PURCHASE AND SALE CONTRACT

Exhibit 10.42

PURCHASE AND SALE CONTRACT

BETWEEN

LANDMARK (NC), LLC,

a Delaware limited liability company,
d/b/a Landmark-Raleigh (NC), LLC, in North Carolina

AS SELLER

AND

PENNSYLVANIA REALTY GROUP, INC.,

a Pennsylvania corporation

AS PURCHASER

LANDMARK APARTMENTS

Table of Contents

Page

PURCHASE AND SALE CONTRACT

THIS PURCHASE AND SALE CONTRACT (this " Contract ") is entered into as of the 31 ^st day of July, 2009 (the " Effective Date "), by and between LANDMARK (NC), LLC, a Delaware limited liability company, d/b/a Landmark – Raleigh (NC), LLC, in North Carolina, having an address at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 (" Seller "), and PENNSYLVANIA REALTY GROUP, INC., a Pennsylvania corporation, having a principal address at 2701 E. Luzerne Street, Philadelphia, Pennsylvania 19137 (" 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 the County of Wake, State of 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 $11,800,000.00, payable by Purchaser, as follows:

2.2.1         On the Effective Date, Purchaser shall deliver to Stewart Title Guaranty Company, c/o Wendy Howell, National Commercial Closing Specialist, 1980 Post Oak Boulevard, Suite 610, Houston, TX 77056, (Tel) 713-625-8161, (Fax) 713-552-1703 (" Escrow Agent " or " Title Insurer ") an initial deposit (the " Initial Deposit ") of $125,000.00 by wire transfer of immediately available funds (" Good Funds "). 

2.2.2         On or before the day that the Feasibility Period expires, Purchaser shall deliver to Escrow Agent an additional deposit (the " Additional Deposit ") of $125,000.00 by wire transfer of Good Funds. 

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

2.2.4         The balance of the Purchase Price for the Property shall be paid to and received by Escrow Agent by wire transfer of Good Funds no later than 10:00 a.m. (Eastern Time) on the Closing Date, subject to the prorations and adjustments herein described.

2.3               Escrow Provisions Regarding Deposit . 

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

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

2.3.3         If prior to the Closing Date either party makes a written demand upon Escrow Agent for payment of the Deposit, Escrow Agent shall give written notice to the other party of such demand.  If Escrow Agent does not receive a written objection from the other party to the proposed payment within 5 Business Days after the giving of such notice, Escrow Agent is hereby authorized to make such payment.  If Escrow Agent does receive such written objection within such 5-Business Day period, Escrow Agent shall continue to hold such amount until otherwise directed by written instructions from the parties to this Contract or a final judgment or arbitrator's decision.  However, Escrow Agent shall have the right at any time to deliver the Deposit to 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 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 environmental, title or survey matters are unsatisfactory to Purchaser for any reason, 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, except as otherwise herein expressly provided, 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 in its reasonable discretion) 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 ") caused by Purchaser's or its Consultants' entry onto the Property, and any Inspections or other acts by Purchaser or Purchaser's Consultants with respect to the Property during the Feasibility Period or otherwise.

3.4.2         Notwithstanding anything in this Contract to the contrary, Purchaser shall not be permitted to perform any invasive tests on the Property without Seller's prior written consent, which consent may be withheld in Seller's sole discretion.  Further, Seller shall have the right, without limitation, to disapprove any and all entries, surveys, tests (including, without limitation, a Phase II environmental study of the Property), investigations and other matters that in Seller's reasonable judgment could result in any injury to the Property or breach of any contract, or expose Seller to any Losses or violation of applicable law, or otherwise adversely affect the Property or Seller's interest therein.  Purchaser shall use reasonable efforts to minimize disruption to Tenants in connection with Purchaser's or its Consultants' activities pursuant to this Section.  No consent by Seller to any such activity shall be deemed to constitute a waiver by Seller or assumption of liability or risk by Seller.  Purchaser hereby agrees to restore, at Purchaser's sole cost and expense, any damage to the Property caused by Purchaser or its Consultants in the 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 not less than $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, as applicable.  Purchaser shall deliver proof of the insurance coverage required pursuant to this Section 3.4.2 to Seller (in the form of a certificate of insurance) prior to the earlier to occur of (i) Purchaser's or Purchaser's Consultants' entry onto the Property, or (ii) the expiration of 5 days after the Effective Date.

