Document:

Exhibit 10.41

 

 

 

PURCHASE AND SALE
CONTRACT

 

 

BETWEEN

 

 

 

LANDMARK (NC), LLC,

 

a Delaware limited liability
company

 

 

 

 

 

AS SELLER

 

 

 

 

AND

 

 

 

 

POLLACK PARTNERS,
LLC

 

a Georgia limited liability
company

 

 

 

AS PURCHASER

 

 

LANDMARK APARTMENTS

 

 

	
Article I
	
DEFINED
TERMS
	
1

	
Article
II
	
PURCHASE
AND SALE, PURCHASE PRICE & DEPOSIT
	
1

	
2.1
	
Purchase
and Sale
	
1

	
2.2
	
Purchase
Price and Deposit
	
1

	
2.3
	
Escrow
Provisions Regarding Deposit
	
2

	
Article
III
	
FEASIBILITY
PERIOD
	
3

	
3.1
	
Feasibility
Period
	
3

	
3.2
	
Expiration
of Feasibility Period
	
3

	
3.3
	
Conduct
of Investigation
	
3

	
3.4
	
Purchaser
Indemnification
	
4

	
3.5
	
Property
Materials
	
4

	
3.6
	
Property
Contracts
	
5

	
Article
IV
	
TITLE
	
6

	
4.1
	
Title
Documents
	
6

	
4.2
	
Survey
	
6

	
4.3
	
Objection
and Response Process
	
6

	
4.4
	
Permitted
Exceptions
	
7

	
4.5
	
Assumed
Encumbrances
	
7

	
4.6
	
Subsequently
Disclosed Exceptions
	
10

	
4.7
	
Purchaser
Financing
	
10

	
Article
V
	
CLOSING
	
10

	
5.1
	
Closing
Date
	
10

	
5.2
	
Seller
Closing Deliveries
	
11

	
5.3
	
Purchaser
Closing Deliveries
	
12

	
5.4
	
Closing
Prorations and Adjustments
	
12

	
5.5
	
Post
Closing Adjustments
	
15

	
Article
VI
	
REPRESENTATIONS
AND WARRANTIES OF SELLER AND PURCHASER
	
15

	
6.1
	
Seller’s
Representations
	
15

	
6.2
	
AS-IS
	
17

	
6.3
	
Survival
of Seller’s Representations
	
18

	
6.4
	
Definition
of Seller’s Knowledge
	
19

	
6.5
	
Representations
and Warranties of Purchaser
	
19

	
Article VII
	
OPERATION
OF THE PROPERTY
	
20

	
7.1
	
Leases
and Property Contracts
	
20

	
7.2
	
General
Operation of Property
	
20

	
7.3
	
Liens
	
20

	
Article
VIII
	
CONDITIONS
PRECEDENT TO CLOSING
	
21

	
8.1
	
Purchaser’s
Conditions to Closing
	
21

	
8.2
	
Seller’s
Conditions to Closing
	
21

	
Article
IX
	
BROKERAGE
	
22

	
9.1
	
Indemnity
	
22

	
9.2
	
Broker
Commission
	
22

	
Article
X
	
DEFAULTS
AND REMEDIES
	
23

	
10.1
	
Purchaser
Default
	
23

	
10.2
	
Seller
Default
	
23

	
Article
XI
	
RISK
OF LOSS OR CASUALTY
	
24

	
11.1
	
Major
Damage
	
24

	
11.2
	
Minor
Damage
	
24

	
11.3
	
Closing
	
25

	
11.4
	
Repairs
	
25

	
Article
XII
	
EMINENT
DOMAIN
	
25

	
12.1
	
Eminent
Domain
	
25

	
Article
XIII
	
MISCELLANEOUS
	
25

	
13.1
	
Binding
Effect of Contract
	
25

	
13.2
	
Exhibits
and Schedules
	
26

	
13.3
	
Assignability
	
26

	
13.4
	
Captions
	
26

	
13.5
	
Number
and Gender of Words
	
26

	
13.6
	
Notices
	
26

	
13.7
	
Governing
Law and Venue
	
28

	
13.8
	
Entire
Agreement
	
28

	
13.9
	
Amendments
	
28

	
13.10
	
Severability
	
29

	
13.11
	
Multiple
Counterparts/Facsimile Signatures
	
29

	
13.12
	
Construction
	
29

	
13.13
	
Confidentiality
	
29

	
13.14
	
Time
of the Essence
	
29

	
13.15
	
Waiver
	
29

	
13.16
	
Attorneys’
Fees
	
30

	
13.17
	
Time
Zone/Time Periods
	
30

	
13.18
	
Intentionally
Omitted
	
30

	
13.19
	
No
Personal Liability of Officers, Trustees or Directors of Seller’s
Partners
	
30

	
13.20
	
No
Exclusive Negotiations
	
30

	
13.21
	
ADA
Disclosure
	
30

	
13.22
	
No
Recording
	
30

	
13.23
	
Relationship
of Parties
	
31

	
13.24
	
Dispute
Resolution
	
31

	
13.25
	
AIMCO
Marks
	
31

	
13.26
	
Non-Solicitation
of Employees
	
31

	
13.27
	
Survival
	
31

	
13.28
	
Multiple
Purchasers
	
32

	
Article
XIV
	
LEAD–BASED
PAINT DISCLOSURE
	
32

	
14.1
	
Disclosure
	
32

	
14.2
	
Consent
Agreement
	
32

PURCHASE AND SALE CONTRACT

THIS
PURCHASE AND SALE CONTRACT (this “Contract”) is entered
into as of the 19th day of May, 2009 (the “Effective
Date”), by and between LANDMARK (NC), LLC, a Delaware limited
liability company, having an address at 4582 South Ulster Street Parkway, Suite
1100, Denver, Colorado 80237 (“Seller”), and POLLACK
PARTNERS, LLC a Georgia limited liability company, having a principal
address at 5605 Glenridge Drive, Suite 775, One Premier Plaza, Atlanta,
Georgia 30342 (“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 Raleigh, North Carolina, as more
particularly described in Exhibit A attached hereto and made a part
hereof, and the improvements thereon, commonly known as Landmark Apartments.

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
$13,000,000, payable by Purchaser, as follows:

2.2.1       
Within 2 Business Days following the Effective Date, Purchaser shall
deliver to Stewart Title Guaranty, c/o Wendy Howell, 1980 Post Oak Boulevard,
Suite 610, Houston, Texas 77056, Telephone: (713) 625-8161, Facsimile:
(713) 552-1703, Email: whowell@stewart.com (“Escrow Agent” or
“Title Insurer”) an initial deposit (the “Initial
Deposit”) of $100,000 by wire transfer of immediately available funds
(“Good Funds”).

2.2.2       
On or before the day that is 2 Business Days after the Feasibility Period
expires, Purchaser shall deliver to Escrow Agent an additional deposit (the
“Additional Deposit”) of $100,000 by wire transfer of Good
Funds.

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

2.2.4       
The balance of the Purchase Price for the Property, as adjusted for
proration pursuant to Section 5.4 below, shall be paid to and received by
Escrow Agent by wire transfer of Good Funds no later than 10:00 a.m. on the
Closing Date.

2.3             
Escrow Provisions Regarding Deposit.  

2.3.1       
Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract.  Escrow Agent
shall invest the Deposit in federally insured interest-bearing bank accounts (or
such other accounts as may be approved by Purchaser and Seller) and all interest
and income thereon shall become part of the Deposit and shall be remitted to the
party entitled to the Deposit pursuant to this Contract.

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

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

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

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

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

Article
III
FEASIBILITY PERIOD

3.1             
Feasibility Period.  Subject to the terms of
Sections 3.3 and 3.4 and the rights of Tenants under the
Leases, from the Effective Date to and including the date which is 45 days after
the Effective Date (the “Feasibility Period”), Purchaser, and its
agents, contractors, engineers, surveyors, attorneys, and employees
(collectively, “Consultants”) shall, at no cost or expense to
Seller, have the right from time to time to enter onto the Property to conduct
and make any and all customary studies, tests, examinations, inquiries,
inspections and investigations of or concerning the Property, review the
Materials and otherwise confirm any and all matters which Purchaser may
reasonably desire to confirm with respect to the Property and Purchaser’s
intended use thereof (collectively, the “Inspections”).

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

3.3             
Conduct of Investigation.  Purchaser shall not permit
any mechanics’ or materialmen’s liens or any other liens to attach to the
Property by reason of the performance of any work or the purchase of any
materials by Purchaser or any other party in connection with any Inspections
conducted by or for Purchaser.  Purchaser shall give reasonable advanced
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, materialmen’s liens, liabilities, penalties, interest, losses, demands,
actions, causes of action, claims, costs and expenses (including reasonable
attorneys’ fees, including the cost of in-house counsel and appeals)
(collectively, “Losses”) arising from or related to Purchaser’s or
its Consultants’ entry onto the Property and any Inspections or other acts by
Purchaser or Purchaser’s Consultants with respect to the Property during the
Feasibility Period or otherwise; provided, that Purchaser shall not be liable
for Losses incurred by Seller resulting solely from the mere discovery by
Purchaser of defects in the Property.

3.4.2    Notwithstanding
anything in this Contract to the contrary, Purchaser shall not be permitted to
perform any invasive tests on the Property without Seller’s prior written
consent, which consent may be withheld in Seller’s sole discretion. 
Further, Seller shall have the right, without limitation, to disapprove any and
all entries, surveys, tests (including, without limitation, a Phase II
environmental study of the Property), investigations and other matters that in
Seller’s reasonable judgment could result in any injury to the Property or
breach of any contract, or expose Seller to any Losses or violation of
applicable law, or otherwise adversely affect the Property or Seller’s interest
therein.  Purchaser shall use reasonable efforts to minimize disruption to
Tenants in connection with Purchaser’s or its Consultants’ activities pursuant
to this Section.  No consent by Seller to any such activity shall be deemed
to constitute a waiver by Seller or assumption of liability or risk by
Seller.  Purchaser hereby agrees to restore, at Purchaser’s sole cost and
expense, the Property to the same condition existing immediately prior to
Purchaser’s exercise of its rights pursuant to this Article III. 
Purchaser 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) to 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) 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, which rent roll is that which Seller uses in the ordinary course
of operating the Property (the “Rent Roll”) together with, to the
extent available, copies of rent rolls for the three (3) calendar months prior
to the Effective Date.  Seller makes no representations or warranties
regarding the Rent Roll other than the express representation set forth in
Section 6.1.5.

