Common use of Inspection and Due Diligence Clause in Contracts

Inspection and Due Diligence. 2.5.1 If Seller has not previously delivered or made available to Buyer the following, then not later than the date which is three (3) days after the Effective Date, Seller will deliver or make available to Buyer the following documents and records regarding the Property to the extent such are in Seller’s possession or control and which are not privileged as reasonably determined by Seller (collectively, the "Property Materials"). The Property Materials are being delivered or made available to Buyer to facilitate Buyer’s Physical Inspections and Other Investigations (as such terms are defined in Section 2.5.3 hereof), of the Property, and except as otherwise specifically provided in this Agreement, Seller makes no representations or warranties of any kind or nature whatsoever regarding the accuracy, completeness or thoroughness of such Property Materials: (a) The current Rent Roll of the Property, identifying the leased premises for each Lease, the term of each such Lease, recurring concessions, and the amount of any security deposit held by Seller pursuant to each such Lease; (b) A copy of the current Accounts Receivable Report for the Property indicating prepaid rent and delinquencies; (c) Copies of the Leases and contents of the tenant files for each current tenant; (d) Copies of the Property’s operating statements for the year 2013, 2014, 2015 and 2016 through the end of the month prior to the Effective Date, including, without limitation, the general ledger for the 12 full calendar months preceding the Effective Date (redacted to remove Seller's confidential information); (e) Copies of Loss Run Reports under Seller’s insurance for the two (2) years prior to the Effective Date; (f) Copies of bills for the two (2) year period prior to the Effective Date for water, electricity, natural gas, and any other utility charges (g) A copy of the most recent Texas survey of the Real Property and Improvements in Seller’s possession; (h) A copy of all maintenance work orders for the two (2) year period prior to the Effective Date; (i) A copy of the Owner’s Policy of Title Insurance (T-1) for the Real Property; (j) Copies of the real property tax bills for the current and past four (4) tax years; (k) Copies of all environmental, asbestos and lead paint reports regarding the Real Property (including, without limitation, a copy of the most recent Phase I report); (l) Copies of or a schedule describing all permits, licenses, and certificates of occupancy with respect to the Property or any part thereof; and (m) Service and operating leases and contracts regarding operation of the Property, together with any amendments or letter agreements relating thereto (collectively, the "Service Contracts"), which Service Contracts are identified on Exhibit "K" attached hereto. 2.5.2 Subject to the terms hereof, Buyer shall notify Seller in writing on or prior to the Approval Date of the Service Contracts which it elects to assume in connection with its purchase of the Property (the "Assumed Service Contracts"); provided, however, that Buyer shall be deemed to have elected to assume i) any Service Contract which has a termination date after the Closing Date and which cannot be terminated by Seller on thirty (30) days prior notice without the payment of a penalty or fee and ii) any Service Contracts for which Buyer failed to deliver notice of its election not to assume on or prior to the Approval Date. 2.5.3 Buyer shall from the Effective Date until 5:00 pm Pacific Time on the date which is forty-five (45) days after the Effective Date (the "Approval Date") to inspect the Property and to make any other investigations set forth herein below. Subject to the rights of tenants in possession, prior to the Approval Date, Buyer and its agents, managers, members, employees and contractors shall be afforded reasonable access to the Property during normal business hours, following at least twenty-four (24) hours prior notice to Seller for inspections not including apartment units and following at least two (2) business days advance prior notice for in-unit inspections, for the purpose of making such inspections and investigations which Buyer elects with respect to the physical condition of the Property, including, without limitation, soils and compaction studies, engineering and geotechnical studies, Americans with Disabilities Act ("ADA") compliance studies, OSHA compliance studies, inspections to confirm compliance with any state or local laws or ordinances related to public health and safety issues (including any applicable water conservation, seismic or smoke detector and sprinkler requirements), seismic tests, environmental studies (including, without limitation, surface and subsurface tests, borings, samplings and measurements) and a survey of the Property (collectively, the "Physical Inspections"). Notwithstanding the foregoing, any destructive or invasive testing or investigation related to the Physical Inspections shall require the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion. In any event, Buyer shall be solely responsible for any corrective or repair work necessitated by Buyer’s Physical Inspections and any such corrective or repair work shall be promptly undertaken by or on behalf of Buyer. Seller will have the right to have a representative of Seller accompany Buyer and Buyer’s representatives, agents, managers, members or assignees while they are on the Property. Prior to any entry upon the Property, Buyer or Buyer’s third party consultants shall be required to provide to Seller current certificates of insurance evidencing that Buyer or the applicable third parties have in place commercial general liability insurance, including public liability and property damage insurance, in the amount of at least Two Million Dollars ($2,000,000), combined single limit for personal injuries or death of persons or property damage occurring in or about the Property. Such insurance shall: (i) name the Seller as an additional insured; (ii) specifically cover the liability assumed by Buyer under this Agreement; (iii) be issued by an insurance company reasonably approved by Seller; (iv) be primary and noncontributory with any insurance which may be carried by Seller; and (v) provide that said insurance shall not be cancelled or coverage changed unless fifteen (15) days' prior written notice shall have been given to Seller. Buyer shall deliver said certificates of insurance to Seller on or before entering the Property. In the event Buyer shall fail to procure and provide satisfactory evidence of such insurance, Seller may prohibit Buyer and its agents, managers, members, employees and contractors from entering the Property. In addition to the Physical Inspections, Buyer may conduct any feasibility studies and other investigations of the Property which it desires or which would be deemed reasonable and prudent in connection with the acquisition of the Property (the "Other Investigations"), which Other Investigations may include, without limitation, the Property’s compliance with all applicable laws, codes, ordinances and regulations which relate to the use, operation and occupancy of the Property, any permit, zoning, land use and related matters, any proposed impositions, assessments or governmental regulations which may affect or do affect the Property, and any financial and economic assessments related to the Property (including operational matters) and the market area. Notwithstanding the foregoing, Buyer shall not contact any governmental authority having jurisdiction over the Property without Seller’s express written consent (which shall not be unreasonably withheld, conditioned or delayed) other than ordinary contacts normally associated with routine due diligence examinations that do not involve any discussions with governmental officials (except to the extent necessary to request records). Buyer shall not unreasonably and materially interfere with any tenant’s right to use or possession of the Property pursuant to a Lease while conducting such Physical Inspections and Other Investigations of the Property and Buyer shall utilize its commercially reasonable efforts to schedule all of its inspections of the interior of each apartment, retail or office unit at the same time. Seller shall reasonably cooperate with Buyer at no cost or liability to Seller in connection with such Physical Inspections and Other Investigations of the Property. Buyer shall notify Seller in writing, at its sole discretion, of its approval or disapproval of its Physical Inspections and Other Investigations of the Property on or prior to the Approval Date (the "Inspection Notice"). If Buyer’s Inspection Notice is timely delivered and unconditionally indicates Buyer’s approval of its Physical Inspections and Other Investigations of the Property, then the transaction contemplated by this Agreement shall proceed in accordance with the terms hereof. If Buyer fails to timely deliver the Inspection Notice, or if Buyer’s Inspection Notice does not unconditionally indicate Buyer’s approval of its Physical Inspections and Other Investigations of the Property, this Agreement shall immediately terminate, the Initial Xxxxxxx Money Deposit less the Independent Consideration shall be returned to Buyer, and the rights and obligations of the parties hereunder, other than as otherwise expressly set forth in this Agreement shall terminate. 2.5.4 Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all damages, injury to property or people, claims, demands, losses, liabilities, liens, judgments, costs and expenses including, without limitation, reasonable attorneys fees and disbursements, arising out of the Physical Inspections or Other Investigations or out of the conduct of Buyer, its employees, agents, managers, members, contractors and consultants in conducting its Physical Inspections and Other Investigations of the Property. Notwithstanding anything to the contrary, however, Buyer shall not be liable for the mere discovery of an existing condition to the extent such condition was not exacerbated by Buyer. Such indemnification shall survive the Closing or termination of this Agreement for a period of two (2) years.

