<PAGE>   1
                                                                    EXHIBIT 10.4


                          CONTRACT OF SALE AND PURCHASE


                                 By and Between


                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                      a North Carolina Limited Partnership

                                       and

                     HIGHWOODS/FORSYTH LIMITED PARTNERSHIP,
                      a North Carolina Limited Partnership



                                January 23, 1998









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                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                           Page No.
                                                                                                           --------
<S>                                                                                                        <C>
Agreement of Purchase and Sale....................................................................................1

Description of the Property.......................................................................................1

Earnest Money.....................................................................................................2

Purchase Price....................................................................................................4

Actions Pending Closing...........................................................................................4
         Survey and Plans.........................................................................................4
         Initial Delivery of Documentation........................................................................5
         Access to, and Examination of, Records...................................................................6
         Access to the Property...................................................................................6
         Matters of Title.........................................................................................7
         Environmental Assessments................................................................................7

Additional Agreements of the Parties..............................................................................8
         Title to the Property....................................................................................8
         Representations and Warranties of Owner..................................................................9

Representations and Warranties of Highwoods......................................................................16

Due Diligence Period.............................................................................................17

Conditions Precedent to Closing..................................................................................17

Maintenance and Operation of the Property........................................................................19

Closing Date.....................................................................................................20

Documents Required to be Delivered at Closing....................................................................20
         Documents  Required to be Delivered by Owner at Closing.................................................20
         Deliveries by Highwoods at Closing......................................................................22

Closing Adjustments..............................................................................................23
         Taxes...................................................................................................23
         Utilities...............................................................................................24
         Rents...................................................................................................24
         Tenants' Overpayment or Underpayment of Estimated Operating Expenses....................................24

</TABLE>

<PAGE>   3


<TABLE>
<CAPTION>
<S>                                                                                                        <C>

         Real Estate Commissions.................................................................................25
         Tenant Improvements.....................................................................................25
         Tenant Security Deposits................................................................................26
         Service Agreement Payments..............................................................................26
         Miscellaneous Items.....................................................................................26
         Settlement After Closing................................................................................26
         Equitable Adjustments...................................................................................26
         Property Income.........................................................................................26

Leases, Estoppels, Contracts, Permits and Zoning Letters, etc....................................................27

Default..........................................................................................................28

Notice of Developments...........................................................................................28

Indemnification..................................................................................................28

Other Provisions.................................................................................................30
         Counterparts............................................................................................30
         Entire Agreement........................................................................................30
         Construction............................................................................................30
         Applicable Law..........................................................................................30
         Severability............................................................................................31
         Waiver of Covenants, Conditions and Remedies............................................................31
         Exhibit.................................................................................................31
         Amendment and Assignment................................................................................31
         Relationship of Parties.................................................................................31
         Further Acts............................................................................................31
         Confidentiality.........................................................................................31
         Broker Commissions......................................................................................32
         Notice..................................................................................................32
         Press Releases..........................................................................................33
</TABLE>



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STATE OF SOUTH CAROLINA
                                                   CONTRACT OF SALE AND PURCHASE
COUNTY OF GREENVILLE

         THIS CONTRACT OF SALE AND PURCHASE (the "Agreement") is made and
entered into as of this the 23rd day of January, 1998, by and between
Yager/Kuester Public Fund Limited Partnership, a North Carolina limited
partnership ("Owner"), and Highwoods/Forsyth Limited Partnership, a North
Carolina limited partnership, or its designated assignee ("Highwoods").

                              W I T N E S S E T H:

         WHEREAS, the parties desire to enter into a Contract of Sale and
Purchase to incorporate all prior negotiations and dealings of the parties with
respect to the purchase and sale of certain property hereinafter described.

         NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the payment of earnest money and other good and valuable
consideration, receipt of which is hereby acknowledged by the Owner, the parties
agree as follows:

                                SALE AND PURCHASE

         1. AGREEMENT OF PURCHASE AND SALE. The Owner agrees to sell and convey,
and Highwoods agrees to purchase, all that Property defined and described in
Section 2 hereof.

         2. DESCRIPTION OF THE PROPERTY. The Property owned by Owner which is
the subject of this Agreement is as follows:

         2.01. All those certain lots or parcels of land in Greenville,
Greenville County, South Carolina, more particularly described on EXHIBIT A
attached hereto and specifically incorporated herein by reference (hereinafter
called the "Land").

         2.02. All of Owner's right, title and interest in and to all rights,
privileges, and easements appurtenant to the Land, including all water rights,
rights-of-way, roadways, parking areas, roadbeds, alleyways and reversions or
other appurtenances used in connection with the beneficial use of the Land.

         2.03. All improvements and fixtures located on the Land owned by Owner
including, without limitation, the building located thereon containing an
aggregate of approximately 39,000 square feet (hereinafter referred to as the
"Building"); any and all other buildings, structures and amenities currently
located on the Land; and all fixtures, apparatus, equipment, vaults, machinery
and built-in appliances used in connection with the operation and occupancy of
the Land such as heating and air conditioning systems, electrical systems,
plumbing systems, sprinkler and other fire protection and life safety systems,
refrigeration, ventilation, or other facilities or services on the Land (all of
which are together hereinafter called the "Improvements"). It is specifically
understood that such Improvements shall include all tenant alterations in the
Building as of the Closing to the extent


<PAGE>   5



such alterations become the property of the landlord under the leases in effect
with respect to the Building.

         2.04. All personal property located on or in or used exclusively in
connection with the Land, Building and Improvements and owned by Owner and used
or usable in the operation of the Property (as defined below) including, without
limitation, fittings, appliances, shades, wall-to-wall carpet, draperies,
screens and screening, awnings, plants, shrubbery, landscaping, furniture,
furnishings, office equipment, lawn care and building maintenance equipment and
other furnishings or items of personal property used or usable in connection
with the ownership and operation of the Improvements, including the computers
which operate the Building's HVAC systems, but excluding all personal property
located on the Land or in the Building owned by tenants of such Building or
contractors who provide service to such Building or which is not otherwise owned
by Owner (hereinafter called the "Personal Property"). A schedule of the
Personal Property shall be specifically identified pursuant to an inventory
supplied by Owner at the time of the execution hereof and attached hereto as
EXHIBIT B. After the date of this Agreement and, except as otherwise set forth
herein, Owner shall not remove any Personal Property from the Building or Land
without the prior written consent of Highwoods.

         2.05. All of Owner's interest, if any, in the intangible property now
or hereafter owned by Owner and used or usable in connection with the Property
including, without limitation, the rights to use the trade style name now used
in connection with such property, all leases, subleases, prepaid rent and all
security deposits, any other contract or lease rights, escrow deposits, utility
agreements, guaranties, warranties or other rights related to the ownership of
or use and operation of the Property. A list of all leases of space within the
Building and subleases and other occupancy agreements to be specifically
assigned to Highwoods (the "Leases") shall be set forth on EXHIBIT C and
attached hereto within three (3) business days of the execution hereof. A list
of all leasing, service, maintenance and/or management contracts affecting or
relating to the Property and to be specifically assigned to and assumed by
Highwoods (the "Service Contracts") and all guaranties and warranties relating
to the Property together with a description of all pertinent terms and
provisions of such Service Contracts, guaranties and warranties shall be set
forth in EXHIBIT D and attached hereto within three (3) business days of the
execution hereof.

         All of the items of property described in Subsections 2.01, 2.02, 2.03,
2.04 and 2.05 above are hereinafter collectively called the "Property."

         3. EARNEST MONEY. Upon the execution of this Agreement, Highwoods will
deliver to Chicago Title Insurance Company (hereinafter referred to as the
"Escrow Agent") the sum of Fifty Thousand and no/100 Dollars ($50,000.00)
(hereinafter the "Initial Earnest Money"). The Initial Earnest Money shall be
deposited by the Escrow Agent into an interest bearing account at the direction
of Highwoods, and shall be paid to Owner or Highwoods according to the
provisions set forth below. If Highwoods has not terminated this Agreement prior
to the end of the Inspection Period as defined in Section 7 below, Highwoods
shall deposit an additional Fifty Thousand and no/100 Dollars ($50,000.00)
(hereinafter, the "Additional Earnest Money") with the Escrow Agent

                                        2

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by 5:00 p.m. on the first business day immediately following the Inspection
Period. The Additional Earnest Money shall be deposited by the Escrow Agent into
an interest bearing account at the direction of Highwoods, and shall be paid to
Owner or Highwoods according to the provisions set forth below. The Initial
Earnest Money and the Additional Earnest Money are collectively referred to
herein as the "Earnest Money."

