BERKSHIRE INCOME REALTY INC
EX. 10.1 - BERKSHIRE INCOME REALTY, INC. 10-30-03
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>bir8k103003ex10-1.txt
<DESCRIPTION>EX. 10.1 - BERKSHIRE INCOME REALTY, INC. 10-30-03
<TEXT>


                         AGREEMENT OF PURCHASE AND SALE
                   [The St. Marin Apartments, Coppell, Texas]

     This Agreement of Purchase and Sale  ("Agreement") is made and entered into
by and between Purchaser and Seller.

                                    RECITALS

          A. Defined terms are  indicated by initial  capital  letters.  Defined
     terms shall have the meaning  set forth  herein,  whether or not such terms
     are used before or after the definitions are set forth.

          B.  Purchaser  desires to purchase the Property and Seller  desires to
     sell the  Property,  all upon the  terms and  conditions  set forth in this
     Agreement.

     NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants
and agreements set forth herein,  as well as the sums to be paid by Purchaser to
Seller,  and  for  other  good  and  valuable  consideration,  the  receipt  and
sufficiency of which are acknowledged, Purchaser and Seller agree as follows:


                          ARTICLE 1 - Basic Information

     1.1  Certain  Basic  Terms.  The  following  defined  terms  shall have the
meanings set forth below:

          1.1.1  Seller:             WHCO Real Estate Limited Partnership, a
                                     Delaware limited partnership

          1.1.2  Purchaser:          Berkshire  Income  Realty - OP,  L.P.,  a
                                     Delaware limited partnership

          1.1.3  Purchase Price:     $26,250,000.00

          1.1.4  Earnest  Money:     $100,000.00  (the  "Initial  Earnest
                                     Money"), including interest thereon,  to be
                                     deposited in accordance with Section 3.1
                                     below, to be increased by $100,000.00 (the
                                     "Additional  Earnest Money") to
                                     $200,000.00, plus interest thereon,
                                     pursuant to Section 3.1.

          1.1.5  Title  Company:     Title  Network,  Ltd.
                                     4975 Preston Park Blvd., Suite 740
                                     Plano,  Texas 75093
                                     Attention:  Mr. Tim Crisp
                                     Telephone:  (469)241-0688
                                     Facsimile: (469) 241-0711

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          1.1.6  Escrow Agent:       Title Network, Ltd.
                                     4975 Preston Park Blvd., Suite 740
                                     Plano, Texas 75093
                                     Attention:  Mr. Tim Crisp
                                     Telephone:  (469) 241-0688
                                     Facsimile: (469) 241-0711

          1.1.7  Broker:             CB Richard Ellis

          1.1.8  Effective Date:     The date on which this Agreement is
                                     executed by the latter to sign of
                                     Purchaser or Seller,  as indicated on the
                                     signature page of this Agreement.

          1.1.9  Title  Commitment
                 Delivery  Date:     The date which is one (1) day after the
                                     Effective Date.


          1.1.10 Survey
                 Delivery  Date:     The date which is one (1) day after the
                                     Effective Date.

          1.1.11 Title and Survey
                 Review  Period:     The period ending twenty (20)days after
                                     Purchaser's receipt of the later of the
                                     Title Commitment with all title exception
                                     documents referenced therein and the
                                     Survey, but in any event not  later than
                                     the  expiration of the  Inspection
                                     Period.

          1.1.12 Inspection
                 Period:             The period ending on October 20, 2003.

          1.1.13 Environmental
                 Inspection  Period: The period beginning on the Effective  Date
                                     and ending on the earlier of (i)  fourteen
                                    (14) days after the Effective Date or (ii)
                                     the expiration of the Inspection Period.

          1.1.14 Closing Date:       October 31, 2003.



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     1.2 Closing Costs. Closing costs shall be allocated and paid as follows:


Cost                                                     Responsible Party

Title  Commitment  required  to be  delivered  pursuant  Seller
to Section  5.1 and any inspection fee charged Seller by
the Title Company, tax certificates,  municipal and
utility lien certificates, and any other Title Company
charges

Premium for standard form Title Policy  required to      Seller
be delivered pursuant to Section 5.4

Premium for any upgrade of Title Policy for extended     Purchaser
or  additional  coverage  and any  endorsements
desired by Purchaser

Costs of Survey                                          Seller

Cost of any revisions, modifications or recertifications Purchaser
to the Survey

Costs for UCC Searches (if  requested by Purchaser)      Purchaser

Any deed taxes,  documentary stamps,  transfer taxes,    Seller
intangible taxes or other similar taxes, Seller fees or
assessments

Any  escrow  fee  charged  by Escrow  Agent for  holding Purchaser1/2
the  Earnest  Money or conducting the Closing            Seller1/2

Real Estate Sales Commission to Broker                   Seller

Recording fees on account of title clearing documents    Seller

Recording  fees, and any mortgage  taxes,  on account of Purchaser
Purchaser's  financing documents



     1.3 Notice Addresses:

               Purchaser:  Berkshire  Income  Realty - OP,  L.P.
                           c/o  Berkshire Realty Holdings L.P.
                           5720 LBJ Freeway,  Suite 480
                           Attention:  Mr.Eric Calub
                           Telephone:  (972) 450-0000
                           Facsimile:  (972) 991-4537
                           E-Mail:     eric.calub@Berkshire-group.com

               Copy  to:   The Berkshire Group
                           One Beacon Street
                           Boston, Massachusetts  02108
                           Attention:  Scott D. Spelfogel, Esquire
                           Telephone:  (617)  574-8385
                           Facsimile:  (617)  556-1408
                           E-Mail:     scott.spelfogel@Berkshire-group.com

               And  to:    Bingham McCutchen LLP
                           150 Federal Street
                           Boston, Massachusetts  02110
                           Attention:   Richard A. Toelke, Esquire
                           Telephone:  (617)951-8830
                           Facsimile:  (617)951-8736
                           E-Mail:     Richard.toelke@bingham.com

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               Seller:     WHCO Real Estate Limited Partnership
                           c/o Archon Group, L.P.
                           600 E. Las Colinas Boulevard, Suite 400
                           Irving, Texas  75039
                           Attention: Mr. Scott Ferguson
                           Telephone: (972) 368-2256
                           Facsimile: (972) 368-3597
                           E-Mail: scott.ferguson@archongroup.com

               Copy to:    Haynes and Boone, LLP
                           901 Main Street, Suite 3100
                           Dallas, Texas  75202
                           Attention:  David M. Shinnick, Esquire
                           Telephone: (214) 651-5029
                           Facsimile: (214) 200-0358
                           E-Mail: david.shinnick@haynesboone.com

     1.4 Index of Certain Additional Defined Terms:

Additional Property Information......................................Section 4.2
Asset Manager......................................................Section 12.18
Asset Manager's Employee.............................................Section 9.3
Assignment......................................................Subsection 7.3.2
Casualty Notice......................................................Section 6.2
CERCLA..............................................................Section 11.3
Closing..............................................................Section 7.1
Deed............................................................Subsection 7.3.1
Designated Representative(s).......................................Section 12.18
Due Diligence Termination Notice.....................................Section 4.4
Environmental Termination Notice.....................................Section 4.4
ERISA...........................................................Subsection 7.4.2
Hazardous Materials.................................................Section 11.4
Improvements....................................................Subsection 2.1.1
Independent Consideration............................................Section 3.2
Intangible Personal Property....................................Subsection 2.1.4
Land............................................................Subsection 2.1.1
Lease Files.....................................................Subsection 4.2.1
Leases..........................................................Subsection 2.1.2
License Agreements..............................................Subsection 2.1.5
Material Damage.................................................Subsection 6.2.1
Operating Statements............................................Subsection 4.1.2
Permitted Exceptions.................................................Section 5.3
Permitted Outside Parties............................................Section 4.7
Property.............................................................Section 2.1
Property Documents...................................................Section 4.5
Property Information.................................................Section 4.1
Real Property...................................................Subsection 2.1.1
Rent Roll.......................................................Subsection 4.1.1
Reports..............................................................Section 4.5

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Service Contracts...............................................Subsection 2.1.4
Survey...............................................................Section 5.2
Survival Period......................................................Section 9.3
Tangible Personal Property......................................Subsection 2.1.3
Taxes................................................................Section 8.1
Tenant Receivables...................................................Section 8.1
Title Commitment.....................................................Section 5.1
Title Policy.........................................................Section 5.4
Unknown Violation of Environmental Law...............................Section 4.4


                              ARTICLE 2 - Property

     2.1 Subject to the terms and conditions of this Agreement, Seller agrees to
sell to Purchaser,  and Purchaser agrees to purchase from Seller,  the following
property (collectively, the "Property"):

               2.1.1 Real  Property.  The land  described  in Exhibit A attached
          hereto (the  "Land"),  together  with (i) all  buildings,  structures,
          fixtures  and  other   improvements   located  thereon   collectively,
          ("Improvements"),   (ii)  all  and  singular  the  rights,   benefits,
          privileges,  easements,  tenements,  hereditaments,  and appurtenances
          thereon or in anywise appertaining thereto, and (iii) without warranty
          (except special warranty of title), all right,  title, and interest of
          Seller,  if any,  in and to all strips and gores and any land lying in
          the bed of any street, road or alley, open or proposed, adjoining such
          Land (collectively, the "Real Property").

               2.1.2 Leases. All of Seller's right, title and interest,  without
          warranty (except special warranty of title), in all leases of the Real
          Property,  including  leases  which  may be made by  Seller  after the
          Effective  Date and prior to Closing as  permitted  by this  Agreement
          (the "Leases").

               2.1.3 Tangible Personal  Property.  All of Seller's right,  title
          and interest,  without warranty (except special warranty of title), in
          the equipment, machinery, furniture,  furnishings,  supplies and other
          tangible  personal  property,  if  any,  owned  by  Seller  and now or
          hereafter  located  in and  used in  connection  with  the  operation,
          ownership or management of the Real Property,  and generally described
          on Schedule 2.1.3,  but  specifically  excluding any items of personal
          property  owned by  tenants  at or on the Real  Property  and  further
          excluding  any items of personal  property  owned by third parties and
          leased to Seller (collectively, the "Tangible Personal Property").

               2.1.4 Intangible Personal Property.  All of Seller's right, title
          and interest,  if any, without  warranty,  in all intangible  personal
          property related to the Real Property and the Improvements, including,
          without limitation:  all trade names and trade marks, domain names and
          web sites  associated  with the Real  Property  and the  Improvements,
          including  Seller's  rights and interests,  if any, in the name of the
          Real Property;  the plans and specifications  and other  architectural
          and engineering  drawings for the Improvements,  if any (to the extent
          assignable  without cost to Seller);  contract  rights  related to the
          operation,  ownership or  management of the Real  Property,  including
          maintenance,   service,  construction,  supply  and  equipment  rental
          contracts,  if any,  but not  including  Leases or License  Agreements
          (collectively,  the  "Service  Contracts")  (but  only  to the  extent
          assignable without cost to Seller and Seller's obligations  thereunder
          are  expressly  assumed  by  Purchaser  pursuant  to this  Agreement);
          warranties  (to  the  extent  assignable   without  cost  to  Seller);
          governmental  permits,  approvals and licenses,  if any (to the extent
          assignable without cost to Seller); and telephone exchange numbers (to
          the extent assignable

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          without cost to Seller) (all of the items described in this Subsection
          2.1.4 collectively referred to as the "Intangible Personal Property").

               2.1.5  License  Agreements.  All of  Seller's  right,  title  and
          interest,  without warranty (except special warranty of title), in and
          to all  agreements  (other than  Leases),  if any,  for the leasing or
          licensing of rooftop space or equipment, telecommunications equipment,
          cable access and other space,  equipment  and  facilities  (including,
          without  limitation,  agreements with laundry service  providers) that
          are  located on or within the Real  Property  and  generate  income to
          Seller as the owner of the Real Property,  including  agreements which
          may be made by Seller after the Effective Date and prior to Closing as
          permitted by this  Agreement (the "License  Agreements").  Anything in
          this Agreement to the contrary notwithstanding, Purchaser shall assume
          the  obligations  of the  "lessor"  or  "licensor"  under all  License
          Agreements, some or all of which may be non-cancelable.