3.5               Property Materials . 

3.5.1         Within 5 Business Days after the Effective Date, and to the extent the same exist and are in Seller's possession or reasonable control (subject to Section 3.5.2 ), Seller agrees to make the documents set forth on Schedule 3.5 (together with any other documents or information provided by Seller or its agents to Purchaser with respect to the Property, the " Materials ") available at the Property for review and copying by Purchaser at Purchaser's sole cost and expense.  In the alternative, at Seller's option and within the foregoing time period, Seller may deliver some or all of the Materials to Purchaser, or make the same available to Purchaser on a secure web site (Purchaser agrees that any item to be delivered by Seller under this Contract shall be deemed delivered to the extent available to Purchaser on such secured web site).  To the extent that Purchaser determines that any of the Materials have not been made available or delivered to Purchaser pursuant to this Section 3.5.1 , Purchaser shall notify Seller and Seller shall use commercially reasonable efforts to deliver the same to Purchaser within 5 Business Days after such notification is received by Seller; provided, however, that under no circumstances will the Feasibility Period be extended and Purchaser's sole remedy will be to terminate this Contract pursuant to Section 3.2 .

3.5.2         In providing the Materials to Purchaser, other than Seller's Representations, Seller makes no representation or warranty, express, written, oral, statutory, or implied, and all such other representations and warranties are hereby expressly excluded and disclaimed.  All Materials are provided for informational purposes only and, together with all Third-Party Reports, shall be returned by Purchaser to Seller (or the destruction thereof shall be certified in writing by Purchaser to Seller) as a condition to return of the Deposit to Purchaser if this Contract is terminated for any reason.  Recognizing that the Materials delivered or made available by Seller pursuant to this Contract may not be complete or constitute all of such documents which are in Seller's possession or control, but are those that are readily and reasonably available to Seller, Purchaser shall not in any way be entitled to rely upon the completeness or accuracy of the Materials and will instead in all instances rely exclusively on its own Inspections and Consultants, and Seller's Representations, 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 ").  Seller makes no representations or warranties regarding the Rent Roll other than the express representation set forth in Section 6.1.6 .  

3.5.4         In addition to the items set forth on Schedule 3.5 , no later than 5 Business Days after the Effective Date, Seller shall deliver to Purchaser (or otherwise make available to Purchaser as provided under Section 3.5.1 ) a list of all current Property Contracts (the " Property Contracts List ").  Seller makes no representations or warranties regarding the Property Contracts List other than the express representations set forth in Section 6.1.7 . 

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

Article IV
TITLE

4.1               Title Documents .  Seller has caused to be delivered to Purchaser a standard form commitment (" 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 search charges and 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 with respect to the Property, including for "extended" coverage.

4.2               Survey .  Seller has delivered to Purchaser's attorneys the 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 20 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 or the Survey to which Purchaser objects (the " Objections ").  If Purchaser fails to tender an Objection Notice on or before the Objection Deadline, Purchaser shall be deemed to have approved and irrevocably waived any objections to any matters covered by the Title Documents and the Survey.  On or before 25 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.  Seller shall be entitled to an adjournment of the Closing Date, not exceeding 7 days, to cure the Objections.  If Seller fails to deliver a Response Notice by the Response Deadline, Seller shall be deemed to have elected not to cure or otherwise resolve any matter set forth in the Objection Notice.  If Purchaser is dissatisfied with the Response Notice or the lack of Response Notice, Purchaser may, as its exclusive remedy, exercise its right to terminate this Contract prior to the expiration of the Feasibility Period in accordance with the provisions of Section 3.2 .  If Purchaser fails to timely exercise such right, Purchaser shall be deemed to accept the Title Documents and Survey with resolution, if any, of the Objections set forth in the Response Notice (or if no Response Notice is tendered, without any resolution of the Objections) and without any reduction or abatement of the Purchase Price. 

