members, has all necessary entity power and authority to own and use
its properties and to transact the business in which it is engaged, and has full
power and authority to enter into this Contract, to execute and deliver the
documents and instruments required of Purchaser herein, and to perform its
obligations hereunder; and no consent of any of Purchaser’s partners, directors,
officers or members are required to so empower or authorize Purchaser.  The
compliance with or fulfillment of the terms and conditions hereof will not
conflict with, or result in a breach of, the terms, conditions or provisions of,
or constitute a default under, any contract to which Purchaser is a party or by
which Purchaser is otherwise bound, which conflict, breach or default would have
a material adverse affect on Purchaser’s ability to consummate the transaction
contemplated by this Contract.  This Contract is a valid, binding and
enforceable agreement against Purchaser in accordance with its terms.

6.5.3   
No pending or, to the knowledge of Purchaser, threatened litigation exists which
if determined adversely would restrain the consummation of the transactions
contemplated by this Contract or would declare illegal, invalid or non-binding
any of Purchaser’s obligations or covenants to Seller.

6.5.4   
Other than Seller’s Representations, Purchaser has not relied on any
representation or warranty made by Seller or any representative of Seller (including, without limitation, Broker) in connection with
this Contract and the acquisition of the Property.

6.5.5   
The Broker and its affiliates do not, and will not at the Closing, have any
direct or indirect legal, beneficial, economic or voting interest in Purchaser
(or in an assignee of Purchaser, which pursuant to
Section 13.3, acquires the Property at the Closing),
nor has Purchaser or any affiliate of Purchaser granted (as of the Effective
Date or the Closing Date) the Broker or any of its affiliates any right or
option to acquire any direct or indirect legal, beneficial, economic or voting
interest in Purchaser.

6.5.6   
Purchaser is not a Prohibited Person.

6.5.7   
To Purchaser’s knowledge, none of its investors, affiliates or brokers or other
agents (if any), acting or benefiting in any capacity in connection with this
Contract is a Prohibited Person.

6.5.8   
The funds or other assets Purchaser will transfer to Seller under this Contract
are not the property of, or beneficially owned, directly or indirectly, by a
Prohibited Person.

6.5.9   
The funds or other assets Purchaser will transfer to Seller under this Contract
are not the proceeds of specified unlawful activity as defined by 18 U.S.C. §
1956(c)(7).

ARTICLE VII
OPERATION OF THE PROPERTY

7.1       Leases and Property
Contracts.

 
During the period of time from the Effective Date to the Closing Date, in the
ordinary course of business Seller may enter into new Property Contracts, new
Leases, renew existing Leases or modify, terminate or accept the surrender or
forfeiture of any of the Leases, modify any Property Contracts, or institute and
prosecute any available remedies for default under any Lease or Property
Contract without first obtaining the written consent of Purchaser; provided,
however, Seller agrees that any such new Property Contracts shall be terminable
on thirty (30) days’ prior written notice without payment or penalty or any new,
renewed or modified Leases (a) shall not have a term in excess of 1 year and (b)
shall be on Seller’s standard form without material deviation and entered into
in the ordinary course of business and in accordance with Seller’s standard
leasing practices for the Property unless the prior written consent of Purchaser
has been obtained, which consent shall not be unreasonably withheld, conditioned
or delayed.  Seller hereby agrees not to change its standard leasing
practices as a result of the execution of this Contract in a manner which would
be adverse to Purchaser.

7.2       General Operation of
Property.

 
Except as specifically set forth in this Article VII, Seller shall
operate the Property after the Effective Date in the ordinary course of
business, and except as necessary in Seller’s reasonable discretion to address
(a) any life or safety issue at the Property or (b) any other matter which in
Seller’s reasonable discretion materially adversely affects the use, operation
or value of the Property, Seller will not make any material alterations to the Property or remove any material
Fixtures and Tangible Personal Property without the prior written consent of
Purchaser which consent shall not be unreasonably withheld, denied or
delayed.  Seller shall not accept any prepayment of rent for more than one
month beyond the Closing Date or apply any Tenant Deposits to any rents owed by
Tenants who remain in possession of their Tenant Units on the Closing
Date.  Seller shall maintain the Property in its current condition, subject
only to ordinary wear and tear, casualty and condemnation excepted and subject
to the provisions of Article 11 and Article 12.

7.3       Liens.

 
Other than utility easements and temporary construction easements granted by
Seller in the ordinary course of business, Seller covenants that it will not
voluntarily create or cause any lien or encumbrance to attach to the Property
between the Effective Date and the Closing Date (other than Leases and Property
Contracts as provided in Section 7.1) unless Purchaser
approves such lien or encumbrance, which approval shall not be unreasonably
withheld, conditioned or delayed.  If Purchaser approves any such
subsequent lien or encumbrance, the same shall be deemed a Permitted Encumbrance
for all purposes hereunder.

7.4       Tax Appeals.

 
Purchaser acknowledges receipt of and, to the extent applicable to Purchaser,
agrees to be bound to the terms of, (a) those certain stipulations of
settlements for the tax years of 2008, 2009 and 2010 between Seller and the Town
of Plainsboro, that have been filed (2008 and 2009 tax years) or will be filed
(2010 tax year) with the Tax Court of New Jersey, as set forth therein and (b)
judgments entered into by the Tax Court of New Jersey for the tax years of 2008
(Docket No. 002023-2008) and 2009 (Docket No. 000437-2009) with respect to the
tax assessment of the Property.  Seller shall not commence any real
property tax reduction proceedings, tax protest proceedings or tax assessment
appeals (except for any actions necessary to finalize or enforce the
stipulations or judgments referenced in this Section 7.4) without the
prior written consent of Purchaser, which consent shall not be unreasonably
withheld, conditioned or delayed.

