EXHIBIT 10.4

REAL ESTATE PURCHASE AND SALE CONTRACT

by and between

CNL REAL ESTATE SERVICES CORP.

d/b/a CNL COMMERCIAL REAL ESTATE,

a Florida corporation, or assigns,

as BUYER

and

BAY INVESTORS, LLC, a Texas limited liability company

as SELLER

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TABLE OF CONTENTS

 

1.

 

Definitions

     1   

2.

 

Purchase and Sale of Premises

     3   

3.

 

Purchase Price for Premises

     3   

4.

 

Closing Date

     4   

5.

 

Inspection Period

     4   

6.

 

Title to Premises; State of Title to be Conveyed

     5   

7.

 

Conditions to Buyer’s Obligation to Close

     7   

8.

 

Deliveries at Closing

     7   

9.

 

Closing and Other Costs, Adjustments and Prorations

     9   

10.

 

Escrow Agent

     10   

11.

 

Seller’s Covenants, Representations and Warranties

     12   

12.

 

Covenants of Seller Pending Closing

     14   

13.

 

Eminent Domain

     14   

14.

 

Casualty

     14   

15.

 

Remedies Upon Default

     15   

16.

 

Notices

     15   

17.

 

Brokerage Commissions

     16   

18.

 

Miscellaneous Provisions

     17   

 

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ATTACHMENTS:

EXHIBIT A – Description of the Premises

EXHIBIT B – Permitted Exceptions

EXHIBIT C – Form of Assignment and Assumption of Lease

EXHIBIT D – Form of Tenant Estoppel Certificate

EXHIBIT E – Form of Assignment of Licenses, Permits, Plans, Contracts and
Warranties

EXHIBIT F – Form of Deed

EXHIBIT G – Form of Bill of Sale

EXHIBIT H – Complete Copy of Lease

 

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REAL ESTATE PURCHASE AND SALE CONTRACT

THIS REAL ESTATE PURCHASE AND SALE CONTRACT (this “Agreement”) made and entered
into as of the Effective Date set forth herein, by and between BAY INVESTORS,
LLC, a Texas limited liability company (“Seller”), having a mailing address at
1125 Pacific Beach Drive, Unit 302, San Diego, California 92109-5154 and CNL
REAL ESTATE SERVICES CORP. d/b/a CNL COMMERCIAL REAL ESTATE, a Florida
corporation, having a mailing address at 420 South Orange Avenue, Suite 950,
Orlando, Florida 32801, or its assigns (“Buyer”);

W I T N E S SE T H:

WHEREAS, Seller is the fee simple owner of and is willing to sell a certain
premises of real property located in Pflugerville, Travis County, Texas, as more
fully described in Exhibit A attached hereto and by reference incorporated
herein, and Buyer is willing to purchase such real property from Seller, upon
the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:

1. Definitions. In addition to other words and terms defined elsewhere in this
Agreement, as used herein the following words and terms shall have the following
meanings, respectively, unless the context hereof otherwise clearly requires:

(a) “Additional Earnest Money Deposit” shall mean the deposit of Fifty Thousand
and No/100 Dollars ($50,000.00) to be given by Buyer to Escrow Agent pursuant to
Section 3(a)(ii) of this Agreement, as well as all interest earned thereon in
the interest-bearing money market account in which Escrow Agent is required to
place the Earnest Money Deposit.

(b) “Closing” shall mean the consummation of the purchase and sale of the
Premises (as defined below) in accordance with the terms of this Agreement.
“Closing Date” shall mean the date on which the Closing actually occurs.

(c) “Earnest Money Deposit” shall mean the Initial Earnest Money Deposit
together with the Additional Earnest Money Deposit, as well as all interest
earned thereon in the interest-bearing money market account in which Escrow
Agent is required to place the Earnest Money Deposit.

(d) “Effective Date” of this Agreement shall mean that date upon which the last
of the Buyer and Seller has executed this Agreement.

(e) “Escrow Agent” shall mean Independence Title Company, by and through its
National Division, whose address is set forth in Section 16 below.

(f) “Hazardous Materials” shall mean all toxic or hazardous materials,
chemicals, wastes, pollutants or similar substances, including, without
limitation, Petroleum (as

 

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hereinafter defined), asbestos insulation and/or urea formaldehyde insulation,
which are regulated, governed, restricted or prohibited by any federal, state or
local law, decision, statute, rule, regulation or ordinance currently in
existence or hereafter enacted or rendered (hereinafter collectively referred to
as the “Hazardous Materials Laws”) including, but not limited to, those
materials or substances defined as “hazardous substances,” “hazardous
materials,” “toxic substances” or “pollutants” in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,42 U.S.C.
Section 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act,
33 U.S.C. Section 1251 et seq., and any applicable statutes, ordinances or
regulations under the laws of the State in which the Premises is located, and
any rules and regulations promulgated thereunder, all as presently or hereafter
amended. “Petroleum” for purposes of this Agreement shall include, without
limitation, oil or petroleum of any kind and in any form including but not
limited to oil, petroleum, fuel oil, oil sludge, oil refuse, oil mixed with
other waste, crude oil, gasoline, diesel fuel and kerosene.

(g) “Improvements” shall mean the building consisting of Fifty One Thousand One
Hundred Eighty Nine (51,189) rentable square feet on the Premises and other
related improvements occupied by Tenant pursuant to the terms of the Lease, and
all appurtenances thereto, including but not limited to all pavement,
accessways, curb cuts, parking, drainage systems and facilities, landscaping,
canopies, and utility facilities and connections for sanitary sewer, potable
water, irrigation, electricity, telephone and natural gas, if applicable or
required by the Lease, to the extent the same form a part of the Premises.

(h) “Initial Earnest Money Deposit” shall mean the deposit of Fifty Thousand and
No/100 Dollars ($50,000.00) to be given by Buyer to Escrow Agent pursuant to
Section 3(a)(i) of this Agreement, as well as all interest earned thereon in the
interest-bearing money market account in which Escrow Agent is required to place
the Earnest Money Deposit.

(i) “Inspection Period” shall mean that period of time starting on the Effective
Date of this Agreement and terminating thirty (30) days following the date upon
which Buyer has received copies of the documents and materials regarding the
Premises which Seller is required to furnish to Buyer pursuant to Section 5(a)
of this Agreement.

(j) “Lease” shall mean that certain Lease Agreement dated August 18, 2000, for
the Premises between McMahon Development Group, LLC, as lessor, and Tenant, as
lessee, a true, correct and complete copy of which is attached hereto on Exhibit
H.

(k) “Permits” shall mean all of the governmental permits, including licenses and
authorizations, required for the construction, ownership and operation of the
Improvements on the Premises, including without limitation certificates of
occupancy, building permits, signage permits, site use approvals, zoning
certificates, environmental and land use permits and any and all necessary
approvals from state or local authorities.

(l) “Permitted Exceptions” shall mean those items described on Exhibit B
attached hereto and those items approved in writing by Buyer during its
Inspection Period.

 

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(m) “Personalty” shall mean all items of tangible personal property owned by
Seller which are located on and which are used or useful in connection with the
maintenance and operation of the Premises; specifically excluding, however, any
personal property owned by Tenant and any personal property used solely to
facilitate the construction of the Improvements.

(n) “Phase I Report” shall mean a Phase I Environmental Site Assessment prepared
by a licensed environmental consulting firm acceptable to Buyer that carries
professional liability insurance in such amounts acceptable to Buyer, prepared
in accordance with the requirements of ASTM E 1527-05, Standard Practice for
Environmental Site Assessments: Phase I Environmental Site Assessment Process,
and certified to Buyer and its successors and assigns.

(o) “Plans” shall mean the final “as-built” plans and specifications for the
Improvements.