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

4.4.1         All matters shown in the Title Documents and the Survey, other than (a) those Objections, if any, which Seller has agreed to cure pursuant to the Response Notice under Section 4.3 , (b) mechanics' liens and taxes due and payable with respect to the period preceding Closing, (c) the standard exception regarding the rights of parties in possession, which shall be limited to those parties in possession pursuant to the Leases, and (d) the standard exception pertaining to taxes, which shall be limited to taxes and assessments payable in the year in which the Closing occurs and subsequent taxes and assessments, not yet due and payable;

4.4.2         All Leases;

4.4.3         The Assumed Encumbrance;

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 Encumbrance . 

4.5.1         Purchaser acknowledges that the Property is encumbered by that certain loan (the " Loan " made to Seller by Capmark Bank, that certain Multifamily Deed of Trust, Assignment of Rents and Security Agreement dated March 11, 2009 and recorded in the Office of the Register of Deeds of Wake County, North Carolina in Book 13432 at Page 867, as assigned by Capmark Bank to Federal Home Loan Mortgage Corporation (" Lender ") pursuant to that certain Assignment of Security Interest, dated March 11, 2009 and recorded in the Office of the Register of Deeds of Wake County, North Carolina in Book 13432 at Page 943 (the " Assumed Deed of Trust ") and certain other security and related documents in connection with the Loan, (the " Assumed Encumbrance ").  The Loan is evidenced by that certain Multifamily Note, executed by Seller and dated March 11, 2009, in the stated principal amount of $8,850,000.00 (the " Note ," and together with the Assumed Deed of Trust, the Assumed Encumbrance and any other documents previously executed by Seller in connection with the Loan, the " Assumed Loan Documents ").  Within 5 days after the Effective Date, Seller agrees that it will make available to Purchaser (in the same manner in which Seller is permitted to make the Materials available to Purchaser under Section 3.5.1 ) copies of the Assumed Loan Documents which are in Seller's possession or reasonable control (subject to Section 3.5.2 ).

4.5.2         At the Closing, (a) Purchaser shall assume Seller's rights and obligations under the Note and all of the other Assumed Loan Documents and accept title to the Property subject to the Assumed Deed of Trust and the Assumed Encumbrance, and (b) the Lender shall release Seller, AIMCO Properties, Inc. under those certain guaranty's executed in connection with the Loan, and any other guarantors or other obligated parties under the Assumed Loan Documents, from all obligations under the Assumed Loan Documents (and any related guarantees or letters of credit) arising after the Closing, including, without limitation, any obligation to make payments of principal and interest under the Note (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.  Accordingly, Purchaser, at its sole cost and expense and within 15 days after receiving the Loan Assumption Application (as defined below) from Seller (the " Loan Assumption Application Submittal Deadline "), shall use its best 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 the Lender for assumption of the Loan together with all documents and information required in connection therewith (" Loan Assumption Application "), and, if Purchaser fails to submit a complete, in all material respects, Loan Assumption Application in a form acceptable to the Lender by the Loan Assumption Application Submittal Deadline, Purchaser shall be in default under this Contract, entitling the Seller to terminate this Contract, in which event the Deposit shall be immediately released to Seller by the Escrow Agent and this Contract shall be of no further force and effect, subject to and except for the Survival Provisions.  Purchaser agrees to provide Seller with a copy of the Loan Assumption Applications no later than 2 Business Days prior to the Loan Assumption Application Submittal Deadline and shall provide evidence of its submission to Lender on or before the Loan Assumption Application Submittal Deadline.  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 be responsible at its sole cost and expense for correcting and re-submitting any deficiencies noted by Lender in connection with the Loan Assumption Application no later than 5 Business Days after notification from Lender of such deficiency.  Purchaser also shall provide Seller with a copy of any correspondence from Lender with respect to the Loan Assumption Application no later than 3 Business Days after receipt of such correspondence from Lender.  Purchaser shall comply with Lender's assumption requirements in connection with the Loan Assumption and Release, which  Purchaser acknowledges may not be consistent with the provisions of the Assumed Loan Documents.  Notwithstanding the foregoing, Purchaser shall not be required to comply with Lender's assumption requirements, to the extent that complying with such assumption requirements would result in a material adverse change to any terms in the Assumed Loan Documents, or would otherwise impose commercially unreasonable obligations upon Purchaser or any guarantor or indemnitor of Purchaser (collectively, the " Onerous Requirements ").  Notwithstanding the foregoing, it shall not be considered an Onerous Requirement for Lender to request that the Specific AIMCO Provisions be removed from the Assumed Loan Documents.