                            ARTICLE 3 - Earnest Money

     3.1 Deposit and Investment of Earnest Money. Within three (3) business days
after the Effective Date, Purchaser shall deposit the Initial Earnest Money with
Escrow  Agent.  $25,000.00  of the Initial  Earnest  Money (the  "Non-Refundable
Earnest Money"),  including  interest thereon shall immediately be deemed earned
by Seller and become  NON-REFUNDABLE  to  Purchaser  in all events other than as
expressly  set  forth  in this  Agreement,  including  without  limitation,  the
following:  (i) a default by Seller and failure to close under Section 10.2 when
Purchaser is not in default hereunder, (ii) termination of this Agreement due to
a  condemnation  in  accordance  with Section  6.3,  (iii)  termination  of this
Agreement by Purchaser  pursuant to Sections 5.4 or 6.2.1,  (iv)  termination of
this  Agreement by either party due to the failure of any one of the  conditions
set forth in Sections 7.2.1,  7.2.2, 7.2.3 or 7.2.4 provided said failure is not
the  result  of  Purchaser's  default  hereunder,  or (v)  termination  of  this
Agreement  by Purchaser  due to an Unknown  Violation  of  Environmental  Law as
described in Section 4.4. If upon the expiration of the Inspection Period,  this
Agreement is still in force and effect,  Purchaser  shall, no later than one (1)
business  day  after  the  expiration  of the  Inspection  Period,  deposit  the
Additional  Earnest  Money as specified in Subsection  1.1.4 above,  with Escrow
Agent.  Immediately  upon receipt Escrow Agent shall invest the Earnest Money in
government  insured   interest-bearing   accounts  satisfactory  to  Seller  and
Purchaser,  shall not commingle the Earnest Money with any funds of Escrow Agent
or others,  and shall promptly provide Purchaser and Seller with confirmation of
the investments  made. Such account shall have no penalty for early  withdrawal,
and Purchaser accepts all risks with regard to such account.

     3.2  Independent  Consideration.  Simultaneously  with the  delivery of the
Initial  Earnest  Money to Escrow  Agent by  Purchaser,  Purchaser  shall pay to
Seller One Hundred and No/100 Dollars ($100.00) as independent consideration for
Seller's performance under this Agreement ("Independent  Consideration"),  which
shall be retained by Seller in all instances,  and shall not be applied  against
the Purchase Price.

     3.3 Form;  Failure  to  Deposit.  The  Earnest  Money  and the  Independent
Consideration shall be in the form of a certified or cashier's check or the wire
transfer  to Escrow  Agent of  immediately  available  U.S.  federal  funds.  If
Purchaser  fails to timely  deposit  any  portion  of the  Earnest  Money or the
Independent  Consideration  within the time periods  required,  and such failure
continues  for one (1)  additional  business  day after  notice  from  Seller to
Purchaser,  Seller may terminate  this Agreement by written notice to Purchaser,
in which event any Earnest Money that has previously been deposited by Purchaser
with Escrow Agent shall be delivered to Seller and thereafter the parties hereto
shall have no

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further  rights or  obligations  hereunder,  except for  rights and  obligations
which, by their terms, survive the termination hereof.

     3.4  Disposition of Earnest Money.  The Earnest Money shall be applied as a
credit to the Purchase  Price at Closing.  However,  (i) if Purchaser  elects to
terminate this Agreement prior to the expiration of the Environmental Inspection
Period  because of an Unknown  Violation  of  Environmental  Law as described in
Section 4.4,  Escrow Agent shall pay the entire  Earnest  Money,  including  the
Non-Refundable  Earnest  Money,  to Purchaser  one (1)  business  day  following
receipt of the Environmental  Termination  Notice from Purchaser (as long as the
current investment can be liquidated and disbursed in one (1) business day); and
(ii) if Purchaser  elects to terminate this Agreement prior to the expiration of
the  Inspection  Period  pursuant  to Section  4.4 for any reason  other than an
Unknown Violation of Environmental Law, Escrow Agent shall pay the Earnest Money
less  the  Non-Refundable  Earnest  Money  to  Purchaser  one (1)  business  day
following  receipt of the Due Diligence  Termination  Notice from  Purchaser (as
long as the  current  investment  can be  liquidated  and  disbursed  in one (1)
business  day).  No notice to Escrow Agent from Seller shall be required for the
release  of the  applicable  Earnest  Money  to  Purchaser  by  Escrow  Agent if
Purchaser  terminates this Agreement  pursuant to Section 4.4. In the event of a
termination of this Agreement by either Seller or Purchaser for any reason other
than  pursuant  to Section  4.4,  Escrow  Agent is  authorized  to  deliver  the
applicable  Earnest  Money to the party hereto  entitled to same pursuant to the
terms hereof on or before the tenth (10th)  business  day  following  receipt by
Escrow Agent and the non-terminating party of written notice of such termination
from the terminating party,  unless the other party hereto notifies Escrow Agent
that it disputes the right of the other party to receive the applicable  Earnest
Money. In such event, Escrow Agent may interplead the Earnest Money into a court
of  competent  jurisdiction  in the county in which the  Earnest  Money has been
deposited.  All attorneys'  fees and costs and Escrow Agent's costs and expenses
incurred in  connection  with such  interpleader  shall be assessed  against the
party  that is not  awarded  the  Earnest  Money,  or if the  Earnest  Money  is
distributed  in part to both  parties,  then in the inverse  proportion  of such
distribution.


                            ARTICLE 4 - Due Diligence

     4.1 Due Diligence  Materials To Be Delivered.  To the extent such items are
in Seller's possession and not previously  delivered to Purchaser,  Seller shall
deliver to Purchaser the following (the "Property Information") on or before the
Effective Date.

               4.1.1  Rent  Roll.  A current  rent roll  ("Rent  Roll")  for the
          Property;

               4.1.2 Financial  Information.  Copy of operating statements and a
          summary of capital  expenditures  pertaining  to the Property from the
          commencement  of Seller's  ownership  and  operation  of the  Property
          ("Operating Statements");

               4.1.3 Lease Form. Copy of Seller's current standard lease form;

               4.1.4   Environmental  and  Structural   Reports.   Copy  of  any
          environmental  reports,  site assessments,  structural  reports,  soil
          reports and other property condition reports related to the Property.

               4.1.5 Tax Statements.  Copy of ad valorem tax statements  related
          to the Property for the last three (3) tax periods;

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               4.1.6  Title and  Survey.  Copy of Seller's  most  current  title
          insurance policy, and survey of the Property;

               4.1.7 Service Contracts. A list, together with copies, of Service
          Contracts;

               4.1.8 Warranties. A list of the Warranties;

               4.1.9 Personal Property. A list of Tangible Personal Property;

               4.1.10 License  Agreements.  A list,  together with copies of any
          License Agreements;

               4.1.11 Governmental  Notices. A list, together with copies of any
          written notices from any governmental  authority or quasi-governmental
          authority  (including any applicable Valley Ranch  association) of any
          material violation of any laws or restrictions  applicable (or alleged
          to be applicable) to the Real Property,  or any part thereof, that has
          not been corrected; and

               4.1.12  Litigation.  A list  of any  litigation  pending  against
          Seller relating to the Property.

     4.2 Due Diligence Materials To Be Made Available.  To the extent such items
are in  Seller's  possession,  Seller  shall make  available  to  Purchaser  for
Purchaser's  review,  at Seller's option at either the offices of Seller's Asset
Manager  or  property  manager  or at the  Property,  the  following  items  and
information (the "Additional Property Information") and Purchaser at its expense
shall have the right to make copies of same.

               4.2.1 Lease Files. The lease files for all tenants, including the
          Leases, amendments,  guaranties, any letter agreements and assignments
          which are then in  effect  and any  correspondence  or  default  files
          ("Lease Files");

               4.2.2  Maintenance  Records.  Maintenance work orders relating to
          the Property for the twelve (12) months preceding the Effective Date;

               4.2.3 Plans and Specifications. Building plans and specifications
          relating to the Property; and

               4.2.4 Licenses, Permits and Certificates of Occupancy.  Licenses,
          permits and certificates of occupancy relating to the Property.

     4.3 Physical Due Diligence. Commencing on the Effective Date and continuing
until the Closing, Purchaser shall have reasonable access to the Property at all
reasonable  times during  normal  business  hours,  upon  appropriate  notice to
tenants as permitted or required under the Leases, for the purpose of conducting
reasonably  necessary tests,  including surveys and architectural,  engineering,
geotechnical  and  environmental   inspections  and  tests,  provided  that  (i)
Purchaser must give Seller  twenty-four  (24) hours' prior  telephone or written
notice  of any such  inspection  or  test,  and with  respect  to any  intrusive
inspection or test (i.e.,  core  sampling)  must obtain  Seller's  prior written
consent,  which  consent  shall  not be  unreasonably  withheld,  (ii)  prior to
performing  any  inspection or test,  Purchaser  must deliver a  certificate  of
insurance to Seller  evidencing that Purchaser and its  contractors,  agents and
representatives  have in  place  reasonable  amounts  of  comprehensive  general
liability insurance and workers compensation insurance for its activities on the
Property in terms and amounts  reasonably  satisfactory  to Seller  covering any
accident arising in connection with the presence of Purchaser,  its

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contractors,  agents and representatives on the Property,  which insurance shall
name Seller and Asset Manager as additional insureds  thereunder,  and (iii) all
such tests shall be  conducted  by  Purchaser  in  compliance  with  Purchaser's
responsibilities set forth in Section 4.10 below.  Purchaser shall bear the cost
of all such  inspections  or tests and shall be  responsible  for and act as the
generator  with respect to any wastes  generated by those tests.  Subject to the
provisions of Section 4.7 hereof,  Purchaser or Purchaser's  representatives may
meet with any tenant; provided,  however, Purchaser must contact Seller at least
forty-eight  (48)  hours in  advance  by  telephone  or fax to inform  Seller of
Purchaser's  intended meeting and to allow Seller the opportunity to attend such
meeting if Seller  desires.  Subject to the  provisions  of Section  4.7 hereof,
Purchaser  or  Purchaser's   representatives  may  meet  with  any  governmental
authority  for any  good  faith,  reasonable  purpose  in  connection  with  the
transaction contemplated by this Agreement;  provided,  however,  Purchaser must
contact Seller at least forty-eight (48) hours in advance by telephone or fax to
inform  Seller  of  Purchaser's   intended  meeting  and  to  allow  Seller  the
opportunity to attend such meeting if Seller desires.

     4.4 Due  Diligence/Environmental/Termination  Right.  Purchaser  shall have
through the last day of the Inspection Period in which to (i) examine,  inspect,
and investigate the Property Information and the Additional Property Information
(collectively,  the "Property  Documents")  and the Property and, in Purchaser's
sole and absolute  judgment and  discretion,  determine  whether the Property is
acceptable to Purchaser, (ii) obtain all necessary internal approvals, and (iii)
satisfy all other  contingencies of Purchaser.  Notwithstanding  anything to the
contrary in this  Agreement,  Purchaser  may  terminate  this  Agreement for any
reason or no reason by giving written notice of termination to Seller and Escrow
Agent (the "Due Diligence  Termination Notice") on or before the last day of the
Inspection  Period.  In  addition,   without  limiting  the  generality  of  the
foregoing,  Purchaser  shall  have  through  the last  day of the  Environmental
Inspection Period to complete any environmental  inspections and tests permitted
by this Agreement and, based on such inspections and tests, to determine whether
or not  the  environmental  condition  of  the  Real  Property  is  suitable  to
Purchaser. If an environmental  inspection or test conducted by or for Purchaser
reveals any environmental contamination on or under the Real Property that is in
violation of a current  environmental law and not disclosed by any environmental
report(s)  set forth on Exhibit J provided to Purchaser by Seller as part of the
Property Documents (an "Unknown Violation of Environmental Law"), then Purchaser
may,  at its  option,  terminate  this  Agreement  by giving  written  notice of
termination to Seller and Escrow Agent (the "Environmental  Termination Notice")
on or before the last day of the Environmental  Inspection  Period. If Purchaser
does not give a Due Diligence Termination Notice or an Environmental Termination
Notice, this Agreement shall continue in full force and effect,  Purchaser shall
be deemed to have waived its right to terminate this Agreement  pursuant to this
Section  4.4, and  Purchaser  shall be deemed to have  acknowledged  that it has
received or had access to all Property  Documents and conducted all  inspections
and tests of the Property that it considers important.