Inspection and Due Diligence. 2.5.1 If Seller has not previously delivered or made available to Buyer the following, then not later than the date which is three (3) days after the Effective Date, Seller will deliver or make available to Buyer the following documents and records regarding the Property to the extent such are in Seller’s possession or control and which are not privileged as reasonably determined by Seller (collectively, the "Property Materials"). The Property Materials are being delivered or made available to Buyer to facilitate Buyer’s Physical Inspections and Other Investigations (as such terms are defined in Section 2.5.3 hereof), of the Property, and except as otherwise specifically provided in this Agreement, Seller makes no representations or warranties of any kind or nature whatsoever regarding the accuracy, completeness or thoroughness of such Property Materials: (a) The current Rent Roll of the Property, identifying the leased premises for each Lease, the term of each such Lease, recurring concessions, and the amount of any security deposit held by Seller pursuant to each such Lease; (b) A copy of the current Accounts Receivable Report for the Property indicating prepaid rent and delinquencies; (c) Copies of the Leases and contents of the tenant files for each current tenant; (d) Copies of the Property’s operating statements for the year 2013, 2014, 2015 and 2016 through the end of the month prior to the Effective Date, including, without limitation, the general ledger for the 12 full calendar months preceding the Effective Date (redacted to remove Seller's confidential information); (e) Copies of Loss Run Reports under Seller’s insurance for the two (2) years prior to the Effective Date; (f) Copies of bills for the two (2) year period prior to the Effective Date for water, electricity, natural gas, and any other utility charges (g) A copy of the most recent Texas ALTA survey of the Real Property and Improvements in Seller’s possession; (h) A copy of all maintenance work orders for the two (2) year period prior to the Effective Date; (i) A copy of the Owner’s Policy of Title Insurance (T-1) for the Real Property; (j) Copies of the real property tax bills for the current and past four (4) tax years; (k) Copies of all environmental, asbestos and lead paint reports regarding the Real Property (including, without limitation, a copy of the most recent Phase I report); (l) Copies of or a schedule describing all permits, licenses, and certificates of occupancy with respect to the Property or any part thereof; and; (m) Service and operating leases and contracts regarding operation of the Property, together with any amendments or letter agreements relating thereto (collectively, the "Service Contracts"), which Service Contracts are identified on Exhibit "KI" attached hereto; and (n) Copies of the Loan Documents. 2.5.2 Subject to the terms hereof, Buyer shall notify Seller in writing on or prior to the Approval Date of the Service Contracts which it elects to assume in connection with its purchase of the Property (the "Assumed Service Contracts"); provided, however, that Buyer shall be deemed to have elected to assume i) any Service Contract which has a termination date after the Closing Date and which cannot be terminated by Seller on thirty (30) days prior notice without the payment of a penalty or fee and ii) any Service Contracts for which Buyer failed to deliver notice of its election not to assume on or prior to the Approval Date. 2.5.3 Buyer shall from the Effective Date until 5:00 pm Pacific Time on the date which is forty-five (45) days after the Effective Date (the "Approval Date") to inspect the Property and to make any other investigations set forth herein below. Subject to the rights of tenants in possession, prior to the Approval Date, Buyer and its agents, managers, members, employees and contractors shall be afforded reasonable access to the Property during normal business hours, following at least twenty-four (24) hours prior notice to Seller for inspections not including apartment units and following at least two (2) business days advance prior notice for in-unit inspections, for the purpose of making such inspections and investigations which Buyer elects with respect to the physical condition of the Property, including, without limitation, soils and compaction studies, engineering and geotechnical studies, Americans with Disabilities Act ("ADA") compliance studies, OSHA compliance studies, inspections to confirm compliance with any state or local laws or ordinances related to public health and safety issues (including any applicable water conservation, seismic or smoke detector and sprinkler requirements), seismic tests, environmental studies (including, without limitation, surface and subsurface tests, borings, samplings and measurements) and a survey of the Property (collectively, the "Physical Inspections"). Notwithstanding the foregoing, any destructive or invasive testing or investigation related to the Physical Inspections shall require the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion. In any event, Buyer shall be solely responsible for any corrective or repair work necessitated by Buyer’s Physical Inspections and any such corrective or repair work shall be promptly undertaken by or on behalf of Buyer. Seller will have the right to have a representative of Seller accompany Buyer and Buyer’s representatives, agents, managers, members or assignees while they are on the Property. Prior to any entry upon the Property, Buyer or Buyer’s third party consultants shall be required to provide to Seller current certificates of insurance evidencing that Buyer or the applicable third parties have in place commercial general liability insurance, including public liability and property damage insurance, in the amount of at least Two Million Dollars ($2,000,000), combined single limit for personal injuries or death of persons or property damage occurring in or about the Property. Such insurance shall: (i) name the Seller as an additional insured; (ii) specifically cover the liability assumed by Buyer under this Agreement; (iii) be issued by an insurance company reasonably approved by Seller; (iv) be primary and noncontributory with any insurance which may be carried by Seller; and (v) provide that said insurance shall not be cancelled or coverage changed unless fifteen (15) days' prior written notice shall have been given to Seller. Buyer shall deliver said certificates of insurance to Seller on or before entering the Property. In the event Buyer shall fail to procure and provide satisfactory evidence of such insurance, Seller may prohibit Buyer and its agents, managers, members, employees and contractors from entering the Property. In addition to the Physical Inspections, Buyer may conduct any feasibility studies and other investigations of the Property which it desires or which would be deemed reasonable and prudent in connection with the acquisition of the Property (the "Other Investigations"), which Other Investigations may include, without limitation, the Property’s compliance with all applicable laws, codes, ordinances and regulations which relate to the use, operation and occupancy of the Property, any permit, zoning, land use and related matters, any proposed impositions, assessments or governmental regulations which may affect or do affect the Property, and any financial and economic assessments related to the Property (including operational matters) and the market area. Notwithstanding the foregoing, Buyer shall not contact any governmental authority having jurisdiction over the Property without Seller’s express written consent (which shall not be unreasonably withheld, conditioned or delayed) other than ordinary contacts normally associated with routine due diligence examinations that do not involve any discussions with governmental officials (except to the extent necessary to request records). Buyer shall not unreasonably and materially interfere with any tenant’s right to use or possession of the Property pursuant to a Lease while conducting such Physical Inspections and Other Investigations of the Property and Buyer shall utilize its commercially reasonable efforts to schedule all of its inspections of the interior of each apartment, retail or office unit at the same time. Seller shall reasonably cooperate with Buyer at no cost or liability to Seller in connection with such Physical Inspections and Other Investigations of the Property. Buyer shall notify Seller in writing, at its sole discretion, of its approval or disapproval of its Physical Inspections and Other Investigations of the Property on or prior to the Approval Date (the "Inspection Notice"). If Buyer’s Inspection Notice is timely delivered and unconditionally indicates Buyer’s approval of its Physical Inspections and Other Investigations of the Property, then the transaction contemplated by this Agreement shall proceed in accordance with the terms hereof. If Buyer fails to timely deliver the Inspection Notice, or if Buyer’s Inspection Notice does not unconditionally indicate Buyer’s approval of its Physical Inspections and Other Investigations of the Property, this Agreement shall immediately terminate, the Initial Xxxxxxx Money Deposit less the Independent Consideration shall be returned to Buyer, and the rights and obligations of the parties hereunder, other than as otherwise expressly set forth in this Agreement shall terminate. 2.5.4 Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all damages, injury to property or people, claims, demands, losses, liabilities, liens, judgments, costs and expenses including, without limitation, reasonable attorneys fees and disbursements, arising out of the Physical Inspections or Other Investigations or out of the conduct of Buyer, its employees, agents, managers, members, contractors and consultants in conducting its Physical Inspections and Other Investigations of the Property. Notwithstanding anything to the contrary, however, Buyer shall not be liable for the mere discovery of an existing condition to the extent such condition was not exacerbated by Buyer. Such indemnification shall survive the Closing or termination of this Agreement for a period of two (2) years.

