Exhibit 10.122

 

CLOSING AGREEMENT

 

(Sherman Town Center)

 

THIS CLOSING AGREEMENT (this “Agreement”) made as of July           , 2006 (the
“Effective Date”), by and between A-S 60 HWY 75-LOY LAKE, L.P., a Texas limited
partnership (“Seller”), and MB SHERMAN TOWN CENTER LIMITED PARTNERSHIP, an
Illinois limited partnership (“Purchaser”).

 

W I T N E S S E T H:

 

WHEREAS, Seller and Purchaser are parties to that certain letter agreement (as
heretofore modified, amended and extended, the “LOI”) dated May 18, 2005,
setting forth the basic terms and conditions pursuant to which Purchaser will
purchase from Seller and Seller will sell to Purchaser certain real property and
improvements, including, without limitation, the Property (as defined below).
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the LOI;

 

WHEREAS, contemporaneously herewith, Seller desires to sell to Purchaser, and
Purchaser desires to purchase from Seller, the Property (as defined below), upon
and subject to the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.             Purchase and Sale. Subject to the terms of this Agreement and the
LOI, Seller hereby agrees to sell and convey, subject to the Permitted
Encumbrances (as defined below), and Purchaser hereby agrees to purchase and pay
for, notwithstanding the Permitted Encumbrances, the following property:

 

(a)       that certain tract of land and easement estates (collectively, the
“Land”) situated in Grayson County, Texas, as more particularly described on
Exhibit A hereto, together with all rights and appurtenances pertaining to such
Land, and all right, title and interest of Seller in and to (i) all streets,
alleys, easements, and rights of way in, on, across, in front of, abutting or
adjoining the Land; and (ii) all oil, gas and other minerals in, on or under the
Land;

 

(b)       all improvements situated on the Land and all fixtures and other
property affixed thereto (collectively, the “Improvements”);

 

(c)       any furniture, furnishings, equipment, systems, facilities and
machinery, and conduits to provide life safety, heat, ventilation, air
conditioning, electrical power, lighting, plumbing, security, gas, sewer and
water thereto, to the extent owned by Seller and now located on or within the
Land and the Improvements and used in connection therewith, including a
maintenance vehicle (the “Maintenance

 

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Vehicle”) used by Seller in connection with the management of the Property
(collectively, the “Personal Property”);

 

(d)       all of Seller’s right, title and interest as landlord in the leases,
as amended, described on Exhibit B hereto for space situated within the Land and
Improvements (collectively, the “Leases”), and to the extent paid to Seller, all
prepaid rents under the Lease applicable to the period from and after the
Closing (as defined below), and security and other deposits under the Leases;

 

(e)       all of Seller’s right, title and interest (but without warranty as to
assignability) in all written contracts (if any) relating solely to the
improvement, maintenance or operation of, or the provision of services or
supplies solely to, the Land or the Improvements (such as trash removal or
elevator, HVAC or landscaping maintenance contracts, and development and common
area maintenance agreements) (collectively, the “Service Contracts”);

 

(f)        all of Seller’s right, title and interest (but without warranty as to
assignability) in any unexpired warranties, guaranties and bonds (including
manufacturers’ warranties on Personal Property and contractors’ warranties for
tenant finish work) (if any) attributable to the Improvements or Personal
Property (the “Warranties”);

 

(g)       all of Seller’s right, title and interest (but without warranty as to
assignability) in all governmental permits, licenses, certificates and
authorizations, including, without limitation, water, wastewater and other
utility rights, allocation, availability and/or capacity and certificates of
occupancy, (if any) attributable to the Land, Improvements or Personal Property
(the “Permits”);

 

(h)       all of Seller’s right, title and interest (but without warranty as to
assignability) in and to all trade names (excluding, however, the name “NewQuest
Properties”), logos and other intangible rights with respect to the Property
(the “Intangibles”); and,

 

(i)        all of Seller’s right, title and interest (but without warranty as to
assignability) in and to all escrow and impound accounts held by the Lender (as
hereinafter defined) with respect to the Property (the “Impounds”).

 

The matters described in items (a) through (i) above are hereinafter
collectively referred to as the “Property.”  To the extent that any of the
personal property described in clause (c) above is owned by occupants of space
at the Property or owned by any service provider pursuant to any of the Service
Contracts or owned by a utility pursuant to one or more Permitted Encumbrances,
it shall be excluded from the definition of the term Property and from the term
Personal Property as used in this Agreement.

 

2.           Purchase Price.

 

(a)       The total purchase price (the “Purchase Price”) to be paid by
Purchaser to Seller for the Property is SIXTY MILLION FIFTY-SIX THOUSAND

 

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ONE HUNDRED TWENTY-NINE AND NO/100 DOLLARS ($60,056,129.00). The Purchase Price
is to be paid by Purchaser as follows:

 

(i)            The assumption by Purchaser and promise to pay, according to the
terms and subject to the limitations on personal liability thereof, all
principal and interest remaining unpaid as of the Effective Date on the Existing
Indebtedness (hereinafter defined); and

 

(ii)           The balance of the Purchase Price (i.e., an amount equal to the
Purchase Price less the principal balance owing on the Existing Indebtedness as
of the Effective Date) shall be payable in cash or other immediately available
funds at Closing as set forth herein below.