3.5.4       
In addition to the items set forth on Schedule 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 6.1.6.  

3.6             
Property Contracts.  On or before 10 days after
the Effective Date, Purchaser may deliver written notice to Seller (the
“Property Contracts Notice”) specifying (i) any Property
Contracts which Purchaser desires to terminate at the Closing (the
“Terminated Contracts”) and those Terminated Contracts for which
Purchaser wants Seller to pay any applicable penalty, premium, or damages,
including liquidated damages, for cancellation (the “Termination
Fees”) and (ii) those Property Contracts not being terminated for
which Purchaser wants Seller to obtain a consent of the vendor to the
assignment.  On or before 10 days after Seller’s receipt of the Property Contracts Notice, Seller may,
in Seller’s sole discretion, give Purchaser notice of those Termination Fees and
those Vendor Assignment Consents which Seller is willing to pay/obtain and the
additional conditions, if any, that Seller requires in order to do so.  If
Purchaser is dissatisfied with the Seller’s response or if Seller fails to
provide a response, Purchaser may, as its sole 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 terms of Seller’s
response and without any reduction or abatement of the Purchase Price.

Article
IV
TITLE

4.1             
Title Documents.  Within 10 days after the Effective
Date, Seller shall cause to be delivered to Purchaser a standard form commitment
or preliminary title report (“Title Commitment”) to provide an
American Land Title Association owner’s title insurance policy for the Property,
using the current policy jacket customarily provided by the 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 3 Business 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 the date
which is 35 days after the Effective Date (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 and 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 40 days after the Effective
Date (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.  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. 
All mortgage and mechanics’ liens caused by Seller encumbering the Property
other than the Assumed Encumbrance to be satisfied from proceeds of the sale or
insured over by Title Insurer and, if Seller does not
otherwise authorize Escrow Agent to do so, Purchaser shall have the right to
direct Escrow Agent to do so.

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    The Assumed
Encumbrances;

4.4.4    Applicable zoning
and governmental regulations and ordinances;

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

4.4.6    The terms and
conditions of this Contract.

4.5             
Assumed Encumbrances.

4.5.1    Purchaser
recognizes and agrees that, in connection with a loan (the “Loan”)
made to Seller by or currently held by Federal Home Loan Mortgage Corporation
(the “Lender”), the Property presently is encumbered by a
multifamily mortgage/deed of trust dated March 11, 2009 and recorded March
13, 2009 (the “Assumed Deed of Trust”) and certain other security
and related documents in connection with the Loan (collectively, the
“Assumed Encumbrances”).  The Loan is evidenced by that
certain promissory note dated March 11, 2009 in the stated principal amount of
$8,850,000 (the “Note,” and together with the Assumed Deed
of Trust, the Assumed Encumbrances and any other documents executed by Seller in
connection with the Loan or otherwise listed under the heading “Loan Documents”
on Schedule 3.5
hereto, the “Assumed Loan Documents”), executed by Seller and
payable to the order of the Lender.  Within 5 days after the Effective
Date, Seller agrees that it will make available to Purchaser (in the same manner
in which Seller is permitted to make the Materials available to Purchaser under
Section 3.5.1) copies of the
Assumed Loan Documents as well as the contact information for the servicer, if
any, of the Loan and the Lender, in each case to the extent in Seller’s
possession or reasonable control (subject to Section 3.5.2).

4.5.2    Purchaser agrees
that, at the Closing, (a) Purchaser shall assume Seller’s obligations under the
Note and all of the other Assumed Loan Documents and accept title to the
Property subject to the Deed of Trust and the Assumed Encumbrances, and
(b) the Lender shall release Seller, as well as any guarantors and other
obligated parties under the Assumed Loan Documents, from all obligations under
the Assumed Loan Documents (and any related guarantees
or letters of credit), including, without limitation, any obligation to make
payments of principal and interest under the Note upon terms that such releases
are commonly provided by Lender in connection with assumptions of debt Lender
holds or as otherwise provided for in the Assumed Loan Documents (collectively,
the foregoing (a) and (b) referred to herein as the “Loan Assumption and
Release”).  Purchaser acknowledges and agrees that (x) certain of
the provisions of the Assumed Loan Documents may have been negotiated for the
exclusive benefit of Seller, AIMCO or their respective affiliates (the
“Specific AIMCO Provisions”), and (y) unless Lender otherwise
agrees in Lender’s sole and arbitrary discretion, Purchaser will not be
permitted to assume the benefit of the Specific AIMCO Provisions and the same
shall be of no further force or effect from and after the Closing Date. 

4.5.3    Purchaser further
acknowledges that the Assumed Loan Documents require the satisfaction by
Purchaser of certain requirements as set forth therein to allow for the Loan
Assumption and Release.  Purchaser, at its sole cost and expense will use
its commercially reasonable efforts to satisfy the requirements set forth in the
Assumed Loan Documents to allow for the Loan Assumption and Release, including,
without limitation, submitting a complete application to Lender for assumption
of the Loan together with all documents and information required in connection
therewith (the “Loan Assumption Application”).  Purchaser
agrees to provide Seller with a copy of the Loan Assumption Application
(exclusive of any financial information relating to any individual),
concurrently with its submission to Lender.  Purchaser acknowledges and
agrees that Purchaser is solely responsible for the preparation and submittal of
the Loan Assumption Application, including the collection of all materials,
documents, certificates, financials, signatures, and other items required to be
submitted to Lender in connection with the Loan Assumption
Application.  

4.5.4    Purchaser shall
comply with Lender’s assumption guidelines in connection with the Loan
Assumption and Release.  Purchaser shall be responsible at its sole cost
and expense for promptly correcting and re-submitting any deficiencies noted by
Lender in connection with the Loan Assumption Application.  Purchaser also
shall provide Seller with a copy of any correspondence from Lender with respect
to the Loan Assumption Application promptly after receipt of such correspondence
from Lender.  Purchaser acknowledges that Lender’s assumption guidelines
may not be consistent with the provisions of the Assumed Loan Documents
concerning the Loan Assumption and Release.  Purchaser shall coordinate
with the Lender to comply with the appropriate provisions of both the Assumed
Loan Documents and Lender assumption guidelines in order to allow for the Loan
Assumption and Release.

4.5.5    Purchaser shall
pay all fees and expenses (including, without limitation, all servicing fees and
charges, transfer fees, assumption fees, title fees, endorsement fees, and other
fees to release Seller of all liability under the Loan) imposed or charged by
the Lender or its counsel (such fees and expenses collectively being referred to
as the “Lender Fees”), in connection with the Loan Assumption
Application and the Loan Assumption and Release. 

4.5.6    Additionally,
Purchaser shall be responsible for (a) replacing (and increasing to the extent
required by Lender) all reserves, impounds and other accounts required to be
maintained in connection with the Loan, and (b) funding any additional reserves,
impounds or accounts required by Lender to be maintained by Purchaser in
connection with the Loan after the Loan Assumption and Release (the foregoing
amounts in (a) and (b) collectively referred to herein
as the “Required Loan Fund Amounts”).  Any existing reserves,
impounds and other accounts required to be replaced by Purchaser pursuant to the
foregoing sentence shall be released in Good Funds to Seller at the
Closing.  

4.5.7    Purchaser agrees
promptly to deliver to the Lender all documents and information required by the
Assumed Loan Documents, and such other information or documentation as the
Lender reasonably may request, including, without limitation, financial
statements, income tax returns and other financial information for Purchaser and
any required guarantor.  Seller agrees that it will cooperate with
Purchaser and Lender, at no cost or expense to Seller, in connection with
Purchaser’s application to Lender for approval of the Loan Assumption and
Release.  

4.5.8    Purchaser shall
order a Phase I Environmental study (prepared by an environmental engineer
reasonably acceptable to Seller and Lender), and covenants that such Phase I
Environmental study shall be delivered to Seller and Lender no later than 10
days prior to the Closing Date in connection with and as a precondition to the
Loan Assumption and Release.

4.5.9    Notwithstanding
anything to the contrary in this Section 4.5, Purchaser shall have until the date that
is 45 days after the Effective Date (such date being hereinafter referred to as
the “Loan Approval Deadline” and the period from the Effective
Date of this Agreement until and including the Loan Approval Deadline being
hereinafter referred to as the “Loan Approval Period”) to obtain
Lender’s approval of the Loan Assumption and Release, each upon terms and
conditions substantially similar to those currently in the Assumed Loan
Documents and/or otherwise reasonably acceptable to Purchaser, in Purchaser’s
sole discretion; provided, however, that Purchaser shall use good faith,
commercially reasonable efforts to obtain Lender’s approval of the Loan
Assumption and Release as soon as possible.  Provided
Purchaser is not in default under the terms of this Contract and Purchaser has
not yet obtained Lender’s approval of the Loan Assumption and Release as
provided above, Purchaser shall be permitted to extend the Loan Approval
Deadline two times for up to an additional 15 days each time by delivering
no later than the then scheduled Loan Approval Deadline (i) to Escrow Agent, an
additional deposit in the amount of $25,000.00 (with respect to each such
extension), which such amount or amounts, as the case may be, shall constitute
part of the “Deposit” for all purposes of this Contract; and (ii) to Seller,
written notice of such election.  Provided that Purchaser acts in good
faith and uses commercially reasonable efforts to obtain the Loan Assumption and
Release, on or prior to the expiration of the Loan Approval Deadline, Purchaser
may, by delivery of written notice to Seller and Escrow Agent that Purchaser has
not obtained the consent of the Lender to the Loan Assumption and Release,
terminate this Contract in which event this Contract shall automatically
terminate and be of no further force and effect, subject to the Survival
Provisions and Escrow Agent shall forthwith return the Deposit to
Purchaser.  If Purchaser fails to deliver on or before the Loan Approval
Deadline such notice, Purchaser’s right to terminate under this Section
4.5.9 shall be permanently
waived, this Contract shall remain in full force and effect and the Deposit
shall be non-refundable except as otherwise expressly provided in this
Contract.  