     4.5 Return of Documents and Reports.  If this Agreement  terminates for any
reason other than Seller's  default  hereunder,  Purchaser shall promptly return
and/or   deliver  to  Seller  all  Property   Documents   and  copies   thereof.
Additionally,  if this  Agreement  terminates for any reason other than Seller's
default,  then  Purchaser  must  deliver  to Seller  copies  of all third  party
reports, investigations and studies, other than economic analyses (collectively,
the  "Reports"  and,  individually,   a  "Report")  prepared  for  Purchaser  in
connection with its due diligence  review of the Property.  The Reports shall be
delivered  to  Seller  without  any   representation   or  warranty  as  to  the
completeness  or accuracy of the Reports or any other matter  relating  thereto,
and Seller shall have no right to rely on any Report without the written consent
of the party  preparing  same.  Purchaser's  obligation  to deliver the Property
Documents  and the  Reports to Seller  shall  survive  the  termination  of this
Agreement.

                                     Page 9
<PAGE>


     4.6  Service  Contracts.  On or prior  to the  last  day of the  Inspection
Period,  Purchaser  will advise Seller in writing of which Service  Contracts it
will  assume and for which  Service  Contracts  Purchaser  requests  that Seller
deliver written  termination at or prior to Closing,  provided Seller shall have
no  obligation to terminate,  and  Purchaser  shall be obligated to assume,  any
Service  Contracts which by their terms cannot be terminated  without penalty or
payment of a fee.  Seller shall deliver at Closing notices of termination of all
Service Contracts that are not so assumed. Purchaser must assume the obligations
arising from and after the Closing Date under those  Service  Contracts (i) that
Purchaser  has  agreed to  assume,  or that  Purchaser  is  obligated  to assume
pursuant  to this  Section  4.6,  and (ii) for  which a  termination  notice  is
delivered as of or prior to Closing but for which  termination  is not effective
until after Closing.

     4.7 Proprietary Information;  Confidentiality.  Purchaser acknowledges that
the Property Documents are proprietary and confidential and will be delivered to
Purchaser   solely  to  assist  Purchaser  in  determining  the  feasibility  of
purchasing the Property.  Purchaser shall not use the Property Documents for any
purpose other than as set forth in either the preceding or succeeding sentences.
Purchaser  shall not  disclose  the  contents  to any  person  other than to its
agents, employees,  representatives,  attorneys,  investors,  lenders, potential
lenders  and other  persons  who are  directly  involved  in the due  diligence,
acquisition  and  financing  of the Property and who have agreed to preserve the
confidentiality of such information as required hereby (collectively, "Permitted
Outside  Parties");  provided,  however,  Purchaser  shall  disclose  only  such
information to a particular  Permitted Outside Party as is reasonably  necessary
for that Permitted  Outside Party to perform its role in assisting  Purchaser to
determine the feasibility of its acquisition of the Property,  and nothing more.
At any time and from time to time,  within two (2) business days after  Seller's
request,  Purchaser  shall  deliver  to  Seller  a list of all  parties  to whom
Purchaser has provided any Property  Documents or any information taken from the
Property  Documents.  Purchaser  shall not divulge the  contents of the Property
Documents  and  other   information   except  in  strict   accordance  with  the
confidentiality standards set forth in this Section 4.7. In permitting Purchaser
to review the Property Documents or any other information, Seller has not waived
any privilege or claim of  confidentiality  with respect  thereto,  and no third
party benefits or  relationships  of any kind,  either express or implied,  have
been offered, intended or created.

     4.8 No Representation or Warranty by Seller.  Purchaser  acknowledges that,
except  as  expressly  set forth in this  Agreement,  neither  Seller  nor Asset
Manager has made nor makes any warranty or  representation  regarding the truth,
accuracy or  completeness  of the Property  Documents or the source(s)  thereof.
Purchaser further  acknowledges  that some if not all of the Property  Documents
were prepared by third parties  other than Seller and Asset  Manager.  Except as
expressly  set  forth in this  Agreement,  Seller  and Asset  Manager  expressly
disclaim any and all liability for  representations  or  warranties,  express or
implied,  statements of fact and other matters contained in such information, or
for  omissions  from the  Property  Documents,  or in any other  written or oral
communications  transmitted or made available to Purchaser.  Except as expressly
set  forth  in  this  Agreement,  Purchaser  shall  rely  solely  upon  its  own
investigation with respect to the Property,  including,  without limitation, the
Property's physical,  environmental or economic condition, compliance or lack of
compliance  with  any  ordinance,  order,  permit  or  regulation  or any  other
attribute  or  matter  relating  thereto.  Seller  and  Asset  Manager  have not
undertaken  any  independent   investigation  as  to  the  truth,   accuracy  or
completeness of the Property  Documents and are providing the Property Documents
solely as an accommodation to Purchaser.

     4.9   Purchaser's   Responsibilities.   In  conducting   any   inspections,
investigations or tests of the Property and/or Property Documents, Purchaser and
its agents and representatives shall: (i) not materially or unreasonably disturb
the  tenants or  interfere  with  their use of the  Property  pursuant  to their
respective  Leases;  (ii) not  materially  or  unreasonably  interfere  with the
operation  and  maintenance  of the

                                    Page 10
<PAGE>


Property;  (iii) not damage any part of the  Property or any  personal  property
owned or held by any tenant or any third  party;  (iv) not  injure or  otherwise
cause bodily harm to Seller, Asset Manager, or their respective agents,  guests,
invitees,  contractors and employees or any tenants or their guests or invitees;
(v) comply with all applicable laws; (vi) promptly pay when due the costs of all
tests, investigations,  and examinations done with regard to the Property; (vii)
not permit any liens to attach to the Real Property by reason of the exercise of
its rights  hereunder;  (viii)  promptly  repair any damage to the Real Property
resulting directly or indirectly from any such inspection or tests; and (ix) not
reveal  or  disclose  prior to  Closing  any  information  obtained  during  the
Inspection Period  concerning the Property and the Property  Documents to anyone
other than the Permitted Outside Parties, in accordance with the confidentiality
standards set forth in Section 4.7 above, or except as may be otherwise required
by law.

     4.10 Purchaser's  Agreement to Indemnify.  Purchaser  indemnifies and holds
Seller and Asset Manager  harmless  from and against any and all liens,  claims,
causes of  action,  damages,  liabilities  and  expenses  (including  reasonable
attorneys' fees) caused by Purchaser's inspections or tests permitted under this
Agreement  or any  violation  of the  provisions  of Sections  4.3, 4.7 and 4.9;
provided,  however,  the indemnity  shall not extend to protect  Seller from any
pre-existing  liabilities  for matters  merely  discovered  by Purchaser  (i.e.,
latent  environmental  contamination)  so long  as  Purchaser's  actions  do not
aggravate any pre-existing  liability of Seller.  Purchaser's  obligations under
this Section 4.10 shall  survive the  termination  of this  Agreement  and shall
survive the Closing.

                          ARTICLE 5 - Title and Survey

     5.1 Title  Commitment.  Seller shall cause to be prepared and  delivered to
Purchaser  on or  before  the  Title  Commitment  Delivery  Date:  (i) a current
commitment  for  title  insurance  or  preliminary   title  report  (the  "Title
Commitment")  issued by the Title  Company,  in the amount of the Purchase Price
and on a Texas standard form commitment, with Purchaser as the proposed insured,
and (ii) copies of all documents of record  referred to in the Title  Commitment
as exceptions to title to the Property.

     5.2 Survey.  Seller shall  deliver or cause to be delivered to Purchaser on
or before the Survey Delivery Date a current,  updated  ALTA/ACSM  survey of the
Property (the "Survey"). Purchaser may elect to modify, or re-certify the Survey
to satisfy Purchaser's lender's requirements or to otherwise satisfy Purchaser's
objectives.

     5.3 Title  Review.  During the Title and Survey  Review  Period,  Purchaser
shall review title to the Property as disclosed by the Title  Commitment and the
Survey. Seller shall have no obligation to cure title objections except monetary
liens of an  ascertainable  amount  created by, under or through  Seller,  which
liens  Seller  shall cause to be released  at or prior to Closing  (with  Seller
having  the right to apply the  Purchase  Price or a  portion  thereof  for such
purpose),  and Seller  shall  deliver  the  Property  free and clear of any such
monetary liens; provided,  however, if a judgment lien, lis pendens,  mechanic's
lien or lien claim, or other  encumbrance is filed against the Property  without
Seller's  consent,  then,  at Seller's  option,  Seller  shall have a reasonable
period of time,  not to exceed  thirty (30) days from the date Seller  first has
actual  knowledge of the filing,  within which to dispute  and/or "bond  around"
said lien or lien claim in  accordance  with  applicable  law and otherwise in a
manner  sufficient  for the Title  Company  to issue the  Title  Policy  without
exception to said lien or lien claim,  and in the event Seller elects to dispute
and "bond  around" said lien or lien claim,  then the Closing shall be extended,
if necessary, up to said thirty (30) day period. Seller further agrees to remove
any exceptions or encumbrances to title which are voluntarily  created by, under
or through  Seller  after the  Effective  Date without  Purchaser's  consent (if
requested, such consent shall not be unreasonably withheld or delayed). The term
"Permitted  Exceptions"  shall  mean:  the  specific  exceptions  in  the  Title
Commitment,  as of the effective  date of the Title

                                    Page 11
<PAGE>


Commitment,  that the Title  Company  has not  agreed  to remove  from the Title
Commitment as of the end of the Title and Survey  Review  Period  (except to the
extent the same are to be modified pursuant to the terms hereof) and that Seller
is not  required to remove as provided  above;  matters  created by,  through or
under  Purchaser;  items shown on the Survey as of the date of the Survey  which
have not been removed as of the end of the Inspection Period;  real estate taxes
not yet due and payable;  rights of tenants,  as tenants only, under the Leases;
rights of tenants or licensees under License Agreements; and any licensees under
any Service Contracts not terminated as of Closing.

     5.4  Delivery  of Title  Policy at  Closing.  In the  event  that the Title
Company  does not issue at  Closing,  or  unconditionally  commit at  Closing to
issue,  to  Purchaser,  an owner's  title  policy in  accordance  with the Title
Commitment,  insuring  Purchaser's  title to the  Property  in the amount of the
Purchase Price,  subject only to the Permitted  Exceptions (the "Title Policy"),
Purchaser  shall have the right to terminate this  Agreement,  in which case the
Earnest Money shall be immediately  returned to Purchaser and the parties hereto
shall  have no  further  rights or  obligations,  other than those that by their
terms survive the termination of this Agreement.


                     ARTICLE 6 - Operations and Risk of Loss

     6.1 Ongoing Operations. From the Effective Date through Closing:

               6.1.1 Leases,  Service Contracts and License  Agreements.  Seller
          will  perform  its  material  obligations  under the  Leases,  Service
          Contracts and License Agreements.

               6.1.2 New  Contracts.  Except as  provided in  Subsection  6.1.4,
          Seller will not enter into or amend or modify any  contract or license
          agreement that will be an obligation affecting the Property subsequent
          to the Closing,  except contracts  entered into in the ordinary course
          of business that are terminable  without cause and without the payment
          of any  termination  penalty on not more than  thirty (30) days' prior
          notice.

               6.1.3 Maintenance of Improvements;  Removal of Personal Property.
          Subject  to  Sections  6.2  and  6.3,   Seller   shall   maintain  all
          Improvements  substantially in their present condition  (ordinary wear
          and tear  and  casualty  excepted)  and in a  manner  consistent  with
          Seller's  maintenance of the  Improvements  during  Seller's period of
          ownership.  Seller  will not remove  any  Tangible  Personal  Property
          except as may be required for  necessary  repair or  replacement,  and
          replacement  shall be of  approximately  equal quality and quantity as
          the removed item of Tangible Personal Property.

               6.1.4 Insurance. Seller shall keep the Property insured under its
          current policy,  or  substantially  similar  policy,  against fire and
          other  hazards on a full  replacement  cost basis  covered by extended
          coverage   endorsement  and  commercial  general  liability  insurance
          against claims for bodily injury, death and property damage, occurring
          in, on or about the Property.

               6.1.5  Access.   Seller  shall  allow  Purchaser  or  Purchaser's
          representatives access to the Property, the Leases and other documents
          required  to  be  delivered   under  this  Agreement  and  such  other
          documentation  Purchaser deems  reasonably  necessary for its intended
          use and operation of the  Property,  upon  reasonable  prior notice at
          reasonable  times during normal  business  hours;  provided  Purchaser
          agrees that the original leases and all other original documents shall
          remain on-site at the Property.