(p) “Premises” shall mean the real property being more particularly described on
Exhibit A attached hereto, together with all of the Improvements, tenements,
hereditaments and appurtenances belonging or in any way appertaining to such
real property, and all of Seller’s rights, title and interest in and to (i) any
and all property lying in the bed of any street, road or avenue, open or
proposed, in front of or adjoining such real property to the center line
thereof, (ii) any strips and gores of land adjacent to, abutting or used in
connection with such real property, and (iii) any easements and rights, if any,
inuring to the benefit of such real property or to Seller in connection
therewith.

(q) “Purchase Price” shall mean the purchase price of the Premises which is Four
Million Five Hundred Fifty Thousand and No/100 Dollars ($4,550,000.00).

(r) “Tenant” shall mean FedEx Ground Package System, Inc., a Delaware
corporation.

(s) “Title Commitment” shall mean a commitment from the Title Company for an
owner’s title insurance policy with respect to the Premises, naming Buyer as the
proposed insured in the amount of the Purchase Price.

(t) “Title Company” shall mean Independence Title Company, which shall issue the
owner’s policy of title insurance required hereunder.

2. Purchase and Sale of Premises. Subject to the terms, provisions and
conditions set forth herein, Seller hereby agrees to sell the Premises to Buyer,
and Buyer hereby agrees to purchase the Premises from Seller.

3. Purchase Price for Premises. The Purchase Price for the Premises shall be
payable in the following manner:

(a) Earnest Money Deposit.

(i) Not later than five (5) business days following the date on which Buyer
shall receive a counterpart of this Agreement fully executed by Buyer and
Seller,

 

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Buyer shall deposit with Escrow Agent the Initial Earnest Money Deposit
hereunder, to be held and disbursed in accordance with the terms of this
Agreement.

(ii) Unless Buyer shall have terminated this Agreement in accordance with its
terms, not later than three (3) business days following the expiration of the
Inspection Period, Buyer shall deposit with Escrow Agent the Additional Earnest
Money Deposit hereunder, to be held and disbursed in accordance with the terms
of this Agreement.

After clearance of funds, Escrow Agent shall only hold the Earnest Money Deposit
in an interest bearing money market account (which holds only U.S. treasuries)
at a federally insured financial institution reasonably acceptable to Buyer and
Escrow Agent, and interest earned thereon shall be reported under the United
States Taxpayer Identification Number of Buyer. All interest earned on the
Earnest Money Deposit, or any thereof, shall be deemed to constitute a portion
of the Earnest Money Deposit and shall be disbursed in accordance with the terms
of this Agreement. The Earnest Money Deposit shall be credited to the cash due
from Buyer at Closing.

(b) Balance of Purchase Price. The balance of the Purchase Price, less any
apportionments set forth in Section 9 hereof and interest earned on the Earnest
Money Deposit, shall be paid in full by Buyer at the Closing by wire transfer of
immediately available federal funds, as Seller shall direct.

(c) Independent Contract Consideration. On the date of this Agreement, Buyer has
delivered to Seller the amount of ONE HUNDRED AND 00/100 DOLLARS ($100.00) (the
“Independent Contract Consideration”) which amount has been bargained for and
agreed to as consideration for the Inspection Period given to Buyer hereunder,
and as consideration for Seller’s execution and delivery of this Agreement. The
Independent Contract Consideration is in addition to and independent of all
other consideration provided in this Agreement, and is non-refundable in all
events.

4. Closing Date. The Closing shall take place on a date mutually acceptable to
Buyer and Seller, but in no event later than thirty (30) days after the
expiration of the Inspection Period.

5. Inspection Period. Buyer’s obligation to purchase the Premises on the Closing
Date is subject to the satisfaction of the contingencies and conditions in the
manner and within the time limits herein specified:

(a) Due Diligence Materials. Within ten (10) days after the Effective Date of
this Agreement, Seller shall deliver to Buyer (at no cost to Buyer) copies of
any and all tests, surveys, examinations, plans, appraisals, permits, licenses,
environmental studies or reports and other studies or investigations for or
regarding the Premises which the Seller may have in its possession or control,
specifically including, without limitation, the following:

(i) All existing environmental reports, studies or surveys of the Premises which
are in the possession, custody or control of Seller or Seller’s agents,
employees or contractors.

 

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(ii) Final “as-built” Plans for the Improvements for the Premises.

(iii) All Permits, including without limitation, a certificate of occupancy for
the use and occupancy of the Premises by Tenant.

(iv) All warranties and guaranties pertaining to the Improvements.

(v) A copy of the deed vesting title to the Premises in Seller, together with a
copy of the owner’s policy of title insurance issued to Seller for the Premises,
if any.

(vi) Seller shall deliver to Buyer a copy of the fully signed Lease, certified
as true, correct and complete, including any amendments.

(vii) The Title Commitment.

(b) Inspection; Termination. Subject to the rights of Tenant under the Lease,
Buyer through its agents, employees and independent contractors shall have the
right from time to time during the Inspection Period and continuing through the
Closing Date, to enter the Premises for the purposes of inspecting the same and
to investigate all matters relating thereto (collectively, the “Inspections” and
singly, an “Inspection”), including, but not limited to, existing zoning
requirements, the physical condition of the Premises, the environmental
condition of the Premises and its environs including, but not limited to,
non-invasive soil sampling (including matters disclosed in the Phase I Report),
and any other matters Buyer deems relevant to its decision to purchase the
Premises. Notwithstanding the foregoing, Buyer acknowledges that it shall be
required to obtain Seller’s prior written consent before undertaking any soil
borings or other invasive testing, which consent shall not be unreasonably
withheld, conditioned or delayed. Buyer shall indemnify and hold harmless
Seller, Tenant and their respective contractors, agents, employees and
affiliates from and against any claims, losses, damages and costs arising out of
any inspection of and testing at the Premises by Buyer, its agents and
representatives. Buyer shall not, and shall not permit its agents or
representatives to, disrupt Seller’s or Tenant’s activities at the Premises.
Buyer shall have the right, in its sole discretion, for any reason or for no
reason, to terminate this Agreement by written notice to Seller and Escrow Agent
given within the Inspection Period, in accordance with and subject to the
provisions of Section 10(b) below, whereupon the Earnest Money Deposit and all
interest earned thereon shall be returned to Buyer and this Agreement and all
rights and obligations of the respective parties hereunder shall be null and
void except as otherwise expressly provided in this Agreement. In the event
Buyer does not terminate this Agreement prior to the end of the Inspection
Period, then Buyer shall have no further right to terminate this Agreement
pursuant to this Section 5(b).

6. Title to Premises; State of Title to be Conveyed.

(a) Title to Premises. At the Closing, Seller shall convey fee simple title to
the Premises to Buyer, free from all liens, encumbrances, restrictions,
rights-of-way and other matters, excepting only the Permitted Exceptions and any
other matter consented to in writing by Buyer pursuant to Section 12(a) hereof.

 

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(b) Right to Pay Off Monetary Encumbrances. Seller shall have the right to pay
off any monetary encumbrances against the Premises on the Closing Date out of
the cash then payable provided (i) recordable instruments of release or
discharge of such encumbrances in form and substance reasonably satisfactory to
Buyer’s counsel are delivered to the Title Company at the Closing and the Title
Company agrees to remove such encumbrances from the Title Commitment and later
the title policy which will be issued for the Premises, or (ii) if the holder of
the monetary encumbrance is an institutional lender, a payoff letter in form and
substance reasonably satisfactory to the Title Company is delivered to the Title
Company at the Closing and the Title Company agrees to remove such encumbrance
from the title policy which will be issued for the Premises. If a payoff letter
is delivered at the Closing, Seller shall, as promptly as practicable after the
Closing, request that the lender record a recordable instrument of discharge or
release of the encumbrance in form reasonably satisfactory to the Title Company.