 

“Existing Indebtedness” means the indebtedness evidenced by that certain
promissory note (as heretofore amended, extended or modified, the “Existing
Note”) executed by Seller, originally payable to the order of JPMORGAN CHASE
BANK, N.A. (ALender”), dated June 15, 2004, and being in the original principal
amount of $39,650,000, such Existing Note having been assigned to Wells Fargo
Bank, N.A., as Trustee for the Registered Holders of J.P. Morgan Chase
Commercial Mortgage Securities Corp., Commercial Pass-Through Certificates,
Series 2004-C3, by instrument filed of record in Volume 3830, Page 203 of the
Official Public Records of Grayson County, Texas. The Existing Note is secured,
in part, by that certain Deed of Trust from Seller to Reno Hartfiel, as Trustee
for Lender, of even date with the Existing Note, filed of record in Volume 3680,
Page 231 of the Official Public Records of Grayson County, Texas (as heretofore
amended, extended or modified the AExisting Mortgage@) and encumbering the
Property. The Existing Note, the Existing Mortgage and all other documents,
instruments and agreements evidencing or securing the Existing Indebtedness are
hereinafter sometimes collectively referred to as the “Existing Loan Documents.”

 

(b)       The Purchase Price set forth in Section 2(a) above is the total price
to be paid to Seller based upon the Existing Indebtedness being presently
defeasible, and assuming Seller has paid all costs and expenses associated with
the defeasance of the Existing Indebtedness. Since the Existing Indebtedness on
the Property is not defeasible as of the Effective Date, only a portion (the
“Cash at Closing”) of the balance of the Purchase Price described in Section
2(a)(ii) above (that portion being $21,307,189.59) is being paid by Purchaser to
Seller as of the Closing. The difference between the balance of the Purchase
Price described in Section 2(a)(ii) above and the Cash at Closing shall be
referred to herein as the “Loan Earnout.”  The date upon which the Existing
Indebtedness first becomes defeasible shall be referred to herein as the
“Initial Defeasance Date.”  Seller shall have the option to designate an actual
defeasance date (the “Designated Defeasance Date”), which Designated Defeasance
Date must be no later than six (6) months following the Initial Defeasance Date,
by providing Purchaser at least fifteen (15) business days prior written notice
of such Designated Defeasance Date (the “Defeasance Notice”). In the event
Seller fails to designate a date within such six (6) month period, the
Designated Defeasance Date

 

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shall be deemed to be the last day of such six (6) month period. At least three
(3) business days prior to the Designated Defeasance Date, Seller and/or
Purchaser shall request and obtain a final defeasance closing statement (the
“Defeasance Closing Statement”), assuming a Designated Defeasance Date
settlement date, from Commercial Defeasance LLC (“Commercial Defeasance”), 11121
Carmel Commons Blvd, Suite 250, Charlotte, NC 28226, (704) 248-2608, Attn:
Joseph Parry. Purchaser has previously approved the form of defeasance documents
utilized by Commercial Defeasance and covenants and agrees to use its best
efforts to cause the defeasance of the Existing Indebtedness to be completed on
the Designated Defeasance Date. Seller shall be responsible for paying, from the
Loan Earnout Escrow, all fees, expenses, penalties and other costs incurred in
connection with such defeasance, including, without limitation, all legal and
accounting fees associated with such defeasance; provided, however, in no event
shall Seller’s responsibility for such costs and expenses exceed the amount of
the Loan Earnout Escrow. Upon successful defeasance of the Existing
Indebtedness, the total amount of costs and expenses in connection with such
defeasance, as reflected on the Defeasance Closing Statement, shall be released
from the Loan Earnout Escrow to pay the costs of the defeasance, and all
remaining Loan Earnout Escrow Funds in the Loan Earnout Escrow, if any, shall be
released to Purchaser. In the event the amount of available funds in the Loan
Earnout Escrow is insufficient to pay all costs and expenses associated with
such defeasance, Purchaser shall be responsible for any amount by which the
costs and expenses exceed such available amount. Notwithstanding anything to the
contrary contained herein or in the LOI, Purchaser shall be solely responsible
for the payment of all principal and interest on the Existing Indebtedness after
the Effective Date of this Agreement.

 

(c)       Pursuant to the provisions of the Loan Earnout Escrow Agreement
referred to in Section 5(n) hereinafter, $300,000 (the “Loan Earnout Escrow
Funds”) has been placed in escrow (the “Loan Earnout Escrow”) by Purchaser to
secure the payment of the Loan Earnout. The Loan Earnout Escrow Funds shall be
placed in an interest bearing account, and all interest thereon shall be paid to
Seler upon receipt thereof by the escrow holder. Funds in the Loan Earnout
Escrow shall be distributed as set forth hereinabove to satisfy the obligations
of Seller under this Section 2 and Paragraph 1 of the LOI.