                                    Page 12
<PAGE>


               6.1.6  Listing and Other  Offers.  Seller will not enter into any
          contracts  or  agreements  (whether  binding  or  not)  regarding  any
          disposition of the Property or authorize the Broker or any other party
          to do so on its behalf.

               6.1.7 Ongoing  Operations.  During the pendency of the Agreement,
          Seller  shall carry on its  business  and  activities  relating to the
          Property,  including  leasing,  maintenance  and  repair  work  of the
          Property, and replacement of carpet and air-conditioning units located
          at the  Property,  substantially  in the same manner as it did for the
          one (1) year period preceding the Effective Date. Without limiting the
          generality of the foregoing, Seller shall not lease any apartment to a
          tenant with a "Saferent" score of less than 300.

               6.1.8 Leasing.  Seller will continue to lease  apartment units in
          the  Improvements  in  the  ordinary  course  of  business,  provided,
          however,  Seller shall not, without Purchaser's prior written consent,
          (a) enter into any new lease for an  apartment  unit with a first-time
          tenant  unless (i) the lease is on Seller's  standard  form,  (ii) the
          lease is for a period of no more than thirteen (13) months,  and (iii)
          the rent is not less than the then  current  fair market rent for such
          unit less any concessions consistent with Seller's specials during the
          three (3) months prior to the  Effective  Date; or (b) renew or extend
          any Lease for an apartment unit with an existing tenant unless (i) the
          lease is on Seller's  standard form, (ii) the lease is for a period of
          not  more  than  thirteen  (13)  months,  and  (iii)  the rent for the
          amended,  renewal or extension term is not less than the lesser of (x)
          the then current  fair market rent for such unit less any  concessions
          consistent with Seller's specials during the three (3) months prior to
          the Effective Date or (y) the current rent under the applicable Lease;
          or (c) terminate any Lease except by reason of a default by the tenant
          thereunder.

               6.1.9 Rent  Ready.  Seller  shall place any  apartments  that are
          vacant as of the  Effective  Date or which  become  vacant five (5) or
          more business days prior to the Closing Date in a rent ready condition
          such that they are available for immediate  occupancy at Closing.  For
          purposes  hereof,  "rent ready  condition"  shall be the  condition in
          which Seller has placed vacant  apartments during its normal course of
          business of operating the  Property,  including,  without  limitation,
          operable  kitchen  appliances  and, if necessary,  fresh paint and new
          carpet.  If Seller  fails to have any such vacant  apartments  in rent
          ready  condition,  then Purchaser shall receive a credit at Closing on
          account thereof in the amount of $500.00 per vacant apartment unit.

     6.2 Damage.  If prior to Closing the  Property  is  damaged,  Seller  shall
estimate the cost to repair and the time  required to complete  repairs and will
provide Purchaser written notice of Seller's  estimation (the "Casualty Notice")
as soon as reasonably possible after the occurrence of the casualty.

               6.2.1  Material.  In the  event  of  any  Material  Damage  to or
          destruction  of the Property or any portion  thereof prior to Closing,
          Purchaser  may, at its option,  terminate this Agreement by delivering
          written  notice to Seller on or before the  expiration  of thirty (30)
          days after the date Seller  delivers the Casualty  Notice to Purchaser
          (and if  necessary,  the  Closing  Date shall be  extended to give the
          parties the full thirty (30) day period to make such  election  and to
          obtain insurance settlement  agreements with Seller's insurers).  Upon
          any such termination, the Earnest Money shall be returned to Purchaser
          and the parties  hereto  shall have no further  rights or  obligations
          hereunder,   other  than  those  that  by  their  terms   survive  the
          termination of this Agreement. If Purchaser does not so terminate this
          Agreement  within said thirty (30) day period,  then the parties shall
          proceed  under  this  Agreement  and  close on  schedule  (subject  to
          extension  of Closing as  provided  above),  and as of Closing  Seller
          shall assign to Purchaser,  without  representation  or warranty by or
          recourse  against  Seller,  all  of  Seller's  rights  in  and  to any
          resulting  insurance  proceeds  (including  any  rent  loss  insurance
          applicable to any period on and after the Closing

                                    Page 13
<PAGE>


          Date)  due  Seller  as a result  of such  damage  or  destruction  and
          Purchaser shall assume full responsibility for all needed repairs, and
          Purchaser shall receive a credit at Closing for any deductible  amount
          under such  insurance  policies.  For the purposes of this  Agreement,
          "Material  Damage" and  "Materially  Damaged"  means damage which,  in
          Seller's  reasonable  estimation,  exceeds  $500,000.00  to  repair or
          which, in Seller's reasonable estimation, will take longer than ninety
          (90) days to repair.

               6.2.2 Not Material.  If the Property is not  Materially  Damaged,
          then Purchaser  shall not have the right to terminate this  Agreement,
          and Seller shall,  at its option,  either (i) repair the damage before
          the Closing in a manner  reasonably  satisfactory  to Purchaser,  (ii)
          assign to  Purchaser  all of Seller's  rights in and to any  resulting
          insurance  proceeds  (including any rent loss insurance  applicable to
          any  period on and after the  Closing  Date) due Seller as a result of
          such  damage  or   destruction   and   Purchaser   shall  assume  full
          responsibility  for all needed repairs,  and Purchaser shall receive a
          credit at Closing  for any  deductible  amount  under  such  insurance
          policies, or (iii) credit Purchaser at Closing for the reasonable cost
          to  complete  the  repair if such  amount is less than the  deductible
          amount under Seller's insurance policies.

     6.3  Condemnation.  If proceedings  in eminent  domain are instituted  with
respect to the Property or any portion thereof, Purchaser may, at its option, by
written  notice to Seller  given  within  ten (10) days  after  Seller  notifies
Purchaser  of such  proceedings  (and if  necessary  the  Closing  Date shall be
automatically  extended to give  Purchaser  the full ten (10) day period to make
such election),  either: (i) terminate this Agreement, in which case the Earnest
Money shall be  immediately  returned to Purchaser and the parties  hereto shall
have no further  rights or  obligations,  other  than those that by their  terms
survive the termination of this Agreement, or (ii) proceed under this Agreement,
in which event  Seller  shall,  at the Closing,  assign to Purchaser  its entire
right, title and interest in and to any condemnation  award, and Purchaser shall
have the sole right after the Closing to negotiate and  otherwise  deal with the
condemning  authority  in respect of such  matter.  If  Purchaser  does not give
Seller  written  notice of its election  within the time  required  above,  then
Purchaser shall be deemed to have elected option (i) above.


                               ARTICLE 7 - Closing

     7.1  Closing.  The  consummation  of the  transaction  contemplated  herein
("Closing")  shall occur on the Closing  Date at the offices of Escrow Agent (or
such other  location  as may be mutually  agreed upon by Seller and  Purchaser).
Funds  shall be  deposited  into and held by Escrow  Agent in a  closing  escrow
account with a bank  satisfactory to Purchaser and Seller.  Upon satisfaction or
completion of all closing  conditions and  deliveries,  the parties shall direct
Escrow  Agent to  immediately  record and deliver the closing  documents  to the
appropriate  parties and make disbursements  according to the closing statements
executed by Seller and Purchaser.

     7.2  Conditions to Parties'  Obligation to Close.  In addition to all other
conditions  set forth herein,  the  obligation of Seller,  on the one hand,  and
Purchaser,  on the other  hand,  to  consummate  the  transactions  contemplated
hereunder are conditioned upon the following:

               7.2.1  Representations,   Covenants  and  Warranties.  The  other
          party's  representations,  covenants, and warranties contained herein,
          including  without  limitation those in Section 6.1, shall be true and
          correct in all  material  respects  as of the  Effective  Date and the
          Closing Date;

               7.2.2  Deliveries.  As of the Closing Date, the other party shall
          have tendered all deliveries to be made at Closing; and

                                    Page 14
<PAGE>


               7.2.3  Actions,  Suits,  etc.  There  shall  exist no  pending or
          threatened  actions,   suits,   arbitrations,   claims,   attachments,
          proceedings,  assignments  for the benefit of  creditors,  insolvency,
          bankruptcy,  reorganization  or other  proceedings,  against the other
          party that would  materially  and  adversely  affect the  operation or
          value of the  Property  or the other  party's  ability to perform  its
          obligations under this Agreement.

               7.2.4  Estoppel  /Certificate  of  Compliance.  On or before  the
          Closing Date,  Purchaser shall have received (i) a certificate  signed
          by an officer of the Valley Ranch Commercial  Association,  as defined
          in that certain Declaration of Covenants,  Conditions and Restrictions
          for the Commercial  Area of the Valley Ranch recorded in Volume 83196,
          Page 801 of the  Deed  Records  of  Dallas  County  (as  amended,  the
          "Commercial Declaration"), stating that (a) all assessments applicable
          to the Property pursuant to the Commercial  Declaration for the period
          prior to the Closing Date have been paid, (b) there are no defaults of
          Seller under the Commercial  Declaration,  and (c) the use of the Real
          Property as a residential  apartment  building is permitted  under the
          Commercial Declaration; (ii) a certificate signed by an officer of the
          Master  Association,  as defined in that certain Master Declaration of
          Covenants,  Conditions and  Restrictions for the Valley Ranch recorded
          in Volume  83196,  Page 748 of the Deed Records of Dallas  County (the
          "Master Declaration"),  stating that (a) all assessments applicable to
          the Property  pursuant to the Master  Declaration for the period prior
          to the Closing  Date have been paid,  and (b) there are no defaults of
          Seller  under  the  Master  Declaration;  and (iii) a  Certificate  of
          Compliance,  as  defined  in  the  Master  Declaration  signed  by the
          Architectural Review Committee, as defined in the Master Declaration.

          So long as a party is not in default  hereunder,  if any  condition to
          such party's  obligation to proceed with the Closing hereunder has not
          been  satisfied  as of the Closing  Date (or such  earlier  date as is
          provided  herein),  such party may, in its sole discretion,  terminate
          this  Agreement by delivering  written notice to the other party on or
          before the Closing Date (or such earlier date as is provided  herein),
          or elect to close (or to permit any such earlier termination  deadline
          to pass)  notwithstanding the  non-satisfaction of such condition,  in
          which  event  such  party  shall be  deemed  to have  waived  any such
          condition.  In the event such party  elects to close (or to permit any
          such  earlier  termination  deadline  to  pass),  notwithstanding  the
          non-satisfaction of such condition, said party shall be deemed to have
          waived said condition,  and there shall be no liability on the part of
          any other party hereto for breaches of representations  and warranties
          of which the party electing to close had knowledge at the Closing.

     7.3  Seller's  Deliveries  in Escrow.  As of or prior to the Closing  Date,
Seller shall deliver in escrow to Escrow Agent the following:

               7.3.1 Deed. A special  warranty deed, in form attached  hereto as
          Exhibit F, and  including a list of Permitted  Exceptions to which the
          conveyance  shall be subject,  executed  and  acknowledged  by Seller,
          conveying to Purchaser  Seller's  interest in the Real  Property  (the
          "Deed");

               7.3.2 Bill of Sale,  Assignment and  Assumption.  A Bill of Sale,
          Assignment  and  Assumption  of Leases  and  Contracts  in the form of
          Exhibit  B  attached   hereto   (the   "Assignment"),   executed   and
          acknowledged  by  Seller,  vesting  in  Purchaser,  without  warranty,
          Seller's  right,  title and interest in and to the property  described
          therein free of any claims, except for the Permitted Exceptions to the
          extent applicable;

                                    Page 15
<PAGE>


               7.3.3  Conveyancing  or  Transfer  Tax  Forms  or  Returns.  Such
          conveyancing or transfer tax forms or returns, if any, as are required
          to be delivered or signed by Seller by applicable  state and local law
          in connection with the conveyance of the Real Property;

               7.3.4  FIRPTA.  A Foreign  Investment  in Real  Property  Tax Act
          affidavit executed by Seller;

               7.3.5  Authority.  Evidence of the  existence,  organization  and
          authority  of Seller and of the  authority  of the  persons  executing
          documents  on  behalf  of  Seller   reasonably   satisfactory  to  the
          underwriter for the Title Policy; and

               7.3.6 Additional Documents.  Any additional documents that Escrow
          Agent or the Title  Company  may  reasonably  require  for the  proper
          consummation  of  the  transaction   contemplated  by  this  Agreement
          (provided,  however,  no such  additional  document  shall  expand any
          obligation,  covenant,  representation or warranty of Seller or result
          in any  new or  additional  obligation,  covenant,  representation  or
          warranty of Seller under this  Agreement  beyond those  expressly  set
          forth in this Agreement).