(c) Title Defects. Not later than ten (10) days prior to the end of the
Inspection Period, Buyer shall furnish to Seller a statement specifying any
defects in title and/or the survey which are not Permitted Exceptions (“Buyer’s
Statement”); provided, however, that each financial encumbrance such as a
mortgage or judgment, lien for delinquent real estate taxes, attachment, lien
claim or other lien or encumbrance of a definite or ascertainable amount which
may be removed by the payment of money that is revealed by the title report
shall automatically, and without requirement that same be specified in Buyer’s
Statement, be deemed an unpermitted exception. Seller shall notify Buyer within
five (5) business days after receipt of Buyer’s Statement or Buyer’s Additional
Statement (defined below), as the case may be, whether Seller will remove or
insure over with respect to prior liens and encumbrances, and in the event of an
encroachment by any improvement, affirmatively insure against compulsory removal
which will include a commitment by the Title Company to provide the same
coverage in a future policy. If Seller does not agree, or is unable, to remove
any such defects, Buyer shall have the right, by notice given to Seller and
Escrow Agent within five (5) business days after receipt of Seller’s notice,
either to (i) waive the defect and close title without abatement or reduction of
the Purchase Price, or (ii) terminate this Agreement and obtain a refund of the
Earnest Money Deposit. In the event Buyer chooses to terminate this agreement
pursuant to the foregoing sentence, neither party shall have any further
liability to the other hereunder except as otherwise expressly provided in this
Agreement. Nothing contained in this Agreement shall be deemed to require Seller
to take or bring any action or proceeding or any other steps to remove any
defect in title or expend monies therefor, nor shall Buyer have any right of
action against Seller therefor, at law, or in equity, for damages or specific
performance for Seller’s inability to convey title in accordance with the
provisions of this Agreement, except defects that Seller agrees to remove or
insure over pursuant to this Section 6(c) but does not exercise commercially
reasonable efforts to remove or insure over prior to Closing. Notwithstanding
the foregoing, prior to the Closing, Buyer shall have the right to order an
update or a date-down of the Title Commitment and/or the survey, and, other than
Permitted Exceptions, shall have the right to make an objection to any new lien
or title defect regarding the Premises which (i) is first revealed or disclosed
thereon, and (ii) and is not acceptable to Buyer (a “Buyer’s Additional
Statement”); whereupon Seller shall be obligated to satisfy, cure or remove any
such lien or defect at or prior to Closing. Notwithstanding the provisions of
this Section to the contrary, in the event that Seller is unable to remove any
new lien or title defect referenced in Buyer’s Additional Statement within the
five (5) business day period following Seller’s receipt thereof, Seller may
extend the Closing Date for an additional period of ten (10) business days by
providing written notice thereof to Buyer and

 

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Escrow Agent; provided that Seller shall be obligated to satisfy, cure or remove
any such lien or defect at or prior to Closing.

7. Conditions to Buyer’s Obligation to Close. Buyer’s obligation to purchase the
Premises on the Closing Date is subject to the satisfaction of the following
contingencies and conditions in the manner on or before the Closing Date:

(a) Seller shall satisfy all of the accrued obligations of lessor pursuant to
the Lease.

(b) The representations and warranties of Seller set forth in Section 11 hereof
shall be true, correct and complete in all material respects on and as of the
Closing Date.

(c) There shall exist no uncured event of default (as such term is defined in
the Lease) or any event which, with the giving of notice or the passage of time
or both, would constitute an event of default under the Lease.

(d) The Phase I Report approved by Buyer during the Inspection Period shall
continue to accurately reflect the environmental condition of the Premises.

(e) The financial condition of Tenant shall not have deteriorated at any time
during the term of this Agreement, or deteriorated from the financial condition
disclosed to Buyer in the financial reports provided to Buyer prior to the date
of this Agreement, and in any event neither the Seller nor the Tenant shall file
or have filed against it a petition seeking relief under the bankruptcy or other
similar laws of the United States or any state thereof.

(f) Buyer shall have received the Title Commitment for the Premises “marked-up”
and effectively dated as of the Closing, deleting all requirements thereunder so
as to obligate the Title Company unconditionally to issue to Buyer an original
owner’s policy of title insurance for the Premises in the amount of the Purchase
Price, subject only to the Permitted Exceptions.

If the foregoing contingencies set forth in this Section 7 are not satisfied
within the respective time periods set forth above, then in addition to any
rights afforded by Section 15 of this Agreement Buyer shall be entitled to
terminate this Agreement, by delivering written notice thereof to Seller and
Escrow Agent in accordance with and subject to the provisions of Section 10(b)
below, whereupon the Earnest Money Deposit and all interest earned thereon shall
be returned to Buyer.

8. Deliveries at Closing. At Closing the parties shall deliver to each other the
documents and items indicated below, which shall be delivered to the Escrow
Agent two (2) business days prior to Closing:

(a) Seller shall deliver to Buyer:

(i) An appropriate “Seller’s Affidavit” or other acceptable evidence attesting
to the absence of liens, lien rights, rights of parties in possession (other
than Tenant) and other encumbrances arising under Seller (other than the
Permitted

 

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Exceptions) naming both Buyer and Title Company as benefited parties, so as to
enable Title Company to delete the “standard” exceptions for such matters from
Buyer’s owner’s policy of title insurance for the Premises and otherwise insure
any “gap” period occurring between the Closing and the recordation of the
closing documents.

(ii) A duly executed Special Warranty Deed with respect to the Premises, subject
to no exceptions other than the Permitted Exceptions, in substantially the form
attached as Exhibit F, and otherwise as approved by the Title Company and
revised as needed to conform to the requirements of state law for the state in
which the Premises is located.

(iii) A duly executed Assignment and Assumption of Lease for the Lease (the
“Assignment”) in the form attached as Exhibit C.

(iv) A duly executed Assignment of Licenses, Permits, Plans, Contracts and
Warranties with respect to the Premises in the form attached as Exhibit E
together with all of the documents assigned thereby.

(v) A duly executed Warranty Bill of Sale with respect to the Personalty in the
form attached as Exhibit G.

(vi) Duly executed counterparts of the closing statement.

(vii) The original executed Lease certified by Seller to be true, correct and
complete. If the legal description of the Premises set forth in the Lease
differs in any respect from the legal description of the Premises set forth in
the Title Commitment and approved by Buyer during the Inspection Period, for any
reason whatsoever (e.g., due to platting, replatting, dedication of additional
right-of-way, etc.), then Seller shall also deliver to Buyer a duly executed
original amendment to the Lease, revising the legal description of the Premises
set forth in the Lease to conform to the legal description set forth in the
Title Commitment and approved by Buyer, also certified by Seller to be true,
correct and complete.

(viii) A notice addressed to the Tenant, signed by Seller, advising Tenant of
the sale of the Premises and directing Tenant to send future rent and notices to
Buyer.

(ix) An appropriate FIRPTA Affidavit or Certificate by Seller, evidencing that
Seller is not a foreign person or entity under Section 1445(f)(3) of the
Internal Revenue Code, as amended.

(x) A Tenant Estoppel Certificate from the Tenant with respect to the Lease,
dated within five (5) business days prior to the Closing Date, in the form and
substance of the Certificate attached as Exhibit D attached hereto and by
reference incorporated herein.

(xi) All certificates of insurance, insuring Buyer as the owner of the Premises,
which are required by the Lease to be furnished by the Tenant to the landlord.

 

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(xii) A certification that all of the representations and warranties of Seller
set forth in Section 11 of this Agreement are true and correct as of the Closing
Date.