 

7.5       Rent-Ready
Condition.

 
Seller agrees that (a) prior to Closing all vacant apartment units at the
Property (which have been vacant for at least seven (7) days prior to the
Closing Date) will be in Rent-Ready Condition, or (b) Purchaser shall receive a
credit against the Purchase Price in an amount equal to the product of (i) the
number of vacant apartment units which are not in Rent-Ready Condition on the
Closing Date (and which have been vacant for at least seven (7) days prior to
the Closing Date), and (ii) $1,000.00.

7.6       Existing
Loans.

 
Between the Effective Date and the Closing Date, Seller shall not voluntarily
prepay any portion of the outstanding principal balance under the Existing
Loans, other than the scheduled amortization payments as set forth in the Notes.


ARTICLE VIII
CONDITIONS
PRECEDENT TO CLOSING

8.1       Purchaser’s
Conditions to Closing.

 
Purchaser’s obligation to close under this Contract shall be subject to and
conditioned upon the fulfillment of the following conditions precedent:

8.1.1    All of the
documents required to be delivered by Seller to Purchaser at the Closing
pursuant to the terms and conditions hereof shall have been delivered;

8.1.2    Each of Seller’s Representations
shall be true and complete in all material respects as of the Closing
Date;

8.1.3    Seller shall have complied with,
fulfilled and performed in all material respects each of the covenants, terms
and conditions to be complied with, fulfilled or performed by Seller hereunder;


8.1.4    Neither Seller nor Seller’s general
partner shall be a debtor in any bankruptcy proceeding nor shall have been in
the last 6 months a debtor in any bankruptcy proceeding;

8.1.5   
The Loan Assumption and Release shall have occurred;

8.1.6   
There shall not be any pending litigation or, to the knowledge of either
Purchaser or Seller, any litigation threatened in writing, which, if adversely
determined, would restrain the consummation of any of the transactions
contemplated by this Contract or declare illegal, invalid or nonbinding any of
the covenants or obligations of the Seller, except for litigation of which
Purchaser has knowledge; and

8.1.7   
Subject to Purchaser’s payment of premiums, the Title Insurer shall be committed
to the issuance of the Title Policy insuring title to the Property subject only
to the Permitted Exceptions.

If
any condition set forth in Sections 8.1.1,
8.1.3, 8.1.4, 8.1.5, 8.1.6 or 8.1.7 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2.  If the condition set
forth in Section 8.1.2 is not met, Seller shall not be
in default pursuant to Section 10.2, and Purchaser may,
as its sole and exclusive remedy, (i) notify Seller of Purchaser’s election to
terminate this Contract and receive a return of the Deposit from the Escrow
Agent, or (ii) waive such condition and proceed to Closing on the Closing Date
with no offset or deduction from the Purchase Price.

8.2       Seller’s Conditions
to Closing.

 
Without limiting any of the rights of Seller elsewhere provided for in this
Contract, Seller’s obligation to close with respect to conveyance of the
Property under this Contract shall be subject to and conditioned upon the
fulfillment of the following conditions precedent:

8.2.1   
All of the documents and funds required to be delivered by Purchaser to Seller
at the Closing pursuant to the terms and conditions hereof shall have been
delivered;

8.2.2   
Each of the representations, warranties and covenants of Purchaser contained
herein shall be true in all material respects as of the Closing Date;

8.2.3    Purchaser shall have complied with,
fulfilled and performed in all material respects each of the covenants, terms
and conditions to be complied with, fulfilled or performed by Purchaser
hereunder;

8.2.4   
There shall not be any pending litigation or, to the knowledge of either
Purchaser or Seller, any litigation threatened in writing, which, if adversely
determined, would restrain the consummation of any of the transactions
contemplated by this Contract or declare illegal, invalid or nonbinding any of
the covenants or obligations of the Purchaser; 

8.2.5   
The Loan Assumption and Release shall have occurred; and 

8.2.6    Seller has informed Purchaser that in
connection with the sale of the Property pursuant to this Contract, Seller is
required to file an information statement with the United States Securities
Exchange Commission (the “SEC”) pursuant to Rule 14(c) of the
Securities Exchange Act of 1934, as amended (the “Information
Statement”) and to distribute the Information Statement to Seller's
limited partners.  Seller shall file the Information Statement with the SEC
promptly after the Effective Date.  It shall be a condition to Seller’s
closing obligations hereunder that (A) either (x) Seller has not received any
comments on the Information Statement from SEC for a period of 10 business days
after the Information Statement has been filed with the SEC or (y) if Seller has
received comments from the SEC within such 10 business day period, such comments
have been addressed to the satisfaction of the SEC and the SEC has confirmed
that it has no further comments to the Information Statement and (B) thereafter
the Information Statement has been delivered to each of the limited partners of
Seller and a period of not less than 20 days has expired.  Seller shall
advise Purchaser when the Information Statement is being mailed to the limited
partners.