Anything
contained in this Section 4.5 to the
contrary notwithstanding, in the event that Purchaser fails to deliver to Seller
on or before 15 days after the Effective Date evidence reasonably satisfactory to Seller that Purchaser has (i)
submitted the completed Loan Assumption Application to Lender, and (ii) ordered
the Phase I environmental study described in Section 4.5.8, Seller may at any time prior to
Purchaser’s delivery of such evidence, by written notice delivered to Purchaser
and Escrow Agent, terminate this Contract, in which event this Contract shall
automatically terminate and be of no further force and effect, subject to the
Survival Provisions and Escrow Agent shall return the Deposit to Purchaser.

 

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 (i) any version of or update to
the Title Commitment delivered to Purchaser during the Feasibility Period or
(ii) provided that Purchaser obtained an updated survey prior to the
expiration of the Feasibility Period, such updated survey (the “New
Exception”), Purchaser shall have a period of 5 business 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 sentence 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 (other than the Assumed Loan, if assumed) shall not be
a contingency to the Closing.  Purchaser may elect, by written notice
delivered to Seller on or before the Business Day immediately following the
expiration of the Feasibility Period, to require Seller to prepay the Loan at
Closing, in which event Purchaser shall be responsible for the payment at
Closing of any prepayment penalties or other costs (other than the repayment of
principal and accrued, but unpaid interest) required in connection with such
prepayment.

Article
V
CLOSING

5.1             
Closing Date.  The Closing shall occur on the date
which is the later of (i) 30 days after the expiration of the Feasibility
Period, and (ii) 15 days after the Loan Approval Deadline (as the same may be
extended) at the time set forth in Section 2.2.4, (herein as 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.  Notwithstanding
the foregoing to the contrary, Seller shall have the option, by delivering written notice to Purchaser, to extend
the Closing Date to the last Business Day of the month in which the Closing Date
otherwise would occur pursuant to the preceding sentence, in order to obtain the
Loan Assumption and Release.  Further, the Closing Date may be
extended without penalty on the mutual consent (which shall not be unreasonably
withheld or delayed) of Purchaser and Seller to a date not later than forty five
(45) days following the Closing Date specified in the first sentence of this
paragraph above (or, if applicable, as extended by Seller pursuant to the second
sentence of this paragraph) in order to finalize the drafting with Lender and
Lender’s counsel of all documents necessary or desirable to accomplish the Loan
Assumption and Release.    

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

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

5.2.5       
Seller’s closing statement.

5.2.6       
Such title affidavits or indemnities, in form reasonably acceptable to
Seller, as may be reasonably and customarily required by title companies in the
market in which the Property is located from sellers in similar
transactions.  

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

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

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

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

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

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 and, if applicable,
the Loan Balance), plus or minus the adjustments or prorations required by this
Contract.

5.3.2       
Such title affidavits or indemnities, in form reasonably acceptable to
Purchaser, as may be reasonably and customarily required by title companies in
the market in which the Property is located from purchasers in similar
transactions.

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

5.3.4       
Purchaser’s closing statement.

5.3.5       
A countersigned counterpart of the General Assignment.

5.3.6       
A countersigned counterpart of the Leases Assignment.

5.3.7       
Intentionally Omitted.

5.3.8       
Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Purchaser’s
authority to consummate this transaction.

5.3.9       
All documents, instruments, guaranties, Lender Fees, Required Loan Fund
Amounts, and other items or funds reasonably required by the Lender to cause the
Loan Assumption and Release.

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 deliver it
to Purchaser not less than 3 days prior to Closing.

5.4.2    Operating
Expenses.  All of the operating, maintenance, taxes (other than
real estate taxes), and other expenses incurred in operating the Property that
Seller customarily pays, including without limitation, laundry bonus money,
remodeling allowances or other upfront payments relating to a laundry lease,
cable television bonus money, door fees or other upfront payments relating to a
cable television contract, 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 105% of the figures from the preceding year
(assuming payment at the earliest time to allow for the maximum possible
discount).  The proration of real property taxes or installments of
assessments shall be final and not subject to re-adjustment after
Closing.

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

5.4.6       
Leases.  

5.4.6.1           
All collected rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases), income and expenses from
any portion of the Property shall be prorated as of the 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 with Seller in
connection with all efforts by Seller to collect such Uncollected Rents;
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,
pet or other refundable deposits paid by any of the Tenants to secure their
respective obligations under the Leases, together, in all cases, with any
interest payable to the Tenants thereunder as may be required by their
respective Tenant Lease or state law (the “Tenant Security Deposit
Balance”).  Any cash (or cash equivalents) held by Seller which
constitutes the Tenant Security Deposit Balance shall be retained by Seller in
exchange for the foregoing credit against the Purchase Price and shall not be
transferred by Seller pursuant to this Contract (or any of the documents
delivered at Closing), but the obligation with respect to the Tenant Security
Deposit Balance nonetheless shall be assumed by Purchaser.  The Tenant
Security Deposit Balance shall not include any non-refundable deposits or fees
paid by Tenants to Seller, either pursuant to the Leases or otherwise.

5.4.7       
Existing Loan.  Seller shall be responsible for all
principal required to be paid under the terms of the Note prior to Closing,
together with all interest accrued under the Note prior to Closing, all of which
may be a credit against the Purchase Price as provided in
Section 2.2.3. 
Purchaser shall be responsible for all Lender Fees and all other fees,
penalties, interest and other amounts due and owing under the Assumed Loan
Documents as a result of the Loan Assumption and Release.  As set forth in
Section 4.5.3, any existing
reserves, impounds and other accounts maintained in connection with the Loan and
required to be replaced by Purchaser, shall be released in Good Funds to Seller
at Closing.  

5.4.8       
Insurance.  No proration shall be made in relation to
insurance premiums and insurance policies will not be assigned to
Purchaser.  Seller shall have the risk of loss of the Property until 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.

5.4.9       
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.

5.4.10    Closing
Costs.  Purchaser shall pay any premiums or fees required to be
paid by Purchaser with respect to the Title Policy pursuant to Section 4.1, and one-half of the escrow fees and
customary closing costs of the Escrow Agent.  Seller shall pay any
transfer, mortgage assumption, sales, use, gross receipts or similar taxes, the
cost of recording any instruments required to discharge any liens or
encumbrances against the Property, the base premium for the Title Policy to the
extent required by Section 4.1, and
one-half of the escrow fees and customary closing costs of the Escrow Agent.

5.4.11   
Intentionally Omitted.  

5.4.12   
Possession.  Possession of the Property, subject to
the Leases, Property Contracts, other than Terminated Contracts, and Permitted
Exceptions, shall be delivered to Purchaser at the Closing upon release from
escrow of all items to be delivered by Purchaser pursuant to Section
5.3.  To the extent reasonably
available to Seller, originals or copies of the Leases and Property Contracts,
lease files, warranties, guaranties, operating manuals, keys to the property,
and Seller’s books and records (other than proprietary information)
(collectively, “Seller’s Property-Related Files and Records”)
regarding the Property shall be made available to Purchaser at the Property
after the Closing.  Prior to Closing, Seller shall be entitled to copy any
of Seller’s Property-Related Files and Records, and, following Closing, shall be
entitled to retain such copies for Seller’s own use.  With respect to any
of Seller’s Related Files that are not copied pursuant to the foregoing
sentence, if during the 1 year period following the Closing Date Purchaser
desires to dispose of Seller’s Property-Related Files and Records, Purchaser
will first provide Seller prior written notice (the “Records Disposal
Notice”).  Purchaser agrees to provide and allow Seller reasonable
access to Seller’s Property-Related Files and Records during such 1 year period
for purposes of inspection and copying thereof, and reasonably maintain and
preserve Seller’s Property-Related Files and Records.  Seller shall have a
period of 30 days after receipt of the Records Disposal Notice to enter the
Property (or such other location where such records are then stored) and remove
or copy 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 any approvals required from Lender for the Loan Assumption and
Release (and successful filing with the Securities Exchange Commission of an
informational statement relating to the sale), has 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 (including contracts evidencing Seller indebtedness) 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.  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 of any
material default by Seller under any of the Property Contracts that will not be
terminated on the Closing Date;

6.1.5       
To Seller’s knowledge, (i) the Rent Roll (as updated pursuant to
Section 5.2.9) is
accurate in all material respects and (ii) except as may be disclosed by
the Title Documents, no party other than those listed on the Rent Roll have any
rights of possession in the Property;

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

6.1.7       
To Seller’s knowledge, Seller has not received any written notice of any
pending or threatened condemnation action with respect to all or any portion of
the Property;

6.1.8       
To Seller’s knowledge, as of the Closing there are no liens affecting the
personal property to be conveyed to Purchaser, save and except security given
for the Assumed Encumbrances;

6.1.9       
To Seller’s knowledge, there are no outstanding options to purchase or
rights of first refusal with respect to all or any part of the Property and, as
of Closing, there will be no outstanding contracts with others for the sale or
mortgage of all or any part of the Property except for the Leases and the
Assumed Encumbrance; 

6.1.10    To Seller’s
knowledge: (A) no hazardous or toxic materials or other substances regulated by
applicable federal or state environmental laws are stored by Seller or otherwise
located on, in or under the Property in quantities or in a manner which violate
applicable laws governing such materials or substances, and (B) the Property is
not used by Seller for the storage, treatment, generation or manufacture of any
hazardous or toxic materials or other substances in a manner which would
constitute a violation of applicable federal or state environmental
laws;

6.1.11    To Seller’s
knowledge, Seller has received no written notice of any claims, demands, suits
or actions arising out of or relating to any water damage, water intrusion, mold
growth or mold infestation affecting the Property;

6.1.12    Seller is not a
Prohibited Person;

6.1.13    To Seller’s
knowledge, except for third party persons who hold direct or indirect ownership
interests in Seller, none of Seller’s affiliates or parent entities is a
Prohibited Person;

6.1.14    To Seller’s
knowledge, except for third party persons who hold direct or indirect ownership
interests in Seller, the Property is not the property of or beneficially owned
by a Prohibited Person;

6.1.15    To Seller’s
knowledge, except for third party persons who hold direct or indirect ownership
interests in Seller, the Property is not the proceeds of specified unlawful
activity as defined by 18 U.S.C. § 1956(c)(7).