(xiii) Such other closing documents as are reasonably necessary and proper in
order to consummate the transaction contemplated by this Agreement, including
those (if any) required to be delivered by Seller pursuant to Section 7 above.

(b) Buyer shall deliver to Seller:

(i) The Purchase Price, less all the deductions, prorations, and credits
provided for herein.

(ii) Duly executed counterparts of the closing statement.

(iii) An executed counterpart of the Assignment.

9. Closing and Other Costs, Adjustments and Prorations. The Closing costs shall
be allocated and other closing adjustments and prorations made between Seller
and Buyer as follows:

(a) The Seller shall be charged with all closing costs (except for the closing
costs which are the responsibility of Buyer as set forth in Subsection 9(b)
below), including but not limited to the following items, all of which shall be
credited against, and shall reduce dollar-for-dollar, the Purchase Price payable
to Seller at the Closing: (i) all real estate conveyance taxes and other
transfer taxes, if any, imposed by state or local authorities and all recording
charges; (ii) costs of removing any lien, assessment or encumbrance required to
be discharged hereunder in order to convey title to the Premises as herein
provided, including, without limitation, any prepayment penalties or fees
incurred in connection therewith; (iii) the basic premium for the owner’s policy
of title insurance; (iv) legal fees and expenses of Seller; (v) the fees, if
any, for the transfer by Seller to Buyer of the warranties associated with the
Premises and/or Improvements; (vi) the recording costs for the deed; (vii) all
amounts due to Seller’s Broker; and (viii) the costs and fees charged by the
Escrow Agent.

(b) The Buyer shall be charged with the following items in addition to the
Purchase Price payable to Seller at Closing: (i) fees and expenses of Buyer’s
counsel, (ii) the cost of any survey, (iii) the cost of the Phase I Report,
(iv) all costs related to Buyer’s inspection of the Premises, and (v) additional
premiums to delete the “standard” exceptions for parties in possession, matters
of survey and construction lien claims, and to issue such endorsements as Buyer
may request.

(c) At Closing, Seller shall give Buyer a credit against the Purchase Price in
the amount of any security deposit, last month’s rent and other sums, if any,
prepaid by Tenant to Seller under the Lease. Minimum rent shall be prorated at
Closing and minimum rent attributable to the period on and after the Closing
Date shall be the property of Buyer; except that, if there is any unpaid minimum
rent from Tenant for any period prior to the Closing Date, such amount shall not
be charged or credited to either party but shall be paid to Seller after Closing
only if and when actually received by Buyer. From and after the Closing Date,
all minimum rent and additional charges received by Buyer shall be first applied
to current monthly

 

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rent and additional charges. Seller shall promptly remit to Buyer any minimum
rent or other sums received by it from Tenant after Closing and attributable to
the period on or after the Closing Date. Buyer shall have no obligation to incur
any expense or to commence any legal action or proceeding against Tenant with
respect to such delinquencies, but Seller shall have the right to take such
measures as may be available to it to collect amounts owed Seller. Percentage
rent shall not be prorated, but shall be paid solely to Buyer. The provisions of
this subsection shall survive the Closing.

(d) Any taxes, assessments or other charges not payable by Tenant under the
Lease shall be prorated as of Closing. To the extent that the real property
taxes for the current year are not yet determined as of Closing, the proration
shall be based on the tax rate for the preceding year as applied to the latest
assessed valuation. Subsequent to Closing, when the tax rate is fixed for the
year in which the Closing occurs and actual taxes become known, Seller and Buyer
covenant and agree to adjust the proration of taxes and, if necessary, refund or
pay such sums as shall be necessary to effect such adjustment. Buyer shall pay
and be responsible for all assessments accruing against the Premises after
Closing, as well as any special annual assessments and any “rollback” taxes or
retroactively assessed taxes which may be levied or assessed against the
Premises for periods prior to or after the Closing resulting from Buyer’s
acquisition of the Premises and/or the change in use of the Premises by Buyer
after Closing. Seller shall pay and be responsible for any “rollback” taxes or
retroactively assessed taxes which arise out of or relate to any use of the
Premises prior to Closing or any improper or inadequate assessment of the
Premises for the period prior to the Closing. The obligations set forth in this
Section 9(d) shall expressly survive the Closing.

(e) To the extent any taxes, insurance premiums, common area maintenance costs
or other charges related to the Premises are to be passed through to, or paid
by, the Tenant under the Lease, there shall be no prorating such charges at
Closing and, at Closing, Seller shall give a credit to Buyer for any unexpended
amounts prepaid by the Tenant for such charges.

10. Escrow Agent. By its execution hereof, Escrow Agent shall accept the escrow
contemplated herein. The Earnest Money Deposit shall be held by the Escrow
Agent, in trust, on the terms hereinafter set forth.

(a) After clearance of funds, the Earnest Money Deposit shall be held by Escrow
Agent in an account meeting the requirements of Section 3(a) above, and shall
not be commingled with any funds of the Escrow Agent or others. Escrow Agent
shall promptly advise Seller and Buyer that the Earnest Money Deposit is made
and the account number under which it has been deposited following clearance of
funds.

(b) The Escrow Agent shall deliver the Earnest Money Deposit to Seller or to
Buyer, as the case may be, under the following conditions:

(i) To Buyer upon receipt of notice of termination of this Agreement by Buyer at
any time prior to the expiration of the Inspection Period.

(ii) To Seller on the Closing Date, provided Closing shall occur pursuant to the
Agreement.

 

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(iii) To Seller upon receipt of written demand therefor (“Seller’s Demand for
Deposit”) stating that Buyer has defaulted in the performance of Buyer’s
obligation to close under this Agreement and the facts and circumstances
underlying such default, provided, however, that the Escrow Agent shall not
honor such demand until more than ten (10) days after the Escrow Agent shall
have sent a copy of such demand to Buyer in accordance with the provisions of
Section 10(c) of this Agreement nor thereafter, if the Escrow Agent shall have
received a “Notice of Objection” (as hereinafter defined) from Buyer within such
ten (10) day period.

(iv) To Buyer upon receipt of written demand therefor (“Buyer’s Demand for
Deposit”) stating that this Agreement has been terminated in accordance with the
provisions hereof for any reason other than as provided in Section 10(b)(i)
above (including the failure of any condition to Buyer’s obligation hereunder),
or that Seller has defaulted in the performance of any of Seller’s obligations
under this Agreement and the facts and circumstances underlying the same;
provided, however, that the Escrow Agent shall not honor such demand until more
than ten (10) days after the Escrow Agent shall have sent a copy of such demand
to Seller in accordance with the provisions of Section 10(c) of this Agreement
nor thereafter, if the Escrow Agent shall have received a Notice of Objection
from Seller within such ten (10) day period.

(c) Within two (2) business days of the receipt by the Escrow Agent of a
Seller’s Demand for Deposit or a Buyer’s Demand for Deposit the Escrow Agent
shall send a copy thereof to the other party in the manner provided in
Section 16 of this Agreement. The other party shall have the right to object to
the delivery of the Deposit by sending written notice (the “Notice of
Objection”) of such objection to the Escrow Agent in the manner provided in
Section 16 of this Agreement, which Notice of Objection shall be deemed null and
void and ineffective if such Notice of Objection is not received by the Escrow
Agent within the time periods prescribed in Section 10(b) of this Agreement.
Such notice shall set forth the basis for objecting to the delivery of the
Deposit. Upon receipt of a Notice of Objection, the Escrow Agent shall promptly
send a copy thereof to the party who sent the written demand.