If
any of the foregoing conditions to Seller’s obligation to close with respect to
conveyance of the Property under this Contract are not met, Seller may (a) waive
any of the foregoing conditions and proceed to Closing on the Closing Date, or
(b) terminate this Contract, and, if such failure constitutes a default by
Purchaser, exercise any of its remedies under
Section 10.1.  If the Closing does not occur
because of a failure of Seller to comply with the provisions of Section 8.2.6
and provided that Purchaser is not otherwise in default under this Contract,
then, in addition to the return of the Deposit to Purchaser, and as Purchaser’s
sole remedy, Purchaser shall be entitled to the reimbursement of its direct and
actual out-of-pocket expenses and costs (documented by paid invoices to third
parties) in connection with this transaction, which reimbursement shall not
exceed $50,000 in the aggregate.

ARTICLE IX
BROKERAGE

9.1       Indemnity.

 
Seller represents and warrants to Purchaser that it has dealt only with Georgia
Malone, Georgia Malone & Company, Inc., 850 Third Ave., 19th Fl., New York,
NY 10022 (“Seller’s Broker”) in connection with this
Contract.  Purchaser represents and warrants to
Seller that it has dealt only with Joseph Brecher, Gebroe Hammer Associates, 2
West Northfield Road, Livingston, New Jersey 07039
(“Purchaser’s Broker”) in connection with this
Contract.  Seller and Purchaser each represents and warrants to the other
that, other than Seller’s Broker and Purchaser’s Broker, it has not dealt with
or utilized the services of any other real estate broker, sales person or finder
in connection with this Contract, and each party agrees to indemnify, hold
harmless, and, if requested in the sole and absolute discretion of the
indemnitee, defend (with counsel approved by the indemnitee) the other party
from and against all Losses relating to brokerage commissions and finder’s fees
arising from or attributable to the acts or omissions of the indemnifying
party.

9.2       Broker
Commission.

 
If the Closing occurs, Seller agrees to pay Seller’s Broker a commission
according to the terms of a separate contract between Seller’s Broker and
Seller.  Seller shall also pay Purchaser’s Broker a commission on behalf of
Purchaser according to the terms of a separate contract between Purchaser’s
Broker and Purchaser, not to exceed $272,500.  Purchaser represents that
the total commissions payable to Purchaser’s Broker is $272,500.  Seller’s
Broker and/or Purchaser’s Broker shall not be deemed a party or third party
beneficiary of this Contract.  As a condition to Seller and Purchaser’s
obligation to pay the commission, Seller’s Broker and Purchaser’s Broker shall
execute the signature page for such party attached hereto solely for purposes of
confirming the matters set forth therein.

ARTICLE X
DEFAULTS AND
REMEDIES

10.1     Purchaser Default.

 
If Purchaser defaults in its obligations hereunder to (a) deliver the Initial
Deposit, the Additional Deposit or the Adjournment Deposit (or any other deposit
or payment required of Purchaser hereunder), (b) deliver to Seller the
deliveries specified under Section 5.3 on the date required
thereunder, or (c) deliver the Purchase Price at the time required by
Section 2.2.4 and close on the purchase of the Property on the
Closing Date, then, immediately and without the right to receive notice or to
cure pursuant to Section 2.3.3, Purchaser shall forfeit the
Deposit, and the Escrow Agent shall deliver the Deposit to Seller, and neither
party shall be obligated to proceed with the purchase and sale of the
Property.  If, Purchaser defaults in any of its other representations,
warranties or obligations under this Contract, and such default continues for
more than 10 days after written notice from Seller, then Purchaser shall forfeit
the Deposit, and the Escrow Agent shall deliver the Deposit to Seller, and
neither party shall be obligated to proceed with the purchase and sale of the
Property.  The Deposit is liquidated damages and recourse to the Deposit
is, except for Purchaser’s indemnity and confidentiality obligations hereunder,
Seller’s sole and exclusive remedy for Purchaser’s failure to perform its
obligation to purchase the Property or breach of a representation or
warranty.  Seller expressly waives the remedies of specific performance and
additional damages for such default by Purchaser.  SELLER AND PURCHASER
ACKNOWLEDGE THAT SELLER’S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE
DEPOSIT IS A REASONABLE ESTIMATE OF SELLER’S DAMAGES RESULTING FROM A DEFAULT BY
PURCHASER IN ITS OBLIGATION TO PURCHASE THE PROPERTY.  SELLER AND PURCHASER
FURTHER AGREE THAT THIS SECTION 10.1 IS INTENDED TO AND DOES
LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER’S EXCLUSIVE
REMEDY AGAINST PURCHASER, BOTH AT LAW AND IN EQUITY, ARISING FROM OR RELATED TO
A BREACH BY PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS CONTRACT, OTHER THAN WITH RESPECT TO
PURCHASER’S INDEMNITY AND CONFIDENTIALITY OBLIGATIONS HEREUNDER.

