Exhibit 10.45

 

 

 

PURCHASE AGREEMENT

by and between

STONEGATE PROFESSIONAL PROPERTIES, L.P.,

a Texas limited partnership,

as Seller,

and

HC-2501 W WILLIAM CANNON DR, LLC

a Delaware limited liability company

as Purchaser

 

                             Premises:

   Stonegate Medical Center    2501 West William Cannon Drive    Buildings 3, 4
and 5    Austin, Texas

                             Date:

   January 13, 2012

 

 

 

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PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (this “Contract”) is made and entered into as of the
Effective Date (as hereinafter defined) by and between STONEGATE PROFESSIONAL
PROPERTIES, L.P., a Texas limited partnership (“Seller”), whose principal place
of business is located at 2501 William Cannon Dr., Building #401, Austin, Texas
78745, and HC-2501 W WILLIAM CANNON DR, LLC, a Delaware limited liability
company (“Purchaser”), whose principal place of business is located at 4211 West
Boy Scout Boulevard, Suite 500, Tampa, Florida 33607. The “Effective Date” shall
be the date the Title Company (as hereinafter defined) receives an original
counterpart of this Contract signed by both Seller and Purchaser, as evidenced
by the Title Company’s signature hereto.

ARTICLE I

PROPERTY

Section 1.01 Property. Seller hereby agrees to sell and convey to Purchaser, and
Purchaser hereby agrees to purchase from Seller, upon the terms and conditions
set forth herein, the following properties and assets:

(a) That certain tract of real property located in Austin, Texas more
particularly described in Exhibit A attached hereto and made a part hereof for
all purposes, together with all of Seller’s right, title and interest in and to
(i) all and singular the rights and appurtenances pertaining to such real
property, including any easements, and all right, title and interest of Seller
in and to adjacent streets, alleys and rights-of-way, and (ii) any and all
water, water rights or similar rights or privileges (including tap rights)
appurtenant to or used in connection with the ownership or operation of such
real property (all of the foregoing being hereinafter collectively referred to
as the “Real Property”).

(b) All improvements, structures and fixtures now constructed and completed with
respect to and situated on the Real Property, including without limitation that
certain 27,373 rentable square foot integrated medical facility and all
equipment and amenities, together with all of Seller’s right, title and interest
in all parking areas, loading dock facilities, landscaping and other
improvements, structures and fixtures (all of the foregoing being hereinafter
collectively referred to as the “Improvements”).

(c) All of Seller’s interest in all leases covering all or any portion of the
Real Property and/or the Improvements (collectively, the “Leases”), all security
deposits, prepaid rents and similar items attributable to periods after Closing
(subject to Section 7.02(d)), any receivables attributable to periods after
Closing for common area maintenance, taxes, insurance and/or other items, if
any, due and payable under any lease for all or any portion of the Real Property
and/or the Improvements, and all of Seller’s right, title and interest in all
parking agreements, and all contract rights approved by Purchaser and all other
intangible

 

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rights which are appurtenant to the Real Property and/or the Improvements,
including (to the extent assignable) all roof, HVAC and other warranties issued
with respect to the Improvements and the right to use of the trade name
associated with the Improvements and any and all derivations of such name and
permits for the beds (all of the foregoing being hereinafter collectively
referred to as the “Intangible Property”).

(d) All of Seller’s right, title and interest, if any, in all beds, equipment,
furniture, furnishings, machinery, heating, plumbing, ventilation and air
conditioning systems and equipment, carpet, tile, floor coverings, security
devices, sprinkler systems, supplies, telephone exchange numbers, tenant lease
files, leasing records, tenant credit reports, telephone systems, audio systems,
keys, surveys, plans and specifications (whether in cad, electronic or other
format), maintenance equipment and supplies and all other tangible personal
property situated on the Real Property and used primarily in connection
therewith or with the Improvements along with Seller’s interest as lessee in any
rented or leased personal property, to the extent approved by Purchaser and to
the extent assignable by Seller (all of the foregoing being hereinafter
collectively referred to as the “Personal Property”).

(e) Seller shall convey all of Seller’s rights, title and interest, if any, as
the declarant and/or developer under any property owner’s associations for any
of the Real Property, arising from and after the date of Closing. Seller shall
cooperate with Purchaser regarding the transfer of control and operation of any
property owner’s associations for any of the Real Property, including, without
limitation, resignation of Seller appointed or affiliated directors and officers
of any property owner’s associations at Closing and appointment of Purchaser’s
directors and officers.

All of the foregoing items purchased under this Contract are collectively
referred to as the “Property”.

ARTICLE II

PURCHASE PRICE

Section 2.01 Purchase Price. The purchase price (the “Purchase Price”) is an
amount equal to NINE MILLION ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($9,100,000.00). The Purchase Price will be paid by Purchaser to Seller at the
Closing (as hereinafter defined) in cash or immediately available wire transfer
funds.

Section 2.02 Earnest Money. Purchaser will, within three (3) business days after
the Effective Date, deposit the amount of ONE HUNDRED THOUSAND AND NO/100
DOLLARS ($100,000.00) as the initial earnest money hereunder (the “Initial
Deposit”), with Heritage Title Company of Austin as agent for First American
Title Insurance Company, 401 Congress Avenue, Suite 1500, Austin, Texas 78701,
Attn: Jennifer Ramberg (the “Title Company”). As used herein, the term “Earnest
Money

 

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Deposit” means the Initial Deposit and, if made, the Extension Deposit made
pursuant to Section 4.01 hereof, together with all interest accrued from time to
time thereon. The Earnest Money Deposit may, at the option of Purchaser, be in
the form of cash, certified check, cashier’s check or other immediately
available funds. The Title Company must hold the Earnest Money Deposit in an
interest-bearing account at a federally insured banking institution acceptable
to Purchaser and Seller, with all interest being paid to Purchaser or Seller, as
the case may be, in accordance with the terms of this Contract. At the Closing,
the Earnest Money Deposit will be applied toward the cash portion of the
Purchase Price, but otherwise the Earnest Money Deposit will be held by the
Title Company, returned to Purchaser, or delivered to Seller, as required by
this Contract.

Section 2.03 Independent Consideration. Purchaser shall, within three
(3) business days after its execution of this Contract, deliver to Seller the
sum of $100.00 as independent consideration for the execution hereof, which
amount shall be non-refundable to Purchaser and shall be applied against the
Purchase Price at Closing.

ARTICLE III

REVIEW ITEMS

Section 3.01 Survey. Seller shall, within five (5) business days following the
Effective Date, deliver to Purchaser a copy of Seller’s most recent survey of
the Property. If the Seller’s most recent survey is insufficient for the Title
Company to insure the Property, then Purchaser, at Seller’s sole cost and
expense, shall have the right to obtain a new or recertified survey of the
Property (the “Survey”) prepared by a surveyor licensed in the State in which
the Property is located and approved by Purchaser. Such new Survey shall conform
to the current Texas Surveyors Association Standards and Specifications for a
Category 1A, Condition 3 survey. Subject to approval of the Survey by Purchaser
and the Title Company, the metes and bounds description of the Real Property
contained in the Survey, or Seller’s most recent survey if no new survey is
required, will be the description of the Real Property used in the Deed (as
hereinafter defined).

Section 3.02 Title Review Items. Purchaser shall have the right, at Seller’s
sole cost and expense, to order a Texas T-1 form commitment for title insurance
(the “Title Commitment”), issued by the Title Company which shall set forth the
state of title to the Real Property and the Improvements.

Section 3.03 Other Review Items. Seller shall, within five (5) business days
following the Effective Date, deliver to Purchaser copies of the Leases. To the
extent not previously delivered, Seller shall use commercially reasonable
efforts to, within five (5) business days following the Effective Date, deliver
to Purchaser the items shown on Schedule 3.03 to this Contract, to the extent in
Seller’s possession.

Section 3.04 Inspection. Purchaser has the right, at all reasonable times, to
conduct on-site inspections of the Property and physical inspections and tests
of the Property during the Review Period (as hereinafter defined), including,
without limitation,

 

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the right to enter and inspect all portions of the Property (subject to the
rights of tenants in possession) and to inspect and audit all of Seller’s books
and records relating to the Property; provided, however, Purchaser agrees not to
unreasonably interfere with any tenant’s possession or operations and/or
Seller’s operations or cause any damage to the Property. Seller hereby directs
the manager of the Property to cooperate with the reasonable requests of
Purchaser and provide Purchaser with such assistance as is reasonably
appropriate for Purchaser to exercise its inspection rights hereunder. Seller
and/or Seller’s representative may be present during Purchaser’s on-site
inspections and tenant interviews, if permitted by Seller. Purchaser shall not
cut or otherwise damage any trees on the Property nor shall Purchaser conduct
any drilling or boring activities within the Property (other than in connection
with a Phase I Environmental Audit) without the prior written consent of Seller,
which consent may be withheld or conditioned by Seller in Seller’s sole and
absolute discretion. Purchaser shall, at its expense, return the Property to the
condition it was in prior to Purchaser’s inspection, repair any damage to the
Property caused by Purchaser’s inspection or testing thereof, and shall
indemnify and hold harmless Seller from and against any and all claims, actions,
suits, liens, damages, liabilities, losses and expenses, including reasonable
attorneys’ fees, to personal property or personal injury to the extent
attributable to any acts performed in exercising Purchaser’s rights under this
Article III. This agreement to indemnify Seller shall survive the Closing and
any termination of this Contract.

ARTICLE IV

REVIEW PERIOD

Section 4.01 Review Period. Purchaser has from the Effective Date until 5:00
p.m., Austin, Texas time, on the thirtieth (30th) day following the Effective
Date (such time period, the “Review Period”) to review and approve such items
and to conduct such inspections, tests and audits as Purchaser, in its sole
discretion, deems appropriate, including, but not limited to obtaining
appraisals, surveys, engineering, work and a Phase I Environmental Audit.
Purchaser shall also have the right to interview the tenants at the Property;
provided, Purchaser shall use commercially reasonable efforts to include Seller
in any such interview. Purchaser shall have the right to extend the Review
Period for an additional fifteen (15) days by depositing an additional deposit
in the amount of Twenty Five Thousand ($25,000) (the “Extension Deposit”) with
Escrow Agent which Extension Deposit shall apply to the Purchase Price.

Section 4.02 Waiver Notice. If for any or no reason Purchaser, in its sole and
absolute discretion, is not satisfied with the items to be delivered by Seller
to Purchaser under Article III, the results of such inspections, interviews,
tests or audits or any other fact or situation with respect to the Property,
then in such event Purchaser shall have the right to terminate this Contract. If
Purchaser fails, for any or no reason, to deliver Seller written notice (the
“Waiver Notice”) unconditionally waiving this termination right on or

 

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before the end of the Review Period, this Contract shall be deemed automatically
terminated. Purchaser’s failure to deliver the Waiver Notice on or before the
expiration of the Review Period shall be deemed Purchaser’s election to
terminate this Contract under this Section 4.02. Following the expiration of the
Review Period, if this Contract has not been terminated, the Earnest Money
Deposit shall be non-refundable to Purchaser unless Purchaser terminates this
Contract under a Contract provision allowing it to do so which expressly
provides that Purchaser is entitled to the Earnest Money Deposit, but shall be
applicable to the Purchase Price at Closing.

Section 4.03 Termination. If this Contract has been terminated in accordance
with, and subject to the terms of this Article IV, the parties hereto shall
thereupon be relieved of all liabilities and obligations hereunder and the
Earnest Money Deposit shall be refunded fully and promptly to Purchaser. Seller
expressly acknowledges and agrees that, if Purchaser requests the Title Company
to return the Earnest Money Deposit as a result of Purchaser’s election to
terminate this Contract under Section 4.02, then the Title Company shall have no
obligation to independently determine whether Purchaser has the right to receive
the Earnest Money Deposit, and the Title Company may rely solely upon the
written instructions set forth in any written notice delivered by Purchaser from
and after such election, without the joinder, approval or consent of Seller.
Purchaser will promptly restore the Property as required by Section 3.04 and
return to Seller any due diligence materials delivered by Seller. Upon any
termination of this Contract, Purchaser shall deliver, without representation or
warranty, to Seller copies of all environmental audits, engineering reports,
feasibility studies, the surveys, and any other documents or information related
to the Property prepared for Purchaser in connection with Purchaser’s inspection
of the Property, but excluding proprietary information. The provisions of this
Section will survive the termination of this Contract.