 

3.             Seller’s Deliveries.

 

Prior to the Effective Date, Seller has delivered to or made available to
Purchaser, originals or true, correct, complete copies of the following:

 

(a)       a current title insurance commitment issued by American Title Company
of Houston as agent on behalf of Chicago Title Insurance Company (“Title
Company”), including copies of all recorded exceptions to title referred to
therein (collectively, the “Title Commitment”), showing the status of title to
the Land and Improvements according to the Title Company. Purchaser and Seller
agree that those exceptions shown on Exhibit F attached hereto shall be
“Permitted Exceptions” hereunder;

 

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(b)       Seller’s existing surveys of the Land and Improvements, together with
updates of the same prepared in accordance with Purchaser’s instructions
(collectively, the “Survey”);

 

(c)       a rent roll of the Property, together with copies of the Leases;

 

(d)       copies of all written Services Contracts, Warranties and Permits;

 

(e)       copies of any and all third-party inspection reports, including
without limitation, soil tests, environmental studies, and engineering reports
in Seller’s possession; but with no warranty as to the accuracy or completeness
thereof; and,

 

(f)        copies of the Existing Loan Documents and any documents necessary to
consummate the assignment by Seller, and assumption by Purchaser, of the
Existing Indebtedness (collectively, the “Assumption Documents”).

 

4.             Investigation. Prior to the Effective Date, Purchaser has had the
opportunity to investigate the Property and all matters relevant to its
acquisition, ownership and operation.

 

5.             The Closing.

 

The consummation of the transaction contemplated by this Agreement (the
“Closing”) shall take place through an escrow with Chicago Title & Trust Company
(the “Escrow Agent”) contemporaneously herewith. Unless waived by the party
entitled to the benefit thereof, the obligations of either party to close under
this Agreement shall be subject to the performance by the other party of all of
the material covenants, agreements and obligations required to be performed by
such party under this Agreement on or before the Closing. At the Closing, the
following shall occur:

 

(a)       Seller shall deliver to Purchaser a duly executed and acknowledged
Special Warranty Deed (collectively, the “Deed”) in substantially the form
attached hereto as Exhibit C.

 

(b)       Seller and Purchaser shall execute and deliver a Bill of Sale,
Assignment and Assumption of Contracts (“Bill of Sale”) in the form of Exhibit E
hereto, conveying to Purchaser the Personal Property, Service Contracts,
Warranties and Intangibles.

 

(c)       Purchaser shall pay the balance of the Purchase Price as provided in
Section 2(a)(ii) hereof, and the parties shall execute settlement statements
reflecting the Purchase Price and the prorations, adjustments and closing costs
described in Section 6 hereof.

 

(d)       Seller and Purchaser shall enter into an Assignment and Assumption of
Leases in substantially the form attached hereto as Exhibit D, whereby Seller
shall deliver as provided in this Agreement and assign to Purchaser the
landlord’s interest in the (i) Leases and (ii) any and all deposits under the
Leases and not

 

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previously applied and whereby Purchaser shall assume all of the obligations of
the landlord under the Leases arising from and after the Closing, including any
obligation to account for the security deposits assigned to Purchaser.

 

(e)       Seller shall deliver to Purchaser originals (or to the extent
originals are not in Seller’s possession, copies) of the Leases, Service
Contracts, Warranties, Permits, plans and specifications of the Improvements,
tenant files and certificates of occupancy (if applicable) relating to the
Property within Seller’s possession.

 

(f)        The parties shall execute a blank form written notice addressed to
tenants under the Leases notifying such tenants of the acquisition of the
Property by Purchaser, which shall be delivered to Purchaser at Closing.

 

(g)       Pursuant to the terms and conditions of this Agreement, possession of
the Property shall be delivered to Purchaser at Closing.

 

(h)       Seller shall deliver to Purchaser all keys to all locks on the
Property within Seller’s possession (or the possession of its agents).

 

(i)        Seller shall deliver to Purchaser a “non-foreign affidavit”
acknowledging that Seller is not a nonresident alien within the meaning of
Section 1445 of the Internal Revenue Code of 1986, as amended.

 

(j)        Seller and Purchaser shall each execute and deliver to the other
party such disclosures as may be required by applicable law.

 

(k)       Seller shall deliver, or cause to be delivered, to Purchaser (or shall
provide evidence that the Title Company is unconditionally prepared to issue to
Purchaser) a TLTA Form B Owner’s Policy of Title Insurance (the “Title Policy”)
with respect to the Property, together with those endorsements set forth in
Section 6(l) of this Agreement, and insuring any appurtenant easements in the
amount of the Purchase Price, insuring Purchaser’s fee simple title to the
Property to be good and indefeasible subject to the terms of such Title Policy
and the exceptions specified therein.