Inspection and Due Diligence. 2.5.1 If Seller has not previously delivered or made available to Buyer the following, then not later than the date which is three (3) days after the Effective Date, Seller will deliver or make available to Buyer the following documents and records regarding the Property to the extent such are in Seller’s possession or control and which are not privileged as reasonably determined by Seller (collectively, the "Property Materials"). The Property Materials are being delivered or made available to Buyer to facilitate Buyer’s Physical Inspections and Other Investigations (as such terms are defined in Section 2.5.3 hereof), of the Property, and except as otherwise specifically provided in this Agreement, Seller makes no representations or warranties of any kind or nature whatsoever regarding the accuracy, completeness or thoroughness of such Property Materials: (a) The current Rent Roll of the Property, identifying the leased premises for each Lease, the term of each such Lease, recurring concessions, and the amount of any security deposit held by Seller pursuant to each such Lease; (b) A copy of the current Accounts Receivable Report for the Property indicating prepaid rent and delinquencies; (c) Copies of the Leases and contents of the tenant files for each current tenant; (d) Copies of the Property’s operating statements for the year 2013, 2014, 2015 and 2016 through the end of the month prior to the Effective Date, including, without limitation, the general ledger for the 12 full calendar months preceding the Effective Date (redacted to remove Seller's confidential information); (e) Copies of Loss Run Reports under Seller’s insurance for the two (2) years prior to the Effective Date; (f) Copies of bills for the two (2) year period prior to the Effective Date for water, electricity, natural gas, and any other utility charges; (g) A copy of the most recent Texas ALTA survey of the Real Property and Improvements in Seller’s possession; (h) A copy of all maintenance work orders for the two (2) year period prior to the Effective Date; (i) A copy of the Owner’s Policy of Title Insurance (T-1) for the Real Property; (j) Copies of the real property tax bills for the current and past four (4) tax years; (k) Copies of all environmental, asbestos and lead paint reports regarding the Real Property (including, without limitation, a copy of the most recent Phase I report); (l) Copies of or a schedule describing all permits, licenses, and certificates of occupancy with respect to the Property or any part thereof; and; (m) Service and operating leases and contracts regarding operation of the Property, together with any amendments or letter agreements relating thereto (collectively, the "Service Contracts"), which Service Contracts are identified on Exhibit "KI" attached hereto; and (n) Copies of the Loan Documents. 2.5.2 Subject to the terms hereof, Buyer shall notify Seller in writing on or prior to the Approval Date of the Service Contracts which it elects to assume in connection with its purchase of the Property (the "Assumed Service Contracts"); provided, however, that Buyer shall be deemed to have elected to assume i) any Service Contract which has a termination date after the Closing Date and which cannot be terminated by Seller on thirty (30) days prior notice without the payment of a penalty or fee and ii) any Service Contracts for which Buyer failed to deliver notice of its election not to assume on or prior to the Approval Date. 2.5.3 Buyer shall from the Effective Date until 5:00 pm Pacific Time on the date which is forty-five (45) days after the Effective Date (the "Approval Date") to inspect the Property and to make any other investigations set forth herein below. Subject to the rights of tenants in possession, prior to the Approval Date, Buyer and its agents, managers, members, employees and contractors shall be afforded reasonable access to the Property during normal business hours, following at least twenty-four (24) hours prior notice to Seller for inspections not including apartment units and following at least two (2) business days advance prior notice for in-unit inspections, for the purpose of making such inspections and investigations which Buyer elects with respect to the physical condition of the Property, including, without limitation, soils and compaction studies, engineering and geotechnical studies, Americans with Disabilities Act ("ADA") compliance studies, OSHA compliance studies, inspections to confirm compliance with any state or local laws or ordinances related to public health and safety issues (including any applicable water conservation, seismic or smoke detector and sprinkler requirements), seismic tests, environmental studies (including, without limitation, surface and subsurface tests, borings, samplings and measurements) and a survey of the Property (collectively, the "Physical Inspections"). Notwithstanding the foregoing, any destructive or invasive testing or investigation related to the Physical Inspections shall require the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion. In any event, Buyer shall be solely responsible for any corrective or repair work necessitated by Buyer’s Physical Inspections and any such corrective or repair work shall be promptly undertaken by or on behalf of Buyer. Seller will have the right to have a representative of Seller accompany Buyer and Buyer’s representatives, agents, managers, members or assignees while they are on the Property. Prior to any entry upon the Property, Buyer or Buyer’s third party consultants shall be required to provide to Seller current certificates of insurance evidencing that Buyer or the applicable third parties have in place commercial general liability insurance, including public liability and property damage insurance, in the amount of at least Two Million Dollars ($2,000,000), combined single limit for personal injuries or death of persons or property damage occurring in or about the Property. Such insurance shall: (i) name the Seller as an additional insured; (ii) specifically cover the liability assumed by Buyer under this Agreement; (iii) be issued by an insurance company reasonably approved by Seller; (iv) be primary and noncontributory with any insurance which may be carried by Seller; and (v) provide that said insurance shall not be cancelled or coverage changed unless fifteen (15) days' prior written notice shall have been given to Seller. Buyer shall deliver said certificates of insurance to Seller on or before entering the Property. In the event Buyer shall fail to procure and provide satisfactory evidence of such insurance, Seller may prohibit Buyer and its agents, managers, members, employees and contractors from entering the Property. In addition to the Physical Inspections, Buyer may conduct any feasibility studies and other investigations of the Property which it desires or which would be deemed reasonable and prudent in connection with the acquisition of the Property (the "Other Investigations"), which Other Investigations may include, without limitation, the Property’s compliance with all applicable laws, codes, ordinances and regulations which relate to the use, operation and occupancy of the Property, any permit, zoning, land use and related matters, any proposed impositions, assessments or governmental regulations which may affect or do affect the Property, and any financial and economic assessments related to the Property (including operational matters) and the market area. Notwithstanding the foregoing, Buyer shall not contact any governmental authority having jurisdiction over the Property without Seller’s express written consent (which shall not be unreasonably withheld, conditioned or delayed) other than ordinary contacts normally associated with routine due diligence examinations that do not involve any discussions with governmental officials (except to the extent necessary to request records). Buyer shall not unreasonably and materially interfere with any tenant’s right to use or possession of the Property pursuant to a Lease while conducting such Physical Inspections and Other Investigations of the Property and Buyer shall utilize its commercially reasonable efforts to schedule all of its inspections of the interior of each apartment, retail or office unit at the same time. Seller shall reasonably cooperate with Buyer at no cost or liability to Seller in connection with such Physical Inspections and Other Investigations of the Property. Buyer shall notify Seller in writing, at its sole discretion, of its approval or disapproval of its Physical Inspections and Other Investigations of the Property on or prior to the Approval Date (the "Inspection Notice"). If Buyer’s Inspection Notice is timely delivered and unconditionally indicates Buyer’s approval of its Physical Inspections and Other Investigations of the Property, then the transaction contemplated by this Agreement shall proceed in accordance with the terms hereof. If Buyer fails to timely deliver the Inspection Notice, or if Buyer’s Inspection Notice does not unconditionally indicate Buyer’s approval of its Physical Inspections and Other Investigations of the Property, this Agreement shall immediately terminate, the Initial Xxxxxxx Money Deposit less the Independent Consideration shall be returned to Buyer, and the rights and obligations of the parties hereunder, other than as otherwise expressly set forth in this Agreement shall terminate. 2.5.4 Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all damages, injury to property or people, claims, demands, losses, liabilities, liens, judgments, costs and expenses including, without limitation, reasonable attorneys fees and disbursements, arising out of the Physical Inspections or Other Investigations or out of the conduct of Buyer, its employees, agents, managers, members, contractors and consultants in conducting its Physical Inspections and Other Investigations of the Property. Notwithstanding anything to the contrary, however, Buyer shall not be liable for the mere discovery of an existing condition to the extent such condition was not exacerbated by Buyer. Such indemnification shall survive the Closing or termination of this Agreement for a period of two (2) years.