Section 4.04 Seller’s Obligation to Remove Liens. Notwithstanding Purchaser’s
delivery of a Waiver Notice, or anything else to the contrary in this Contract,
Seller must remove at or prior to the Closing any mortgages and mechanics and
materialmen liens created, suffered or incurred by, through or under Seller
against the Property; provided, however, if Seller in good faith disputes any
such mechanics’ and materialmen’s lien it may bond around such lien in lieu of
removing it.

Section 4.05 Service Contracts. Seller agrees that all service, maintenance and
property management contracts (collectively, the “Service Contracts”) must be
terminated by Seller on or before the Closing Date unless Purchaser otherwise
elects, by written notice prior to the end of the Review Period, to assume same;
provided, however, Seller has no obligation to terminate any Service Contracts
which cannot be terminated, without cause and without any termination fee, on
thirty (30) or less days notice. The Service Contracts exclude management and
leasing agreements, all of which must be terminated by Seller, at Seller’s sole
cost, on or before the Closing Date.

 

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ARTICLE V

GOOD AND INDEFEASIBLE TITLE

Section 5.01 Conveyance. At the Closing, Seller will convey good and
indefeasible fee simple title to the Real Property and the Improvements to
Purchaser by the Deed and title to the Personal Property and the Intangible
Property by the Bill of Sale (as hereinafter defined), free and clear of any and
all deeds of trust, mortgages or other liens or indebtedness; subject, however,
to the following (collectively, the “Permitted Exceptions”):

(a) General real estate taxes for the year in which the Closing occurs and
subsequent years not yet due and payable.

(b) All easements, restrictions, rights-of-way, party wall agreements,
encroachments, covenants, reservations, agreements, leases, tenancies, licenses,
conditions and other matters affecting all or any portion of the Property to the
extent (i) reflected on Schedule B to the Title Commitment and not agreed in
writing to be removed prior to Closing; (ii) reflected on the Survey, as
recertified, and not agreed in writing to be removed prior to Closing; and/or
(iii) created by or consented and agreed to in writing by Purchaser prior to or
at the Closing.

(c) The rights of tenants, as tenants only, under unrecorded written leases
delivered by Seller to Purchaser prior to the Closing.

Section 5.02 Owner Policy. At the Closing, Purchaser must be able to obtain a
standard Texas T-1 Owner Policy of Title Insurance (the “Owner Policy”) issued
by the Title Company in Purchaser’s favor in the amount of the Purchase Price,
insuring Purchaser’s fee simple title to the Real Property and the Improvements
subject only to the Permitted Exceptions, together with such endorsements as
Purchaser may request on or before the end of the Review Period.

ARTICLE VI

CLOSING

Section 6.01 Closing. Subject to satisfaction or waiver of the Conditions
Precedent to Closing set forth in Section 9.05 of this Contract, the purchase
and sale of the Property (the “Closing”) will be held through escrow at the
offices of the Title Company and will occur at 11:00 a.m. Austin, Texas time on
the earlier of the date which is: (i) five (5) business days following receipt
by Seller of Purchaser’s written notice of its intent to close following the
expiration of the Review Period or (ii) thirty (30) days after the end of the
Review Period (the “Closing Date”).

 

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Section 6.02 Seller’s Obligations. At the Closing, Seller shall execute and
deliver to Purchaser, and/or cause the execution and delivery by all parties
other than Purchaser of, the following with respect to the Property:

(a) That certain special warranty deed (the “Deed”) in the form attached hereto
as Exhibit B.

(b) That certain blanket conveyance, bill of sale and assignment (“Bill of
Sale”) in the form attached hereto as Exhibit C.

(c) That certain assignment and assumption of leases (the “Lease Assignment”) in
the form attached hereto as Exhibit D.

(d) That certain affidavit (the “FIRPTA Affidavit”) in the form attached hereto
as Exhibit E.

(e) Those certain tenant estoppel certificates (the “Tenant Estoppel
Certificates”) in the form attached hereto as Exhibit F and made a part hereof
for all purposes from all tenants (the “Required Estoppels”). The Tenant
Estoppel Certificates, in order to be effective, must be dated no earlier than
thirty (30) days prior to the Closing Date. The Tenant Estoppel Certificates
must be joined in by any guarantor and be completed to reflect the terms of the
applicable Lease and must not, unless expressly waived by Purchaser in writing,
disclose any material defaults or other matters reasonably unacceptable to
Purchaser. The completed form of the Tenant Estoppel Certificates must be
prepared by Seller and submitted to Purchaser, for Purchaser’s review and
reasonable approval, prior to delivery to the tenants. Purchaser shall deliver
any comments to the completed Tenant Estoppel Certificates within three
(3) business days following receipt thereof, failing which such completed Tenant
Estoppel Certificates shall be deemed approved. Seller agrees to use all
reasonable efforts to obtain and deliver to Purchaser the Tenant Estoppel
Certificate no later than the third (3rd) business day prior to the Closing
Date. Seller will not be in default for failure to deliver the Tenant Estoppel
Certificates and Purchaser’s sole recourse for such failure will be to terminate
this Contract and receive the Earnest Money Deposit. Purchaser shall be entitled
to extend the Closing Date for up to fifteen (15) days, if necessary, in order
for Seller to obtain the Required Estoppels.

(f) Original counterparts (to the extent available) of all Leases, lease files
(including all correspondence, applications and credit reports, but not
including any attorney-client privileged communications), operating agreements,
reciprocal easement agreements, options, warranties, guarantees, permits and
other agreements related to the Property, including all modifications,
supplements or amendments to each of the foregoing.

(g) All landlord keys to the Property.

(h) To the extent necessary to permit the Title Company to remove any exception
in the Owner Policy for mechanics’ and materialmen’s liens and general rights of
parties in possession, an affidavit as to debts and liens and parties in
possession executed by Seller, made to the Title Company and in a form
reasonably acceptable to the Title Company, and any other items reasonably
required by the Title Company.

 

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(i) An updated, certified rent roll certified by Seller to be true, complete and
correct in all material respects to the best of Seller’s actual knowledge.

(j) That certain tenant notification letter (the “Tenant Letter”) in the form
attached hereto as Exhibit G.

(k) Appropriate evidence of Seller’s authority to consummate the transactions
contemplated by this Contract as may be required by the Title Company.

(l) Estoppel certificate, in form and substance reasonably satisfactory to
Purchaser, from the HOA, to the extent designated by Purchaser during the Review
Period and in substantially the form attached hereto as Exhibit I and made a
part hereof. Seller will not be in default for failure to deliver such estoppel
certificate and Purchaser’s sole recourse for such failure will be to terminate
this Contract and receive the Earnest Money Deposit.

(m) Resignation as an officer and/or director of any property owners association
for the Real Property.

(n) An assignment of Seller’s right, title and interest as declarant and/or
developer of any property owners association for the Real Property arising from
and after the date of Closing, the form of which will be agreed to by Purchaser
and Seller prior to the expiration of the Review Period (the “Assignment of
Declarant’s Rights”).

Section 6.03 Purchaser’s Obligations. At the Closing, Purchaser shall deliver
the Purchase Price to Seller in cash or by wire transfer of immediately
available funds, and shall execute and deliver to Seller the following with
respect to the Property:

(a) The Tenant Letter.

(b) Appropriate evidence of Purchaser’s authority to consummate the transactions
contemplated by this Contract as may be required by the Title Company.

(c) The Lease Assignment.

Section 6.04 Management Transition/Roof Warranty. From the date hereof until the
earlier of the Closing or this Contract is terminated, Seller will provide
Purchaser with copies of all current income and expense reports concerning the
Property as and when received by Seller. Seller agrees that Purchaser may
contact Seller and its managing agent to obtain copies of and to discuss any
income and expense reports prepared for the Property and to discuss the
operation of the Property. To the extent

 

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Seller has any warranties, Seller shall obtain at Closing, at Seller’s cost and
expense, the consents of the issuers of any roof warranties and all other
warranties affecting the Property to the assignment of such roof warranties and
all other warranties at Closing from Seller to Purchaser, including by making
property management personnel available at reasonable times and after reasonable
notice for inspections of the roof by such roof warranty issuers and the other
issuers of the other warranties and executing such documents as reasonably
necessary to assign any such roof warranties to Purchaser. Seller shall be
responsible for any fees, including but not limited to, inspection fees assessed
by the roof warranty issuers to give such consents, together with the cost of
any repairs or replacements required by any roof warranty issuer as a condition
to delivery of its consent. It is expressly understood and agreed to between the
parties that the roof warranties may be held by the homeowners association and
not the Seller.

Section 6.05 Possession. Possession of the Property must be delivered by Seller
to Purchaser at the Closing, subject only to the Permitted Exceptions.

Section 6.06 Due Diligence Costs. Purchaser will pay its own costs in conducting
its due diligence activities.

ARTICLE VII

CLOSING ADJUSTMENTS

Section 7.01 General Prorations. The following will be apportioned at the
Closing:

(a) Rents, if any, as and when collected (the term “rents” as used in this
Contract including base rent, percentage rent, common area maintenance, parking,
tax, insurance and other payments due and payable under any Lease for all or any
portion of the Improvements, together with all sales and other taxes thereon)
and all other income generated by all or any portion of the Property, including
parking revenue. There will be no proration of rents accrued but not collected
as of the Closing Date.

(b) Taxes and other assessments (including personal property taxes on the
Personal Property) applicable to the Property. Special assessments certified by
any municipal utility district or other taxing authority prior to the Closing
Date must be paid in their entirety by Seller at or before the Closing, except
to the extent such assessments are payable in installments or not yet due and
payable, in which event they shall be prorated between the parties. If the tax
rate or assessed valuation or both have not yet been fixed, the proration shall
be based on a good faith estimate as to the amount of such taxes for the current
year after consideration of the tax rate and/or assessed valuation last fixed;
provided that the parties hereto agree that to the extent the actual taxes for
the current year differ from the amount so apportioned at the Closing, the
parties hereto will make all necessary adjustments by appropriate payments
between themselves following the Closing, and this provision shall survive
delivery of the Deed.

 

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(c) Payments under any Service Contracts, if any, which pursuant to Section 4.06
Purchaser has agreed to assume at the Closing.

(d) Gas, electricity and other utility charges, if any, to be apportioned on the
basis of the last meter reading.

In making such apportionments, Purchaser will receive credit for all rents and
other income paid with respect to the day of the Closing, and Purchaser will be
charged for taxes and other expenses incurred with respect to the day of the
Closing. All apportionments are to be subject to post-closing adjustments as
necessary to reflect later relevant information not available at the Closing and
to correct any errors made at the Closing with respect to such apportionments;
provided, however, that such apportionments shall be deemed final and not
subject to further post-closing adjustments if no such adjustments have been
requested in writing after a period of sixty (60) days following Closing. All
apportionments (regardless of whether all relevant information has been received
on errors have been made) are final and not subject to further post-closing
adjustment one (1) year following the Closing Date.

Section 7.02 Specific Prorations. Anything hereinabove contained to the contrary
notwithstanding:

(a) Seller shall retain and be entitled to receive any tax refunds issued after
Closing to the extent applicable to the period prior to the Closing, but not
otherwise. Seller may not initiate nor demand Purchaser initiate or continue any
litigation to collect such tax refunds. There will be no proration of any
insurance related expenses, it being agreed that Purchaser will obtain its own
insurance coverage as of the Closing Date.

(b) As to gas, electricity and other utility charges, Seller may on written
notice to Purchaser on or before the Closing Date elect to pay one or more of
said items accrued to the date hereinabove fixed for apportionment directly to
the person or entity entitled thereunto and to the extent Seller so elects, such
item shall not be apportioned hereunder, and Seller’s obligation to pay such
item directly in such case shall survive the delivery of the Deed; provided,
however, that Seller will not take any action or fail to take any action which
would result in the cessation or termination of utility service to the Property.