         In the event the transaction contemplated by this Agreement closes or
should this transaction not close solely because of any default on the part of
Owner, or if any of the conditions precedent set forth in Section 8 fail to be
satisfied at Closing, or if Highwoods terminates its obligations set forth
herein pursuant to any other provision of this Agreement, then the Escrow Agent
shall pay to Highwoods all Earnest Money, including interest which has accrued
thereon, but such return shall not affect any other remedies available to
Highwoods, as specified and limited in this Agreement, in the event of a breach
of this Agreement by Owner; provided, in the event Highwoods terminates this
Agreement pursuant to Section 7 hereof, $100 of the Earnest Money should be paid
to Owner as consideration for Highwoods' right to terminate this Agreement
pursuant to Section 7.

         In the event the transaction contemplated by this Agreement is not
closed solely because of any default on the part of Highwoods, then the Escrow
Agent shall pay to Owner all Earnest Money, including interest which has accrued
thereon, and such payment shall be and represent liquidated damages arising out
of Highwoods' default, which liquidated damages shall be the full extent of
Highwoods' liability with respect to such default and Owner shall have no
further right or claim against Highwoods.

         Upon the filing of a written demand for the Earnest Money by Highwoods
or Owner, pursuant to this Section 3, the Escrow Agent shall promptly mail a
copy thereof to the other party. The other party shall have the right to object
to the delivery of the Earnest Money by filing written notice of such objection
with the Escrow Agent such that it is actually received by the Escrow Agent at
any time within ten (10) days after the mailing of such copy to it, but not
thereafter. Such notice shall set forth the basis for objecting to the delivery
of the Earnest Money. Upon receipt of such notice, the Escrow Agent shall
promptly mail a copy thereof to the party who filed the written demand. If the
Escrow Agent does not receive a notice of objection as set forth above, it shall
pay the Earnest Money, plus interest which has accrued thereon, to the party
requesting payment of same.

         In the event the Escrow Agent shall have received the notice of
objection provided for above and within the time therein prescribed, the Escrow
Agent shall continue to hold the Earnest Money until (i) the Escrow Agent
receives written notice from Owner and Highwoods directing the disbursement of
said Earnest Money, in which case the Escrow Agent shall then disburse said
Earnest Money in accordance with said direction; or (ii) in the event of
litigation between Owner and Highwoods, the Escrow Agent shall deliver the
Earnest Money to the Clerk of the Court in which said litigation is pending; or
(iii) the Escrow Agent takes such affirmative steps as the Escrow Agent may, in
the Escrow Agent's reasonable opinion, elect in order to terminate the Escrow
Agent's duties, including but not limited to, deposit in the Court of
appropriate jurisdiction in connection

                                        3

<PAGE>   7



with an action for interpleader, the costs thereof to be borne by whichever of
Owner or Highwoods is the losing party.

         The Escrow Agent may act upon any instrument or other writing believed
by it in good faith to be genuine and to be signed and presented by the proper
person, and shall not be liable in connection with the performance of any duties
imposed upon the Escrow Agent by the provisions of this Agreement, except for
the Escrow Agent's willful default. The Escrow Agent shall have no duties or
responsibilities except those set forth herein. The Escrow Agent shall not be
bound by any modification of this Agreement, unless the same is in writing and
signed by Highwoods and Owner, and, if the Escrow Agent's duties hereunder are
affected, unless Escrow Agent shall have given prior written consent thereto. In
the event that the Escrow Agent shall be uncertain as to the Escrow Agent's
duties or rights hereunder, or shall receive instructions from Highwoods or
Owner which, in the Escrow Agent's opinion, are in conflict with any of the
provisions hereof, the Escrow Agent shall be entitled to hold and apply the
Earnest Money pursuant to the preceding paragraph and may decline to take any
other action. The Escrow Agent shall not charge a fee for its services as escrow
agent.

         4. PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, the purchase price to be paid by Highwoods to Owner at Closing shall
be Three Million, Six Hundred Thousand and no/100 Dollars ($3,600,000.00) (the
"Purchase Price") (before taking into account adjustments to the Purchase Price
for prorated items as set forth in Section 12 below) and shall be paid to Owner
by Highwoods' as set forth in the next sentence hereof. At the Closing, the
Purchase Price shall be wire transferred from Highwoods to the Escrow Agent and
Escrow Agent shall make all disbursements of the Purchase Price to Owner as
required herein.

         5. ACTIONS PENDING CLOSING.

         5.01. SURVEY AND PLANS. Highwoods may, at Highwoods' election, cause to
be secured current physical and boundary surveys (the "Surveys") of the Land,
Building and other Improvements prepared by a South Carolina registered land
surveyor or licensed engineer which shall be certified to Highwoods and the
Title Company (as defined in Subsection 6.01 below) and shall contain such other
documentation and certifications as Highwoods or the Title Company may require.
The cost of such Surveys shall be borne by Highwoods. If the Surveys are
procured by Highwoods, the Surveys shall be used for a description of the Land
contained in the deed of conveyance referenced in 11.01(a) and in all other
documents related to this transaction which require a legal description of the
Land (including, without limitation, such description as is required for the
title insurance commitment described under Subsection 6.01; provided, any real
property shown within the boundary lines of the Land not described in the deeds
of conveyance to Owner shall be conveyed by Owner to Highwoods by quitclaim deed
rather than the special warranty deed described above). In addition, at the time
of the execution of this Agreement, Owner shall supply to Highwoods without
representation or warranty (i) copies of any existing survey(s) of the Land
reasonably available to Owner (the "Existing Surveys"), and (ii) to the extent
reasonably available to Owner, a complete set of the plans from which the
Improvements were constructed (the "Plans").

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In the event the Surveys (or the Existing Surveys delivered to Highwoods by
Owner) reveal anything which materially and adversely affect the Property,
Highwoods shall give notice to Owner of those matters objected to by Highwoods
in the Surveys or Existing Surveys by the fifteenth (15) day after the delivery
thereof to Highwoods. Owner shall then have the right, but not the obligation,
for a period of ten (10) business days to cure any defects or objectionable
matters specified by Highwoods. The parties agree that they shall each use their
best efforts to cause all matters of review and inspection to take place during
the Inspection Period. In the event that Owner fails or is unwilling to cure
such defects to the reasonable satisfaction of Highwoods' counsel, Highwoods may
proceed to a Closing subject to the defect (in which event Highwoods will be
deemed to have waived such defect); or by written notice to Owner, terminate
this Agreement or based on its other due diligence and Inspection Period rights
contained herein, otherwise allow this Agreement to expire. If Highwoods does
not procure the Surveys, the Existing Surveys shall be used for a description of
the Land contained in the deed of conveyance referenced in 11.01(a) and in all
other documents related to this transaction which require a legal description of
the Land.

         5.02. INITIAL DELIVERY OF DOCUMENTATION. At the time of the execution
of this Agreement and to the extent that the information is in Owner's
possession, Owner shall provide to Highwoods the following: (i) a list of all
the personal property described in Section 2 above which shall be attached
hereto as EXHIBIT B; (ii) copies of each Lease listed on EXHIBIT C along with
all amendments thereto and a current rent roll of the Property setting forth
with respect to each Lease listed on EXHIBIT C, the date of the Lease, the name
of the tenant, the approximate area of the demised premises subject to each
Lease, the monthly rental and other charges payable by the tenant, the Lease
expiration date, and any renewal options or purchase options set forth in any
Lease, together with a schedule of rental delinquencies and other breaches of
tenant under the Leases and a schedule of security deposits held; (iii) true,
correct and complete copies of all service, maintenance, utility and other
contracts related to the Property, including any warranties or guaranties, which
shall be attached hereto as EXHIBIT D; (iv) copies of financial and operating
statements of the Property for calendar years 1996and 1997, and the proposed
budget for fiscal operations of the Property for 1998, if already prepared by
Owner; (v) all title information in Owner's possession or reasonably available
to Owner related to the Land, including, but not limited to, title insurance
policies, attorney's opinions on title, surveys, deeds, etc.; (vi) true, correct
and complete copies of all the Promissory Notes, deeds of trust or mortgages,
loan agreements, and related documents concerning the Property; (vii) copies of
all plans (original or otherwise), specifications, drawings, studies, space
audits, and programs for upgrading and improving, concerning or relating to the
Buildings or any of the Improvements; (viii) true, correct and complete copies
of the Leases and subleases and any amendments thereto covering any space within
the Buildings or Improvements; (ix) all environmental, engineering or similar
reports relating to the Property; (x) copies of all notices of any
environmental, building code or other violation relating to the Property, which
is uncorrected, if any, and a description of any building code or other
violation of which Owner is aware; (xi) the names and addresses of all
contractors who have performed material maintenance or repair work or have
otherwise been materially involved in connection with the maintenance, repair or
restoration of the Property or the correction of any building code or other
violation during the twelve (12) months prior to the date of this Agreement,
along with a summary