6.2             
AS-IS.  Except for Seller’s Representations, the
Property is expressly purchased and sold “AS IS,” “WHERE IS,” and “WITH ALL
FAULTS.”  The Purchase Price and the terms and conditions set forth herein
are the result of arm’s-length bargaining between entities familiar with
transactions of this kind, and said price, terms and conditions reflect the fact
that Purchaser shall have the benefit of, but is not relying upon, any
information provided by Seller or Broker or statements, representations or
warranties, express or implied, made by or enforceable directly against Seller
or Broker, including, without limitation, any relating to the value of the
Property, the physical or environmental condition of the Property, any state,
federal, county or local law, ordinance, order or permit; or the suitability,
compliance or lack of compliance of the Property with any regulation, or any
other attribute or matter of or relating to the Property (other than any
covenants of title contained in the Deed conveying the Property and Seller’s
Representations).  Except for liabilities arising from a breach of a
Seller Representation, 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.  Except for liabilities arising from a
breach of a Seller Representation, 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.  Purchaser represents and warrants
that, as of the date hereof and as of the Closing Date, it has and shall have
reviewed and conducted such independent analyses, studies (including, without
limitation, environmental studies and analyses concerning the presence of lead,
asbestos, water intrusion and/or fungal growth and any resulting damage, PCBs
and radon in and about the Property), reports, investigations and inspections as
it deems appropriate in connection with the Property.  If Seller 
provides or has provided any documents, summaries, opinions or work product of
consultants, surveyors, architects, engineers, title companies, governmental
authorities or any other person or entity with respect to the Property,
including, without limitation, the offering prepared by Broker, Purchaser and
Seller agree that Seller has done so or shall do so only for the convenience of
both parties, Purchaser shall not rely thereon and the reliance by Purchaser
upon any such documents, summaries, opinions or work product shall not create or
give rise to any liability of or against Seller’s Indemnified Parties. 
Purchaser acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Leases or, without limiting any of the
foregoing, occupancy at Closing.  Prior to Closing, Seller shall have the
right, but not the obligation, to enforce its rights against any and all
Property occupants, guests or tenants.  Purchaser agrees that the departure
or removal, prior to Closing, of any of such guests, occupants or tenants shall
not be the basis for, nor shall it give rise to, any claim on the part of
Purchaser, nor shall it affect the obligations of Purchaser under this Contract
in any manner whatsoever; and Purchaser shall close title and accept delivery of
the Deed with or without such tenants in possession and without any allowance or
reduction in the Purchase Price under this Contract.  Purchaser hereby
releases Seller from any and all claims and liabilities relating to the
foregoing matters; provided, Seller acknowledges that the Purchaser does not
have the authority to release claims  held by third parties (as opposed to
Purchaser) against Seller, if any.

6.3             
Survival of Seller’s Representations.  Seller and
Purchaser agree that Seller’s Representations shall survive Closing for a period
of 9 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 $650,000 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
Regional Property Manager and Property Manager and shall not be construed to
refer to the knowledge of any other partner, officer, director, agent, employee
or representative of Seller, or any affiliate of Seller, or to impose upon such
Regional Property Manager any duty to investigate the matter to which such
actual knowledge or the absence thereof pertains, or to impose upon such
Regional Property Manager any individual personal liability.  As used
herein, the term “Regional Property Manager” shall refer to Dawn
Bailey who is the regional property manager handling this Property and the term
“Property Manager” shall refer to Elizabeth Swaringen who is the property
manager handling this Property, Seller represents and warrants that the Regional
Property Manager and the Property Manager have duties and responsibilities with
respect to the Property that put them in a position to have current knowledge
regarding the issues addressed in Sections 6.1.3 through 6.1.15.  

6.5             
Representations and Warranties of Purchaser.  For the
purpose of inducing Seller to enter into this Contract and to consummate the
sale and purchase of the Property in accordance herewith, Purchaser represents
and warrants to Seller the following as of the Effective Date and as of the
Closing Date:

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

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

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

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

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

6.5.6       
Purchaser is not a Prohibited Person.

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

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

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

Article VII
OPERATION OF THE PROPERTY

7.1             
Leases and Property Contracts.  During the period of
time from the Effective Date to the Closing Date, in the ordinary course of
business Seller may enter into new Property Contracts, new Leases, renew
existing Leases or modify, terminate or accept the surrender or forfeiture of
any of the Leases, modify any Property Contracts, or institute and prosecute any
available remedies for default under any Lease or Property Contract without
first obtaining the written consent of Purchaser; provided, however, Seller
agrees that, without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed,  any such new or
renewed Leases shall not have a term in excess of 1 year and any such new
Property Contract entered into by Seller after the expiration of the Feasibility
Period shall be cancellable upon 30 days prior notice without penalty.

7.2             
General Operation of Property.  Except as specifically
set forth in this  Article VII, Seller shall
operate the Property after the Effective Date in the ordinary course of
business, and except as necessary in Seller’s 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, which approval shall not be unreasonably withheld, conditioned or delayed.  If Purchaser approves
any such subsequent lien or encumbrance, the same shall be deemed a Permitted
Encumbrance for all purposes hereunder.

Article
VIII
CONDITIONS PRECEDENT TO CLOSING

8.1             
Purchaser’s Conditions to Closing.  Purchaser’s
obligation to close under this Contract shall be subject to and conditioned upon
the fulfillment of the following conditions precedent:

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

8.1.2    Each of Seller’s
Representations shall be true 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 general partner shall be a debtor in any bankruptcy proceeding nor
shall have been in the last 6 months a debtor in any bankruptcy
proceeding.

Notwithstanding
anything to the contrary, there are no other conditions to 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 or
(c) terminate this Contract and receive a return of the Deposit from the
Escrow Agent.  If the condition set forth in Section 8.1.2 is not met, Seller shall not be
in default pursuant to Section 10.2 unless the applicable
warranty was untrue when originally made or became untrue as a result of
Seller’s deliberate act, and Purchaser may, absent such default, 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       
Seller shall have received approval from the Securities Exchange
Commission of an information statement relating to the sale of the
Property.  Seller agrees to use commercially reasonable efforts to prepare,
file and process the information statement and its review by the Securities
Exchange Commission so as to have the 10-day SEC review period elapse on or
before the expiration of the Feasibility Period.  Seller will, at
Purchaser’s request, apprise Purchaser from time-to-time as to the status of
such preparation, filing and processing;

8.2.5       
There shall not be pending or, to the knowledge of either Purchaser or
Seller, any litigation or threatened litigation affecting Purchaser which, if
determined adversely, would adversely affect Purchaser’s ability to consummate
the purchase of the Property on the terms and conditions of this Contract or
declare illegal, invalid or nonbinding any of the covenants or obligations of
the Purchaser; and

8.2.6       
The Loan Assumption and Release shall have occurred.

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 Georgia, Inc.,
1201 W. Peachtree, Suite 3300, Atlanta, Georgia 30309 (“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.  

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 Additional Deposit (or any other
deposit or payment required of Purchaser hereunder), (b) deliver the deliveries
specified under Section 5.3 on
the date required thereunder and close on the purchase of the Property on the
Closing Date, or (c) deliver the Purchase Price at the time required by
Section 2.2.4 and close on the
purchase of the Property on the Closing Date, then, immediately and without the
right to receive notice or to cure pursuant to Section 2.2.3, 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 affects
Purchaser’s ability to consummate this transaction and 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 $200,000.00 in aggregate, or (b)
subject to the conditions below, Purchaser may seek specific performance of
Seller’s obligation to deliver the Deed pursuant to this Contract (but not
damages).  Purchaser may seek specific performance of Seller’s obligation
to deliver the Deed pursuant to this Contract only if, as a condition precedent
to initiating such litigation for specific performance, Purchaser first shall
(i) not otherwise be in default under this Contract; and (ii) 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 to the extent paid for with the out of pocket expenses reimbursed by
Seller pursuant to the foregoing sentence.  SELLER AND PURCHASER FURTHER
AGREE THAT THIS SECTION 10.2
IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE
REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER’S EXCLUSIVE REMEDY
AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY
SELLER OF ITS COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS CONTRACT.  UNDER NO CIRCUMSTANCES MAY PURCHASER SEEK
OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR
INDIRECT DAMAGES, ALL OF WHICH PURCHASER SPECIFICALLY WAIVES, FROM SELLER FOR
ANY BREACH BY SELLER, OF ITS COVENANTS OR ITS OBLIGATIONS UNDER THIS
CONTRACT.  PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS
OR ANY LIEN AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO
SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AND IS DILIGENTLY
PURSUING AN ACTION SEEKING SUCH REMEDY.

Article
XI
RISK OF LOSS OR CASUALTY

11.1         
Major Damage.  In the event that the Property is
damaged or destroyed by fire or other casualty prior to Closing, and the cost
for demolition, site cleaning, restoration, replacement, or other repairs
(collectively, the “Repairs”), is more than $1,300,000.00, then
Seller shall have no obligation to make such Repairs, and shall notify Purchaser
in writing of such damage or destruction (the “Damage
Notice”).  Within 10 days after Purchaser’s receipt of the Damage
Notice and, as and when Seller has such information, evidence of the amount of
insurance that will be available to make Repairs under Seller’s insurance
policies, 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 $1,300,000.00, this transaction shall
be closed in accordance with Section 11.3, notwithstanding such casualty.  In
such event, Seller may at its election endeavor to make such Repairs to the
extent of any recovery from insurance carried on the Property, if such Repairs
can be reasonably effected before the Closing.  Regardless of Seller’s
election to commence such Repairs, or Seller’s ability to complete such Repairs
prior to Closing, this transaction shall be closed in accordance with
Section 11.3 below.

