Document:

sfy_ex101-5122009.htm

    AMENDMENT
NO. 2

    TO
THE

    SWIFT
ENERGY COMPANY

    FIRST
AMENDED AND RESTATED

    2005
STOCK COMPENSATION PLAN

    

    SWIFT
ENERGY COMPANY, a Texas corporation (the “Company”), pursuant to the authority
granted in Section 14(b) of the Swift Energy Company First Amended and Restated
2005 Stock Compensation Plan (the “Plan”), hereby amends the Plan, effective as
of May 12, 2009, as follows:

     

    WITNESSETH:

     

    WHEREAS, the Plan provides for
the maximum aggregate number of shares of the Company’s common stock in respect
of which Awards may be granted under the 2005 Plan as 2,850,000 shares (“Plan
Maximum”); and

     

    WHEREAS, the Board of
Directors of the Company and the requisite number of the Company’s shareholders
have approved the Plan Maximum to be increased by up to an additional 1,250,000
shares:

     

    NOW, THEREFORE, the Plan shall
read as follows:

     

    
      	
              1.  

            	
              Existing
      Section 5(b) of the Plan shall remain in its entirety except
      that “2,850,000” be deleted and “up to 4,100,000” be substituted in its
      place.

            

    

     

    
      	
              2.  

            	
              Except
      as amended hereby, the Plan shall remain in full
  effect.

            

    

     

    IN WITNESS WHEREOF, the Plan
is amended effective as of the day and year first above written.

     

    
      	 
      	
              SWIFT
      ENERGY COMPANY

            
	 
      	
              By:

            	
              /s/
      Alton D. Heckaman, Jr.

            
	 
      	 
      	
              Alton
      D. Heckaman, Jr.

              Executive
      Vice President 

              and
      Chief Financial OfficerThe Knolls - Contract of Sale

Exhibit 10.75

 

 

 

 

 

PURCHASE AND SALE
CONTRACT

 

 

 

BETWEEN

 

 

 

CCIP KNOLLS,
L.L.C.,

a Delaware limited liability
company

 

 

 

AS SELLER

 

 

 

 

 

 

AND

 

 

 

 

HAMILTON ZANZE &
COMPANY,

a California
corporation

 

 

 

AS PURCHASER

 

 

The Knolls 
1510 Gatehouse
Circle S
Colorado Springs, Colorado 80904

 

TABLE OF
CONTENTS

 

 

	
 
	
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
	
6

	
 
	
3.3
	
Conduct
of Investigation
	
6

	
 
	
3.4
	
Purchaser
Indemnification
	
7

	
 
	
3.5
	
Property
Materials
	
8

	
 
	
3.6
	
Property
Contracts
	
10

	
 
	
ARTICLE
IV
	
TITLE
	
11

	
 
	
4.1
	
Title
Documents
	
11

	
 
	
4.2
	
Survey
	
11

	
 
	
4.3
	
Objection
and Response Process
	
12

	
 
	
4.4
	
Permitted
Exceptions
	
13

	
 
	
4.5
	
Existing
Deed of Trust
	
13

	
 
	
4.6
	
Subsequently
Disclosed Exceptions
	
14

	
 
	
4.7
	
Purchaser
Financing
	
14

	
 
	
ARTICLE
V
	
CLOSING
	
16

	
 
	
5.1
	
Closing
Date
	
16

	
 
	
5.2
	
Seller
Closing Deliveries
	
17

	
 
	
5.3
	
Purchaser
Closing Deliveries
	
18

	
 
	
5.4
	
Closing
Prorations and Adjustments
	
19

	
 
	
5.5
	
Post
Closing Adjustments
	
25

	
 
	
ARTICLE
VI
	
REPRESENTATIONS
AND WARRANTIES OF SELLER AND
	
 

	
 
	
 
	
PURCHASER
	
25

	
 
	
6.1
	
Seller’s
Representations
	
25

	
 
	
6.2
	
AS-IS
	
27

	
 
	
6.3
	
Survival
of Seller’s Representations
	
29

	
 
	
6.4
	
Definition
of Seller’s Knowledge
	
30

	
 
	
6.5
	
Representations
and Warranties of Purchaser
	
30

	
 
	
6.6
	
Definition
of Purchaser’s Knowledge
	
32

	
 
	
ARTICLE
VII
	
OPERATION
OF THE PROPERTY
	
32

	
 
	
7.1
	
Leases
and Property Contracts
	
32

	
 
	
7.2
	
General
Operation of Property
	
33

	
 
	
7.3
	
Liens
	
34

	
 
	
ARTICLE
VIII
	
CONDITIONS
PRECEDENT TO CLOSING
	
34

	
 
	
8.1
	
Purchaser’s
Conditions to Closing
	
34

	
 
	
8.2
	
Seller’s
Conditions to Closing
	
35

	
 
	
ARTICLE
IX
	
BROKERAGE
	
37

	
 