                                        5

<PAGE>   9



description of any such repairs or work, together with copies of all studies,
estimates, plans and specifications in Owner's possession for such maintenance,
repair, restoration or code violations; provided Owner will deliver names and
addresses of all contractors who have performed any repair or restoration work
to the Building's roof, structure and heating, ventilating or air conditioning
systems (exclusive of routine maintenance related thereto) during the twelve
(12) months prior to the date of this Agreement; and (xii) a full description of
the Personal Property identified in EXHIBIT B, together with a listing of all
liens or security interests of others with respect thereto. If Highwoods, in its
reasonable discretion, is dissatisfied in any respect with the information
supplied pursuant to this Subsection 5.02, and if Highwoods elects to notify
Owner in writing of such determination within forty-five (45) days of the final
execution hereof, then Highwoods shall have an absolute right to terminate this
Agreement, and neither Highwoods nor Owner shall have any further liability to
the other.

         5.03. ACCESS TO, AND EXAMINATION OF, RECORDS. Owner will permit
Highwoods and Highwoods' accountants to examine the financial records and other
books and records of Owner concerning or relating to the operation of the
Property in order that Highwoods' accountants can prepare at Highwoods' expense
audited financial statements for the Property for Owner's most recent fiscal
year ending December 31, 1997 (if requested by Highwoods), and an unaudited
financial statement for the Property for the year prior thereto and for the
current fiscal year to date.

         5.04. ACCESS TO THE PROPERTY. Subject to the rights of existing
tenants, Owner shall give Highwoods and its agents, engineers and other
representatives, full access to the Property during regular business hours upon
reasonable notice, during the period prior to the Closing Date. In addition to
any other requirement hereunder and in connection with such access, Owner shall
endeavor to furnish Highwoods all information concerning the Property and its
operations which Highwoods may reasonably request. Highwoods may, at its
expense, make such engineering and other studies of the Property prior to the
Closing as it may deem necessary. Highwoods agrees to indemnify and hold Owner
harmless of and from any and all liability, costs and expenses (including
reasonable counsel fees of Owner) arising out of or with respect to any act or
omission of Highwoods or its agents, engineers, and other representatives in
connection with such access as aforesaid unless and except to the extent caused
by the negligence or wilful misconduct of Owner or its agents or tenants of any
of the Property; provided Highwoods shall have no liability to Owner as a result
of the mere discovery by Highwoods or its experts of environmental contamination
on the Land not caused by Highwoods or its agents.

         With respect to the investigation of the Property by Highwoods: (a) the
costs and expenses of Highwoods' investigation shall be borne solely by
Highwoods; (b) prior to the expiration of the Inspection Period, Highwoods shall
restore any damage to the Property caused by Highwoods or its agents to the
condition which existed prior to Highwoods' entry thereon and investigation
thereof; (c) Highwoods shall not unreasonably interfere, interrupt or disrupt
the operation of Owner's business on the Property and, further, such access by
Highwoods and/or its agents shall be subject to the rights of Tenants under
Tenant Leases; (d) Highwoods shall not permit any mechanic's or materialman's
liens or any other liens to attach to the Property by reason of the performance
of any

                                        6

<PAGE>   10



work or the other liens to attach to the Property by reason of the performance
of any work or the purchase of any materials by Highwoods or any other party in
connection with any studies or tests conducted pursuant to this Agreement; (e)
Highwoods shall give notice to Owner forty-eight (48) hours prior to entry by it
or its designees onto the Property and shall permit Owner to have a
representative present during all investigations and inspections conducted with
respect to the Property; provided, if Owner's representative is not present at
the Property on the time designated by Highwoods, Highwoods may still enter the
Property and conduct its investigations and inspections without Owner's
representative being present; (f) Highwoods shall take all reasonable actions
and implement all reasonable protections necessary to ensure that all actions
taken in connection with the investigations and inspections of the Property, and
all equipment, materials and substances generated, used or brought onto the
Property in the course of such investigations and inspections pose no material
threat to the safety of persons or the environment and cause no damage to the
Property or other property of Owner or other persons. The indemnity obligation
of Highwoods set forth in this Section 5.04 shall survive the Closing.

         5.05. MATTERS OF TITLE. If any objection to the title, the Surveys or
the Existing Surveys is identified by Highwoods, Owner shall have the right, but
not the obligation, for a period of ten (10) business days to cure Highwoods'
objections to title, the Surveys or the Existing Surveys to Highwoods'
reasonable satisfaction. In the event that Owner cannot or refuses to cure any
such objection which remains unacceptable to Highwoods, then and in that event,
Highwoods, in accordance with its other due diligence and Inspection Period
rights contained herein, may terminate this Agreement without any further claim
or obligation of any kind to Owner, or in the alternative, consummate the
Closing in accordance with the terms of this Agreement. Notwithstanding anything
else contained herein, if Highwoods has not made an objection to the title, the
Surveys or the Existing Surveys by the conclusion of the Inspection Period, it
shall be conclusively presumed that Highwoods is satisfied with the status of
title and survey matters regarding the Land, Building, Improvements, and
Personal Property as of the date of termination of the Inspection Period.

         5.06. ENVIRONMENTAL ASSESSMENTS. Prior to Closing, Highwoods at its
expense may cause to be undertaken and completed a current Phase I environmental
site assessment, and as necessary, Phase II assessment, of the Land and Building
(the "Environmental Assessments"). The Environmental Assessments shall be
performed by environmental inspection and engineering firms selected by
Highwoods. Highwoods shall determine from such Environmental Assessments and
from such other information available to Highwoods, in its sole discretion, that
the Land and Buildings are not contaminated by hazardous or toxic wastes,
substances or materials (including, but not limited to, asbestos, PCB's or
petroleum products) as defined under any applicable federal, state or local
laws, statutes, orders, rules, regulations, permits or approvals. In the event
that contamination or any other adverse environmental condition is found on or
under the Land or any Building, Highwoods reserves the right to terminate this
Agreement in its sole discretion.


                                        7

<PAGE>   11



         6. ADDITIONAL AGREEMENTS OF THE PARTIES.

         6.01. TITLE TO THE PROPERTY. At the Closing, Owner shall deliver to
Highwoods a special warranty deed in form and content satisfactory to Highwoods'
counsel and customarily used in South Carolina for transactions of the type
described herein with recording fees paid at Highwoods' expense (and documentary
stamps paid by Owner), conveying to Highwoods a good, indefeasible, fee simple
and insurable title to the Land, its appurtenances and Improvements, said title
to be insurable both as to fee at regular rates by a title insurance company of
Highwoods' choice (the "Title Company"), subject only to those matters
specifically enumerated in (a) through (f) of this Section 6.01 ("Permitted
Exceptions"); provided, any real property shown on the Surveys within the
boundary lines of the Land not described in the deeds of conveyance to Owner
shall be conveyed by Owner to Highwoods by quitclaim deed rather than the
special warranty deed descried above. Within fifteen (15) days of the date
hereof, Highwoods shall obtain a current title insurance commitment for the Land
issued by the Title Company (which shall be selected by Highwoods) showing the
condition of title of the Land (the "Title Report"). If Highwoods disapproves of
any matter of title contained in the Title Report, Highwoods may then elect to
provide, no later than the fifth (5th) business day after its receipt of the
Title Report, written notice of Highwoods' disapproval of the same to Owner
(those disapproved title matters as so identified by Highwoods are hereafter
called the "Disapproved Exceptions"). Owner shall have the right, but not the
obligation, for a period of ten (10) business days to remove any Disapproved
Exception, and if such Disapproved Exception is not removed, Highwoods, in
accordance with its other due diligence and Inspection Period rights contained
herein, shall have the right to terminate this Agreement; but in the event that
Highwoods has not terminated this Agreement by the expiration of the Inspection
Period such Disapproved Exception shall then be deemed to be a Permitted
Exception. All expenses incurred in obtaining such title insurance commitment
(including, without limitation, those incurred by an attorney in conducting the
necessary title search) shall be borne by Highwoods. The title insurance premium
shall also be borne by Highwoods. The title insurance commitment of the Title
Company shall provide full coverage against mechanics' or materialmen's liens,
shall commit full survey coverage and shall commit a standard ALTA zoning
endorsement, and such other coverages and endorsements as shall be reasonably
required by Highwoods.