(d) In the event the Escrow Agent shall have received the Notice of Objection
within the time periods prescribed in Section 10(b) of this Agreement, or has
otherwise received conflicting demands from the Buyer and Seller, the Escrow
Agent shall continue to hold the Earnest Money Deposit until (i) the Escrow
Agent receives written notice from Seller and Buyer directing the disbursement
of the Earnest Money Deposit, in which case the Escrow Agent shall then disburse
the Earnest Money Deposit in accordance with such joint direction, or
(ii) litigation shall occur between Seller and Buyer, in which event the Escrow
Agent shall draw upon the letter(s) of credit and deliver the Earnest Money
Deposit to the clerk of the court in which said litigation is pending, or
(iii) the Escrow Agent takes such affirmative steps as the Escrow Agent may, at
the Escrow Agent’s option, elect in order to terminate the Escrow Agent’s duties
including, but not limited to, drawing upon the letter(s) of credit and
depositing the Earnest Money Deposit in the appropriate court for Travis County,
Texas and bringing an action for interpleader, the costs thereof to be deducted
from the amount so deposited into the registry of the court; provided, however,
that upon disbursement of the deposited amount pursuant to court order or
otherwise, the prevailing party shall be entitled to collect from the losing
party the amount of such costs and expenses so deducted by the Escrow Agent.

 

11

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(e) The duties of the Escrow Agent are only as herein specifically provided, and
Escrow Agent shall incur no liability whatever except for willful misconduct or
gross negligence as long as the Escrow Agent has acted in good faith. The Seller
and Buyer each release the Escrow Agent from any act done or omitted to be done
by the Escrow Agent in good faith in the performance of its duties hereunder.

(f) Upon making delivery of the Earnest Money Deposit in the manner herein
provided, the Escrow Agent shall have no further liability hereunder.

(g) The Escrow Agent shall either execute this Agreement or indicate in writing
that it has accepted the role of Escrow Agent pursuant to this Agreement which
in either case will confirm that the Escrow Agent is holding and will hold the
Earnest Money Deposit in escrow, pursuant to the provisions of this Agreement.

11. Seller’s Covenants, Representations and Warranties. In order to induce Buyer
to enter into this Agreement and purchase the Premises, Seller makes the
following covenants, agreements, representations and warranties, all of which
shall survive the Closing and the purchase and sale of the Premises:

(a) Seller has obtained all necessary authorizations and consents to enable it
to execute and deliver this Agreement and to consummate the transaction
contemplated hereby, including without limitation all authorizations and
consents required to be obtained from governmental authorities during the course
of, and upon completion of, construction of the Improvements.

(b) Seller holds fee simple title to the Premises, free of all liens,
assessments and encumbrances except for the Permitted Exceptions, and liens and
encumbrances which will be paid and discharged at or prior to the Closing.
Seller has no knowledge of any condition or state of facts which would preclude,
limit or restrict the business operations conducted or contemplated, pursuant to
the terms of the Lease, to be conducted by Tenant at the Premises.

(c) There are no employees of Seller at the Premises, and except for
construction warranties with respect to the Improvements, there are no service
or maintenance contracts affecting the Premises to which Seller is a party or by
which Seller is bound.

(d) The Premises and the use thereof by Tenant and the condition thereof do not
violate any applicable deed restrictions, zoning or subdivision regulations,
urban redevelopment plans, local, state or federal environmental law or
regulation or any building code or fire code applicable to the Premises, and are
not designated by any governmental agency to be in a flood plain area.

(e)(i) There exists no uncured Event of Default nor any event which, with the
giving of notice or the passage of time or both, would constitute an Event of
Default by Seller or Tenant under the Lease; (ii) Tenant has not asserted nor
does it have any defense, set-off or counterclaim in respect of its obligations
under the Lease; (iii) no rent under the Lease has been prepaid for more than
one month in advance nor are there any rebates, rental concessions, free-rent
periods, credits, set-offs, rent reductions, take-back or take-over obligations
or any other

 

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concessions granted thereunder; and (iv) all leasing commissions and fees with
respect to the Lease, if any, have been paid in full.

(f) There is no pending or, to Seller’s knowledge, threatened litigation or
other proceeding affecting the title to or the use or operation of the Premises.

(g) There is no pending or, to Seller’s knowledge, threatened or contemplated
taking or eminent domain action affecting title to or the use or operation of
the Premises.

(h) Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of
the Internal Revenue Code of 1986, as amended, and Seller shall certify its
taxpayer identification number at Closing.

(i) To Seller’s knowledge, there are no federal, state, county or municipal
plans to restrict or change access from any highway or road to the Premises.

(j) The Premises is a separate parcel for real estate tax assessment purposes.

(k) All of the financial data regarding the construction, ownership and
operation of the Premises and regarding Tenant that Seller previously provided
to Buyer prior to the Effective Date and prior to the Closing Date, is true,
complete and correct.

(l) The Improvements have been constructed in accordance with applicable
building codes, laws and regulations in a good, substantial and workmanlike
manner.

(m) To the best of Seller’s knowledge and belief, except as disclosed in the
Phase I Report, no Hazardous Materials are, will be, or have been, stored,
treated, disposed of or incorporated into, on or around the Premises in
violation of any applicable statutes, ordinances or regulations; the Premises is
in material compliance with all applicable environmental, health and safety
requirements; any business currently or, to the best of Seller’s knowledge,
heretofore operated on the Premises has disposed of its waste in accordance with
all applicable statutes, ordinances and regulations; and Seller has no notice of
any pending or, to the best of Seller’s knowledge, threatened action or
proceeding arising out of the condition of the Premises or any alleged violation
of environmental, health or safety statutes, ordinances or regulations.

(n) Seller specifically acknowledges and understands that where Seller knows of
any fact(s) materially affecting the value or desirability of the Premises,
whether said fact(s) is/are readily observable or not, Seller hereby assumes and
accepts a duty to disclose said fact(s) to Buyer.

(o) There are no leases on the Premises as of the date hereof and as of the date
of Closing other than the Lease with the Tenant.

(p) Seller has delivered to Buyer all of the items Seller is and was required to
deliver pursuant to Section 5(a) and Section 8 of this Agreement.

 

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(q) Seller warrants that, other than as may be disclosed in the foregoing
representations and warranties, Seller has no knowledge of any other fact(s)
materially affecting the value or desirability of the Premises whether or not
said fact(s) is/are readily observable.

All of the representations, warranties and agreements of Seller set forth herein
and elsewhere in this Agreement shall be true upon the execution of this
Agreement and shall be considered reaffirmed as of the Closing Date and shall
survive the Closing Date without the need for Seller to sign any reaffirmation
certificate or affidavit or any other documents at closing.

12. Covenants of Seller Pending Closing. Between the date hereof and the Closing
Date:

(a) Seller shall not modify, cancel, extend or otherwise change in any manner
any of the terms, covenants or conditions of the Lease, nor enter into any
contracts for services or otherwise that may be binding upon the Premises or
upon the Buyer subsequent to Closing, nor grant any easements or licenses
affecting the Premises, nor take any legal action in connection with the
Premises which will affect Buyer’s title to the same, nor enter into any new
leases of space in the Premises, without the express prior written consent of
Buyer. Buyer’s consent may be withheld at Buyer’s sole option; however, Buyer’s
response to any of the foregoing shall not be unreasonably delayed and, if
denied, shall be accompanied by a reasonably detailed explanation of the reason
for such denial.

(b) Seller shall take reasonable efforts to cause the Lease to remain in effect,
provided, however, that Seller shall have no obligation to initiate any
litigation with respect thereto and Seller shall continue to perform all of
landlord’s obligations under the Lease.

(c) Seller shall within two (2) business days following receipt thereof (or the
day of receipt if received the day prior to the Closing Date) provide Buyer with
copies of any letters or notices received by Seller relating to or in any manner
affecting the Premises, including without limitation any letter or notice from
Seller’s lender, if any.