10.2     Seller
Default.

 
If Seller defaults in its obligations hereunder to (a) deliver to Escrow Agent
the deliveries specified under Section 5.2 on the date required
thereunder or (b) satisfy the conditions contained in Sections 8.1.1,
8.1.3 (with respect to the covenants of Seller to be performed on the
Closing Date only), 8.1.4 or 8.1.6 and provided that Purchaser is,
on the Closing Date, ready, willing and able to deliver all of Purchaser’s
deliveries specified by Section 5.3 and pay the Purchase Price to Seller,
then Seller shall be deemed to immediately be in default and Purchaser may
exercise Purchaser’s rights contained in this Section 10.2 without any
opportunity of Seller to cure such default.  If Seller, prior to the
Closing, defaults in its covenants or obligations under this Contract which are
to be performed prior to Closing and such default continues for more than 10
days after written notice from Purchaser, then, at Purchaser’s election and as
Purchaser’s sole and exclusive remedy, either (a) this Contract shall terminate,
and all payments and things of value, including the Deposit, provided by
Purchaser hereunder shall be returned to Purchaser and Purchaser may recover, as
its sole recoverable damages (but without limiting its right to receive a refund
of the Deposit), its direct and actual out-of-pocket expenses and costs
(documented by paid invoices to third parties) in connection with this
transaction, which damages shall not exceed $50,000 in aggregate, or (b) subject
to the conditions below, Purchaser may seek specific performance of Seller’s
obligation to deliver the Deed pursuant to this Contract (but not
damages).  Purchaser may seek specific performance of Seller’s obligation
to deliver the Deed pursuant to this Contract only if, as a condition precedent
to initiating such litigation for specific performance, Purchaser first shall
(i) deliver all Purchaser Closing documents to Escrow Agent in accordance with
the requirements of this Contract, including, without limitation,
Sections 2.2.3 and 5.3 (with the exception of
Section 5.3.1); (ii) not otherwise be in default under this
Contract; and (iii) file suit therefor with the court on or before the 120th day
after the Closing Date; if Purchaser fails to file an action for specific
performance within 120 days after the Closing Date, then Purchaser shall be
deemed to have elected to terminate the Contract in accordance with subsection
(a) above.  Purchaser agrees that it shall promptly deliver to Seller an
assignment of all of Purchaser’s right, title and interest in and to (together
with possession of) all plans, studies, surveys, reports, and other materials
paid for with the out-of-pocket expenses reimbursed by Seller pursuant to the
foregoing sentence.  SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION
10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE
REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER’S EXCLUSIVE REMEDY
AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY
SELLER OF ITS COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS CONTRACT.  UNDER NO CIRCUMSTANCES MAY PURCHASER SEEK
OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR
INDIRECT DAMAGES, ALL OF WHICH PURCHASER SPECIFICALLY WAIVES, FROM SELLER FOR
ANY BREACH BY SELLER, OF ITS COVENANTS OR ITS OBLIGATIONS UNDER THIS
CONTRACT.  PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS
OR ANY LIEN AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO
SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED
AND IS DILIGENTLY PURSUING AN ACTION SEEKING SUCH REMEDY.

ARTICLE XI
RISK OF LOSS
OR CASUALTY

11.1     Major Damage.

 
In the event that the Property is damaged or destroyed by fire or other casualty
prior to Closing, and the cost for demolition, site cleaning, restoration,
replacement, or other repairs (collectively, the “Repairs”), is
more than $1,000,000.00, then Seller shall have no obligation to make such
Repairs, and shall notify Purchaser in writing of such damage or destruction
(the “Damage Notice”).  Within 10 Business Days after
Purchaser’s receipt of the Damage Notice, Purchaser may elect at its option to
terminate this Contract by delivering written notice to Seller in which event
the Deposit shall be refunded to Purchaser.  In the event Purchaser fails
to terminate this Contract within the foregoing 10 Business Day period, this
transaction shall be closed in accordance with
Section 11.3 below.

11.2     Minor Damage.

 
In the event that the Property is damaged or destroyed by fire or other casualty
prior to the Closing, and the cost of Repairs is equal to or less than
$1,000,000.00, this transaction shall be closed in accordance with
Section 11.3, notwithstanding such casualty.  In
such event, Seller may at its election endeavor to make such Repairs to the
extent of any recovery from insurance carried on the Property, if such Repairs
can be reasonably effected before the Closing.  Regardless of Seller’s
election to commence such Repairs, or Seller’s ability to complete such Repairs
prior to Closing, this transaction shall be closed in accordance with
Section 11.3 below.

11.3     Closing.

 
In the event Purchaser fails to terminate this Contract following a casualty as
set forth in Section 11.1, or in the event of a
casualty as set forth in Section 11.2, then this
transaction shall be closed in accordance with the terms of the Contract, at
Seller’s election, either (i) for the full Purchase Price, notwithstanding
any such casualty, in which case Purchaser shall, at Closing, execute and
deliver an assignment and assumption (in a form reasonably required by Seller)
of Seller’s rights and obligations with respect to the insurance claim related
to such casualty, and thereafter Purchaser shall receive all insurance proceeds
pertaining to such claim, less any amounts which may already have been spent by
Seller for Repairs (plus a credit against the Purchase Price at Closing in the
amount of any deductible payable by Seller in connection therewith, plus the
amount of any uninsured loss for which coverage has been denied and plus the
amount of any proceeds which are not assignable to Purchaser); or (ii) for the
full Purchase Price less a credit to Purchaser in the amount necessary to
complete such Repairs (less any amounts which may already have been spent by
Seller for Repairs).