Inspection and Due Diligence. 2.5.1 If Seller has not previously delivered or made available to Buyer the 6 following, then not later than the date which is three (3) days after the Effective Date, Seller will deliver or make available to Buyer the following documents and records regarding the Property to the extent such are in Seller’s possession or control and which are not privileged as reasonably determined by Seller (collectively, the "Property Materials"). The Property Materials are being delivered or made available to Buyer to facilitate Buyer’s Physical Inspections and Other Investigations (as such terms are defined in Section 2.5.3 hereof), of the Property, and except as otherwise specifically provided in this Agreement, Seller makes no representations or warranties of any kind or nature whatsoever regarding the accuracy, completeness or thoroughness of such Property Materials: (a) The current Rent Roll of the Property, identifying the leased premises for each Lease, the term of each such Lease, recurring concessions, and the amount of any security deposit held by Seller pursuant to each such Lease; (b) A copy of the current Accounts Receivable Report for the Property indicating prepaid rent and delinquencies; (c) Copies of the Leases and contents of the tenant files for each current tenant; ; (d) Copies of the Property’s operating statements for the year 2013, 2014, 2015 and 2016 through the end of the month prior to the Effective Date, including, without limitation, the general ledger for the 12 full calendar months preceding the Effective Date (redacted to remove Seller's confidential information); ; (e) Copies of Loss Run Reports under Seller’s insurance for the two (2) years prior to the Effective Date; ; (f) Copies of bills for the two (2) year period prior to the Effective Date for water, electricity, natural gas, and any other utility charges charges (g) A copy of the most recent Texas ALTA survey of the Real Property and Improvements in Seller’s possession; ; (h) A copy of all maintenance work orders for the two (2) year period prior to the Effective Date; ; (i) A copy of the Owner’s Policy of Title Insurance (T-1) for the Real Property; ; (j) Copies of the real property tax bills for the current and past four (4) tax years; ; (k) Copies of all environmental, asbestos and lead paint reports regarding the Real Property (including, without limitation, a copy of the most recent Phase I report); ; (l) Copies of or a schedule describing all permits, licenses, and certificates of occupancy with respect to the Property or any part thereof; and and (m) Service and operating leases and contracts regarding operation of the 7 Property, together with any amendments or letter agreements relating thereto (collectively, the "Service Contracts"), which Service Contracts are identified on Exhibit "KJ" attached hereto. 2.5.2 Subject to the terms hereof, Buyer shall notify Seller in writing on or prior to the Approval Date of the Service Contracts which it elects to assume in connection with its purchase of the Property (the "Assumed Service Contracts"); provided, however, that Buyer shall be deemed to have elected to assume i) any Service Contract which has a termination date after the Closing Date and which cannot be terminated by Seller on thirty (30) days prior notice without the payment of a penalty or fee and ii) any Service Contracts for which Buyer failed to deliver notice of its election not to assume on or prior to the Approval Date. 2.5.3 Buyer shall from the Effective Date until 5:00 pm Pacific Time on the date which is forty-five (45) days after the Effective Date (the "Approval Date") to inspect the Property and to make any other investigations set forth herein below. Subject to the rights of tenants in possession, prior to the Approval Date, Buyer and its agents, managers, members, employees and contractors shall be afforded reasonable access to the Property during normal business hours, following at least twenty-four (24) hours prior notice to Seller for inspections not including apartment units and following at least two (2) business days advance prior notice for in-unit inspections, for the purpose of making such inspections and investigations which Buyer elects with respect to the physical condition of the Property, including, without limitation, soils and compaction studies, engineering and geotechnical studies, Americans with Disabilities Act ("ADA") compliance studies, OSHA compliance studies, inspections to confirm compliance with any state or local laws or ordinances related to public health and safety issues (including any applicable water conservation, seismic or smoke detector and sprinkler requirements), seismic tests, environmental studies (including, without limitation, surface and subsurface tests, borings, samplings and measurements) and a survey of the Property (collectively, the "Physical Inspections"). Notwithstanding the foregoing, any destructive or invasive testing or investigation related to the Physical Inspections shall require the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion. In any event, Buyer shall be solely responsible for any corrective or repair work necessitated by Buyer’s Physical Inspections and any such corrective or repair work shall be promptly undertaken by or on behalf of Buyer. Seller will have the right to have a representative of Seller accompany Buyer and Buyer’s representatives, agents, managers, members or assignees while they are on the Property. Prior to any entry upon the Property, Buyer or Buyer’s third party consultants shall be required to provide to Seller current certificates of insurance evidencing that Buyer or the applicable third parties have in place commercial general liability insurance, including public liability and property damage insurance, in the amount of at least Two Million Dollars ($2,000,000), combined single limit for personal injuries or death of persons or property damage occurring in or about the Property. Such insurance shall: (i) name the Seller as an additional insured; (ii) specifically cover the liability assumed by Buyer under this Agreement; (iii) be issued by an insurance company reasonably approved by Seller; (iv) be primary and noncontributory with any insurance which may be carried by Seller; and (v) provide that said insurance shall not be cancelled or coverage changed unless fifteen (15) days' prior written notice shall have been given to Seller. Buyer shall deliver said certificates of insurance to Seller on or before entering the Property. In the event Buyer shall fail to procure and provide satisfactory evidence of such 8 insurance, Seller may prohibit Buyer and its agents, managers, members, employees and contractors from entering the Property. In addition to the Physical Inspections, Buyer may conduct any feasibility studies and other investigations of the Property which it desires or which would be deemed reasonable and prudent in connection with the acquisition of the Property (the "Other Investigations"), which Other Investigations may include, without limitation, the Property’s compliance with all applicable laws, codes, ordinances and regulations which relate to the use, operation and occupancy of the Property, any permit, zoning, land use and related matters, any proposed impositions, assessments or governmental regulations which may affect or do affect the Property, and any financial and economic assessments related to the Property (including operational matters) and the market area. Notwithstanding the foregoing, Buyer shall not contact any governmental authority having jurisdiction over the Property without Seller’s express written consent (which shall not be unreasonably withheld, conditioned or delayed) other than ordinary contacts normally associated with routine due diligence examinations that do not involve any discussions with governmental officials (except to the extent necessary to request records). Buyer shall not unreasonably and materially interfere with any tenant’s right to use or possession of the Property pursuant to a Lease while conducting such Physical Inspections and Other Investigations of the Property and Buyer shall utilize its commercially reasonable efforts to schedule all of its inspections of the interior of each apartment, retail or office unit at the same time. Seller shall reasonably cooperate with Buyer at no cost or liability to Seller in connection with such Physical Inspections and Other Investigations of the Property. Buyer shall notify Seller in writing, at its sole discretion, of its approval or disapproval of its Physical Inspections and Other Investigations of the Property on or prior to the Approval Date (the "Inspection Notice"). If Buyer’s Inspection Notice is timely delivered and unconditionally indicates Buyer’s approval of its Physical Inspections and Other Investigations of the Property, then the transaction contemplated by this Agreement shall proceed in accordance with the terms hereof. If Buyer fails to timely deliver the Inspection Notice, or if Buyer’s Inspection Notice does not unconditionally indicate Buyer’s approval of its Physical Inspections and Other Investigations of the Property, this Agreement shall immediately terminate, the Initial Xxxxxxx Money Deposit less the Independent Consideration shall be returned to Buyer, and the rights and obligations of the parties hereunder, other than as otherwise expressly set forth in this Agreement shall terminate. 2.5.4 Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all damages, injury to property or people, claims, demands, losses, liabilities, liens, judgments, costs and expenses including, without limitation, reasonable attorneys fees and disbursements, arising out of the Physical Inspections or Other Investigations or out of the conduct of Buyer, its employees, agents, managers, members, contractors and consultants in conducting its Physical Inspections and Other Investigations of the Property. Notwithstanding anything to the contrary, however, Buyer shall not be liable for the mere discovery of an existing condition to the extent such condition was not exacerbated by Buyer. Such indemnification shall survive the Closing or termination of this Agreement for a period of two (2) years.