         The Land, its appurtenances and the Improvements shall be conveyed by
Owner to Highwoods free and clear of all liens, encumbrances, claims,
rights-of-way, easements, leases, restrictions and restrictive covenants, except
the following Permitted Exceptions:

                  (a) Public rights-of-way of streets;

                  (b) Public utility easements and rights-of-way in customary
         form;

                  (c) Rights and claims of tenants under recorded and unrecorded
         leases, so long as (i) all of same have been fully disclosed by Owner
         to Highwoods on EXHIBIT C attached hereto; (ii) all of the same contain
         no tenant cancellation rights except as has otherwise been disclosed to
         Highwoods in writing, right of rent abatement, or right of option or
         first refusal

                                        8

<PAGE>   12



         for the purchase of the Property; (iii) Highwoods shall have approved
         such leases; and (iv) there shall have been no modifications or
         amendments to the same from the date hereof;

                  (d) Zoning and building laws or ordinances, provided they do
         not prohibit the use of the Property for office and related commercial
         purposes, and so long as the Property is in compliance with same;

                  (e) Ad valorem taxes for any year in which they are not yet
         due and payable;

                  (f) Any other matters of record not designated by Highwoods as
         a Disapproved Exception in the manner set forth above.

         If, in the opinion of Highwoods' counsel, Highwoods is not able to
obtain an owner's title insurance commitment from the Title Company complying
with the requirements of this Subsection 6.01, Highwoods shall have the option
of taking title "as is" and consummating the Closing, or terminating this
Agreement, it being understood that such termination shall be the sole remedy of
Highwoods in such event; provided, however, in the event Highwoods is not able
to obtain an owners title insurance commitment as described above as the result
of a wilful act of Owner occurring subsequent to the execution hereof, then in
such event upon Highwoods' termination of this Agreement, Owner shall pay to
Highwoods all costs incurred by Highwoods related to its due diligence of the
Property during the Inspection Period, not to exceed $15,000. Notwithstanding
any other provision contained herein to the contrary, if the title defect(s) is
a mortgage, lien, judgment, assessment, unpaid taxes or tax which can be cured
by a monetary payment of $50,000 or less and which does not exist as the result
of a wilful act of Owner occurring subsequent to the execution hereof (and with
respect to which affirmative title insurance coverage is not available at the
Title Company's standard rates) Highwoods has, and shall have, the absolute
right of making such payment and reducing by a like amount the Purchase Price
due to Owner at Closing.

         6.02. REPRESENTATIONS AND WARRANTIES OF OWNER. Owner hereby makes the
following representations and warranties to Highwoods:

                  (a) EXHIBIT C contains a current rent roll of the Property
         (the "Rent Roll") relating to the Leases, which Rent Roll sets forth
         with respect to each Lease (i) the date thereof, (ii) the name of the
         tenant, (ii) the approximate area of the demised premises, (iv) the
         monthly rental and other charges payable by the tenant, (v) the Lease
         expiration date; and (vi) any Lease renewal options or purchase options
         set forth in such Lease; and with respect to the Leases;

                           (1) The Leases are in full force and effect, have
         been validly executed by the landlord and have not been amended or
         modified in any manner whatsoever, except as noted on the Rent Roll;


                                        9

<PAGE>   13



                           (2) The summary of the Leases set forth in EXHIBIT C
         is accurate in all material respects and, to Owner's knowledge there
         are no subleases of the Property except as noted in EXHIBIT C;

                           (3) The Owner's interest in the Leases will be free
         and clear of all liens, encumbrances and agreements on the date of the
         Closing contemplated hereby;

                           (4) Except for the prospective leases identified in
         EXHIBIT C-1, attached hereto, which Owner shall have the right to enter
         into on substantially the same terms set forth on EXHIBIT C-2, prior to
         Closing, without the consent of Highwoods, Owner shall not enter into
         any new lease with respect to the Building or any part thereof, or the
         Property or any part thereof, nor shall Owner hereafter enter into any
         amendment, modification or cancellation of any of the Leases, nor give
         any rent concessions, or give any considerations other than possession
         to any tenant without the prior written consent of Highwoods, provided,
         after Owner notifies Highwoods of any such proposed lease, notification
         cancellation or amendment if Highwoods does not respond to Owner within
         ten (10) business days after receipt of written notice from Owner,
         Highwoods will be deemed to have accepted any such lease. Such leases
         will be in the form set forth on EXHIBIT C-2 attached hereto and
         incorporated herein by reference;

                           (5) Owner has taken no action, by act or omission,
         which may support a default, by waiver or otherwise, by a tenant under
         a Lease, except as herein specifically pro vided;

                           (6) Owner has fulfilled all of the landlord's duties
         and obligations including the completion of all upfittings,
         construction, decoration and alteration work which Owner is obligated
         to perform under any Lease, except as noted on EXHIBIT F;

                           (7) Except as set forth on EXHIBIT F-1, Owner shall
         not be obligated at Closing under any leasing, agency, brokerage or
         management agreement relating to the Leases and Highwoods shall not be
         obligated to pay at Closing any leasing commissions or other
         compensation due with respect to the Leases or any leasable space
         located in or on the Property;

                           (8) Owner, and to Owner's knowledge, each tenant
         under the Leases is not in default under any of the terms and
         provisions of said Leases, and Owner has received no notice, nor has
         Owner any knowledge of any alleged default in connection with said
         Leases;

                           (9) Except as set forth on the Rent Roll, there are
         no prepaid rentals under the Leases and there are no other rent
         concessions or set-offs against rent, nor has any tenant asserted any
         defense, set-off, or counterclaim in connection with said Leases;


                                       10

<PAGE>   14



                           (10) Owner has not collected any of the rent or other
         sums arising or accruing under any of the Leases in advance of the time
         when the same shall become due;

                           (11) Owner, prior to taking any enforcement action
         under any of the Leases because of a default of a tenant thereunder,
         shall obtain the consent of Highwoods, which consent will not be
         unreasonably withheld or delayed, provided, if Highwoods does not
         respond to Owner within five (5) business days after receipt of written
         notice from Owner of its intent to take such enforcement action, Owner
         may take such action without Highwoods' actual consent;

                           (12) The tenants under the Leases currently occupy
         all of the space described in the Leases, and the tenants under such
         Leases have no unwritten rights with respect to the Property not
         otherwise set forth on the Rent Roll or in the Leases.

                  (b) No service, maintenance, property management or other
         contracts affecting the Property will be in existence as of the Closing
         except as set forth on EXHIBIT D attached hereto, all of which can be
         terminated without cost or payment on not more than thirty (30) days'
         notice except as otherwise noted on said EXHIBIT D, and in no event
         shall there be in existence as of the Closing any contracts relating to
         management or leasing of the Building or Improvements. The copies of
         the Service Contracts to be delivered pursuant to Section 5.02 hereof
         are true, correct and complete in all respects and contain all
         amendments;

                  (c) Owner shall keep all insurance relating to the Property in
         full force and effect through the Closing. No notices or requests have
         been received by Owner from any insurance company issuing any of said
         policies which have not been complied with by Owner, and such insurance
         is now in full force and effect. Any notices or requests from any such
         insurance company received prior to the Closing shall be complied with
         by Owner prior to Closing;

                  (d) To the best of Owner's knowledge, but without having made
         any independent investigations, the roof of the Building drains
         adequately;

                  (e) Except as otherwise set forth herein, all equipment,
         fixtures and personal property as listed on EXHIBIT B attached hereto
         shall remain present on the Land or in the Improvements at the Closing,
         and shall be in the same condition and working order at Closing as of
         the date hereof, reasonable wear and tear excepted;