(c) Seller and Purchaser agree that all rents received after the Closing from
any tenant after reasonable costs of collection, if any, incurred by Purchaser
shall be applied first to current rentals owed by such tenant, and then to
delinquent rentals, if any, owed by such tenant in the inverse order of their
maturity, and Purchaser will deliver to Seller any such delinquent rentals owed
Seller and received following the Closing. For a period of six (6) months
following the Closing, Purchaser shall use reasonable efforts to collect for
Seller any rental payments past due as of the Closing or due subsequent to
Closing for a period prior to Closing, from tenants who were tenants as of the
Closing; provided, however, Purchaser shall not be required to declare a lease
default or

 

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institute any legal action in any court against any tenant. Seller will deliver
to Purchaser, within five (5) business days following receipt, any rents
received by Seller after the Closing and attributable to the period from and
after the Closing. From and after the end of the sixth (6th) month following the
Closing Date, Seller shall have the right to pursue reasonable collection
remedies against any tenant owing delinquent rentals owed Seller, provided that
(i) Seller shall notify Purchaser of its intent to institute any collection
remedy or proceeding not less than fifteen (15) days prior to the institution
thereof, and (ii) Seller shall in no event institute any proceeding to evict or
dispossess a tenant from the Property. Purchaser may, by written notice to
Seller within ten (10) days of receipt of Seller’s notice of intent to institute
collection remedies or proceedings, restrict Seller from collecting such
delinquent rentals, but only if Purchaser first pays Seller such delinquent
rentals in exchange for Seller’s assignment to Purchaser of all of Seller’s
rights and causes of action with respect thereto.

(d) At the Closing, Seller shall credit to the account of Purchaser against the
Purchase Price (i) any security deposit reflected as being made under any leases
executed with respect to the Property or otherwise actually collected by Seller,
together with all interest, if any, which must be paid thereon to any tenant
thereunder; and (ii) all prepaid rents and other charges paid in advance by any
tenants of the Property and attributable to the period after the Closing; and in
each case, the Lease Assignment shall provide for Purchaser’s assumption of the
obligation to return any such sums (and, if applicable, interest thereon) to the
extent same are so credited, but not otherwise. If any security deposits are in
the form of a letter of credit, Seller must deliver to Purchaser at Closing the
original letter of credit, together with all assignment/transfer documentation
(fully executed and bank authenticated, as applicable) and assignment/transfer
fees required by the issuing entity to cause same to be reissued to Purchaser
immediately following the Closing.

(e) Leasing commissions and tenant improvement expenses relating to lease
agreements pertaining to the Property shall be apportioned between the parties
as follows:

(i) All such expenses relating to leases executed before the Effective Date, and
which are not contingent on renewal or expansion of any such Lease after the
Effective Date, shall be the sole obligation of Seller and shall be paid in full
by Seller (regardless of whether any portion of such expenses may not otherwise
become due until after the Closing Date), on or before the Closing Date and, if
Purchaser fails to receive reasonably acceptable evidence of such payment
(together with the release of any lien applicable thereto), the unpaid portion
shall be credited against the Purchase Price.

(ii) All such expenses relating to Leases executed before the Effective Date,
which are solely payable with respect to and contingent upon renewal of any such
Lease or expansion into additional space by the tenant under any such Lease
after the Closing Date shall be the sole obligation of Purchaser,

 

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provided such expenses are disclosed in the Leases and commission agreements
delivered to Purchaser at least three (3) business days prior to the expiration
of the Review Period. Any such expenses not so disclosed shall render Seller
liable for any such expenses and, if Purchaser fails to receive reasonably
acceptable evidence of payment (together with the release of any lien applicable
thereto) on or before the Closing, Purchaser will receive a credit therefor
against the Purchase Price.

(iii) Any such expenses relating to Leases executed between the Effective Date
and Closing shall be borne by Seller and, if Purchaser fails to receive
reasonably acceptable evidence of payment (together with the release of any lien
applicable thereto) on or before the Closing, Purchaser will receive a credit
therefor against the Purchase Price.

(f) Notwithstanding the foregoing, in the event that a tenant under the Leases
is responsible for paying any of the items which are to be prorated, then there
shall only be a proration to the extent that the Tenant under such Leases does
not pay for the same.

(g) Purchaser shall be responsible for all taxes and assessments for prior tax
years or for the Closing tax year being assessed because of a change in land
usage or ownership of the Property (known variously as “rollback,” “agricultural
recoupment” or “school board revaluation” taxes).

Section 7.03 Transaction Costs. Seller shall be responsible for (a) all
attorneys fees and expenses, if any, of counsel to Seller; (b) recordation of
the Deed; (c) the cost of the Owner’s Policy, excluding all endorsements
thereto; (d) one-half (1/2) of any escrow and other charges of the Title Company
and recording fees; (e) the cost of the current Survey (subject to
Section 3.01); (f) any other similar closing costs customarily paid by a seller
of real property in Travis County, Texas; and (g) any transfer costs imposed by
any homeowners association governing the Property. Purchaser shall be
responsible for (i) all attorneys’ fees and expenses, if any, of counsel to
Purchaser; (ii) one-half (1/2) of any escrow and other charges of the Title
Company; (iii) the cost of any endorsements requested by the Purchaser including
extended coverage; and (iv) any other similar closing costs customarily paid by
a purchaser of real property in Travis County, Texas.

Section 7.04 Brokerage Commissions. Purchaser represents to Seller that
Purchaser has not engaged the services of any broker, finder or other agent in
regard to this Contract. Purchaser hereby agrees to indemnify Seller and hold
Seller harmless against all liability, loss, cost, damage and expense
(including, but not limited to, attorneys’ fees and court costs, including any
appeal that may be filed) which Seller shall ever suffer or incur because of any
claim by any broker, finder, or other agent, whether or not meritorious, for any
fee, commission or other compensation with respect hereto resulting from the
acts of Purchaser. Seller represents to Purchaser that Seller has not engaged
the services of any real estate broker, finder or other agent in regard to this
Contract other than Blue Pacific Wealth Management, Inc. who shall be paid a
commission by Seller pursuant to the terms of a separate agreement if the
transaction

 

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contemplated by this Contract closes. Seller hereby agrees to indemnify
Purchaser and hold Purchaser harmless against all liability, loss, cost, damage
and expense (including, but not limited to, attorneys’ fees and court costs,
including any appeal that may be filed) which Purchaser shall ever suffer or
incur because of any claim by any broker, finder, or other agent, whether or not
meritorious, for any fee, commission or other compensation with respect hereto
resulting from the acts of Seller. This provision shall survive Closing.

Section 7.05 Survival. The terms of this Article shall survive the termination
of this Contract and the Closing and delivery of the Deed.

ARTICLE VIII

TERMINATION AND REMEDIES

Section 8.01 Purchaser’s Default. If Purchaser defaults under this Contract
(other than a failure to restore the Property as required by Section 3.04) and
such default (other than the payment of money) remains uncured for a period of
three (3) days after written notice thereof, Seller shall be entitled, as
Seller’s sole and exclusive remedy, to terminate this Contract and receive the
Earnest Money Deposit from the Title Company. Seller and Purchaser acknowledge
and agree that delivery of the Earnest Money Deposit shall be deemed liquidated
damages for Purchaser’s breach of this Contract, it being further agreed that
the actual damages to Seller in the event of such breach are impractical to
ascertain and the Earnest Money Deposit is a reasonable estimate thereof. There
shall be no limitation on Purchaser’s liability with respect to its obligation
to restore the Property pursuant to Section 3.04. Seller has no right to
specifically enforce Purchaser’s obligations under this Contract nor to seek or
otherwise collect any actual, out-of-pocket, lost profit, punitive,
consequential, treble, or other damages from or against Purchaser, except for
the indemnity obligations of Purchaser expressly set forth in this Contract or
with respect to Purchaser’s obligation to restore the Property pursuant to
Section 3.04. In no event shall any officer, director, agent or employee of
Purchaser or its partners be personally liable for any of Purchaser’s
obligations under this Contract or the documents to be delivered at the Closing.

Section 8.02 Seller’s Default. If Seller defaults under this Contract and such
default (other than the payment of money) remains uncured for a period of three
(3) days after written notice thereof, Purchaser shall be entitled, as
Purchaser’s sole and exclusive remedies, to either (a) terminate this Contract
upon written notice to Seller and to receive a return of the Earnest Money
Deposit from the Title Company, together with all accrued interest thereon, or
(b) pursue an action to enforce specific performance of Seller’s obligations
under this Contract. Purchaser has no right, except as provided in the next
sentence, to seek damages against Seller. Notwithstanding the foregoing, in the
event that specific performance is not a viable remedy as a result of Seller
conveying the Property to a third party or mortgaging the Property in violation
of the terms of this Agreement, then Purchaser shall be entitled to recover
damages as a result of Seller’s willful default of this Agreement by virtue of
conveying the Property to a third party or mortgaging its interest in the
Property if said mortgage is not satisfied at the Closing.

 

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ARTICLE IX

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 9.01 Seller’s Representations. Seller hereby represents and warrants to
Purchaser except as set forth in that certain schedule (the “Disclosure
Schedule”) attached hereto as Exhibit H and made a part hereof for all purposes,
as follows:

(a) Seller is a duly organized, validly existing limited partnership in good
standing under the laws of the State of Texas and is authorized to conduct
business in the State of Texas. This Contract has been duly authorized, executed
and delivered by Seller, and is and at the time of the Closing will be a legal,
valid and binding obligation of Seller enforceable against Seller in accordance
with its terms.

(b) Seller has received no written notice of any (and, to Seller’s actual
knowledge, there is no) current, proposed or threatened eminent domain or
similar proceeding, or private purchase in lieu of such proceeding, which would
adversely affect the Property in any way whatsoever.

(c) Seller has not received any written notice of a claim that the Property does
not comply with any federal, state, county, city or any other laws, ordinances,
rules and regulations, including, but not limited to, those relating to
environmental, zoning, land use and division, building, fire, health and safety
matters, of any government or any agency, body or subdivision thereof bearing on
the construction of the Improvements and on the operation, ownership or use of
the Property (collectively, “Applicable Laws”), which noncompliance Seller has
not cured.

(d) Seller has received no written notice of any pending or threatened,
litigation which does or would adversely affect the Property or Seller’s ability
to fulfill all of its obligations under this Contract. Except as set forth in
the Disclosure Schedule, there are no outstanding claims on Seller’s insurance
policies which claims relate to the Property.

(e) Seller has delivered to Purchaser true and complete copies of all Leases. To
Seller’s actual knowledge, no material default or breach exists on the part of
any tenant under the Leases. Seller as landlord has fully completed all
construction obligations and all tenant improvements specified in the Leases to
be the responsibility of the landlord thereunder and has paid all tenant
improvement costs, allowances and leasing commissions applicable thereto and no
such costs are payable at any time hereafter. Seller has not received any
written notice of any default or breach on the part of the landlord under any of
the Leases, nor, to Seller’s actual knowledge, does there exist any default or
breach on the part of the landlord thereunder. No Lease grants any tenant any
right to purchase all or any portion of the Property. Except as set forth in the
Disclosure Schedule, there are no agreements which would require the payment of
a leasing commission by the

 

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landlord upon any renewal or expansion of an existing Lease or new Lease
executed or otherwise exercised after the Effective Date. There are no pending
contracts for the sale of all or any portion of the Property.

(f) Except as disclosed to Purchaser, there are no Service Contracts or other
written agreements for services, supplies or materials affecting the use,
operation or management of the Property. Seller has delivered to Purchaser true,
complete and correct copies of all Service Contracts.

(g) Seller has not received any written notice concerning any alleged violation
of any applicable environmental law, rule or regulation which remains uncured.

(h) Purchaser has no obligation to continue to employ any persons presently
employed by Seller at the Property.

(i) Seller is not a foreign corporation, foreign partnership, foreign trust or
foreign estate (as defined in the Internal Revenue Code (“Code”)), and is not
subject to the provisions of Sections 897(a) or 1445 of the Code related to the
withholding of sales proceeds to foreign persons.

(j) To the best of Seller’s knowledge, Purchaser and its successors and assigns
shall have the right to use and enjoy the common amenities of the property
owners association, if any, to fullest extent that any other owner of a unit or
property within Arbor at Cannons Gate Office Condominium enjoys.

(k) Seller represents and warrants that Seller has no actual knowledge that
(i) the Arbors at Cannons Gate Office Condominium Association, Inc. (the “HOA”)
does not have sufficient funds, inclusive of accounts receivable, to pay its
anticipated debts incurred in the ordinary course of business, (ii) the HOA has
not been operated in accordance with all applicable Texas laws, rules and
regulation and (iii) all subdivision improvements have not been constructed in
accordance with approved plans, specifications and permits and there are no
claims relating to such subdivision improvements.

Section 9.02 Purchaser’s Representations. Purchaser hereby represents and
warrants to Seller, as of the date hereof and as of the Closing Date, as
follows:

(a) Purchaser is duly organized, validly existing and in good standing under the
laws of the state of its organization, and has all requisite power and authority
to carry on its business as now conducted. This Contract constitutes a valid and
binding obligation of Purchaser enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting the rights and
remedies of creditors.