               7.3.7   Certificate  of   Representations   and   Warranties.   A
          certificate,  dated as of the Closing and executed on behalf of Seller
          by a duly authorized officer thereof, stating that the representations
          and  warranties  of Seller as set forth in Section  9.1 hereof  remain
          true  and  correct  in  all  material  respects  as of  Closing  (with
          appropriate modifications of those representations and warranties made
          in Section  9.1 hereof to reflect  any  changes  therein  not known by
          Seller as of the date of Seller's execution hereof) or identifying any
          representation  or  warranty  which is not,  or no longer is, true and
          correct and  explaining  the state of facts  giving rise to the change
          (which  certificate  shall be subject to all  provisions of Article 9,
          including, without limitation, the limitations on knowledge, liability
          and duration in Section 9.3);

               7.3.8 Owner's Affidavit.  An affidavit or indemnity as to parties
          in possession and debts and liens in a form reasonably required by the
          Title  Company  to  modify  the  so-called   "parties  in  possession"
          exception to list only those tenants under Leases as shown on the Rent
          Roll as of the  Closing  and to  delete  any  exceptions  relating  to
          mechanics liens or similar liens;

               7.3.9  Evidence  of  Termination  of Service  Contracts.  Written
          evidence that Seller has delivered termination notices for the Service
          Contracts  Purchaser  has not elected to assume or is not obligated to
          assume pursuant to terms of the Agreement;

               7.3.10  Evidence  of  Payment  of  Broker's  Commission.  Written
          evidence  that the  Broker's  commission  payable upon the sale of the
          Property will be paid by the Title Company out of Seller's proceeds at
          Closing; and

               7.3.11  Rent  Roll and  Other  Reports.  A  current  Rent Roll in
          substantially  the  same  form as  provided  to  Seller  prior  to the
          Effective  Date,  as well as a current aged  delinquency  report and a
          current pre-paid rent report.

     7.4 Purchaser's  Deliveries in Escrow.  As of or prior to the Closing Date,
Purchaser shall deliver in escrow to Escrow Agent the following:

               7.4.1 Bill of Sale,  Assignment and  Assumption.  The Assignment,
          executed and acknowledged by Purchaser;

                                    Page 16
<PAGE>


               7.4.2 ERISA  Letter.  A letter to Seller in the form of Exhibit C
          attached hereto duly executed by Purchaser,  confirming that Purchaser
          is not acquiring  the Property with the assets of an employee  benefit
          plan as defined  in Section  3(3) of the  Employee  Retirement  Income
          Security Act of 1974 ("ERISA")  and, in the event  Purchaser is unable
          or unwilling to make such a representation,  Purchaser shall be deemed
          to be in  default  hereunder,  and  Seller  shall  have  the  right to
          terminate this Agreement and to receive and retain the Earnest Money;

               7.4.3  Conveyancing  or  Transfer  Tax  Forms  or  Returns.  Such
          conveyancing or transfer tax forms or returns, if any, as are required
          to be delivered or signed by Purchaser by  applicable  state and local
          law in connection with the conveyance of Real Property; and

               7.4.4 Additional Documents. Any additional documents that Seller,
          Escrow  Agent or the Title  Company  may  reasonably  require  for the
          proper consummation of the transaction  contemplated by this Agreement
          (provided,  however,  no such  additional  document  shall  expand any
          obligation,  covenant,  representation  or  warranty of  Purchaser  or
          result in any new or additional obligation,  covenant,  representation
          or warranty of Purchaser  under this Agreement  beyond those expressly
          set forth in this Agreement).

     7.5  Closing  Statements.  As of or prior to the Closing  Date,  Seller and
Purchaser shall deposit with Escrow Agent executed closing statements consistent
with this Agreement in the form required by Escrow Agent.

     7.6 Purchase  Price. At or before 3:00 p.m. local time on the Closing Date,
Purchaser  shall  deliver to Escrow Agent the Purchase  Price,  less the Earnest
Money  that  is  applied  to  the  Purchase  Price,  plus  or  minus  applicable
prorations,  in  immediate,  same-day  U.S.  federal funds wired for credit into
Escrow  Agent's  escrow  account,  which funds must be  delivered in a manner to
permit  Escrow  Agent to  deliver  good funds to Seller or its  designee  on the
Closing Date (and, if requested by Seller, by wire transfer);  in the event that
Escrow  Agent is unable to deliver  good funds to Seller or its  designee on the
Closing Date, then the closing statements and related prorations will be revised
as necessary.

     7.7  Possession.  Seller  shall  deliver  possession  of  the  Property  to
Purchaser at the Closing subject only to the Permitted Exceptions.

     7.8 Delivery of Books and Records. After the Closing,  Seller shall deliver
to the offices of  Purchaser's  property  manager or to the Real Property to the
extent in Seller's or its property manager's possession or control, originals of
the following: all Leases, Lease Files; License Agreements;  maintenance records
and  warranties;  plans and  specifications;  drawings,  licenses,  permits  and
certificates  of  occupancy;  copies or  originals  of all books and  records of
account,  contracts,  and copies of  correspondence  with tenants and suppliers;
receipts for deposits,  unpaid bills and other papers or documents which pertain
to the Property; all advertising materials;  booklets; keys; and other items, if
any, used in the operation of the Property.

     7.9  Notice to  Tenants.  Seller and  Purchaser  shall  each  execute,  and
Purchaser shall deliver to each tenant  immediately after the Closing,  a notice
regarding the sale in substantially  the form of Exhibit D attached  hereto,  or
such other form as may be required by applicable  state law. This  obligation on
the part of Purchaser shall survive the Closing.


                                    Page 17
<PAGE>


                  ARTICLE 8 - Prorations, Deposits, Commissions

     8.1 Prorations. At Closing, the following items shall be prorated as of the
date of Closing,  with all items of income and expense  for the  Property  being
borne by Purchaser from and after (but including) the date of Closing: collected
rents,  fees and other income  received  from tenants  under Leases or licensees
under License Agreements  (collectively,  "Tenant Receivables") and other income
that has been collected by Seller as of Closing;  fees and assessments;  prepaid
expenses  and  obligations  and any credits  under  Service  Contracts;  accrued
operating  expenses;  real and  personal  ad valorem  taxes  ("Taxes");  and any
assessments by private covenant for the  then-current  calendar year of Closing.
Specifically,  the following  shall apply to such prorations and to post-Closing
collections and allocations:

               8.1.1  Taxes.  If Taxes for the year of Closing  are not known or
          cannot be reasonably estimated, Taxes shall be prorated based upon the
          tax rates for the year prior to  Closing  multiplied  by the  assessed
          value of the Property in the year in which the Closing  occurs.  Taxes
          payable  during the year in which the  Closing  occurs are  thereafter
          determined  to be more or less  than  the  Taxes  payable  during  the
          preceding  year,  Seller  and  Purchaser  shall  promptly  adjust  the
          proration of such Taxes and Seller or  Purchaser,  as the case may be,
          shall  pay to the  other  any  amount  required  as a  result  of such
          adjustment.

               8.1.2  Utilities.  Purchaser  shall take all steps  necessary  to
          effectuate the transfer of all utilities to Purchaser's name as of the
          Closing Date and Seller will reasonably  cooperate with such transfer;
          where  necessary,  Purchaser  shall  post  deposits  with the  utility
          companies.  Seller shall ensure that all utility meters are read as of
          the  Closing  Date.  Seller  shall be  entitled to recover any and all
          deposits held by any utility company as of the Closing Date.

               8.1.3 Tenant  Receivables.  Tenant  Receivables  and other income
          from the Property not  collected by Seller as of Closing  shall not be
          prorated  between  Seller  and  Purchaser  at  Closing  but  shall  be
          apportioned  after  Closing  on the basis of the period for which same
          are applicable,  as follows:  All Tenant  Receivables and other income
          collected  after  Closing  shall be  allocated  (i)  first,  to Tenant
          Receivables  and/or  other  income due for the month  during which the
          Closing occurs (and shall be allocated between Seller and Purchaser as
          if same  had  been  prorated  at  Closing),  (ii)  second,  to  Tenant
          Receivables  and/or other  income due for other  periods of time after
          Closing,  and (iii) finally, to Tenant Receivables and/or other income
          due for any periods of time  before  Closing.  In the event  Purchaser
          receives  Tenant  Receivables  or other income after  Closing to which
          Seller is entitled as provided  above,  Purchaser  agrees to hold said
          funds in trust for Seller and to promptly  remit said funds to Seller.
          Seller  shall have the right to pursue the  collection  of  delinquent
          Tenant Receivables and other delinquent income from the Property for a
          period of one (1) year after  Closing  without  prejudice  to Seller's
          rights or Purchaser's obligations hereunder;  provided that Seller may
          not bring eviction  proceedings in the pursuit of such collection.  In
          the event Seller  receives  Tenant  Receivables  or other income after
          Closing to which  Purchaser  is  entitled as  provided  above,  Seller
          agrees to hold such funds in trust for Purchaser and to promptly remit
          said funds to Purchaser. The provisions of this Subsection 8.1.3 shall
          survive the Closing.

               8.1.4 Homeowner's  Association  Dues. If Homeowner's  Association
          Dues for the year of  Closing  are not known or  cannot be  reasonably
          estimated,  then Homeowner's  Association Dues shall be prorated based
          on such dues for the year prior to Closing. If Homeowner's Association
          Dues  payable  during  the  year  in  which  the  Closing  occurs  are
          thereafter determined to be more or less than Homeowner's  Association
          Dues payable  during the preceding  year,  Seller and Purchaser  shall
          promptly adjust the proration of such Homeowner's Association Dues and
          Seller or  Purchaser,  as the case may be,  shall pay to the other any
          amount required as a result of such adjustment.

                                    Page 18
<PAGE>


     8.2 Closing  Costs.  Closing  costs shall be allocated  between  Seller and
Purchaser in accordance with Section 1.2.

     8.3 Final  Adjustment  After  Closing.  If final bills are not available or
cannot be issued prior to Closing for any item being prorated under Section 8.1,
then  Purchaser  and Seller agree to allocate such items on a fair and equitable
basis as soon as such bills are available,  final  adjustment to be made as soon
as reasonably possible after the Closing.  Payments in connection with the final
adjustment  shall be due within  thirty  (30) days of written  notice.  All such
rights and obligations shall survive the Closing.

     8.4 Tenant Deposits.  All tenant and licensee security  deposits  collected
and not applied by Seller (and interest  thereon if required by law or contract)
shall be  transferred  or credited to Purchaser  at Closing.  As of the Closing,
Purchaser  shall  assume  Seller's  obligations  related to tenant and  licensee
security  deposits,  but only to the extent they are credited or  transferred to
Purchaser.

     8.5  Commissions.  Seller shall be  responsible to Broker for a real estate
sales  commission  at  Closing  (but only in the  event of a  Closing  in strict
accordance with this Agreement) in accordance with a separate  agreement between
Seller and  Broker.  Broker  may share its  commission  with any other  licensed
broker involved in this transaction, but the payment of the commission by Seller
to Broker  shall fully  satisfy any  obligations  of Seller to pay a  commission
hereunder.  Under  no  circumstances  shall  Seller  owe a  commission  or other
compensation  directly to any other  broker,  agent or person.  Any  cooperating
broker shall not be an affiliate, subsidiary or related in any way to Purchaser.
Other  than as stated  above in this  Section  8.5,  Seller and  Purchaser  each
represent and warrant to the other that no real estate  brokerage  commission is
payable to any person or entity in connection with the transaction  contemplated
hereby, and each agrees to and does hereby indemnify and hold the other harmless
against the payment of any commission to any other person or entity claiming by,
through or under Seller or Purchaser, as applicable.  This indemnification shall
extend  to any  and all  claims,  liabilities,  costs  and  expenses  (including
reasonable  attorneys'  fees and  litigation  costs) arising as a result of such
claims and shall survive the Closing.