11.3         
Closing.  In the event Purchaser fails to terminate
this Contract following a casualty as set forth in Section 11.1, or in the event of a casualty as set
forth in Section 11.2, then this transaction shall be closed in accordance with the terms
of the Contract, at Seller’s election, either (i) for the full Purchase
Price, notwithstanding any such casualty, in which case Purchaser shall, at
Closing, execute and deliver an assignment and assumption (in a form reasonably
required by Seller) of Seller’s rights and obligations with respect to the
insurance claim related to such casualty, and thereafter Purchaser shall receive
all insurance proceeds pertaining to such claim, less any amounts which may
already have been spent by Seller for Repairs (plus a credit against the
Purchase Price at Closing in the amount of any deductible payable by Seller in
connection therewith and any shortfall in the amount of insurance proceeds
compared to Seller’s estimate of costs necessary to complete the Repairs (to the
extent such estimate is supported by reasonable scope and bids provided by
potential reputable contractors or the Repair contracts, if any, being assigned
to Purchaser pursuant to Section 11.4 below)); 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 obligations under such construction and
other contracts entered into by Seller in connection with such Repairs relating
to all yet to be completed work under such contracts, provided, that, except for
emergency repairs, Seller will first consult with Purchaser and provide
Purchaser with reasonable evidence of Seller’s ability to pay the cost of such
Repairs before entering into any such Repair contract although Seller retains
the absolute right and authority to enter into any such Repair contract.

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.

Article
XIII
MISCELLANEOUS

13.1         
Binding Effect of Contract.  This Contract shall not
be binding on either party until executed by both Purchaser and Seller. 
Neither the Escrow Agent’s nor the Broker’s execution of this Contract shall be
a prerequisite to its effectiveness.  Subject to Section 13.3, this Contract
shall be binding upon and inure to the benefit of Seller and Purchaser, and
their respective successors and permitted assigns.

13.2         
Exhibits and Schedules.  All Exhibits and Schedules,
whether or not annexed hereto, are a part of this Contract for all
purposes.

13.3         
Assignability.  Except to the extent required to
comply with the provisions of Section 13.18 related to a 1031 Exchange, this
Contract is not assignable by Purchaser without first obtaining the prior
written approval of Seller.  Notwithstanding the foregoing, Purchaser may
assign this Contract, without first obtaining the prior written approval of
Seller, to one or more entities so long as (a) Purchaser is an affiliate of the
purchasing entity(ies), (b) Purchaser is not released from its liability
hereunder, and (c) Purchaser provides written notice to Seller of any proposed
assignment no later than 2 Business Days prior to the Closing Date.  As
used herein, an affiliate is a person or entity controlled by, under common
control with, or controlling another person or entity.

13.4         
Captions.  The captions, headings, and arrangements
used in this Contract are for convenience only and do not in any way affect,
limit, amplify, or modify the terms and provisions hereof.

13.5         
Number and Gender of Words.  Whenever herein the
singular number is used, the same shall include the plural where appropriate,
and words of any gender shall include each other gender where
appropriate.

13.6         
Notices.  All notices, demands, requests and other
communications required or permitted hereunder shall be in writing, and shall be
(a) personally delivered with a written receipt of delivery; (b) sent by a
nationally-recognized overnight delivery service requiring a written
acknowledgement of receipt or providing a certification of delivery or attempted
delivery; (c) sent by certified or registered mail, return receipt requested; or
(d) sent by confirmed facsimile transmission or electronic delivery with an
original copy thereof transmitted to the recipient by one of the means described
in subsections (a) through (c) no later than 3 Business Days thereafter. 
All notices shall be deemed effective when actually delivered as documented in a
delivery receipt; provided, however, that if the notice was sent by overnight
courier or mail as aforesaid and is affirmatively refused or cannot be delivered
during customary business hours by reason of the absence of a signatory to
acknowledge receipt, or by reason of a change of address with respect to which
the addressor did not have either knowledge or written notice delivered in
accordance with this paragraph, then the first attempted delivery shall be
deemed to constitute delivery.  Each party shall be entitled to change its
address for notices from time to time by delivering to the other party notice
thereof in the manner herein provided for the delivery of notices.  All
notices shall be sent to the addressee at its address set forth following its
name below:

To
Purchaser:                          
Pollack Partners, LLC

5605
Glenridge Drive, Suite 775

Atlanta,
Georgia  30342

Attention: 
Marc S. Pollack

Telephone:
 (404) 835-1475

Facsimile:
 (404) 835-1476

 

And

 

                       
                       
Pollack Partners, LLC

5605
Glenridge Drive, Suite 775

Atlanta,
Georgia  30342

Attention: 
Jennifer Ross

Telephone:
 (404) 835-1475

Facsimile:
 (404) 835-1476

 

To
Seller:                                 
c/o AIMCO

4582
South Ulster Street Parkway 

Suite
1100

Denver,
Colorado  80237

Attention: 
Mark Reoch

Telephone:
 (303) 691-4337

Facsimile:
 (720) 200-6882

 

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

 

with
copy
to:                            
AIMCO

4582
South Ulster Street Parkway 

Suite
1100

Denver,
Colorado  80237

Attention: 
John Spiegleman, Esq.

Telephone:
 (303) 691-4303

Facsimile: 
(720) 200-6882

 

and a copy
to:                          
Cushman & Wakefield

1201
W. Peachtree

Suite
3300

Atlanta,
Georgia  30309

Attention: 
Chris Spain

Telephone: 
(404) 853-5234

Facsimile: 
(404) 853-5248

 

and
a copy
to:                          
Kutak Rock LLP

1801
California Street, Suite 3100

Denver,
Colorado  80202

Attention: 
William S. Martin, Esq.

Telephone:
 (303) 297-2400

Facsimile: 
(303) 292-7799

 

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

Stewart
Title Guaranty

1980
Post Oak Boulevard, Suite 610

Houston,
Texas  77056

Attention: 
Wendy Howell

Telephone: 
(713) 625-8161

Facsimile:
 (713) 552-1703

 

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
North Carolina 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, partners, potential investors, 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
until all rights of Purchaser to terminate this Contract (other than by reason
of a Seller default) have been waived by Purchaser or have expired, without the
prior written consent of Seller, which consent may be withheld in Seller’s sole
discretion.  Notwithstanding the provisions of Section 13.8 Purchaser agrees that the covenants,
restrictions and agreements of Purchaser contained in any confidentiality
agreement executed by Purchaser prior to the Effective Date shall survive the
execution of this Contract and shall not be superseded hereby.

13.14     
Time of the Essence.  It is expressly agreed by the
parties hereto that time is of the essence with respect to this Contract and any
aspect thereof.

13.15     
Waiver.  No delay or omission to exercise any right or
power accruing upon any default, omission, or failure of performance hereunder
shall impair any right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often as
may be deemed expedient.  No waiver, amendment, release, or modification of
this Contract shall be established by conduct, custom, or course of dealing and
all waivers must be in writing and signed by the waiving party.

13.16     
Attorneys’ Fees.  In the event either party hereto
commences litigation or arbitration against the other to enforce its rights
hereunder, the prevailing party in such litigation shall be entitled to recover
from the other party its reasonable attorneys’ fees and expenses incidental to
such litigation and arbitration, including the cost of in-house counsel and any
appeals.

13.17     
Time Zone/Time Periods.  Any reference in this
Contract to a specific time shall refer to the time in the time zone where the
Property is located.  (For example, a reference to 3:00 p.m. refers to 3:00
p.m. MST if the Property is located in Denver, Colorado.)  Should the last
day of a time period fall on a weekend or legal holiday, the next Business Day
thereafter shall be considered the end of the time period.

13.18     
Intentionally Omitted.  

13.19     
No Personal Liability of Officers, Trustees or Directors of
Seller’s Partners.  Purchaser acknowledges that this Contract is
entered into by Seller which is a California limited partnership, and Purchaser
agrees that none of Seller’s Indemnified Parties shall have any personal
liability under this Contract or any document executed in connection with the
transactions contemplated by this Contract.

13.20     
No Exclusive Negotiations.  Seller shall have the
right, at all times prior to the expiration of the Feasibility Period, to
solicit backup offers and enter into discussions, negotiations, or any other
communications concerning or related to the sale of the Property with any
third-party; provided, however, that such communications are subject to the
terms of this Contract, and that Seller shall not enter into any binding
contract with a third-party for the sale of the Property unless such contract is
contingent on the termination of this Contract without the Property having been
conveyed to Purchaser.

13.21     
ADA Disclosure.  Purchaser acknowledges that the
Property may be subject to the federal Americans With Disabilities Act (the
“ADA”) and the federal Fair Housing Act (the
“FHA”).  The ADA requires, among other matters, that tenants
and/or owners of “public accommodations” remove barriers in order to make the
Property accessible to disabled persons and provide auxiliary aids and services
for hearing, vision or speech impaired persons.  Seller makes no warranty,
representation or guarantee of any type or kind with respect to the Property’s
compliance with the ADA or the FHA (or any similar state or local law), and
Seller expressly disclaims any such representations.

13.22     
No Recording.  Purchaser shall not cause or allow this
Contract or any contract or other document related hereto, nor any memorandum or
other evidence hereof, to be recorded or become a public record without Seller’s
prior written consent, which consent may be withheld at Seller’s sole
discretion.  If Purchaser records this Contract or any other memorandum or
evidence thereof, Purchaser shall be in default of its obligations under this
Contract.  Purchaser hereby appoints Seller as Purchaser’s attorney-in-fact
to prepare and record any documents necessary to effect the nullification and
release of the Contract or other memorandum or evidence thereof from the public
records.  This appointment shall be coupled with an interest and
irrevocable.

13.23     
Relationship of Parties.  Purchaser and Seller
acknowledge and agree that the relationship established between the parties
pursuant to this Contract is only that of a seller and a purchaser of
property.  Neither Purchaser nor Seller is, nor shall either hold itself
out to be, the agent, employee, joint venturer or partner of the other
party.