Inspection and Due Diligence. 2.5.1 If Seller has not previously delivered or made available to Buyer the following, then not later than the date which is three two (32) days after the Effective Date (the “Delivery Date”), Seller will shall deliver to Buyer, to the extent in Seller’s or make available to Buyer its property management agent’s possession or control, copies of the following documents and records regarding the Property set forth on Exhibit “I” attached hereto, except for those items which will be made available to Buyer at the extent such are in Seller’s possession Property as expressly set forth on Exhibit “I” (collectively with those items previously delivered or control and which are not privileged as reasonably determined by Seller (collectivelymade available, the "“Property Materials"”). The Property Materials are being delivered or made available to Buyer to facilitate Buyer’s Physical Inspections and Other Investigations (as such terms are defined in Section 2.5.3 hereof), hereafter defined) of the Property, and except as otherwise specifically provided in this Agreement, Seller makes no representations or warranties of any kind or nature whatsoever regarding the accuracy, completeness or thoroughness of such Property Materials: (a) The current Rent Roll of the Property, identifying the leased premises for each Lease, the term of each such Lease, recurring concessions, and the amount of any security deposit held by Seller pursuant to each such Lease; (b) A copy of the current Accounts Receivable Report for the Property indicating prepaid rent and delinquencies; (c) Copies of the Leases and contents of the tenant files for each current tenant; (d) Copies of the Property’s operating statements for the year 2013, 2014, 2015 and 2016 through the end of the month prior to the Effective Date, including, without limitation, the general ledger for the 12 full calendar months preceding the Effective Date (redacted to remove Seller's confidential information); (e) Copies of Loss Run Reports under Seller’s insurance for the two (2) years prior to the Effective Date; (f) Copies of bills for the two (2) year period prior to the Effective Date for water, electricity, natural gas, and any other utility charges (g) A copy of the most recent Texas survey of the Real Property and Improvements in Seller’s possession; (h) A copy of all maintenance work orders for the two (2) year period prior to the Effective Date; (i) A copy of the Owner’s Policy of Title Insurance (T-1) for the Real Property; (j) Copies of the real property tax bills for the current and past four (4) tax years; (k) Copies of all environmental, asbestos and lead paint reports regarding the Real Property (including, without limitation, a copy of the most recent Phase I report); (l) Copies of or a schedule describing all permits, licenses, and certificates of occupancy with respect to the Property or any part thereof; and (m) Service and operating leases and contracts regarding operation of the Property, together with any amendments or letter agreements relating thereto (collectively, the "Service Contracts"), which Service Contracts are identified on Exhibit "K" attached hereto. 2.5.2 Subject to the terms hereof, Buyer shall notify Seller in writing on or prior to the Approval Date of the Service Contracts listed on Exhibit “J” attached hereto (collectively, the “Service Contracts”) which it Buyer elects in its discretion to assume in connection with its purchase of the Property (the "“Assumed Service Contracts"”); provided, however, that Buyer shall be deemed to have elected to assume i) any Service Contract which has a termination date after the Closing Date and which cannot be terminated by Seller on thirty (30) days prior notice without the payment of a penalty fee (unless Buyer elects in its sole discretion to pay any applicable termination costs or fee expenses). Promptly following receipt of such election, Seller shall terminate, or initiate the termination of, all Service Contracts which Buyer has elected not to assume and ii) which Buyer has not been deemed to have elected to assume hereunder, which terminations and any and all right of entry to the Property thereunder shall be effective as of the Closing Date. Seller shall cooperate with Buyer, both before and after the Closing Date, to obtain any approvals or consents required to assign any Service Contracts to Buyer, including, without limitation, sending requests for which Buyer failed to deliver notice of its election not to assume on such approvals or prior consents to the Approval Dateparty or parties whose consent or approval is required. If Seller fails to timely send any such request for approval or consent, Buyer may do so in Seller’s name. Seller’s obligations under this Section to cooperate with Buyer to obtain any such approvals or consents required to assign any Service Contracts to Buyer shall survive the Closing for a period of thirty (30) days. 2.5.3 Buyer shall The period from the Effective Date until 5:00 pm Pacific Time on p.m. (PST) October 14, 2016 shall be the date which is forty-five (45) days after “Due Diligence Period”. Buyer shall have from the Effective Date until the expiration of the Due Diligence Period (and, if this Agreement has not been terminated, at Buyer’s lender’s reasonable request, thereafter until the "Approval Closing Date") ), to inspect the Property and and, subject to the limitations expressly set forth herein, to make any other investigations set forth herein belowinvestigations, tests or examinations as Buyer may elect in order to evaluate the Property and Buyer’s contemplated acquisition thereof. Subject to the rights of tenants in possession, prior to the Approval Date, Buyer and its agents, managers, members, employees and contractors shall be afforded reasonable complete access to the Property during normal business hours, following at least twenty-four (24) hours prior email notice to Seller (except for inspections not including apartment occupied residential units and following at least two with respect to which Buyer shall give forty-eight (248) business days advance hours prior notice for in-unit inspectionsemail notice), for the purpose of making such inspections and investigations which Buyer elects with respect to the physical condition of the Property, including, without limitation, soils and compaction studies, engineering and geotechnical studies, Americans with Disabilities Act ("“ADA"”) compliance studies, OSHA compliance studies, inspections to confirm compliance with any state or local laws or ordinances related to public health and safety issues (including any applicable water conservation, seismic or smoke detector and sprinkler requirements), seismic tests, environmental studies (including, without limitation, surface and subsurface tests, borings, samplings and measurements) and a survey of the Property (collectively, the "“Physical Inspections"”). Notwithstanding the foregoing, any Any destructive or invasive testing or investigation related to the Physical Inspections (except for such tests as may be required as part of a Phase I environmental audit) shall require the prior written consent of Seller, which consent may be withheld in Seller's ’s sole and absolute discretion; provided that Buyer, in seeking such consent, shall describe in reasonable detail the nature of any destructive testing or investigations that are contemplated. In the event that Seller has consented to any eventinvasive or destructive testing or investigation