11.4     Repairs.

 
To the extent that Seller elects to commence any Repairs prior to Closing, then
Seller shall be entitled to receive and apply available insurance proceeds to
any portion of such Repairs completed or installed prior to Closing, with
Purchaser being responsible for completion of such Repairs after Closing. 
To the extent that any Repairs have been commenced prior to Closing, then the
Property Contracts shall include, and Purchaser shall assume at Closing, all
construction and other contracts entered into by Seller in connection with such
Repairs. 

ARTICLE XII
EMINENT DOMAIN

12.1    
Eminent Domain.

 
In the event that, at the time of Closing, any material part of the Property is
(or previously has been) acquired, or is about to be acquired, by any
governmental agency by the powers of eminent domain or transfer in lieu thereof
(or in the event that at such time there is any notice of any such acquisition
or intent to acquire by any such governmental agency), Purchaser shall have the
right, at Purchaser’s option, to terminate this Contract by giving written
notice within 10 days after Purchaser’s receipt from Seller of notice of the
occurrence of such event, and if Purchaser so terminates this Contract,
Purchaser shall recover the Deposit hereunder.  If Purchaser fails to
terminate this Contract within such 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
and Purchaser shall receive the full benefit of any condemnation award.  It
is expressly agreed between the parties hereto that this section shall in no way
apply to customary dedications for public purposes which may be necessary for
the development of the Property.

ARTICLE XIII
MISCELLANEOUS

13.1    
Binding Effect of Contract.

 
This Contract shall not be binding on either party until executed by both
Purchaser and Seller.  Neither the Escrow Agent’s nor the Broker’s
execution of this Contract shall be a prerequisite to its effectiveness. 
Subject to Section 13.3, this Contract shall be binding
upon and inure to the benefit of Seller and Purchaser, and their respective
successors and permitted assigns.

13.2    
Exhibits and Schedules.

 
All Exhibits and Schedules, whether or not annexed hereto, are a part of this
Contract for all purposes.

13.3    
Assignability.

 
Except to the extent required to comply with the provisions of
Section 13.18 related to a 1031 Exchange, this Contract
is not assignable by Purchaser without first obtaining the prior written
approval of Seller.  Notwithstanding the foregoing, Purchaser may assign
this Contract, without first obtaining the prior written approval of Seller, to
one or more entities so long as (a) Purchaser is an affiliate of the purchasing
entity(ies), (b) Purchaser is not released from its liability hereunder, and (c)
Purchaser provides written notice to Seller of any proposed assignment no later
than 10 days prior to the Closing Date.  As used herein, an affiliate is a
person or entity controlled by, under common control with, or controlling
another person or entity.

13.4    
Captions.

 
The captions, headings, and arrangements used in this Contract are for
convenience only and do not in any way affect, limit, amplify, or modify the
terms and provisions hereof.

13.5     Number
and Gender of Words.

 
Whenever herein the singular number is used, the same shall include the plural
where appropriate, and words of any gender shall include each other gender where
appropriate.

13.6    
Notices.

 
All notices, demands, requests and other communications required or permitted
hereunder shall be in writing, and shall be (a) personally delivered with a written receipt of delivery; (b) sent by a
nationally-recognized overnight delivery service requiring a written
acknowledgement of receipt or providing a certification of delivery or attempted
delivery; (c) sent by certified or registered mail, return receipt requested; or
(d) sent by confirmed facsimile transmission or electronic delivery with an
original copy thereof transmitted to the recipient by one of the means described
in subsections (a) through (c) no later than 3 Business Days thereafter. 
All notices shall be deemed effective when actually delivered as documented in a
delivery receipt; provided, however, that if the notice was sent by overnight
courier or mail as aforesaid and is affirmatively refused or cannot be delivered
during customary business hours by reason of the absence of a signatory to
acknowledge receipt, or by reason of a change of address with respect to which
the addressor did not have either knowledge or written notice delivered in
accordance with this paragraph, then the first attempted delivery shall be
deemed to constitute delivery.  Each party shall be entitled to change its
address for notices from time to time by delivering to the other party notice
thereof in the manner herein provided for the delivery of notices.  All
notices shall be sent to the addressee at its address set forth following its
name below:

To
Purchaser:

Lighthouse
Property Investments, LLC
2 Executive Drive
Suite 470
Fort Lee, New
Jersey 07024
Attention:  Meyer Orbach
Telephone: 
201-947-2494
Facsimile:  201-947-2495

With a copy to:

Feinstein
Raiss Kelin & Booker
100 Executive Drive
Suite 360
West Orange, New
Jersey 07052
Attention: Rich Kelin, Esq.
Telephone:  973-324-5400
extension 107
Facsimile:  973-731-4669
rkelin@frkblaw.com 

To
Seller:

c/o AIMCO
4582 South Ulster Street Parkway
Suite
1100
Denver, Colorado  80237
Attention:  Mark Reoch and Brian
Bornhorst
Telephone:  303-757-9101 (Mark Reoch) and 303-691-4472 (Brian
Bornhorst)
Facsimile:  303-300-3261 (Mark Reoch and Brian
Bornhorst)
mark.reoch@aimco.com and brian.bornhorst@aimco.com

And:

c/o AIMCO

191
Post Road West

Westport,
CT  06880

Attention: 
Mr. Lance Graber

Telephone:
203-221-2621

Facsimile: 
203-222-0527
lance.graber@aimco.com 

with
copy to:

AIMCO
4582 South Ulster Street Parkway
Suite
1100
Denver, Colorado  80237
Attention:  John Spiegleman,
Esq.
Telephone: 303-691-4303
Facsimile: 
720-200-6882
john.spiegleman@aimco.com 

and
a copy to:

Gebroe Hammer Associates
2 West Northfield
Road
Livingston, New Jersey 07039
Attention:  Joseph
Brecher
Telephone:  973-994-4500 extension 162
Facsimile: 
973-994-9752
jbrecher@gebroehammer.com 

and
a copy to:

Bryan Cave LLP
1290 Avenue of the Americas
New York, New
York 10104
Attention:  Sandor A. Green, Esq.
Telephone:
212-541-2049
Facsimile:  212-541-1449
sagreen@bryancave.com 

Any
notice required hereunder to be delivered to the Escrow Agent shall be delivered
in accordance with above provisions as follows:

First American Title Insurance Company of New York
633
Third Avenue
New York, New York 10017
Attention: Linda J.
Isaacson
Telephone: 212-850-0664
Facsimile:
212-331-1467
lisaacson@firstam.com

Unless
specifically required to be delivered to the Escrow Agent pursuant to the terms
of this Contract, no notice hereunder must be delivered to the Escrow Agent in
order to be effective so long as it is delivered to the other party in
accordance with the above provisions.

13.7    
Governing Law and Venue.

 
The laws of the State of New Jersey shall govern the validity, construction,
enforcement, and interpretation of this Contract, unless otherwise specified
herein except for the conflict of laws provisions thereof.  Subject to
Section 13.24, all claims, disputes and other matters in
question arising out of or relating to this Contract, or the breach thereof,
shall be decided by proceedings instituted and litigated in a court of competent
jurisdiction in the state in which the Property is situated, and the parties
hereto expressly consent to the venue and jurisdiction of such court.

13.8     Entire Agreement.

 
This Contract embodies the entire Contract between the parties hereto concerning
the subject matter hereof and supersedes all prior conversations, proposals,
negotiations, understandings and contracts, whether written or oral.

13.9    
Amendments.

 
This Contract shall not be amended, altered, changed, modified, supplemented or
rescinded in any manner except by a written contract executed by all of the
parties; provided, however, that, (a) the signature of the Escrow Agent shall
not be required as to any amendment of this Contract other than an amendment of
Section 2.3, and (b) the signature of the Broker shall not be
required as to any amendment of this Contract

13.10  
Severability.

 
In the event that any part of this Contract shall be held to be invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
reformed, and enforced to the maximum extent permitted by law.  If such
provision cannot be reformed, it shall be severed from this Contract and the
remaining portions of this Contract shall be valid and enforceable.

13.11   Multiple
Counterparts/Facsimile Signatures.

 
This Contract may be executed in a number of identical counterparts.  This
Contract may be executed by facsimile signatures or electronic delivery of
signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.

13.12  
Construction.

 
No provision of this Contract shall be construed in favor of, or against, any
particular party by reason of any presumption with respect to the drafting of
this Contract; both parties, being represented by counsel, having fully
participated in the negotiation of this instrument.

13.13  
Confidentiality.

 
Purchaser shall not disclose the terms and conditions contained in this Contract
and shall keep the same confidential, provided that Purchaser may disclose the terms and conditions of this Contract (a) as
required by law, (b) to consummate the terms of this Contract, or any financing
relating thereto, or (c) to Purchaser’s or Seller’s lenders, attorneys,
accountants, advisors, consultants and potential investors.  Any
information obtained by Purchaser in the course of its inspection of the
Property, and any Materials provided by Seller to Purchaser hereunder, shall be
confidential and Purchaser shall be prohibited from making such information
public to any other person or entity other than its Consultants, without
Seller’s prior written authorization, which may be granted or denied in Seller’s
sole discretion.  In addition, Purchaser shall use its reasonable efforts
to prevent its Consultants from divulging any such confidential information to
any unrelated third parties except as reasonably necessary to third parties
engaged by Purchaser for the limited purpose of analyzing and investigating such
information for the purpose of consummating the transaction contemplated by this
Contract.  Unless and until the Closing occurs, Purchaser shall not market
the Property (or any portion thereof) to any prospective purchaser or lessee
without the prior written consent of Seller, which consent may be withheld in
Seller’s sole discretion.  Notwithstanding the provisions of
Section 13.8 Purchaser agrees that the covenants, restrictions
and agreements of Purchaser contained in any confidentiality agreement executed
by Purchaser prior to the Effective Date shall survive the execution of this
Contract and shall not be superseded hereby.

13.14   Time of the
Essence.

 
It is expressly agreed by the parties hereto that time is of the essence with
respect to this Contract and any aspect thereof.

13.15   Waiver.

 
No delay or omission to exercise any right or power accruing upon any default,
omission, or failure of performance hereunder shall impair any right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.  No
waiver, amendment, release, or modification of this Contract shall be
established by conduct, custom, or course of dealing and all waivers must be in
writing and signed by the waiving party.

13.16   Attorneys’
Fees.

 
In the event either party hereto commences litigation or arbitration against the
other to enforce its rights hereunder, the prevailing party in such litigation
shall be entitled to recover from the other party its reasonable attorneys’ fees
and expenses incidental to such litigation and arbitration, including the cost
of in-house counsel and any appeals.