                   ARTICLE 9 - Representations and Warranties

     9.1 Seller's Representations and Warranties. Seller represents and warrants
to Purchaser that:

               9.1.1 Organization and Authority. Seller has been duly organized,
          is validly existing,  and is in good standing in the state in which it
          was formed.  Seller has the full right and  authority and has obtained
          any and all  consents  required  to enter into this  Agreement  and to
          consummate or cause to be consummated  the  transactions  contemplated
          hereby.  This  Agreement  has  been,  and all of the  documents  to be
          delivered  by Seller at the Closing will be,  authorized  and executed
          and constitute,  or will  constitute,  as  appropriate,  the valid and
          binding  obligation of Seller,  enforceable  in accordance  with their
          terms.

               9.1.2  Conflicts  and Pending  Actions.  There is no agreement to
          which Seller is a party or, to Seller's knowledge,  that is binding on
          Seller  which  is  in  conflict  with  this  Agreement.   To  Seller's
          knowledge, Seller is not in default under any agreement related to the
          Property.  To  Seller's  knowledge,  there is no action or  proceeding
          pending  or  threatened  in writing  against  Seller  relating  to the
          Property except as set forth on Exhibit G.

                                    Page 19
<PAGE>


               9.1.3  Service  Contracts  and  License  Agreements.  To Seller's
          knowledge,  the  list of  Service  Contracts  and  License  Agreements
          attached to this Agreement as Exhibit H is a correct and complete list
          of  all  Service  Contracts  and  License  Agreements   affecting  the
          Property.

               9.1.4  Notices  from   Governmental   Authorities.   To  Seller's
          knowledge,  Seller has not received from any governmental authority or
          quasi-governmental  authority  (including any applicable  Valley Ranch
          association)  written notice of any material  violation of any laws or
          restrictions  applicable  (or  alleged to be  applicable)  to the Real
          Property, or any part thereof, that has not been corrected,  except as
          may be set forth in Exhibit I.

               9.1.5  Bankruptcy.  There is not pending any case,  proceeding or
          other  action   seeking   reorganization,   arrangement,   adjustment,
          liquidation,  dissolution  or  recomposition  of Seller  under any law
          relating to bankruptcy,  insolvency,  reorganization  or the relief of
          debtors, or seeking the appointment of a receiver,  trustee, custodian
          or similar official for the Seller or the Property.

               9.1.6 Environmental  Reports. To Seller's knowledge except as set
          forth on Exhibit J there are no environmental  reports which have been
          conducted with respect to the Property.

               9.1.7 Other Third-Party Reports. To Seller's knowledge Seller has
          delivered  to  Purchaser  all  third-party   reports  required  to  be
          delivered by Seller under the terms of this Agreement.

               9.1.8  Labor  Union  Contracts.  Seller  is  not a  party  to any
          contract  with  any  labor  union  that  covers  the  Property  or any
          operations  thereof.  Purchaser  shall  not  have  any  obligation  to
          continue  to employ any  persons  presently  employed by Seller at the
          Property.

               9.1.9 Options;  Right of First Refusal, Etc. There are no options
          to purchase,  rights of first refusal or any other purchase  rights in
          favor of any third parties with respect to the Property.

               9.1.10 Rent Roll. To Seller's  knowledge,  the Rent Roll that has
          been  delivered to Purchaser  pursuant to Section 4.1 and that will be
          delivered  to Purchaser  pursuant to Section  7.3.11 are the same Rent
          Rolls  maintained in the ordinary course of business for the Property.
          To Seller's  knowledge,  as of the date of the  applicable  Rent Roll,
          there are no other  leases  except  those  shown on the Rent Roll.  To
          Seller's knowledge, (a) except as disclosed in the Property Documents,
          Seller  has not sent  written  notice  to any  current  tenant  of the
          Property,  nor has Seller  received  any written  notice from any such
          tenant,  claiming that such tenant,  or Seller, as the case may be, is
          in default,  which default remains uncured; (b) except as set forth on
          the Rent  Roll,  there  are no  security  deposits  or other  deposits
          (including  last  month's  rent and pet  deposits);  (c) except as set
          forth on the aged delinquency report delivered to Purchaser, there are
          no rent delinquencies;  and (d) no rent has been paid more than thirty
          (30) days in advance  under any Lease  other than as shown on the Rent
          Roll.   Seller  hereby  agrees  to  be  responsible  for  any  leasing
          commissions  due with regard to the  execution of any new lease or the
          renewal or extension of any current Lease prior to the Closing Date.

     9.2 Purchaser's  Representations and Warranties.  Purchaser  represents and
warrants to Seller that:

               9.2.1  Organization  and  Authority.   Purchaser  has  been  duly
          organized and is validly existing as a corporation in good standing in
          the State of Delaware  and is qualified to do business in the state in
          which the Real  Property is located.  Purchaser has the full right and
          authority and has obtained any and all consents required to enter into
          this Agreement and to consummate or cause to be

                                    Page 20
<PAGE>


          consummated the transactions  contemplated  hereby. This Agreement has
          been,  and all of the  documents  to be  delivered by Purchaser at the
          Closing will be, authorized and properly  executed and constitute,  or
          will constitute,  as appropriate,  the valid and binding obligation of
          Purchaser, enforceable in accordance with their terms.

               9.2.2  Conflicts  and Pending  Action.  There is no  agreement to
          which  Purchaser  is a party or to  Purchaser's  knowledge  binding on
          Purchaser which is in conflict with this Agreement. There is no action
          or proceeding pending or, to Purchaser's knowledge, threatened against
          Purchaser which challenges or impairs  Purchaser's  ability to execute
          or perform its obligations under this Agreement.

     9.3 Survival of Representations  and Warranties.  The  representations  and
warranties set forth in this Article 9 are made as of the Effective Date and are
remade as of the  Closing  Date and  shall  not be  deemed to be merged  into or
waived by the instruments of Closing, but shall survive the Closing for a period
of  nine  (9)  months  (the  "Survival  Period").  Terms  such  as "to  Seller's
knowledge," "to the best of Seller's  knowledge" or like phrases mean the actual
present and conscious  awareness or knowledge of Mark Walcott,  asset manager of
the Property  ("Asset  Manager's  Employee"),  Scott  Ferguson and Roger Beless,
without  any duty of  inquiry  or  investigation;  provided  that so  qualifying
Seller's  knowledge shall in no event give rise to any personal liability on the
part of Asset  Manager's  Employee,  Scott  Ferguson,  Roger Beless or any other
officer or employee of Seller or its Asset Manager,  on account of any breach of
any representation or warranty made by Seller herein.  Said terms do not include
constructive  knowledge,  imputed knowledge, or knowledge Seller or such persons
do not have but could have obtained through further investigation or inquiry. No
broker,   agent,   or  party  other  than  Seller  is  authorized  to  make  any
representation or warranty for or on behalf of Seller. Each party shall have the
right to bring an action against the other on the breach of a representation  or
warranty hereunder, but only on the following conditions: (i) the party bringing
the action for breach first becomes actually, presently and consciously aware of
the breach after Closing and files such action within the Survival  Period,  and
(ii) neither  party shall have the right to bring a cause of action for a breach
of a  representation  or warranty  unless the damage to such party on account of
such breach  (individually  or when combined  with damages from other  breaches)
equals or  exceeds  $5,000.00.  Neither  party  shall have any  liability  after
Closing for the breach of a  representation  or warranty  hereunder of which the
other party hereto had knowledge as of Closing.  Furthermore,  Purchaser  agrees
that the  maximum  liability  of  Seller  for the  alleged  breach of any or all
representations  or  warranties  set  forth  in this  Agreement  is  limited  to
$500,000.00.  The provisions of this Section 9.3 shall survive the Closing.  Any
breach of a  representation  or warranty  that occurs prior to Closing  shall be
governed by Article 10.

                        ARTICLE 10 - Default and Remedies

     10.1  Seller's  Remedies.  If  Purchaser  fails to perform its  obligations
pursuant to this  Agreement at or prior to Closing for any reason except failure
by  Seller  to  perform  hereunder,  or if prior to  Closing  any one or more of
Purchaser's  representations or warranties are breached in any material respect,
and if said  failure  or breach  continues  for more  than  five (5) days  after
written  notice  thereof,  Seller shall be entitled,  as its sole and  exclusive
remedy at law and in equity (except as provided in Sections 4.11,  8.5, 10.3 and
10.4  hereof),  to terminate  this  Agreement  and recover the Earnest  Money as
liquidated  damages and not as penalty,  in full  satisfaction of claims against
Purchaser hereunder.  Seller and Purchaser agree that Seller's damages resulting
from Purchaser's default are difficult, if not impossible,  to determine and the
Earnest Money is a fair estimate of those damages which has been agreed to in an
effort  to cause the  amount  of such  damages  to be  certain.  Notwithstanding
anything in this Section 10.1 to the  contrary,  if the default by Purchaser (i)
does not adversely  affect  Purchaser's  ability to close on the purchase of the
Property in accordance with the terms of this Agreement, (ii) is a

                                    Page 21
<PAGE>


default that cannot be cured due to the passage of a time deadline, and (iii) is
a default that does not prejudice  Seller's  rights under this Agreement  (e.g.,
the  failure  of  Purchaser  to  deliver  a copy of a  report  to  Seller  by an
applicable  deadline  when  delivery of said report to Seller after the deadline
does not prejudice Seller's rights hereunder) (a "Non-Material  Default"),  then
Purchaser shall use diligent efforts to remedy said Non-Material Default, to the
extent  possible,  as  soon as  reasonably  possible,  and so long as  Purchaser
continues to diligently attempt to remedy said Non-Material Default, and so long
as the  Closing  is not  delayed  more than ten (10)  days  from the  originally
scheduled  Closing  Date,  then  Seller  shall have no right to  terminate  this
Agreement or receive the Earnest Money as a result of said Non-Material  Default
(although  Seller  shall at all times have its rights  and  remedies  under this
Section 10.1 for any default by Purchaser that is not a  Non-Material  Default).
Notwithstanding  anything in this Section 10.1 or in Exhibit E to the  contrary,
in the event of Purchaser's  default or a termination of this Agreement,  Seller
shall have all remedies  available at law or in equity in the event Purchaser or
any party  related to or  affiliated  with  Purchaser is asserting any claims or
right to the Property that would  otherwise  delay or prevent Seller from having
clear,  indefeasible  and  marketable  title to the Property,  and in said event
Seller  shall  not  be  required  to  submit  such  matter  to   arbitration  as
contemplated  by Exhibit E,  provided  that Seller  shall have no such rights if
such  actions are taken by Purchaser in  furtherance  of a specific  performance
action.  In all  other  events  Seller's  remedies  shall  be  limited  to those
described in this Section 10.1 and Sections 4.11, 8.5, 10.3 and 10.4 hereof.

     10.2  Purchaser's  Remedies.  If Seller  fails to perform  its  obligations
pursuant to this  Agreement at or prior to Closing for any reason except failure
by  Purchaser  to perform  hereunder,  or if prior to Closing any one or more of
Seller's representations or warranties are breached in any material respect, and
if said failure or breach  continues  for more than five (5) days after  written
notice  thereof,  Purchaser  shall  elect,  as its sole  remedy,  either  to (i)
terminate this Agreement by giving Seller timely written notice of such election
prior to or at Closing  and recover the Earnest  Money,  (ii)  enforce  specific
performance  (in which  event  Purchaser  shall not be  required  to submit such
matter to arbitration as  contemplated by Exhibit E, or (iii) waive said failure
or  breach  and  proceed  to  Closing.  Notwithstanding  anything  herein to the
contrary,  Purchaser shall be deemed to have elected to terminate this Agreement
if Purchaser  fails to deliver to Seller  written notice of its intent to file a
claim or assert a cause of action for specific  performance against Seller on or
before thirty (30) days  following  the scheduled  Closing Date or, having given
such notice,  fails to file a lawsuit asserting such claim or cause of action in
the county in which the Property is located  within  three (3) months  following
the  scheduled  Closing  Date.  Purchaser's  remedies  shall be limited to those
described in this Section 10.2 and Sections 10.3 and 10.4 hereof.  If,  however,
the equitable  remedy of specific  performance is not  available,  Purchaser may
seek any other right or remedy available at law or in equity; provided, however,
that in no event shall Seller's liability exceed $1,000,000.00.  For purposes of
this  provision,  specific  performance  shall be  considered  not  available to
Purchaser only if a court of competent jurisdiction determines conclusively that
due solely to the  actions or  omissions  of Seller,  Purchaser  is  entitled to
specific  performance  on the  merits of its  claim but said  court is unable to
enforce specific performance due to reasons beyond the control of the court, and
the appeal  period with respect to such  determination  has expired or an appeal
has been denied,  whichever  is earlier.  IN NO EVENT SHALL  SELLER'S  DIRECT OR
INDIRECT PARTNERS,  SHAREHOLDERS,  OWNERS OR AFFILIATES,  ANY OFFICER, DIRECTOR,
EMPLOYEE OR AGENT OF THE  FOREGOING,  OR ANY  AFFILIATE  OR  CONTROLLING  PERSON
THEREOF HAVE ANY  LIABILITY  FOR ANY CLAIM,  CAUSE OF ACTION OR OTHER  LIABILITY
ARISING OUT OF OR RELATING TO THIS  AGREEMENT OR THE PROPERTY,  WHETHER BASED ON
CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.