                  (f) Owner owns the Personal Property free and clear from all
         liens and encumbrances, except for such exceptions to the title thereto
         as may be approved in writing by Highwoods or are released at the
         Closing;

                  (g) Owner has entered into no agreement, oral or written,
         other than as set forth on EXHIBIT G attached hereto, which affects
         title to the Property or the operation thereof, and

                                       11

<PAGE>   15



         has entered into no agreement, oral or written, related to the Property
         not otherwise referenced herein; neither Owner nor the Property is
         subject to any claim, demand, suit, unfiled lien, proceeding or
         litigation of any kind, pending or outstanding, or to the knowledge of
         Owner, threatened or likely to be made or instituted which would in any
         way be binding upon Highwoods or its successors or assigns or affect or
         limit Highwoods' or its successors' or assigns' full use and enjoyment
         of the Property or which would limit or restrict in any way Owner's
         right or ability to enter into this Agreement and consummate the
         transaction contemplated hereby;

                  (h) Copies of the Leases and Service Contracts, supplied by
         Owner to Highwoods at any time prior to Closing are true, correct and
         complete;

                  (i) Owner owns and will own at the date of Closing a fee
         simple title to the Land subject only to Permitted Exceptions;

                  (j) To the best of Owner's knowledge, there are no taxes,
         charges or assessments of any nature or description arising out of the
         conduct of Owner's business or the operation of the Property which
         would constitute a lien against the Property that will be unpaid at the
         date of Closing except the lien of the City/County ad valorem property
         taxes for the year in which Closing occurs;

                  (k) To the best of Owner's knowledge, but without having made
         any independent investigations, all functional systems and structural
         components of the Building including, without limitation, the roofs,
         roof curbs, floors, heating, air conditioning and ventilating
         mechanical systems, compressors, electrical systems, plumbing systems,
         sprinklers and other fire protection and life safety systems,
         refrigeration systems, vaults, equipment and appliances (collectively,
         the "Systems") are currently in good condition and working order.
         Subsequent to the execution hereof and at any time prior to Closing,
         Owner agrees to provide Highwoods with any information or knowledge it
         may have related to any defects in the Systems or the structural
         soundness of the Building;

                  (l) Subject to a majority in interest of Owner's limited
         partners consenting to the transaction contemplated hereby and assuming
         this transaction does not violate federal and state securities laws,
         Owner has full power and authority to enter into this Agreement and to
         assume and perform all of its obligations hereunder; the execution and
         delivery of this Agreement and the performance by Owner of its
         obligations hereunder have been duly authorized by such partnership
         action as may be required (including, without limitation, proper
         approval by the partners thereof) and no further action or approval is
         required in order to constitute this Agreement as a binding and
         enforceable obligation of Owner, subject to bankruptcy and similar laws
         reflecting the remedies or recourses of creditors generally; the
         execution and delivery of this Agreement and the consummation of the
         transactions contem plated hereunder on the part of Owner do not and
         will not violate the partnership agreement of Owner, do not and will
         not conflict with or result in the breach of any condition or

                                       12

<PAGE>   16



         provision of, or constitute a default under, or result in the creation
         or imposition of any lien, charge or encumbrance upon any of the
         property or assets of Owner (including the Property) by reason of the
         terms of any contract, mortgage, lien, lease, agreement, indenture,
         instrument or judgment to which Owner is a party or which is or
         purports to be binding upon Owner or which affects Owner and which will
         remain in effect after the Closing; and no action by any federal, state
         or municipal or other governmental department, commission, board,
         bureau or instrumentality is necessary to make this Agreement a valid
         instrument binding upon Owner in accordance with its terms, subject to
         bankruptcy and similar laws affecting the remedies or recourses of
         creditors generally;

                  (m) Owner is a limited partnership duly organized, validly
         existing and in good standing under the laws of the State of North
         Carolina. Owner has full power and authority to carry on its business
         as now conducted and to own or lease and to operate its properties and
         assets now owned or leased and operated by them;

                  (n) The Property is not the subject of any outstanding
         agreements with any party other than Highwoods pursuant to which any
         such party may acquire any interest in the Property, except for (i)
         certain mortgage loans against the Property (which will be discharged
         and paid in full at Closing or assumed by Highwoods as set forth
         herein), and (ii) the Leases, provided the Leases do not create any
         option or other rights to purchase or acquire any interest in the
         Property other than a leasehold estate described in the Leases;

                  (o) To the best of Owner's knowledge, but without having made
         any independent investigations, the Improvements are free from damage
         or infestation from termites or other wood destroying organisms;

                  (p) Owner is not a "foreign person" within the meaning of
         Section 1445 of the Internal Revenue Code of 1986, as amended;

                  (q) To the best knowledge of Owner, but without having made
         any independent investigations and without any knowledge related to the
         actions of the tenants in the Building related to the subject matter of
         this Subsection 6.02(q), as of the date of this Agreement and as of the
         Closing Date and subject to the findings of any Environmental
         Assessments obtained (or in the event Highwoods does not obtain an
         Environmental Assessment, which could have been obtained) pursuant to
         Highwoods' inspection right pursuant to Sections 5.04 and 5.06 above,
         the Property (for purposes of this Subsection, the use of the term
         "Property" shall include all leased and vacant space, land surface
         water, groundwater, and any Improvements) is now and will then be free
         of all contamination, including, without limitation (i) any "hazardous
         waste," "underground storage tanks," "petroleum," "regulated
         substance," or "used oil" as defined by the Resource Conservation and
         Recovery Act of 1976 (42 U.S.C. ss. 6901, et seq.) as amended, or by
         any regulations promulgated thereunder; (ii) any "hazardous substance"
         as defined by the Comprehensive Environmental Response, Compensation
         and Liability Act of 1980 (42 U.S.C. ss. 9601, et seq.) as amended, or
         by any

                                       13

<PAGE>   17



         regulations promulgated thereunder (including, but not to limited to,
         asbestos and radon); (iii) any "oil" or other "hazardous substances" as
         defined by the Oil and Hazardous Substances Control Act of 1976; (iv)
         any substance the presence of which on, in, or under the Property, is
         prohibited or regulated by any law similar to those set forth above;
         and (v) any other substance which by law, regulation or ordinance
         (whether published or unpublished) requires special handling in its
         collection, storage, treatment, or disposal;

                  (r) To the best knowledge of Owner, but without having made
         any independent investigations and without any knowledge related to the
         actions of the tenants in the Building as of the date of this Agreement
         and as of the Closing Date and subject to the findings of any
         Environmental Assessments (or in the event Highwoods does not obtain an
         Environmental Assessment, which could have been obtained) obtained
         pursuant to Highwoods' inspection right under Sections 5.04 and 5.06),
         the Property (for purposes of this Subsection, the use of the term
         "Property" shall include all leased and vacant space, land surface
         water, groundwater, and any Improvements), (i) will be free of asbestos
         or any asbestos related products (including, without limitation, the
         presence of any asbestos in the insulation or other material used
         comprising any part of the Improvements); (ii) has no underground
         storage tanks located on, under or at the Property; (iii) does not
         appear on any state of federal CERCLA (Comprehensive Environmental
         Responsibility, Compensation and Liability Act), Superfund or other
         similar lists; (iv) has ever been used as a sanitary landfill, waste
         dump site or for the treatment, storage or disposal of hazardous waste
         as defined in the Resource Conservation Recovery Act; (v) has not been
         the subject of a notice of violation or other written communication
         from a governmental agency or any other entity or person alleging or
         suggesting an environmental law violation on the Property; (vi) neither
         Owner nor any of Owner's employees, agents, tenants, licensees or
         invitees have placed or permitted the placement of any hazardous or
         toxic substances, wastes or material in, on or over the Property in
         violation of any environmental law; (vii) no other party has placed any
         hazardous or toxic substances, wastes or material in, or over the
         Property in violation of any environmental law; (viii) the Property is
         not subject to any federal, state or local lien (including any
         "Superfund" lien), proceedings, claim, liability or action, or the
         threat or likelihood thereof, relating to the clean-up, removal or
         remediation of any such hazardous substance from the Property and Owner
         has received no request or information from the United States
         Environmental Protection Agency, or the appropriate state environmental
         agency within which the Property is located, or any public,
         governmental or quasi-governmental agency or authority relating
         thereto;

