Exhibit 10.10

 

SALE, PURCHASE AND ESCROW AGREEMENT

 

BETWEEN

 

 

VERANDAH OWNER LIMITED PARTNERSHIP

(Seller)

 

 

AND

 

 

HARVARD PROPERTY TRUST, LLC

(Purchaser)

 

 

AND

 

 

PARTNERS TITLE COMPANY

(Escrow Agent)

 

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TABLE OF CONTENTS

 

Table of Contents

 

 

 

 

 

 

Page

 

 

 

 

 

 

ARTICLE I PURCHASE AND SALE

 

1

 

1.1

 

Background

 

1

 

1.2

 

Purchase and Sale

 

1

 

 

 

 

 

 

ARTICLE II PURCHASE PRICE

 

3

 

2.1

 

Price

 

3

 

2.2

 

Investments

 

3

 

2.3

 

Interest on the Deposit

 

4

 

2.4

 

Existing Loan

 

4

 

2.5

 

Option Consideration

 

5

 

 

 

 

 

 

ARTICLE III CONDITIONS TO THE PARTIES’ OBLIGATIONS

 

5

 

3.1

 

Conditions to Purchaser’s Obligation to Purchase

 

5

 

3.2

 

Conditions to Seller’s Obligation to Sell

 

6

 

 

 

 

 

 

ARTICLE IV PURCHASER’S DELIVERIES AND SELLER’S DELIVERIES TO ESCROW AGENT

 

7

 

4.1

 

Purchaser’s Deliveries

 

7

 

4.2

 

Seller’s Deliveries

 

7

 

4.3

 

Failure to Deliver

 

8

 

 

 

 

 

 

ARTICLE V INVESTIGATION OF PROPERTY

 

8

 

5.1

 

Survey

 

8

 

5.2

 

Intentionally Deleted

 

8

 

5.3

 

Review of Survey and Title

 

8

 

5.4

 

Inspection of Property

 

9

 

5.5

 

Operational Information

 

10

 

5.6

 

No Obligation to Cure

 

11

 

5.7

 

Inspection Period

 

11

 

5.8

 

Right to Audit

 

11

 

5.9

 

Proprietary Documents; Confidentiality

 

11

 

5.10

 

Purchaser’s Responsibilities

 

12

 

5.11

 

Purchaser’s Agreement to Indemnify

 

12

 

 

 

 

 

 

ARTICLE VI THE CLOSING

 

13

 

6.1

 

Date and Manner of Closing

 

13

 

 

 

 

 

 

ARTICLE VII PRORATION, FEES, COSTS AND ADJUSTMENTS

 

13

 

7.1

 

Prorations

 

13

 

7.2

 

Seller’s Closing Costs

 

16

 

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7.3

 

Purchaser’s Closing Costs

 

16

 

 

 

 

 

 

ARTICLE VIII DISTRIBUTION OF FUNDS AND DOCUMENTS

 

16

 

8.1

 

Delivery of the Purchase Price

 

16

 

8.2

 

Other Monetary Disbursements

 

16

 

8.3

 

Recorded Documents

 

16

 

8.4

 

Documents to Purchaser

 

16

 

8.5

 

Documents to Seller

 

17

 

8.6

 

All Other Documents

 

17

 

 

 

 

 

 

ARTICLE IX RETURN OF DOCUMENTS AND FUNDS UPON TERMINATION

 

17

 

9.1

 

Return of Seller’s Documents

 

17

 

9.2

 

Return of Purchaser’s Documents

 

17

 

9.3

 

Deposit

 

18

 

9.4

 

Disbursement of Deposit

 

18

 

9.5

 

No Effect on Rights of Parties; Survival

 

18

 

 

 

 

 

 

ARTICLE X DEFAULT

 

18

 

10.1

 

Seller’s Remedies

 

18

 

10.2

 

Purchaser’s Remedies

 

19

 

 

 

 

 

 

ARTICLE XI REPRESENTATIONS AND WARRANTIES

 

20

 

11.1

 

Seller’s Warranties and Representations

 

20

 

11.2

 

Purchaser’s Warranties and Representations

 

23

 

11.3

 

No Other Warranties and Representations

 

24

 

 

 

 

 

 

ARTICLE XII CASUALTY AND CONDEMNATION

 

25

 

12.1

 

Uniform Vendor and Purchaser Act Not Applicable

 

26

 

 

 

 

 

 

ARTICLE XIII CONDUCT PRIOR TO CLOSING

 

26

 

13.1

 

Conduct

 

26

 

13.2

 

Actions Prohibited

 

27

 

13.3

 

Modification of Existing Leases and Service Contracts

 

28

 

13.4

 

New Leases and Contracts

 

28

 

13.5

 

Right to Cure

 

28

 

 

 

 

 

 

ARTICLE XIV OCCUPANCY CONTINGENCY

 

28

 

 

 

 

 

 

ARTICLE XV NOTICES

 

29

 

 

 

 

 

 

ARTICLE XVI TRANSFER OF POSSESSION

 

31

 

16.1

 

Transfer of Possession

 

31

 

16.2

 

Delivery of Documents at Closing

 

31

 

 

 

 

 

 

ARTICLE XVII GENERAL PROVISIONS

 

31

 

17.1

 

Captions

 

31

 

17.2

 

Exhibits

 

31

 

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17.3

 

Entire Agreement

 

31

 

17.4

 

Modification

 

32

 

17.5

 

Attorneys’ Fees

 

32

 

17.6

 

Governing Law

 

32

 

17.7

 

Time of Essence

 

32

 

17.8

 

Survival of Warranties

 

32

 

17.9

 

Assignment by Purchaser

 

32

 

17.10

 

Severability

 

33

 

17.11

 

Successors and Assigns

 

33

 

17.12

 

Interpretation

 

33

 

17.13

 

Counterparts

 

33

 

17.14

 

Recordation

 

33

 

17.15

 

Limitation on Liability

 

33

 

17.16

 

Possession of Advisor

 

34

 

17.17

 

Business Day

 

34

 

17.18

 

Waiver of Jury Trial

 

34

 

 

 

 

 

 

ARTICLE XVIII ESCROW AGENT DUTIES AND DISPUTES

 

34

 

18.1

 

Other Duties of Escrow Agent

 

34

 

18.2

 

Disputes

 

35

 

18.3

 

Reports

 

35

 

EXHIBITS

 

EXHIBIT A

 

—

 

Description of Land

EXHIBIT B

 

—

 

Rent Roll

EXHIBIT C

 

—

 

Form of Assignment of Leases and Contracts

EXHIBIT D

 

—

 

Form of Blanket Conveyance, Bill of Sale and Assignment

EXHIBIT E

 

—

 

Intentionally Omitted

EXHIBIT F

 

—

 

Service Contracts

EXHIBIT G

 

—

 

Form of Notice to Tenants

EXHIBIT H

 

—

 

FIRPTA Affidavit

EXHIBIT I

 

—

 

Form of Deed

EXHIBIT J

 

—

 

Personal Property

EXHIBIT K

 

—

 

Due Diligence Materials

EXHIBIT L

 

—

 

Lease Guidelines

 

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INDEX OF DEFINED TERMS

 

Term

 

Section

 

 

 

Additional Funds

 

2.1.2

Advisor

 

5.4

Apartment Development

 

1.1

Assignment of Escrow Accounts

 

4.2.9

Assignment of Leases and Contracts

 

4.1.2

Assumption Documents

 

4.2.8

Blanket Conveyance

 

4.1.3

Closing

 

6.1

Code

 

11.2.5

Deed

 

4.2.1

Deposit

 

2.1.1

Due Diligence Materials

 

5.4

ERISA

 

11.2.5

Escrow Agent

 

Introduction

Existing Survey

 

5.1

Final Closing Date

 

6.1

Guarantor

 

3.2.4

Improvements

 

1.2(a)

Indemnitor

 

3.2.4

Inspection Period

 

5.6

Intangibles

 

1.2(e)

Land

 

1.2(a)

Lender

 

2.4

Lender Consent

 

2.4(e)

Lender Consent Notice

 

2.4(e)

Leases

 

1.2(c)

Limitation Period

 

10.2

Lists

 

11.1.11(2)(a)

Loan

 

2.4(a)

Loan Assumption Fee

 

7.2

Loan Documents

 

2.4(a)

Maximum Liability Cap

 

16.15

Mortgage

 

2.4(a)

Note

 

2.4(a)

Occupancy Condition

 

Art. XV

OFAC

 

11.1.14

Option Consideration

 

2.5

Order(s)

 

11.1.14

Original Lender

 

2.4(a)

Owner’s Affidavit

 

4.2.10

Permitted Exceptions

 

5.3

 

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Permitted Outside Parties

 

5.9

Personal Property

 

1.2(b)

Property

 

1.2

Property Documents

 

5.9

Purchase Price

 

2.1

Purchaser

 

Introduction

Purchaser’s Action

 

10.1

Purchaser Assumption Documents

 

4.1.6

Real Property

 

1.2(a)

Rent Ready Condition

 

13.1.4

Rent Roll

 

1.2(c)

Seller

 

Introduction

Seller Assumption Documents

 

4.2.8

Seller Parties

 

16.15

Seller’s Broker

 

11.1.1

Service Contracts

 

1.2(d)

Survey

 

5.1

Tenant Payments

 

7.1.1

Title Commitment

 

3.1.3(i)

Title Company

 

3.1.3

Title Cure Period

 

5.3

Title Documents

 

5.3

Title Objections

 

5.3

Title Policy

 

3.1.3

Title Report

 

5.2

Title Review Period

 

5.3

Underlying Documents

 

3.1.3(i)

 

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SALE, PURCHASE AND ESCROW AGREEMENT

 

This Agreement, dated as of January 26, 2009, is made by and between Verandah
Owner Limited Partnership, a Delaware limited partnership (“Seller”), and
Harvard Property Trust, LLC, a Delaware limited liability company (“Purchaser”)
and constitutes (i) a contract of sale and purchase between the parties and
(ii) an escrow agreement among Seller, Purchaser and Partners Title Company
(“Escrow Agent”), the consent of which appears at the end hereof.

 

ARTICLE I

 

PURCHASE AND SALE

 

1.1                               Background.  Seller is the owner of a 301-unit
apartment development commonly known as The Verandah at Meyerland Apartments
(the “Apartment Development”) located at 4620 N. Braeswood Avenue, Houston,
Harris County, Texas.  Purchaser is willing to enter into a contract to buy the
Apartment Development on the terms provided in this Agreement, and Seller has
indicated that it is willing to enter into a contract to sell the Apartment
Development to Purchaser on the terms provided herein.

 

1.2                               Purchase and Sale.  Seller shall sell and
convey to Purchaser, and Purchaser shall buy from Seller, the Property (as
hereinafter defined) for the consideration and upon and subject to the terms,
provisions, and conditions of this Agreement. The “Property” means:

 

(a)                                  to the extent owned by Seller, the land
situated in Harris County, Texas, more particularly described in Exhibit A (the
“Land”), together with: (i) the Apartment Development and other improvements
situated on the Land and all other structures, fixtures, buildings, and
improvements situated on the Land (such buildings, structures, fixtures, and
improvements being herein called the “Improvements”); (ii) any and all rights,
titles, powers, privileges, easements, licenses, rights-of-way and interests
appurtenant to the Land and the Improvements; (iii) all rights, titles, powers,
privileges, licenses, easements, rights-of-way, and interests, if any, of
Seller, either at law or in equity, in possession or in expectancy, in and to
any real estate lying in the streets, highways, roads, alleys, rights-of-way or
sidewalks, open or proposed, in front of, above, over, under, through or
adjoining the Land and in and to any strips or gores of real estate adjoining
the Land; (iv) and all rights, titles, powers, privileges, interests, licenses,
easements, and rights-of-way appurtenant or incident to any of the foregoing,
including, without limitation, to the extent owned by Seller, all mineral, oil,
gas and other hydrocarbon substances on and under and that may be produced from
the Land, as well as all development rights, land use entitlements, air rights,
water, water rights, riparian rights, and water stock relating to the Land (Land
and Improvements being sometimes collectively herein referred to as the “Real
Property”);

 

(b)                                 all equipment, fixtures, appliances,
inventory, and other personal property of whatever kind or character owned by
Seller and attached to or installed or located on or in the Land or the
Improvements, including, without limitation, furniture, furnishings,

 

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drapes and floor coverings, office equipment and supplies, heating, lighting,
refrigeration, plumbing, ventilating, incinerating, cooking, laundry,
communication, electrical, dishwashing, and air conditioning equipment,
disposals, window screens, storm windows, recreational equipment, pool
equipment, patio furniture, sprinklers, hoses, tools and lawn equipment (the
“Personal Property”), a current list of the Personal Property being attached
hereto as Exhibit J;

 

(c)                                  all right, title, and interest of Seller in
and to all leases, rental agreements, licenses, and other similar arrangements
permitting occupancy or use by another of any apartment unit in the Improvements
or any other space or area on the Land or in the Improvements, a current rent
roll as of the date shown thereon being attached hereto as Exhibit B (the “Rent
Roll”) (collectively, “Leases”), all guaranties of Leases, all rents, revenues,
income, profits and receipts due under Leases or otherwise receivable by the
owner of the Property for use or occupancy of any of the Property, and all
security and other deposits and advance payments under Leases (subject to
proration as provided in this Agreement);

 

(d)                                 all right, title, and interest of Seller in
and to all contracts to which Seller is a party relating to the operation,
maintenance, or management of the Property, including any agreements for
electric, gas, telephone, cable television, security alarm monitoring, sewer,
trash collection or similar services, supply contracts, and brokerage and
leasing agreements (collectively, the “Service Contracts”) to the extent that
Service Contracts are assignable without consent, a current list of Service
Contracts being attached hereto as Exhibit F, but specifically excluding any
contract with any affiliate of Seller (which shall be terminated on or prior to
the date of Closing (as hereinafter defined)) and specifically excluding any
contracts terminated by Seller pursuant to Section 5.6;

 

(e)                                  all right, title and interest of Seller in
and to (i) all transferable permits, licenses, approvals, utility rights,
development rights and similar rights related to the Property, if any, whether
granted by governmental authorities or private persons, to the extent that such
transferable permits, licenses, approvals, utility rights, development rights
and similar rights are assignable without consent, (ii) all trademarks, trade
names, or symbols under which the Land or the Improvements (or any part thereof)
is operated including, without limitation, the name of “The Verandah at
Meyerland” and the Internet domain name www.verandahmeyerland.com, (iii) all
telephone numbers serving the Apartment Development, (iv) all of the right,
title, and interest in and to all site plans, surveys, soil and substrata
studies, architectural drawings, plans and specifications, engineering plans and
studies, floor plans, landscape plans and other plans or studies of any kind
that relate to the Land, the Improvements or the Personal Property in the
possession of or under the control of Seller, and (v) all assignable warranties
and  guaranties covering all or any part of the Property provided by any person
and expressly including any warranty or guaranty from an affiliate of Seller, if
any, (collectively, the “Intangibles”), provided that any cost to assign or
transfer any of the Intangibles shall be paid by Purchaser; and

 

2

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(f)                                    all other rights, privileges and
appurtenances owned by Seller directly relating to the above-described
properties.

 

ARTICLE II

 

PURCHASE PRICE

 

2.1                               Price.  In consideration of the covenants
herein contained, Seller hereby agrees to sell and Purchaser hereby agrees to
purchase the Property for a total purchase price of TWENTY-NINE MILLION AND
TWO-HUNDRED THOUSAND DOLLARS ($29,200,000) (the “Purchase Price”), which shall
be paid by Purchaser as follows:

 

2.1.1                     DEPOSIT.  PURCHASER HAS DELIVERED CONCURRENTLY WITH
ITS EXECUTION OF THIS AGREEMENT, OR WILL DELIVER WITHIN TWO (2) BUSINESS DAYS,
TO ESCROW AGENT BY BANK WIRE OF IMMEDIATELY AVAILABLE FUNDS THE SUM OF
TWO-HUNDRED THOUSAND DOLLARS ($200,000) (THE “DEPOSIT”).

 

2.1.2                     ADDITION TO DEPOSIT.  ON OR BEFORE THE EXPIRATION OF
THE INVESTIGATION PERIOD (AS DEFINED IN SECTION 5.7), PURCHASER SHALL DELIVER TO
ESCROW AGENT, BY BANK WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS, AN
ADDITIONAL TWO-HUNDRED THOUSAND DOLLARS ($200,000) (THE “ADDITIONAL FUNDS”),
UNLESS PURCHASER SHALL HAVE TERMINATED THIS AGREEMENT IN ACCORDANCE WITH
SECTION 5.7.  THE ADDITIONAL FUNDS SHALL BE DEEMED PART OF THE DEPOSIT, FOR AN
AGGREGATE DEPOSIT OF FOUR-HUNDRED THOUSAND DOLLARS ($400,000).  IF PURCHASER
FAILS TO DELIVER THE ADDITIONAL FUNDS TO ESCROW AGENT ON OR BEFORE THE
EXPIRATION OF THE INVESTIGATION PERIOD (PROVIDED PURCHASER HAS NOT TERMINATED
THIS AGREEMENT IN ACCORDANCE WITH SECTION 5.7), SUCH FAILURE SHALL BE A DEFAULT
UNDER THIS AGREEMENT.

 

2.1.3                     BALANCE OF PURCHASE PRICE.  PURCHASER SHALL, AT LEAST
ONE (1) DAY BEFORE THE CLOSING (AS DEFINED IN SECTION 6.1), DELIVER TO ESCROW
AGENT, BY BANK WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS, A SUM EQUAL TO THE
BALANCE OF THE PURCHASE PRICE, IT BEING UNDERSTOOD THAT PURCHASER SHALL RECEIVE
A CREDIT AGAINST THE PURCHASE PRICE IN THE AMOUNT OF THE OUTSTANDING PRINCIPAL
BALANCE OF THE LOAN (AS DESCRIBED IN SECTION 2.4 BELOW) AS OF THE DATE OF
CLOSING WHICH SHALL BE $24,000,000, AND WHICH PURCHASER SHALL ASSUME SUBJECT TO
THE TERMS THEREOF AT CLOSING.  THE BALANCE OF THE PURCHASE PRICE RECEIVED BY
SELLER AT CLOSING SHALL BE ADJUSTED TO REFLECT PRORATIONS AND OTHER ADJUSTMENTS
PURSUANT TO ARTICLE VII.

 

2.2                               Investments.  Following the collection of the
Deposit, Escrow Agent shall, at the direction of Purchaser, invest the Deposit
in:

 

(I)                                     OBLIGATIONS OF THE UNITED STATES
GOVERNMENT, ITS AGENCIES OR INDEPENDENT DEPARTMENTS;

 

(II)                                  CERTIFICATES OF DEPOSIT ISSUED BY A
BANKING INSTITUTION WHOSE PRINCIPAL OFFICE IS IN NEW YORK CITY OR HOUSTON WITH
ASSETS IN EXCESS OF $1 BILLION; OR

 

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(III)                               AN INTEREST-BEARING ACCOUNT OF A BANKING
INSTITUTION WHOSE PRINCIPAL OFFICE IS IN NEW YORK CITY OR HOUSTON WITH ASSETS IN
EXCESS OF $1 BILLION.

 

No investment of the Deposit shall have a maturity date beyond the Final Closing
Date (as defined in Section 6.1).

 

2.3                               Interest on the Deposit.  Any interest earned
on the Deposit shall be credited and delivered to the party entitled to receive
the Deposit, provided, however, that if the transaction closes, at Closing any
interest earned on the Deposit shall be credited to Purchaser by applying the
same against the Purchase Price.

 

2.4                               Existing Loan.  (a)  Seller has advised
Purchaser that, as of the date of this Agreement, the Property is encumbered by
a lien securing certain indebtedness (the “Loan”), which indebtedness is more
particularly described in that certain Deed of Trust and Security Agreement
given by Seller to Charles E. Odom, as trustee for Deutsche Banc Mortgage
Capital, L.L.C., a Delaware limited liability company, as beneficiary (the
“Original Lender”) dated as of August 11, 2006 and recorded on August 14, 2006
under Clerk’s File No. Z524614 of the Official Public Records of Harris County,
Texas, as assigned by Original Lender to Wells Fargo Bank, N.A. as trustee for
the Registered Holders of Banc of America Commercial Mortgage Inc., Commercial
Mortgage Pass-Through Certificates, Series 2006-4 (the “Lender”) pursuant to
that certain Assignment of Deed of Trust and Security Agreement and Assignment
of Assignment of Leases and Rents by Original Lender in favor of Lender dated as
of August 29, 2006 and recorded on December 29, 2006 under Clerk’s File
No. 20060294331 of the Official Public Records of Harris County, Texas
(collectively, the “Mortgage”) and the Promissory Note in the original principal
amount of $24,000,000 dated as of August 11, 2006 payable to Original Lender
(the “Note” and together with the Mortgage, collectively the “Loan Documents”). 
Provided that Seller and Purchaser obtain the approval of Lender as herein
provided, Purchaser shall assume the Loan at Closing, subject to the terms and
provisions of the Loan Documents.