(b) Purchaser has the capacity and complete authority to enter into and perform
this Contract, and no consent, approval or other action by any person or

 

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entity (other than the person signing this Contract on behalf of Purchaser and
any approval to be obtained by Purchaser during the Review Period) will be
needed thereafter to authorize Purchaser’s execution and performance of this
Contract.

(c) Purchaser has no knowledge of any facts or circumstances which Purchaser has
not disclosed to Seller and which would reveal any breach of any representation,
warranty or covenant on the part of Seller under this Contract.

Section 9.03 Discovery. If either Seller or Purchaser discovers, prior to or at
the Closing, that any representation or warranty of the other party is false,
misleading or inaccurate in any material respect, the discovering party may, at
its option, terminate this Contract and the parties hereto shall be relieved of
all liabilities and obligations hereunder and (a) if Purchaser is the
discovering party, Purchaser shall be entitled to the immediate return of the
Earnest Money Deposit, together with all accrued interest thereon, and to pursue
its remedies under Section 8.02 of this Contract; and (b) if Seller is the
discovering party, Seller shall be entitled to pursue its remedies under
Section 8.01 of this Contract. If the discovering party elects to proceed to
Closing such party cannot later bring a claim against the other as to such
discovered matter. Representations and warranties under this Article IX shall
fully survive the Closing and the delivery of the Deed, but to the extent that
neither Seller nor Purchaser has made any claim as to the breach of any such
representation or warranty within one (1) year after the Closing Date, such
representations and warranties will terminate and be of no further force and
effect.

Section 9.04 Operating Covenants. Seller agrees to operate and maintain the
Property prior to the Closing in a manner consistent with its current operating
procedures, and shall not, without the prior written consent of Purchaser, do
any of the following:

(a) Enter into any contract (other than leases which are subject to clause
(b) below) that will not be fully performed by Seller on or before the Closing
Date or that will not be susceptible of cancellation by Purchaser on or after
the Closing Date upon thirty (30) days or less prior written notice, without
cost or liability to Purchaser, or amend, modify or supplement any existing
contract (other than leases which are subject to clause (b) below) or agreement
in any material respect.

(b) Enter into any new lease or amend, modify, supplement or terminate any
existing lease in any material way. Seller agrees that, after the Review Period,
Purchaser shall have the right, without Seller’s consent, to enter into new
leases affecting all or any portion of the Property, as long as any such lease
will only take effect from and after the Closing Date and only if Purchaser
becomes owner of the Property. Seller agrees to reasonably cooperate with
Purchaser’s leasing efforts.

(c) Fail to maintain its current insurance covering Seller’s interest in the
Property or advise Purchaser promptly of the occurrence of any fire or other
casualty affecting the Property.

 

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(d) Sell, assign or create any right, title or interest whatsoever in or to the
Property (including any so-called “back up” contracts which are expressly
prohibited) or create any voluntary lien, thereon from and after the date of the
Title Commitment, other than liens or encumbrances noted in the Title
Commitment, without promptly discharging same or otherwise complying with the
terms of Section 4.04.

(e) Intentionally take any action which would have the effect of violating any
of the representations and warranties of Seller contained in this Contract.

Section 9.05 Conditions Precedent. Purchaser is not obligated to perform under
this Contract unless all of the following conditions precedent are satisfied (or
waived in writing by Purchaser) and are otherwise true and correct as of the
Closing Date:

(a) All of Seller’s representations and warranties in this Contract that are
qualified by materiality or subject to thresholds are true and correct in all
respects and the representations and warranties of Seller contained in this
Contract that are not so qualified are true and correct in all material
respects, in each case as of the Closing Date (except for the representations or
warranties that are expressly made as of a specified date, which (i) to the
extent not qualified by materiality or subject to thresholds, shall be true and
correct in all material respects, or (ii) to the extent qualified by materiality
or subject to thresholds, shall be true and correct in all respects, in each
case as of such specified date only), except for changes specifically permitted
or contemplated by this Contract.

(b) Seller has performed all of its covenants, agreements, and obligations under
this Contract in all material respects and is otherwise not in default.

(c) Seller has delivered all Required Estoppels in compliance with
Section 6.02(e).

(d) There has been no material adverse change in the matters reflected in the
Title Commitment, the Survey, the rent roll, the operating statements or the
environmental condition since the date of delivery, approval or review, as
applicable, of such items, except to reflect those items approved or otherwise
created in writing by Purchaser.

(e) If all or any portion of the Improvements are vacant or are to be vacant as
of the Closing, such portion of the Improvements must be in “broom clean”
condition with all racking systems and other personal designated by Purchaser
removed on or before the Closing, with all damage caused thereby repaired in a
manner reasonably acceptable to Purchaser.

 

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Notwithstanding the generality of the foregoing, Seller shall use reasonable
efforts to satisfy all of the foregoing conditions precedent. If Seller is
unable to satisfy all of the foregoing conditions precedent, Purchaser may waive
one or more conditions precedent, extend the Closing Date for up to an
additional fifteen (15) days or terminate this Contract, in any such event by
written notice to Seller. If Purchaser elects to close, Purchaser will be deemed
to have waived any conditions actually known by Purchaser to be unsatisfied at
the Closing. If Purchaser elects to terminate, the Earnest Money Deposit shall
be immediately returned to Purchaser.

Section 9.06 Post Closing Claim. If: (i) Purchaser makes a claim against Seller
with regard to a representation or warranty which expressly survives Closing,
(ii) Purchaser makes such claim within the one (1) year time period set forth in
Section 9.03 above, and (iii) Purchaser obtains a final and non-appealable
judgment against Seller which remains unpaid for a period of thirty (30) days,
then Seller agrees that Purchaser shall have the right to trace the Purchase
Price to the extent necessary to satisfy such claim. Seller represents to
Purchaser that Seller has (or will prior to distribution of any such disposition
proceeds) provide written notice to Seller’s partners, shareholders and members
(and, if such partners, shareholders and members are entities whose sole
material asset is their respective interest in Seller, their respective members,
partners and affiliates) of this tracing provision. Seller acknowledges and
agrees that Purchaser has relied and has the right to rely upon the foregoing in
connection with Purchaser’s consummation of the transaction set forth in this
Contract.

Section 9.07 Disclaimer of Representations and Warranties. EXCEPT FOR SELLER’S
REPRESENTATIONS AND WARRANTIES AS CONTAINED IN SECTION 9.01 ABOVE, THE PROPERTY
SHALL BE CONVEYED IN IS “AS IS”, “WHERE IS” and “WITH ALL FAULTS” BASIS AND
SELLER DISCLAIMS ANY AND ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER,
EITHER EXPRESS OR IMPLIED OR STATUTORY RELATING TO THE PROPERTY OR ANY PORTION
THEREOF, OF ITS CONDITION.

SELLER FURTHER MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR PURPOSE IN
RESPECT OF THE PROPERTY. PURCHASER AFFIRMS THAT PURCHASER HAS NOT RELIED ON
SELLER’S SKILL OR JUDGMENT TO SELECT OR FURNISH SUCH PROPERTY FOR ANY PARTICULAR
PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT SUCH PROPERTY IS FIT FOR ANY
PARTICULAR PURPOSE. PURCHASER HAS TAKEN INTO ACCOUNT AND ASSUMES SUCH RISK OF
UNKNOWN, AND/OR UNDISCOVERED ADVERSE CONDITIONS IN MAKING ITS DECISION TO
PURCHASE THE PROPERTY ON THE TERMS SET FORTH HEREIN.

All references in this Contract and/or in any other document or instrument
executed by Seller in connection with or pursuant to this Contract, to Seller’s
“knowledge,” “actual knowledge” or “to the knowledge of Seller” and words of
similar import shall refer to facts within the current actual knowledge of Matt
McCarty (the “Seller Representative”). Nothing in this Contract shall imply or
impose any duty of investigation or inquiry upon Seller or the Seller
Representative, or give rise to any personal liability on the part of the Seller
Representative.

 

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ARTICLE X

NOTICES

Section 10.01 Notices. Any notice, demand or other communication which may or is
required to be given under this Contract must be in writing and must be:
(a) personally delivered; (b) transmitted by United States postage prepaid mail,
registered or certified mail, return receipt requested; (c) transmitted by
reputable overnight courier service, such as Federal Express; or (d) transmitted
by legible facsimile (with answer back confirmation) to Purchaser and Seller as
listed below. Except as otherwise specified herein, all notices and other
communications shall be deemed to have been duly given on (i) the date of
receipt if delivered personally, (ii) two (2) business days after the date of
posting if transmitted by registered or certified mail, return receipt
requested, (iii) the first (1st) business day after the date of deposit, if
transmitted by reputable overnight courier service, or (iv) the date of
transmission with confirmed answer back if transmitted by facsimile, whichever
shall first occur. A notice or other communication not given as herein provided
shall only be deemed given if and when such notice or communication and any
specified copies are actually received in writing by the party and all other
persons to whom they are required or permitted to be given. Purchaser and Seller
may change their addresses for purposes hereof by notice given to the other
parties in accordance with the provisions of this Section, but such notice shall
not be deemed to have been duly given unless and until it is actually received
by the other parties. Notices hereunder shall be directed as follows:

 

If to Purchaser:

   HC-2501 W William Cannon Dr LLC    a Delaware limited liability company   
4211 W. Boy Scout Blvd.    Suite 500    Tampa, FL 33607    Attention: John E.
Carter    Telephone: (813) 263-5312    Facsimile: (813) 287-0397    Email:
jcarter@carterusa.com

With a copy to:

   Lisa Drummond    HC-2501 W William Cannon Dr, LLC    4211 W. Boy Scout
Boulevard, Suite 500    Tampa, Florida 33607    Telephone: (813) 387-1691   
Facsimile: (813) 287-0397    Email: ldrummond@carterusa.com

 

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With a copy to:

   GrayRobinson, P.A.    201 North Franklin Street, Suite 2200    Tampa, Florida
33602    Attention: Stephen L. Kussner, Esquire    Telephone: (813) 273-5296   
Facsimile: (813) 273-5145    Email: stephen.kussner@gray-robinson.com

If to Seller:

   Stonegate Professional Properties, L.P.    2501 William Cannon Dr., Building
#401    Austin, Texas 78745    Attention: Matt McCarty and Robert Wills   
Telephone: (512) 699-2461    Facsimile:                                         
  

Email: rwills@austinpainassociates.com and

mattfmccarty@gmail.com

With a copy to:

   Winstead PC    401 Congress Ave., Suite 2100    Austin, Texas 78701   
Attention: Michael N. Blue, Esq.    Telephone: (512) 370-2843    Facsimile:
(512) 370-2850    Email: mblue@winstead.com

Either party’s counsel may deliver any notice required or otherwise permitted to
be given by the party they represent hereunder with the same effect as if given
directly by such party.

ARTICLE XI

RISK OF LOSS

Section 11.01 Minor Damage. In the event of “minor” loss or damage (being
defined for the purpose of this Contract as damage to the Property such that the
Property could be repaired or restored, in the opinion of an architect mutually
acceptable to Seller and Purchaser (with any fees, costs or expenses pertaining
to such opinion to be borne equally by Purchaser and Seller), to a condition
substantially identical to that of the Property immediately prior to the event
of damage at a cost equal to or less than $250,000 and which would not permit
any tenant to terminate its Lease), neither Seller nor Purchaser shall have the
right to terminate this Contract as to the Property due to such damage but
Seller shall, at Seller’s option as expressed to Purchaser in writing, either
(a) reduce the Purchase Price by an amount equal to the cost to repair such
damage, or (b) repair and restore the damaged portion of the Property to a
condition substantially identical to that which existed immediately prior to the
occurrence of such damage and in either such event Seller shall retain all of
Seller’s right, title and interest to any claims and proceeds Seller may have
with respect to any casualty, rental loss and other insurance

 

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policies relating to the Property. If Seller elects to repair and restore the
damaged portion of the Property, Seller shall act promptly and diligently to
complete such repairs in a good and workmanlike manner and shall complete such
repairs prior to the Closing Date if reasonably possible. If it is not
reasonably possible to complete such repairs prior to the Closing Date, the
parties will nonetheless proceed to the Closing, but Seller must give Purchaser
a credit equal to the remaining cost to complete such repairs.