13.17   Time Zone/Time
Periods.

 
Any reference in this Contract to a specific time shall refer to the time in the
time zone where the Property is located.  (For example, a reference to 3:00
p.m. refers to 3:00 p.m. MST if the Property is located in Denver,
Colorado.)  Should the last day of a time period fall on a weekend or legal
holiday, the next Business Day thereafter shall be considered the end of the
time period.

13.18   1031 Exchange.

 
Seller and Purchaser acknowledge and agree that the purchase and sale of the
Property may be part of a tax-free exchange for either Purchaser or Seller
pursuant to Section 1031 of the Code, the regulations promulgated
thereunder, revenue procedures, pronouncements and other guidance issued by the
Internal Revenue Service.  Each party hereby agrees to cooperate with each
other and take all reasonable steps on or before the Closing Date to facilitate
such exchange if requested by the other party, provided that (a) no party making
such accommodation shall be required to acquire any substitute property, (b)
such exchange shall not affect the representations,
warranties, liabilities and obligations of the parties to each other under this
Contract, (c) no party making such accommodation shall incur any additional
cost, expense or liability in connection with such exchange (other than expenses
of reviewing and executing documents required in connection with such exchange),
and (d) no dates in this Contract will be extended as a result thereof, except
as specifically provided herein.  Notwithstanding anything in this
Section 13.18 to the contrary, Seller shall have the right to
extend the Closing Date (as extended pursuant to the second or third sentences
of Section 5.1) for up to 30 days in order to facilitate a tax
free exchange pursuant to this Section 13.18, and to obtain
all documentation in connection therewith.

13.19   No Personal
Liability of Officers, Trustees or Directors of Seller’s Partners.

 
Purchaser acknowledges that this Contract is entered into by Seller which is a
California limited partnership, and Purchaser agrees that none of
Seller’s Indemnified Parties shall have any personal liability under this
Contract or any document executed in connection with the transactions
contemplated by this Contract.

13.20   No Exclusive Negotiations.

 
Seller shall have the right, at all times prior to the expiration of the
Feasibility Period, to solicit backup offers and enter into discussions,
negotiations, or any other communications concerning or related to the sale of
the Property with any third-party; provided, however, that such communications
are subject to the terms of this Contract, and that Seller shall not enter into
any binding contract with a third-party for the sale of the Property unless such
contract is contingent on the termination of this Contract without the Property
having been conveyed to Purchaser.

13.21   ADA Disclosure.

 
Purchaser acknowledges that the Property may be subject to the federal Americans
With Disabilities Act (the “ADA”) and the federal Fair Housing Act
(the “FHA”).  The ADA requires, among other matters, that
tenants and/or owners of “public accommodations” remove barriers in order to
make the Property accessible to disabled persons and provide auxiliary aids and
services for hearing, vision or speech impaired persons.  Seller makes no
warranty, representation or guarantee of any type or kind with respect to the
Property’s compliance with the ADA or the FHA (or any similar state or local
law), and Seller expressly disclaims any such representations.

13.22   No
Recording.

 
Purchaser shall not cause or allow this Contract or any contract or other
document related hereto, nor any memorandum or other evidence hereof, to be
recorded or become a public record without Seller’s prior written consent, which
consent may be withheld at Seller’s sole discretion.  If Purchaser records
this Contract or any other memorandum or evidence thereof, Purchaser shall be in
default of its obligations under this Contract.  Purchaser hereby appoints
Seller as Purchaser’s attorney-in-fact to prepare and record any documents
necessary to effect the nullification and release of the Contract or other
memorandum or evidence thereof from the public records.  This appointment
shall be coupled with an interest and irrevocable.

13.23   Relationship of
Parties.

 
Purchaser and Seller acknowledge and agree that the relationship established
between the parties pursuant to this Contract is only that of a seller and a
purchaser of property.  Neither Purchaser nor Seller is, nor shall either
hold itself out to be, the agent, employee, joint venturer or partner of the
other party.

13.24   Dispute Resolution.

 
Any controversy, dispute, or claim of any nature arising out of, in connection
with, or in relation to the interpretation, performance, enforcement or breach
of this Contract (and any closing document executed in connection herewith),
including any claim based on contract, tort or statute, shall be resolved at the
written request of any party to this Contract by binding arbitration.  The
arbitration shall be administered in accordance with the then current Commercial
Arbitration Rules of the American Arbitration Association.  Any matter to
be settled by arbitration shall be submitted to the American Arbitration
Association in the state in which the Property is located.  The parties
shall attempt to designate one arbitrator from the American Arbitration
Association.  If they are unable to do so within 30 days after written
demand therefor, then the American Arbitration Association shall designate an
arbitrator.  The arbitration shall be final and binding, and enforceable in
any court of competent jurisdiction.  The arbitrator shall award attorneys’
fees (including those of in-house counsel) and costs to the prevailing party and
charge the cost of arbitration to the party which is not the prevailing
party.  Notwithstanding anything herein to the contrary, this
Section 13.24 shall not prevent Purchaser or Seller from
seeking and obtaining equitable relief on a temporary or permanent basis,
including, without limitation, a temporary restraining order, a preliminary or
permanent injunction or similar equitable relief, from a court of competent
jurisdiction located in the state in which the Property is located (to which all
parties hereto consent to venue and jurisdiction) by instituting a legal action
or other court proceeding in order to protect or enforce the rights of such
party under this Contract or to prevent irreparable harm and injury.  The
court’s jurisdiction over any such equitable matter, however, shall be expressly
limited only to the temporary, preliminary, or permanent equitable relief
sought; all other claims initiated under this Contract between the parties
hereto shall be determined through final and binding arbitration in accordance
with this Section 13.24.  Notwithstanding the
foregoing, Purchaser may obtain a restraining order from a court of competent
jurisdiction.