 

(b)                                  Promptly after the execution of this
Agreement and the delivery to Seller of such information as is currently
available to Purchaser to satisfy the requirements of Lender with respect to a
transfer of the Property, Seller shall deliver to Lender a loan assumption
request together with the applicable application fee set forth in the Loan
Documents.  Purchaser and Seller shall then use commercially reasonable efforts
to pursue the approval of Lender to the assignment and assumption of the Loan.
Purchaser and Seller hereby agree to cooperate with the other in connection with
the foregoing, including, without limitation, promptly furnishing all financial
and other information reasonably required by Lender in connection with the
foregoing, including without limitation any relating both to Purchaser and its
partners or members, and otherwise satisfying Lender’s transfer requirements.

 

(c)                                   Purchaser shall have the right to contact
Lender directly to discuss the Loan and the terms of any assumption thereof,
provided Purchaser shall use commercially reasonable efforts to advise Seller of
all material matters (excluding confidential financial information) that
Purchaser discusses with Lender with respect to the assignment and assumption of
the Loan.

 

4

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(d)                                  In connection with the assumption of the
Loan, Purchaser shall be solely responsible for the payment of any and all
Lender application fees, $50,000 of the Loan assumption fee and other Lender
fees and expenses (including Lender attorneys’ fees), including, without
limitation, any portion thereof required to be paid at the time the request for
consent is submitted to Lender, and any rating agency fees, provided however
that Seller shall be obligated to pay $190,000 of the one percent (1%) Loan
assumption fee ($240,000) and all of its expenses in connection with obtaining
Lender Consent, including its own attorney fees.

 

(e)                                   Seller and Purchaser shall use
commercially reasonable efforts to obtain Lender’s agreement to the form of Loan
Assumption and Consent Agreement in a form that is satisfactory to Purchaser,
Lender and Seller (the “Lender Consent”).  If Purchaser and Lender are unable to
agree upon an acceptable form of assumption agreement within thirty (30) days
after Purchaser is in receipt of draft loan assumption documents from the
Lender, Purchaser shall notify Seller in writing specifying the issues with
respect to which Purchaser and Lender have failed to agree (the “Lender Consent
Notice”).  Thereafter, Seller and/or Purchaser may terminate this Agreement by
written notice to the other delivered within five (5) business days after
receipt of the Lender Consent Notice, in which event, the obligations of the
parties hereunder shall be null and void and of no further force and effect
except those expressly stated to survive termination of this Agreement and the
Deposit shall be returned to Purchaser, within five (5) business days after
receipt of the termination notice by the non-terminating party.

 

2.5                               Option Consideration.  Seller hereby
acknowledges receipt of the sum of ONE HUNDRED AND NO/100 DOLLARS ($100.00) cash
(the “Option Consideration”) from Purchaser, as consideration for execution of
this Agreement by Seller. If the purchase and sale of the Property is
consummated pursuant to this Agreement, the Option Consideration shall be
applied toward the cash portion of the Purchase Price paid by Purchaser. If this
Agreement is terminated pursuant to a default by Seller hereunder, the Option
Consideration shall be immediately returned by Seller to Purchaser. If this
Agreement is terminated for any reason other than a default by Seller hereunder,
Seller shall be entitled to retain the Option Consideration.

 

ARTICLE III

 

CONDITIONS TO THE PARTIES’ OBLIGATIONS

 

3.1                               Conditions to Purchaser’s Obligation to
Purchase.  Purchaser’s obligation to purchase is expressly conditioned upon each
of the following:

 

3.1.1                     PERFORMANCE BY SELLER.  PERFORMANCE IN ALL MATERIAL
RESPECTS OF THE OBLIGATIONS AND COVENANTS OF, AND DELIVERIES REQUIRED OF, SELLER
HEREUNDER.

 

3.1.2                     DELIVERY OF TITLE AND POSSESSION.  DELIVERY AT THE
CLOSING OF (I) ALL CLOSING DOCUMENTS AS SET FORTH IN SECTION 4.2 HEREOF AND
(II) POSSESSION AS PROVIDED IN SECTION 17.1.

 

3.1.3                     TITLE INSURANCE.  DELIVERY AT THE CLOSING OF THE
STANDARD CURRENT FORM OF TEXAS LAND TITLE ASSOCIATION (TLTA) OWNER’S POLICY OF
TITLE INSURANCE (THE “TITLE

 

5

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POLICY”), OR AN IRREVOCABLE COMMITMENT TO ISSUE THE SAME, WITH LIABILITY IN THE
AMOUNT OF THE PURCHASE PRICE ISSUED BY PARTNERS TITLE COMPANY AS AGENT FOR
CHICAGO TITLE INSURANCE COMPANY (THE “TITLE COMPANY”), INSURING THAT GOOD AND
INDEFEASIBLE FEE TITLE TO THE REAL PROPERTY VESTS IN PURCHASER SUBJECT TO THE
PERMITTED EXCEPTIONS (AS DEFINED IN SECTION 5.3) AND THE STANDARD PRINTED
EXCEPTIONS.

 

(I)                                     PURCHASER WILL PROCURE A COMMITMENT FOR
TITLE INSURANCE ISSUED BY THE TITLE COMPANY (THE “TITLE COMMITMENT, AND ALL
SUPPORTING ENCUMBRANCE DOCUMENTS (THE “UNDERLYING DOCUMENTS”).

 

(II)                                  SELLER WILL PAY VIA A CLOSING ADJUSTMENT
THE BASE PREMIUM FOR THE BASIC COST OF THE TITLE POLICY NOT TO EXCEED
$91,577.00.  AT ITS OPTION, PURCHASER MAY DIRECT THE TITLE COMPANY TO ISSUE
ADDITIONAL TITLE INSURANCE ENDORSEMENTS IF PURCHASER PAYS FOR THE EXTRA COST OF
SUCH ADDITIONAL ENDORSEMENTS, PROVIDED THAT THE TITLE COMPANY’S FAILURE TO ISSUE
ANY SUCH ADDITIONAL ENDORSEMENTS SHALL NOT AFFECT PURCHASER’S OBLIGATIONS UNDER
THIS AGREEMENT.

 

3.1.4                     SELLER’S REPRESENTATIONS.  THE REPRESENTATIONS AND
WARRANTIES BY SELLER SET FORTH IN SECTION 11.1 BEING TRUE AND CORRECT IN ALL
MATERIAL RESPECTS AS OF THE CLOSING EXCEPT AS MODIFIED BY NOTICE (IN ACCORDANCE
WITH SECTION 11.1) TO WHICH PURCHASER DOES NOT OBJECT IN WRITING BY THE LATER OF
(I) THREE BUSINESS DAYS AFTER RECEIPT THEREOF OR (II) THE END OF THE
INVESTIGATION PERIOD.

 

3.1.5                     LOAN ASSUMPTION.  LENDER’S WILLINGNESS TO EXECUTE AND
DELIVER LENDER’S CONSENT .

 

3.2                               Conditions to Seller’s Obligation to Sell. 
Seller’s obligation to sell is expressly conditioned upon each of the following:

 

3.2.1                     PERFORMANCE BY PURCHASER.  PERFORMANCE IN ALL MATERIAL
RESPECTS OF THE OBLIGATIONS AND COVENANTS OF, AND DELIVERIES REQUIRED OF,
PURCHASER HEREUNDER.

 

3.2.2                     RECEIPT OF PURCHASE PRICE.  RECEIPT OF THE PURCHASE
PRICE AND ANY ADJUSTMENTS DUE SELLER UNDER ARTICLE VII AT THE CLOSING IN THE
MANNER HEREIN PROVIDED.

 

3.2.3                     LOAN ASSUMPTION.  PURCHASER’S ASSUMPTION OF THE LOAN
IN ACCORDANCE WITH SECTION 2.4 HEREOF AND PURCHASER’S SATISFACTION OF ALL
CONDITIONS REQUIRED BY LENDER IN CONNECTION THEREWITH.

 

3.2.4                     RELEASE. RELEASE OF ALL INDEMNITIES FROM HARRY BOOKEY
(THE “GUARANTOR”) AND SELLER (COLLECTIVELY, THE “INDEMNITOR”) WITH RESPECT TO
THAT CERTAIN ENVIRONMENTAL INDEMNITY AGREEMENT DATED AUGUST 11, 2006, BY
INDEMNITOR IN FAVOR OF ORIGINAL LENDER, AND THE RELEASE OF GUARANTOR FROM
OBLIGATIONS AND LIABILITY UNDER THE GUARANTY AND INDEMNITY DATED AS OF
AUGUST 11, 2006, BY GUARANTOR IN FAVOR OF ORIGINAL LENDER.  IN ADDITION,
SELLER’S OBLIGATION TO SELL IS CONDITIONED UPON SELLER’S RECEIPT FROM LENDER OF
A RELEASE OF ALL OF SELLER’S OBLIGATIONS UNDER THE LOAN DOCUMENTS ACCRUING ON
AND AFTER THE CLOSING.

 

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ARTICLE IV

 

PURCHASER’S DELIVERIES AND SELLER’S DELIVERIES TO ESCROW AGENT

 

4.1                               Purchaser’s Deliveries.  Purchaser shall, at
or before the Closing, deliver to Escrow Agent each of the following:

 

4.1.1                     PURCHASE PRICE.  THE BALANCE OF THE PURCHASE PRICE AS
SET FORTH IN ARTICLE II.

 

4.1.2                     ASSIGNMENT OF LEASES AND CONTRACTS.  FOUR (4) EXECUTED
COUNTERPARTS OF THE ASSIGNMENT AND ASSUMPTION OF LEASES, CONTRACTS AND OTHER
PROPERTY INTERESTS (THE “ASSIGNMENT OF LEASES AND CONTRACTS”) IN THE FORM OF
EXHIBIT C.

 

4.1.3                     BLANKET CONVEYANCE, BILL OF SALE AND ASSIGNMENT.  FOUR
(4) EXECUTED COUNTERPARTS OF A BLANKET CONVEYANCE, BILL OF SALE, AND ASSIGNMENT
(THE “BLANKET CONVEYANCE”) IN THE FORM OF EXHIBIT D.

 

4.1.4                     CLOSING STATEMENT.  AN EXECUTED SETTLEMENT STATEMENT
REFLECTING THE PRORATIONS AND ADJUSTMENTS REQUIRED UNDER ARTICLE VII.

 

4.1.5                     CASH – PRORATIONS.  THE AMOUNT, IF ANY, REQUIRED OF
PURCHASER UNDER ARTICLE VII.

 

4.1.6                     LOAN ASSUMPTION.  SUCH DOCUMENTS AS MAY REASONABLY BE
REQUIRED BY LENDER TO BE EXECUTED OR DELIVERED BY PURCHASER IN CONNECTION WITH
THE ASSUMPTION BY PURCHASER OF THE LOAN (THE “PURCHASER ASSUMPTION DOCUMENTS”).

 

4.2                               Seller’s Deliveries.  Seller shall, at or
before the Closing, deliver to Escrow Agent each of the following:

 

4.2.1                     DEED.  A SPECIAL WARRANTY DEED (THE “DEED”) IN THE
FORM OF EXHIBIT I WITH RESPECT TO THE REAL PROPERTY, EXECUTED AND ACKNOWLEDGED
BY SELLER, PURSUANT TO WHICH SELLER SHALL CONVEY TITLE TO THE REAL PROPERTY
SUBJECT TO THE PERMITTED EXCEPTIONS AS DEFINED IN SECTION 5.3 HEREOF.

 

4.2.2                     ASSIGNMENT OF LEASES AND CONTRACTS.  FOUR (4) EXECUTED
COUNTERPARTS OF THE ASSIGNMENT OF LEASES AND CONTRACTS IN THE FORM OF EXHIBIT C,
AND (WHETHER THROUGH THE CLOSING ESCROW OR THROUGH SUCH OTHER METHOD OF DELIVERY
AS THE PARTIES MAY ESTABLISH) ORIGINAL EXECUTED LEASES (OR COPIES IF ORIGINALS
ARE NOT IN SELLER’S POSSESSION) AND THE SERVICE CONTRACTS WHICH ARE TO BE
ASSUMED HEREUNDER PURSUANT TO SECTION 5.6 HEREOF.

 

4.2.3                     BLANKET CONVEYANCE, BILL OF SALE AND ASSIGNMENT.  FOUR
(4) EXECUTED COUNTERPARTS OF THE BLANKET CONVEYANCE.

 

4.2.4                     NOTICES TO TENANTS.  A NOTICE SIGNED BY SELLER (OR
SELLER’S MANAGER FOR THE IMPROVEMENTS) ADDRESSED TO THE TENANTS UNDER THE LEASES
IN THE FORM OF EXHIBIT G.

 

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4.2.5                     FIRPTA AFFIDAVIT.  FOUR (4) EXECUTED COPIES OF AN
AFFIDAVIT IN THE FORM OF EXHIBIT H WITH RESPECT TO THE FOREIGN INVESTMENT IN
REAL PROPERTY TAX ACT.

 

4.2.6                     CLOSING STATEMENT.  AN EXECUTED SETTLEMENT STATEMENT
REFLECTING THE PRORATIONS AND ADJUSTMENTS REQUIRED UNDER ARTICLE VII.

 

4.2.7                     CASH – PRORATIONS.  THE AMOUNT, IF ANY, REQUIRED OF
SELLER UNDER ARTICLE VII.

 

4.2.8                     LOAN ASSUMPTION.  SUCH DOCUMENTS AS MAY REASONABLY BE
REQUIRED BY LENDER TO BE EXECUTED OR DELIVERED BY SELLER IN CONNECTION WITH THE
ASSUMPTION BY PURCHASER OF THE LOAN (THE “SELLER ASSUMPTION DOCUMENTS,” TOGETHER
WITH THE PURCHASER ASSUMPTION DOCUMENTS, THE “ASSUMPTION DOCUMENTS”).

 

4.2.9                     ASSIGNMENT OF DEED OF TRUST ESCROW ACCOUNTS.  FOUR
(4) EXECUTED COUNTERPARTS OF THE ASSIGNMENT OF DEED OF TRUST ESCROW ACCOUNTS
(THE “ASSIGNMENT OF ESCROW ACCOUNTS”).

 

4.2.10              OWNER’S AFFIDAVIT.  A CUSTOMARY OWNER’S AFFIDAVIT (THE
“OWNER’S AFFIDAVIT”) IN A FORM REASONABLY SATISFACTORY TO THE TITLE COMPANY
CERTIFYING TO THE TITLE COMPANY THAT THERE ARE NO UNPAID BILLS OR CLAIMS
RELATING TO THE PROPERTY AS OF THE DATE OF CLOSING EXCEPT AS SPECIFIED, AND
WHATEVER DOCUMENTATION MAY BE REASONABLY REQUESTED OR REQUIRED IN ORDER TO
CONFIRM THE PROPER AUTHORITY OF SELLER TO CONSUMMATE THIS TRANSACTION AND TO
ISSUE THE TITLE POLICY.

 

4.3                               Failure to Deliver.  The failure of Purchaser
or Seller to make any delivery required above by and in accordance with this
Article IV which is not waived by the other party shall constitute a default
hereunder by Purchaser or Seller, as applicable.

 

ARTICLE V

 

INVESTIGATION OF PROPERTY

 

5.1                               Survey.  Seller has, in accordance with
Section 5.6 below and as one of the Due Diligence Materials (as defined
therein), delivered to Purchaser an existing survey of the Land and Improvements
prepared by Terra Surveying Co., Inc. (the “Existing Survey”).  Within the Title
Review Period (hereinafter defined), Purchaser, using commercially reasonable
efforts, and at its sole expense, shall cause to be delivered to Seller and
Title Company a current plat of an “as-built” “update” of the Existing Survey in
form acceptable to Purchaser (the “Survey”), and a field note description
thereof, prepared and certified as to all matters shown thereon by a licensed
professional engineer or surveyor acceptable to the Title Company and in such
form and substance sufficient to permit deletion from the Title Policy of the
survey exception except for “shortages in area”.

 

5.2                               Intentionally Deleted.

 

5.3                               Review of Survey and Title.  Purchaser shall
have a period (the “Title Review Period”) ending at 5 p.m. Central Standard Time
fifteen (15) days after the Effective Date within

 

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which to review the Survey, the Title Commitment, and the Underlying Documents
(collectively, “Title Documents”) and give Seller written notice of its
objection to the condition of title reflected by the Title Documents (the “Title
Objections”). With regard to any objection so made by Purchaser, Seller shall
reasonably cooperate with Purchaser to remedy such objection, but Seller shall
not be obligated to pay any sum of money or to incur any obligation or liability
to any third party as any inducement to remove an objection to title other than
(i) a voluntary lien against the Property recorded subsequent to the date of the
Title Commitment and consented to by Seller, or (ii) any mechanic’s or
materialman’s lien arising from work contracted for by Seller.  If Seller does
not cure such objections or agree in writing to cure such objections within ten
(10) days after receipt of Purchaser’s written objections (the “Title Cure
Period”), Purchaser may, at its option, (i) waive such uncured objections and
accept such title as Seller can deliver, or (ii) terminate this Agreement by
notice in writing delivered to Seller within five (5) business days after the
end of the Title Cure Period and receive back the Deposit.  In such event, if no
termination notice is given under (ii) above, Purchaser shall be deemed to have
waived such uncured objections and shall accept such title as Seller can
deliver.  In the event of such termination, neither party shall have any further
rights or obligations under this Agreement except for those that expressly
survive the termination hereof.  In the event Purchaser fails to furnish Seller,
on or before the end of the Title Review Period, either written notice that the
Survey, the Title Report, and the Underlying Documents are satisfactory, or
written notice of Purchaser objections to the Survey, the Title Report, and/or
the Underlying Documents, Purchaser shall be deemed to have waived any objection
to the Survey, Title Report, and the Underlying Documents and shall accept such
title as Seller can deliver.  In any event, any title matters that Seller does
not expressly agree in writing to cure by written notice to Purchaser or that
Seller is not expressly obligated to cure as provided above and that the Title
Company does not agree to remove shall be “Permitted Exceptions” and deemed
waived by Purchaser if Purchaser does not elect to terminate this Agreement
prior to the expiration of the Title Cure Period.  The term “Permitted
Exceptions” shall mean: the specific exceptions in the Title Report that the
Title Company has not agreed to remove from the Title Report as of the end of
the Title Cure Period and that Seller is not required to remove as provided
above; any other lien, encumbrance, easement or other exception or matter
voluntarily imposed or consented to by Purchaser prior to or as of the Closing
or matters created by, through or under Purchaser; items shown on the Survey
which have not been removed as of the end of the Title Cure Period; real estate
taxes not yet due and payable; rights of tenants under the Leases and any other
leases executed in accordance with this Agreement after the date hereof, and the
rights of tenants thereunder; rights of tenants or licensees under Service
Contracts not terminated as of Closing; all exceptions (including printed
exceptions) to title contained or disclosed in the Title Commitment other than
Title Objections identified and not thereafter waived by Purchaser; all matters,
rights and interests that would be discovered by an inspection or survey of the
Property; and the deed of trust and any other security instruments securing or
evidencing the Loan.

 

5.4                               Inspection of Property.  Seller, at its
expense, shall deliver or make available to Purchaser copies of all material
documents on the attached list attached hereto as Exhibit K, in addition to
materials and documents previously delivered to Purchaser (together, the “Due
Diligence Materials”) Purchaser and its agents and duly authorized
representatives shall have the right to inspect the condition of the Land,
Improvements and Personal Property and the books and records of Seller
pertaining thereto during reasonable business hours.  Seller hereby agrees

 

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to give Purchaser its reasonable cooperation in connection with such
inspections, provided that (i) Purchaser must give Seller twenty-four (24)
hours’ prior telephone or written notice of any such inspection or test, and
with respect to any intrusive inspection or test (i.e., core sampling) must
obtain Seller’s prior written consent (which consent may be given, withheld or
conditioned in Seller’s sole discretion), (ii) prior to performing any
inspection or test, Purchaser must deliver a certificate of insurance to Seller
evidencing that Purchaser and its contractors, agents and representatives have
in place not less than $1,000,000 of comprehensive general liability insurance
(including a contractual liability endorsement insuring Purchaser’s indemnity
obligation under this Agreement) covering any accident or damage arising in
connection with the presence of Purchaser, its contractors, agents and
representatives on the Property, which insurance shall name Seller and BlackRock
Realty Advisors, Inc. (“Advisor”) as additional insureds thereunder, issued by a
licensed company qualified to do business in the State in which the Property is
located, and (iii) all such tests shall be conducted by Purchaser in compliance
with Purchaser’s responsibilities set forth in Section 5.9 below.  Purchaser
shall bear the cost of all such inspections or tests.