Section 11.02 Major Damage. In the event of a “major” loss or damage (being
defined as any loss or damage which is not “minor” as defined hereinabove),
Purchaser shall have the option of terminating this Contract by written notice
to Seller within seven (7) days of written receipt of such loss or damage, in
which event Seller and Purchaser shall thereupon be released from any and all
liability hereunder. If Purchaser elects not to terminate this Contract,
Purchaser and Seller shall proceed with the Closing, provided Seller shall
assign all of Seller’s right, title and interest to any claims and proceeds
Seller may have with respect to any casualty, rental loss and other insurance
policies relating to the Property, and Purchaser shall receive a credit against
the Purchase Price in an amount equal to the aggregate amount of any
deductible(s) under the insurance policies assigned to Purchaser, together with
the uninsured portion of any such damage.

Section 11.03 Vendor and Purchaser Risk. Except as set forth in Section 11.01
and Section 11.02, Seller shall bear the full risk of loss until Closing. Upon
the Closing, full risk of loss with respect to the Property shall pass to
Purchaser.

Section 11.04 Condemnation. If before the Closing any condemnation or eminent
domain proceedings are threatened or initiated against all or any portion of the
Property and, in the reasonable opinion of Purchaser, such condemnation or
eminent domain proceedings would materially interfere with the current use of
the Property, then Purchaser may terminate this Contract by written notice to
Seller within seven (7) days of written receipt of such condemnation or eminent
domain proceedings and Seller and Purchaser shall thereupon be released from any
and all further liability hereunder. If Purchaser does not elect to terminate
this Contract within seven (7) days after receipt of written notice of the
commencement of any such proceedings, or if, in the reasonable opinion of
Purchaser, such condemnation or eminent domain proceedings would not materially
interfere with Seller’s current use of the Property, Seller shall assign to
Purchaser at the Closing all rights and interest of Seller in and to any
condemnation awards payable or to become payable on account of such condemnation
or eminent domain proceedings.

ARTICLE XII

MISCELLANEOUS

Section 12.01 Entire Agreement; Confidentiality. This Contract constitutes the
entire agreement between the parties hereto and supersedes any prior
understanding, letter of intent or written or oral agreements between the
parties concerning the Property.

 

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Section 12.02 No Rule of Construction. This Contract has been drafted by both
Seller and Purchaser and no rule of construction shall be invoked against either
party with respect to the authorship hereof or of any of the documents to be
delivered by the respective parties at the Closing.

Section 12.03 Multiple Counterpart; Governing Law. This Contract may be executed
in multiple counterparts each of which shall be deemed an original but together
shall constitute one and the same instrument, and shall be construed and
interpreted under the laws of the State in which the Property is located
(without regard to conflicts of laws) and all obligations of the parties created
hereunder are performable in the City and County in which the Property is
located. A facsimile signature of a party shall be binding on such party to the
same extent as an original signature. If this Contract, or any future amendment
to this Contract, is signed by the parties or a party and delivered by means of
facsimile transmission, the parties agree promptly to thereafter exchange
original, executed counterparts thereof.

Section 12.04 Attorneys’ Fees. In the event of any litigation or other
proceeding brought by either party hereunder, the prevailing party shall be
entitled to recover its attorneys’ fees and costs of suit.

Section 12.05 Interpretation. This Contract shall, unless otherwise specified
herein, be subject to the following rules of interpretation: (a) the singular
includes the plural and the plural the singular; (b) words importing any gender
include the other genders; (c) references to persons or entities include their
permitted successors and assigns; (d) words and terms which include a number of
constituent parts, things or elements, including the terms Improvements,
Permitted Exceptions, Personal Property, Intangible Property and Property, shall
be construed as referring separately to each constituent part, thing or element
thereof, as well as to all of such constituent parts, things or elements as a
whole; (e) references to statutes are to be construed as including all rules and
regulations adopted pursuant to the statute referred to and all statutory
provisions consolidating, amending or replacing the statute referred to;
(f) references to agreements and other contractual instruments shall be deemed
to include all subsequent amendments thereto or changes therein entered into in
accordance with their respective terms; (g) the words “approve” or “consent” or
“agree” or derivations of said words or words of similar import mean, unless
otherwise expressly provided herein or therein, the prior approval, consent, or
agreement in writing of the person holding the right to approve, consent or
agree with respect to the matter in question, and the words “require” or
“judgment” or “satisfy” or derivations of said words or words of similar import
mean the requirement, judgment or satisfaction of the person who may make a
requirement or exercise judgment or who must be satisfied, which approval,
consent, agreement, requirement, judgment or satisfaction shall, unless
otherwise expressly provided herein or therein, be in the sole and absolute
discretion of the person holding the right to approve, consent or agree or who
may make a requirement or judgment or who must be satisfied; (h) the words
“include” or “including” or words of similar import shall be deemed to be
followed by the words “without limitation”; (i) the words “hereto” or “hereby”
or “herein” or “hereof” or “hereunder,” or words of similar import, refer to
this Contract in its entirety; (j) references to sections, articles, paragraphs
or clauses are to the sections, articles,

 

23

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paragraphs or clauses of this Contract; and (k) numberings and headings of
sections, articles, paragraphs and clauses are inserted as a matter of
convenience only and shall not affect the construction of this Contract. Seller
acknowledges that Seller’s obligations with respect to any covenant, indemnity,
representation or warranty under this Contract which expressly survives the
Closing shall be considered a “liability” for purposes of any member or other
distribution limitation imposed under the organizational laws applicable to
Seller and/or its members, shareholders and partners.

Section 12.06 Exhibits. The exhibits attached hereto shall be deemed to be an
integral part of this Contract.

Section 12.07 Modifications. This Contract cannot be changed orally, and no
executory agreement shall be effective to waive, change, modify or discharge it
in whole or in part unless such executory agreement is in writing and is signed
by the parties against whom enforcement of any waiver, change, modification or
discharge is sought. Any such modification need not be joined in by the Title
Company.

Section 12.08 Reporting Person. Purchaser and Seller hereby designate the Title
Company as the “reporting person” pursuant to the provisions of Section 6045(e)
of the Internal Revenue Code of 1986, as amended.

Section 12.09 Time of Essence. Time is of the essence to both Seller and
Purchaser in the performance of this Contract, and they have agreed that strict
compliance by both of them is required as to any date and/or time set out
herein, including, without limitation, the dates and times set forth in Article
IV of this Contract. If the final day of any period of time set out in any
provision of this Contract falls upon a Saturday, Sunday or a legal holiday
under the laws of the State in which the Property is located, then and in such
event, the time of such period shall be extended to the next day which is not a
Saturday, Sunday or legal holiday.

Section 12.10 Confidentiality. Purchaser and Seller shall hold, and shall cause
and their respective employees and representatives to hold, in strict
confidence, and Purchaser and Seller shall not disclose, and shall prohibit
their respective employees and representatives from disclosing, to any other
person without the prior written consent of the other party, (a) the terms of
this Contract and the Property, including the existing lease and sublease
thereon, (b) any of the information in respect of the Property delivered to or
for the benefit of Purchaser whether by its employees and representatives
(“Purchaser’s Representatives”) or Seller or its respective employees and
representatives (“Seller’s Representatives”), and (c) the identity of any direct
or indirect owner of any beneficial interest in Seller or Purchaser.
Notwithstanding anything contained in this Contract to the contrary, the parties
obligations under clauses (a), (b) and (c) of the immediately preceding sentence
shall survive the Closing and not be merged therein. Notwithstanding anything to
the contrary hereinabove set forth, the parties may disclose such information
(i) on a need-to-know basis to its employees, agents, consultants, members of
professional firms serving it or potential lenders, investors, consultants and
brokers, on a confidential basis, such terms of the Contract as are customarily
disclosed to such parties in connection with similar acquisitions, (ii) as may
be required in order to

 

24

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comply with applicable laws, rules or regulations or a court order or as may be
required for any disclosure or filing requirements of the Securities and
Exchange Commission, the Securities Act of 1933, as amended (the “Securities
Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
the rules promulgated thereunder or any authority governing disclosure filings
required by applicable law, rules or regulations, including but not limited to
the disclosure of any lease, including any amendments, modifications, extensions
or renewals thereto and any collateral material used in connection with a public
offering of securities by Purchaser or (iii) to the extent that such information
is a matter of public record. By Seller’s execution of this Contract, Seller
hereby confirms its agreement to indemnify, defend and hold Purchaser free and
harmless from and against any and all problems, conditions, losses, costs,
damages, claims, liabilities, expenses, demands or obligations (including
reasonable attorneys’ fees, expenses and disbursements), of any kind or nature
whatsoever, arising out of Seller’s breach of this Section up to a maximum
amount of Ten Thousand Dollars ($10,000.00).

Section 12.11 SEC S-X 3-14 Audit. Seller acknowledges that Purchaser is, or may,
subject to Section 12.13, elect to assign all of its right, title and interest
in and to the Contract to a company that is subject to the requirements of the
Exchange Act and/or the Securities Act (a “Registered Company”) promoted by the
Purchaser or to an affiliate of a Registered Company (a “Registered Company
Affiliate”). In the event Purchaser is a Registered Company or Purchaser’s
assignee under the Contract is a Registered Company or a Registered Company
Affiliate, the Registered Company will be required to make certain filings with
the U.S. Securities and Exchange Commission (“SEC”) required under SEC Rule 3-14
of Regulation S-X (the “SEC Filings”) that relate to previous fiscal years for
the Property and/or the tenant and subtenant. To assist the Registered Company
with the preparation of the SEC Filings, Seller agrees to, at Purchaser’s sole
cost and expense, and shall, provide Purchaser and the Registered Company with
financial information regarding the Property and/or the tenant and any subtenant
for the years requested by Purchaser, the Registered Company, and/or Purchaser’s
or the Registered Company’s auditors. Such information may include, but is not
limited to, bank statements, operating statements, general ledgers, cash
receipts schedules, invoices for expenses and capital improvements, insurance
documentation, and accounts receivable aging related to the Property and/or the
tenant and subtenant (“SEC Filing Information”). Seller shall deliver the SEC
Filing Information requested by Purchaser, the Registered Company and/or
Purchaser’s or the Registered Company’s auditors prior to the expiration of the
Review Period, and Seller agrees to cooperate with Purchaser, at no material
cost to Seller, the Registered Company and Purchaser’s or the Registered
Company’s auditors regarding any inquiries by Purchaser, the Registered Company
and Purchaser’s or the Registered Company’s auditors following receipt of such
information, including delivery by Seller of an executed representation letter
prior to Closing in form and substance requested by Purchaser’s or the
Registered Company’s auditors (“SEC Filings Letter”). A sample SEC Filings
Letter is attached to the Contract as Exhibit J; however, Purchaser’s and/or the
Registered Company’s auditors may require additions and/or revisions to such
letter following review of the SEC Filing Information provided by Seller. Seller
consents to the disclosure of the SEC Filing Information in any SEC Filings by
the Registered Company. Purchaser agrees to promptly reimburse Seller for all
out-of-pocket costs and expenses, including attorneys’ fees, incurred by Seller
in complying with this Section 12.11. Seller’s obligations under this
Section 12.11 shall survive the Closing and not be merged therein.

 

25

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Section 12.12 Severability. In case any one or more of the provisions contained
in this Contract shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and the remainder of this Contract
shall be enforced. In addition, the invalid, illegal or unenforceable provision
shall be deemed to be automatically modified, and, as so modified, to be
included in this Contract, such modification being made to the minimum extent
necessary to render the provision valid, legal and enforceable. Notwithstanding
the foregoing, however, if the severed or modified provision concerns all or a
portion of the essential consideration to be delivered under this Contract by
one party to the other, the remaining provisions of this Contract shall also be
modified to the extent necessary to equitably adjust the parties’ respective
rights and obligations under this Contract.

Section 12.13 Assignment. Purchaser may assign its rights under this Contract
without Seller’s consent if, but only if, such assignee is an affiliate of
Purchaser.

Section 12.14 Right of Termination. Notwithstanding any provision in this
Agreement to the contrary, in the event Purchaser uses Regions Bank to finance
the acquisition of the Property then Seller shall have the right to terminate
the Agreement by giving written notice of such termination to Purchaser prior to
the Closing and in that event, the parties hereto shall thereupon be relieved of
all liabilities and obligations hereunder and the Earnest Money Deposit shall be
refunded fully and promptly to Purchaser.

[SEE SIGNATURES ON THE FOLLOWING PAGES]

 

26

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IN WITNESS WHEREOF, this Contract has been executed by Purchaser as of (but not
necessarily on) the date and year first above written.

 

WITNESSES:     PURCHASER:    

HC-2501 W WILLIAM CANNON DR, LLC,

a Delaware limited liability company

    By: /s/ John Carter                                        

/s/ Elizabeth Fay

   

John Carter

Elizabeth Fay

    CEO                                                                         
/s/ Lisa Collado    

Lisa Collado

   

 

27

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IN WITNESS WHEREOF, this Contract has been executed by Seller as of (but not
necessarily on) the date and year first above written.