     10.3 Attorneys'  Fees. In the event either party hereto employs an attorney
in  connection  with  claims by one party  against  the other  arising  from the
operation of this Agreement,  the non-prevailing

                                    Page 22
<PAGE>


party shall pay the prevailing party all reasonable fees and expenses, including
attorneys' fees, incurred in connection with such transaction.

     10.4 Other Expenses.  If this Agreement is terminated due to the default of
a party,  then the defaulting  party shall pay any fees or charges due to Escrow
Agent for holding the Earnest Money as well as any escrow  cancellation  fees or
charges and any fees or charges due to the Title Company for preparation  and/or
cancellation of the Title Commitment.


                 ARTICLE 11 - Disclaimers, Release and Indemnity

     11.1  Disclaimers  By  Seller.  Except  as  expressly  set  forth  in  this
Agreement, it is understood and agreed that Seller and Asset Manager have not at
any  time  made and are not now  making,  and they  specifically  disclaim,  any
warranties or representations of any kind or character, express or implied, with
respect  to  the  Property,   including,  but  not  limited  to,  warranties  or
representations as to (i) matters of title; (ii) environmental  matters relating
to the  Property or any portion  thereof,  including,  without  limitation,  the
presence  of  Hazardous  Materials  in,  on,  under  or in the  vicinity  of the
Property,   (iii)  geological   conditions,   including,   without   limitation,
subsidence,  subsurface conditions,  water table,  underground water reservoirs,
limitations  regarding  the  withdrawal  of water,  and geologic  faults and the
resulting damage of past and/or future faulting, (iv) whether, and to the extent
to which the Property or any portion  thereof is affected by any stream (surface
or  underground),  body of water,  wetlands,  flood  prone  area,  flood  plain,
floodway or special flood hazard, (v) drainage, (vi) soil conditions,  including
the existence of instability, past soil repairs, soil additions or conditions of
soil  fill,  or  susceptibility  to  landslides,   or  the  sufficiency  of  any
undershoring,  (vii) the presence of endangered  species or any  environmentally
sensitive or protected  areas,  (viii) zoning or building  entitlements to which
the Property or any portion thereof may be subject, (ix) the availability of any
utilities to the Property or any portion thereof including,  without limitation,
water, sewage, gas and electric,  (x) usages of adjoining property,  (xi) access
to the Property or any portion  thereof,  (xii) the value,  compliance  with the
plans  and  specifications,   size,   location,   age,  use,  design,   quality,
description, suitability, structural integrity, operation, title to, or physical
or financial  condition of the Property or any portion  thereof,  or any income,
expenses,  charges,  liens,  encumbrances,  rights or claims on or  affecting or
pertaining to the Property or any part  thereof,  (xiii) the condition or use of
the  Property or  compliance  of the Property  with any or all past,  present or
future federal, state or local ordinances, rules, regulations or laws, building,
fire or zoning  ordinances,  codes or other similar laws, (xiv) the existence or
non-existence of underground storage tanks, surface impoundments,  or landfills,
(xv) the  merchantability  of the  Property or fitness of the  Property  for any
particular  purpose,  (xvi) the truth,  accuracy or completeness of the Property
Documents,  (xvii) tax  consequences,  or (xviii) any other matter or thing with
respect to the Property.

     11.2 Sale "As Is, Where Is."  Purchaser  acknowledges  and agrees that upon
Closing,  Seller shall sell and convey to Purchaser and  Purchaser  shall accept
the Property "AS IS, WHERE IS, WITH ALL FAULTS," except to the extent  expressly
provided  otherwise in this  Agreement  and any document  executed by Seller and
delivered  to  Purchaser  at  Closing.  Except  as  expressly  set forth in this
Agreement,  Purchaser  has not  relied  and will not rely on, and Seller has not
made and is not  liable for or bound by,  any  express  or  implied  warranties,
guarantees,  statements,   representations  or  information  pertaining  to  the
Property  or  relating  thereto  (including  specifically,  without  limitation,
Property  information packages distributed with respect to the Property) made or
furnished  by Seller,  the Asset  Manager of the  Property,  or any real  estate
broker,  agent or third party representing or purporting to represent Seller, to
whomever made or given, directly or indirectly,  orally or in writing. Purchaser
represents that it is a knowledgeable,  experienced

                                    Page 23
<PAGE>


and  sophisticated  purchaser of real estate and that,  except as expressly  set
forth in this  Agreement,  it is relying solely on its own expertise and that of
Purchaser's consultants in purchasing the Property and shall make an independent
verification  of the  accuracy  of any  documents  and  information  provided by
Seller.  Purchaser  will  conduct such  inspections  and  investigations  of the
Property  as  Purchaser  deems  necessary,  including,  but not  limited to, the
physical and  environmental  conditions  thereof,  and shall rely upon same.  By
failing to terminate  this  Agreement  prior to the expiration of the Inspection
Period,  Purchaser  acknowledges  that  Seller  has  afforded  Purchaser  a full
opportunity to conduct such  investigations  of the Property as Purchaser deemed
necessary  to  satisfy  itself  as to the  condition  of the  Property  and  the
existence or  non-existence  or curative  action to be taken with respect to any
Hazardous  Materials on or discharged  from the  Property,  and will rely solely
upon same and not upon any information provided by or on behalf of Seller or its
agents or  employees  with  respect  thereto,  other than such  representations,
warranties and covenants of Seller as are expressly set forth in this Agreement.
Upon Closing,  Purchaser shall assume the risk that adverse matters,  including,
but not  limited  to,  adverse  physical  or  construction  defects  or  adverse
environmental,  health  or safety  conditions,  may not have  been  revealed  by
Purchaser's inspections and investigations.

Purchaser's Initials____________

     11.3 Seller Released from Liability.  Purchaser  acknowledges  that it will
have the opportunity to inspect the Property during the Inspection  Period,  and
during such period, observe its physical characteristics and existing conditions
and the  opportunity  to  conduct  such  investigation  and  study on and of the
Property and adjacent areas as Purchaser deems  necessary,  and Purchaser hereby
FOREVER RELEASES AND DISCHARGES Seller and Asset Manager from all responsibility
and liability, including without limitation, liabilities under the Comprehensive
Environmental  Response,  Compensation  and  Liability  Act Of 1980  (42  U.S.C.
Sections  9601  et  seq.),  as  amended  ("CERCLA"),  regarding  the  condition,
valuation,  salability or utility of the Property,  or its  suitability  for any
purpose whatsoever (including,  but not limited to, with respect to the presence
in the soil,  air,  structures and surface and subsurface  waters,  of Hazardous
Materials or other  materials or substances  that have been or may in the future
be determined to be toxic,  hazardous,  undesirable or subject to regulation and
that may need to be specially treated,  handled and/or removed from the Property
under  current  or  future  federal,   state  and  local  laws,  regulations  or
guidelines,  and any structural  and geologic  conditions,  subsurface  soil and
water  conditions  and solid and  hazardous  waste and  Hazardous  Materials on,
under,  adjacent to or otherwise  affecting  the  Property).  Purchaser  further
hereby  WAIVES (and by Closing this  transaction  will be deemed to have WAIVED)
any and all objections and complaints  (including,  but not limited to, federal,
state and local statutory and common law based actions, and any private right of
action under any federal,  state or local laws,  regulations  or  guidelines  to
which the Property is or may be subject,  including, but not limited to, CERCLA)
concerning  the  physical  characteristics  and any existing  conditions  of the
Property.  Purchaser  further  hereby  assumes the risk of changes in applicable
laws  and  regulations  relating  to  past,  present  and  future  environmental
conditions  on the Property and the risk that adverse  physical  characteristics
and  conditions,  including,  without  limitation,  the  presence  of  Hazardous
Materials   or  other   contaminants,   may  not  have  been   revealed  by  its
investigation. The foregoing notwithstanding, nothing in this Section 11.3 shall
prevent  Purchaser from  asserting that Seller is the proper  defendant or party
with  respect to a Third Party  Claim  (defined  below)  against  Purchaser  and
joining  Seller in an action  related to any such  Third  Party  Claim.  As used
herein, the term "Third Party Claim" shall mean a suit, claim, or demand made by
any unrelated  third-party  person or entity against Purchaser which arises from
any act or event  occurring  or  arising  on the  Property  during the period of
Seller's  ownership of the  Property  and for which  Seller  would  otherwise be
liable  (except to the extent  Purchaser is  responsible  for same in accordance
with Section 4.10).

                                    Page 24
<PAGE>


     11.4  "Hazardous  Materials"  Defined.  For  purposes  hereof,   "Hazardous
Materials"  means "Hazardous  Material,"  "Hazardous  Substance,"  "Pollutant or
Contaminant,"  and  "Petroleum"  and "Natural  Gas  Liquids," as those terms are
defined or used in Section  101 of CERCLA,  and any other  substances  regulated
because  of  their  effect  or  potential   effect  on  public  health  and  the
environment,  including,  without limitation,  PCBs, lead paint, asbestos,  urea
formaldehyde,  radioactive  materials,  putrescible  materials,  and  infectious
materials.

     11.5 [Intentionally deleted.]

     11.6 Survival.  The terms and conditions of this Article 11 shall expressly
survive the Closing,  not merge with the provisions of any closing documents and
shall be incorporated into the Deed.

     Purchaser acknowledges and agrees that the disclaimers and other agreements
set forth herein are an integral  part of this  Agreement  and that Seller would
not have agreed to sell the Property to Purchaser for the Purchase Price without
the disclaimers and other agreements set forth above.


                           ARTICLE 12 - Miscellaneous

     12.1 Parties Bound;  Assignment.  This Agreement, and the terms, covenants,
and conditions  herein  contained,  shall inure to the benefit of and be binding
upon the heirs, personal representatives, successors, and assigns of each of the
parties  hereto.  Purchaser may assign its rights under this  Agreement upon the
following  conditions:  (i) the  assignee of  Purchaser  must be an affiliate of
Purchaser or an entity controlling,  controlled by, or under common control with
Purchaser,  or an affiliate of Purchaser,  (ii) the assignee of Purchaser  shall
assume all  obligations  of  Purchaser  hereunder,  but  Purchaser  shall remain
primarily  liable for the  performance of Purchaser's  obligations,  and (iii) a
copy of the fully executed written assignment and assumption  agreement shall be
delivered to Seller at least five (5) days prior to Closing.

     12.2 Headings.  The article,  section,  subsection,  paragraph and/or other
headings  of this  Agreement  are for  convenience  only and in no way  limit or
enlarge the scope or meaning of the language hereof.

     12.3  Invalidity  and  Waiver.  If any  portion of this  Agreement  is held
invalid or inoperative,  then so far as is reasonable and possible the remainder
of this  Agreement  shall be deemed  valid and  operative,  and, to the greatest
extent legally  possible,  effect shall be given to the intent manifested by the
portion  held  invalid or  inoperative.  The failure by either  party to enforce
against the other any term or provision of this Agreement shall not be deemed to
be a waiver of such party's right to enforce against the other party the same or
any other such term or provision in the future.

     12.4  Governing Law. This Agreement  shall,  in all respects,  be governed,
construed,  applied,  and  enforced in  accordance  with the law of the state in
which the Real Property is located.

     12.5 Survival.  The provisions of this Agreement that expressly contemplate
performance  after the Closing shall survive the Closing and shall not be deemed
to be merged into or waived by the instruments of Closing.

                                    Page 25
<PAGE>


     12.6 Entirety and Amendments.  This Agreement embodies the entire agreement
between the parties  and  supersedes  all prior  agreements  and  understandings
relating to the Property.  This Agreement may be amended or supplemented only by
an  instrument  in writing  executed by the party  against whom  enforcement  is
sought.