 

5.5                               Operational Information.  In addition, Seller
agrees specifically to provide upon request of Purchaser or make available to
Purchaser (in Seller’s offices or at the management office of Seller’s local
property manager or at the Property), to the extent in Seller’s possession or
control and to the extent not previously delivered under Section 5.4 above or
made available to Purchaser under Section 5.4 above, the following:

 

5.5.1                     LEASES AND CONTRACTS.  COPIES OF THE LEASES AND THE
CONTRACTS.

 

5.5.2                     PLANS AND SPECIFICATIONS.  TO THE EXTENT IN SELLER’S
POSSESSION, COPIES OF ALL PLANS AND SPECIFICATIONS FOR THE IMPROVEMENTS.

 

5.5.3                     REPORTS.  TO THE EXTENT IN SELLER’S POSSESSION, COPIES
OF ALL ENVIRONMENTAL REPORTS PREPARED BY THIRD PARTIES.

 

5.5.4                     PERMITS.  TO THE EXTENT IN SELLER’S POSSESSION, COPIES
OF ALL GOVERNMENTAL PERMITS, CERTIFICATES OF OCCUPANCY AND APPROVALS, IN EACH
CASE REGARDING THE PROPERTY.

 

5.5.5                     LOAN DOCUMENTS.  COPIES OF THE LOAN DOCUMENTS.

 

5.5.6                     OTHER.  SUCH ADDITIONAL CUSTOMARY DOCUMENTATION AND
INSTRUMENTS AS PURCHASER MAY REASONABLY REQUEST.

 

  If Purchaser terminates this Agreement as set forth in Section 5.6 below, then
the Due Diligence Materials and all other information, documents and materials
furnished by Seller to Purchaser shall be returned promptly to Seller (which
obligation shall survive the termination of this Agreement).  Purchaser agrees
that, in the exercise of the right of access granted hereby, it will not
unreasonably interfere with or permit unreasonable interference with any person
occupying or providing service at the Property.  Purchaser agrees that it or its
agents will not communicate with any tenants without the consent of Seller.

 

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5.6                               No Obligation to Cure.  Nothing contained in
this Agreement or otherwise shall require Seller to render its title marketable
or to remove or correct any exception or matter disapproved by Purchaser or to
spend any money or incur any expense in order to do so except as set forth in
Section 5.3 hereof.

 

5.7                               Inspection Period.  Purchaser shall have until
5 p.m. Central Standard Time on February 20, 2009 (“Inspection Period”) within
which to review, examine, inspect, test and satisfy itself as to the condition
of the Land, Improvements and Personal Property and the operational information
relating thereto. In the event that such inspection indicates that the Property
is not satisfactory to Purchaser, in Purchaser’s sole and absolute discretion,
Purchaser may terminate this Agreement by notice in writing delivered to Seller
prior to the expiration of the Inspection Period, in which event the Deposit
will be returned to Purchaser, and neither party shall have any further right or
obligation hereunder other than as set forth herein with respect to rights or
obligations which survive termination.  If this Agreement is not terminated by
written notice to Seller in the manner and within the time provided in this
Section 5.7, Purchaser’s right to terminate this Agreement pursuant to this
Section 5.7 and any and all objections with respect to the Inspection Period
will be deemed to have been waived by Purchaser for all purposes.  Except as
provided below, Seller shall cause all Service Contracts to be terminated
effective as of or prior to the date of Closing, provided that (i) Seller shall
have no obligation to assign or terminate, and Purchaser shall be obligated to
assume, any Service Contracts which by their terms cannot be assigned or 
terminated without penalty or payment of a fee and (ii) Seller shall not
terminate any Service Contracts which Purchaser notifies Seller in writing prior
to the expiration of the Inspection Period that it desires to assume.  At
Closing Seller shall assign and Purchaser must assume the obligations arising
from and after the Closing Date under those Service Contracts that Purchaser is
obligated or desires to assume pursuant to this Section 5.7.

 

5.8                               Right to Audit.  At Purchaser’s request, at
any time before Closing or within one (1) year after Closing, and without
material cost or expense to Seller, Seller shall provide to Purchaser’s
designated independent auditor reasonable access to the books and records of the
Property to the extent in Seller’s possession, and all related information in
Seller’s possession regarding the period for which Purchaser is required to have
the Property audited under the regulations of the Securities and Exchange
Commission, Purchaser agrees to indemnify and hold harmless Seller from any
claim, damage, loss, or liability to which Seller is at any time subjected by
any person who is not a party to this Agreement as a result of Seller’s
compliance with this paragraph, except to the extent any such claim, damage,
loss or liability arises from Seller’s fraud or intentional misrepresentation,
which indemnification shall survive the Closing or earlier termination of this
Agreement.

 

5.9                               Proprietary Documents; Confidentiality. 
Purchaser acknowledges that the documents and information provided or made
available to Purchaser pursuant to this Agreement, including without limitation
the documents and information described in Sections 5.4 and 5.5 above
(collectively, the “Property Documents”) are proprietary and confidential and
will be delivered to Purchaser solely to assist Purchaser in determining the
feasibility of purchasing the Property.  Purchaser shall not use the Property
Documents for any purpose other than as set forth in the preceding sentence. 
Purchaser shall not disclose the contents to any person other than to those
persons who are responsible for determining the feasibility of Purchaser’s
acquisition of the Property and who have agreed to preserve the confidentiality
of such information as required

 

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hereby (collectively, “Permitted Outside Parties”); provided, however, Purchaser
shall disclose only such information to a particular Permitted Outside Party as
is reasonably necessary for that Permitted Outside Party to perform its role in
assisting Purchaser to determine the feasibility of its acquisition of the
Property, and nothing more. Purchaser shall not divulge the contents of the
Property Documents and other information except in strict accordance with the
confidentiality standards set forth in this Section 5.9.  In permitting
Purchaser to review the Property Documents or any other information, Seller has
not waived any privilege or claim of confidentiality with respect thereto, and
no third party benefits or relationships of any kind, either express or implied,
have been offered, intended or created.  Purchaser shall not at any time issue a
press release or otherwise communicate with media representatives regarding this
sale and purchase unless such release or communication occurs after the Closing,
but in no event shall such press release or media communication include
information regarding the Purchase Price.  Purchaser shall promptly deliver all
Property Documents to Seller in the event that the  Closing does not occur. 
This Section 5.9 shall survive the Closing or termination of this Agreement.

 

5.10                        Purchaser’s Responsibilities.  In conducting any
inspections, investigations or tests of the Property and/or Property Documents,
Purchaser and its agents and representatives shall:  (i) not disturb the tenants
or interfere with their use of the Property pursuant to their respective Leases;
(ii) not interfere with the operation and maintenance of the Property; (iii) not
damage any part of the Property or any personal property owned or held by any
tenant or any third party; (iv) not injure or otherwise cause bodily harm to
Seller or its agents, guests, invitees, contractors and employees or any tenants
or their guests or invitees; (v) comply with all applicable laws; (vi) promptly
pay when due the costs of all tests, investigations, and examinations done with
regard to the Property; (vii) allow Seller to have a representative present
during any such inspection or test; (viii) cooperate with any reasonable request
by Seller in connection with the timing of any such inspection or test;
(ix) provide Seller, upon Seller’s request, with a copy of any written
inspection or test report or summary prepared by any third party; (x) not permit
any liens to attach to the Property by reason of the exercise of its rights
hereunder; (xi) not reveal or disclose prior to Closing any information obtained
during the Inspection Period concerning the Property and the Property Documents
to anyone other than the Permitted Outside Parties, in accordance with the
confidentiality standards set forth in Section 5.9 above, or except as may be
otherwise required by law.  Purchaser agrees at its own expense to promptly
repair or restore the Property, if any inspection or test requires or results in
any damage to or alteration of the condition of the Property, and that the
obligations set forth in this sentence shall survive the Closing or any
termination of this Agreement.

 

5.11                        Purchaser’s Agreement to Indemnify.  Purchaser
hereby agrees to indemnify, defend and hold harmless Seller, Advisor, and their
affiliates, members, partners, subsidiaries, shareholders, officers, directors
and agents from and against any and all liens, claims, causes of action,
damages, liabilities, losses, injuries, costs, and expenses (including
reasonable attorneys’ fees and costs) arising out of inspections or tests by
Purchaser or its employees, consultants, agents or representatives permitted
under this Agreement ; provided, however, the indemnity shall not extend to
protect Seller from any pre-existing liabilities for matters merely discovered
by Purchaser (i.e., latent environmental contamination) so long as Purchaser’s
actions do not aggravate any pre-existing liability of Seller.  Furthermore,
Purchaser shall be liable only for direct damages, and not incidental,
consequential or punitive damages (except to the extent

 

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Seller is liable to third parties for such incidental, consequential or punitive
damages for which Purchaser shall provide indemnity) and Purchaser shall not be
liable for claims to the extent arising in whole or in part from the negligence
of Seller, its agents, independent contractors, servants and/or employees. 
Purchaser’s obligations under this Section 5.11 shall survive the termination of
this Agreement and shall survive the Closing.

 

ARTICLE VI

 

THE CLOSING

 

6.1                               Date and Manner of Closing.  Escrow Agent
shall close the escrow (the “Closing”) as soon as all conditions to closing
contained in this Agreement have been satisfied (or deemed satisfied) or waived
in writing which shall in any event be not later than 12:00 noon Central
Standard Time on the date that is ten (10) days after the later of (i) the
expiration of the Investigation Period or (ii) Lender’s confirmation of its
willingness to immediately execute and deliver the Lender Consent (the “Final
Closing Date”), and thereafter recording and delivering all documents and funds
as set forth in Article VIII.  Notwithstanding anything herein to the contrary,
the Final Closing Date shall occur on or before May 1, 2009, after which date
either party shall have the right to terminate this Agreement by written notice
to the other, in which event the Deposit shall be returned to the Purchaser.

 

ARTICLE VII

 

PRORATION, FEES, COSTS AND ADJUSTMENTS

 

7.1                               Prorations.  Prior to the Closing, Seller and
Purchaser shall determine the amounts of the prorations in accordance with this
Agreement within no less than two (2) days prior to Closing.  Purchaser shall
review and approve such determination promptly and prior to the Closing, such
approval not to be unreasonably withheld or delayed.  Thereafter, Purchaser and
Seller shall each inform Escrow Agent of such amounts.

 

7.1.1                     CERTAIN ITEMS PRORATED.  IN ACCORDANCE WITH THE
NOTIFICATIONS, ESCROW AGENT SHALL PRORATE BETWEEN THE PARTIES (AND THE PARTIES
SHALL DEPOSIT FUNDS THEREFOR WITH ESCROW AGENT OR SHALL INSTRUCT ESCROW AGENT TO
DEBIT AGAINST SUMS HELD BY ESCROW AGENT OWING TO SUCH PARTY), AS OF 11:59 P.M.
THE DAY PRIOR TO THE CLOSING, ALL INCOME AND OPERATING EXPENSES WITH RESPECT TO
THE PROPERTY AND PAYABLE TO OR BY THE OWNER OF THE PROPERTY, INCLUDING, WITHOUT
LIMITATION:  (I) ALL REAL PROPERTY AND PERSONAL PROPERTY TAXES AND ASSESSMENTS
ON THE BASIS OF THE FISCAL PERIOD FOR WHICH ASSESSED (IF THE CLOSING SHALL OCCUR
BEFORE THE TAX RATE IS FIXED, THE APPORTIONMENT OF TAXES SHALL BE BASED ON THE
TAX RATE FOR THE PRECEDING PERIOD APPLIED TO THE LATEST ASSESSED VALUATION AND
AFTER THE CLOSING, WHEN THE ACTUAL REAL PROPERTY AND PERSONAL PROPERTY TAXES ARE
FINALLY FIXED, SELLER AND PURCHASER SHALL PROMPTLY MAKE A RECALCULATION OF SUCH
PRORATION, AND THE APPROPRIATE PARTY SHALL MAKE THE APPLICABLE PAYMENT
REFLECTING THE RECALCULATION TO THE OTHER PARTY); (II) RENTS AND OTHER TENANT
PAYMENTS AND TENANT REIMBURSEMENTS, IF ANY (COLLECTIVELY, “TENANT PAYMENTS”),
RECEIVED AND COLLECTED UNDER THE LEASES; (III) CHARGES FOR WATER, SEWER,
ELECTRICITY, GAS, FUEL AND OTHER UTILITY CHARGES, ALL OF WHICH SHALL BE READ
PROMPTLY

 

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BEFORE CLOSING, UNLESS SELLER ELECTS TO CLOSE ITS OWN APPLICABLE ACCOUNT, IN
WHICH EVENT PURCHASER SHALL OPEN ITS OWN ACCOUNT AND THE RESPECTIVE CHARGES
SHALL NOT BE PRORATED; (IV) AMOUNTS PREPAID AND AMOUNTS ACCRUED BUT UNPAID ON
SERVICE CONTRACTS WHICH ARE TO BE ASSUMED BY PURCHASER UNDER THE TERMS HEREOF;
AND (V) PERIODIC FEES FOR LICENSES, PERMITS OR OTHER AUTHORIZATIONS, IF ANY,
WITH RESPECT TO THE PROPERTY.  IF SUCH CHARGES, EXPENSES AND INCOME ARE
UNAVAILABLE AT THE CLOSING, A READJUSTMENT SHALL BE MADE WITHIN THIRTY (30) DAYS
AFTER THE CLOSING OF THESE ITEMS.

 

7.1.2                     LEASING COMMISSIONS.  AT THE CLOSING, PURCHASER AND
SELLER SHALL PRORATE, BASED ON THE PORTION OF THE TERM OF THE APPLICABLE LEASE
OCCURRING BEFORE AND AFTER THE CLOSING, ALL LEASING COMMISSIONS ENTERED INTO
AFTER THE END OF THE INVESTIGATION PERIOD, ANY RENEWAL OR EXTENSION OF AN
EXISTING LEASE AFTER SUCH DATE AND ANY NEW LEASE REFERRED TO IN SECTION 13.4.

 

7.1.3                     TAXES.

 

(A)                                  REAL PROPERTY TAX REFUNDS AND CREDITS
RECEIVED AFTER THE CLOSING WHICH ARE ATTRIBUTABLE TO A FISCAL TAX YEAR PRIOR TO
THE YEAR OF CLOSING SHALL BELONG TO SELLER.  ANY SUCH REFUNDS AND CREDITS
ATTRIBUTABLE TO THE FISCAL TAX YEAR DURING WHICH THE CLOSING OCCURS SHALL BE
APPORTIONED BETWEEN SELLER AND PURCHASER AFTER DEDUCTING THE REASONABLE
OUT-OF-POCKET EXPENSES OF COLLECTION THEREOF.  THIS APPORTIONMENT OBLIGATION
SHALL SURVIVE THE CLOSING.

 

(B)                                 IF ANY TAX APPEAL OR CERTIORARI PROCEEDINGS
SHALL NOT HAVE BEEN FINALLY RESOLVED OR SETTLED PRIOR TO THE CLOSING AND SHALL
RELATE TO THE YEAR 2008 OR A PRIOR YEAR, SELLER, AT ITS SOLE COST AND EXPENSE,
SHALL BE ENTITLED TO CONTROL THE DISPOSITION OF ANY SUCH TAX APPEAL OR
CERTIORARI PROCEEDING AND SHALL BE ENTITLED TO ANY REFUNDS RECEIVED THEREFROM. 
WITH RESPECT TO THE 2009 TAX YEAR, PURCHASER SHALL BE ENTITLED TO CONTROL ANY
TAX PROTEST AND ANY REFUNDS RECEIVED THEREFROM, NET OF ANY EXPENSES INCURRED BY
PURCHASER IN CONNECTION THEREWITH, SHALL BE PRORATED BETWEEN THE PARTIES ON THE
BASIS OF THE PORTIONS ACCRUING TO PERIODS BEFORE AND AFTER THE CLOSING.

 

(C)                                  PAYMENT OF ROLLBACK TAXES THAT ARE THE
RESULT OF THE CHANGE OF PURCHASER’S USE OF THE PROPERTY AFTER CLOSING THAT
RESULT IN THE ASSESSMENT OF ADDITIONAL TAXES, PENALTIES OR INTEREST (ASSESSMENT)
FOR PERIODS BEFORE CLOSING SHALL BE THE RESPONSIBILITY OF PURCHASER

 

7.1.4                     SECURITY AND OTHER DEPOSITS.  AT THE CLOSING, SELLER
SHALL DELIVER TO PURCHASER ALL UNAPPLIED REFUNDABLE SECURITY AND PET DEPOSITS
(PLUS INTEREST ACCRUED THEREON TO THE EXTENT REQUIRED TO BE PAID BY THE
APPLICABLE LEASES OR APPLICABLE LAWS) REQUIRED TO BE HELD BY SELLER UNDER THE
LEASES AND PURCHASER SHALL PAY SELLER AN AMOUNT EQUAL TO ALL UTILITY AND
CONTRACT DEPOSITS THEN HELD BY THIRD PARTIES WITH RESPECT TO THE PROPERTY AND
TRANSFERRED TO PURCHASER HEREUNDER.

 

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7.1.5                     ADJUSTMENTS.

 

(A)                                  WITH RESPECT TO DELINQUENT RENTALS AND ANY
OTHER RENTALS NOT COLLECTED AS OF THE CLOSING (AND THUS NOT PRORATED AS OF
CLOSING), PURCHASER SHALL MAKE A COMMERCIALLY REASONABLE AND CUSTOMARY ATTEMPT
TO COLLECT THE SAME FOR SELLER’S BENEFIT AFTER THE CLOSING AND SUCH COLLECTION,
IF ANY, SHALL BE REMITTED TO SELLER PROMPTLY UPON RECEIPT BY PURCHASER. NOTHING
CONTAINED HEREIN SHALL OPERATE TO REQUIRE PURCHASER TO INSTITUTE ANY LAWSUIT OR
OTHER LEGAL COLLECTION PROCEDURE TO COLLECT SUCH DELINQUENT RENTALS. PURCHASER
AND SELLER AGREE THAT ANY SUMS RECEIVED BY PURCHASER FROM ANY TENANTS AFTER
CLOSING SHALL BE APPLIED (I) FIRST TO RENTALS DUE FOR THE MONTH DURING WHICH THE
CLOSING OCCURS (AND SAID RENTALS SHALL BE ALLOCATED BETWEEN SELLER AND PURCHASER
AS IF SAME HAD BEEN PRORATED AT CLOSING, WITH THE AMOUNT DUE SELLER TO BE PAID
TO SELLER PROMPTLY UPON RECEIPT BY PURCHASER), (II) SECOND, TO CURRENT RENTALS
DUE AFTER THE MONTH IN WHICH THE CLOSING OCCURS, (III) THIRD, TO DELINQUENT
RENTALS OWED WITH RESPECT TO THE PERIOD AFTER THE MONTH IN WHICH THE CLOSING
OCCURS, AND (IV) FOURTH, TO DELINQUENT RENTALS OWED WITH RESPECT TO THE PERIOD
PRIOR TO CLOSING, REGARDLESS OF THE DESIGNATION OF SUCH SUMS BY THE TENANT. IN
ADDITION TO PURCHASER’S AGREEMENT SET FORTH ABOVE TO PURSUE DELINQUENT RENTS FOR
THE BENEFIT OF SELLER, SELLER SHALL HAVE THE RIGHT TO PURSUE COLLECTION OF
DELINQUENT RENTS, BUT SELLER AGREES THAT IT WILL INITIATE NO SUIT OR LEGAL
PROCEEDING TO COLLECT DELINQUENT RENTS FROM A TENANT SO LONG AS THEY REMAIN A
TENANT OF THE PROPERTY.

 

(B)                                 SELLER SHALL RECEIVE A CREDIT FOR THE AMOUNT
OF ALL RESERVE ESCROW ACCOUNTS UNDER THE LOAN TO BE ASSIGNED TO PURCHASER AT THE
CLOSING.