of the Property (the “Invasive Testing”), Buyer shall be solely responsible for damage caused by such Invasive Testing. Buyer shall, at its sole cost and expense, promptly restore any corrective physical damage or repair work necessitated by Buyer’s alteration of the physical condition of the Property which results from any Physical Inspections and any such corrective or repair work shall be promptly undertaken conducted by or on behalf of Buyer to substantially the same condition existing immediately prior to Buyer’s exercise of its rights pursuant to this Paragraph, except that Buyer shall have no obligation to restore the Property to address any existing issue or condition (a) discovered, but not caused by, Buyer or (b) that is not caused by Buyer or its consultants. Seller will have the right to have a representative of Seller accompany Buyer and Buyer’s representatives, agents, managers, members or assignees while they are on the Property. Prior to conducting any entry upon inspections or tests on the Property, Buyer or Buyer’s third party consultants shall be required to provide maintain (a) commercial public liability insurance with coverages of not less than $1,000,000.00 for injury or death to Seller current certificates any one person and $2,000,000.00 (except for Buyer’s surveyor, for which this limit shall be $1,000,000) for injury or death to more than one person and $300,000.00 with respect to property damage, by water or otherwise, and (b) worker’s compensation insurance for all of insurance evidencing that Buyer or their respective employees in accordance with the applicable third parties have in place commercial general laws of the State of Colorado. With respect to public liability insurance, including public liability and property damage insurance, in the amount of at least Two Million Dollars ($2,000,000), combined single limit for personal injuries or death of persons or property damage occurring in or about the Property. Such insurance shall: (i) name the Seller shall be named as an additional insured; insured regarding the activities to be conducted by Buyer or Buyer’s consultants in connection with the Physical Inspections and (ii) specifically cover the liability assumed by Buyer under this Agreement; (iii) such policy shall be issued by an insurance company reasonably approved by Seller; (iv) be primary and noncontributory with any insurance which may be carried by Seller; and (v) provide that said insurance shall not be cancelled or coverage changed unless fifteen (15) days' prior written notice shall have been given to Sellera carrier licensed in Colorado. Buyer shall deliver said certificates proof of the insurance coverage required pursuant to this Agreement to Seller on (in the form of a certificate of insurance) prior to Buyer’s or before entering the Property. In the event Buyer shall fail to procure and provide satisfactory evidence of such insurance, Seller may prohibit Buyer and its agents, managers, members, employees and contractors from entering consultants’ entry onto the Property. In addition to the Physical Inspections, during the Due Diligence Period and thereafter if this Agreement has not terminated, Buyer may conduct any 4555356.6 8 feasibility studies studies, review of all of Seller and its property managers on-site books and records, and other investigations of the Property which it desires or which would be deemed reasonable and prudent in connection with the acquisition of the Property (the "“Other Investigations"”), which Other Investigations may include, include without limitation, limitation the Property’s compliance with all applicable laws, codes, ordinances and regulations which relate to the use, operation and occupancy of the Property, any permit, zoning, land use and related matters, any proposed impositions, assessments or governmental regulations which may affect or do affect the Property, and any financial and economic assessments related to the Property (including operational matters) and the market area. Notwithstanding the foregoing, Buyer shall not contact any governmental authority having jurisdiction over the Property without Seller’s express written consent (which shall not be unreasonably withheld, conditioned or delayed) other than ordinary contacts normally associated with routine due diligence examinations that do not involve any discussions with governmental officials (except to the extent necessary to request records). Buyer shall not unreasonably and materially interfere with any tenant’s right to use or possession of the Property pursuant to a Lease while conducting such Physical Inspections and Other Investigations of the Property and Buyer shall utilize its commercially reasonable efforts to schedule all of its inspections of the interior of each apartment, retail or office apartment unit at the same time. Seller shall reasonably cooperate with Buyer at no cost or liability to Seller in connection with such Physical Inspections and Other Investigations of the Property. Buyer shall notify Seller in writing, at its sole and absolute discretion, of its approval for any reason or disapproval of its Physical Inspections and Other Investigations of the Property no reason whatsoever, as to whether it elects to terminate this Agreement on or prior to the Approval Date expiration of the Due Diligence Period (the "“Inspection Notice"”). If The date that Buyer’s service of the Inspection Notice is timely delivered deemed complete in accordance with Section 7.1 hereof shall be referred to herein as the “Approval Date”, and unconditionally indicates Buyer’s approval of its Physical Inspections and Other Investigations in the event that the Approval Date occurs prior to the expiration of the PropertyDue Diligence Period, such Due Diligence Period shall be deemed to have expired on the Approval Date. If Buyer does not terminate this Agreement in its Inspection Notice, then the transaction contemplated by this Agreement shall proceed in accordance with the terms hereof. If Buyer fails to timely deliver the Inspection Notice, or if Buyer’s Inspection Notice does not unconditionally indicate Buyer’s approval of its Physical Inspections and Other Investigations of the Propertyterminates this Agreement, this Agreement shall immediately terminate, in which event only Three Hundred Seventy-Five Thousand and No/100 Dollars ($375,000.00) of the Initial Xxxxxxx Money Deposit less the Independent Consideration shall will be returned to BuyerBuyer and Seller shall be entitled to retain the balance of the Initial Deposit as liquidated damages, and the rights and obligations of the parties Parties hereunder, other than as otherwise expressly set forth in this Agreement Agreement, shall terminate. 2.5.4 Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all damages, injury to property or people, claims, demands, losses, liabilities, liens, judgments, costs and expenses including, without limitation, reasonable attorneys fees and disbursements, arising out of the Physical Inspections or Other Investigations or out of the conduct of Buyer, its employees, agents, managers, members, contractors and consultants in conducting its Physical Inspections and Other Investigations of the Property. Notwithstanding anything to the contrary, however, Buyer shall not be liable for the mere discovery of an existing condition to the extent such condition was not exacerbated by Buyer. Such indemnification shall survive the Closing or termination of this Agreement for a period of two (2) years.