	
9.1
	
Indemnity
	
37

	
 
	
9.2
	
Broker
Commission
	
37

	
 
	
ARTICLE
X
	
DEFAULTS
AND REMEDIES
	
38

	
 
	
10.1
	
Purchaser
Default
	
38

	
 
	
10.2
	
Seller
Default
	
39

	
 
	
ARTICLE
XI
	
RISK
OF LOSS OR CASUALTY
	
41

	
 
	
11.1
	
Major
Damage
	
41

	
 
	
11.2
	
Minor
Damage
	
41

	
 
	
11.3
	
Closing
	
41

	
 
	
11.4
	
Repairs
	
42

	
 
	
ARTICLE
XII
	
EMINENT
DOMAIN
	
42

	
 
	
12.1
	
Eminent
Domain
	
42

	
 
	
ARTICLE
XIII
	
MISCELLANEOUS
	
43

	
 
	
13.1
	
Binding
Effect of Contract
	
43

	
 
	
13.2
	
Exhibits
and Schedules
	
43

	
 
	
13.3
	
Assignability
	
43

	
 
	
13.4
	
Captions
	
44

	
 
	
13.5
	
Number
and Gender of Words
	
44

	
 
	
13.6
	
Notices
	
44

	
 
	
13.7
	
Governing
Law and Venue
	
48

	
 
	
13.8
	
Entire
Agreement
	
48

	
 
	
13.9
	
Amendments
	
49

	
 
	
13.10
	
Severability
	
49

	
 
	
13.11
	
Multiple
Counterparts/Facsimile Signatures
	
49

	
 
	
13.12
	
Construction
	
49

	
 
	
13.13
	
Confidentiality
	
49

	
 
	
13.14
	
Time
of the Essence
	
50

	
 
	
13.15
	
Waiver
	
50

	
 
	
13.16
	
Attorneys’
Fees
	
51

	
 
	
13.17
	
Time
Zone/Time Periods
	
51

	
 
	
13.18
	
1031
Exchange
	
51

	
 
	
13.19
	
No
Personal Liability of Officers, Trustees or Directors of
	
 

	
 
	
 
	
Seller’s
Partners
	
52

	
 
	
13.20
	
Intentionally
Omitted
	
52

	
 
	
13.21
	
ADA
Disclosure
	
52

	
 
	
13.22
	
No
Recording
	
52

	
 
	
13.23
	
Relationship
of Parties
	
53

	
 
	
13.24
	
Dispute
Resolution
	
53

	
 
	
13.25
	
AIMCO
Marks
	
54

	
 
	
13.26
	
Non-Solicitation
of Employees
	
54

	
 
	
13.27
	
Survival
	
54

	
 
	
13.28
	
Multiple
Purchasers
	
55

	
ARTICLE
XIV
	
LEAD-BASED
PAINT DISCLOSURE
	
55

	
 
	
14.1
	
Disclosure
	
55

								

 

 

PURCHASE AND SALE CONTRACT

 

THIS
PURCHASE AND SALE CONTRACT (this "Contract") is entered
into as of the 12th day of May, 2009 (the "Effective
Date"), by and between CCIP KNOLLS, L.L.C., a Delaware limited
liability company, having an address at 4582 South Ulster Street Parkway, Suite
1100, Denver, Colorado 80237 ("Seller"), and HAMILTON ZANZE
& COMPANY, a California corporation, having a principal address at 37
Graham Street, Suite 200B, San Francisco, California 94129
("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 El Paso County, as more particularly
described in Exhibit A attached hereto and made a part hereof, and the
improvements thereon, commonly known as The Knolls and having an address at 1510
Gatehouse Circle S, Colorado Springs, CO 80904.

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 Fourteen Million One Hundred Fifty Thousand ($14,150,000)
Dollars, payable by Purchaser, as follows:

2.2.1    Within 2
Business Days following the Effective Date, Purchaser shall deliver to Fidelity
National Title Insurance Company, 8450 E. Crescent Parkway, Suite 410, Greenwood
Village, CO 80111, Attention: Valena Bloomquist, Telephone: (303) 244-9198; Fax:
(720) 489-7593 ("Escrow Agent" or "Title Insurer")
an initial deposit (the "Initial Deposit") of $141,500 by wire
transfer of immediately available funds ("Good Funds"). 

2.2.2    Within 1
Business Day after the day that the Feasibility Period expires, Purchaser shall
deliver to Escrow Agent an additional deposit (the "Additional
Deposit") of $141,500 by wire transfer of Good Funds.  

2.2.3    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 1:00 p.m. (Central Daylight Savings Time) on the
Closing Date.

2.2.4    Seller and Purchaser acknowledge and
agree that (i) the Fixtures and Tangible Personal Property are incidental to the
use and operation of the Property, and (ii) no portion of the Purchase Price is
allocable to the Fixtures and Tangible Personal Property. 