 

(C)                                  PURCHASER SHALL NOT RECEIVE A CREDIT AT THE
CLOSING FOR ITS PRORATED PORTION OF ANY BONUS OR OTHER UP FRONT PAYMENT
PREVIOUSLY MADE AND RECEIVED BY SELLER UNDER OR IN CONNECTION WITH ANY SERVICE
CONTRACT, INCLUDING, WITHOUT LIMITATION, LAUNDRY ROOM LEASES, SECURITY SYSTEM,
INTERNET, SATELLITE AND CABLE TV LEASES OR CONTRACTS ENTERED INTO PRIOR TO
CLOSING.

 

7.1.6                     INSURANCE.  SELLER’S EXISTING LIABILITY AND PROPERTY
INSURANCE PERTAINING TO THE PROPERTY SHALL BE CANCELED AS OF THE CLOSING, AND
SELLER SHALL RECEIVE ANY PREMIUM REFUND DUE THEREON.

 

7.1.7                     LOAN ESCROWS AND INTEREST.  IN THE EVENT LENDER
RETAINS ANY TAX, INSURANCE OR OTHER ESCROW AMOUNT (INCLUDING ANY AMOUNTS WHICH
HAVE BEEN FUNDED BUT HELD BACK) AND ARE ASSIGNED TO PURCHASER PURSUANT TO THE
ASSIGNMENT OF ESCROW ACCOUNT, THE AMOUNTS THEREOF SHALL BE PAID TO SELLER AT
CLOSING.  ANY ACCRUED AND UNPAID INTEREST ON THE LOAN SHALL BE CREDITED AGAINST
THE PURCHASE PRICE.  SELLER SHALL NOTIFY PURCHASER OF SUCH AMOUNTS, IF ANY, NO
LATER THAN FIVE (5) DAYS PRIOR TO THE CLOSING.

 

7.1.8                     SURVIVAL.  THE PROVISIONS OF THIS ARTICLE VII SHALL
SURVIVE THE CLOSING OF THIS TRANSACTION AND THE PAYMENT OF ANY CONSIDERATION AND
THE DELIVERY OF ALL CLOSING INSTRUMENTS.

 

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7.2                               Seller’s Closing Costs.  Seller shall pay (i) 
one-half of Escrow Agent’s escrow fee or escrow termination charge, (ii) the
cost of any update to the Existing Survey of the Property, (iii) $91,577 towards
the cost of the base Title Policy, (iv) all brokerage fees, (v) $190,000 of the
one percent (1%) loan assumption fee of $240,000 (the “Loan Assumption Fee”),
and (vi) Seller’s own attorneys’ fees.  In addition, Seller shall be responsible
for any sales or use taxes imposed, if any, resulting from this transaction.

 

7.3                               Purchaser’s Closing Costs.   Purchaser shall
pay (i) any documentary stamp or transfer tax, (ii) one-half of Escrow Agent’s
escrow fee or escrow termination charge, (iii) the cost of any other title
insurance endorsements ordered by Purchaser and any difference in price between
the base title premium for the base Title Policy and $91,577, (iv) any costs
incurred in recording the Deed or any other instruments, (v) any costs incurred
in connection with Purchaser’s investigation of the Property pursuant to
Article V, including the cost of any new environmental assessment commissioned
by Purchaser, (vi) all costs and expenses of Lender in connection with obtaining
Lender Consent as described in Section 2.4(d) hereof, any rating agency fees and
$50,000 of the Loan Assumption Fee, and (vii) Purchaser’s own attorneys’ fees.

 

ARTICLE VIII

 

DISTRIBUTION OF FUNDS AND DOCUMENTS

 

8.1                               Delivery of the Purchase Price.  At the
Closing, Escrow Agent shall deliver the Purchase Price to Seller, and the
transaction shall not be considered closed until such delivery occurs.

 

8.2                               Other Monetary Disbursements.  Escrow Agent
shall, at the Closing, hold for personal pickup or arrange for wire transfer,
(i) to Seller, or order, as instructed by Seller, all sums and any proration or
other credits to which Seller is entitled and less any appropriate proration or
other charges and (ii) to Purchaser, or order, any excess funds therefore
delivered to Escrow Agent by Purchaser and all sums and any proration or other
credits to which Purchaser is entitled and less any appropriate proration or
other charges.

 

8.3                               Recorded Documents.  Escrow Agent shall cause
the Deed and any other documents that Seller or Purchaser desires to record to
be recorded with the appropriate county recorder and, after recording, returned
to the grantee, beneficiary or person acquiring rights under said document or
for whose benefit said document was required.

 

8.4                               Documents to Purchaser.  Escrow Agent shall at
the Closing deliver by overnight express delivery to Purchaser the following:

 

(1)                                  ONE CONFORMED COPY OF THE DEED SHOWING ALL
RECORDING DATA;

(2)                                  TWO ORIGINALS OF THE ASSIGNMENT OF LEASES
AND CONTRACTS;

(3)                                  TWO ORIGINALS OF THE BLANKET CONVEYANCE;

(4)                                  TWO ORIGINALS OF THE ASSIGNMENT OF ESCROW
ACCOUNTS;

(5)                                  ONE ORIGINAL OF THE NOTICE TO TENANTS;

(6)                                  TWO ORIGINALS OF THE FIRPTA AFFIDAVIT;

(7)                                  ONE ORIGINAL OF THE CLOSING STATEMENT;

 

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(8)                                  ONE ORIGINAL OF ALL ASSUMPTION DOCUMENTS;

(9)                                  ONE ORIGINAL OF THE TITLE POLICY; AND

(10)                            one original of any Owner Affidavit.

 

8.5                               Documents to Seller.  Escrow Agent shall at
the Closing deliver by overnight express delivery to Seller, the following:

 

(1)                                  ONE CONFORMED COPY OF THE DEED SHOWING ALL
RECORDING DATA;

(2)                                  TWO ORIGINALS OF THE ASSIGNMENT OF LEASES
AND CONTRACTS;

(3)                                  TWO ORIGINALS OF THE BLANKET CONVEYANCE;

(4)                                  TWO ORIGINALS OF THE ASSIGNMENT OF ESCROW
ACCOUNTS;

(5)                                  ONE COPY OF THE NOTICE TO TENANTS;

(6)                                  TWO ORIGINALS OF THE FIRPTA AFFIDAVIT;

(7)                                  ONE ORIGINAL OF THE CLOSING STATEMENT;

(8)                                  ONE COPY OF ALL ASSUMPTION DOCUMENTS;

(9)                                  ONE COPY OF THE TITLE POLICY; AND

(10)                            ONE COPY OF ANY OWNER AFFIDAVIT.

 

8.6                               All Other Documents.  Escrow Agent shall at
the Closing deliver by overnight express delivery, each other document received
hereunder by Escrow Agent to the person acquiring rights under said document or
for whose benefit said document was required.

 

ARTICLE IX

 

RETURN OF DOCUMENTS AND FUNDS UPON TERMINATION

 

9.1                               Return of Seller’s Documents.  If escrow or
this Agreement is terminated by Purchaser for any reason, Purchaser shall,
within five (5) days following such termination, deliver to Seller all documents
and materials relating to the Property previously delivered to Purchaser by
Seller and copies of all reports and studies obtained by Purchaser from third
parties in connection with the Property and Purchaser’s investigation thereof. 
Such items shall be delivered without representation or warranty as to accuracy
or completeness and with no right of Seller to rely thereon without the consent
of the third party.  Escrow Agent shall deliver all documents and materials
deposited by Seller and then in Escrow Agent’s possession to Seller and shall
destroy any documents executed by both Purchaser and Seller.  Upon delivery by
Escrow Agent to Seller (or such destruction, as applicable) of such documents
and materials, Escrow Agent’s obligations with regard to such documents and
materials under this Agreement shall be deemed fulfilled and Escrow Agent shall
have no further liability with regard to such documents and materials to either
Seller or Purchaser.

 

9.2                               Return of Purchaser’s Documents.  If escrow or
this Agreement is terminated by Seller for any reason, Escrow Agent shall
deliver all documents and materials deposited by Purchaser and then in Escrow
Agent’s possession to Purchaser and shall destroy any documents executed by both
Purchaser and Seller. Upon delivery by Escrow Agent to Purchaser (or such
destruction, as applicable) of such documents and materials, Escrow Agent’s
obligations with regard to such documents and materials under this Agreement
shall be deemed fulfilled and

 

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Escrow Agent shall have no further liability with regard to such documents and
materials to either Seller or Purchaser.

 

9.3                               Deposit.  If escrow or this Agreement is
terminated (i) pursuant to Section 2.4(e), Section 5.7, Section 10.2,
Article XII, or Article XIV, or (ii) due to the failure of a condition set forth
in Section 3.1, then Purchaser shall be entitled to obtain the return of the
Deposit pursuant to Section 9.4 below.  If the Closing does not take place and
escrow or this Agreement is terminated for any other reason, Seller shall be
entitled to the Deposit by retaining or causing Escrow Agent to deliver the
Deposit to Seller pursuant to Section 9.4 below.

 

9.4                               Disbursement of Deposit.  If Escrow Agent
receives a notice from either party instructing Escrow Agent to deliver the
Deposit to such party, Escrow Agent shall deliver a copy of the notice to the
other party within three (3) days after receipt of the notice.  If the other
party does not object to the delivery of the Deposit as set forth in the notice
within three (3) business days after receipt of the copy of the notice, Escrow
Agent shall, and is hereby authorized to, deliver the Deposit to the party
requesting it pursuant to the notice.  Any objection hereunder shall be by
notice setting forth the nature and grounds for the objection and shall be sent
to Escrow Agent and to the party requesting the Deposit.

 

9.5                               No Effect on Rights of Parties; Survival.  The
return of documents and monies as set forth above shall not affect the right of
either party to seek such legal or equitable remedies as such party may have
under Article X with respect to the enforcement of this Agreement.  The
obligations under this Article IX shall survive termination of this Agreement.

 

ARTICLE X

 

DEFAULT

 

10.1                        Seller’s Remedies.  If, for any reason whatsoever
(other than the failure of a condition set forth in Section 3.1 and other than a
termination of this Agreement pursuant to Section 2.4(e), Section 5.7,
Section 10.2, Article XII, or Article XIV), Purchaser fails to complete the
acquisition as herein provided, Purchaser shall be in breach of its obligations
hereunder and Seller shall be released from any further obligations hereunder. 
BY INITIALING BELOW, PURCHASER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT
SELLER’S ACTUAL DAMAGES IN THE EVENT OF SUCH A BREACH OF THIS AGREEMENT BY
PURCHASER WOULD BE EXTREMELY DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT THE
AMOUNT OF THE DEPOSIT IS THE PARTIES’ BEST AND MOST ACCURATE ESTIMATE OF THE
DAMAGES SELLER WOULD SUFFER IN THE EVENT THE TRANSACTION PROVIDED FOR IN THIS
AGREEMENT FAILS TO CLOSE, AND THAT SUCH ESTIMATE IS REASONABLE UNDER THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT.  PURCHASER AND SELLER
AGREE THAT SELLER’S RIGHT TO RETAIN THE DEPOSIT SHALL BE THE SOLE AND EXCLUSIVE
REMEDY OF SELLER AT LAW IN THE EVENT OF SUCH A BREACH OF THIS AGREEMENT BY
PURCHASER. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECTION 10.1, IF PURCHASER BRINGS AN ACTION AGAINST SELLER FOR AN ALLEGED BREACH
OR DEFAULT BY SELLER OF ITS OBLIGATIONS UNDER THIS AGREEMENT, RECORDS A LIS
PENDENS OR

 

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OTHERWISE ENJOINS OR RESTRICTS SELLER’S ABILITY TO SELL AND TRANSFER THE
PROPERTY OR REFUSES TO CONSENT TO OR INSTRUCT RELEASE OF THE DEPOSIT TO SELLER
IF REQUIRED BY ESCROW AGENT AND SELLER IS ENTITLED THERETO UNDER THE TERMS
HEREOF (EACH A “PURCHASER’S ACTION”), SELLER SHALL NOT BE RESTRICTED BY THE
PROVISIONS OF THIS SECTION 10.1 FROM BRINGING AN ACTION AGAINST PURCHASER
SEEKING EXPUNGEMENT OR RELIEF FROM ANY IMPROPERLY FILED LIS PENDENS, INJUNCTION
OR OTHER RESTRAINT, AND/OR RECOVERING FEES, COSTS AND EXPENSES (INCLUDING
ATTORNEYS’ FEES) WHICH SELLER MAY SUFFER OR INCUR AS A RESULT OF ANY PURCHASER’S
ACTION BUT ONLY TO THE EXTENT THAT SELLER IS THE PREVAILING PARTY; AND THE
AMOUNT OF ANY SUCH FEES, COSTS AND EXPENSES AWARDED TO SELLER SHALL BE IN
ADDITION TO THE LIQUIDATED DAMAGES SET FORTH HEREIN.  NOTHING IN THIS AGREEMENT
SHALL, HOWEVER, BE DEEMED TO LIMIT PURCHASER’S LIABILITY TO SELLER FOR DAMAGES
OR INJUNCTIVE RELIEF FOR BREACH OF PURCHASER’S INDEMNITY OBLIGATIONS UNDER
SECTION 5.11 ABOVE OR FOR ATTORNEYS’ FEES AND COSTS AS PROVIDED IN SECTION 16.5
BELOW.

 

ACCEPTED AND AGREED TO:

 

/s/ HB

 

/s/ MA

Seller

 

Purchaser

 

10.2                        Purchaser’s Remedies.  If the sale is not completed
as herein provided solely by reason of any material default of Seller, Purchaser
shall be entitled, as its sole and exclusive remedy, to either (i) (a) terminate
this Agreement (by delivering notice to Seller which includes a waiver of any
right, title or interest of Purchaser in the Property) and (b) if Purchaser so
elects, pursue an action at law for recovery of Purchaser’s actual out-of-pocket
third-party costs incurred as part of Purchaser’s due diligence efforts and
attorney’s fees incurred in connection with the negotiation and preparation of
this Agreement and representation of Purchaser hereunder, up to but not to
exceed $150,000, which action must be commenced, if at all, within the sixty
(60) day period following the occurrence of such material default of Seller 
(the “Limitation Period”); provided, however, that if, within the Limitation
Period, Purchaser gives Seller written notice of such a breach and Seller
commences to cure and thereafter terminates such cure effort, Purchaser shall
have an additional thirty (30) days from the date of such termination within
which to commence an action at law for third-party costs, as aforesaid, as a
consequence of Seller’s failure to cure or (ii) treat this Agreement as being in
full force and effect and pursue only the specific performance of this
Agreement, provided that Purchaser must commence any action for specific
performance within sixty (60) days after the scheduled Final Closing Date. 
Purchaser waives any right to pursue any other remedy at law or equity for such
default of Seller, including, without limitation, any right to seek, claim or
obtain damages (other than for costs under (i)(b) and (ii) above), punitive
damages or consequential damages.  Except as set forth herein and in this
Agreement, in no case shall Seller ever be liable to Purchaser under any
statutory, common law, equitable or other theory of law, either prior to or
following the Closing, for any lost rents, profits, “benefit of the bargain,”
business opportunities or any form of consequential damage in connection with
any claim, liability, demand or cause of action in any

 

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way or manner relating to the Property, the condition of the Property, this
Agreement, or any transaction or matter between the parties contemplated
hereunder.  Purchaser’s remedies hereunder are in addition to the right to
receive the return of the Deposit, subject to Section 9.4, to the extent it is
not applied to the Purchase Price in connection with Purchaser’s action for
specific performance.

 

ARTICLE XI

 

REPRESENTATIONS AND WARRANTIES

 

11.1                        Seller’s Warranties and Representations.  The
matters set forth in this Section 11.1 constitute representations and warranties
by Seller which are now and (subject to matters contained in any notice given
pursuant to the next succeeding sentence) shall, in all material respects, at
the Closing be true and correct.  If Seller has actual knowledge that any of the
representations and warranties contained in this Article XI may cease to be
true, Seller shall give prompt notice to Purchaser (which notice shall include
copies of the instrument, correspondence, or document, if any, upon which
Seller’s notice is based).  As set forth in Section 3.1.4 hereof, the obligation
of Purchaser to consummate this transaction shall be contingent upon the lack of
any material variance with respect to the truth and accuracy of all such
representations and warranties to the extent of Seller’s actual knowledge as of
the date scheduled for Closing.  Otherwise, Purchaser shall have the right to
terminate this Agreement in accordance with Section 3.1.4 hereof.  As used in
this Section 11.1, the phrase “to the extent of Seller’s actual knowledge” shall
mean the actual knowledge of Joe Tortorello, the asset manager of Advisor
responsible for the Property.  There shall be no duty imposed or implied to
investigate, inquire, inspect, or audit any such matters, and there shall be no
personal liability on the part of such asset manager.  To the extent Purchaser
has or acquires actual knowledge or is deemed to know prior to the expiration of
the Investigation Period that these representations and warranties are
inaccurate, untrue or incorrect in any way, such representations and warranties
shall be deemed modified to reflect Purchaser’s knowledge or deemed knowledge. 
Purchaser shall be deemed to know a representation or warranty is untrue,
inaccurate or incorrect if this Agreement or any files, documents, materials,
analyses, studies, tests, or reports disclosed or made available to Purchaser at
the office of Seller’s property manager prior to the expiration of the
Investigation Period contains information which is inconsistent with such
representation or warranty.

 

11.1.1              NO BROKER.  SELLER HAS NOT ENGAGED OR DEALT WITH ANY BROKER
OR FINDER IN CONNECTION WITH THE SALE CONTEMPLATED BY THIS AGREEMENT, EXCEPT
APARTMENT REALTY ADVISORS (THE “SELLER’S BROKER”).  SELLER SHALL PAY A BROKERAGE
COMMISSIONS TO THE SELLER’S BROKER IN ACCORDANCE WITH A SEPARATE AGREEMENT. 
SELLER SHALL INDEMNIFY AND HOLD HARMLESS PURCHASER FROM ANY CLAIMS, COSTS,
DAMAGES OR LIABILITIES (INCLUDING ATTORNEYS’ FEES) ARISING FROM ANY BREACH OF
THE REPRESENTATION CONTAINED IN THIS SECTION 11.1.1 OR IF THE SAME SHALL BE
BASED ON ANY STATEMENT, REPRESENTATION OR AGREEMENT BY SELLER WITH RESPECT TO
THE PAYMENT OF ANY BROKERAGE COMMISSIONS OR FINDER’S FEES.

 

11.1.2              ORGANIZATION.  SELLER HAS BEEN DULY FORMED, VALIDLY EXISTS
AND IS IN GOOD STANDING IN THE JURISDICTION OF ITS FORMATION AND IN THE STATE IN
WHICH THE PROPERTY IS LOCATED.

 

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11.1.3              POWER AND AUTHORITY.  SELLER HAS THE LEGAL POWER, RIGHT AND
AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

11.1.4              PROCEEDINGS. SELLER HAS NOT RECEIVED ANY WRITTEN NOTICE OF
ANY PENDING OR THREATENED CONDEMNATION OR SIMILAR PROCEEDING AFFECTING ANY PART
OF THE PROPERTY.

 

11.1.5              CONTRAVENTION.  SELLER IS NOT PROHIBITED FROM CONSUMMATING
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT BY ANY LAW, REGULATION,
AGREEMENT, INSTRUMENT, RESTRICTION, ORDER OR JUDGMENT.

 

11.1.6              SERVICE CONTRACTS.  THE SERVICE CONTRACTS LISTED ON
EXHIBIT F COMPRISE ALL OF THE MATERIAL SERVICE CONTRACTS WHICH CURRENTLY AFFECT
THE PROPERTY AS OF THE DATE HEREOF.

 

11.1.7              COMPLIANCE.  SELLER HAS NOT RECEIVED WRITTEN NOTICE FROM ANY
GOVERNMENTAL AUTHORITY THAT THE PROPERTY IS NOT IN MATERIAL COMPLIANCE WITH ALL
APPLICABLE LAWS, EXCEPT FOR SUCH FAILURES TO COMPLY, IF ANY, WHICH HAVE BEEN
REMEDIED.

 

11.1.8              EMPLOYEES.  SELLER HAS NO EMPLOYEES ON-SITE AT THE PROPERTY
PROVIDING ON-SITE SERVICES TO THE PROPERTY AND ALL SUCH SERVICES ARE PERFORMED
BY SELLER’S THIRD PARTY MANAGER OF THE PROPERTY.