(d) Seller shall immediately notify Buyer and Escrow Agent if the Lease has been
terminated, in which event Buyer may terminate this Agreement and receive a
refund of the Earnest Money Deposit.

13. Eminent Domain. If prior to the date of the Closing, Seller acquires
knowledge of any pending or threatened action, suit or proceeding to condemn or
take all or any part of the Premises under the power of eminent domain, then
Seller shall immediately give notice thereof to Buyer. In such event, at Buyer’s
option, Buyer may terminate this Agreement. If Buyer elects not to terminate
this Agreement, the condemnation and any condemnation proceeds shall be handled
as provided for in the Lease for the Premises.

14. Casualty. If prior to the date of the Closing the Premises, or any portion
thereof, shall be damaged or destroyed by reason of fire, storm, accident or
other casualty, then Seller shall immediately give notice thereof to Buyer. In
such event, the Buyer, at its option, may terminate this Agreement. If Buyer
elects not to terminate this Agreement, Buyer shall be entitled to all insurance
proceeds and a credit in the amount of any deductible.

 

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15. Remedies Upon Default.

(a) In the event Buyer breaches or defaults under any of the terms of this
Agreement prior to or on the Closing Date, the sole and exclusive remedy of
Seller shall be to receive from Escrow Agent the Earnest Money Deposit, and
Buyer shall have no right therein. Buyer and Seller acknowledge and agree that
(i) the Earnest Money Deposit and any interest earned thereon if received in
accordance with the terms of this Agreement is a reasonable estimate of and
bears a reasonable relationship to the damages that would be suffered and costs
incurred by Seller as a result of having withdrawn the Premises from sale and
the failure of Closing to occur due to a default of Buyer under this Agreement;
(ii) the actual damages suffered and costs incurred by Seller as a result of
such withdrawal and failure to close due to a default of Buyer under this
Agreement would be extremely difficult and impractical to determine; (iii) Buyer
seeks to limit its liability under this Agreement to the amount of the Earnest
Money Deposit, and any interest earned thereon if the transaction contemplated
by this Agreement does not close due to a default of Buyer under this Agreement;
and (iv) such amount shall be and constitute valid liquidated damages.

(b) In the event Seller defaults under any of the terms of this Agreement on or
prior to the Closing Date, Buyer shall be entitled to (i) compel specific
performance of this Agreement, in which event Buyer may also recover its damages
incurred as a result of such default, including but not limited to all of its
costs and attorneys’ fees in seeking such specific performance, and/or (ii) if
specific performance, receive a refund of the Earnest Money Deposit and recover
actual damages incurred as a result of such default, which shall include damages
resulting from a breach of any warranty or representation of Seller as of the
Closing even if the same is not discovered until after the Closing, to the
extent the same survive the Closing. Notwithstanding the foregoing, however, if
the Seller’s breach is precipitated by a default by Tenant under the Lease,
Buyer’s remedy shall be limited to receiving a refund of the Earnest Money
Deposit and terminating the Agreement.

16. Notices. All notices, elections, requests and other communication hereunder
shall be in writing and shall be deemed given (i) when personally delivered, or
(ii) two (2) business days after being deposited in the United States mail,
postage prepaid, certified or registered, or (iii) the next business day after
being deposited with a recognized overnight mail or courier delivery service,
(iv) when transmitted by facsimile or telecopy transmission, with receipt
acknowledge upon transmission, or (v) when sent via electronic mail; addressed
as follows (or to such other person or at such other address, of which any party
hereto shall have given written notice as provided herein):

 

 

  If to Seller:

    

Bay Investors, LLC

1125 Pacific Beach Drive, Unit 302

San Diego, California 92109-5154

Attention: Maxine Harris, Manager

Telephone: (858) 273-3849

Fax:                                         

Email: terrifitzgerald@cox.net

 

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  with a copy to:

    

McPherson Hughes Bradley Wimberley Steele & Chatelain

3120 Central Mall Drive

Port Arthur, Texas 77642

Attention: Pete Steele, Esq.

Telephone: (512) 965-1988

Fax: (409) 724-7585

Email: psteele@mhbwsc.com

 

  If to Buyer:

    

CNL Commercial Real Estate

420 South Orange Avenue, Suite 950

Orlando, Florida 32801

Attention: John McRae

Phone: (407) 540-7701

Fax: (407) 540-7750

Email: john.mcrae@cnl.com

 

  with a copy to:

    

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

450 South Orange Avenue, Suite 800

Orlando, Florida 32801

Attention: Joaquin E. Martinez, Esquire

Phone: (407) 843-4600

Fax: (407) 843-4444

Email: quino.martinez@lddkr.com

 

  If to Escrow Agent:

    

Independence Title Company

9442 Capital of Texas Highway, Bldg. 2, Ste 200

Austin, Texas 78759

Attention: Dan Phares

Telephone: (512) 279-8229

Fax: (512) 767-6350

Email: dphares@independencetitle.com

17. Brokerage Commissions. Seller warrants to Buyer that all finders or brokers
which have been involved with the introduction of Seller and Tenant and/or the
execution and delivery of the Lease for the Premises and the leasing of the same
pursuant thereto have been paid in full, and that no commissions or fees shall
be due and payable to any finder, broker or leasing agent in the event of a
renewal or expansion with respect to the Lease. Seller and Buyer each warrant to
the other party that no finders or brokers have been involved with the
introduction of Seller and Buyer and/or the purchase and sale of the Premises,
other than the Stan Johnson Company and Stan McElroy Company (“Seller’s Broker”)
that shall be paid by Seller pursuant to a separate written agreement between
Broker and Seller. In the event of a breach of the foregoing warranties, the
breaching party agrees to save, defend, indemnify and hold harmless the
non-breaching party from and against any claims, losses, damages, liabilities
and expenses, including but not limited to attorneys’ fees. The obligations of
this Section shall survive the Closing or earlier termination of this Agreement.

 

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18. Miscellaneous Provisions.

(a) Assignment; Binding Effect. Buyer may assign all of its rights and
obligations hereunder, without the written consent of Seller, to (i) any entity
which is owned, controlled, managed or advised by Buyer or any affiliate of
Buyer, or (ii) any other third party which has the financial wherewithal to
perform the obligations of Buyer hereunder; provided however, that any assignee
of Buyer shall assume all of the obligations of Buyer hereunder. In the event of
any permitted assignment hereunder Buyer shall thereupon be relieved of all
further liability under this Agreement; except that the Earnest Money Deposit
shall not be released or otherwise adversely affected as a result of any such
assignment. Seller shall have the right to assign its rights and obligations
hereunder, provided that the Seller named herein shall deliver written notice
thereof to Buyer and shall remain liable for any breach of the representations
and warranties and performance of the covenants set forth herein. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of Seller and Buyer and their respective successors and assigns.

(b) Captions. The several headings and captions of the Sections and subsections
used herein are for convenience of reference only and shall in no way be deemed
to limit, define or restrict the substantive provisions of this Agreement.

(c) Entire Agreement. This Agreement constitutes the entire agreement of Buyer
and Seller with respect to the purchase and sale of the Premises, and supersedes
any prior or contemporaneous agreement with respect thereto. No amendment or
modification of this Agreement shall be binding upon the parties unless made in
writing and signed by both Seller and Buyer.

(d) Time of Essence. Time is of the essence with respect to the performance of
all of the terms, conditions and covenants of this Agreement.

(e) Cooperation. Buyer and Seller shall cooperate fully with each other to carry
out effectively the purchase and sale of the Premises, in accordance herewith
and the satisfaction and compliance with all of the conditions and requirements
set forth herein, and shall execute such instruments and perform such acts as
may be reasonably requested by either party hereto.