2.2.5    Any and all provisions of this
Contract which provide that the Deposit shall be nonrefundable are subject to
the other provisions of this Contract which set forth limited circumstances
under which the Deposit may become refundable which are the following: 
(i) Section 3.2 (which provides that the Initial Deposit is refundable
if the Contract is timely terminated on or before the expiration of the
Feasibility Period); (ii) Section 8.1 (which grants Purchaser the right
to terminate this Contract in the event that a condition precedent to
Purchaser’s obligation to close is not satisfied and to obtain a refund of the
Deposit); (iii) Section 10.2 (which grants Purchaser the right to
terminate this Contract on account of a default by Seller and recover the
Deposit); (iv) Section 11.1 (which grants Purchaser the right to
terminate this Contract as a result of Major Damage and recover the Deposit);
and (v) Section 12.1 (which grants Purchaser the right to terminate this
Contract as a result of the exercise of a right of eminent domain and recover
the Deposit).

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, which shall constitute the sole
instructions to Escrow Agent.  Escrow Agent shall execute the signature
page for Escrow Agent attached hereto solely with respect to 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.

 
The Feasibility Period begins on the Effective Date and continues up to and
including June 26, 2009 (the "Feasibility Period"). Subject to the
terms of Section 3.3 and 3.4 and the rights of Tenants under the Leases,
Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and
employees (collectively, "Consultants") shall, at no cost or
expense to Seller, have the right from and after the Effective Date 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 materialmens’ 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, Regional
Property Manager, and AIMCO (collectively, including Seller, "Seller's
Indemnified Parties"), from and against any and all damages, mechanics'
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 the 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, provided the
foregoing shall not require Purchaser to repair or remediate any pre-existing
conditions on the Property that are merely discovered by Purchaser in the course
of its investigations.  Purchaser shall maintain and cause its third party
consultants to 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 the earlier to occur of (i) Purchaser's or Purchaser's Consultants'
entry onto the Property, or (ii) the expiration of 5 days after the Effective
Date.  

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),
Seller agrees to make the documents set forth on Schedule 3.5 (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.

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 3.5, 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 listing the move-in date, monthly base rent payable,
lease expiration date and unapplied security deposit for each Lease (the
"Rent Roll").  Seller makes no representations or warranties
regarding the Rent Roll other than the express representation set forth in
Section 6.1.6.  

3.5.4    In addition to the items set forth on
Schedule 3.5, 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) 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 6.1.7.  

3.6       Property
Contracts.

 
On or before the expiration of the Feasibility Period, 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 the expiration of the Feasibility Period, there shall be no
Terminated Contracts and Purchaser shall assume all Property Contracts at the
Closing.  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.  Seller shall, at no cost
and expense to Seller, cooperate reasonably with Purchaser in Purchaser’s
efforts to obtain any Required Assignment Consent.  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. Additionally, in
respect of any commercial lease affecting the Property, including, without
limitation, any lease for laundry equipment, Seller shall, at no cost or expense
to Seller, cooperate reasonably with Purchaser in Purchaser’s efforts to obtain
on or before Closing any subordination, nondisturbance and attornment agreement
(“Subordination Agreement”) that may be required by any lender to
Purchaser as a condition to funding any loan to be secured by the Property. It
is understood and agreed by Seller and Purchaser that the receipt by Purchaser
of such Subordination Agreement from any such commercial tenant shall not be a
condition to Closing hereunder.

Article
IV
TITLE

4.1       Title
Documents.

 
Within 5 days after the Effective Date, Seller shall cause to be delivered to
Purchaser a standard form commitment ("Title Commitment") to
provide an extended coverage American Land Title Association owner’s title
insurance policy for the Property, using the current policy jacket customarily
provided by the Title Insurer, 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").  Seller shall be
responsible only for payment of the basic premium for the Title Policy. 
Purchaser shall be solely responsible for payment of all other costs relating to
procurement of the Title Commitment, the Title Policy, and any requested
endorsements.  

4.2      
Survey.

 
Subject to Section 3.5.2, within 5 days after the Effective Date, Seller
shall deliver to Purchaser or make available at the Property any existing survey
of the Property (the "Existing Survey").  Purchaser may, at
its sole cost and expense, order a new or updated survey of the Property either
before or after the Effective Date (such new or updated survey, together with
the Existing Survey, is referred to herein as the "Survey"). 