 

11.1.9              LITIGATION.  TO THE EXTENT OF SELLER’S ACTUAL KNOWLEDGE,
THERE IS NO LEGAL ACTION, SUIT, PROCEEDING OR CLAIM AFFECTING SELLER OR THE
LAND, IMPROVEMENTS OR PERSONAL PROPERTY OR ANY PORTION THEREOF RELATING TO OR
ARISING OUT OF THE OWNERSHIP, OPERATION, USE OR OCCUPANCY OF THE PROPERTY BEING
PROSECUTED IN ANY COURT OR BY OR BEFORE ANY FEDERAL, STATE, COUNTY OR MUNICIPAL
DEPARTMENT, COMMISSION, BOARD, BUREAU OR AGENCY OR OTHER GOVERNMENTAL
INSTRUMENTALITY.

 

11.1.10       SPECIAL ASSESSMENTS.  SELLER HAS RECEIVED NO WRITTEN NOTICE OF ANY
PENDING IMPROVEMENT LIENS OR SPECIAL ASSESSMENTS TO BE MADE AGAINST THE PROPERTY
BY ANY GOVERNMENTAL AUTHORITY.

 

11.1.11       LEASES.  BASED ON INFORMATION PROVIDED BY SELLER’S PROPERTY
MANAGER AND TO SELLER’S ACTUAL KNOWLEDGE, THE RENT ROLL LISTS ALL LEASES
AFFECTING THE LAND AND IMPROVEMENTS OTHER THAN THOSE LEASES ENTERED INTO BY
SELLER SUBSEQUENT TO THE EFFECTIVE DATE, AND IS THE RENT ROLL USED IN THE
ORDINARY COURSE OF BUSINESS, AND IS TRUE AND CORRECT.

 

11.1.12       NO CONTRACTS.  THERE ARE NO OPTIONS, CONTRACTS OR OTHER
OBLIGATIONS OUTSTANDING FOR THE SALE, EXCHANGE OR TRANSFER OF THE PROPERTY OR
ANY PORTION THEREOF OR THE BUSINESS OPERATED THEREON.

 

11.1.13       ENVIRONMENTAL ISSUES.  SELLER HAS NOT RECEIVED ANY WRITTEN NOTICE
OF AND HAS NO ACTUAL KNOWLEDGE THAT ANY GOVERNMENTAL AUTHORITY OR ANY EMPLOYEE
OR AGENT THEREOF HAS DETERMINED, OR THREATENS TO DETERMINE, THAT THERE IS A
PRESENCE, RELEASE, THREAT OF RELEASE, PLACEMENT ON OR IN THE PROPERTY, OF ANY
POLLUTANTS. SELLER HAS NOT ENTERED INTO ANY AGREEMENTS WITH ANY GOVERNMENTAL
AUTHORITY OR AGENCY (FEDERAL, STATE OR LOCAL) OR ANY TENANT OR PRIOR OWNER OF
THE PROPERTY OR ANY OWNER OF ANY PROPERTY LOCATED NEAR THE

 

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PROPERTY, RELATING IN ANY WAY TO THE PRESENCE, RELEASE, THREAT OF RELEASE,
PLACEMENT ON OR IN THE PROPERTY, OR THE GENERATION, TRANSPORTATION, STORAGE,
TREATMENT, OR DISPOSAL AT THE PROPERTY, OF ANY POLLUTANTS.  FOR PURPOSES HEREOF,
“POLLUTANTS” SHALL MEAN ASBESTOS, PCB AND ANY SUBSTANCE THAT IS DEFINED OR
LISTED AS A HAZARDOUS, TOXIC OR DANGEROUS SUBSTANCE UNDER ANY EXISTING STATUTE,
INCLUDING, WITHOUT LIMITATION, ANY SUBSTANCE THAT IS A “HAZARDOUS SUBSTANCE”
UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT
OF 1980, AS AMENDED BY THE SUPERFUND AMENDMENTS AND REAUTHORIZATION ACT OF 1986,
AS THE SAME BE FURTHER AMENDED, PETROLEUM, NATURAL GAS, NATURAL GAS LIQUIDS,
LIQUEFIED NATURAL GAS, AND SYNTHETIC GAS USABLE FOR FUEL, AND ANY MATERIALS
REGULATED BY TEXAS LAW.

 

11.1.14       PATRIOT ACT.

 

(1)                                  SELLER IS IN COMPLIANCE WITH THE
REQUIREMENTS OF EXECUTIVE ORDER NO. 133224, 66 FED. REG. 49079 (SEPT. 25, 2001)
(THE “ORDER”) AND OTHER SIMILAR REQUIREMENTS CONTAINED IN THE RULES AND
REGULATIONS OF THE OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY
(“OFAC”) AND IN ANY ENABLING LEGISLATION OR OTHER EXECUTIVE ORDERS OR
REGULATIONS IN RESPECT THEREOF (THE ORDER AND SUCH OTHER RULES, REGULATIONS,
LEGISLATION, OR ORDERS ARE COLLECTIVELY CALLED THE “ORDERS”).  FURTHER, SELLER
COVENANTS AND AGREES TO MAKE ITS POLICIES, PROCEDURES AND PRACTICES REGARDING
COMPLIANCE WITH THE ORDERS, IF ANY, AVAILABLE TO PURCHASER FOR ITS REVIEW AND
INSPECTION DURING NORMAL BUSINESS HOURS AND UPON REASONABLE PRIOR NOTICE.

 

(2)                                  NEITHER SELLER NOR ANY BENEFICIAL OWNER OF
SELLER:

 

(A)                                  IS LISTED ON THE SPECIALLY DESIGNATED
NATIONALS AND BLOCKED PERSONS LIST MAINTAINED BY OFAC PURSUANT TO THE ORDER
AND/OR ON ANY OTHER LIST OF TERRORISTS OR TERRORIST ORGANIZATIONS MAINTAINED
PURSUANT TO ANY OF THE RULES AND REGULATIONS OF OFAC OR PURSUANT TO ANY OTHER
APPLICABLE ORDERS (SUCH LISTS ARE COLLECTIVELY REFERRED TO AS THE “LISTS”);

 

(B)                                 IS A PERSON OR ENTITY WHO HAS BEEN
DETERMINED BY COMPETENT AUTHORITY TO BE SUBJECT TO THE PROHIBITIONS CONTAINED IN
THE ORDERS; OR

 

(C)                                  IS OWNED OR CONTROLLED BY, OR ACTS FOR OR
ON BEHALF OF, ANY PERSON OR ENTITY ON THE LISTS OR ANY OTHER PERSON OR ENTITY
WHO HAS BEEN DETERMINED BY COMPETENT AUTHORITY TO BE SUBJECT TO THE PROHIBITIONS
CONTAINED IN THE ORDERS.

 

Notwithstanding anything contained herein to the contrary, for the purposes of
this provision, the phrase “any beneficial owner of Seller” shall not include
(x) any holder of a direct or indirect interest in a publicly traded company
whose shares are listed and traded on a United States national stock exchange,
or (y) any limited partner, unit holder or shareholder owning an interest of
five percent (5%) or less in Seller or in the holder of any direct or indirect
interest in Seller.

 

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11.2                        Purchaser’s Warranties and Representations.  The
matters set forth in this Section 11.2 constitute representations, warranties
and covenants by Purchaser which are now and shall, at the Closing, be true and
correct.

 

11.2.1              NO BROKER.  EXCEPT FOR SELLER’S BROKER, PURCHASER HAS NOT
ENGAGED OR DEALT WITH ANY BROKER OR FINDER IN CONNECTION WITH THE SALE
CONTEMPLATED BY THIS AGREEMENT.  PURCHASER SHALL INDEMNIFY AND HOLD HARMLESS
SELLER AND ADVISOR FROM ANY CLAIMS, COSTS, DAMAGES OR LIABILITIES (INCLUDING
ATTORNEYS’ FEES) ARISING FROM ANY BREACH OF THE REPRESENTATION CONTAINED IN THIS
SECTION 11.2.1 OR IF THE SAME SHALL BE BASED ON ANY STATEMENT, REPRESENTATION OR
AGREEMENT BY PURCHASER WITH RESPECT TO THE PAYMENT OF ANY BROKERAGE COMMISSIONS
OR FINDER’S FEES.

 

11.2.2              POWER AND AUTHORITY.  PURCHASER HAS THE LEGAL POWER, RIGHT
AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

11.2.3              INDEPENDENT INVESTIGATION.  THE CONSUMMATION OF THIS
TRANSACTION SHALL CONSTITUTE PURCHASER’S ACKNOWLEDGMENT THAT IT HAS
INDEPENDENTLY INSPECTED AND INVESTIGATED THE PROPERTY AND, TOGETHER WITH THE
TERMS AND CONDITIONS OF THIS AGREEMENT INCLUDING SELLER’S REPRESENTATIONS AND
WARRANTIES UNDER SECTION 11.1 HEREOF, HAS MADE AND ENTERED INTO THIS AGREEMENT
BASED UPON SUCH INSPECTION AND INVESTIGATION AND ITS OWN EXAMINATION OF THE
CONDITION OF THE PROPERTY.

 

11.2.4              PURCHASER RELIANCE.  PURCHASER IS EXPERIENCED IN AND
KNOWLEDGEABLE ABOUT THE OWNERSHIP AND MANAGEMENT OF REAL ESTATE, AND IT HAS
RELIED AND WILL RELY EXCLUSIVELY ON ITS OWN CONSULTANTS, ADVISORS, COUNSEL,
EMPLOYEES, AGENTS, PRINCIPALS AND/OR STUDIES, INVESTIGATIONS AND/OR INSPECTIONS
WITH RESPECT TO THE PROPERTY, ITS CONDITION, VALUE AND POTENTIAL.  PURCHASER
AGREES THAT, NOTWITHSTANDING THE FACT THAT IT HAS RECEIVED CERTAIN INFORMATION
FROM SELLER OR ITS AGENTS OR CONSULTANTS, PURCHASER HAS RELIED SOLELY UPON AND
WILL CONTINUE TO RELY SOLELY UPON ITS OWN ANALYSIS AND WILL NOT RELY ON ANY
INFORMATION PROVIDED BY SELLER OR ITS AGENTS OR CONSULTANTS, EXCEPT AS EXPRESSLY
SET FORTH IN SECTION 11.1.

 

11.2.5              ERISA.  PURCHASER REPRESENTS, WARRANTS AND COVENANTS THAT IT
IS NOT USING THE ASSETS OF ANY (I) “EMPLOYEE BENEFIT PLAN” (WITHIN THE MEANING
OF SECTION 3(3) OF  THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED (“ERISA”)), (II) “PLAN” (WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) OR (III) ENTITY WHOSE
UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF A PLAN’S INVESTMENT IN SUCH
ENTITY, TO FUND ITS PURCHASE OF THE PROPERTY UNDER THIS AGREEMENT.

 

11.2.6              PATRIOT ACT.

 

(1)                                  PURCHASER IS IN COMPLIANCE WITH THE
REQUIREMENTS OF THE ORDERS.  FURTHER, PURCHASER COVENANTS AND AGREES TO MAKE ITS
POLICIES, PROCEDURES AND PRACTICES REGARDING COMPLIANCE WITH THE ORDERS, IF ANY,
AVAILABLE TO SELLER FOR ITS REVIEW AND INSPECTION DURING NORMAL BUSINESS HOURS
AND UPON REASONABLE PRIOR NOTICE.

 

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(2)                                  NEITHER PURCHASER NOR ANY BENEFICIAL OWNER
OF PURCHASER:

 

(A)                                  IS LISTED ON THE LISTS;

 

(B)                                 IS A PERSON OR ENTITY WHO HAS BEEN
DETERMINED BY COMPETENT AUTHORITY TO BE SUBJECT TO THE PROHIBITIONS CONTAINED IN
THE ORDERS; OR

 

(C)                                  IS OWNED OR CONTROLLED BY, OR ACTS FOR OR
ON BEHALF OF, ANY PERSON OR ENTITY ON THE LISTS OR ANY OTHER PERSON OR ENTITY
WHO HAS BEEN DETERMINED BY COMPETENT AUTHORITY TO BE SUBJECT TO THE PROHIBITIONS
CONTAINED IN THE ORDERS.

 

11.2.7              PATRIOT ACT NOTICE.  PURCHASER HEREBY COVENANTS AND AGREES
THAT IF PURCHASER OBTAINS KNOWLEDGE THAT PURCHASER OR ANY OF ITS BENEFICIAL
OWNERS BECOMES LISTED ON THE LISTS OR IS INDICTED, ARRAIGNED, OR CUSTODIALLY
DETAINED ON CHARGES INVOLVING MONEY LAUNDERING OR PREDICATE CRIMES TO MONEY
LAUNDERING, PURCHASER SHALL IMMEDIATELY NOTIFY SELLER IN WRITING, AND IN SUCH
EVENT, SELLER SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT WITHOUT PENALTY
OR LIABILITY TO PURCHASER IMMEDIATELY UPON DELIVERY OF WRITTEN NOTICE THEREOF TO
PURCHASER.

 

11.3                        No Other Warranties and Representations.  Except as
specifically set forth in this Article XI, neither Seller nor Advisor has made,
makes or has authorized anyone to make, any warranty or representation as to the
Leases, the Service Contracts, any written materials delivered to Purchaser, the
persons preparing such materials, the truth, accuracy or completeness of such
materials, the present or future physical condition, development potential,
zoning, building or land use law or compliance therewith, the operation, income
generated by, or any other matter or thing affecting or relating to the Property
or any matter or thing pertaining to this Agreement.  Purchaser expressly
acknowledges that no such warranty or representation has been made and that
Purchaser is not relying on any warranty or representation whatsoever other than
as is expressly set forth in this Article XI.  Purchaser shall accept the
Property “as is” and in its condition on the date of Closing subject only to the
express provisions of this Agreement and hereby acknowledges and agrees that
EXCEPT AS SET FORTH IN SECTION 11.1 OF THIS AGREEMENT, SELLER HAS NOT MADE, DOES
NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES
OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED,
ORAL OR WRITTEN, PAST, PRESENT, FUTURE OR OTHERWISE, OF, AS TO, CONCERNING OR
WITH RESPECT TO, THE PROPERTY.

 

11.3.1              NO ENVIRONMENTAL REPRESENTATIONS.  EXCEPT AS SET FORTH IN
SECTION 11.1.13 HEREOF, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AS TO
WHETHER THE PROPERTY CONTAINS ASBESTOS, RADON OR ANY HAZARDOUS MATERIALS OR
HARMFUL OR TOXIC SUBSTANCES, OR PERTAINING TO THE EXTENT, LOCATION OR NATURE OF
SAME, IF ANY.  FURTHER, TO THE EXTENT THAT SELLER HAS PROVIDED TO PURCHASER
INFORMATION FROM ANY INSPECTION, ENGINEERING OR ENVIRONMENTAL REPORTS CONCERNING
ASBESTOS, RADON OR ANY HAZARDOUS MATERIALS OR HARMFUL OR TOXIC SUBSTANCES,
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE

 

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ACCURACY OR COMPLETENESS, METHODOLOGY OF PREPARATION OR OTHERWISE CONCERNING THE
CONTENTS OF SUCH REPORTS.

 

11.3.2              RELEASE OF CLAIMS.  SUBJECT TO THE EXPRESS PROVISIONS HEREOF
AND EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES UNDER SECTIONS 11.1.13 HEREOF,
PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER MAKES NO REPRESENTATION OR
WARRANTY AS TO, AND PURCHASER, FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY
WAIVES AND RELEASES SELLER FROM ANY PRESENT OR FUTURE CLAIMS, AT LAW OR IN
EQUITY, WHETHER KNOWN OR UNKNOWN, FORESEEABLE OR OTHERWISE, ARISING FROM OR
RELATING TO THE PRESENCE OR ALLEGED PRESENCE OF ASBESTOS, RADON OR ANY HAZARDOUS
MATERIALS OR HARMFUL OR TOXIC SUBSTANCES IN, ON, UNDER OR ABOUT THE PROPERTY,
INCLUDING WITHOUT LIMITATION ANY CLAIMS UNDER OR ON ACCOUNT OF (I) THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS
THE SAME MAY HAVE BEEN OR MAY BE AMENDED FROM TIME TO TIME, AND SIMILAR STATE
STATUTES, AND ANY REGULATIONS PROMULGATED THEREUNDER, (II) ANY OTHER FEDERAL,
STATE OR LOCAL LAW, ORDINANCE, RULE OR REGULATION, NOW OR HEREAFTER IN EFFECT,
THAT DEALS WITH OR OTHERWISE IN ANY MANNER RELATES TO, ENVIRONMENTAL MATTERS OF
ANY KIND, (III) THIS AGREEMENT, OR (IV) THE COMMON LAW.  PURCHASER HEREBY
SPECIFICALLY ACKNOWLEDGES THAT PURCHASER HAS CAREFULLY REVIEWED THIS
SECTION 11.3.2 AND HAS DISCUSSED ITS IMPORT WITH LEGAL COUNSEL AND THAT THE
PROVISIONS OF THIS SECTION 11.3.2 ARE A MATERIAL PART OF THIS AGREEMENT.

 

This Section 11.3.2 shall survive the Closing forever.

 

ARTICLE XII

 

CASUALTY AND CONDEMNATION

 

Promptly upon learning thereof, Seller shall give Purchaser written notice of
any condemnation, damage or destruction of the Property occurring prior to the
Closing.  If prior to the Closing any portion of the Property is condemned such
that there is a material and adverse effect on use of the Property, or is
materially damaged or destroyed by an insured casualty, Purchaser shall have the
option of either (i) applying the proceeds of any condemnation award or payment
under any insurance policies (other than business interruption or rental loss
insurance applicable to the period prior to Closing) toward the payment of the
Purchase Price to the extent such condemnation awards or insurance payments have
been received by Seller, receiving from Seller an amount equal to any applicable
deductible under any such insurance policy and receiving an assignment from
Seller of Seller’s right, title and interest in any such awards or payments not
theretofore received by Seller (including business interruption or rental loss
insurance of Seller which would be applicable to any period subsequent to
Closing), or (ii) terminating this Agreement by delivering written notice of
such termination to Seller and Escrow Agent within ten (10) days after Purchaser
has received written notice from Seller of such condemnation or material damage
or destruction.  If, prior to the Closing, a portion of the Property is damaged
or destroyed and such portion is not a material portion of the Property, the
proceeds of any condemnation award or payment and any applicable deductible
under any insurance policies shall be applied toward the payment of the Purchase
Price to the extent such condemnation awards or insurance payments have been
received by Seller and Seller shall assign to Purchaser all of Seller’s right,
title and interest in any unpaid awards or payments.  With respect to option
(i) described above and the preceding sentence as it relates to the requirement

 

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of Seller to assign to Purchaser the right to receive insurance awards and
payments to be due Seller, Seller agrees that in the event that Seller’s
insurance carrier(s) do not permit assignment thereof Seller agrees to request
from the insurance carrier(s) a “policy endorsement” whereby Purchaser shall be
added as a “loss payee” under the Purchaser’s policies effective as of the
Closing Date.  For purposes of this Article XII, in defining a casualty, the
terms “Material” and “Materially” shall mean damage valued at greater than
$1,000,000.  If the damage or destruction arises out of an uninsured risk,
Seller shall elect, by written notice within ten (10) days of the occurrence of
such damage or destruction either to terminate this Agreement or to close the
transaction contemplated hereby with a reduction of the Purchase Price equal to
the costs of repairing the Property, as reasonably estimated by an engineer
engaged by Seller and reasonably acceptable to Purchaser.

 

12.1                        Uniform Vendor and Purchaser Act Not Applicable: It
is the express intent of the parties hereto that the provisions of this
Article XII govern the rights of the parties in the event of damage to or
condemnation of the property and that the Uniform Vendor and Purchaser Act
(Section 5.007 of the Texas Property Code) not apply to this agreement.

 

ARTICLE XIII

 

CONDUCT PRIOR TO CLOSING

 

13.1                        Conduct.  From and after the date hereof and through
Closing, Seller covenants and agrees to operate the Property as follows:

 

13.1.1                  Seller will cause the Property to be maintained and
operated in a good and workmanlike manner in accordance with the manner as is
being conducted by Seller at the time of execution hereof, and will keep the
Improvements and Personal Property in good order and operating condition
(reasonable wear and tear and casualty accepted), causing all necessary repairs,
renewals and replacements to be promptly made. Seller will not knowingly use or
occupy the Property in a manner that constitutes waste or a public or private
nuisance or that makes void, voidable or cancelable, or increases the premium
of, any insurance then in force with respect thereto. Seller will not do any act
whereby the value of any part of the Property may be materially lessened.