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

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 Section 13.20); (b) Sections
2.3, 3.3, 3.4, 3.5, 4.5.5, 4.5.6, 5.4, 5.5, 6.1, 6.2, 6.3, 6.4, 6.5, 9.1, 10.2, 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 Service, Inc.,
performed the Testing and reported its findings in the Multifamily: Component
Type Report, dated May 14, 2001, a copy of which is attached hereto as
Exhibit I (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, 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:

 

LANDMARK
(NC), LLC,

a
Delaware limited liability company

 

By:      
ANGELES INCOME PROPERTIES, LTD. II,

     
a California limited partnership, its sole member

 

     
By: ANGELES REALTY CORPORATION II,

            
a California corporation,

            
its managing general partner

 

 

 

     
By:  /s/Brian J. Bornhorst

             
Name:  Brian J. Bornhorst

             
Title:  Vice President

 

 

 

Purchaser:

 

POLLACK
PARTNERS, LLC,

a
Georgia limited liability company

 

 

 

By: 
/s/ Steven L. Shores

Name: 
Steven L. Shores

Title: 
Presidentcweiseventhamend52009.htm

    
      
        

      
Exhibit
10.1

     

    SEVENTH
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     

    This
Seventh Amendment to Amended and Restated Credit Agreement (hereinafter referred
to as the “Amendment”) executed
as of May 20, 2009 by and among Clayton Williams Energy, Inc., a Delaware
corporation (“CWEI”), Southwest
Royalties, Inc. (successor by merger to CWEI-SWR, Inc.), a Delaware corporation
(“SWR”, and
together with CWEI and each of their respective successors and permitted
assigns, the “Borrowers” and each a
“Borrower”),
Warrior Gas Co., a Texas corporation (“Warrior”), CWEI
Acquisitions, Inc. a Delaware corporation (“CWEI Acquisitions”),
Romere Pass Acquisition L.L.C., a Delaware limited liability company (“Romere”), CWEI Romere
Pass Acquisition Corp., a Delaware corporation (“Romere Corp”), Blue
Heel Company, a Delaware corporation (“Blue Heel”), and
Tex-Hal Partners, Inc., a Delaware corporation (“Tex-Hal,” and
together with Warrior, CWEI Acquisitions, Romere, Romere Corp and Blue Heel and
each of their successors and permitted assigns, the “Guarantors” and each
a “Guarantor”),
JPMorgan Chase Bank, N.A. (successor by merger to Bank One, N.A. (Illinois)), a
national banking association (“JPMorgan Chase”),
each of the financial institutions which is a party hereto (as evidenced by the
signature pages to this Amendment) or which may from time to time become a party
to the Agreement pursuant to the provisions of Section 14.3
thereof or any successor or permitted assignee thereof (hereinafter collectively
referred to as “Lenders”, and
individually, “Lender”), JPMorgan
Chase, as Administrative Agent (in its capacity as Administrative Agent and
together with its successors in such capacity, “Administrative
Agent”).  Capitalized terms used but not defined in this
Amendment have the meanings assigned to such terms in that certain Amended and
Restated Credit Agreement dated as of May 21, 2004, by and among Borrowers,
Guarantors, Administrative Agent and Lenders (as amended, supplemented or
otherwise modified from time to time, the “Agreement”).

     

    WITNESSETH:

     

    WHEREAS, the Borrowers and the
Guarantors have requested, among other things, that the Lenders (or at least the
required percentage thereof) amend certain provisions of the Agreement;
and

     

    WHEREAS, the Administrative
Agent and the Lenders have agreed to do so on the terms and conditions
hereinafter set forth.

     

    NOW, THEREFORE, for and in
consideration of the mutual covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the Borrowers, the Guarantors, the Administrative
Agent and the Lenders, hereby agree as follows:

     

    SECTION
1.     Amendments to the
Agreement.  Subject to the satisfaction or waiver in writing of
each condition precedent set forth in Section 3 hereof, and
in reliance on the representations, warranties, covenants and agreements
contained in this Amendment, the Agreement shall be amended in the manner
provided in this Section
1.

     

    
      
        
          

           

          Seventh
Amendment to Amended and Restated Credit Agreement – Page 1

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    1.1     Amended
Definitions.  Article I of the
Agreement shall be and it hereby is amended by amending and restating the
following definition to read in its entirety as follows:

     

    “Alternate
Base Rate” means, for any day, a rate per annum equal to the greatest of
(i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective
Rate in effect on such day plus one-half of one percent (1⁄2 of 1%) and (iii) the
LMIR on such day plus 1%.  Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Federal Funds Effective Rate or the LMIR
shall be effective from and including the effective date of such change in the
Prime Rate, the Federal Funds Effective Rate or the LMIR,
respectively.

     

    “Obligations”
means all obligations of every nature of each Credit Party from time to time
owed to the Agents (including former Agents), the LC Issuer, the Lenders or any
of them and the Lender Counterparties, under any Loan Document or Rate
Management Transaction (including with respect to Rate Management Transactions
with any Person that was a Lender Counterparty at the time such Credit Party
entered into such Rate Management Transactions regardless of whether such Person
is no longer a Lender Counterparty), whether for principal, interest (including
interest which, but for the filing of a petition in bankruptcy with respect to
such Credit Party, would have accrued on any Obligation, whether or not a claim
is allowed against such Credit Party for such interest in the related bankruptcy
proceeding), all Cash Management Obligations, all Reimbursement Obligations,
payments for early termination of Rate Management Transactions, fees, expenses,
indemnification or otherwise.

     

    “Prime
Rate” means the rate of interest per annum publicly announced from time to time
by the Administrative Agent as its prime rate; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.

     

    “Subsidiary”
of a Person means (i) any corporation more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or
controlled, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or
controlled.  Unless otherwise expressly provided, all references
herein to a “Subsidiary” shall mean a Subsidiary of
CWEI.  Notwithstanding the foregoing, until the date on which CWEI
makes the Larclay Investment in accordance with Section 8.15(viii), the term
“Subsidiary” shall not include Larclay.

     

    1.2     Additional Definitions.  Article I of the
Agreement shall be and it hereby is amended by adding the following definition
in the correct alphabetical order:

     

    “Cash Collateral Account” means a
segregated deposit account with, and in the name of, the Administrative Agent,
for the benefit of the Lenders, established and maintained for the deposit of
cash collateral required under or in connection with this Agreement and the
other Loan Documents.

     

    
      
        
          

           

          Seventh
Amendment to Amended and Restated Credit Agreement – Page 2

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    “Cash Management Obligations” means
with respect to any Credit Party, any obligations of such Credit Party owed to
any Lender (or any Affiliate of any Lender) in respect of treasury management
arrangements, depositary or other cash management services, including commercial
credit card and merchant card services.

     

    “Defaulting Lender” means any Lender,
as reasonably determined by the Administrative Agent, that has (a) failed to
fund any portion of the Reimbursement Obligations required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) failed to fund any portion of the Loans required to be funded by
it hereunder within one Business Day of the date required to be funded by it
hereunder, unless the subject of a good faith dispute, (c) notified the
Borrowers, the Administrative Agent, the LC Issuer or any other Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement, (d)
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute, or (e) (i) become
or is insolvent or has a parent company that has become or is insolvent or (ii)
become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment.

     

    “Larclay Credit Agreement” means that
certain Term Loan and Security Agreement, dated as of April 21, 2006, among
Larclay LP, the lenders from time to time party thereto and Merrill Lynch
Capital, a division of Merrill Lynch Business Financial Services Inc., as
administrative agent, as amended from time to time.

     

    “Larclay Investment” is defined in
Section 8.15(viii)(b).

     

    “LMIR” means, for any day, the
applicable British Bankers’ Association LIBOR rate as reported by any generally
recognized financial information service as of 11:00 a.m. (London time) for one
month Dollar deposits on such day, or if such day is not a Business Day, then
the immediately preceding Business Day, provided that, if no such British
Bankers’ Association LIBOR rate is available to the Administrative Agent, the
applicable LMIR shall instead be the rate determined by the Administrative Agent
to be the rate at which the Administrative Agent or one of its Affiliate banks
offers to place one month Dollar deposits with first-class banks in the London
interbank market at approximately 11:00 a.m. (London time) on such day, in the
approximate amount of the relevant Loan.

     

    1.3     Collateral
Account.  Section 2.19.11 of
the Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    
      
        
          

           

          Seventh
Amendment to Amended and Restated Credit Agreement – Page 3

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    2.19.11  Cash
Collateralization.

     

    (a)           If
any Default or Unmatured Default shall occur and be continuing, on the Business
Day that the Borrower Representative receives notice from the Administrative
Agent or the Required Lenders (or, if the maturity of the Loans has been
accelerated, Lenders having a combined Pro Rata Share of LC Obligations
representing greater than sixty-six and two-thirds percent (66-2/3%) of the
total LC Obligations) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrowers shall deposit in the Cash Collateral Account an amount
in cash equal to the total LC Obligations as of such date plus any accrued and
unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Default with respect to the
Borrower described in Section 9.5 or Section 9.6.

     

    (b)           Deposits
in the Cash Collateral Account made pursuant to the foregoing paragraph (a) and
Section 2.25 shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Borrowers under this Agreement
and the Borrowers hereby grant a security interest in such cash and each deposit
account into which such cash is deposited and all proceeds, including cash and
non-cash proceeds of the foregoing, to secure the Obligations.  The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over the Cash Collateral
Account.  Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the Administrative Agent and at the Borrowers’ risk and expense, such deposits
shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account.  Moneys in such account
shall be applied by the Administrative Agent to reimburse the LC Issuer for
unpaid Reimbursement Obligations and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Obligations at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders having a combined Pro Rata
Share of LC Obligations representing sixty-six and two-thirds percent (66-2/3%)
or more of the total LC Obligations), be applied to satisfy other Obligations
and to the extent any excess remains after payment in full in cash of all
Obligations and the termination of all Commitments, such excess shall be
released to the Borrowers.

     

    (c)           If
the Borrowers are required to provide cash collateral pursuant to paragraph (a)
above or Section 2.25, the amount of such cash collateral (to the extent not
applied as aforesaid) shall be returned to the Borrowers within three (3)
Business Days after (i) in the case of cash collateral provided pursuant to
paragraph (a) above, all Defaults and Unmatured Defaults have been cured or
waived and (ii) in the case of cash collateral provided pursuant to Section
2.25, the applicable Defaulting Lender is no longer a Defaulting
Lender.