 

SELLER:

STONEGATE PROFESSIONAL PROPERTIES, L.P.,

a Texas limited partnership

By:   Stonegate Professional Properties Management, L.L.C., a Texas limited
liability company, its general partner   By:   /s/ Robert P.
Wills                                     Robert P. Wills     Manager

 

28

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TITLE COMPANY JOINDER

The Title Company joins herein in order to evidence its agreement to perform the
duties and obligations of the Title Company set forth herein and the
accompanying escrow instructions and to acknowledge receipt, as of the date set
forth below, of an original counterpart of this Contract signed by Seller and
Purchaser. The Title Company acknowledges that any demand made by Purchaser for
the return of the Earnest Money Deposit received on or before the last day of
the Review Period need not be joined in by Seller in order to be effective.

Date: January 17, 2012.

 

HERITAGE TITLE COMPANY OF

AUSTIN, INC.

By:  

/s/ Jennifer J. Rambery

  Jennifer J. Rambery   Vice President

 

29

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SCHEDULE 3.03

LIST OF CERTAIN REVIEW ITEMS

TENANT INFORMATION

 

1. Rent Roll – Rent roll including square footage, lease term, base rent and
scheduled rent escalations.

 

2. Lease Documents – All leases, lease addendum, lease amendments, subleases,
commencement verification letters, and any other letter agreements related
thereto.

 

3. Recent Leasing Activity – Copies of any and all proposals or letters of
intent submitted to or received from existing or prospective tenants within the
past six months.

 

4. Tenant Financial Statements, if any.

 

5. Guarantor’s Financial Statements, if any.

OPERATING INFORMATION

 

6. Historical Operating Statements – Three (3) years historical operating
statements. Current YTD monthly operating statements.

 

7. Operating Budget – Current year’s operating and capital budget(s).

 

8. Service Contracts – Copies of all service, maintenance, leasing, management,
and other contracts or agreements to be assumed by Purchaser at closing.

 

9. Tax Bills – Three (3) years historical real estate tax bills.

BUILDING INFORMATION

 

10. Property Condition Reports – All third party reports in Seller’s possession
accessing the physical and structural condition of the Property and Property
components including, without limitation: Soils, Engineering, Structural,
Seismographic, Geotechnical, Mechanical, Roof, Environmental, Fire/Life/Safety,
Air Quality Investigations; and ADA reports.

 

11. Building Plans – Comprehensive set of “As-Built” plans including all
specialty plan subsets: Architectural, Structural, Mechanical, Plumbing,
Electrical, Roof, and Landscape plans.

 

Schedule 3.03 - 1

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

12. Active T.I. Plans – Comprehensive set of plans, specifications, construction
contracts, and agreements for all tenant improvement or other construction
projects currently underway or committed to at the Property.

 

13. Certificates of Occupancy – Copies of certificates of occupancy for the
building shell(s) and all demised tenant spaces.

 

14. Operating Permits, Licenses & Certifications – Copies of all licenses,
permits, certifications, and other authorizations required for onsite operations
including, without limitation, Sprinkler Certification(s), Fire Alarm
Certification(s), Elevator Permits, Boiler Permit(s), Generator Permit(s),
Infra-red Electrical Test(s), Fire Pump Permit(s), UST Permit(s), Back-Flow
Certification(s); Swing Stage License(s), etc.

 

15. Elevator & HVAC Maintenance Logs – Two (2) years historical periodic
Elevator & HVAC maintenance reports, including comprehensive inventory of all
mechanical systems units stating manufacturer, make/model, capacity, age,
condition, and estimated remaining useful life.

 

16. Warranties & Guaranties – All active warranties and guaranties for products
installed and workmanship performed on the project.

 

17. Personal Property – Inventory of personal property to be transferred to
Purchaser.

 

18. All zoning and land use information.

 

19. All tenant and market analysis, appraisals, tax returns for Seller and the
guarantor of the Lease.

MISCELLANEOUS OTHER INFORMATION

 

20. Violations – Copies of any notices of violations from any agency or entity
having public or private jurisdiction over the Property.

 

21. Litigation – List of all litigation pending against the Property or the
Seller relating to the Property.

 

22. Insurance Documents – Current certificate of property insurance and
certificate of liability insurance.

 

23. Tenant Improvements. Description of improvements and costs paid for by
Tenants for any Tenant improvements.

HOMEOWNERS ASSOCIATION INFORMATION

 

24. Three (3) Year historical operating statements.

 

25. Current year to date monthly operating statements.

 

Schedule 3.03 - 2

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

26. Operating Budget – current year’s operating budget and capital budget.

 

27. Copies of all service, maintenance, management and other contracts.

 

Schedule 3.03 - 3

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

EXHIBIT A

LEGAL DESCRIPTION

Unit 301, 401 and 501, Stonegate Commons Office Condominiums, a Condominium
Project situated in Travis County, Texas, according to the Declaration of
Condominium and Plats and Exhibits attached thereto of record in Document
No. 2004233570 and Document No. 2004239650 (Plat), as amended by Document
No. 2005050752, Document No. 2005170928, Document No. 2005229466 and Document
No. 2006110880 of the Public Records of Travis County, Texas, together with an
undivided interest in the common elements thereof, together with the limited
common elements appurtenant thereto.

 

A - 1

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EXHIBIT B

SPECIAL WARRANTY DEED

[To be conformed to the laws of where the Property is located.]

This instrument prepared by or under the supervision of

(and after recording should be returned to):

Name:             , Esquire

Address:                                  
                                

 

 

(Space Reserved for Clerk of Court)

 

 

 

Parcel I.D. No.

SPECIAL WARRANTY DEED

THIS SPECIAL WARRANTY DEED is made and entered into as of the             day of
            , 20            by             , a             (“Grantor”), whose
mailing address is             ,             ,             ,             , to
            , a             (“Grantee”), whose taxpayer identification number is
and whose mailing address is             . Wherever used herein, the terms
“Grantor” and “Grantee” shall include all of the parties to this instrument and
their successors and assigns.

W I T N E S S E T H:

GRANTOR, for and in consideration of Ten and No/100 Dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, has granted, bargained and sold, and by these presents does hereby
grant, bargain and sell to Grantee and Grantee’s heirs, successors and assigns
forever, the following described land situate and being in Travis County, Texas
(the “Property”), to wit:

SEE EXHIBIT “A” ATTACHED HERETO AND MADE A PART

HEREOF

TOGETHER WITH all the tenements, hereditaments and appurtenances thereunto
belonging or in anywise appertaining.

THIS CONVEYANCE is subject to those matters set forth on Exhibit “B” attached
hereto and made a part hereof.

 

B - 1

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

TO HAVE and to hold the same in fee simple forever.

GRANTOR hereby binds Grantor and Grantor’s heirs and successors to warrant and
forever defend all and singular the Property to Grantee and Grantee’s heirs,
successors, and assigns against every person whomsoever lawfully claiming or to
claim the same or any part thereof when the claim is by, through, or under
Grantor but not otherwise, except as to the those matters set forth on Exhibit
“B” attached hereto and made a part hereof.

EXCEPT FOR GRANTOR’S REPRESENTATIONS AND WARRANTIES AS CONTAINED IN SECTION 9.01
OF THAT CERTAIN PURCHASE AGREEMENT (THE “CONTRACT”) ENTERED INTO BETWEEN GRANTOR
AS SELLER AND GRANTEE AS PURCHASER AND THE WARRANTIES OF TITLE SET FORTH HEREIN,
THE PROPERTY IS BEING CONVEYED IN IS “AS IS”, “WHERE IS” AND “WITH ALL FAULTS”
BASIS AND GRANTOR DISCLAIMS ANY AND ALL OTHER REPRESENTATIONS OR WARRANTIES
WHATSOEVER, EITHER EXPRESS OR IMPLIED OR STATUTORY RELATING TO THE PROPERTY OR
ANY PORTION THEREOF, OF ITS CONDITION.

GRANTOR FURTHER MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR PURPOSE IN
RESPECT OF THE PROPERTY. GRANTEE AFFIRMS THAT GRANTEE HAS NOT RELIED ON
GRANTOR’S SKILL OR JUDGMENT TO SELECT OR FURNISH SUCH PROPERTY FOR ANY
PARTICULAR PURPOSE, AND THAT GRANTOR HAS MADE NO WARRANTY THAT SUCH PROPERTY IS
FIT FOR ANY PARTICULAR PURPOSE. GRANTEE HAS TAKEN INTO ACCOUNT AND ASSUMES SUCH
RISK OF UNKNOWN, AND/OR UNDISCOVERED ADVERSE CONDITIONS IN MAKING ITS DECISION
TO PURCHASE THE PROPERTY ON THE TERMS SET FORTH HEREIN.

EXCEPT AS TO THE REPRESENTATIONS AND WARRANTIES SET OUT IN SECTION 9.01 OF THE
CONTRACT AND THE WARRANTIES OF TITLE SET FORTH HEREIN, GRANTEE SHALL BE DEEMED
TO HAVE WAIVED, RELINQUISHED AND RELEASED ANY AND ALL RIGHTS, CLAIMS AND CAUSES
OF ACTION OF ANY KIND OR NATURE WHATSOEVER WHETHER ARISING FROM STRICT LIABILITY
CLAIMS OR OTHERWISE AND REGARDLESS OF WHETHER BASED ON THE GRANTOR’S OWN
NEGLIGENCE, WHICH GRANTEE SHALL THEN HAVE OR MAY BE ENTITLED TO ASSERT AGAINST
GRANTOR AND ITS PREDECESSORS OR SUCCESSORS OF INTEREST, TRANSFEREES, ASSIGNS,
OFFICERS, DIRECTORS, EMPLOYEES, MANAGERS, ATTORNEYS, ACCOUNTANTS, AGENTS AND
SERVANTS, AND EACH OF THEM, IN ALL CAPACITIES (INCLUDING, INDIVIDUALLY) ARISING
OUT OF OR WITH RESPECT TO THE PROPERTY (OR THE ENVIRONMENTAL, EXISTING
CONDITIONS OR OTHER CONDITION THEREOF) INCLUDING, WITHOUT LIMITATION, ANY AND
ALL RIGHTS, CLAIMS AND CAUSES OF

 

B - 2

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

ACTION UNDER OR WITH RESPECT TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS
LOCATED OR TITLE 42 OF THE UNITED STATES CODE, SECTION 9601 ET SEQ., EXCEPT FOR
ANY RIGHTS ARISING OUT OF THE BREACH OF ANY EXPRESS REPRESENTATIONS OR
WARRANTIES SET FORTH IN THIS DEED.

GRANTOR AND GRANTEE EXPRESSLY CONFIRM AND AGREE THAT THE PURCHASE PRICE PAID BY
GRANTEE TO GRANTOR FOR THE PROPERTY HAS BEEN ADJUSTED AND AGREED UPON BY GRANTEE
AND GRANTOR IN PART AS A RESULT OF GRANTEE’S AGREEING TO PURCHASE THE PROPERTY:
(A) IN ITS CURRENT “AS IS” CONDITION; AND (B) SUBJECT TO THE DISCLAIMER OF
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS DEED.

Ad valorem taxes with respect to the Property are prorated as of this date and
Grantee assumes payment of all ad valorem taxes and special and general
assessments applicable to the Property for the year 2012 and subsequent years.

IN WITNESS WHEREOF, Grantor has hereunto set its hand and seal as of the day and
year first above written.

 

WITNESSES:

 

                                                                   
                      

Print Name:                                                                    

 

                                                                   
                      

Print Name:                                                                    

  

______________________________, a _____________________

 

By:                                                                  
                    

Print Name:                                        
                               

Title:                                                                          
         

 

[CORPORATE SEAL]

 

Address:                                                                  
           

                                                                          
                                                     
                                                              

 

STATE OF                              )       )    ss:
COUNTY OF                          )   

The foregoing instrument was acknowledged before me this             day of
            , 20            by            , as             of
            corporation, on behalf of the corporation. They/he/she are/is
personally known to me or produced             as identification.