13.25   AIMCO
Marks.

 
Purchaser agrees that Seller, the Property Manager or AIMCO, or their respective
affiliates, are the sole owners of all right, title and interest in and to the
AIMCO Marks (or have the right to use such AIMCO Marks pursuant to license
agreements with third parties) and that no right, title or interest in or to the
AIMCO Marks is granted, transferred, assigned or conveyed as a result of this
Contract.  Purchaser further agrees that Purchaser will not use the AIMCO
Marks for any purpose.

13.26   Intentionally
omitted.

13.27   Survival.

 
Except for (a) all of the provisions of this Article XIII (other than
Sections 13.18 and 13.20); (b)
Sections 2.3, 3.3,
3.4, 3.5, 4.7.5, 4.7.6,
5.4, 5.5, 6.2, 6.5,
9.1, 11.4, 14.1, and 14.2; (c) any
other provisions in this Contract, that by their express terms survive the
termination or Closing; and (d) any payment obligation of Purchaser under this
Contract (the foregoing (a), (b), (c) and (d) referred to herein as the
“Survival Provisions”), none of the terms and provisions of this
Contract shall survive the termination of this Contract, and if the Contract is
not so terminated, all of the terms and provisions of this Contract (other than
the Survival Provisions, which shall survive the Closing) shall be merged into
the Closing documents and shall not survive Closing.

13.28   Multiple
Purchasers.

 
As used in this Contract, the term “Purchaser” means all entities
acquiring any interest in the Property at the Closing, including, without limitation, any assignee(s) of the original Purchaser
pursuant to Section 13.3 of this Contract.  In the
event that “Purchaser” has any obligations or makes any covenants,
representations or warranties under this Contract, the same shall be made
jointly and severally by all entities being a Purchaser hereunder.

13.29  
New Jersey Tax Indemnity.

 
AIMCO Properties, L.P., a beneficial owner of Seller, hereby agrees to
indemnify, defend and hold Purchaser harmless from and against all claims,
demands, liabilities and damages (including reasonable attorneys’ fees) arising
out of the failure of Seller to pay any taxes due to the State of New Jersey
Division of Taxation resulting from the sale of the Property to Purchaser
pursuant to the terms of this Contract or Seller’s operation and ownership of
the Property prior thereto, including, without limitation, any sales tax due in
connection with the bulk sale of the personal property comprising a portion of
the Property.  

ARTICLE XIV
LEAD–BASED
PAINT DISCLOSURE

14.1     Disclosure.

 
Seller and Purchaser hereby acknowledge delivery of the Lead Based Paint
Disclosure attached as Exhibit H hereto.

14.2     Consent Agreement.

 
Testing (the “Testing”) has been performed at the Property with
respect to lead-based paint.  Law Engineering and Environmental Services,
Inc. performed the Testing and reported, in a certification dated May 14, 2001,
that the Property is “Lead-Based Paint Free Housing” (the
“Certification”).  By execution hereof, Purchaser
acknowledges receipt of a copy of the Certification, the Lead-Based Paint
Disclosure Statement attached hereto as Exhibit H, and acknowledges
receipt of that certain Consent Agreement (the “Consent
Agreement”) by and among the United States Environmental Protection
Agency (executed December 19, 2001), the United States Department of Housing and
Urban Development (executed January 2, 2002), and AIMCO (executed December 18,
2001).  Because the Property has been certified as lead-based paint free,
Seller is not required under the Consent Agreement to remediate or abate any
lead-based paint condition at the Property prior to the Closing.  Purchaser
acknowledges and agrees that (1) after Closing, Purchaser and the Property shall
be subject to the Consent Agreement and the provisions contained herein related
thereto and (2) that Purchaser shall not be deemed to be a third party
beneficiary to the Consent Agreement.

[Remainder
of Page Intentionally Left Blank]


NOW, THEREFORE, the parties hereto have executed this
Contract as of the date first set forth above.

Seller:

ANGELES
INCOME PROPERTIES, LTD. II, a California limited partnership

 

By:      
ANGELES REALTY CORPORATION II, a California corporation, its managing general
partner

 

By:
/s/Brian J. Bornhorst 

Name:
Brian J. Bornhorst

Title:
Vice President

Accepted
and agreed, as to Section 13.29 only:

AIMCO
PROPERTIES, L.P., a Delaware limited partnership

By: AIMCO-GP, Inc., a Delaware corporation, its
General Partner

By:
 /s/ Brian J. Bornhorst
Name: Brian J. Bornhorst
Title: Vice
President

Purchaser:

LIGHTHOUSE
PROPERTY INVESTMENTS, LLC, a New Jersey
limited liability company

By:
/s/ Meyer Orbach
Name:  Meyer
Orbach
Title:     Managing Member