Inspection and Due Diligence. 2.5.1 If Seller has not previously delivered or made available to Buyer the following, then not later than the date which is three (3) days after the Effective Date, Seller will deliver or make available to Buyer the following documents and records regarding the Property to the extent such are in Seller’s possession or control and which are not privileged as reasonably determined by Seller (collectively, the "Property Materials"). The Property Materials are being delivered or made available to Buyer to facilitate Buyer’s Physical Inspections and Other Investigations (as such terms are defined in Section 2.5.3 hereof), of the Property, and except as otherwise specifically provided in this Agreement, Seller makes no representations or warranties of any kind or nature whatsoever regarding the accuracy, completeness or thoroughness of such Property Materials: (a) The current Rent Roll of the Property, identifying the leased premises for each Lease, the term of each such Lease, recurring concessions, and the amount of any security deposit held by Seller pursuant to each such Lease; (b) A copy of the current Accounts Receivable Report for the Property indicating prepaid rent and delinquencies; (c) Copies of the Leases and contents of the tenant files for each current tenant; (d) Copies of the Property’s operating statements for the year 2013, 2014, 2015 and 2016 through the end of the month prior to the Effective Date, including, without limitation, the general ledger for the 12 full calendar months preceding the Effective Date (redacted to remove Seller's confidential information); (e) Copies of Loss Run Reports under Seller’s insurance for the two (2) years prior to the Effective Date; (f) Copies of bills for the two (2) year period prior to the Effective Date for water, electricity, natural gas, and any other utility charges (g) A copy of the most recent Texas ALTA survey of the Real Property and Improvements in Seller’s possession; (h) A copy of all maintenance work orders for the two (2) year period prior to the Effective Date; (i) A copy of the Owner’s Policy of Title Insurance (T-1) for the Real Property; (j) Copies of the real property tax bills for the current and past four (4) tax years; (k) Copies of all environmental, asbestos and lead paint reports regarding the Real Property (including, without limitation, a copy of the most recent Phase I report); (l) Copies of or a schedule describing all permits, licenses, and certificates of occupancy with respect to the Property or any part thereof; and (m) Service and operating leases and contracts regarding operation of the Property, together with any amendments or letter agreements relating thereto (collectively, the "Service Contracts"), which Service Contracts are identified on Exhibit "KJ" attached hereto. 2.5.2 Subject to the terms hereof, Buyer shall notify Seller in writing on or prior to the Approval Date of the Service Contracts which it elects to assume in connection with its purchase of the Property (the "Assumed Service Contracts"); provided, however, that Buyer shall be deemed to have elected to assume i) any Service Contract which has a termination date after the Closing Date and which cannot be terminated by Seller on thirty (30) days prior notice without the payment of a penalty or fee and ii) any Service Contracts for which Buyer failed to deliver notice of its election not to assume on or prior to the Approval Date. 2.5.3 Buyer shall from the Effective Date until 5:00 pm Pacific Time on the date which is forty-five (45) days after the Effective Date (the "Approval Date") to inspect the Property and to make any other investigations set forth herein below. Subject to the rights of tenants in possession, prior to the Approval Date, Buyer and its agents, managers, members, employees and contractors shall be afforded reasonable access to the Property during normal business hours, following at least twenty-four (24) hours prior notice to Seller for inspections not including apartment units and following at least two (2) business days advance prior notice for in-unit inspections, for the purpose of making such inspections and investigations which Buyer elects with respect to the physical condition of the Property, including, without limitation, soils and compaction studies, engineering and geotechnical studies, Americans with Disabilities Act ("ADA") compliance studies, OSHA compliance studies, inspections to confirm compliance with any state or local laws or ordinances related to public health and safety issues (including any applicable water conservation, seismic or smoke detector and sprinkler requirements), seismic tests, environmental studies (including, without limitation, surface and subsurface tests, borings, samplings and measurements) and a survey of the Property (collectively, the "Physical Inspections"). Notwithstanding the foregoing, any destructive or invasive testing or investigation related to the Physical Inspections shall require the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion. In any event, Buyer shall be solely responsible for any corrective or repair work necessitated by Buyer’s Physical Inspections and any such corrective or repair work shall be promptly undertaken by or on behalf of Buyer. Seller will have the right to have a representative of Seller accompany Buyer and Buyer’s representatives, agents, managers, members or assignees while they are on the Property. Prior to any entry upon the Property, Buyer or Buyer’s third party consultants shall be required to provide to Seller current certificates of insurance evidencing that Buyer or the applicable third parties have in place commercial general liability insurance, including public liability and property damage insurance, in the amount of at least Two Million Dollars ($2,000,000), combined single limit for personal injuries or death of persons or property damage occurring in or about the Property. Such insurance shall: (i) name the Seller as an additional insured; (ii) specifically cover the liability assumed by Buyer under this Agreement; (iii) be issued by an insurance company reasonably approved by Seller; (iv) be primary and noncontributory with any insurance which may be carried by Seller; and (v) provide that said insurance shall not be cancelled or coverage changed unless fifteen (15) days' prior written notice shall have been given to Seller. Buyer shall deliver said certificates of insurance to Seller on or before entering the Property. In the event Buyer shall fail to procure and provide satisfactory evidence of such insurance, Seller may prohibit Buyer and its agents, managers, members, employees and contractors from entering the Property. In addition to the Physical Inspections, Buyer may conduct any feasibility studies and other investigations of the Property which it desires or which would be deemed reasonable and prudent in connection with the acquisition of the Property (the "Other Investigations"), which Other Investigations may include, without limitation, the Property’s compliance with all applicable laws, codes, ordinances and regulations which relate to the use, operation and occupancy of the Property, any permit, zoning, land use and related matters, any proposed impositions, assessments or governmental regulations which may affect or do affect the Property, and any financial and economic assessments related to the Property (including operational matters) and the market area. Notwithstanding the foregoing, Buyer shall not contact any governmental authority having jurisdiction over the Property without Seller’s express written consent (which shall not be unreasonably withheld, conditioned or delayed) other than ordinary contacts normally associated with routine due diligence examinations that do not involve any discussions with governmental officials (except to the extent necessary to request records). Buyer shall not unreasonably and materially interfere with any tenant’s right to use or possession of the Property pursuant to a Lease while conducting such Physical Inspections and Other Investigations of the Property and Buyer shall utilize its commercially reasonable efforts to schedule all of its inspections of the interior of each apartment, retail or office unit at the same time. Seller shall reasonably cooperate with Buyer at no cost or liability to Seller in connection with such Physical Inspections and Other Investigations of the Property. Buyer shall notify Seller in writing, at its sole discretion, of its approval or disapproval of its Physical Inspections and Other Investigations of the Property on or prior to the Approval Date (the "Inspection Notice"). If Buyer’s Inspection Notice is timely delivered and unconditionally indicates Buyer’s approval of its Physical Inspections and Other Investigations of the Property, then the transaction contemplated by this Agreement shall proceed in accordance with the terms hereof. If Buyer fails to timely deliver the Inspection Notice, or if Buyer’s Inspection Notice does not unconditionally indicate Buyer’s approval of its Physical Inspections and Other Investigations of the Property, this Agreement shall immediately terminate, the Initial Xxxxxxx Money Deposit less the Independent Consideration shall be returned to Buyer, and the rights and obligations of the parties hereunder, other than as otherwise expressly set forth in this Agreement shall terminate. 2.5.4 Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all damages, injury to property or people, claims, demands, losses, liabilities, liens, judgments, costs and expenses including, without limitation, reasonable attorneys fees and disbursements, arising out of the Physical Inspections or Other Investigations or out of the conduct of Buyer, its employees, agents, managers, members, contractors and consultants in conducting its Physical Inspections and Other Investigations of the Property. Notwithstanding anything to the contrary, however, Buyer shall not be liable for the mere discovery of an existing condition to the extent such condition was not exacerbated by Buyer. Such indemnification shall survive the Closing or termination of this Agreement for a period of two (2) years.