 

(l)        Each party shall deliver to the other party such documentary and
other evidence as may be reasonably required by the Title Company including,
without limitation, such documents evidencing its existence and/or good standing
and the authority of the person or persons who are executing the various
documents on its behalf in connection with this Agreement, and a certificate
confirming such party’s representations and warranties and, in the case of
Seller, Seller will execute customary affidavits of debts, liens, and possession
required by the Title Company, including, including, without limitation, those
required to limit any exception for “parties in possession” to the rights of
tenants, as tenants only, under the Leases delivered to Purchaser in accordance
with Section 3.

 

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(m)      The Purchaser and NewQuest Properties shall execute and deliver to the
other party a Leasing Agreement in form and substance reasonably acceptable to
Purchaser and NewQuest Properties.

 

(n)       Each party shall execute and deliver to the other party the escrow
agreement (the “Loan Earnout Escrow Agreement”) relating to the escrow of
certain funds contemplated to be used to pay all costs, premiums and penalties
to defease the Existing Indebtedness, as contemplated by Section 2 hereof and
Paragraph 1 of the LOI.

 

(o)       Each party shall execute and deliver to the other party such
agreements as may be reasonably required as contemplated by Paragraph 17 of the
LOI, including, to the extent applicable, any required REA or Sign Agreement
contemplated therein.

 

(p)       Purchaser shall execute and deliver the Assumption Documents.

 

6.             Prorations.

 

(a)       Taxes. General real estate and personal property taxes and assessments
relating to the Property shall be prorated and shall be assumed at Closing by
Purchaser. The proration for such taxes and assessments shall be based upon, at
Purchaser’s option, the greater of (i) one hundred ten percent (110%) of the
most recently issued tax bill for the Property, or (ii) the estimated assessment
for calendar year 2006 utilizing the local tax assessor’s method of assessment.
If the most recent tax bill is not for the current tax year, then the parties
shall reprorate within thirty (30) days of the receipt of the tax bill for the
current tax year. Purchaser shall receive a credit at Closing equal to the
prorated amount of such taxes through Closing. Seller shall be responsible for
all “roll-back” taxes assessed against the Property for any period before or
after the Closing. After Closing, Purchaser shall have sole authority to control
the progress of, and to make all decisions with respect to, any proceedings for
the reduction of the assessed valuation of the Property. All net tax refunds and
credits attributable to any period prior to the Closing Date which Seller has
paid or for which Seller has given a credit to Purchaser shall belong to and be
the property of Seller, provided, however, that any such refunds and credits
that are the property of tenants under Leases shall be promptly remitted
directly to such tenants. All net tax refunds and credits attributable to any
period subsequent to the Closing Date shall belong to and be the property of
Purchaser.

 

(b)       Fixed, Minimum and Base Rents. Subject to Section 6(g) below, Seller
shall be entitled to fixed, minimum and base rents which are due or past due or
not yet due but accrued under the terms of the Leases, prorated to 11:59 p.m. of
the day prior to the Closing, regardless of when such payments are actually
made. At Closing, rents for the month of Closing will be prorated as provided
below. “Delinquent Amounts”, as defined in Section 6(j) below, shall be handled
in the manner provided in Section 6(j) below). All scheduled payments of fixed,
minimum or base rents received by Seller or Purchaser for the month of Closing
shall be prorated based upon the

 

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number of days in that month occurring before the Closing. If, as of the
Closing, any scheduled payment of fixed, minimum or base rents has not been paid
by a tenant for the month of Closing (such amount being referred to as the
“Current Unpaid Rent” for such tenant), than any subsequent payments made by
such tenant after Closing shall first be applied to (but only to the extent of)
the Current Unpaid Rent for such tenant. If after the Closing, Seller receives
any payment from a tenant with Current Unpaid Rent, Seller shall be entitled to
retain from any such payment the amount of the Current Unpaid Rent for such
tenant (with the balance of any such payment being treated as a “Delinquent
Amount” and disposed of pursuant to the provisions of Section 6(j) below, or if
Purchaser receives any such payment from a tenant with Current Unpaid Rent,
Purchaser shall promptly remit to Seller from any such payment the amount of the
Current Unpaid Rent for such tenant (with the balance of any such payment being
treated as a “Delinquent Amount” and disposed of pursuant to the provisions of
Section 6(j) below.

 

(c)       Percentage Rents. Any percentage rents due or paid under any of the
Leases (“Percentage Rent”) shall be prorated between Purchaser and Seller
outside of escrow as of the Closing Date on a LeaseBbyBLease basis, as follows; 
(a) Seller shall be entitled to receive the portion of the Percentage Rent under
each Lease for the Lease Year in which Closing occurs, which portion shall be
the ratio of the number of days of said Lease Year in which Seller was Landlord
under the Lease to the total number of days in the Lease Year, and (b) Purchaser
shall receive the balance of Percentage Rent paid under each Lease for the Lease
Year. As used herein, the term “Lease Year” means the twelve (12) month period
as to which annual Percentage Rent is owed under each Lease. Upon receipt by
either Seller or Purchaser of any gross sales reports (“Gross Sales Reports”)
and any full or partial payment of Percentage Rent from any tenant of the
Property, the party receiving the same shall provide to the other party a copy
of the Gross Sales Report and a check for the other party’s proBrata share of
the Percentage Rent within five (5) days of the receipt thereof. In the event
that the tenant only remits a partial payment, then the amount to be remitted to
the other party shall be its proBrata share of the partial payment. Nothing
contained herein shall be deemed or construed to require either Purchaser or
Seller to pay to the other party its proBrata share of the Percentage Rent prior
to receiving the Percentage Rent from the tenant, and the acceptance or
negotiation of any check for Percentage Rent by either party shall not be deemed
a waiver of that party’s right to contest the accuracy or amount of the
Percentage Rent paid by the tenant.