 

13.1.2                  Seller will advise Purchaser promptly of any change in
any applicable laws, regulations, restrictions, rulings, or orders that might
affect the value or use of the Property by Purchaser of which Seller obtains
written notice after the Effective Date. Seller will also advise Purchaser
promptly of any litigation, arbitration or administrative hearing concerning or
affecting the Property of which Seller obtains written notice after the
Effective Date.

 

13.1.3                  Without obtaining Purchaser’s prior consent, which
consent will not be unreasonably withheld, Seller will enter into no lease with
respect to any portion of the Property unless such lease is on a standard form
customarily utilized at the Property and is in conformity with the Seller’s
Lease Guidelines; which are attached hereto as Exhibit L.

 

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13.1.4                  Subject to the prorations prescribed herein, Seller will
cause to be paid all trade accounts, costs and expenses of operation and
maintenance of the Property incurred and accruing or due prior to Closing.

 

13.1.5                  Seller will not knowingly take any action, which action
would have the effect of materially violating any of the Representations and
Warranties of Seller set forth in Section 11.1 of the Agreement.

 

13.1.6                  Seller will not, without the prior written consent of
Purchaser, remove any equipment forming a part of the Property except such as is
replaced by Seller by an article of substantially equal suitability and value,
free and clear of any lien or security interest.

 

13.1.7                  Intentionally Omitted

 

13.1.8                  Seller will not, without Purchaser’s prior written
consent, enter into any contracts of a continuing nature (or any optional
renewal of Service Contracts) for services, supplies, or materials affecting the
Property that cannot be canceled on thirty (30) days’ notice.

 

13.1.9                  If any apartment unit is vacated more than five
(5) business days prior to Closing, then prior to Closing Seller shall return
such unit to rentable condition in accordance with Seller’s customary cleaning,
painting, and repair standards for vacant units (the condition of such an
apartment unit after cleaning is referred to herein as a “Rent Ready
Condition”); provided if Seller fails to return any such vacated unit to a Rent
Ready Condition prior to Closing, or a unit is vacated within five (5) business
days of Closing and Seller fails to return such unit to rent ready condition by
Closing, then at Closing Seller shall credit Purchaser an amount equal to the
reasonably estimated cost to return such unit to a Rent Ready Condition, up to,
but not to exceed, $500.

 

13.2                        Actions Prohibited.  Seller shall not, without the
prior written approval of Purchaser:

 

(I)                                     MAKE ANY MATERIAL STRUCTURAL ALTERATIONS
OR ADDITIONS TO THE PROPERTY EXCEPT AS (A) IN THE ORDINARY COURSE OF OPERATING
THE PROPERTY, (B) REQUIRED FOR MAINTENANCE AND REPAIR, (C) REQUIRED BY ANY OF
THE LEASES OR THE SERVICE CONTRACTS OR (D) REQUIRED BY THIS AGREEMENT;

 

(II)                                  SELL, TRANSFER, ENCUMBER OR CHANGE THE
STATUS OF TITLE OF ALL OR ANY PORTION OF THE PROPERTY;

 

(III)                               CHANGE OR ATTEMPT TO CHANGE, DIRECTLY OR
INDIRECTLY, THE CURRENT ZONING OF THE REAL PROPERTY IN A MANNER MATERIALLY
ADVERSE TO IT; OR

 

(IV)                              CANCEL, AMEND OR MODIFY, IN A MANNER
MATERIALLY ADVERSE TO THE PROPERTY, ANY LICENSE OR PERMIT HELD BY SELLER WITH
RESPECT TO THE PROPERTY OR ANY PART THEREOF WHICH WOULD BE BINDING UPON
PURCHASER AFTER THE CLOSING.

 

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13.3                        Modification of Existing Leases and Service
Contracts.  Prior to the expiration of the Investigation Period, Seller may
cancel, amend and modify any of the Leases and any of the Contracts, provided
such action is in the ordinary course of business and notice is given to
Purchaser within five (5) business days after such action and in any event at
least two (2) business days prior to the expiration of the Investigation
Period.  After the expiration of the Investigation Period, Seller may not
cancel, amend, or modify any material Service Contracts (except those Purchaser
has elected to terminate under Section 5.6) or Leases, in a manner binding upon
Purchaser after the Closing, unless such action is in the ordinary course of
business, the Service Contract is cancelable on thirty (30) days or less notice
without penalty or premium, and unless Seller obtains prior written consent
thereof from Purchaser, which consent shall not be unreasonably withheld.

 

13.4                        New Leases and Contracts.  Prior to the expiration
of the Investigation Period (and up and until the Closing Date with respect to
new leases), Seller may enter into any new lease or service contract affecting
the Property, or any part thereof, provided such new lease is in conformity with
Seller’s Lease Guidelines or otherwise consented to in writing by Purchaser and,
with respect to service contracts, notice is given to Purchaser within five
(5) business days after such action and in any event at least two (2) business
days prior to the expiration of the Investigation Period and the service
contract is cancelable on thirty (30) days notice, or less without penalty or
premium.  After the expiration of the Investigation Period, Seller may not enter
into any service contract without Purchaser’s consent, which consent will not be
unreasonably withheld or delayed.  Notwithstanding the preceding sentence, after
the expiration of the Investigation Period, Seller may enter into any new
service contracts without Purchaser’s consent if doing so is in the ordinary
course of operating the Property and the contract (i) will not be binding on
Purchaser after Closing unless Purchaser elects prior to Closing to assume such
service contract or (ii) is cancelable on thirty (30) days or less notice
without penalty or premium.

 

If Seller shall request Purchaser’s approval to any of the foregoing matters,
Purchaser shall have five (5) days from its receipt of such request to give
Seller notice of its approval or disapproval of such matter.  If Purchaser does
not give such notice, such matter shall be deemed approved by Purchaser.

 

13.5                        Right to Cure.  If any title defect or other  matter
which would entitle Purchaser to terminate this Agreement shall first arise
after Purchaser notifies Seller of its Title Objections pursuant to Section 5.3
and prior to the Closing or if Seller shall have breached any representation or
warranty hereunder, Seller may elect, by written notice to Purchaser, to cure
such title defect or other matter by causing it to be removed, insured over or
bonded to cure such breach and Seller may adjourn the Closing for up to thirty
(30) days to do so.  Nothing contained in this Section 13.5 shall require Seller
to cure any such title defect or other matter or to incur any liability or
expense to do so.

 

ARTICLE XIV

 

OCCUPANCY CONTINGENCY

 

Anything in this Agreement to the contrary notwithstanding, it shall be
condition

 

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precedent to Purchaser’s obligation to close that as of the Closing Date, Actual
Occupancy (as defined below) shall be at least 85.0% (the “Occupancy
Condition”).  If as of the Closing Date the above Occupancy Condition has not
been achieved or exceeded, then Seller may, at its option by written notice to
Purchaser, elect to extend the Closing Date by thirty (30) days in order to
provide more time to achieve or exceed the Occupancy Condition. If Seller does
not elect to extend the Closing Date, or if Seller extends the Closing Date but
the Occupancy Condition still has not been achieved or exceeded as of the
extended Closing Date, then Purchaser may, at its option, elect either to
(i) terminate this Agreement, whereupon the Deposit will be returned to
Purchaser, and neither party shall have any further right or obligation
hereunder other than as set forth herein with respect to rights or obligations
which survive termination, or (ii) waive the Occupancy Condition and close.  If
the Occupancy Condition has not been achieved or exceeded and Purchaser does not
advise Seller in writing of its election to terminate this Agreement on or
before the scheduled Closing Date, then Purchaser shall be deemed to have
elected to waive the Occupancy Condition and close, whereupon the Closing shall
occur on the scheduled Closing Date.

 

In determining whether the Occupancy Condition has been “exceeded” or
“achieved,”  the specific percentage occupancy numbers shall be rounded up to
the nearest whole number if the fractional portion of said number is equal to or
greater than .5 but shall not be rounded down to the nearest whole number if the
fractional portion of said number is less than .5.  By way of illustration,
84.5% would be rounded up to 85.0%, but 84.4% would not be rounded down to
84.0%.

 

As used herein, the term “Actual Occupancy” shall mean, with respect to all
apartment units on the Property (except for the model unit), the percentage of
said units for which a leasehold tenancy exists pursuant to a lease signed by
both landlord and tenant (regardless of whether the tenant has taken physical
occupancy or commenced payment of rent) but shall be reduced based on move-out
notices received by Seller as of the Closing Date.

 

ARTICLE XV

 

NOTICES

 

All notices, demands or other communications given hereunder shall be in writing
and shall be deemed to have been duly delivered (i) upon the delivery (or
refusal to accept delivery) by messenger or overnight express delivery service
(or, if such date is not on a business day, on the business day next following
such date), or (ii) on the third (3rd) business day next following the date of
its mailing by certified mail, postage prepaid, at a post office maintained by
the United States Postal Service, or (iii) upon the receipt by facsimile
transmission as evidenced by a receipt transmission report (followed by next day
delivery by one of the other means identified in (i)-(ii)), addressed as
follows:

 

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If to Purchaser, to:

 

Harvard Property Trust, LLC
Attn: Mark T. Alfieri, Senior Vice President
15601 Dallas Parkway, #600
Addison, Texas 75001
Facsimile:  (214) 655-1610

 

with a copy to:

 

Robert L. Abbott, P.C.
Attn:  Robert L. Abbott
2828 Routh Street, Suite 500
Dallas, Texas 75201
Facsimile:  (214) 848-9823

 

If to Seller, to:

 

Verandah Owner Limited Partnership
c/o BH Equities, L.L.C.
400 Locust Street, Suite 790
Des Moines, Iowa 50309
Attention: Nicholas Roby, Esq.
Facsimile: (515) 244-2742

 

with a copy to:

 

c/o BlackRock Realty Advisors, Inc.
300 Campus Drive, 3rd Floor,
Florham Park, New Jersey 07932
Attention: Mario Mirabelli, Vice President
Facsimile: (646) 521-4990

 

and

 

Diamond Verandah LLC
c/o BlackRock Realty Advisors, Inc.
300 Campus Drive, 3rd Floor,
Florham Park, New Jersey 07932
Attention: Jeremy Litt, Esq.
Facsimile: (646) 521-4998

 

and

 

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Goodwin Procter LLP
Exchange Place
Boston, Massachusetts  02109
Attention:  Lawrence R. Cahill, Esq.
Facsimile:  (617) 227-8591

 

If to Escrow Agent, to:

 

Partners Title Company
712 Main Street, Suite 2000E
Houston, Texas 77002-3218
Attention:  Reno Hartfiel, Executive VP / General Counsel
Facsimile: (713) 238-9199

 

Either party may, by notice given as aforesaid, change the address or addresses,
or designate an additional address or additional addresses, for its notices,
provided, however, that no notice of a change of address shall be effective
until actual receipt of such notice.

 

ARTICLE XVI

 

TRANSFER OF POSSESSION

 

16.1                        Transfer of Possession.  Possession of the Property
shall be transferred to Purchaser at the time of Closing subject to the
Permitted Exceptions.

 

16.2                        Delivery of Documents at Closing.  At the time of
Closing, Seller shall deliver to Purchaser originals or copies of any additional
documents, instruments or records in the possession of Seller or its agents
which are necessary for the ownership and operation of the Property.

 

ARTICLE XVII

 

GENERAL PROVISIONS

 

17.1                        Captions.  Captions in this Agreement are inserted
for convenience of reference only and do not define, describe or limit the scope
or the intent of this Agreement or any of the terms hereof.

 

17.2                        Exhibits.  All exhibits referred to herein and
attached hereto are a part hereof.

 

17.3                        Entire Agreement.  This Agreement contains the
entire agreement between the parties relating to the transaction contemplated
hereby and all prior or contemporaneous agreements, understandings,
representations and statements, oral or written, are merged herein.

 

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17.4                        Modification.  No modification, waiver, amendment,
discharge or change of this Agreement shall be valid unless the same is in
writing and signed by the party against which the enforcement of such
modification, waiver, amendment, discharge or change is or may be sought.

 

17.5                        Attorneys’ Fees.  Should any party hereto employ an
attorney for the purpose of enforcing or construing this Agreement, or any
judgment based on this Agreement, in any legal proceeding whatsoever, including
insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the
prevailing party shall be entitled to receive from the other party or parties
thereto reimbursement for all reasonable attorneys’ fees and all costs, whether
incurred at the trial or appellate level, including but not limited to service
of process, filing fees, court and court reporter costs, investigative costs,
expert witness fees and the cost of any bonds, whether taxable or not, and such
reimbursement shall be included in any judgment, decree or final order issued in
that proceeding.  The “prevailing party” means the party in whose favor a
judgment, decree, or final order is rendered.

 

17.6                        Governing Law.  This Agreement shall be construed
and enforced in accordance with the laws of the State in which the Property is
located.

 

17.7                        Time of Essence.  Time is of the essence to this
Agreement and to all dates and time periods set forth herein.

 

17.8                        Survival of Warranties.  Only those warranties and
representations contained in Sections 11.1 and 11.2 and the provisions of
Section 11.3 shall survive the Closing, the delivery of the Deed and the payment
of the Purchase Price, provided that (i) such representations and warranties
(but not such provisions) shall cease and terminate nine (9) months after the
date of Closing, except in respect of any representation or warranty as to which
Purchaser or Seller, as the case may be, shall have commenced, on or before such
nine (9) month anniversary, a legal proceeding based on the breach thereof as of
the date of Closing, and then only for so long as such proceeding shall continue
and limited to the breach therein claimed, (ii) Seller shall have no liability
to Purchaser with respect thereto unless and until the damages suffered by
Purchaser as a result thereof shall equal or exceed $25,000 in the aggregate,
and (iii) the maximum total liability for which Seller shall be responsible with
respect to all representations and warranties shall not exceed the Maximum
Liability Cap in the aggregate.  Unless otherwise expressly herein stated to
survive, all other representations, covenants, indemnities, conditions and
agreements contained herein shall merge into and be superseded by the various
documents executed and delivered at Closing and shall not survive the Closing. 
Seller shall have no liability to Purchaser after Closing for any matter
disclosed by Seller pursuant to the terms of this Agreement or disclosed to
Purchaser prior to Closing.

 

17.9                        Assignment by Purchaser.  Purchaser may not assign
its rights under this Agreement.  Notwithstanding the foregoing, Purchaser may
upon written notice to Seller assign its rights under this Agreement to (a) any
affiliate of Purchaser, or (b) any entity in which Purchaser, or the principals
thereof, have control as defined herein, provided that  in each
instance’ Purchaser remains liable for Purchasers obligations hereunder.  For
purposes of this Section 16.9, an “affiliate” means (i) any entity that
controls, is controlled by, or is under common control, with the entity in
question, or (ii) any investment program or any of its affiliates, sponsored by
Behringer Harvard Holdings, LLC, the general partner of Purchaser.  The

 

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term “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities or otherwise

 

17.10                 Severability.  If any term, covenant, condition, provision
or agreement herein contained is held to be invalid, void or otherwise
unenforceable by any court of competent jurisdiction, the fact that such term,
covenant, condition, provision or agreement is invalid, void or otherwise
unenforceable shall in no way affect the validity or enforceability of any other
term, covenant, condition, provision or agreement herein contained.

 

17.11                 Successors and Assigns.  All terms of this Agreement shall
be binding upon, inure to the benefit of and be enforceable by, the parties
hereto and their respective legal representatives, successors and assigns
(subject to Section 16.9).

 

17.12                 Interpretation.  Seller and Purchaser acknowledge each to
the other that both they and their counsel have reviewed and revised this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments or exhibits hereto.

 

17.13                 Counterparts.  This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed an original;
such counterparts shall together constitute but one agreement.

 

17.14                 Recordation.  This Agreement may not be recorded and any
attempt to do so shall be of no effect whatsoever.

 

17.15                 Limitation on Liability.  In any action brought to enforce
the obligations of Seller under this Agreement or any other document delivered
in connection herewith, the judgment or decree shall be subject to the
provisions of Section 16.8 and shall, otherwise in any event, be enforceable
against Seller only up to an amount not to exceed 2.5% of the Purchase Price
(“Maximum Liability Cap”).  In connection with this Agreement, Advisor is acting
as the investment adviser to Seller and shall not have any individual liability
hereunder. No shareholder, officer, employee or agent of or consultant to
Advisor or of or to Seller shall be held to any personal liability hereunder,
and no resort shall be had to their property or assets, or the property or
assets of Advisor for the satisfaction of any claims hereunder or in connection
with the affairs of Advisor.  Furthermore, Seller’s liability under this
Agreement is explicitly limited to Seller’s interest in the Property, including
any proceeds thereof.  Purchaser shall have no recourse against any other
property or assets of Seller, if any, any assets of the Advisor, or to any of
the past, present or future, direct or indirect, shareholders, partners,
members, managers, principals, directors, officers, agents, incorporators,
affiliates or representatives of Seller or the Advisor (collectively, “Seller
Parties”) or of any of the assets or property of any of the Seller Parties for
the payment or collection of any amount, judgment, judicial process, arbitral
award, fee or cost or for any other obligation or claim arising out of or based
upon this Agreement and requiring the payment of money by Seller.  Except as
otherwise expressly set forth in this Agreement, neither Seller nor any Seller
Party shall be subject to levy, lien, execution, attachment or other enforcement
procedure for the satisfaction of any of Purchaser’s rights or remedies under or
with respect to this Agreement, at law, in equity or otherwise.  Purchaser shall

 

33

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not seek enforcement of any judgment, award, right or remedy against any
property or asset of Seller or any Seller Parties other than Seller’s interest
in the Property or any proceeds thereof.  The provisions of this Section shall
survive the termination of this Agreement.

 

17.16                 Possession of Advisor.  As used in this Agreement, the
“possession” or “receipt” of a document, notice or similar writing by Seller
shall be deemed to be only the possession, receipt or notice of such document by
Advisor.

 

17.17                 Business Day.  As used in this Agreement, “business day”
shall be deemed to be any day other than a day on which banks in the state of
Texas shall be permitted or required to close.

 

17.18                 Waiver of Jury Trial.  PURCHASER AND SELLER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ANY ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY
MANNER WITH THIS AGREEMENT OR THE PROPERTY (INCLUDING WITHOUT LIMITATION, ANY
ACTION TO RESCIND OR CANCEL THIS AGREEMENT OR ANY CLAIMS OR DEFENSES ASSERTING
THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE).
THIS WAIVER IS A MATERIAL INDUCEMENT FOR SELLER TO ENTER INTO AND ACCEPT THIS
AGREEMENT AND THE DOCUMENTS TO BE DELIVERED BY PURCHASER AT CLOSING, AND SHALL
SURVIVE THE CLOSING OR TERMINATION OF THIS AGREEMENT.  Each party hereby
authorizes and empowers the other to file this Section 16.18 and this Agreement
with the clerk or judge of any court of competent jurisdiction as a written
consent to waiver of jury trial.

 

ARTICLE XVIII

 

ESCROW AGENT DUTIES AND DISPUTES

 

18.1                        Other Duties of Escrow Agent.  Escrow Agent shall
not be bound in any way by any other agreement or contract between Seller and
Purchaser, whether or not Escrow Agent has knowledge thereof.  Escrow Agent’s
only duties and responsibilities with respect to the Deposit shall be to hold
the Deposit and other documents delivered to it as agent and to dispose of the
Deposit and such documents in accordance with the terms of this Agreement. 
Without limiting the generality of the foregoing, Escrow Agent shall have no
responsibility to protect the Deposit and shall not be responsible for any
failure to demand, collect or enforce any obligation with respect to the Deposit
or for any diminution in value of the Deposit from any cause, other than Escrow
Agent’s gross negligence or willful misconduct.  In the event of any dispute
hereunder, Escrow Agent may, at the expense of Seller and Purchaser, consult
with counsel and accountants in connection with its duties under this
Agreement.  Escrow Agent shall not be liable to the parties hereto for any act
taken, suffered or permitted by it in good faith in accordance with the advice
of counsel and accountants.  Escrow Agent shall not be obligated to take any
action hereunder that may, in its reasonable judgment, result in any liability
to it unless Escrow Agent

 

34

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shall have been furnished with reasonable indemnity satisfactory in amount, form
and substance to Escrow Agent.