4.3       Objection and
Response Process.

 
On or before June 9, 2009 (the "Objection Deadline"), Purchaser
shall give written notice (the "Objection Notice") to the
attorneys for Seller of any matter set forth in the Title Documents or the
Survey to which Purchaser objects (the "Objections").  If
Purchaser fails to tender an Objection Notice on or before the Objection
Deadline, Purchaser shall be deemed to have approved and irrevocably waived any
objections to any matters covered by the Title Documents and the Survey. 
On or before June 16, 2009 (the "Response Deadline"), Seller may,
in Seller's sole discretion, give Purchaser notice (the "Response
Notice") of those Objections which Seller is willing to cure, if
any.  Seller shall be entitled to reasonable adjournments of the Closing
Date to cure the Objections.  If Seller fails to deliver a Response Notice
by the Response Deadline, Seller shall be deemed to have elected not to cure or
otherwise resolve any matter set forth in the Objection Notice.  If
Purchaser is dissatisfied with the Response Notice or the lack of Response
Notice, Purchaser may, as its exclusive remedy, exercise its right to terminate
this Contract prior to the expiration of the Feasibility Period in accordance
with the provisions of Section 3.2.  If Purchaser fails to timely
exercise such right, Purchaser shall be deemed to accept the Title Documents and
Survey with resolution, if any, of the Objections set forth in the Response
Notice (or if no Response Notice is tendered, without any resolution of the
Objections) and without any reduction or abatement of the Purchase Price.

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    All matters shown in the Title
Documents and the Survey, other than (a) those Objections, if any, which Seller
has agreed to cure pursuant to the Response Notice under Section 4.3, (b)
mechanics' liens and taxes due and payable with respect to the period preceding
Closing, (c) the standard exception regarding the rights of parties in
possession, which shall be limited to those parties in possession pursuant to
the Leases, and (d) the standard exception pertaining to taxes, which shall be
limited to taxes and assessments payable in the year in which the Closing occurs
and subsequent taxes and assessments; 

4.4.2    All Leases;

4.4.3    Applicable zoning and governmental
regulations and ordinances;

4.4.4    Any defects in or objections to title
to the Property, or title exceptions or encumbrances, arising by, through or
under Purchaser; and

4.4.5    The terms and conditions of this
Contract.

4.5       Existing Deed
of Trust.

 
It is understood and agreed that, whether or not Purchaser gives an Objection
Notice with respect thereto, any deeds of trust and/or mortgages which secure
the Note (collectively, the "Deed of Trust") shall not be deemed
Permitted Exceptions, whether Purchaser gives further
written notice of such or not, and shall be paid off, satisfied, discharged
and/or cured from proceeds of the Purchase Price at Closing.

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 materially adversely affects
title to the Property which was not disclosed on any version of 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, Seller
may, in Seller's sole discretion, notify Purchaser as to whether it is willing
to cure the New Exception.  If Seller elects to cure the New Exception,
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, Seller shall be
deemed to have elected not to cure the New Exception.  If Purchaser is
dissatisfied with Seller's response, or lack thereof, Purchaser may, as its
exclusive remedy elect either:  (i) to terminate this Contract, in which
event the Deposit shall be promptly returned to Purchaser or (ii) to 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 in accordance with the foregoing clause within 6 days
after the expiration of the New Exception Review Period, Purchaser shall be
deemed to have elected to approve and irrevocably waive any objections to the
New Exception.

4.7       Purchaser
Financing.

 
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.

4.8       Housing Assistance
Program Vouchers.

 
Purchaser recognizes and agrees that the Property is and may become the subject
of one or more Housing Assistance Payment voucher (tenant based) contracts
(collectively, the “HAP Contracts”), which regulate Section 8
payments to the Property under existing vouchers administered by the local
housing authorities (collectively, the “Housing Authority”).
Within 5 calendar days after the Effective Date, Seller agrees to deliver or
make available to Purchaser as part of the Materials, copies of the HAP
Contracts which are in Seller’s possession or reasonable control (subject to
Section 3.5.2).  At Closing, Purchaser either (a) shall assume all
obligations under the HAP Contracts and accept title to the Property subject to
the same, or (b) the existing HAP Contracts shall be terminated, and Purchaser
shall enter into replacement Housing Assistance Payment contracts which are
acceptable to the Housing Authority (either (a) or (b) meaning the “HAP
Assumption”).  No later than 15 days after the Effective Date,
Purchaser, at its sole cost and expense, shall submit all applications,
documents, information, materials, and fees to the Housing Authority, required
in order for the Housing Authority to approve Purchaser’s request for
pre-approval as an entity qualified to assume the HAP Contracts, and shall
diligently proceed using its best efforts to obtain such pre-approval as soon as
possible. Purchaser agrees to provide Seller with copies of such applications no
later than 5 Business Days after submittal thereof to the Housing
Authority.  Purchaser shall make such filings with the Housing Authority,
deliver such documents, pay such fees and costs (if any), and pay such reserves,
impounds, escrows and other amounts (if any) post-Closing as required by the
Housing Authority with respect to the HAP Contracts (which may include, but not be limited to, a change in ownership
form, name of the new owner, name of the property manager, evidence that title
to the applicable Property has transferred and an IRS form W-9). From and after
the Effective Date, Seller shall promptly deliver to Purchaser copies of any new
HAP Contracts entered into by Seller after the Effective Date with respect to
the Property.  The provisions of this Section 4.8 shall survive
Closing, and Purchaser shall accomplish the HAP Assumption after the Closing and
Seller shall have no obligations with respect to such HAP Assumption; provided,
however Seller agrees to reasonably cooperate with Purchaser to accomplish the
HAP Assumption (to the extent necessary) at no out of pocket cost to Seller.