 

(d)       Utilities Charges and Deposits. Water and sewer service charges,
telephone, cable television and charges for all other utilities, including,
without limitation, steam, electricity and gas shall be prorated to the date of
Closing. Seller shall cause all utility meters to be read on the Closing Date
and Seller shall pay to Purchaser (or furnish evidence of prior payment) an
amount equal to utility charges incurred or accrued up to the reading of such
utility meters. Seller shall retain the right to any security deposits on
deposit with any utility companies, and Purchaser shall be required to deposit
with any such utility companies security deposits for its own account. If final
readings and billings cannot be obtained as of the Closing Date, the

 

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final bills when received shall be prorated based upon the number of days Seller
owned the Subject Properties in such final billing period.

 

(e)       Rent Concessions, Tenant Improvements and Commissions. Purchaser shall
be credited at Closing with the amount of any and all rent concessions (except
for those, if any, that are reflected in Paragraph 18 and Paragraph 19 of the
LOI, as to which no credit shall be given to Purchaser) given by Seller to any
tenant of the Property for any period beyond the Closing Date. Seller shall be
responsible for all leasing commissions and all tenant improvement costs,
refurbishment allowances and other tenant inducements, which relate to the
Leases which were entered into by or on behalf of Seller or any prior owner of
the Property prior to the Effective Date hereof, whether or not payment for such
item is due before or after the Closing. With respect to any Leases entered into
after the Effective Date of this Agreement, Purchaser shall be responsible for
any such expenses.

 

(f)        Lender Escrow Accounts and Impounds. At Closing, Seller shall be
credited for the full amount of any escrow accounts and impounds maintained by
the Lender with respect to the Property, Seller’s interest in such escrow
accounts and impounds having been assigned by Seller to Purchaser
contemporaneously with the Closing.

 

(g)       Other Items of Expense or Receipt. All other customarily prorated
items of expense or receipt (excluding those items previously addressed in this
Section 6 above) shall be prorated between the Seller and Purchaser as of the
Closing, except to the extent certain expenses are payable by tenants under the
Leases on a annual basis after Closing, in which event such expenses shall be
not be prorated and shall be assumed in their entirety by Purchaser. To the
extent Purchaser will assume any obligations which are attributable to periods
of time prior to the Closing Date, Purchaser shall receive a credit for such
amount at Closing. The Seller shall retain (and the Assignment of Leases shall
reserve to Seller) all receivables from tenants for common area maintenance,
taxes and insurance for 2006 and previous years and Seller shall have the right
to pursue and collect such receivables from all tenants after the Closing;
provided, Seller shall have no right to sue any current tenant under the Leases.
Purchaser shall cooperate with Seller in the collection of such receivables.
Purchaser shall have no obligation to take any enforcement action, but if any
such amounts are paid to Purchaser, they shall be paid immediately to Seller by
Purchaser. If the apportionment of any payments relating to common area
maintenance charges for calendar year 2006 (which have, as of the Closing, been
billed, but not collected, by Seller) received by Purchaser after the date of
Closing from a tenant under any of the Leases on account of periods prior to
Closing and on account of sums which are attributable to expenses incurred by
the lessor/landlord for periods of time prior to Closing (and which are not
reimbursed or credited by Purchaser to Seller pursuant to any other provision of
this Agreement), cannot be precisely determined at the time of Closing, such
sums shall be apportioned on a cash basis at closing pro-rata between Purchaser
and Seller on a per diem basis as of the date of Closing. A post closing
adjustment shall be made, if necessary, between Purchaser and Seller for such
apportioned items (including specifically, without limitation, the payment by
Purchaser

 

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to Seller of common area maintenance charges for calendar year 2006 to the
extent collected by Purchaser from and after the Closing Date) within thirty
(30) days after the sums can be precisely determined. The provisions hereof
shall expressly survive the Closing. Except with respect to items prorated at
the Closing, Seller shall be responsible for payment of any and all bills or
charges incurred on or prior to the Closing for work, services, supplies or
materials relating to the Property, and Purchaser shall be responsible for
payment of any and all bills or charges incurred after the Closing for work,
services, supplies or materials relating to the Property for which Purchaser has
engaged the party performing or delivering such items or has expressly assumed
such obligations pursuant to an express provision herein or in a separate
document executed at Closing.