     12.7 Time. Time is of the essence in the performance of this Agreement.

     12.8  Confidentiality.  Purchaser  shall  make no  public  announcement  or
disclosure of any  information  related to this Agreement to outside  brokers or
third parties,  before or after the Closing,  without the prior written specific
consent  of  Seller;  provided,  however,  that  Purchaser  may,  subject to the
provisions  of Section 4.7, make  disclosure of this  Agreement to its Permitted
Outside Parties as necessary to perform its obligations  hereunder and as may be
required under laws or regulations applicable to Purchaser.

     12.9  Notices.  All notices  required or  permitted  hereunder  shall be in
writing and shall be served on the parties at the addresses set forth in Section
1.3. Any such notices  shall,  unless  otherwise  provided  herein,  be given or
served (i) by  depositing  the same in the United  States  mail,  postage  paid,
certified  and  addressed  to the  party to be  notified,  with  return  receipt
requested,  (ii) by overnight delivery using a nationally  recognized  overnight
courier,  (iii)  by  personal  delivery,  or (iv)  by  facsimile,  evidenced  by
confirmed  receipt.  Notice  deposited  in the  mail in the  manner  hereinabove
described shall be effective on the third (3rd) business day after such deposit.
Notice given in any other manner shall be effective only if and when received by
the party to be  notified  between  the hours of 7:00 a.m.  and 6:00 p.m. of any
business  day with  delivery  made after such  hours to be deemed  received  the
following  business day. A party's  address may be changed by written  notice to
the other party; provided,  however, that no notice of a change of address shall
be  effective  until actual  receipt of such  notice.  Copies of notices are for
informational  purposes  only,  and a failure to give or  receive  copies of any
notice shall not be deemed a failure to give notice. Notices given by counsel to
the Purchaser shall be deemed given by Purchaser and notices given by counsel to
the Seller shall be deemed given by Seller.

     12.10  Construction.  The  parties  acknowledge  that the parties and their
counsel have reviewed and revised this  Agreement and agree that the normal rule
of construction - to the effect that any ambiguities are to be resolved  against
the  drafting  party -  shall  not be  employed  in the  interpretation  of this
Agreement or any exhibits or amendments hereto.

     12.11 Calculation of Time Periods. Unless otherwise specified, in computing
any period of time described herein, the day of the act or event after which the
designated  period of time begins to run is not to be included  and the last day
of the period so computed is to be included, unless such last day is a Saturday,
Sunday or legal holiday for national banks in the location where the Property is
located, in which event the period shall run until the end of the next day which
is neither a Saturday,  Sunday, or legal holiday.  The last day of any period of
time  described  herein  shall be deemed to end at 5:00 p.m.  local  time in the
state in which the Real Property is located.

     12.12  Execution in  Counterparts.  This  Agreement  may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Agreement.  To facilitate execution of
this  Agreement,  the parties may execute and  exchange by  telephone  facsimile
counterparts of the signature pages,  provided that executed  originals  thereof
are forwarded to the other party on the same day by any of the delivery  methods
set forth in Section 12.9 other than facsimile.

                                    Page 26
<PAGE>


     12.13 No Recordation.  Without the prior written  consent of Seller,  there
shall be no recordation of either this  Agreement or any memorandum  hereof,  or
any affidavit  pertaining  hereto, and any such recordation of this Agreement or
memorandum or affidavit by Purchaser without the prior written consent of Seller
shall constitute a default  hereunder by Purchaser,  whereupon Seller shall have
the remedies set forth in Section 10.1 hereof.

     12.14 Further Assurances.  In addition to the acts and deeds recited herein
and  contemplated to be performed,  executed and/or delivered by either party at
Closing,  each party  agrees to perform,  execute and  deliver,  but without any
obligation to incur any additional liability or expense, on or after the Closing
any  further  deliveries  and  assurances  as may  be  reasonably  necessary  to
consummate  the  transactions  contemplated  hereby or to  further  perfect  the
conveyance, transfer and assignment of the Property to Purchaser.

     12.15  Discharge of  Obligations.  The  acceptance of the Deed by Purchaser
shall be deemed to be a full  performance and discharge of every  representation
and warranty  made by Seller herein and every  agreement  and  obligation on the
part of Seller to be performed  pursuant to the  provisions  of this  Agreement,
except those which are herein specifically stated to survive Closing.

     12.16  ERISA.  Under no  circumstances  shall  Purchaser  have the right to
assign this Agreement to any person or entity owned or controlled by an employee
benefit plan if Seller's sale of the Property to such person or entity would, in
the  reasonable  opinion of Seller's ERISA  advisors or  consultants,  create or
otherwise cause a "prohibited  transaction"  under ERISA. In the event Purchaser
assigns this  Agreement or transfers  any ownership  interest in Purchaser,  and
such  assignment  or transfer  would make the  consummation  of the  transaction
hereunder a "prohibited transaction" under ERISA and necessitate the termination
of this Agreement  then,  notwithstanding  any contrary  provision  which may be
contained herein, Seller shall have the right to terminate this Agreement.

     12.17 No Third Party  Beneficiary.  The provisions of this Agreement and of
the  documents to be executed  and  delivered at Closing are and will be for the
benefit of Seller,  Asset Manager and Purchaser only and are not for the benefit
of any third party (other than Asset Manager),  and accordingly,  no third party
(other than Asset  Manager)  shall have the right to enforce the  provisions  of
this Agreement or of the documents to be executed and delivered at Closing.

     12.18 Asset Manager:  Designated Representative.  Seller has engaged Archon
Group,  L.P. or affiliated  companies ("Asset Manager") to provide certain asset
management services with respect to the Property,  including acting as a liaison
between Seller and Purchaser in connection with the Property and this Agreement.
The  Asset  Manager  will  appoint  one  or  more  representatives  ("Designated
Representative(s)") to deal with Purchaser.  Whenever any approval,  acceptance,
consent,  direction or action of Seller is required  pursuant to this Agreement,
Purchaser  shall  send  to  the  Designated   Representative  a  written  notice
requesting same, which notice shall: (i) describe in detail the matter for which
such  approval,  acceptance,  consent,  direction  or other  action of Seller is
requested;  (ii) be  accompanied  by a copy of any contract,  agreement or other
document to be executed by Seller evidencing such approval, consent, acceptance,
direction or action of Seller; and (iii) be accompanied by such other documents,
written  explanations and information as may be reasonably  necessary to explain
the request fully and completely.  The Asset Manager will  communicate  Seller's
response to any such requests to Purchaser.

                                    Page 27
<PAGE>


     12.19  Mandatory  Arbitration.  The parties  have agreed to submit  certain
disputes to mandatory arbitration in accordance with the provisions of Exhibit E
attached hereto and made a part hereof for all purposes.

     12.20 Tax Structure.  Notwithstanding anything herein to the contrary, each
of the parties to the proposed transactions described herein (and each employee,
representative  or other agent  thereof)  may  disclose to any and all  persons,
without  limitation  of any kind,  the tax  treatment  and tax  structure of the
transactions  described herein and all materials of any kind (including opinions
or other tax  analyses)  that are  provided  to such party  relating to such tax
treatment  and tax  structure.  However,  any  information  relating  to the tax
treatment  or  tax  structure  shall  remain  subject  to  the   confidentiality
provisions  hereof (and the  foregoing  sentence  shall not apply) to the extent
reasonably  necessary to enable the parties,  their respective  affiliates,  and
their respective  affiliates'  directors and employees to comply with applicable
securities  laws. For this purpose,  "tax structure" means any facts relevant to
the US federal  income tax  treatment of the proposed  transaction  but does not
include the identity of the parties or their respective affiliates.

     12.21  Cross-Default  to Related  Transaction;  Seller  Termination  Right.
Purchaser  and  a  related  entity  to  Seller,  WHCO  II  Real  Estate  Limited
Partnership ("Seller's  Affiliate"),  have entered into an Agreement of Purchase
and Sale concerning  certain real property known as "The Karrington  Apartments"
located in Dallas County, Texas (the "Related Contract"). Purchaser acknowledges
that Seller and Seller's  Affiliate intend to sell the Property and the property
covered by the Related Contract  together.  Accordingly,  anything herein to the
contrary  notwithstanding,  a default by  Purchaser  under the Related  Contract
shall constitute a default by Purchaser  hereunder  (permitting  Seller to avail
itself of the  remedies  set forth in Section  10.1  hereof).  Additionally,  if
Purchaser  terminates  the Related  Contract  prior to the end of the Inspection
Period  thereunder  (as defined in Section  1.1.13 of the Related  Contract)  or
pursuant  to any other  right to  terminate  set forth in the  Related  Contract
except for Seller's default or failure of a Closing condition,  then Seller may,
at its option but without obligation, terminate this Agreement by written notice
to Purchaser at anytime  within five (5) business days after  termination of the
Related  Contract,  in which  event the  Earnest  Money less the  Non-Refundable
Earnest  Money  shall be  returned to  Purchaser  and the parties  shall have no
further rights or obligations  hereunder except for those that expressly survive
the termination hereof.

     12.22 Post-Closing  Audit Rights. If, after Closing,  Purchaser is required
to have the  Property  audited  under  the  regulations  of the  Securities  and
Exchange  Commission  or  other  federal  laws  and  regulations  applicable  to
Purchaser, then Purchaser, at any time within two (2) years after Closing, shall
have the  right to  conduct  an audit of  certain  books and  records  of Seller
relating  to the  operations  and  financial  results  of the  Property  for the
calendar years of 2000, 2001 and 2002;  provided,  however,  Seller shall not be
required  to  maintain  any books,  records or  materials  that  Seller does not
maintain in the ordinary  course of business.  Additionally,  anything herein to
the   contrary   notwithstanding,   Seller  shall  be  entitled  to  redact  any
confidential  non-financial  information  from the books,  records or  materials
provided  to  Purchaser  or its  auditors.  All  costs  incurred  as a result of
Purchaser  undertaking such audit shall be borne  exclusively by Purchaser.  All
such audit  activities  shall be conducted  at Seller's or its agent's  place of
business in a commercially  reasonable  fashion,  with as little interruption of
Seller's  business as is reasonably  possible,  during normal business hours and
upon  fifteen (15) days' prior  notice from  Purchaser  to Seller,  and shall be
without  representation  or warranty by, or recourse against,  Seller.  Further,
Purchaser and its accountants shall maintain the  confidentiality of such books,
records and materials in accordance with Section 4.7.  Purchaser  further agrees
to indemnify,  defend and hold harmless Seller from any claim,  damage, loss, or
liability  to which  Seller is at any time  subjected by any person who is not a
party to this  Agreement  as a result of Seller's  compliance  with this Section
12.22.  After the

                                    Page 28
<PAGE>


expiration of one (1) year after  Closing,  Purchaser's  audit rights under this
paragraph shall terminate. This Section 12.22 shall survive Closing.



                    [SIGNATURE PAGES AND EXHIBITS TO FOLLOW]




                                    Page 29
<PAGE>




                         SIGNATURE PAGE TO AGREEMENT OF
                                PURCHASE AND SALE
                                 BY AND BETWEEN
                      WHCO REAL ESTATE LIMITED PARTNERSHIP,
                         a Delaware limited partnership,
                                       and
                       BERKSHIRE INCOME REALTY - OP, L.P.,
                         a Delaware limited partnership


     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on the
day and year written below.


                                                     SELLER:

                                           WHCO REAL ESTATE LIMITED PARTNERSHIP,
                                           a Delaware limited partnership

                                           By: WHRB Gen-Par, Inc.
                                               a Delaware corporation,
                                               its general partner


Date executed by Seller:                   By: /s/ Roger Beless
   October 16, 2003                            ---------------------------------
-----------------------                    Name: Roger Beless
                                                --------------------------------
                                           Title: Assistant Vice President
                                                 -------------------------------


                                                     PURCHASER:

                                           BERKSHIRE INCOME REALTY - OP, L.P.,
                                           a Delaware limited partnership

                                           By:  Berkshire Income Realty, Inc.,
                                                a Maryland corporation,
                                                its general partner


Date executed by Purchaser:                By: /s/ David C. Quade
   October 16, 2003                          -----------------------------------
--------------------------                 Name: David C. Quade
                                                --------------------------------
                                           Title: President
                                                 -------------------------------




                                    Page 30



</TEXT>
</DOCUMENT>