Article V
CLOSING

5.1       Closing
Date.  

5.1.1   
The Closing shall occur on July 13, 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.  If required in order to
obtain any necessary consents or approvals pursuant to Section 8.2.6,
then Seller shall have the option, by delivering written notice to the Purchaser
not later than ten (10) Business Days prior to the Closing Date set forth in the
first sentence of this Section 5.1.1 above, to extend the Closing Date to a
Business Day not later than thirty (30) days following the Closing Date
specified in the first sentence of this paragraph above.

5.1.2   
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 Closing Date set forth in the first sentence of
Section 5.1.1 above, to adjourn the Closing Date, solely for the purpose
of finalizing Purchaser’s financing of the Property, to a Business Day not later
than thirty (30) days following the Closing Date set forth in the first sentence
of Section 5.1.1 above, provided that Purchaser shall, concurrently with
the delivery of Purchaser’s Adjournment Notice, deliver to Escrow Agent an
additional deposit of $141,500 (the “Adjournment Deposit”). 
The Adjournment Deposit shall be deemed part of the Deposit and shall be applied
toward the Purchase Price. 

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    Special
Warranty 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    Two (2)
originals of a General Assignment in the form attached as Exhibit D (the
"General Assignment").

5.2.4    Two (2)
originals of an Assignment of Leases and Security Deposits in the form attached
as Exhibit E (the "Leases Assignment").

5.2.5    A letter in the form attached hereto
as Exhibit F prepared and addressed by Purchaser, and
countersigned by Seller, to each of the vendors under the Terminated Contracts
informing them 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").

5.2.6    Seller's closing statement.

5.2.7    A 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.

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

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

5.2.10  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.

5.2.11  Intentionally Omitted. 

5.2.12  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.

5.3       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 2.2.3), 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), 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    Two (2)
countersigned counterparts of the General Assignment.

5.3.6    Two (2) countersigned counterparts 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.

5.3.8    The Vendor Terminations.

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

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

5.3.11  Any applicable transfer tax forms or conveyance
forms, including, without limitation, the Real Property Transfer Declaration
(TD-1000).

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 Closing
Date, Seller being charged or credited, as appropriate, for all of same
attributable to the period up to the Closing Date (and credited for any amounts
paid by Seller attributable to the period on or 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 Closing Date.  Seller shall prepare a proration schedule (the
"Proration Schedule") of the adjustments described in this
Section 5.4 and shall deliver such Proration Schedule to both Purchaser
and the Escrow Agent no later than three (3) Business Days prior to the
scheduled Closing Date.  

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 Closing Date and Purchaser shall pay all such expenses that
accrue from and after the Closing Date.

5.4.3    Utilities.  The final
readings and final billings for utilities will be made if possible as of the
Closing Date, in which case Seller shall pay all such bills as of the Closing
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 noon on 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 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 (other than the Terminated Contacts, if any); 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
Closing Date.  Purchaser shall receive all collected rent and income
attributable to dates from and after the Closing Date.  Seller shall
receive all collected rent and income attributable to dates prior to 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.  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 reasonably 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
reasonably 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.

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 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. 

5.4.7  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 11:59 p.m. the day prior to the Closing Date, after which time the risk of
loss shall pass to Purchaser and Purchaser shall be responsible for obtaining
its own insurance thereafter.

5.4.8    Employees.  All of
Seller's and Seller's manager's on-site employees shall have their employment at
the Property terminated as of the Closing Date.

5.4.9    Closing Costs.  Purchaser
shall pay any transfer (including, without limitation, the State documentary
fee), sales, use, gross receipts or similar taxes, the cost of recording any
instruments required to discharge any liens or encumbrances against the
Property, any fees for recording the Deed and any other conveyance forms
required to be recorded or filed under local law or custom, any premiums or fees
required to be paid by Purchaser with respect to the Title Policy pursuant to
Section 4.1 (other than the base premium for the Title Policy), and
one-half of the customary closing costs of the Escrow Agent.  Seller shall
pay the base premium for the Title Policy and one-half of the customary closing
costs of the Escrow Agent.  

5.4.10  Utility
Contracts.  If Seller has entered into an agreement for the purchase of
electricity, gas or other utility service for the Property or a group of
properties (including the Property) (a "Utility Contract"), or an
affiliate of Seller has entered into a Utility Contract, then, at the option of
Seller, either (a) Purchaser either shall assume the Utility Contract with
respect to the Property, or (b) the reasonably calculated costs of the Utility
Contract attributable to the Property from and after the Closing shall be paid
to Seller at the Closing and Seller shall remain responsible for payments under
the Utility Contract. 