(f) Governing Law. This Agreement and the rights of the parties hereunder shall
be governed by and construed in accordance with the laws and customs of the
State of Texas.

(g) Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts each of which, when
so executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.

(h) Attorneys’ Fees. In the event any party to this Agreement should bring suit
against the other party in respect to any matters provided for herein, the
prevailing party shall be entitled to recover from the non-prevailing party its
costs of court, legal expenses and reasonable attorneys’ fees whether incurred
before, during or after trials or an appeal. As used herein, the “prevailing
party” shall include, without limitation, any party who dismisses an action for
recovery hereunder in exchange for payment of the sums allegedly due,
performance of covenants allegedly

 

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breached or consideration substantially equal to the relief sought in the
action. This paragraph shall survive Closing or the early termination of this
Agreement.

(i) Certain References. As used in this Agreement, the words “hereof,” “herein,”
“hereunder” and words of similar import shall mean and refer to this entire
Agreement and not to any particular article, section or paragraph of this
Agreement, unless the context clearly indicates otherwise.

(j) Time Periods. Unless otherwise expressly provided herein, all periods for
performance, approval, delivery or review and the like shall be determined on a
“calendar” day basis. If any day for performance, approval, delivery or review
shall fall on a Saturday, Sunday or legal holiday, the time therefor shall be
extended to the next business day.

(k) Authority. Each person executing this Agreement, by his or her execution
hereof, represents and warrants that they are fully authorized to do so, and
that no further action or consent on the part of the party for whom they are
acting is required to the effectiveness and enforceability of this Agreement
against such party following such execution.

(l) Severability. If any provision of this Agreement should be held to be
invalid or enforceable, the validity and enforceability of the remaining
provisions of this Agreement shall not effected thereby.

(m) Waiver. One or more waivers of any covenant, term or condition of this
Agreement by either party shall not be construed as a waiver of any subsequent
breach of the same covenant, term or condition. The consent or approval by
either party to or of any act by the other party requiring such consent or
approval shall not be deemed to waiver or render unnecessary consent to or
approval of any subsequent similar act.

(n) Relationship of the Parties. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or of joint venture
between the parties hereto, it being understood and agreed that no provision
contained herein, nor any acts of the parties hereto shall be deemed to create
the relationship between the parties hereto other than the relationship of
seller and buyer.

(o) Termination. This Agreement shall be void and of no force and effect unless
signed by Seller and delivered to Buyer no later than five (5) days following
the date of Buyer’s execution of this Agreement.

(p) Tax Deferred Exchange. Seller and Buyer agree to cooperate with each other
in effecting for the benefit of either party a delayed like-kind exchange of
real property pursuant to Section 1031 of the United States Internal Revenue
Code and similar provisions of applicable state law; provided that (i) neither
party shall be obligated to delay the closing hereunder and (ii) neither party
shall be obligated to execute any note, contract, deed or other document not
otherwise expressly provided for in this Agreement providing for any personal
liability, nor shall either party be obligated to take title to any property
other than the property as otherwise contemplated in this Agreement or incur
additional expense for the benefit of the other party. Each party shall
indemnify and hold the other harmless against any liability which arises or is
claimed to have arisen on account of any exchange proceeding which is initiated
on behalf of the indemnifying party.

 

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(q) No Recordation. Neither this Agreement nor any memorandum thereof shall be
recorded in the public record of any jurisdiction.

(r) Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BUYER AND
SELLER HEREBY WANE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON, OR IN RESPECT OF,
ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT, THE RELATIONSHIP OF BUYER AND SELLER HEREUNDER, OR ARISING OUT OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT.

(s) Specially Designated Nationals and Blocked Persons. Seller represents and
warrants to Buyer that (I) Seller and each Person owning an interest in Seller
is (aa) not currently identified on the Specially Designated Nationals and
Blocked Persons List maintained by the Office of Foreign Assets Control of the
Department of the Treasury (“OFAC”) and/or on any other similar list maintained
by OFAC pursuant to any authorizing statute, executive order or regulation
(collectively, the “List”), and (bb) not currently a Person with whom a citizen
of the United States is prohibited to engage in transactions by any trade
embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States, (II) none
of the funds or other assets of Seller constitute property of, or are
beneficially owned, directly or indirectly, by, any Embargoed Person, (III) no
Embargoed Person has any interest of any nature whatsoever in Seller (whether
directly or indirectly), (IV) none of the funds of Seller have been derived from
any unlawful activity with the result that the investment in Seller is
prohibited by law or that this Lease is in violation of law, and (V) Seller has
implemented procedures, and will consistently apply those procedures, to ensure
the foregoing representations and warranties remain true and correct at all
times. The term “Embargoed Person” means any Person or government subject to
trade restrictions under U.S. law, including without limitation, the
International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., the
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders
or regulations promulgated thereunder with the result that the investment in
Seller is prohibited by law or Seller is in violation of law. The term “Person”
means any natural person, corporation, company, partnership, trust or other
business entity. Seller covenants and agrees (I) to comply with all requirements
of law relating to money laundering, anti-terrorism, trade embargos and economic
sanctions, now or hereafter in effect, (II) to immediately notify Buyer in
writing if any of the representations, warranties or covenants set forth in this
Section are no longer true or have been breached or if Seller has a reasonable
basis to believe that they may no longer be true or have been breached, (III)
not to use funds from any “Prohibited Person” (as such term is defined in the
September 24, 2001 Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism)
to make any payment due to Buyer under this Agreement and (IV) at the request of
Buyer, to provide such information as may be requested by Buyer to determine
Seller’s compliance with the terms hereof.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Real Estate Purchase
and Sale Contract on the date first above written.

 

SELLER:

 

BAY INVESTORS, LLC,

a Texas limited liability company

By:  

      /s/ Maxine Davis Harris

Name:  

                Maxine Davis Harris

Title :  

                 Manager

Date:  

                 3-21-11

 

BUYER:

 

CNL REAL ESTATE SERVICES CORP.

d/b/a CNL COMMERCIAL REAL ESTATE,

a Florida corporation

 

By:  

      /s/ Paul Ellis

Name:  

                Paul Ellis

Title :  

                 President

Date:  

                 3/17/2011

 

ESCROW AGENT:

 

INDEPENDENCE TITLE COMPANY

 

By:  

      /s/ Dan Phares

Name:  

                Dan Phares

Title :  

Vice-President; Commercial Division Manager

Date:  

                 3/22/2011

 

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EXHIBITS

Exhibits A through H omitted as they are not necessary for an understanding

of the Real Estate Purchase and Sale Contract

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

FIRST AMENDMENT TO

REAL ESTATE PURCHASE AND SALE CONTRACT

THIS FIRST AMENDMENT TO REAL ESTATE PURCHASE AND SALE CONTRACT (this
“Amendment”) is made effective as of this 3rd day of May, 2011, by and between
BAY INVESTORS, LLC, a Texas limited liability company (“Seller”), and MACQUARIE
CNL INCOME, LP, a Delaware limited partnership (“Buyer”) (each of Seller and
Buyer are at times hereinafter referred to individually as a “Party” and
together as the “Parties”).

R E C I T A L S

WHEREAS, Seller and CNL Real Estate Services Corp. d/b/a CNL Commercial Real
Estate, a Florida corporation (“Original Buyer”) entered into that certain Real
Estate Purchase and Sale Contract dated March 21, 2011, as assigned by Original
Buyer to Buyer pursuant to that certain Assignment and Assumption of Rest Estate
Purchase and Sale Contract dated March 28, 2011 (collectively, the “Agreement”);
and

WHEREAS, the Parties desire to amend the Agreement as specifically provided
hereinafter.