 

                                                                          
                      

 

B - 3

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

[Notarial Seal]   

Notary Public, State of                                                      

Print Name:                                                                
        

My Commission Expires:                                                 

 

 

B - 4

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

EXHIBIT A

To Special Warranty Deed

PROPERTY DESCRIPTION

 

B - 5

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

EXHIBIT B

To Special Warranty Deed

PERMITTED EXCEPTIONS

 

B - 6

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

EXHIBIT C

BLANKET CONVEYANCE, BILL OF SALE AND ASSIGNMENT

 

THE STATE OF                       

     §            §                   KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF                         

     §      

That concurrently with the execution and delivery hereof, STONEGATE PROFESSIONAL
PROPERTIES, L.P., a Texas limited partnership (“Assignor”), is conveying to
HC-2501 W WILLIAM CANNON DR, LLC, a Delaware limited liability company
(“Assignee”), by Special Warranty Deed (the “Deed”), those certain tracts of
land more particularly described on Exhibit A attached to the Deed and made a
part thereof for all purposes (the “Property”). Unless otherwise defined herein,
all initially capitalized terms shall have the respective meanings ascribed to
such terms in that certain Purchase Agreement dated             ,
20            , by and between Assignor and Assignee with respect to the
conveyance of the Property.

It is the desire of Assignor hereby to assign, sell and deliver to Assignee,
subject, however, to those certain matters more particularly described on
Exhibit B attached to the Deed thereto and made a part thereof for all purposes
(collectively, the “Permitted Encumbrances”), all Improvements, Personal
Property, and Intangible Property, including, without limitation, those items
more particularly described on Exhibit A attached hereto and made a part hereof
for all purposes (collectively, the “Assigned Properties”); provided, however,
the Assigned Properties shall not be deemed to include, Assignee shall have no
liability under, and Assignor shall remain solely liable and responsible for,
the contracts and other matters set forth on Exhibit B attached hereto and made
a part hereof for all purposes (collectively, the “Non-Assigned Properties”).

NOW, THEREFORE, in consideration of the receipt of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, in hand paid by Assignee to
Assignor, the receipt and sufficiency of which are hereby acknowledged and
confessed by Assignor, Assignor does hereby ASSIGN, SELL and DELIVER to
Assignee, its successors, legal representatives and assigns, subject to the
Permitted Encumbrances, all of Assignor’s right, title and interest in and to
the Assigned Properties.

TO HAVE AND TO HOLD the Assigned Properties, together with any and all rights
and appurtenance thereto in anywise belonging to Assignor unto Assignee, its
successors and assigns FOREVER, and Assignor does hereby bind itself and its
successors to WARRANT AND FOREVER DEFEND all and singular the Assigned
Properties, subject to the Permitted Encumbrances, unto Assignee, its successors
and assigns, against every person lawfully claiming or to claim the same or any
part thereof by, through or under Assignor, but not otherwise. Assignee, by its
acceptance hereof, hereby assumes all obligations of Assignor arising with
respect to the Assigned Properties from and after the date hereof, but not
otherwise.

 

C - 1

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Assignor indemnifies Assignee from any claims applicable to the Assigned
Properties with respect to the period prior to the date hereof. Assignee
indemnifies Assignor from any claims applicable to the Assigned Properties with
respect to the period from and after the date hereof.

WITH THE EXCEPTION OF THE WARRANTIES OF TITLE, ASSIGNOR HAS MADE NO AFFIRMATION
OF FACT OR PROMISE RELATING TO THE ASSIGNED PROPERTIES THAT HAS BECOME ANY BASIS
OF THIS BARGAIN, AND FURTHER, ASSIGNOR HAS MADE NO AFFIRMATION OF FACT OR
PROMISE RELATING TO THE ASSIGNED PROPERTIES THAT WOULD CONFORM TO ANY SUCH
AFFIRMATION OR PROMISE. ASSIGNOR DISCLAIMS ANY WARRANTY OF FITNESS FOR ANY
PARTICULAR PURPOSE WHATEVER WITH RESPECT TO THE ASSIGNED PROPERTIES. THE
ASSIGNED PROPERTIES ARE SOLD ON AN “AS IS”, “WHERE IS” AND “WITH ALL FAULTS”
BASIS.

IN WITNESS WHEREOF, Assignor has executed this instrument as of (but not
necessarily on this             day of             , 20            .

 

  

SELLER:

 

STONEGATE PROFESSIONAL

PROPERTIES, L.P., a Texas limited partnership

 

By:  Stonegate Professional Properties
Management, L.L.C., a Texas
limited liability company,
its general partner

 

By:                                                               
               

Print Name:                                                                

Title:                                                                          
 

                                                                   
                              

Print Name:                                        
                                   

 

                                                                   
                              

Print Name:                                        
                                   

  

ASSIGNEE:

 

HC-2501 W WILLIAM CANNON DR,
LLC, a Delaware limited liability company

 

By:                                                                  
                     

Print Name:                                        
                               

Title:                                                                          
          

 

 

 

C - 2

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EXHIBIT D

ASSIGNMENT AND ASSUMPTION OF LEASES

 

THE STATE OF                       

     §            §                   KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF                         

     §      

THAT, STONEGATE PROFESSIONAL PROPERTIES, L.P., a Texas limited partnership
(“Assignor”), hereby transfers, assigns and sets over unto HC-2501 W WILLIAM
CANNON DR, LLC, a Delaware limited liability company (“Assignee”), any and all
leases (the “Leases”) with tenants demising space in the premises (the
“Premises”) described in Exhibit A attached hereto and made a part hereof for
all purposes, and the Leases, together with all amendments thereto and
modifications thereof, are more particularly described on the rent roll attached
hereto as Exhibit B and made a part hereof for all purposes.

TO HAVE AND TO HOLD the Leases, together with any and all security deposits,
prepaid rents, rights and appurtenances thereto in anywise belonging to Assignor
unto Assignee, its successors, legal representatives and assigns FOREVER, and
Assignor does hereby bind itself and its successors and assigns to WARRANT AND
FOREVER DEFEND all and singular the ownership of the landlord’s interest in the
Leases unto Assignee, its successors, and assigns, against every person
whomsoever lawfully claiming or to claim the same or any part thereof by,
through or under Assignor, but not otherwise.

Assignor indemnifies and agrees to hold Assignee harmless from and against any
loss, cost, damage or expense incurred by Assignee and arising from or in
connection with any liabilities or obligations of the landlord under the Leases
(including specifically, without limitation, the liabilities and obligations of
the landlord under the Leases with respect to security deposits) attributable to
the period prior to the date hereof and Assignor shall be solely liable for such
liabilities and obligations.

Assignee, by its acceptance hereof, agrees to assume and indemnify and hold
Assignor harmless from and against all liabilities and obligations of the
landlord under the Leases (including specifically, without limitation, the
liabilities and obligations of the landlord under the Leases with respect to
security deposits, the receipt of which Assignee acknowledges was made by credit
to Assignee to the extent shown on the closing statement for Assignee’s
acquisition of the Premises) to the extent same arise or are otherwise
attributable to the period from and after the date hereof, but not otherwise;
provided, however, (a) Assignee shall have no liability to indemnify and hold
Assignor harmless from and against any liability or obligation arising under the
Leases prior to the date hereof even though same may be subject to a claim
brought after the date hereof; and (b) Assignee shall have no liability for the
payment of any tenant finish costs or leasing commissions attributable to any of
the Leases (including any commissions payable in connection with any renewal or
expansion thereof) except as and to the extent expressly set forth on Exhibit C
attached hereto and made a part hereof for all purposes, but not otherwise.

 

D - 1

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IN WITNESS WHEREOF, Assignor has executed this instrument as of (but not
necessarily on) this             day of             , 20            .

 

  

SELLER:

 

STONEGATE PROFESSIONAL
PROPERTIES, L.P., a Texas limited
partnership

 

By:   Stonegate Professional Properties Management,
L.L.C., a Texas limited liability company, its
general partner

 

By:                                                                           
   

Print Name:                                                                

Title:                                                                          
 

                                                                   
                             

Print Name:                                        
                                   

 

                                                                   
                             

Print Name:                                        
                                   

  

ASSIGNEE:

 

HC-2501 W WILLIAM CANNON DR,
LLC, a Delaware limited liability company

 

By:                                                                  
                     

Print Name:                                        
                               

Title:                                                                          
          

 

 

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EXHIBIT E

FIRPTA AFFIDAVIT

 

THE STATE OF                       

     §            §           KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF                         

     §      

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign person.
To inform             (“Transferee”) that withholding of tax is not required
upon the disposition of a U.S. real property interest by
            “Transferor”), Transferor hereby certifies the following:

 

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

 

  2. Transferor’s U.S. employer identification number is:             ;

 

  3. Transferor is not a “disregarded entity” as defined in IRS Regulation
1.1445-2(b)(iii); and

 

  4. Transferor’s office address is             .

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

Under penalties 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.

EXECUTED as of (but not necessarily on) this day of             ,
20            .

 

   TRANSFEROR:                                         , a
                                          

By:                                                                  
                    

Name:                                                                  
               

Title:                                                                  
                 

 

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SWORN TO AND SUBSCRIBED BEFORE ME this             day of             ,
20            .

 

[Notarial Seal]   

Notary Public, State of                                                     

Print Name:                                                                
        

My Commission Expires:                                                 

 

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EXHIBIT F

TENANT ESTOPPEL CERTIFICATE

 

         Attention:                           
                                    

 

  Re: Lease dated             , between             or its predecessor in
interest (“Landlord”) and             (“Tenant”) for Suite             (the
“Premises”) located at             (the “Property”)

Ladies and Gentlemen:

The undersigned, the Tenant under the referenced Lease, hereby certifies and
confirms to and agrees with             ,             [IF KNOWN, INSERT NAME OF
ULTIMATE PURCHASING ENTITY], and their successors and assigns (collectively,
“Purchaser”), any lender of Purchaser, and such lender’s successors and assigns
(collectively, “Lenders”) and Landlord as follows:

1. A true, correct and complete copy of the lease Tenant has entered into and
all amendments to the lease and all other agreements modifying or supplementing
the lease are attached hereto as Exhibit 1 and incorporated herein by reference
(collectively, the “Lease”). The Lease is the sole agreement between Landlord
and Tenant relating in any way to the Premises and the Property, and there are
no other agreements, oral or written, between Landlord and Tenant relating to
the Premises or the Property.

2. The term of the Lease commenced on             ,             , and shall
expire on             ,             . Tenant has no right to terminate the Lease
prior to its stated expiration other than as specifically set forth in the Lease
with respect to casualty and condemnation.

3. The current fixed monthly rent under the Lease is $            , and Tenant
has paid rent under the Lease through and including             , 201_. The
Lease provides for Tenant to pay all operating expenses, real estate taxes,
insurance premiums, and all costs of utilities for the Premises. [MAY NEED
MODIFICATION IF TENANT PAYS UTILITIES DIRECTLY.].

4. The amount of the security deposit being held by Landlord is $            .

5. The number of rentable [LEASEABLE] square feet included with the Premises is
approximately             .

 

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6. No monetary obligations of Tenant under the Lease, including, without
limitation, rent have been prepaid, except as follows:             .

7. The Landlord has fulfilled all of its obligations under the Lease to date,
including without limitation (i) completion of the improvements and the space
required to be completed by Landlord to date according to the Lease in
accordance with the plans and specifications therefore approved by Tenant and
(ii) all Tenant finish and other construction costs or allowances payable by
Landlord have been paid and no such costs are payable hereafter under the Lease,
except as follows:             . As of the date of this certificate, Tenant has
no knowledge of any violations of any exclusive use, co-tenancy, parking ratio
or similar restrictions set forth in the Lease.

8. There are no existing defenses which Tenant has against enforcement of the
Lease by Landlord. Tenant has not advanced any funds by or on behalf of
Landlord, and Tenant is not entitled to any credit, offset or reduction in rent.
There exists no default under the Lease, except as follows:             . Tenant
has not given Landlord notice of its intention to vacate the Premises prior to
the end of the term of the Lease and no controversy or dispute exists between
Landlord and Tenant, except as follows:             . Tenant’s interest under
the Lease has not been assigned, by operation of law or otherwise, and no
sublease, concession agreement or license covering the Premises or any portion
thereof has been entered into by Tenant, except as follows:             .

9. Tenant is actually using the Premises for the following purposes:
            .

10. Landlord has not granted to Tenant any free rent periods or tenant
improvement contributions under the Lease, and Landlord is not reimbursing
Tenant or paying Tenant’s rent obligations under any other lease, except:
            .

11. Tenant has no options to expand, or extend the term of the Lease, or an
option or preferred right or right of first refusal to purchase any portion of
the Property except:            .

12. There are no actions, whether voluntary or otherwise, pending against Tenant
under the bankruptcy laws of the United States or any state thereof.