Inspection and Due Diligence. 2.5.1 If Seller has not previously delivered or made available to Buyer the following, then not later than the date which is three (3) days after the Effective Date, Seller will deliver or make available to Buyer the following documents and records regarding the Property to the extent such are in Seller’s possession or control and which are not privileged as reasonably determined by Seller (collectively, the "Property Materials"). The Property Materials are being delivered or made available to Buyer to facilitate Buyer’s Physical Inspections and Other 7 Investigations (as such terms are defined in Section 2.5.3 hereof), of the Property, and except as otherwise specifically provided in this Agreement, Seller makes no representations or warranties of any kind or nature whatsoever regarding the accuracy, completeness or thoroughness of such Property Materials: (a) The current Rent Roll of the Property, identifying the leased premises for each Lease, the term of each such Lease, recurring concessions, and the amount of any security deposit held by Seller pursuant to each such Lease; (b) A copy of the current Accounts Receivable Report for the Property indicating prepaid rent and delinquencies; (c) Copies of the Leases and contents of the tenant files for each current tenant; ; (d) Copies of the Property’s operating statements for the year 2013, 2014, 2015 and 2016 through the end of the month prior to the Effective Date, including, without limitation, the general ledger for the 12 full calendar months preceding the Effective Date (redacted to remove Seller's confidential information); ; (e) Copies of Loss Run Reports under Seller’s insurance for the two (2) years prior to the Effective Date; ; (f) Copies of bills for the two (2) year period prior to the Effective Date for water, electricity, natural gas, and any other utility charges ; (g) A copy of the most recent Texas ALTA survey of the Real Property and Improvements in Seller’s possession; ; (h) A copy of all maintenance work orders for the two (2) year period prior to the Effective Date; ; (i) A copy of the Owner’s Policy of Title Insurance (T-1) for the Real Property; ; (j) Copies of the real property tax bills for the current and past four (4) tax years; ; (k) Copies of all environmental, asbestos and lead paint reports regarding the Real Property (including, without limitation, a copy of the most recent Phase I report); ; (l) Copies of or a schedule describing all permits, licenses, and certificates of occupancy with respect to the Property or any part thereof; and (m) Service and operating leases and contracts regarding operation of the Property, together with any amendments or letter agreements relating thereto (collectively, the "Service Contracts"), which Service Contracts are identified on Exhibit "KI" attached hereto. 2.5.2 Subject to the terms hereof, Buyer shall notify Seller in writing on or prior to the Approval Date of the Service Contracts which it elects to assume in connection with its purchase of the Property (the "Assumed Service Contracts"); provided, however, that Buyer shall be deemed to have elected to assume i) any Service Contract which has a termination date after the Closing Date and which cannot be terminated by Seller on thirty (30) days prior notice without the payment of a penalty or fee and ii) any Service Contracts for which Buyer failed to deliver notice of its election not to assume on or prior to the Approval Date. 2.5.3 Buyer shall from the Effective Date until 5:00 pm Pacific Time on the date which is forty-five (45) days after the Effective Date (the "Approval Date") to inspect the Property and to make any other investigations set forth herein below. Subject to the rights of tenants in possession, prior to the Approval Date, Buyer and its agents, managers, members, employees and contractors shall be afforded reasonable access to the Property during normal business hours, following at least twenty-four (24) hours prior notice to Seller for inspections not including apartment units and following at least two (2) business days advance prior notice for in-unit inspections, for the purpose of making such inspections and investigations which Buyer elects with respect to the physical condition of the Property, including, without limitation, soils and compaction studies, engineering and geotechnical studies, Americans with Disabilities Act ("ADA") compliance studies, OSHA compliance studies, inspections to confirm compliance with any state or local laws or ordinances related to public health and safety issues (including any applicable water conservation, seismic or smoke detector and sprinkler requirements), seismic tests, environmental studies (including, without limitation, surface and subsurface tests, borings, samplings and measurements) and a survey of the Property (collectively, the "Physical Inspections"). Notwithstanding the foregoing, any destructive or invasive testing or investigation related to the Physical Inspections shall require the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion. In any event, Buyer shall be solely responsible for any corrective or repair work necessitated by Buyer’s Physical Inspections and any such corrective or repair work shall be promptly undertaken by or on behalf of Buyer. Seller will have the right to have a representative of Seller accompany Buyer and Buyer’s representatives, agents, managers, members or assignees while they are on the Property. Prior to any entry upon the Property, Buyer or Buyer’s third party consultants shall be required to provide to Seller current certificates of insurance evidencing that Buyer or the applicable third parties have in place commercial general liability insurance, including public liability and property damage insurance, in the amount of at least Two Million Dollars ($2,000,000), combined single limit for personal injuries or death of persons or property damage occurring in or about the Property. Such insurance shall: (i) name the Seller as an additional insured; (ii) specifically cover the liability assumed by Buyer under this Agreement; (iii) be issued by an insurance company reasonably approved by Seller; (iv) be primary and noncontributory with any insurance which may be carried by Seller; and (v) provide that said insurance shall not be cancelled or coverage changed unless fifteen (15) days' prior written notice shall have been given to Seller. Buyer shall deliver said certificates of insurance to Seller on or before entering the Property. In the event Buyer shall fail to procure and provide satisfactory evidence of such insurance, Seller may prohibit Buyer and its agents, managers, members, employees and contractors from entering the Property. In addition to the Physical Inspections, Buyer may conduct any feasibility studies and other investigations of the Property which it desires or which would be deemed reasonable and prudent in connection with the acquisition of the Property (the "Other Investigations"), which Other Investigations may include, without limitation, the Property’s compliance with all applicable laws, codes, ordinances and regulations which relate to the use, operation and occupancy of the Property, any permit, zoning, land use and related matters, any proposed impositions, assessments or governmental regulations which may affect or do affect the Property, and any financial and economic assessments related to the Property (including operational matters) and the market area. Notwithstanding the foregoing, Buyer shall not contact any governmental authority having jurisdiction over the Property without Seller’s express written consent (which shall not be unreasonably withheld, conditioned or delayed) other than ordinary contacts normally associated with routine due diligence examinations that do not involve any discussions with governmental officials (except to the extent necessary to request records). Buyer shall not unreasonably and materially interfere with any tenant’s right to use or possession of the Property pursuant to a Lease while conducting such Physical Inspections and Other Investigations of the Property and Buyer shall utilize its commercially reasonable efforts to schedule all of its inspections of the interior of each apartment, retail or office unit at the same time. Seller shall reasonably cooperate with Buyer at no cost or liability to Seller in connection with such Physical Inspections and Other Investigations of the Property. Buyer shall notify Seller in writing, at its sole discretion, of its approval or disapproval of its Physical Inspections and Other Investigations of the Property on or prior to the Approval Date (the "Inspection Notice"). If Buyer’s Inspection Notice is timely delivered and unconditionally indicates Buyer’s approval of its Physical Inspections and Other Investigations of the Property, then the transaction contemplated by this Agreement shall proceed in accordance with the terms hereof. If Buyer fails to timely deliver the Inspection Notice, or if Buyer’s Inspection Notice does not unconditionally indicate Buyer’s approval of its Physical Inspections and Other Investigations of the Property, this Agreement shall immediately terminate, the Initial Xxxxxxx Money Deposit less the Independent Consideration shall be returned to Buyer, and the rights and obligations of the parties hereunder, other than as otherwise expressly set forth in this Agreement shall terminate. 2.5.4 Buyer agrees to indemnify, defend and hold Seller harmless from and against any and all damages, injury to property or people, claims, demands, losses, liabilities, liens, judgments, costs and expenses including, without limitation, reasonable attorneys fees and disbursements, arising out of the Physical Inspections or Other Investigations or out of the conduct of Buyer, its employees, agents, managers, members, contractors and consultants in conducting its Physical Inspections and Other Investigations of the Property. Notwithstanding anything to the contrary, however, Buyer shall not be liable for the mere discovery of an existing condition to the extent such condition was not exacerbated by Buyer. Such indemnification shall survive the Closing or termination of this Agreement for a period of two (2) years.8