4.5.5         Purchaser shall pay all fees and expenses (including, without limitation, all servicing fees and charges, transfer fees, assumption fees, title fees and endorsement fees) 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         A capital reserve escrow account has been established for the benefit of Lender, which escrow account currently has a balance of $658,188.00 (" Capital Reserve Escrow Amount ").  Lender and Seller have agreed that certain repair and maintenance items must be completed at the Property, a summary of which has been provided to Purchaser by Seller.   Although the Capital Reserve Escrow Amount is being used by Seller to complete such maintenance and repairs, a portion of the maintenance and repairs may not be completed as of the Closing Date.  As part of the Loan Assumption and Release, at Closing Seller will execute documentation in a form satisfactory to Lender and Purchaser releasing Seller's interest in the escrow account established for such capital reserves.  The Capital Reserve Escrow Amount (or whatever amount remains in such escrow account as of the Closing Date) shall be released (if permitted by Lender) or assigned to Purchaser at Closing as part of the Loan Assumption and Release.  Upon written request from Purchaser, Seller shall deliver or make available (pursuant to Section 3.5.1 of the Contract) to Purchaser (subject to Section 3.5.2 of the Contract), any records in Seller's possession or control, relating to the maintenance and repairs to the Property funded from the Capital Reserve Escrow Amount, and the outstanding balance in the Capital Reserve Escrow Account.  In addition, a replacement reserve escrow account has been established for the benefit of Lender, which escrow account currently has a balance of $26,427.00 (" Replacement Reserve Escrow Amount ").  At Closing, the Replacement Reserve Escrow Amount shall be released to Seller in Good Funds, or Seller shall receive a credit for such amount at Closing.  Subject to Section 4.5.4 , 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, including but not limited to the Replacement Reserve Escrow Amount, 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, other than the Capital Reserve Escrow Account, required to be replaced by Purchaser pursuant to the Loan Assumption and Release shall be released to Seller in Good Funds, or Seller shall receive a credit for such amount at 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         No later than 10 days after the Effective Date, 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         If Purchaser complies with its obligations under this Contract (including this Section 4.5 ) and the requirements of the Assumed Deed of Trust (including, without limitation, Section 21 of the Assumed Deed of Trust), in connection with obtaining the Loan Assumption and Release, and Purchaser uses diligent efforts to obtain the Loan Assumption and Release, but prior to the expiration of 45 days after the Effective Date (the " Loan Approval Period ") either: (i) Lender fails to provide its approval of the Loan Assumption and Release, or (ii) Lender conditions its approval of the Loan Assumption and Release on the Onerous Requirements, then, on or before the expiration of the Loan Approval Period, Purchaser shall have the right to give Seller and Escrow Agent written notice terminating this Contract (the " Loan Approval Termination ").  Seller and Purchaser may mutually agree, in writing, to extend the Loan Approval Period, provided however, that neither party shall have any obligation whatsoever to agree to an extension of the Loan Approval Period.  In such event, this Contract shall be of no further force and effect, subject to and except for the Survival Provisions, and Escrow Agent shall forthwith return the Deposit to Purchaser.  If Purchaser fails to provide Seller with the Loan Approval Termination prior to the expiration of the Loan Approval Period in strict accordance with the notice provisions of this Contract, Purchaser's right to terminate under this Section 4.5.9 shall be permanently waived, this Contract shall remain in full force and effect, the Deposit shall be non-refundable, except as otherwise herein expressly provided, and Purchaser's obligation to obtain the Lender's approval of the Loan Assumption and Release and to purchase the Property shall be non-contingent and unconditional except only for satisfaction of the conditions expressly stated in Section 8.1 .  Purchaser recognizes and agrees that, if the Loan Approval Period expires and Purchaser does not terminate this Contract, the Loan Assumption and Release shall not be a condition to Purchaser's obligation to close, and, if the Loan Assumption and Release is not obtained and the Closing has not occurred on or before the Closing Date, Purchaser shall be in default under this Contract, entitling the Seller to terminate this Contract, in which event the Deposit shall be immediately released to Seller by the Escrow Agent and this Contract shall be of no further force and effect, subject to and except for the Survival Provisions.