13. The person executing this estoppel certificate on behalf of Tenant hereby
certifies that he/she has knowledge of the matters stated herein and has the
authority to execute this estoppel certificate on behalf of Tenant.

 

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14. Tenant acknowledges that, if Purchaser or its assigns acquire the Premises,
the landlord’s interest in the Lease will be assigned to Lenders, as security
for a mortgage loan to be made by Lenders, encumbering the Premises, and
confirms that said assignment does not constitute a default under the Lease.
Tenant hereby agrees that the subordination and attornment provisions of the
Lease shall apply for the benefit of Lenders, and their respective successors
and assigns, with respect to any mortgage loan, and all extensions, renewals,
increases and modifications thereof.

The undersigned understands that Purchaser or its assigns is acquiring the
Premises and Lenders, will make a mortgage loan secured by the Premises, each in
reliance upon the certifications and agreements set forth herein, and agrees
that Purchaser, Lenders, and their respective successors and assigns may rely
upon the certifications and agreements for that purpose. The undersigned agrees
that Lenders, may assign this estoppel and any of Lender’s rights hereunder to
any assignee of Lender’s note and mortgage or to any purchaser of the Premises
at a foreclosure sale or to any purchaser of the Premises from such Lender.

IN WITNESS WHEREOF, the undersigned Tenant has executed and delivered this
Estoppel Certificate as of the             day of                 , 20        .

 

  

                                                                   
                          

 

By:                                                                  
                     

Print Name:                                        
                               

Title:                                                                          
          

 

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[DELETE WHERE NO GUARANTY EXISTS: The undersigned Guarantor(s) of the Lease
hereby certify to Buyer, Lender and their respective successors and assigns as
of the date hereof that their guaranty of the Lease (the “Guaranty”) is in full
force and effect and has not been amended or modified and that the undersigned
Guarantor(s) have no claims or defenses under the Guaranty or otherwise with
respect to their performance in full of all terms, covenants and conditions of
the guaranty. Further, Guarantor(s) agrees that in the event Lenders or a
purchaser at any foreclosure sale shall succeed to the interest of Landlord
under the Lease, Lenders or a purchaser at foreclosure sale shall have the same
rights and remedies as Landlord under the Guaranty; provided, however, that
Lenders or a purchaser at foreclosure sale shall not be subject to any offsets,
defenses or any other claims which Guarantor(s) may then have (whether known or
unknown) as a result of the acts or omissions to act of any prior landlord
(including Landlord), Tenant or any other party Guarantor(s) agrees that, if
Lenders makes a mortgage loan secured by the Premises, the Guaranty will not be
amended, modified or terminated without Lender’s prior written consent.]

 

  

                                                                   
                          

 

By:                                                                  
                     

Print Name:                                        
                               

Title:                                                                          
          

 

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EXHIBIT G

TENANT NOTIFICATION LETTER

                    , 20        

[Name and Address of Tenant]

 

  Re:                              
                            

Dear Tenant:

Please be advised that:

1.             (“Purchaser”) has purchased the captioned property (the
“Property”) from              (“Seller”).

2. In connection with such purchase, Seller has transferred your security
deposit in the amount of $            (the “Security Deposit”) to Purchaser.
Purchaser specifically acknowledges the receipt of and sole responsibility for
the return of the Security Deposit.

3. All rental and other payments that become due subsequent to the date hereof
should be payable to Purchaser and should be delivered to the following address:

 

  

c/o                                                        

 

                                                                   
             

 

 

                                                                   
             

 

Attention:                                            

  

4. Copies of any notices to landlord under your lease should be delivered to the
following address:

 

  

                                                             

 

                                                                   
             

 

 

                                                                   
             

 

Attention:                                            

  

[Signature page follows.]

 

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WITNESSES:    PURCHASER:

                                                                   
                              

Print Name:                                        
                                   

 

                                                                   
                              

Print Name:                                        
                                   

  

________________________, a

________________

 

By:                                                                           
            

Print Name:                                        
                               

Title:                                                                          
          

 

                                                                   
                              

Print Name:                                        
                                   

 

                                                                   
                                                             

Print Name:                                        
                                   

  

SELLER:

 

___________________________, a __________________

 

By:                                                                  
                     

Print Name:                                        
                               

Title:                                                                          
          

 

 

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EXHIBIT H

DISCLOSURE SCHEDULE

Seller discloses the following items with regards to its representations,
warranties and covenants set forth in Article IX of this Contract.

 

  1. Stonegate Surgery Center (“SSC”), a tenant occupying space in the Property,
is liable on an approximately $10,000,000 note to Green Bank. As part of its
plan to repay this note, SSC has a note receivable from its general partner RMC
Medstone. One of RMC Medstone’s debt funds, RMC Medstone V, LLC, has recently
defaulted on interest payments due to its noteholders. Seller has no knowledge
nor has it received any indication that RMC Medstone will default under its note
to SSC.

 

  2. Building 3’s roofline is above the permitted building height under the
HOA’s governing documents. This building was constructed three years ago and no
action has ever been taken by the HOA with respect to its height.

SELLER AGREES THAT ATTACHMENT OF THIS SCHEDULE TO THIS CONTRACT DOES NOT
INDICATE PURCHASER’S ACCEPTANCE OF THE ABOVE ITEMS NOR MODIFY OR OTHERWISE WAIVE
ANY OF PURCHASER’S RIGHTS UNDER THIS CONTRACT, INCLUDING PURCHASER’S RIGHT, FOR
ANY OR NO REASON, TO TERMINATE THIS CONTRACT DURING THE REVIEW PERIOD.

 

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EXHIBIT I

DECLARATION ESTOPPEL CERTIFICATE

 

THE STATE OF             

     §      

PRESENTS:

     §           KNOW ALL MEN BY THESE

COUNTY OF                 

     §      

THIS DECLARATION ESTOPPEL CERTIFICATE (this “Certificate”) has been executed
this             day of             , 20            , by             (“Owner”)
and             ARBORS AT CANNON GATE OFFICE CONDOMINIUM ASSOCIATION INC. (the
“Committee”) to and for the benefit of             (“Carter”). Owner and
Committee are collectively referred to as “Declarant” and Carter and its
successors and assigns are collectively referred to as “Beneficiary”.

R E C I T A L S:

A. Beneficiary has now or will soon hereafter acquire fee title to that certain
project located at             (the “Property”). The current Owner of the
Property is             (“Seller”).

B. Reference is made to that certain [Declaration of Covenants and Restrictions]
dated             ,             , recorded under File No.             ,
            County,             , as amended by instruments dated             ,
            , recorded under             ,             ,             , recorded
under             and             and             ,             under
            (such instrument, as so amended and assigned, is hereinafter
referred to as the “Declaration”). Unless otherwise defined herein, all
initially capitalized terms have the respective meanings assigned to such terms
in the Declaration.

C. As a condition to Beneficiary’s acquisition of the Property, Beneficiary has
requested and Declarant has agreed to deliver this Certificate with respect to
certain matters covered under the Declaration. Beneficiary would not have agreed
to acquire the Property in the absence of this Certificate.

In consideration of the recitals set forth above, Declarant hereby certifies to
Beneficiary, and otherwise consents and approves, the following:

ARTICLE I

DECLARATION MATTERS

Section 1.01 Declaration. The Declaration is currently in full force and effect
and has not, except as noted above, been modified or otherwise amended. The

 

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Declaration does not contain any reacquisition or similar options. Seller has
not defaulted under, nor otherwise violated the terms set forth in, the
Declaration. The current members of the Committee are:

 

 

 

 

 

 

Section 1.02 Assessments. All general and special assessments or other payments
due with respect to the Property have been paid in full and no amounts are
currently due and owing. No default assessments have been levied against the
Property nor have any assessment or similar liens been filed against the
Property. The general assessments and the special assessments levied and
expected to be levied under the Declaration for the             and
            calendar years in the aggregate and the portion thereof allocable to
the Property are as follows:

 

   Aggregate    Property Share General    $_______ - 20___    $_______ - 20___
Special    $_______ - 20___    $_______ - 20___

Section 1.03 Improvements. Declarant has reviewed and approved all information,
if any, concerning the improvements located upon the Property (collectively, the
Improvements”) which is required to be submitted to Declarant for approval under
the Declaration. All Improvements have been constructed and are otherwise in
full compliance with the Declaration. The current use and operation of the
Property does not violate the Declaration and the Property satisfies (or has
been granted a permitted variance from) all setback, parking, outside storage,
landscaping, signage, screening and other construction requirements set forth in
the Declaration.

Section 1.04 Notice. Effective upon Declarant’s receipt of written notice of
Beneficiary’s acquisition of the Property, (a) Beneficiary will be entitled to
all voting and other benefits under the Declaration with respect to the
Property; and (b) all notices, demands or other written communication delivered
by Declarant under the Declaration or any other instrument applicable thereto,
must be delivered to Beneficiary in the manner set forth therein to the
following address (or such other or further addresses as Beneficiary may
hereafter designate):

 

  

                                                             

 

                                                                   
              

 

 

                                                                   
              

 

Attention:                                            

  

 

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ARTICLE II

MISCELLANEOUS

Section 2.01 Authority. All approvals and other actions required to authorize
Declarant’s execution of this Certificate have been received or otherwise taken.

Section 2.02 Reliance. Declarant acknowledges that Beneficiary has the right to
rely and will rely upon this Certificate in connection with Beneficiary’s
acquisition of the Property.

IN WITNESS WHEREOF, this Certificate has been executed as of (but not
necessarily on) the date and year first above written.

 

 

OWNER:

 

                                                                           
                      

 

By:                                                                  
                         

Print Name:                                        
                                   

Title:                                                                  
                      

 

COMMITTEE:

 

ARBORS AT CANNONS GATE OFFICE CONDOMINIUM ASSOCIATION, INC., a

Texas non profit corporation

 

By:                                                                  
                         

Print Name:                                        
                                   

Title:                                                                  
                      

 

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THE STATE OF                 §    § COUNTY OF                    §

This instrument was acknowledged before me on this             day of
            , 20            , by             , a             of             , as
managing partner of             , a             , on behalf of such entity.

 

[Notarial Seal]   

                                                                   
                          

Notary Public, State of                                                      

Print Name:                                        
                               

My Commission Expires:                                                 

 

THE STATE OF                 §    § COUNTY OF                    §

This instrument was acknowledged before me on this             day of
            , 20            , by             , a member of the
            Architectural Control Committee, on behalf of such entity.

 

[Notarial Seal]   

                                                                   
                          

Notary Public, State of                                                      

Print Name:                                        
                               

My Commission Expires:                                                 

 

 

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EXHIBIT J

FORM OF SEC S-X 3-14 LETTER

We are providing this letter in connection with your audit of the historical
statement of certain revenues and certain expenses of [], located at [] (the
“Property”) for the purpose of expressing an opinion as to whether the
historical statement presents fairly, in all material respects, certain revenues
and certain expenses for the year ended December 31, 20[ ] of the Property on
the basis of cash receipts and disbursements, which is a comprehensive basis of
accounting other than accounting principles generally accepted in the United
States of America. We confirm that we are responsible for the following:

a. The fair presentation in the historical statement of certain revenues and
certain expenses on the basis of cash receipts and disbursements, which is a
comprehensive basis of accounting other than accounting principles generally
accepted in the United States of America.

b. The design and implementation of programs and controls to prevent and detect
fraud.

We confirm, to the best of our knowledge and belief, the following
representations made to you during your audit.

i. The financial statements referred to above are fairly presented on the basis
of cash receipts and disbursements, which is a comprehensive basis of accounting
other than accounting principles generally accepted in the United States of
America.

ii. We have made available to you all financial records and related data.

iii. We have no knowledge of any fraud or suspected fraud affecting the Property
involving (1) management, (2) employees or (3) others where the fraud could have
a material effect on the financial statements.

iv. We have no knowledge of any allegations of fraud or suspected fraud
affecting the Property received in communications from employees, former
employees, analysts, regulators, short sellers, or others.

v. There are no unasserted claims or assessments that legal counsel has advised
us are probable of assertion and must be disclosed in accordance with Statement
of Financial Accounting Standards No. 5, Accounting for Contingencies.

vi. Related-party transactions have been appropriately identified, properly
recorded, and disclosed in the financial statements.

 

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vii. No events have occurred subsequent to December 31, 20[ ] that require
consideration as adjustments to or disclosures in the financial statements.

 

                                                                 

(CEO Signature and Title)

    

                                                             

(CFO Signature and Title)

 

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