5.4.11 
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 not less than 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 at Seller’s sole cost and expense, and (b) reasonably
maintain and preserve Seller's Property-Related Files and Records.  After
the expiration of the Records Hold Period, Purchaser shall have no obligations
with regard to Seller’s Property-Related Files and Records.  If Seller
desires to retain any of Seller's Property-Related Files and Records, Seller
shall provide Purchaser written notice no later than thirty (30) days prior to
the expiration of the Records Hold Period, of Seller’s intention to retain the
files, and Seller and Purchaser shall agree upon a time, prior to the expiration
of the Records Holds Period, for Seller to enter the Property (or such other
location where such records are then stored) and copy, at Seller’s sole cost and
expense, those of Seller's Property-Related Files and Records that Seller
desires to retain. 

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 60 days after Closing, or (b)
subject to such 60-day period, unless such items exceed $5,000.00 in magnitude
(either individually or in the aggregate).  

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 8.2.4, 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 8.2.4, 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 against the Property, which will adversely impact
Seller's ability to convey the Property;

6.1.4    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; 

6.1.5    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;

6.1.6    To Seller's
knowledge, the Rent Roll (as updated pursuant to Section 5.2.10) is
accurate in all material respects;

6.1.7    To Seller's
knowledge, the Property Contracts List (as updated pursuant to Section
5.2.12) is accurate in all material respects;

6.1.8    Seller has not, and, as of the
Closing, shall not have (A) made a general assignment for the benefit of
creditors, (B) filed any voluntary petition in bankruptcy or suffered the filing
of any involuntary petition by Seller’s creditors, (C) suffered the appointment
of a receiver to take possession of all, or substantially all, of Seller’s
assets, which remains pending as of such time, (D) suffered the attachment or
other judicial seizure of all, or substantially all, of Seller’s assets, which
remains pending as of such time, (E) admitted in writing its inability to pay
its debts as they come due, or (F) made an offer of settlement, extension or
composition to its creditors generally; and

6.1.9    To Seller’s knowledge, there are no
condemnation proceedings pending or threatened that would result in the taking
of any portion of the Property.  To Seller’s knowledge, Seller has not
received any written notice of any special assessment proceedings affecting the
Property.

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, and, except for Seller’s Representations, 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, its successors and assigns, and anyone claiming by,
through or under Purchaser, hereby fully releases Seller's Indemnified Parties
from, and irrevocably waives its right to maintain, any and all claims and
causes of action that it or they may now have or hereafter acquire against
Seller's Indemnified Parties with respect to any and all Losses arising from or
related to any defects, errors, omissions or other conditions affecting the
Property except, subject to the terms of set forth in Section 6.3 below,
for claims or causes of action arising from the fraud or misrepresentation of
Seller.  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, subject to Seller’s
Representations, 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, except for Seller’s Representations, 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, except, subject to the terms
of set forth in Section 6.3 below, for claims and liabilities arising
from or in any way connected with the fraud or misrepresentation of
Seller.  

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 $150,000 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 knowledge 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 Representative of the Seller and shall not be
construed to refer to the knowledge of any other partner, officer, director,
agent, employee or representative of the Seller, or any affiliate of the Seller,
or to impose upon such Designated Representative any duty to investigate the
matter to which such actual knowledge or the absence thereof pertains, or to
impose upon such Designated Representative any individual personal
liability.  As used herein, the term Designated Representative shall refer
to Kendra Miller, who is the Regional Property Manager handling this Property
(the "Regional Property Manager").  

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 corporation duly
organized, validly existing and in good standing under the laws of the State of
California.

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 and binding 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).

6.6       Definition
of Purchaser’s Knowledge.

 
Any representations and warranties made “to the knowledge of Purchaser” shall
not be deemed to imply any duty of inquiry.  For purposes of this Contract,
including, without limitation, the provisions of Section 6.5 above, the
term Purchaser’s “knowledge” shall mean and refer only to actual knowledge of
Kurt E. Houtkooper or David Nelson and shall not be construed to refer to the
knowledge of any other partner, officer, director, agent, employee or
representative of Purchaser, or any affiliate of Purchaser, or to impose upon
Kurt E. Houtkooper or David Nelson any duty to investigate the matter to which
such actual knowledge or the absence thereof pertains, or to impose upon Kurt E.
Houtkooper or upon David Nelson any individual personal liability.