 

18.2                        Disputes.  Escrow Agent is acting as a stakeholder
only with respect to the Deposit.  If there is any dispute as to whether Escrow
Agent is obligated to deliver the Deposit or as to whom the Deposit is to be
delivered, Escrow Agent shall not make any delivery, but shall hold the Deposit
until receipt by Escrow Agent of an authorization in writing, signed by all the
parties having an interest in the dispute, directing the disposition of the
Deposit, or, in the absence of authorization, Escrow Agent shall hold the
Deposit until the final determination of the rights of the parties in an
appropriate proceeding.  Escrow Agent shall have no responsibility to determine
the authenticity or validity of any notice, instruction, instrument, document or
other item delivered to it, and it shall be fully protected in acting in
accordance with any written notice, direction or instruction given to it under
this Agreement and believed by it to be authentic.  If written authorization is
not given, or proceedings for a determination are not begun, within thirty (30)
days after the date scheduled for the closing of title and diligently continued,
Escrow Agent may, but is not required to, bring an appropriate action or
proceeding for leave to deposit the Deposit with a court of the State of Texas
pending a determination.  Escrow Agent shall be reimbursed for all costs and
expenses of any action or proceeding, including, without limitation, attorneys’
fees and disbursements incurred in its capacity as Escrow Agent, by the party
determined not to be entitled to the Deposit.  Upon making delivery of the
Deposit in the manner provided in this Agreement, Escrow Agent shall have no
further liability hereunder.  In no event shall Escrow Agent be under any duty
to institute, defend or participate in any proceeding that may arise between
Seller and Purchaser in connection with the Deposit.

 

18.3                        Reports.  Escrow Agent shall be responsible for the
timely filing of any reports or returns required pursuant to the provisions of
Section 6045(e) of the Internal Revenue Code of 1986 (and any similar reports or
returns required under any state or local laws) in connection with the closing
of the transaction contemplated by this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

35

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first set
forth above.

 

 

SELLER:

 

 

 

VERANDAH OWNER LIMITED PARTNERSHIP,

 

a Delaware limited partnership

 

 

 

By:

Houston Verandah Investor Limited Partnership, a Delaware limited partnership,
its general partner

 

 

 

 

 

By:

BH Verandah, L.L.C., an Iowa limited liability company, its general partner

 

 

 

 

 

 

 

By:

BH Equities L.L.C., an Iowa limited liability company, its managing member

 

 

 

 

 

 

 

 

 

By:

/s/ Harry Bookey

 

 

 

 

 

Name: Harry Bookey

 

 

 

 

 

Title: Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

PURCHASER:

 

 

 

HARVARD PROPERTY TRUST, LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

By:

/s/ Mark T. Alfieri

 

 

 

Mark T. Alfieri, Senior Vice President

 

36

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CONSENT AND AGREEMENT OF ESCROW AGENT

 

The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be escrow agent under said Agreement, and (iii) be bound by said
Agreement in the performance of its duties as escrow agent.

 

 

PARTNERS TITLE COMPANY

 

 

 

 

 

By:

/s/ Reno Hartfiel

 

 

Name: Reno Hartfiel

 

 

Title:   Executive Vice President & General Counsel

 

1

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EXHIBIT A

 

Description of Land

 

Being a tract or parcel containing 5.313 acres (231,427 square feet) of land
situated in the James D. Owen Survey, Abstract Number 612; being out of and a
part of Unrestricted Block 7, of MEYER PARK, SECTION 2, a subdivision plat of
record in Volume 142, Page 30, Harris County Map Records; and being out of and a
part of that certain tract of land (Tract One) conveyed to Aramco Services
Company as described in deed recorded under Harris County Clerk’s File
(H.C.C.F.) Number H104446, Harris County, Texas; and being that certain called
5.313 acre tract conveyed to Verandah IH-610, L.P. as described in deed recorded
under H.C.C.F. number W636306; and said 5.313 acre tract being more particularly
described by metes and bounds as follows (bearings are oriented to said record
plat):

 

BEGINNING at 1-inch iron rod found in the north right-of-way (R.O.W.) line of
Braeswood Boulevard (100 feet wide) and marking the most southerly southwest
corner of the aforesaid Block 7 and the herein described tract;

 

THENCE, North 06°18’24” West, along a southwest line of said Block 7, a distance
of 150.00 feet to an interior corner of said Block and the herein described
tract, from which a found 1-inch iron rod bears South 60°43’ West, 0.26 feet;

 

THENCE, South 71°35’50” West, along a southwest line of said Block 7, a distance
of 150.00 feet to the curved east R.O.W. line of Interstate Highway 610 (West
Loop South) (Width Varies) for the most westerly southwest corner of said Block
7 and the herein described tract and for a point of tangency of a non-tangent
curve to the right, from which a found 1-inch iron rod bears North 66°35’ West,
0.36 feet;

 

THENCE, Northerly, an arc distance of 288.32 feet along said east R.O.W. line
and the west line of said Block 7 and along said curve to the right, having a
central angle of 01°26’45”, a radius of 11,425.80 feet and a chord which bears
North 05°14’26” West, 288.31 feet to a 5/8-inch iron rod with plastic cap
stamped “Terra Surveying” set marking the northwest corner of the herein
described tract;

 

THENCE, departing said east R.O.W. line and over and across the aforesaid Aramco
Services Company tract, the following courses and distances:

 

North 89°49’01” East, a distance of 86.98 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

South 45°41’49” East, a distance of 14.27 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 89°49’01” East, a distance of 34.78 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 44°49’01” East, a distance of 14.14 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

1

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North 89°49’01” East, a distance of 215.65 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 44°49’01” East, a distance of 52.57 feet to an “X” set in concrete for an
interior corner of the herein described tract;

 

North 89°49’01” East, a distance of 396.89 feet to “X” set in concrete set in
the curved west R.O.W. line of Meyer Park Drive (60 feet wide) and the east line
of the aforesaid Block 7 and marking a point of curvature of a non-tangent curve
to the left and the northeast corner of the herein described tract;

 

THENCE, Southerly, an arc distance of 170.01 feet along said west R.O.W. line
and the east line of said Block 7 and along said curve to the left, having a
central angle of 10°49’14”, a radius of 900.22 feet and a chord which bears
South 16°02’49” East, 169.76 feet to the most northerly end of a cutback-line
for the most easterly southeast corner of said Block 7 and the herein described
tract, from which a found 5/8-inch iron rod bears South 05°53’ East, 0.17 feet;

 

THENCE, South 23°32’34” West, along said cutback-line, a distance of 14.16 feet
to the aforesaid north R.O.W. line of Braeswood Boulevard for the most southerly
southeast corner of said Block 7 and the herein described tract, from which a
found 5/8-inch iron rod bears South 16°31’ East, 0.65 feet;

 

THENCE, South 68°32’34” West, along the common line of said north R.O.W. line
and the south line of said Block 7, a distance of 435.95 feet to a point of
curvature of a tangent curve to the right, from which a found 5/8-inch iron rod
bears South 19°40’ West, 0.22 feet;

 

THENCE, Southwesterly, an arc distance of 107.06 feet continuing along said
common line and said curve to the right, having a central angle of 01°04’14”, a
radius of 5,730.00 feet and a chord which bears South 69°04’41” West, 107.06
feet to a point of reverse curvature for a tangent curve to the left, from which
a found 5/8-inch iron rod bears South 62°55’ West, 0.20 feet;

 

THENCE, Southwesterly, an arc distance of 107.06 feet continuing along said
common line and said curve to the left, having a central angle, of 01°04’14”, a
radius of 5,730.00 feet and a chord which bears South 69°04’41” West, 107.06
feet to a point of tangency, from which a found 5/8-inch iron rod bears South
09°03’ East, 0.55 feet;

 

THENCE, South 68°32’34” West, continuing along said common line, a distance of
45.05 feet to the POINT OF BEGINNING and containing 5.313 acres (231,427 square
feet) of land.  This description is based on the Land Title Survey and plat made
by Terra Surveying Company, Inc., dated July 1, 2002, latest revision dated
April 27, 2005.  TSC Project Number 0038-0101-S.

 

2

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EXHIBIT B

 

Rent Roll

 

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EXHIBIT C

 

ASSIGNMENT OF TENANT LEASES AND ASSUMPTION AGREEMENT

(The Verandah at Meyerland Apartments, Houston, Texas)

 

THIS ASSIGNMENT OF TENANT LEASES AND ASSUMPTION AGREEMENT is made as of the
           day of               , 2009, by and between VERANDAH OWNER LIMITED
PARTNERSHIP, a Delaware limited partnership (“Assignor”), and
                                                      , a                   
limited partnership (“Assignee”).

 

W I T N E S S E T H:

 

For good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee hereby agree as follows:

 

1.                                       Assignor hereby sells, transfers,
assigns and conveys to Assignee all right, title and interest of Assignor in and
to all leases, rental agreements, licenses, and other similar arrangements
permitting occupancy or use by another of any apartment unit in the Improvements
or any other space or area on the Land or in the Improvements, including,
without limitation, each of the leases described on the rent roll attached
hereto as Exhibit B-1, which Assignor represents that, based on information
provided by Assignor’s property manager and to Assignor’s knowledge (as defined
in that certain Sale, Purchase and Escrow Agreement dated
                      , 2009 (the “Sale Agreement”), by and between Assignor, as
Seller, and Harvard Property Trust, LLC, as Purchaser, whose rights thereunder
have been assigned to Assignee), that certain Sale, Purchase and Escrow
Agreement among Assignor, Assignee and Partners Title Company) , is true,
complete and correct, along with the leases, agreements and/or licenses
identified in Exhibit B-2 attached hereto (collectively, the “Leases”), along
with Assignee’s right, title and interest in and to all guaranties of Leases,
all rents, revenues, income, profits and receipts due under Leases or otherwise
receivable by the owner of the Land and Improvements for use or occupancy of any
of the Land or Improvements, and all security and other deposits and advance
payments under Leases (subject to proration and/or retention by Assignor as
provided in the Purchase Agreement) to the extent assignable.  As used herein,
the term “Land” shall mean the land situated in Harris County, Texas, more
particularly described in Exhibit A attached hereto (the “Land”), and the term
“Improvements” shall mean the all structures, fixtures, buildings, and
improvements situated on the Land.

 

2.                                       This Assignment of Tenant Leases and
Assumption Agreement shall be construed and enforced in accordance with the laws
of the State of Texas.

 

3.                                       Consistent with the Purchase Agreement,
which is hereby incorporated by reference as if herein set out in full and
except as set forth herein, the Leases conveyed hereunder are conveyed by
Assignor and accepted by Assignee WITHOUT ANY REPRESENTATION OR WARRANTIES OF
WHATSOEVER NATURE, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR
IN THE PURCHASE AGREEMENT.

 

4.                                       Assignee hereby accepts the assignment
of the Leases and agrees to assume and discharge, in accordance with the terms
thereof, all of the obligations thereunder from and after the date hereof.

 

5.                                       Assignee agrees to indemnify and hold
harmless Assignor from any cost, liability,

 

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

 

damage or expense (including attorneys’ fees) arising out of or relating to
Assignee’s failure to perform any of the foregoing obligations accruing on or
after the date hereof.

 

6.                                       Assignor agrees to indemnify and hold
harmless Assignee from any cost, liability, damage or expense (including
attorneys’ fees) arising out of or relating to Assignor’s failure to perform any
of the obligations of Assignor under the Leases, to the extent accruing prior to
the date hereof.

 

7.                                       This Assignment and Assumption may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

 

[Signature pages immediately follow.]

 

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

 

IN WITNESS WHEREOF, the parties hereto have executed this Assignment of Tenant
Leases and Assumption Agreement as of the date first above written.

 

 

 

ASSIGNOR:

 

 

 

VERANDAH OWNER LIMITED PARTNERSHIP, a Delaware limited partnership

 

 

 

By:

Houston Verandah Investor Limited Partnership, a Delaware limited partnership,
its general partner

 

 

 

 

 

By:

BH Verandah, L.L.C., an Iowa limited liability company, its general partner

 

 

 

 

 

 

 

By:

BH Equities L.L.C., an Iowa limited liability company, its managing member

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name: Harry Bookey

 

 

Title: Manager

 

 

THE STATE OF

 

§

 

 

§

COUNTY OF

 

§

 

This instrument was acknowledged before me on this            day
of                                 , 2009, by Harry Bookey, the Manager of BH
Equities L.L.C., an Iowa limited liability company, the managing member of BH
Verandah, L.L.C., an Iowa limited liability company, the general partner of
Houston Verandah Investor Limited Partnership, a Delaware limited partnership,
the general partner of Verandah Owner Limited Partnership, a Delaware limited
partnership, on behalf of said limited liability company and limited
partnership.

 

 

 

 

 

NOTARY PUBLIC in and for the

 

State of

 

My Commission Expires:

Printed Name of Notary:

 

 

 

 

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

 

IN WITNESS WHEREOF, the parties hereto have executed this Assignment of Tenant
Leases and Assumption Agreement as of the date first above written.

 

 

ASSIGNEE:

 

 

 

[PURCHASER ENTITY]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

THE STATE OF

 

§

 

§

COUNTY OF

 

§

 

This instrument was acknowledged before me on this            day
of                                , 2009, by
                                                        ,
                                                   of
                                        
                                          , on behalf of said limited
partnership.

 

 

 

 

 

NOTARY PUBLIC in and for the

 

State of

 

My Commission Expires:

Printed Name of Notary:

 

 

 

 

 

Exhibit A

Leases

 

Exhibit B

Real Property

 

 

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EXHIBIT D

 

Form of Blanket Conveyance, Bill of Sale and Assignment

(The Verandah at Meyerland Apartments, Houston, Texas)

 

THIS BLANKET CONVEYANCE, BILL OF SALE AND ASSIGNMENT is made as of the
           day of                         , 2009, by and between VERANDAH OWNER
LIMITED PARTNERSHIP, a Delaware limited partnership (“Assignor”), and
                                                                      , a
                                             (“Assignee”).

 

W I T N E S S E T H:

 

For good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged Assignor and Assignee hereby agree as follows:

 

1.                                       Assignor hereby sells, transfers,
assigns and conveys to Assignee the following:

 

a.                                       All right, title and interest of
Assignor in and to all equipment, fixtures, appliances, inventory, and other
personal property of whatever kind or character owned by Assignor and attached
to or installed or located on or in the Land or the Improvements (defined
below), including, without limitation, furniture, furnishings, drapes and floor
coverings, office equipment and supplies, heating, lighting, refrigeration,
plumbing, ventilating, incinerating, cooking, laundry, communication,
electrical, dishwashing, and air conditioning equipment, disposals, window
screens, storm windows, recreational equipment, pool equipment, patio furniture,
sprinklers, hoses, tools and lawn equipment, and specifically including, without
limitation, the items listed on Exhibit B attached hereto to the extent attached
to or installed or located on or in the Land or the Improvements (defined
below)  (the “Personal Property”).  As used herein, the term “Land” shall mean
the land situated in Harris County, Texas, more particularly described in
Exhibit A attached hereto (the “Land”), and the term “Improvements” shall mean
the all structures, fixtures, buildings, and improvements situated on the Land.

 

b.                                      All right, title, and interest of
Assignor in and to those contracts and agreements described on Exhibit C
attached hereto (collectively, the “Service Contracts”).

 

c.                                       All right, title and interest of
Assignor in and to (i) all transferable permits, licenses, approvals, utility
rights, development rights and similar rights related to the Property, if any,
whether granted by governmental authorities or private persons, (ii) all
trademarks, trade names, or symbols under which the Land or the Improvements (or
any part thereof) is operated including, without limitation, the name of “The
Verandah at Meyerland” and the Internet domain name
“                                              ,” (iii) all telephone numbers
serving the Apartment Development (as defined in the Purchase Agreement), and
(iv) all of the right, title, and interest in and to all site plans, surveys,
soil and substrata studies, architectural drawings, plans and specifications,
engineering plans and studies, floor plans, landscape plans and other plans or
studies of any kind that relate to the Land, the Improvements or the Personal
Property in the possession of or under the control of Assignor (collectively,
the “Intangibles”), provided that any cost to assign or transfer any of the
Intangibles shall be paid by Assignee.

 

2.                                       This Blanket Conveyance, Bill of Sale
and Assignment is given pursuant to that certain Sale, Purchase and Escrow
Agreement dated                                by and between Assignor and
Assignee (the “Purchase Agreement”), providing for, among other things, the
conveyance of the Personal Property,

 

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the Service Contracts, and the Intangibles.

 

3.                                       Consistent with the Purchase Agreement,
which is hereby incorporated by reference, the property conveyed hereunder is
conveyed by Assignor and accepted by Assignee AS IS, WHERE IS, AND WITHOUT ANY
WARRANTIES OF WHATSOEVER NATURE, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET
FORTH IN THE PURCHASE AGREEMENT, IT BEING THE INTENTION OF ASSIGNOR AND ASSIGNEE
EXPRESSLY TO NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR
PURPOSE, WARRANTIES CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY
DESCRIPTION OF THE PROPERTY CONVEYED HEREUNDER, OR BY ANY SAMPLE OR MODEL
THEREOF, AND ALL OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE
STATE OF TEXAS UNIFORM COMMERCIAL CODE.

 

4.                                       Assignee hereby accepts the assignment
of the Personal Property, the Service Contracts, and the Intangibles Personal
Property and agrees to assume and discharge, in accordance with the terms
thereof, all of the obligations thereunder accruing and applicable to the period
from and after the date hereof.

 

5.                                       Assignee agrees to indemnify and hold
harmless Assignor from any cost, liability, damage or expense (including
attorneys’ fees) arising out of or relating to Assignee’s failure to perform any
of the foregoing obligations arising from and accruing on or after the date
hereof.

 

6.                                       Assignor agrees to indemnify and hold
harmless Assignee from any cost, liability, damage or expense (including
attorneys’ fees) arising out of or relating to Assignor’s failure to perform any
of the obligations of Assignor under the Service Contracts or the Intangibles,
to the extent accruing prior to the date hereof.

 

7.                                       This Blanket Conveyance, Bill of Sale
and Assignment may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.

 

[Signature pages immediately follow.]

 

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

 

IN WITNESS WHEREOF, the parties hereto have executed this Blanket Conveyance,
Bill of Sale and Assignment as of the date first above written.

 

 

ASSIGNOR:

 

 

 

VERANDAH OWNER LIMITED PARTNERSHIP,
a Delaware limited partnership

 

 

 

By:

Houston Verandah Investor Limited Partnership, a Delaware limited partnership,
its general partner

 

 

 

 

 

By:

BH Verandah, L.L.C., an Iowa limited liability company, its general partner

 

 

 

 

 

 

 

By:

BH Equities L.L.C., an Iowa limited liability company, its managing member

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name: Harry Bookey

 

 

Title: Manager

 

 

 

ASSIGNEE:

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

EXHIBIT E

 

Intentionally Deleted

 

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

 

EXHIBIT F

 

Service Contracts

 

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

 

EXHIBIT G

 

Form of Notice to Tenants

 

 

, 20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Re:

 

 

 

 

 

 

Dear Tenant:

 

Please be advised that effective __________________, 20___,
____________________________ has sold the above-referenced property to
_________________________________. Your security deposit has been transferred to
such entity and such entity shall be responsible for holding the same in
accordance with the terms of your lease. Effective ___________, 20___, all
future rental payments should be sent to the following address:

 

 

 

 

 

 

 

 

 

 

 

 

 

Any questions regarding maintenance and management of the property should be
addressed to:

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Very truly yours,

 

 

 

VERANDAH OWNER LIMITED PARTNERSHIP, a Delaware limited partnership

 

 

 

By:

Houston Verandah Investor Limited Partnership, a Delaware limited partnership,
its general partner

 

 

 

 

 

By:

BH Verandah, L.L.C., an Iowa limited liability company, its general partner

 

 

 

 

 

 

 

By:

BH Equities L.L.C., an Iowa limited liability company, its managing member

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Name: Harry Bookey

 

 

 

 

 

Title: Manager

 

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

 

EXHIBIT H

 

FIRPTA Affidavit

Transferor’s Certification of Non-Foreign Status

 

To inform [PURCHASER ENTITY], a                                     
(“Transferee”), that withholding of tax under Section 1445 of the Internal
Revenue Code of 1986, as amended (the “Code”), will not be required upon the
transfer of certain real property to Transferee by Verandah Owner Limited
Partnership, a Delaware limited partnership (“Transferor”), the undersigned
hereby certifies the following on behalf of Transferor:

 

1.                                       Transferor is not a foreign
corporation, foreign partnership, foreign trust or foreign estate (as those
terms are defined in the Code and the Income Tax Regulations promulgated
thereunder);

 

2.                                       Seller is not a disregarded entity as
defined in §1.1445-2(b)(2)(iii);

 

3.                                       Transferor’s U.S. employer
identification number is                     ;and

 

4.                                       Transferor’s office address is c/o BH
Equities, L.L.C. 400 Locust Street, Suite 790, Des Moines, Iowa 50309, Attn:
Nicholas Roby, Esq.

 

Transferor understands that this Certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.