                  (s) There are no employees of Owner engaged in the operation
         and maintenance of the Property to which Highwoods shall, at or after
         Closing, have any obligation whatsoever because of any action taken or
         promises made by Owner;

                  (t) To Owner's best knowledge, there are no outstanding
         written requirements or recommendations by the fire insurance
         underwriters or rating boards, or any insurance

                                       14

<PAGE>   18



         companies, requiring or recommending any repairs or work to be done
         with reference to the improvements located on the Property;

                  (u) The books and records relating to the Property which have
         been made or will be made available to Highwoods accurately, fully and
         correctly reflect the operation of the Property in all material
         respects and all income received and expenses incurred by Owner in
         connection therewith. At Closing, there will have been no material
         adverse change in the financial condition of the Property as previously
         represented by Owner;

                  (v) No federal, state or local taxing authority has asserted
         any tax deficiency, lien, interest or penalty or other assessment
         against Owner's interest in the Property or Owner which has not been
         paid and there is no pending audit or inquiry from any federal, state
         or local tax authority relating to the Owner's interest in the Property
         or Owner which reasonably may be expected to result in a tax
         deficiency, lien, interest, penalty or other assessment against Owner's
         interest in the Property or Highwoods;

                  (w) To the best knowledge of Owner, but without having made
         any independent investigation, the Owner has operated the Property in
         accordance with all applicable laws, ordinances, rules and regulations.

                  (x) In the event that Owner has knowledge, after the execution
         of this Agreement but prior to Closing that any tenant under a Lease
         shall become a debtor in a proceeding under Title 11 of the United
         States Code, or the subject of any other insolvency proceeding,
         including state receivership proceedings or a proceeding for the
         assignment for the benefit of creditors under State law, then in such
         event, Owner shall disclose such fact to Highwoods.

         All representations and warranties of Owner contained in this Agreement
shall be true, accurate and correct in all material respects as of the date
hereof and Owner shall deliver to Highwoods at Closing a certificate certifying
that they are still true, accurate and correct as of the Closing Date. In the
event that Highwoods, prior to Closing, reasonably determines that any
representation or warranty set forth herein is not materially accurate,
Highwoods' sole remedy shall be its right to terminate its obligations under
this Agreement and receive the Earnest Money; provided, however, if any such
representation or warranty is not materially accurate solely as the result of
Owner's intentional or wilful act occurring after the execution hereof, and
Highwoods elects not to close the transaction contemplated hereby, Owner shall
pay to Highwoods all due diligence costs expended by Highwoods it during the
Inspection Period, not to exceed $15,000.

         The representations and warranties set forth above shall survive the
Closing for a period of six (6) months (the "Notice Period"), but only if
Highwoods is unaware at the time of Closing that any such representation or
warranty is not correct in all material respects. Highwoods agrees to execute an
Affidavit to Owner at Closing certifying that it has no reason to believe that
the Owner's representations and warranties set forth herein are not true in all
material respects. Provided

                                       15

<PAGE>   19



Highwoods executes the Affidavit referenced in the preceding sentence and so
long as Highwoods has notified Owner of the inaccuracy of any such
representation or warranty within the Notice Period, the fact that the extent of
the inaccuracy has not been quantified within the Notice Period, or the fact
that any dispute relating to the inaccuracy of any such representation or
warranty has not been resolved within the Notice Period, shall not limit
Highwoods' right to pursue to completion after the Notice Period any remedy it
may have related to a notice of an inaccuracy of any representation or warranty
given before the expiration of the Notice Period. Notwithstanding the above,
Highwoods may exercise any legal remedy available to it as a result of Owner's
intentional misrepresentation or other procurement of this Agreement through
fraudulent means until the time for seeking such remedy is barred by the running
of any applicable statute of limitations. Owner hereby indemnifies and holds
harmless Highwoods from and against any and all loss, costs (including without
limitation attorney fees and costs), claims or liability now or at any time
hereafter arising as a result of any misrepresentations or untruth or inaccuracy
of any of the foregoing representations, whether made now or at the time of
Closing, whether or not such claim is made before or after the Closing
contemplated hereby; provided, however, Owner shall not be required to indemnify
Highwoods pursuant to this paragraph until the amount of loss incurred by
Highwoods resulting from Seller's misrepresentations, or the untruth or
inaccuracy of any of the foregoing representations, exceeds Twenty-Five Thousand
and no/100 Dollars ($25,000.00), and then, Owner shall only be liable to
Highwoods for the amount of such loss exceeding $25,000.00.

         6.03. REPRESENTATIONS AND WARRANTIES OF HIGHWOODS. Highwoods hereby
represents and warrants to Owner as follows:

                  (a) Highwoods has been duly formed and is validly existing as
         a North Carolina limited partnership and is duly qualified to do
         business in all jurisdictions where such qualification is necessary to
         carry on its business as now conducted and is duly qualified in all
         jurisdictions where the ownership of its property would necessitate
         such qualification. Highwoods has all partnership power and authority
         under its partnership agreement and its certificate of limited
         partnership to enter into this Agreement and to enter into and deliver
         all of the documents and instruments required to be executed and
         delivered by Highwoods and to perform its obligations hereunder and
         thereunder.

                  (b) The execution and delivery of this Agreement and the
         documents required to be executed by Highwoods hereunder, and the
         performance of its obligations under this Agreement, have been duly
         authorized by all requisite partnership action, and this Agreement has
         been, and such documents will on the Closing date have been, duly
         executed and delivered by Highwoods. None of the foregoing requires any
         action by or in respect of, or filing with, any governmental body,
         agency or official or contravenes or constitutes a default under any
         provision of applicable law or regulation, any organizational document
         of Highwoods or any agreement, judgment, injunction, order, decree or
         other instrument binding upon Highwoods. This Agreement does and will,
         and the documents executed by Highwoods will, constitute the valid and
         binding obligation of Highwoods enforceable in

                                       16

<PAGE>   20



         accordance with their terms, subject to bankruptcy and similar laws
         affecting the remedies or recourses of creditors generally.

                  (c) To the actual knowledge of Highwoods, there is no existing
         or threatened legal action or governmental proceedings of any kind
         involving Highwoods, any of its assets or the operation of any of the
         foregoing, which if determined adversely to Highwoods or its assets,
         would have a material adverse effect on the financial condition,
         business or prospects of Highwoods or its assets or which would
         interfere with Highwoods' ability to execute or deliver, or perform its
         obligations under this Agreement or any of the documents required to be
         executed by it.

         7. DUE DILIGENCE PERIOD. Highwoods shall have the right for a period of
forty-five (45) days from the date of execution hereof by all parties hereto
(the "Inspection Period") to inspect the Property including, without limitation,
the physical condition of such Property including the Building, Improvements,
mechanical and electrical systems, landscaping and parking areas, a BOMA-AOA
analysis, financial records and Leases to determine if it desires to purchase
the Property from Owner as herein set forth. The cost of such inspections shall
be borne by Highwoods. If Highwoods determines for any reason that it does not
desire to purchase the Property, it must give notice of this fact to Owner on or
before the end of the Inspection Period, and upon the giving of such notice,
this Agreement shall be null and void and of no further force or effect and all
but $100 of the Earnest Money shall be returned to Highwoods, with such $100
being paid to Owner as consideration for Highwoods' right to terminate this
Agreement pursuant to this Section 7. If Highwoods does not give such notice,
then the Closing shall take place at the time and place set forth in this
Agreement. During the Inspection Period, Highwoods shall have the right of
access to the Property and Owner's financial records and other records and
documents related thereto as set forth in Sections 5.03 and 5.04, and agrees to
indemnify, defend and hold harmless Owner from any claim, suit, demand, action,
loss, damage, cost or expense, including, without limitation, reasonable
attorneys' fees incurred by Owner arising out of such access as set forth in
Section 5.04, provided Highwoods shall have no liability to Owner as a result of
the mere discovery by Highwoods or its experts of environmental contamination on
the Land not caused by Highwoods or its agents. All physical inspections and
entry onto the Property shall be subject to the rights of tenants in possession
or occupying portions of the Property under the Leases. During the Inspection
Period, Highwoods shall not have the right to contact tenants under the Leases
and/or their agents concerning their tenancies.