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 (a) Seller may only enter into any such new Property
Contract if it is terminable on not more than thirty (30) days’ prior notice,
and (b) no new or renewed Leases shall have a term in excess of 1 year without
the prior written consent of Purchaser, which consent shall not be unreasonably
withheld, conditioned or delayed.   Seller shall terminate at or prior
to the Closing, at no cost or expense to Purchaser, any and all management
agreements affecting the Property.  Seller shall use commercially
reasonable efforts to deliver all apartment units which are vacant as of the
Closing Date (each, a "Vacant Unit") in Rent Ready Condition (as
hereinafter defined).  Not less than three (3) Business Days prior to
the Closing Date, Seller and Purchaser shall jointly
inspect the Property and shall mutually agree on a list of the Vacant Units,
which list shall specify those Vacant Units that are not in Rent Ready
Condition. At Closing, Purchaser shall receive a credit against the Purchase
Price in the amount of Five Hundred Dollars ($500) for each Vacant Unit which is
not in Rent Ready Condition as of the Closing. For purposes hereof, the term
"Rent Ready Condition" shall mean interior carpets have been
shampooed, interior walls have been freshly painted, kitchen appliances (and
water heaters and HVAC to the extent such items serve only the individual Vacant
Unit(s)) are in working order, and there is no material damage to the doors,
walls, ceilings, floors and windows inside such Vacant Units..

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 the Seller's sole 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.

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 in writing, which approval shall not be unreasonably withheld or
delayed.  If Purchaser approves any such subsequent lien or encumbrance,
the same shall be deemed a Permitted Encumbrance for all purposes
hereunder.  

Article
VIII
CONDITIONS PRECEDENT
TO CLOSING

8.1       Purchaser's
Conditions to Closing.

 
Without limiting the rights of Purchaser elsewhere provided for in this
Contract, 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 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; and

8.1.4    Neither
Seller nor Seller's member 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    There shall
not be pending or, to the knowledge of either Purchaser or Seller, any
litigation or threatened litigation which, if determined adversely, would
restrain, in all material respects,  the consummation of any of the
transactions contemplated by this Contract or declare illegal, invalid or
nonbinding any of the material covenants or material obligations of Seller.

Notwithstanding
anything to the contrary, there are no other conditions on Purchaser's
obligation to Close except as expressly set forth in this Section
8.1.  If any condition set forth in Sections 8.1.1, 8.1.3 or
8.1.4 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 or 8.1.5 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   
Intentionally omitted;

8.2.5    There shall not be pending or, to the
knowledge of either Purchaser or Seller, any litigation or threatened litigation
which, if determined adversely, 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;

8.2.6   
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  Regulation 14C of the Securities Exchange Act of 1934, as
amended (the "Information Statement").  Seller shall file the
Information Statement with the SEC after the Effective Date.  It shall be a
condition to Seller’s closing obligations hereunder that (a) either (i) Seller
has not received any notice of review on the Information Statement from the SEC
for a period of ten (10) days after the preliminary Information Statement has
been filed with the SEC or (ii) if Seller has received  notice of a review
from the SEC on the preliminary Information Statement,  and subsequently receives comments on the Information Statement, then 
Seller shall have submitted one or more revised preliminary Information
Statement(s) to the SEC  and satisfied all comments of the SEC and (b)
thereafter twenty (20) days have elapsed from the filing of the definitive
Information  Statement  with the SEC and the mailing 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.  

Article
IX
BROKERAGE

9.1      
Indemnity.

            
Seller represents and warrants to Purchaser that it has dealt only with Cushman
& Wakefield of Colorado, Inc., 1050 17th Street, Suite 1400,
Denver, Colorado 80265, Attention: Pat Stucker ("Broker") in
connection with this Contract.  Seller and Purchaser each represents and
warrants to the other that, other than 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.  Without limiting the generality of the foregoing, Seller hereby
acknowledges that the foregoing indemnity shall extend to any claim 
brought against Purchaser by CB Richard Ellis for a brokerage commission or
finder’s fee in connection with the transactions contemplated under this
Contract to the extent such claim arises from or is attributable to the acts or
omissions of Seller.

 

9.2       Broker
Commission.

 
If the Closing occurs, Seller agrees to pay Broker a commission according to the
terms of a separate contract.  Broker shall not be deemed a party or third
party beneficiary of this Contract.  As a condition to Seller's obligation
to pay the commission, Broker shall execute the signature page for Broker
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 or Additional Deposit (or any other deposit or payment required of
Purchaser hereunder), (b) deliver to the 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 2.2.3 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, prior to the Closing, defaults in its covenants, or obligations under
this Contract, including to sell the Property as required by this Contract 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
$35,000 in aggregate, provided, however, (i) if such default is solely as a
result of Seller’s failure to obtain by the Closing Date the consent of the
required number of members or limited partners, as the case may be, to
consummate the transactions contemplated herein and (ii) Purchaser is not
otherwise in default under this Contract and is ready, willing and able to
consummate the Closing on the Closing Date, then the amount of direct and actual
out-of-pocket expenses and costs that Purchaser may recover as a result of such
default shall not exceed $150,000 in the 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 90th day after the Closing Date; if Purchaser fails to file an action for
specific performance within 90 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 REPRESENTATIONS,
WARRANTIES, OR 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 REPRESENTATIONS, WARRANTIES, OR 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
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 $250,000, 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 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-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 $250,000,
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 this 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); 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, heirs 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 the
Seller.  Notwithstanding the foregoing, Purchaser may assign this Contract,
without first obtaining the prior written approval of the Seller, to one or more
entities so long as (a) (i) Purchaser is the managing member of, managing
general partner of or otherwise holds a controlling interest in the purchasing
entity(ies), (ii) the assignment is to a tenancy-in-common
structure in which Purchaser or one or more of its
affiliates are the sponsor, or (iii) Purchaser or an affiliate of
Purchaser serves as the asset manager of the purchasing
entity(ies), (b) Purchaser is not released from its liability hereunder, (c)
Purchaser provides written notice to Seller of any proposed assignment no later
than 10 days prior to the Closing Date and (d) in the event this Contract is
assigned to more than one entity, the assignees shall be deemed to be jointly
and severally liable with respect to the obligations of the Purchaser.