     

    1.4     Replacement of
Lender.  Section 2.22 of the
Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    
      
        
          

           

          Seventh
Amendment to Amended and Restated Credit Agreement – Page 4

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    2.22           Replacement of
Lender.  In the event that (i) any Borrower is required
pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to any
Lender or if any Lender’s obligation to make or continue, or to convert Floating
Rate Advances into, Eurodollar Advances shall be suspended pursuant to Section
3.3 (any Lender so affected an “Affected Lender”), (ii) in connection with any
proposed amendment, modification, termination, waiver or consent with respect to
any of the provisions of this Agreement or any other Loan Document as
contemplated by Section 10.2, the consent of  Required Lenders
shall have been obtained but the consent of one or more of such other Lenders
(each a “Non-Consenting Lender”) whose consent is required has not been obtained
or (iii) any Lender is a Defaulting Lender; then, the Borrowers may elect to
replace such Affected Lender, Non-Consenting Lender or Defaulting Lender (a
“Terminated Lender”) as a Lender party to this Agreement, provided that, with
respect to the replacement of an Affected Lender, no Default or Unmatured
Default shall have occurred and be continuing at the time of such replacement,
and provided further that, concurrently with the replacement of any Terminated
Lender, (x) another financial institution or other entity which is reasonably
satisfactory to the Administrative Agent shall agree, as of such date, to
purchase for cash the Advances and other Obligations due to the Terminated
Lender pursuant to an assignment substantially in the form of Exhibit C and to
become a Lender for all purposes under this Agreement and to assume all
obligations of the Terminated Lender to be terminated as of such date and to
comply with the requirements of Section 14.3 applicable to assignments, and
(y) the Borrowers shall pay to such Terminated Lender in same day funds on the
day of such replacement (A) all amounts that are due to such Terminated Lender
pursuant to Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 3.4 had the Loans of such Terminated Lender been prepaid on such
date rather than sold to the replacement Lender.  The Lenders agree
that a Terminated Lender will not be entitled to receive liquidated damages
pursuant to Section 2.7 as a result of its assignment under this Section
2.22.  A Lender shall not be required to make any such assignment if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment cease to apply
or, in the case of a Defaulting Lender, such Lender is no longer a Defaulting
Lender.

     

    1.5     Defaulting Lenders. The
following shall be and it hereby is added to the end of Article II as Section
2.25 of the Agreement:

     

    2.25  Defaulting
Lenders.  Notwithstanding any provision of
this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then
the following provisions shall apply for so long as such Lender is a Defaulting
Lender:

     

    (a)           if
any LC Obligations exist at the time a Lender is a Defaulting Lender, the
Borrowers shall within one (1) Business Day following notice by the
Administrative Agent cash collateralize such Defaulting Lender’s Pro Rata Share
of the LC Obligations in accordance with procedures set forth in Section 2.19.11
for so long as such LC Obligations are outstanding;

     

    
      
        
          

           

          Seventh
Amendment to Amended and Restated Credit Agreement – Page 5

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    (b)           the
LC Issuer shall not be required to issue, amend or increase any Facility LC
unless it is satisfied that cash collateral will be provided by the Borrowers in
accordance with Section 2.25(a); and

     

    (c)           all
cash collateral provided by the Borrowers in accordance with Section 2.25(a)
shall be deposited in the Cash Collateral Account.

     

    1.6     Indebtedness. Clause (xii) of Section 8.11 of the
Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    (xii)           Until
the date Larclay becomes a Subsidiary, Indebtedness of CWEI consisting of an
unsecured guarantee of Indebtedness for borrowed money of Larclay, in an
aggregate amount at any time outstanding not to exceed the lesser of (a)
$15,795,000 and (b) the maximum committed amount of the obligations so
guaranteed by CWEI in accordance with the terms of such guarantee as in effect
on the Sixth Amendment Effective Date or as otherwise amended or modified to the
extent permitted under Section 8.18.

     

    1.7     Sale of Larclay
Assets.  The following shall be and it hereby is added to the
end of Section
8.14 of the Agreement:

     

    (iv)           Sales
by Larclay of its assets to the extent such assets were owned by Larclay on the
date it became a Subsidiary.

     

    1.8     Investments in Larclay. Clause (viii) of Section 8.15 of the
Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    (viii)                      (a)
Investments by CWEI in Larclay made on or prior to the Sixth Amendment Effective
Date in an aggregate amount not exceeding $12,600,000 and (b) a one-time
additional Investment made by CWEI in Larclay as a single transaction at any
time during the period beginning on May 20, 2009 and ending on December 31, 2009
in an aggregate amount not exceeding the sum of (1) the total obligations owed
by CWEI under the Larclay Drilling Contract as of the date of such Investment,
plus (2) the
aggregate amount of Indebtedness of CWEI pursuant to its unsecured guarantee of
Indebtedness for borrowed money of Larclay to the extent permitted under Section
8.11(xii) as of the date of such Investment, plus (3) $3,000,000
(the “Larclay
Investment”); provided that, with
respect to the immediately foregoing clause (b), on the date the Larclay
Investment is made, (1) no Default or Unmatured Default shall have occurred and
be continuing or would be caused thereby, (2) both immediately before and after
giving effect to such Investment, the Available Aggregate Commitment is not less
than 30% of the Borrowing Base then in effect, (3) all proceeds of such
Investment are immediately used to pay in full all Indebtedness of Larclay under
the Larclay Credit Agreement, (4) Larclay shall have executed and delivered to
the Administrative Agent a Joinder Agreement, Guaranty and a security agreement
in form and substance satisfactory to the Administrative Agent pursuant to which
Larclay grants to the Collateral Agent for the benefit of the Lenders a security
interest in and to substantially all of its assets and (5) CWEI shall have
executed and delivered to the Administrative

     

    
      
        
          

           

          Seventh
Amendment to Amended and Restated Credit Agreement – Page 6

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    Agent
a Pledge Agreement covering all of the membership interests in Larclay GP and
all of the limited partnership interests in Larclay LP.

     

    1.9     Affiliates.  Section 8.17 of the
Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    8.17           Affiliates.  No
Borrower will, nor will any Borrower permit any other Credit Party to, enter
into any transaction (including, without limitation, the purchase or sale of any
Property or service) with, or make any payment or transfer to, any Affiliate
except transactions not otherwise prohibited under this Agreement or any other
Loan Document made in the ordinary course of business and pursuant to the
reasonable requirements of such Credit Party’s business and upon fair and
reasonable terms no less favorable to such Credit Party than such Credit Party
would obtain in a comparable arms-length transaction; provided that, until the
date Larclay becomes a Subsidiary, with respect to any transaction between any
Credit Party and Larclay, except for the guarantee permitted by Section
8.11(xii), the Larclay Operating Agreement and the Larclay Drilling Contract,
such transaction shall be subject to the prior written consent of the Required
Lenders.

     

    1.10     EBITDAX Leverage
Ratio.  Section 8.22.2 of the
Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    8.22.2  EBITDAX Leverage
Ratio.  CWEI will not permit the ratio, determined as of the
end of each Fiscal Quarter ending on the dates set forth in the table below, of
(i) Consolidated Funded Indebtedness of CWEI and its Consolidated Subsidiaries
to (ii) Consolidated EBITDAX of CWEI and its Consolidated Subsidiaries for the
then most-recently ended four Fiscal Quarters to be greater than the maximum
ratio set forth in the table below opposite such date.

     

    
      	
              
                Date

                 

              

            	
              
                Maximum
      EBITDAX

                Leverage
      Ratio

                 

              

            
	
              June
      30, 2009

            	
              3.50
      to 1.00

            
	
              September
      30, 2009

            	
              3.50
      to 1.00

            
	
              December
      31, 2009

            	
              3.50
      to 1.00

            
	
              March
      31, 2010

            	
              3.50
      to 1.00

            
	
              June
      30, 2010

            	
              3.50
      to 1.00

            
	
              September
      30, 2010

            	
              3.50
      to 1.00

            
	
              December
      31, 2010

            	
              3.50
      to 1.00

            
	
              March
      31, 2011

            	
              3.25
      to 1.00

            
	
              June
      30, 2011

            	
              3.25
      to 1.00

            
	
              September
      30, 2011

            	
              3.25
      to 1.00

            
	
              December
      31, 2011

            	
              3.25
      to 1.00

            
	
              March
      31, 2012 and for each Fiscal Quarter ending thereafter

            	
              3.00
      to 1.00

            

    

    
      
        
          

           

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Amendment to Amended and Restated Credit Agreement – Page 7

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    1.11     Larclay.  Section 8.26 of the
Agreement shall be and it hereby is amended in its entirety to read as
follows:

     

    8.26.        Larclay.  Notwithstanding
anything to the contrary herein, and regardless of whether Larclay becomes a
Subsidiary, CWEI shall cause Larclay to:

     

    (a)           maintain
its own separate books and records and bank accounts, which are and will be, in
each case, separate and apart from those of any other Person;

     

    (b)           be,
and at all times hold itself out to the public as, a legal entity separate and
distinct from any other Person (including any Affiliate thereof), maintain and
utilize separate invoices and checks bearing its own name and otherwise conduct
its own business and own its own assets and correct any known misunderstanding
regarding its separate identity;

     

    (c)           maintain
separate financial statements showing its assets and liabilities separate and
apart from those of any other Person, not have its assets listed on the
financial statements of another and file its own tax returns;

     

    (d)           refrain
from dissolving or winding up (in whole or in part) unless otherwise permitted
under this Agreement;

     

    (e)           refrain
from commingling its funds or other assets with those of any Affiliate or any
other Person;

     

    (f)           refrain
from maintaining its assets in such a manner that would make it costly or
difficult to segregate, ascertain or identify its individual assets from those
of any Affiliate or any other Person; and

     

    (g)           observe
all corporate formalities.

     

    1.12     Pricing
Schedule.  The Pricing Schedule attached to the Agreement shall
be and it hereby is replaced with the Pricing Schedule attached to this
Amendment.