         8. CONDITIONS PRECEDENT TO CLOSING.

         8.01. The obligations of Highwoods to purchase the Property from Owner
and meet its other obligations hereunder shall be subject to the following
conditions precedent, any of which may be waived by Highwoods in writing at the
Closing:

                  (a) All of the representations and warranties of Owner made
         herein shall be true and correct in all material respects as of the
         Closing ("actual knowledge" or the "best

                                       17

<PAGE>   21



         knowledge" of Owner as set forth in said representations and
         warranties, for the purposes of this subparagraph 8.01 only, shall be
         deemed to include knowledge acquired by Owner subsequent to the date
         hereof and prior to Closing).

                  (b) Owner's obligations with respect to the Property as set
         forth herein shall have been performed.

                  (c) Title to the Property must be insurable in accordance with
         the Title Commitment, with no exceptions to title other than the
         Permitted Exceptions, and Highwoods must be able to obtain a title
         insurance policy from the Title Company in accordance with such Title
         Insurance Commitment with payment of only standard title insurance
         premiums.

                  (d) The Property must be in the same condition as of the date
         of this Agreement, ordinary wear and tear excepted, and subject to the
         specific provisions set forth herein related to condemnation and
         casualty.

                  (e) Owner shall have delivered to Highwoods tenant estoppel
         certificates in the form attached hereto as EXHIBIT H (or in the form
         attached to any Lease and made a part thereof, provided such form has
         been approved by Highwoods) dated not more than thirty (30) days prior
         to Closing from tenants occupying 80% of the net rentable space in the
         Building. Owner agrees to send estoppel certificates to all tenants of
         the Property and request that the same be completed and returned to
         Owner for delivery to Highwoods. If Highwoods has not received
         satisfactory estoppel certificates from tenants occupying at least 80%
         of the net rentable space in the Buildings on or before Closing, then
         Highwoods may terminate this Agreement, but except for such
         termination, Highwoods shall have no further remedy against Owner for
         the failure of the condition precedent set forth in this Subsection
         8.01(e). If Highwoods does not so terminate this Agreement, then the
         condition precedent set forth in this Subsection 8.01(e) shall be
         deemed waived and of no further force or effect.

                  (f) All management fees due any property manager of the
         Property, and leasing commissions due arising out of any leases of the
         Property (even if such commissions are due over time after the Closing)
         shall be paid in full by Owner at Closing.

                  (g) No Tenant of 5% or more of the leasable space in any
         Building shall have become a debtor in a proceeding under Title 11 of
         the United States Bankruptcy Code or, the subject of any other
         insolvency proceeding, including state receivership proceedings or a
         proceeding for the assignment for the benefit of creditors under any
         state law.

                  (h) Highwoods shall have received a fully-executed, full
         service lease between Seller and Branch Banking and Trust Co. on terms
         acceptable to Highwoods, including without limitation, a new minimum
         lease term of five (5) years (the "BB&T Lease"). Highwoods shall have
         seven (7) business days to review and approve or disapprove the

                                       18

<PAGE>   22



         provisions of the BB&T Lease. If Highwoods has not objected to any
         provision of the BB&T Lease within seven (7) days after delivery
         thereof to Highwoods, then in such event Highwoods shall be deemed to
         have approved the BB&T Lease.

                  (i) Highwoods Investment Committee shall have approved this
         transaction, with said approval to have been given prior to the end of
         the Inspection Period.

                  In the event any of the aforesaid conditions precedent are not
fulfilled, Highwoods may only (i) terminate its obligations hereunder, (ii)
waive any such failure and close in accordance with the terms hereof, or (iii)
require Owner to use its best efforts to perform its obligations as elsewhere
set forth herein and as limited by other provisions of this Agreement.

         8.02. The obligations of Owner under this Agreement are subject to the
satisfaction of each of the following conditions on or before the Closing Date,
any of which may be waived by Owner, and Highwoods agrees to cause the
conditions described in clauses (a) and (b) below to be so satisfied: (a) all
the terms, covenants, and conditions of this Agreement to be complied with and
performed by Highwoods on or before the Closing Date shall have been duly
complied with and performed in all respect; (b) the representations and
warranties of Highwoods contained in this Agreement shall be true and correct in
all respects at and as of the Closing Date with the same force and effect as
though such representations and warranties had been made as of the Closing Date,
except for any changes which have been disclosed to Owner in writing and
expressly approved or waived by Owner in writing; and (c) Owner shall have
obtained the consent of a majority in interest of Seller's limited partners to
the consummation of the transactions contemplated by this Agreement and have
assured itself that such consent and transactions related thereto comply with
Owner's Partnership Agreement and federal and state securities laws. If Owner's
limited partners' consent is not obtained as set forth above and this
transaction does not close, then in such event Owner shall pay to Highwoods all
due diligence expenses expended by Highwoods during the Inspection Period and
related to the Property, provided the costs thereof shall not exceed $15,000.

         9. MAINTENANCE AND OPERATION OF THE PROPERTY.

         9.01. From and after the date of this Agreement through the Closing,
Owner shall operate the Property in substantially the same condition and manner
in which it is now maintained and operated, normal wear and tear and damage or
destruction by casualty and condemnation excepted.

         9.02. From and after the date of this Agreement through the day
following the Closing, Owner shall maintain on the Property such insurance as is
now in effect.

         9.03. Highwoods acknowledges that Owner shall have the right, from and
after the date of this Agreement through the Closing, to remove or replace items
of Personal Property from time to time in the normal course of business.
Highwoods agrees that Owner may remove items of Personal Property from the
Property if such items are obsolete or replaced by Personal Property of equal or
greater utility or value. Any such Personal Property removed shall cease to
constitute Personal

                                       19

<PAGE>   23



Property for all purposes under this Agreement. Any Personal Property replaced
pursuant to this subparagraph 9.03 shall, to the extent not thereafter removed,
constitute Personal Property for all purposes under this Agreement.

         9.04. Highwoods acknowledges that Owner shall have the right, from and
after the date of this Agreement through the Closing with respect to the
Property, in the ordinary course of business, to enter into agreements
pertaining to the operation of the Property. All such agreements entered into
after the date hereof shall either be (i) approved in writing by Highwoods or
(ii) terminable without penalty on no more than thirty (30) days' notice.
Notwithstanding the above, Highwoods agrees to approve the BB&T Lease so long as
it is in substantially the form set forth on EXHIBIT H-1.

         9.05. Owner shall promptly deliver to Highwoods written notice of any
casualty or taking involving the Property. If, prior to the Closing, all or any
part of a Building is damaged or destroyed by casualty or is taken by
condemnation, eminent domain or agreement in lieu thereof, such that (i) twenty
percent (20%) or more of the floor area of any Building or the parking area on
the Property is damaged or destroyed by such casualty (a "Major Casualty"); or
(ii) in the event of a taking, such taking is of twenty percent (20%) or more of
the floor area of any Building or of the parking area on the Property, or such
taking renders the Property unfit for use as an office (a "Major Taking"), then
either Highwoods or Owner may elect to terminate this Agreement. If any part of
the Property is damaged, destroyed or taken by a casualty, condemnation
proceeding, eminent domain proceeding or agreement in lieu thereof that does not
constitute a Major Casualty or a Major Taking, then the Closing shall take place
as set forth herein with Highwoods to receive all insurance or condemnation
proceeds related thereto.

         9.06. On or before the Closing, Owner shall cause all debts secured by
the Property, or other liens or judgments filed against the Property to be paid
and satisfied in full, or in the alternative, Highwoods shall pay the same at
Closing pursuant to Section 4.02(a).

         10. CLOSING DATE. The Closing shall take place on or before the
thirtieth (30th) day following the end of the Inspection Period at 10:00 o'clock
a.m. in the offices of Shumaker, Loop & Kendrick, LLP, in Charlotte, North
Carolina, unless another time, place and date is designated by Highwoods, but
only upon ten (10) business days prior notice thereof. In the event the
thirtieth (30th) day after the Inspection Period is a Saturday, Sunday or
Holiday, then in such event the Closing shall occur on the first business day
following the thirtieth (30th) day after the Inspection Period ends.