 

(h)       Adjustments. Prorations shall be accomplished by an adjustment in the
Purchase Price due Seller on the Closing, except as otherwise expressly provided
in this Agreement.

 

(i)        Post-Closing Adjustments. Seller and Purchaser shall, on or before
the Closing, agree upon and furnish to the Escrow Agent an agreed schedule of
the foregoing prorations. To the extent possible, the amount of any adjustment
described in this section shall be estimated and paid at the Closing based upon
the best information available to Purchaser and Seller at the time, and shall be
adjusted as soon thereafter as may be reasonably practicable when final billings
are available or when such amounts may be determined with reasonable certainty.
In the event any adjustments pursuant to this Section 6 are, subsequent to
Closing, found to be erroneous, then either party hereto who is entitled to
additional monies shall invoice the other party for such additional amounts as
may be owing, and such amount shall be paid within ten (10) days from receipt of
the invoice. This covenant shall expressly survive Closing.

 

(j)        Collections and Application of Payments after the Closing. After the
Closing, Purchaser shall bill the tenants for all amounts due under Leases,
including amounts accruing prior to the Closing but only with respect to the
calendar year of Closing. Any amounts or charges payable by the tenants on or
after the Closing with respect to which Seller is entitled to receive a share
under this Agreement, which are not paid within thirty (30) days after the due
date, and any amount due and owing Seller before the Closing by tenants under
the Leases which are unpaid as of the Closing, are collectively herein called
“Delinquent Amounts”. Notwithstanding the foregoing or any direction from
tenants to the contrary, (i) Current Unpaid Rent shall not be considered to be a
Delinquent Amount for purposes of this Section 6(j), and (ii) rental and other
payments received by Purchaser or Seller from the tenants (other than Current
Unpaid Rent, which shall be handled in the manner provided in Section 6(b)
above) shall be first applied toward rent and other charges (including, without
limitation, costs of collection) due for any period after Closing, then toward
Delinquent Amounts for periods prior to the calendar month of Closing, and any
excess monies received shall be applied toward any other amounts due to
Purchaser.

 

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(k)       Service Contract Charges. Amounts due and payable under any Service
Contract assigned to Purchaser at Closing shall be prorated as of the Closing,
and, at the Closing, Seller or Purchaser, as the case may be, shall pay to the
other any amount required as a result of such adjustment, and this covenant
shall not merge with the deed delivered hereunder but shall survive the Closing.

 

(l)        Closing Costs. Any escrow fee and expenses charged by the Title
Company shall be paid equally by Seller and Purchaser. Seller shall pay (i) all
costs for the Title Commitment and the basic premium for the Title Policy;
(ii) all costs for title curative matters to the extent required by this
Agreement or the LOI; (iii) its share of the prorations described above, (iv)
one-half (1/2) of the costs of the updated Survey, and (v) all fees and expenses
incurred in connection with the assumption by Purchaser of the Existing
Indebtedness, including, without limitation, all legal and accounting fees
associated with such assumption. Purchaser shall pay (i) the cost of recording
the Deed for the Real Property; (ii) one-half (1/2) of the costs of the updated
Survey; (iii) all premiums for any modifications or endorsements to the Title
Policy, including any premium charged to obtain the T-19.1, T-23 and T-25
Endorsements and the “shortages in area” deletion and any inspection fee imposed
by the Title Company in order to issue the Title Policy without any exception
for rights of parties in possession (except for rights of tenants under written
leases described in the certified rent roll to be delivered by Seller to
Purchaser at Closing); and (iv) its proportionate share of the prorations
described above. Each party shall be responsible for the payment of its own
attorneys’ fees incurred in connection with this Agreement and all other
expenses which such party incurs. Additionally, any expenses, charges and fees
of closing, not specifically allocated herein or incurred by a specific party,
shall be borne by the parties in accordance with general custom in the county
where the Property is located, or, if no such custom exists, shall be borne
equally between the parties.

 

(m)      Survival. Unless otherwise expressly provided herein, this Section 6
shall survive until the first anniversary of the Closing.

 

7.             Remedies; Post-Closing Defaults. Notwithstanding anything to the
contrary contained herein, if after the Closing a party (the “Defaulting Party”)
breaches an obligation under this Agreement which is expressly stated to survive
the termination of this Agreement or the Closing, as the case may be, the
Defaulting Party shall be liable to the other party (the “Non-Defaulting Party”)
for the actual damages incurred by the Non-Defaulting Party as a direct result
of such breach, subject to the terms and provisions contained herein. The
Non-Defaulting Party shall also have the right to pursue any remedy available to
it in law or in equity in the event of a breach by the Defaulting Party of any
covenant or agreement contained herein. However, in no event shall the
Non-Defaulting Party be entitled to recover from the Defaulting Party any
punitive, consequential or speculative damages.