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:

 

Hamilton
Zanze & Company

37
Graham Street

Suite
200B

San
Francisco, California 94129

Attention: 
David Nelson
Telephone:  415-561-6800 x 110

Facsimile: 
415-561-6801
david@hamiltonzanze.com 

 

And:

 

Hamilton
Zanze & Company

37
Graham Street

Suite
200B

San
Francisco, California 94129

Attention: 
Kurt Houtkooper
Telephone:  415-561-6800 x 109

Facsimile: 
415-561-6801
kurt@hamiltonzanze.com 

 

 

with
a copy to:

 

Foley
& Lardner, LLP

555
South Flower Street

Suite
3500

Los
Angeles, CA 90071

Attention: 
Craig P. Wood, Esq.
Telephone:  213-972-4555

Facsimile: 
213-486-0065
cwood@foley.com 

 

To
Seller:

 

c/o
AIMCO

4582
South Ulster Street Parkway 

Suite
1100

Denver,
Colorado  80237

Attention:
Mark Reoch or Derik Hart

                       
Telephone: (303) 691-4337 

                       
Facsimile:  (303) 300-3261  

mark.reoch@aimco.com
or derik.hart@aimco.com 

 

And:

 

c/o
AIMCO

4582
South Ulster Street Parkway 

Suite
1100

Denver,
Colorado  80237

Attention: 
Mr. Harry Alcock

Telephone: 
303-691-4344

Facsimile: 
303-300-3282

harry.alcock@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: 
303-300-3260

john.spiegleman@aimco.com

 

and
a copy to:

 

Cushman
& Wakefield of Colorado, Inc.
1050 17th Street
Suite
1400
Denver, CO 80625
Attention: Pat Stucker

Telephone:
303-813-6407

Facsimile: 
303-813-6499
pat.stucker@cushwake.com 

 

and
a copy to:

 

Bryan
Cave LLP

1290
Avenue of the Americas

New
York, New York 10104

Attention:
Sandor 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:

           
Fidelity National Title Insurance
Company
                       
8450 E. Crescent
Parkway
                       
Suite
410
                       
Greenwood Village, Colorado
80111
                       
Attention:  Valena
Bloomquist
                       
Telephone:
303-244-9198
                       
Facsimile: 720-489-7593

 

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 Colorado 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 and accountants.  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.

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 substantially 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.

 
Except as otherwise expressly provided herein, 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 Colorado Springs, CO).  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.  

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
Delaware limited liability company, 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   Intentionally Omitted. 

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.  Nothing
contained in this Section 13.21 shall be deemed to limit or otherwise
modify the Seller’s Representations set forth in Section 6.1.4 above.

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 the 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 the 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 substantially
prevailing party and charge the cost of arbitration to the party which is
not the substantially 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.

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   Non-Solicitation of
Employees.

 
Prior to the expiration of the Feasibility Period, Purchaser acknowledges and
agrees that, without the express written consent of Seller, neither Purchaser
nor any of Purchaser's employees, affiliates or agents shall solicit any of
Seller's employees or any employees located at the Property (or any of Seller's
affiliates' employees located at any property owned by such affiliates) for
potential employment.

13.27   Survival.

 
Except for (a) all of the provisions of this Article XIII (other than Sections
13.18); (b) Sections 2.3, 3.3, 3.4, 3.5, 4.8, 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.  

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 its findings in a report with a certification
date of May 14, 2001, a copy of which has been previously provided to the
Purchaser (the "Report").  The Report certifies the Property
as lead-based paint free.  By execution hereof, Purchaser acknowledges
receipt of a copy of the Report, 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, the 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:

 

CCIP
KNOLLS, L.L.C., a Delaware limited liability company

 

By:
    CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES, LP SERIES B, a
Delaware limited partnership, its member

 

By:   
CONCAP EQUITIES, INC., a Delaware corporation, its general partner

 

By: 
/s/Brian J. Bornhorst

Name: 
Brian J. Bornhorst

Title: 
Vice President

 

 

Purchaser:

 

HAMILTON
ZANZE & COMPANY,

a
California corporation

 

 

 

By: 
/s/Tony Zanze

Name:
 Tony Zanze

Title:
CFO

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