 

Under penalty of perjury I declare that I have examined this Certification and
to the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this document on behalf of
Transferor.

 

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

 

Dated:                             , 20

 

 

VERANDAH OWNER LIMITED PARTNERSHIP, a Delaware limited partnership

 

 

 

By:

Houston Verandah Investor Limited Partnership, a Delaware limited partnership,
its general partner

 

 

 

 

 

By:

BH Verandah, L.L.C., an Iowa limited liability company, its general partner

 

 

 

 

 

 

 

By:

BH Equities L.L.C., an Iowa limited liability company, its managing member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Name: Harry Bookey

 

 

 

 

 

Title: Manager

 

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

 

EXHIBIT I

 

Form of Special Warranty Deed

 

THE STATE OF TEXAS

 

§

 

 

§

KNOW ALL MEN BY THESE PRESENTS THAT:

COUNTY OF HARRIS

 

§

 

VERANDAH OWNER LIMITED PARTNERSHIP, a Delaware limited partnership (whether one
or more, “Grantor”), for and in consideration of the sum of TEN AND NO/100
DOLLARS ($10.00), and other good and valuable consideration paid by
                                  , a                                  (the
“Grantee”), the receipt and sufficiency of which are hereby acknowledged and
confessed, subject to the exceptions, liens, encumbrances, terms and provisions
hereinafter set forth and described, has GRANTED, BARGAINED, SOLD and CONVEYED,
and by these presents does hereby GRANT, BARGAIN, SELL and CONVEY, unto Grantee
all of that certain lot, tract or parcel of land situated in Harris County,
Texas, and being more particularly described in Exhibit “A” attached hereto and
incorporated herein by reference for all purposes.

 

TOGETHER WITH, all and singular, the rights, benefits, privileges, easements,
tenements, hereditaments, appurtenances and interests thereon or in anywise
appertaining thereto and with all improvements located thereon belonging to
Grantor (said land, rights, benefits, privileges, easements, tenements,
hereditaments, appurtenances, improvements and interests being hereinafter
referred to as the “Property”).

 

For the same consideration recited above, Grantor hereby BARGAINS, SELLS and
TRANSFERS, without warranty, express or implied, all interest, if any, of
Grantor in (i) strips or gores, if any, between the Property and abutting or
immediately adjacent properties, and (ii) any land lying in or under the bed of
any street, alley, road or right-of-way, opened or proposed, abutting or
immediately adjacent to the Property.

 

This conveyance is made subject and subordinate to the encumbrances and
exceptions (“Permitted Exceptions”) described in Exhibit “B” attached hereto and
incorporated herein by reference for all purposes, but only to the extent they
affect or relate to the Property.

 

ALL GRANTS, BARGAINS, SALES AND TRANSFERS ARE MADE “AS—IS, WITHOUT
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EXCEPT AS SET FORTH IN THE DEED
AND IN ARTICLE XI OF THAT CERTAIN SALE, PURCHASE AND ESCROW AGREEMENT DATED
                    , 2009 (THE “SALE AGREEMENT”), BY AND BETWEEN GRANTOR, AS
SELLER, AND HARVARD PROPERTY TRUST, LLC, AS PURCHASER, WHOSE RIGHTS THEREUNDER
HAVE BEEN ASSIGNED TO GRANTEE, WITHOUT WARRANTY OF HABITABILITY, SUITABILITY,
MERCHANTIBILITY FOR FITNESS FOR A PARTICULAR PURPOSE, WITH NO RELIANCE OF ANY
BUYER ON ANY REPRESENATION WITH RESPECT TO PROPERTY CONDITION EXCEPT AS
DESCRIBED ABOVE WITH RESPECT TO THE SALE AGREEMENT, AND WITH KNOWLEDGE THAT

 

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

 

ANY BUYER IS INSTEAD RELYING ON ITS OWN EXAMINATION OF THE PROPERTY.

 

At no time prior to January 1, 2015 shall all or any portion of the Property be
established as a condominium regime under the laws of the State of Texas unless
the then current owner of the Property (the “Owner”) (i) shall have given
written notice to Grantor and Verandah IH 610, L.P. of Owner’s intention to file
such condominium declaration and establish all or any portion of the Property as
a condominium regime and (ii) shall have, at least sixty (60) days prior to the
recordation of a condominium declaration covering the Property, recorded in the
Official Public Records of Real Property of Harris County, Texas an affidavit,
in the form attached hereto as Exhibit “C,” swearing that such notice was
properly given. If Owner fails to timely file the affidavit prior to recording
any such condominium declaration as provided herein, then such condominium
declaration shall be null and void ab initio. However, if the affidavit is
timely filed as provided herein, all subsequent purchasers may rely on the
affidavit as conclusive proof that the notice was properly given, and the
condominium declaration shall be fully effective and will not be void or
voidable for failure to have properly given such notice. The notice required
hereunder shall be delivered to Grantor and Verandah IH 610, L.P. by United
States Mail, as a certified item with postage prepaid and return receipt
requested, addressed as follows:

 

Verandah Owner Limited Partnership
c/o BlackRock Realty Advisors, Inc.
300 Campus Drive, 3rd Floor, Florham Park, New Jersey 07932
Attention: Jeremy Litt, Esq.

 

with a copy to

 

Goodwin Procter LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Lawrence R. Cahill, Esq.

 

and

 

Verandah IH 610, L.P.

c/o Verandah Development, Inc.

8588 Katy Freeway, Suite 230

Houston, Texas 77024

 

with a copy to

 

J. Robert Fisher

Winstead Sechrest & Minick P.C.

910 Travis Street, Suite 2400

Houston, Texas 77002

 

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

 

TO HAVE AND TO HOLD the Property, subject to the Permitted Exceptions as
aforesaid, unto Grantee, and Grantee’s successors and assigns, forever; and
Grantor does hereby bind Grantor, and Grantor’s successors and assigns, to
WARRANT and FOREVER DEFEND, all and singular, the Property, subject to the
Permitted Exceptions, unto Grantee, and Grantee’s successors and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof, by, through or under Grantor, but not otherwise.

 

Grantee, by its acceptance hereof, does hereby assume and agree to pay any and
all ad valorem taxes and special assessments pertaining to the Property for
calendar year 2009 and subsequent years, there having been a proper proration of
ad valorem taxes for the current calendar year between Grantor and Grantee.

 

[Remainder of page left intentionally blank]

 

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

 

EXECUTED as of the              day of                                   , 200

 

 

 

GRANTOR:

 

 

 

VERANDAH OWNER LIMITED PARTNERSHIP, a Delaware limited partnership

 

 

 

By:

Houston Verandah Investor Limited Partnership, a Delaware limited partnership,
its general partner

 

 

 

 

 

By:

BH Verandah, L.L.C., an Iowa limited liability company, its general partner

 

 

 

 

 

 

 

 

By:

BH Equities L.L.C., an Iowa limited liability company, its managing member

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Name: Harry Bookey

 

 

 

 

 

Title: Manager

 

 

THE STATE OF

 

 

§

 

 

 

§

COUNTY OF

 

 

§

 

This instrument was acknowledged before me on this            day of
                             , 2009, by Harry Bookey, the Manager of BH Equities
L.L.C., an Iowa limited liability company, the managing member of BH Verandah,
L.L.C., an Iowa limited liability company, the general partner of Houston
Verandah Investor Limited Partnership, a Delaware limited partnership, the
general partner of Verandah Owner Limited Partnership, a Delaware limited
partnership, on behalf of said limited liability company and limited
partnership.

 

 

 

 

 

NOTARY PUBLIC in and for the

 

State of

 

My Commission Expires:

Printed Name of Notary:

 

 

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

 

GRANTEE’S ADDRESS FOR TAX NOTICES:

 

 

 

 

 

 

 

 

 

When recorded, return to:

 

 

 

 

 

 

 

 

 

List of Exhibits:

 

 

 

 

 

Exhibit A

—

Property Description

Exhibit B

—

Permitted Exceptions

Exhibit C

—

Affidavit

 

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

 

EXHIBIT “A” TO SPECIAL WARRANTY DEED

 

PROPERTY DESCRIPTION

 

Being a tract or parcel containing 5.313 acres (231,427 square feet) of land
situated in the James D. Owen Survey, Abstract Number 612; being out of and a
part of Unrestricted Block 7, of MEYER PARK, SECTION 2, a subdivision plat of
record in Volume 142, Page 30, Harris County Map Records; and being out of and a
part of that certain tract of land (Tract One) conveyed to Aramco Services
Company as described in deed recorded under Harris County Clerk’s File
(H.C.C.F.) Number H104446, Harris County, Texas; and being that certain called
5.313 acre tract conveyed to Verandah IH-610, L.P. as described in deed recorded
under H.C.C.F. number W636306; and said 5.313 acre tract being more particularly
described by metes and bounds as follows (bearings are oriented to said record
plat):

 

BEGINNING at 1-inch iron rod found in the north right-of-way (R.O.W.) line of
Braeswood Boulevard (100 feet wide) and marking the most southerly southwest
corner of the aforesaid Block 7 and the herein described tract;

 

THENCE, North 06°18’24” West, along a southwest line of said Block 7, a distance
of 150.00 feet to an interior corner of said Block and the herein described
tract, from which a found 1-inch iron rod bears South 60°43’ West, 0.26 feet;

 

THENCE, South 71°35’50” West, along a southwest line of said Block 7, a distance
of 150.00 feet to the curved east R.O.W. line of Interstate Highway 610 (West
Loop South) (Width Varies) for the most westerly southwest corner of said Block
7 and the herein described tract and for a point of tangency of a non-tangent
curve to the right, from which a found 1-inch iron rod bears North 66°35’ West,
0.36 feet;

 

THENCE, Northerly, an arc distance of 288.32 feet along said east R.O.W. line
and the west line of said Block 7 and along said curve to the right, having a
central angle of 01°26’45”, a radius of 11,425.80 feet and a chord which bears
North 05°14’26” West, 288.31 feet to a 5/8-inch iron rod with plastic cap
stamped “Terra Surveying” set marking the northwest corner of the herein
described tract;

 

THENCE, departing said east R.O.W. line and over and across the aforesaid Aramco
Services Company tract, the following courses and distances:

 

North 89°49’01” East, a distance of 86.98 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

South 45°41’49” East, a distance of 14.27 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 89°49’01” East, a distance of 34.78 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

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

 

North 44°49’01” East, a distance of 14.14 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 89°49’01” East, a distance of 215.65 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 44°49’01” East, a distance of 52.57 feet to an “X” set in concrete for an
interior corner of the herein described tract;

 

North 89°49’01” East, a distance of 396.89 feet to “X” set in concrete set in
the curved west R.O.W. line of Meyer Park Drive (60 feet wide) and the east line
of the aforesaid Block 7 and marking a point of curvature of a non-tangent curve
to the left and the northeast corner of the herein described tract;

 

THENCE, Southerly, an arc distance of 170.01 feet along said west R.O.W. line
and the east line of said Block 7 and along said curve to the left, having a
central angle of 10°49’14”, a radius of 900.22 feet and a chord which bears
South 16°02’49” East, 169.76 feet to the most northerly end of a cutback-line
for the most easterly southeast corner of said Block 7 and the herein described
tract, from which a found 5/8-inch iron rod bears South 05°53’ East, 0.17 feet;

 

THENCE, South 23°32’34” West, along said cutback-line, a distance of 14.16 feet
to the aforesaid north R.O.W. line of Braeswood Boulevard for the most southerly
southeast corner of said Block 7 and the herein described tract, from which a
found 5/8-inch iron rod bears South 16°31’ East, 0.65 feet;

 

THENCE, South 68°32’34” West, along the common line of said north R.O.W. line
and the south line of said Block 7, a distance of 435.95 feet to a point of
curvature of a tangent curve to the right, from which a found 5/8-inch iron rod
bears South 19°40’ West, 0.22 feet;

 

THENCE, Southwesterly, an arc distance of 107.06 feet continuing along said
common line and said curve to the right, having a central angle of 01°04’14”, a
radius of 5,730.00 feet and a chord which bears South 69°04’41” West, 107.06
feet to a point of reverse curvature for a tangent curve to the left, from which
a found 5/8-inch iron rod bears South 62°55’ West, 0.20 feet;

 

THENCE, Southwesterly, an arc distance of 107.06 feet continuing along said
common line and said curve to the left, having a central angle, of 01°04’14”, a
radius of 5,730.00 feet and a chord which bears South 69°04’41” West, 107.06
feet to a point of tangency, from which a found 5/8-inch iron rod bears South
09°03’ East, 0.55 feet;

 

THENCE, South 68°32’34” West, continuing along said common line, a distance of
45.05 feet to the POINT OF BEGINNING and containing 5.313 acres (231,427 square
feet) of land.  This description is based on the Land Title Survey and plat made
by Terra Surveying Company, Inc., dated July 1, 2002, latest revision dated
April 27, 2005.  TSC Project Number 0038-0101-S.

 

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

 

EXHIBIT “B” TO SPECIAL WARRANTY DEED

 

PERMITTED EXCEPTIONS

 

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

 

EXHIBIT “C” TO SPECIAL WARRANTY DEED

 

AFFIDAVIT

 

STATE OF TEXAS

 

§

 

 

§

COUNTY OF HARRIS

 

§

 

AFFIDAVIT

 

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR
STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS  INSTRUMENT BEFORE IT IS FILED
FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S
LICENSE NUMBER.

 

This Affidavit is executed as of the          day of
                              , 20        by
                                              , who, after being duly sworn by
the undersigned notary public, upon (his/her) oath did depose and say as
follows:

 

My name is
                                                                        , I am
over the age of 21 years, have personal knowledge of the facts set forth in this
Affidavit and am in all things competent to give this Affidavit.

 

I am the                                        of
                                           (“Owner”), the owner of the real
property located in Houston, Harris County, Texas (the “Property”).  This
Affidavit is given pursuant to the requirements set forth in that certain
Special Warranty Deed dated                     , 200    ecorded under Clerk’s
File No.                                      in the Official Public Records of
Real Property of Harris County, Texas (the “Deed”).

 

Owner intends, not sooner that sixty (60) days from the date of the recordation
of this Affidavit in the Official Public Records of Real Property of Harris
County, Texas, to subject all or a part of the Property to a declaration for the
purposes of establishing a condominium regime over all or a part of the
Property.

 

Prior to the recordation of this Affidavit Owner, fully in accordance with the
terms of the Deed, gave written notice of its intent to subject all or a part of
the Property to a declaration for the purposes of establishing a condominium
regime over all or a part of the Property to the grantor under the Deed.  Such
written notice was delivered to such grantor by United States certified mail, as
a certified item with postage paid and return receipt requested, addressed as
follows:

 

Verandah Owner Limited Partnership
c/o BlackRock Realty Advisors, Inc.

300 Campus Drive, 3rd Floor, Florham Park, New Jersey 07932

Attention: Jeremy Litt, Esq.

 

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

 

with a copy to

 

Goodwin Procter LLP

Exchange Place

Boston, Massachusetts  02109

Attention:  Lawrence R. Cahill, Esq.

 

End of Affidavit

 

 

 

 

Name:

 

(typed or printed)

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

SUBSCRIBED, SWORN TO AND ACKNOWLEDGED by
                                             before me this          day of
                            , 20      .

 

 

 

 

Notary Public in and for the State of

 

 

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

 

EXHIBIT “A” TO AFFIDAVIT

 

PROPERTY DESCRIPTION

 

Being a tract or parcel containing 5.313 acres (231,427 square feet) of land
situated in the James D. Owen Survey, Abstract Number 612; being out of and a
part of Unrestricted Block 7, of MEYER PARK, SECTION 2, a subdivision plat of
record in Volume 142, Page 30, Harris County Map Records; and being out of and a
part of that certain tract of land (Tract One) conveyed to Aramco Services
Company as described in deed recorded under Harris County Clerk’s File
(H.C.C.F.) Number H104446, Harris County, Texas; and being that certain called
5.313 acre tract conveyed to Verandah IH-610, L.P. as described in deed recorded
under H.C.C.F. number W636306; and said 5.313 acre tract being more particularly
described by metes and bounds as follows (bearings are oriented to said record
plat):

 

BEGINNING at 1-inch iron rod found in the north right-of-way (R.O.W.) line of
Braeswood Boulevard (100 feet wide) and marking the most southerly southwest
corner of the aforesaid Block 7 and the herein described tract;

 

THENCE, North 06°18’24” West, along a southwest line of said Block 7, a distance
of 150.00 feet to an interior corner of said Block and the herein described
tract, from which a found 1-inch iron rod bears South 60°43’ West, 0.26 feet;

 

THENCE, South 71°35’50” West, along a southwest line of said Block 7, a distance
of 150.00 feet to the curved east R.O.W. line of Interstate Highway 610 (West
Loop South) (Width Varies) for the most westerly southwest corner of said Block
7 and the herein described tract and for a point of tangency of a non-tangent
curve to the right, from which a found 1-inch iron rod bears North 66°35’ West,
0.36 feet;

 

THENCE, Northerly, an arc distance of 288.32 feet along said east R.O.W. line
and the west line of said Block 7 and along said curve to the right, having a
central angle of 01°26’45”, a radius of 11,425.80 feet and a chord which bears
North 05°14’26” West, 288.31 feet to a 5/8-inch iron rod with plastic cap
stamped “Terra Surveying” set marking the northwest corner of the herein
described tract;

 

THENCE, departing said east R.O.W. line and over and across the aforesaid Aramco
Services Company tract, the following courses and distances:

 

North 89°49’01” East, a distance of 86.98 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

South 45°41’49” East, a distance of 14.27 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 89°49’01” East, a distance of 34.78 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 44°49’01” East, a distance of 14.14 feet to a 5/8-inch iron rod with
plastic cap stamped

 

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

 

“Terra Surveying” set for an interior corner of the herein described tract;

 

North 89°49’01” East, a distance of 215.65 feet to a 5/8-inch iron rod with
plastic cap stamped “Terra Surveying” set for an interior corner of the herein
described tract;

 

North 44°49’01” East, a distance of 52.57 feet to an “X” set in concrete for an
interior corner of the herein described tract;

 

North 89°49’01” East, a distance of 396.89 feet to “X” set in concrete set in
the curved west R.O.W. line of Meyer Park Drive (60 feet wide) and the east line
of the aforesaid Block 7 and marking a point of curvature of a non-tangent curve
to the left and the northeast corner of the herein described tract;

 

THENCE, Southerly, an arc distance of 170.01 feet along said west R.O.W. line
and the east line of said Block 7 and along said curve to the left, having a
central angle of 10°49’14”, a radius of 900.22 feet and a chord which bears
South 16°02’49” East, 169.76 feet to the most northerly end of a cutback-line
for the most easterly southeast corner of said Block 7 and the herein described
tract, from which a found 5/8-inch iron rod bears South 05°53’ East, 0.17 feet;

 

THENCE, South 23°32’34” West, along said cutback-line, a distance of 14.16 feet
to the aforesaid north R.O.W. line of Braeswood Boulevard for the most southerly
southeast corner of said Block 7 and the herein described tract, from which a
found 5/8-inch iron rod bears South 16°31’ East, 0.65 feet;

 

THENCE, South 68°32’34” West, along the common line of said north R.O.W. line
and the south line of said Block 7, a distance of 435.95 feet to a point of
curvature of a tangent curve to the right, from which a found 5/8-inch iron rod
bears South 19°40’ West, 0.22 feet;

 

THENCE, Southwesterly, an arc distance of 107.06 feet continuing along said
common line and said curve to the right, having a central angle of 01°04’14”, a
radius of 5,730.00 feet and a chord which bears South 69°04’41” West, 107.06
feet to a point of reverse curvature for a tangent curve to the left, from which
a found 5/8-inch iron rod bears South 62°55’ West, 0.20 feet;

 

THENCE, Southwesterly, an arc distance of 107.06 feet continuing along said
common line and said curve to the left, having a central angle, of 01°04’14”, a
radius of 5,730.00 feet and a chord which bears South 69°04’41” West, 107.06
feet to a point of tangency, from which a found 5/8-inch iron rod bears South
09°03’ East, 0.55 feet;

 

THENCE, South 68°32’34” West, continuing along said common line, a distance of
45.05 feet to the POINT OF BEGINNING and containing 5.313 acres (231,427 square
feet) of land.  This description is based on the Land Title Survey and plat made
by Terra Surveying Company, Inc., dated July 1, 2002, latest revision dated
April 27, 2005.  TSC Project Number 0038-0101-S.]

 

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EXHIBIT J

 

Personal Property

 

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EXHIBIT K

 

Due Diligence Materials

 

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EXHIBIT L

 

Seller’s Lease Guidelines

 

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