 

8.             Real Estate Commissions.

 

Each party hereto represents to the other that it has not authorized any broker
or finder to act on its behalf in connection with the sale and purchase of the
Property and that such

 

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party has not dealt with any broker or finder purporting to act on behalf of any
other party. Each party hereto agrees to indemnify and hold harmless the other
party from and against any and all losses, liens, claims, judgments,
liabilities, costs, expenses or damages (including reasonable attorneys’ fees
and disbursements and court costs) of any kind or character arising out of or
resulting from any agreement, arrangement or understanding alleged to have been
made or dealing by such party or on its behalf with any broker or finder in
connection with this Agreement or the transaction contemplated hereby.

 

9.             Notice.

 

Any notice required hereunder must be given in writing (by a party or by such
party’s attorney), sent by (a) personal delivery, (b) overnight delivery service
with proof of delivery, (c) United States Postal Service, postage prepaid,
registered or certified mail, return receipt requested, or (d) telecopy, except
as otherwise expressly provided in this Agreement, addressed as follows:

 

If to Purchaser:

 

MB SHERMAN TOWN CENTER LIMITED PARTNERSHIP

2901 Butterfield Road

Oak Brook, Illinois  60523

Attn: Lori Faust

Telephone: (630) 218-8000

Telecopy: (630) 645-7242

 

With a copy to:

 

The Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attn: Dennis K. Holland, Associate Counsel

Telephone: (630) 218-8000

Telecopy: (630) 218-4900

 

If to Seller:

 

8807 W. Sam Houston Pkwy. North

Suite 200

Houston, Texas  77040

Attn:  Steven D. Alvis

Telephone:  (281) 477-4310

Telecopy:  (281) 477-4311

 

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with a copy to:

 

Nathan Sommers Jacobs

A Professional Corporation

2800 Post Oak Boulevard, 61st Floor

Houston, Texas 77056

Attention: Louis B. Sullivan III, Esq.

Telephone: (713) 892-4830

Telecopy: (713) 892-4840

 

Any such notice shall be deemed to have been given and received either, in the
case of personal delivery, at the time of personal delivery; in the case of
delivery service, as of the date of the first attempted delivery at the address
and in the manner provided herein; in the case of mailing, the earlier of actual
receipt or three (3) business days after depositing with the U.S. Postal
Service; or in the case of telecopy, upon transmission; provided, however, that
if the last date permitted for notice shall be the business day before the
Closing or the Closing, then such notice must be given so that it is actually
received on such day. E-mail or electronic mail is not sufficient notice.

 

10.           Post Closing Obligations.

 

(a)       Hobby Lobby Payments. Seller and Purchaser acknowledge and agree that,
pursuant to the terms and provisions of the Lease with Hobby Lobby, the tenant
thereunder has the right to offset the monthly minimum rent payable thereunder
by 50% of the rent and triple net charges that are payable under its sublease
with The Kroger Co. at the tenant’s former location in the City of Sherman. For
so long as Hobby Lobby has the right under its Lease to offset the monthly
minimum rent payable thereunder and actually exercises such offset rights,
Seller shall pay to Purchaser, on a monthly basis at the time and in the manner
that the minimum rent is due under the Hobby Lobby Lease, the amount that Hobby
Lobby properly offsets against the minimum rent that is payable to the landlord
under its Lease. The covenants and obligations of Seller contained in this
Section 10(a) shall survive Closing, and such obligations shall be jointly and
severally guaranteed by Steven D. Alvis, Jay K. Sears, H. Dean Lane, Jr., and
Kyle D. Lippman.

 

(b)       Pylon Signs. Purchaser agrees to cooperate in good faith with Seller
(or any partnership which Seller or its affiliates control) to allow Seller (or
such controlled partnership) to utilize any available (meaning that Purchaser
(or the Partnership) does not need any such unused sign panel(s) for vacant
space(s) in the Property) space(s) on pylon or monument signs within the
Property for use in connection with an additional parcel of land owned by Seller
(or an affiliate of Seller) comprised of approximately 16.1 acres located
adjacent to the Property.

 

11.           Attorney’s Fees and Legal Expenses.

 

In the event that either party hereto institutes any action or proceeding in
court to enforce or interpret any provision hereof or for damages by reason of
any alleged breach of any

 

13

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provision of this Agreement or for any other judicial remedy, the prevailing
party shall be entitled to receive from the losing party all reasonable
attorneys’ fees and disbursements and all court costs in connection with said
proceedings.

 

12.           Section Headings; Other Terms.

 

The section headings contained in this Agreement are for convenience only and
shall in no way enlarge or limit the scope or meaning of the various and several
paragraphs hereof. The words “herein,” “hereof,” “hereto,” “hereunder,” and
others of similar import refer to the Agreement as a whole and not to any
particular section, subsection or clause contained in this Agreement. The
singular of a term shall include the plural and the plural shall include the
singular. The terms “includes” and “including” are not limiting.

 

13.           Entire Agreement.

 

The LOI and this Agreement embodies the entire agreement between the parties
hereto relating to the subject matter hereof and supersedes any prior
understandings or written or oral agreements between the parties concerning the
Property. Further, this Agreement cannot be varied, modified, amended, altered
or terminated except by the written agreement of the parties.