4.5.10     Seller shall satisfy, in all material respects, its obligations under the Assumed Loan Documents as they come due, provided such obligations arise prior to the Closing Date.

4.6               Subsequently Disclosed Exceptions .  If at any time after the expiration of the Feasibility Period, any update to the Title Commitment discloses any additional item that materially adversely affects title to the Property which was not disclosed on any version of, or update to, the Title Commitment delivered to Purchaser during the Feasibility Period (the " New Exception "), Purchaser shall have a period of 5 days from the date of its receipt of such update (the " New Exception Review Period ") to review and notify Seller in writing of Purchaser's approval or disapproval of the New Exception.  If Purchaser disapproves of the New Exception, 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, not exceeding 7 days, 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 shall not be a contingency to the Closing.

Article V
CLOSING

5.1               Closing Date .  The Closing shall occur at the time set forth in Section 2.2.4 on the date that is 30 days after expiration of the Loan Approval Period (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 connection with the Loan Assumption and Release.  Further, the Closing Date may be extended without penalty at the option of Seller (a) to a date not later than November 30, 2009 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, or (b) as provided in Section 13.29.3 .

            Provided that Purchaser is not in default under this Contract, Purchaser shall be permitted two 15-day extensions of the Closing Date specified in the first sentence of this Section 5.1 , by (i) delivering written notice to Seller no later than five days prior to the then scheduled Closing Date (as such Closing Date may have been previously extended) (the " Purchaser Extension Deadline ") and (ii) simultaneously with each such notice to Seller, delivering to Escrow Agent the amount of $25,000.00, which amount when received by Escrow Agent shall be added to the Deposit hereunder and shall be held, credited and disbursed in the same manner as provided hereunder with respect to the Deposit.

5.2               Seller Closing Deliveries .  No later than 1 Business Day prior to the Closing Date, Seller shall deliver to Escrow Agent (for disbursement to Purchaser upon Closing), each of the following items:

5.2.1         Special Warranty Deed (the " Deed ") in the form attached as Exhibit B to Purchaser, subject to the Permitted Exceptions.

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

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

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

5.2.5         Seller's closing statement.

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

5.2.7         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 Seller in the form attached hereto as Exhibit G , which shall be delivered to all Tenants by Seller immediately after the 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, unless otherwise provided in this Section 5.3 ) the following items:

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

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

5.3.3         Any declaration or other statement which may be required to be submitted by Purchaser 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         Any cancellation fees or penalties due to any vendor under any Terminated Contract as a result of the termination thereof, which such cancellation fees or penalties shall be disbursed directly to the appropriate vendor by the Escrow Agent.

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

5.3.10     All documents, instruments, guaranties, Lender Fees, Required Loan Fund Amounts, and other items or funds required by the 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, wi