     

    1.13     Redetermined Borrowing
Base.  This Amendment shall constitute a notice of the
Redetermination of the Borrowing Base pursuant to Section 4.2 of
the Agreement, and the Administrative Agent hereby notifies the Borrowers that,
as of the date of this Amendment and until the next Redetermination, the
redetermined Borrowing Base is $250,000,000.

     

    SECTION
2.     Consent and Reaffirmation of
Guarantors.  By their execution hereof, each Guarantor hereby
(i) acknowledges receipt of this Amendment, (ii) consents to the Borrowers’
execution and delivery hereof; (iii) agrees to be bound hereby; (iv) affirms
that nothing contained therein shall modify in any respect whatsoever its
guaranty of the obligations of the Borrowers to Lenders pursuant to the terms of
its Guaranty in favor of Administrative Agent and the Lenders and (v) reaffirms
that its Guaranty is and shall continue to remain in full force and
effect.

     

    
      
        
          

           

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Amendment to Amended and Restated Credit Agreement – Page 8

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
3.     Conditions.  The
amendments to the Agreement contained in Section 1 of this
Amendment shall be effective upon the satisfaction of each of the conditions set
forth in this Section
3.

     

    3.1     Execution and
Delivery.  The Administrative Agent shall have received from
the Required Lenders, the Borrower and the Guarantors, counterparts (in such
number as may be requested by the Administrative Agent) of this Amendment signed
on behalf of such Persons.

     

    3.2     Representations and
Warranties.  The representations and warranties of each
Borrower under the Agreement, as amended by this Amendment, are true and correct
in all material respects as of such date, as if then made (except to the extent
that such representations and warranties relate solely to an earlier
date).

     

    3.3     No Default.  No
Default or Unmatured Default shall have occurred and be continuing.

     

    3.4     Other
Documents.  The Administrative Agent shall have received such
other instruments and documents incidental and appropriate to the transaction
provided for herein as the Administrative Agent or its special counsel may
reasonably request, and all such documents shall be in form and substance
satisfactory to the Administrative Agent.

     

    SECTION
4.     Representations and Warranties of
Borrowers.  To induce the Lenders to enter into this Amendment,
the Borrowers hereby represent and warrant to the Lenders as
follows:

     

    4.1     Reaffirmation of Representations and
Warranties/Further Assurances.  After giving effect to the
amendments herein, each representation and warranty of any Borrower or any
Guarantor contained in the Agreement or in any of the other Loan Documents is
true and correct in all material respects on the date hereof (except to the
extent such representations and warranties relate solely to an earlier
date).

     

    4.2     Corporate Authority; No
Conflicts.  The execution, delivery and performance by each
Borrower and each Guarantor (to the extent a party hereto or thereto) of this
Amendment and all documents, instruments and agreements contemplated herein are
within each such Borrower’s or such Guarantor’s corporate or other
organizational powers, have been duly authorized by necessary action, require no
action by or in respect of, or filing with, any court or agency of government
and do not violate or constitute a default under any provision of any applicable
law or other agreements binding upon any Borrower or any Guarantor or result in
the creation or imposition of any Lien upon any of the assets of any Borrower or
any Guarantor except for Permitted Liens and otherwise as permitted in the
Agreement.

     

    4.3     Enforceability.  This
Amendment constitutes the valid and binding obligation of each Borrower and each
Guarantor enforceable in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditor’s rights generally, and (ii) the availability of equitable
remedies may be limited by equitable principles of general
application.

     

    
      
        
          

           

          Seventh
Amendment to Amended and Restated Credit Agreement – Page 9

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
5.     Miscellaneous.

     

    5.1     Reaffirmation of Loan Documents and
Liens.  Any and all of the terms and provisions of the
Agreement and the Loan Documents shall, except as amended and modified hereby,
remain in full force and effect.  Each Borrower hereby agrees that the
amendments and modifications herein contained shall in no manner affect or
impair the liabilities, duties and obligations of such Borrower or any Guarantor
under the Agreement and the other Loan Documents or the Liens securing the
payment and performance thereof.

     

    5.2     Parties in
Interest.  All of the terms and provisions of this Amendment
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns.

     

    5.3     Legal Expenses.  The
Borrowers hereby agree, jointly and severally, to pay all reasonable fees and
expenses of counsel to the Administrative Agent incurred by the Administrative
Agent in connection with the preparation, negotiation and execution of this
Amendment and all related documents.

     

    5.4     Counterparts.  This
Amendment may be executed in one or more counterparts and by different parties
hereto in separate counterparts each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.  However, this
Amendment shall bind no party until the Borrowers, the Guarantors, the Lenders
(or at least the requisite percentage thereof), and the Administrative Agent
have executed a counterpart.  Delivery of photocopies of the signature
pages to this Amendment by facsimile or electronic mail shall be effective as
delivery of manually executed counterparts of this Amendment.

     

    5.5     Complete
Agreement.  THIS AMENDMENT, THE AGREEMENT, AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

     

    5.6     Headings.  The
headings, captions and arrangements used in this Amendment are, unless specified
otherwise, for convenience only and shall not be deemed to limit, amplify or
modify the terms of this Amendment, nor affect the meaning thereof.

     

    

    [Signature
Pages Follow]

    
      
        
          

           

          Seventh
Amendment to Amended and Restated Credit Agreement – Page 10

           

          65292201.6

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      
        IN WITNESS WHEREOF, the
parties have caused this Seventh Amendment to Amended and Restated Credit
Agreement to be duly executed as of the date first above written.

         

        
          	 
      	
                  BORROWERS:

                  CLAYTON
      WILLIAMS ENERGY, INC.

                  a
      Delaware corporation

                  By:
         /s/ Mel G.
      Riggs

                  Mel
      G. Riggs, Senior Vice President

                
	 
      	
                  SOUTHWEST
      ROYALTIES, INC.

                  a
      Delaware corporation

                  By:    /s/ Mel G.
      Riggs

                  Mel
      G. Riggs, Vice President

                
	 
      	
                  GUARANTORS:

                  WARRIOR
      GAS CO.

                  a
      Texas corporation

                  By:    /s/ Mel G.
      Riggs

                  Mel
      G. Riggs, Vice President

                
	 
      	
                  CWEI
      ACQUISITIONS, INC.

                  a
      Delaware corporation

                  By:    /s/ Mel G.
      Riggs

                  Mel
      G. Riggs, Vice President

                
	 
      	
                  ROMERE
      PASS ACQUISITION L.L.C.

                  a
      Delaware limited liability company

                  By:    /s/ Mel G.
      Riggs

                  Mel
      G. Riggs, Vice President

                
	 
      	
                  CWEI
      ROMERE PASS ACQUISITION CORP.

                  a
      Delaware corporation

                  By:   /s/ Mel G.
      Riggs

                  Mel
      G. Riggs, Vice President

                
	 
      	
                  BLUE
      HEEL COMPANY

                  a
      Delaware corporation

                  By:   /s/ Mel G.
      Riggs

                  Mel
      G. Riggs, Vice President

                
	 
      	
                  TEX-HAL
      PARTNERS, INC.

                  a
      Delaware corporation

                  By:   /s/ Mel G.
      Riggs

                  Mel
      G. Riggs, Vice President

                

        

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	 
      	
                   

                  JPMORGAN CHASE BANK,
      N.A.,

                  (successor
      by merger to Bank One, N.A. (Illinois)), as Administrative Agent and
      a Lender

                  By:   /s/ Elizabeth
      K.
      Johnson                                                                    

                  Name:   Elizabeth
      K. Johnson

                  Title:     Vice
      President

                
	 
      	
                  BANK
      OF SCOTLAND

                  as
      Co-Agent and a Lender

                  By:                                                                    

                  Name:   Julia
      R. Franklin

                  Title:     Assistant
      Vice President

                
	 
      	
                   

                  UNION
      BANK OF CALIFORNIA, N.A.

                  as
      Syndication Agent and a Lender

                  By:   /s/ Timothy
      Brendel

                  Name:   Timothy
      Brendel

                  Title:     Vice
      President

                
	 
      	
                   

                  BNP
      PARIBAS

                  as
      Documentation Agent and a Lender

                  By:                                                                    

                  Name:   Brian
      M. Malone

                  Title:     Managing
      Director

                  By:                                                                    

                  Name:   Courtney
      Kubesch

                  Title:     Vice
      President

                
	 
      	
                   

                  FORTIS CAPITAL
      CORP.

                  as
      a Lender

                  By:   /s/ Michele
      Jones

                  Name:   Michele
      Jones

                  Title:     Director

                  By:   /s/ Darrell
      Holley

                  Name:   Darrell
      Holley

                  Title:     Managing
      Director

                
	 
      	
                  NATIXIS (formerly
      Natexis Banques Populaires)

                  as
      a Lender

                  By:    /s/ Donovan C.
      Broussard                                                                    

                  Name:   Donovan
      C. Broussard

                  Title:     Managing
      Director

                  By:    /s/ Liana
      Tchernysheva                                                                    

                  Name:   Liana
      Tchernysheva

                  Title:     Director

                

        

        
          
            
              

               

              Seventh
Amendment to Amended and Restated Credit Agreement – Signature Page

               

              65292201

               

              

            

             

          

          
             

            
              

            

          

          
             

          

        

    

    PRICING
SCHEDULE

    APPLICABLE
MARGIN

     

    

    
      	
              Borrowing
      Base Usage

            	
              Applicable
      Margin for Floating Rate Loans

            	
              Applicable
      Margin for Eurodollar Loans

            	
              Applicable
      Margin for

              Commitment
      Fee

            
	
              Greater
      than or equal to 90%

            	
              2.125%

            	
              3.00%

            	
              .50%

            
	
              Greater
      than or equal to 75% and less than 90%

            	
              1.875%

            	
              2.75%

            	
              .50%

            
	
              Greater
      than or equal to 50% and less than 75%

            	
              1.625%

            	
              2.50%

            	
              .50%

            
	
              Greater
      than or equal to 25% and less than 50%

            	
              1.375%

            	
              2.25%

            	
              .50%

            
	
              Less
      than 25%

            	
              1.125%

            	
              2.00%

            	
              .50%

            

    

    

     

     

    

      Seventh
Amendment to Amended and Restated Credit Agreement – Pricing
Schedule

      65292201.6

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