 

14.           Applicability.

 

The terms and provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors and
assigns, except as expressly set forth herein.

 

15.           Exhibits.

 

All exhibits and schedules described herein and attached hereto are fully
incorporated into this Agreement by this reference for all purposes.

 

16.           Applicable Law.

 

THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAW.

 

17.           Counterparts.

 

This Agreement may be executed in counterparts, all such executed counterparts
shall constitute the same agreement, and the signature of any party to any
counterpart shall be deemed a signature to, and may be appended to, any other
counterpart.

 

18.           Facsimile Signatures.

 

In order to expedite the transaction contemplated herein, telecopied signatures
may be used in place of original signatures on this Agreement. Seller and
Purchaser intend to be bound by the signatures on the telecopied document, and
are aware that the other party will rely

 

14

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on the telecopied signatures, and hereby waive any defenses to the enforcement
of the terms of this Agreement based upon the form of signature. If telecopied
signatures are delivered, Seller and Purchaser will each forward original
counterpart signatures to the other promptly after delivery of the telecopied
signatures as set forth herein.

 

19.           Business Day.

 

As used herein, the term “business day” shall mean all days, excluding
Saturdays, Sundays and all days observed by either the State of Texas or the
Federal Government as legal holidays. In the event that any date for performance
falls on a day other than a business day, then performance shall be postponed
until the next business day.

 

20.           Strict Performance.

 

It is specifically agreed that “time is of the essence” as to all matters
provided for in this Agreement.

 

21.           Additional Notices.

 

(a)       If the Property is situated in a utility or other statutorily created
district providing water, sewer, drainage, or flood control facilities and
services, Chapter 49 of the Texas Water Code requires Seller to deliver and
Purchaser to sign the statutory notice relating to the tax rate, bonded
indebtedness, or standby fee of the district prior to final execution of this
Agreement.

 

(b)       If the Property is located outside the limits of a municipality,
Seller notifies Purchaser under Section 5.011, Texas Property Code, that the
Property may now or later be included in the extraterritorial jurisdiction of a
municipality and may now or later be subject to annexation by the municipality.
Each municipality maintains a map that depicts its boundaries and
extraterritorial jurisdiction. To determine if the Property is located within a
municipality’s extraterritorial jurisdiction or is likely to be located within a
municipality’s extraterritorial jurisdiction, contact all municipalities located
in the general proximity of the Property for further information.

 

22.           Conflict with LOI.

 

This Agreement is being entered into pursuant to and in accordance with the
terms and provisions of the LOI. The LOI shall survive the execution of this
Agreement. In the event of a direct conflict between the terms of this Agreement
and the terms of the LOI, the LOI shall control. Notwithstanding the forgoing,
the matters set forth in Section 2 of this Agreement are meant to be construed
in conjunction with the LOI and neither document shall control over the other
with respect to such Section 2.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

15

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IN WITNESS WHEREOF, this Agreement is executed in multiple originals by Seller
and Purchaser.

 

 

SELLER:

 

 

 

A-S 60 HWY 75-LOY LAKE, L.P., a Texas
limited partnership

 

 

 

BY:

 

SHERMAN GP, LLC, A DELAWARE LIMITED
LIABILITY COMPANY, ITS GENERAL PARTNER

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Steven D. Alvis

 

 

 

 

 

Manager

 

 

The following individuals join in the execution of this Agreement to acknowledge
their obligations pursuant to Section 10(a) of this Agreement.

 

 

 

 

STEVEN D. ALVIS

 

 

 

 

 

JAY K. SEARS

 

 

 

 

 

H. DEAN LANE, JR.

 

 

 

 

 

KYLE D. LIPPMAN

 

 

16

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IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date by
Purchaser.

 

 

 

PURCHASER:

 

 

 

 

 

MB SHERMAN TOWN CENTER LIMITED
PARTNERSHIP, an Illinois limited partnership

 

 

 

 

 

By:

MB Sherman Town Center GP, L.L.C., a Delaware limited
liability company, its general partner

 

 

 

 

 

 

 

 

By:

Minto Builders (Florida), Inc., a
Florida corporation, its sole member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

 

 

 

 

Title:

 

 

 

17

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EXHIBIT A

 

LEGAL DESCRIPTION OF THE LAND

 

A-1

--------------------------------------------------------------------------------

 

EXHIBIT B

 

RENT ROLL

 

B-1

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EXHIBIT C

 

DEED

 

C-1

--------------------------------------------------------------------------------

 

EXHIBIT D

 

ASSIGNMENT AND ASSUMPTION OF LEASES

 

D-1

--------------------------------------------------------------------------------

 

EXHIBIT E

 

BILL OF SALE, ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS,
WARRANTIES, PERM(ITS AND INTANGIBLES

 

E-1

--------------------------------------------------------------------------------

 

EXHIBIT F

 

PERMITTED EXCEPTIONS

 

F-1

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