NOW, THEREFORE, for and in consideration of the sum of Ten Dollars ($10.00) and
other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:

1. Recitals. The Parties acknowledge and agree that the foregoing recitals are
true and correct and incorporated herein by reference.

2. Defined Terms. Except as specified to the contrary in this Amendment, all
defined terms in this Amendment have the same meaning set forth in the
Agreement.

1. Inspection Period. Section 1(i) of the Agreement is hereby deleted in its
entirety and the following substituted therefore:

“(i) “Inspection Period” shall mean that period of time starting on the
Effective Date of this Agreement and terminating at 5:00 P.M. EST. on Friday,
May 13, 2011.”

2. Closing Date. Section 4 of the Agreement is hereby deleted in its entirety
and the following substituted therefore:

“4. Closing Date. The Closing shall take place on a date mutually acceptable to
Buyer and Seller, but in no event later than Friday, May 27, 2011.”

 

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3. Third Party Reports. In the event the Parties do not consummate the Closing
of the transaction contemplated by the Agreement, Buyer hereby agrees to provide
to Seller, within a commercially reasonably time after the termination of the
Agreement, copies of the Phase I Report and the property condition assessment
obtained by Buyer during the due diligence period in connection with its due
diligence investigations of the Premises.

4. Closing Deliveries. The following sub-sections shall be inserted at the end
of Section 8(a) of the Agreement and become a part thereof:

“(xiv) An amendment to the Lease extending the term thereof and updating the
legal description of the premises described therein, all in form and substance
reasonably acceptable to Buyer.

(xv) An estoppel certificate from the Tenant in favor of JPMorgan Chase Bank,
N.A. (“Lender”) with respect to the Lease, dated within five (5) business days
of the Closing Date, in the form attached as Exhibit I.

(xvi) Duly executed counterparts of a Non-Disturbance, Attornment and
Subordination Agreement from Tenant with respect to the Lease, in the form
attached as Exhibit J.”

5. Exhibits. Exhibits I and J which are attached hereto, shall become a part of
the Agreement.

6. Conflicts. In the event of any conflict or inconsistency between the
provisions of this Amendment and the provisions of the Agreement, the provisions
of this Amendment shall govern and control.

7. Ratification. As modified by this Amendment, the Agreement is hereby ratified
and confirmed and remains in full force and effect.

8. Execution of Amendment. A Party may deliver executed signature pages to this
Amendment by facsimile or other electronic transmission to the other Party,
which facsimile or other electronic copy shall be deemed to be an original
executed signature page. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
counterparts together shall constitute one agreement with the same effect as if
the Parties hereto had signed the same signature page.

[Signatures on following pages]

 

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IN WITNESS WHEREOF, each Party has caused this Amendment to be executed and
delivered as of the date first set forth above.

 

SELLER:

 

BAY INVESTORS, LLC,

a Texas limited liability company

By:

 

    /s/ Maxine Davis Harris

Name:

 

        Maxine Davis Harris

Title:

 

        Manager

 

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BUYER:

 

MACQUARIE CNL INCOME, LP,

a Delaware limited partnership

By:   Macquarie CNL Income GP, LLC, a Delaware  

limited liability company, as General Partner

 

By:

 

Macquarie CNL Global Income Trust, Inc., a Maryland corporation, as Managing
Member

   

By:

 

      /s/ Robert A. Bourne

   

Name:

 

            Robert A. Bourne

   

Title:

 

      Chief Executive Officer

 

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EXHIBIT I TO

FIRST AMENDMENT TO

REAL ESTATE PURCHASE AND SALE CONTRACT

ESTOPPEL CERTIFICATE

[Omitted as not necessary for an understanding of the agreement]

 

- 5 -

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EXHIBIT J TO

FIRST AMENDMENT TO

REAL ESTATE PURCHASE AND SALE CONTRACT

NON-DISTURBANCE, ATTORNMENT AND SUBORDINATION AGREEMENT

[Omitted as not necessary for an understanding of the agreement]

 

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SECOND AMENDMENT TO

REAL ESTATE PURCHASE AND SALE CONTRACT

THIS SECOND AMENDMENT TO REAL ESTATE PURCHASE AND SALE CONTRACT (this
“Amendment”) is made effective as of this 27rd day of May, 2011, by and between
BAY INVESTORS, LLC, a Texas limited liability company (“Seller”), and MACQUARIE
CNL INCOME, LP, a Delaware limited partnership (“Buyer”) (each of Seller and
Buyer are at times hereinafter referred to individually as a “Party” and
together as the “Parties”).

W I T N E S S E T H:

WHEREAS, Seller and CNL Real Estate Services Corp. d/b/a CNL Commercial Real
Estate, a Florida corporation (“Original Buyer”), entered into that certain Real
Estate Purchase and Sale Contract effectively dated March 21, 2011, as assigned
by Original Buyer to Buyer pursuant to that certain Assignment and Assumption of
Rest Estate Purchase and Sale Contract dated as of March 28, 2011, as amended by
that certain First Amendment to Real Estate Purchase and Sale Contract
effectively dated as of May 3, 2011 (collectively, the “Agreement”); and

WHEREAS, the Parties desire to amend the Agreement as specifically provided for
hereinafter.

NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars
($10.00) and other valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Parties agree as follows:

1. Recitals. The Parties acknowledge and agree that the foregoing recitals are
true and correct and incorporated herein by reference.

2. Defined Terms. Except as specified to the contrary in this Amendment, all
defined terms in this Amendment have the same meaning set forth in the
Agreement.

3. Closing Date. Section 4 of the Agreement is hereby deleted in its entirety
and the following substituted therefore:

“Closing Date. The Closing shall take place on a date mutually acceptable to
Buyer and Seller, but in no event later than Wednesday, June 1, 2011, except as
hereinafter provided. Notwithstanding the foregoing, the Closing shall not occur
sooner than two (2) business days following the date on which Seller has
delivered and/or Buyer has received the items described in Section 8(a)(xiv),
(xv) and (xvi) of the Agreement and Seller is otherwise prepared to close
pursuant to the terms of the Agreement, and if such events have not occurred by
June 1, 2011, then the Closing shall be extended to the next business day which
is not sooner than two (2) business days following the date on which such events
have occurred. In no

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event shall the Closing occur later than June 8, 2011 unless the parties
otherwise agree in writing.”

4. Conflicts. In the event of any conflict or inconsistency between the
provisions of this Amendment and the provisions of the Agreement, the provisions
of this Amendment shall govern and control.

5. Ratification. As modified by this Amendment, the Agreement is hereby ratified
and confirmed and remains in full force and effect.

6. Execution of Amendment. A Party may deliver executed signature pages to this
Amendment by facsimile or other electronic transmission to the other Party,
which facsimile or other electronic copy shall be deemed to be an original
executed signature page. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
counterparts together shall constitute one agreement with the same effect as if
the Parties hereto had signed the same signature page.

IN WITNESS WHEREOF, each Party has caused this Amendment to be executed and
delivered as of the date first set forth above.

 

SELLER:

 

BAY INVESTORS, LLC,

a Texas limited liability company

By:

 

/s/ Maxine Davis Harris

Name:

 

  Maxine Davis Harris

Title:

 

  Manager

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

2

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BUYER:

 

MACQUARIE CNL INCOME, LP,

a Delaware limited partnership

 

By:

 

Macquarie CNL Income GP, LLC, a Delaware

limited liability company, as General Partner

   

By:

 

Macquarie CNL Global Income Trust,

Inc., a Maryland corporation, as

Managing Member

     

By:

 

    /s/ Robert A. Bourne

     

Name:

 

        Robert A. Bourne

     

Title:

 

        Chief Executive Officer

 

3