PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this Agreement) is executed by and between THE R & S APARTMENT LAND, LLC, a Missouri limited liability company (Seller), and AMERICA FIRST APARTMENT INVESTORS, INC., a Maryland corporation, or its permitted assigns (Purchaser).

In consideration of the mutual covenants and representations herein contained, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser agree as follows:

1.

PURCHASE AND SALE

1.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Seller hereby agrees to sell, transfer, assign and convey to Purchaser, and Purchaser hereby agrees to purchase from Seller, all of the Membership Interests, as defined herein, in CSI, L.L.C., a Missouri limited liability company (the Company). The Membership Interests shall include collectively and without limitation, any and all rights to receive any participation, allocations or distributions from the Company, any and all voting rights, and any and all other benefits to which such members may be entitled pursuant to the Articles of Organization and Operating Agreement of the Company dated February 5, 2001, a true and complete copy of which, together with all amendments, is attached hereto as Exhibit B (the Organizational Documents), together with the obligations of such members to comply with the terms and provisions of the Organizational Documents .

1.2 Assets of the Company Seller represents and warrants that the Company owns all of the following described property (herein collectively called the Property):

(a) Land. That certain tract of land (the Land) located in Independence, Missouri, being more particularly described on Exhibit A attached hereto and made a part hereof.

(b) Easements. All easements, if any, benefiting the Land or the Improvements (as defined in Section 1.1(d) of this Agreement).

(c) Rights and Appurtenances. All rights and appurtenances pertaining to the Land, including any right, title and interest of the Company in and to adjacent streets, alleys or rights-of-way included in the Land and all benefits under the Tax Increment Financing documents and instruments applicable to the Land and Improvements.

(d) Improvements. All buildings, improvements and related amenities known as Cornerstone Apartments (the Improvements) in and on the Land, consisting of a total of 420 apartment units and related amenities.

(e) Leases. All right, title and interest under all leases (the Leases) of space in the Property, concession leases, and all tenant security deposits (whether refundable or non-refundable) held by the Company on the Closing Date (as defined in Section 6.1 of this Agreement).

(f) Tangible Personal Property. All appliances, fixtures, equipment, machinery, furniture, carpet, drapes and other personal property, if any, owned by the Company and located on or about the Land and the Improvements (the Tangible Personal Property), including, without limitation, those items of personal property set forth on Exhibit D attached hereto and excluding property owned by tenants.

(g) Contracts. The Companys right, title and interest (to the extent the same is assignable) under the Contracts (as defined in Section 4.1(c) of this Agreement), other than the Rejected Contracts (as defined hereinafter).

(h) Intangible Property. All intangible property (the Intangible Property), if any, owned by the Company and pertaining to the Land, the Improvements, or the Tangible Personal Property including, without limitation, the name Cornerstone Apartments, transferable utility contracts, transferable telephone exchange numbers and all assignable warranties and guarantees relating to the Property or any part thereof. The Seller will furnish Purchaser with copies of the blueprints, plans and specifications, engineering plans and studies, floor plans and landscape plans for use with respect to the Land and Improvements only, but is not selling copyrights and rights to reproduce such items for use elsewhere, the ownership of which is being retained.

1.3 Retained Assets and Liabilities.

(a) In addition to items described in Section 1.2 (h), the Seller retain the following assets of the Company:

(i) All rights against former tenants of the Property (not in possession on the date of Closing) for the collection of rents and any other amounts due for time periods prior to Closing.

(ii) The rights to duplicate and reuse the design, specifications, blueprints and plans for the Property at other locations are retained by the Seller; provided, however, Seller is selling and expressly shall not be permitted to use the name Cornerstone Apartments, all rights to which shall be transferred by Seller to Purchaser hereunder as an asset of the Company.

(iii) All bank accounts and cash on hand, exclusive of tenant deposits and Seller shall retain all of its original accounting and bank records and tax returns for the Company for the time periods prior to Closing, but Seller shall provide copies of such records and returns to Purchaser upon request if needed for Company or tax purposes after Closing.

(b) Except as herein stated, Seller shall also retain the following Liabilities of the Company pertaining to the development, ownership, and financing of the Property up to the date of Closing, including, without limitation the following:

(i) All liabilities pertaining to the existing loan documents and instruments evidencing and securing the Companys existing loan for the Property, which shall be paid in full at Closing.

(ii) Any and all claims, losses, liabilities, damages, obligations, fines, penalties, suits, actions, proceedings, costs or expenses of any nature whatsoever (including, without limitation, reasonable attorneys fees and expenses and court costs), whether now known or unknown, asserted or unasserted, accrued or unaccrued, liquidated or unliquidated or due or to become due, including, without limitation, any liabilities in respect of any applicable laws other than (w) trade payables not yet due which have been disclosed to the Purchaser and any other obligations which have been subject to proration under Section 6.3 of this Agreement; (x) obligations under the Leases with tenants arising from and after the date of Closing; (y) obligations under the Contracts arising from and after the date of Closing; and (z) any and all tax obligations for the Company arising from and after the date of Closing

2.

PURCHASE PRICE

2.1 Purchase Price. The purchase price (the Purchase Price) for the Membership Interests shall be Thirty Seven Million Five Hundred Thousand and no/100 Dollars ($37,500,000.00), less the total amount of all concessions to tenants under the Leases in effect at Closing for the remainder of their existing terms, and further subject to prorations and adjustments as set forth in this Agreement. Concessions for this purpose shall mean discounts from the stated rent amount in such leases for free rent or reduced rent for a stated time period below the regular rent amount stated in such Lease. The Purchase Price, as adjusted, shall be paid by Purchaser to Seller at the Closing by wire transfer of immediately available funds to the Escrow Company (as defined below) on the Closing Date in accordance with wire transfer instructions to be provided by the Escrow Company.

3.
 

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