         11. DOCUMENTS REQUIRED TO BE DELIVERED AT CLOSING:

         11.01. DOCUMENTS REQUIRED TO BE DELIVERED BY OWNER AT CLOSING. As a
condition to each party's obligation to close, at Closing, Owner shall deliver
to Highwoods the following:

                  (a) A special warranty deed in the form reasonably acceptable
         to Highwoods, and in the form customarily used in South Carolina in
         transactions of the type contemplated

                                       20

<PAGE>   24



         hereby, conveying good and marketable fee simple title to the Property,
         free and clear of all liens, encumbrances, easements and restrictions,
         except the Permitted Exceptions and the Leases, which may encumber the
         Property at the time of the conveyance thereof;

                  (b) A bill of sale transferring all the Personal Property
         subject to this Agreement which bill of sale will be in a form
         reasonably acceptable to Highwoods in the form attached hereto as
         EXHIBIT I;

                  (c) A standard owner's affidavit and lien waiver form used by
         the Title Company to cause an extended coverage ALTA owner's title
         insurance policy to be issued to Highwoods without standard exceptions
         and with customary endorsements as Highwoods may reasonably request;

                  (d) An assignment of all tenant security deposits held by
         Owner under the terms of the Leases (this sum may be credited against
         the Purchase Price otherwise due Owner from Highwoods at Closing);

                  (e) An assignment of the Leases in the form set forth on
         EXHIBIT J, providing that Owner shall indemnify Highwoods in the manner
         set forth in Section 16.02 and Highwoods shall indemnify Owner in the
         manner set forth in Section 16.01 below;

                  (f) The original Leases set forth on EXHIBIT C, and all keys,
         licenses and permits related to the Property and copies of all tenant
         files and such other books and records as shall be necessary for
         Highwoods to own and operate the Property commencing on the date of
         Closing;

                  (g) An assignment of those Service Contracts assumed by
         Highwoods in the form set forth on EXHIBIT K;

                  (h) A letter from Owner and Highwoods to tenants of the
         Property which shall be sent on or immediately after the Date of
         Closing advising them of the sale of the Property to Highwoods and that
         all future payments under the Leases are to be paid to Highwoods;

                  (i) A certificate of Owner as to the warranties and
         representations referred to in Section 6.02 hereof being true and
         correct as of the Closing Date;

                  (j) A Rent Roll of the Property certified by Owner;

                  (k) An affidavit as to "foreign persons" referred to in
         Section 6.02(q) hereof;

                  (l) All architectural and engineering plans in possession of
         Owner relating to the Buildings or the Property;


                                       21

<PAGE>   25



                  (m) A blanket assignment and transfer (without warranty) of
         any and all miscellaneous interests and all warranties and guarantees
         from contractors, subcontractors, suppliers, manufacturers or
         distributors relating to the Property, if any, and all of Owner's
         right, title, interest and benefits in, to and under all contracts,
         licenses, permits, and similar documents or authorizations pertaining
         to the ownership and operation of the Property, if any, including the
         trade name of the Property in the form attached hereto as EXHIBIT K-1;

                  (n) Original of the certificate or certificates of occupancy
         for the Property, if available;

                  (o) Originals of the tenant estoppel certificates referenced
         in Section 8.01(e), duly executed by each of the tenants occupying
         space in any Building located on the Property;

                  (p) The opinion of counsel for Owner in the form to be
         mutually acceptable to the attorneys for Owner and Highwoods;

                  (q) Originals or certified copies of all contracts related to
         the Property (including management contracts, service contracts and the
         Leases) together with updated rent rolls pertaining to the Property and
         all security deposits under the Leases.

                  (r) A certified copy of all appropriate partnership
         resolutions authorizing the execution, delivery and performance by such
         Owner of this Agreement and any other applicable documents required to
         be delivered hereunder by Owner.

                  (s) Upon delivery to the Title Company of the Existing Surveys
         delivered to Highwoods pursuant to Section 5.02 hereof, if the Title
         Company will issue the Title Commitment and the final title policy to
         be issued in connection therewith without exception to matters which
         would be shown by a current survey, then, Owner shall deliver to
         Highwoods at Closing an affidavit certifying, if true, that the
         Existing Surveys delivered by Owner to Highwoods pursuant to 5.02
         remain accurate in every respect and that no buildings, structures or
         other improvement have been constructed on the Property since the date
         of the survey so delivered.

                  (t) A settlement statement setting forth the total amount of
         cash to be delivered to Owner hereunder and the prorated items and
         other adjustments required to be made to the Purchase Price hereunder.

                  (u) Such other documents and instruments as may be reasonably
         necessary to consummate the transactions contemplated by this
         Agreement.

         11.02. DELIVERIES BY HIGHWOODS AT CLOSING. At Closing, Highwoods shall
pay the Purchase Price to Owner pursuant to Section 4 hereof and shall execute
and deliver to Owner the following:

                  (a) An assignment of the Leases in the form set forth on
         EXHIBIT J;


                                       22

<PAGE>   26



                  (b) An assignment of those Service Contracts assumed by
         Highwoods in the form set forth on EXHIBIT K;

                  (c) A Settlement Statement as described in Section 11.01(t)
         above.

                  (d) Such other documents and instruments as may be reasonably
         necessary to consummate the transactions with Owner under this
         Agreement.

         12. CLOSING ADJUSTMENTS. Unless otherwise specified in this Agreement,
all income, expenses and costs related to the Property shall be prorated as of
the effective date of the Closing as follows, with any credits or debits to
Owner as the result of such adjustments being added to or subtracted from the
amount of the Purchase Price due Owner under Section 4.02(b) of this Agreement.

         12.01. TAXES. Ad valorem property taxes due or to be levied against the
Property for the year of Closing shall be prorated with Owner being responsible
for all such taxes from January 1st of the year of Closing through the last day
prior to the day of Closing. Highwoods shall be responsible for paying the
balance of the remaining ad valorem taxes due or to be levied against the
Property for the year of Closing. Owner shall be responsible for paying any
unpaid taxes for any year prior to closing. In the event the Taxes are not
determinable at the time of Closing, the Taxes shall be prorated on the basis of
the best available information (the "Estimated Taxes") . In the event any of the
Taxes are delinquent at the time of Closing, the same shall be paid at Closing.
If the Taxes are not paid at Closing, Owner shall deliver to Highwoods the bills
for the Taxes promptly upon receipt thereof and Highwoods shall thereupon be
responsible for the payment in full of the Taxes within the time fixed for
payment thereof and before the same shall become delinquent. Notwithstanding the
foregoing, in the event actual Taxes for the year of Closing exceed the
Estimated Taxes for the year of Closing (the "Tax Excess") or Estimated Taxes
for the year of Closing exceed the actual Taxes for year of Closing (the "Tax
Refund"), Owner and Highwoods shall prorate and pay such Tax Refund as follows:

                  (a) Owner shall be responsible for a portion of the Tax Excess
         or shall receive credit for the Tax Refund prorated from January 1st of
         the year of Closing through the Closing Date based upon a 365 day
         calendar year. Highwoods shall notify Owner of any Tax Excess or Tax
         Refund. The notification shall include a calculation of the amount due
         to Highwoods from Owner in the case of a Tax Excess or the amount due
         to Owner from Highwoods in the case of a Tax Refund. Owner shall have
         thirty (30) days from Owner's receipt of such notification to pay its
         portion of the Tax Excess to Highwoods and Highwoods shall have thirty
         (30) days from Highwoods's delivery of such notification to Owner to
         pay Owner its portion of the Tax Refund.

                  (b) Highwoods shall be responsible for a portion of the Tax
         Excess prorated from the Closing Date through December 31st of the year
         of Closing based upon a 365 day calendar year. Highwoods shall assume
         responsibility for payment of all Estimated Taxes

                                       23

<PAGE>   27



         for the year of Closing as of the Closing Date, and shall notify Owner
         of any Tax Excess or Tax Refund pursuant to the terms of this Section
         12.02.

         Notwithstanding the above, in the event the ad valorem property taxes
levied against the Property are paid directly by the tenant of any Building,
then in such event, there shall be no proration of such taxes between Highwoods
and Owner.

         12.02. UTILITIES. All utility charges and reimbursement for utility
charges related to the Property (including, without limitation, telephone,
water, storm and sanitary sewer, electricity, gas, garbage and waste removal)
(to the extent not paid or payable by tenants under Leases) shall be prorated as
of the Closing Date, transfer fees required with respect to any such utility
shall be paid by or charged to Highwoods, and Owner shall be credited with any
deposits transferred to the account of Highwoods.

         Notwithstanding the above, in the event the utility charges
attributable to the Property are paid directly by the tenant of the Building,
then in such event, there shall be no proration of such utility charges between
Highwoods and Owner.

         12.03. RENTS. All paid rents, together with any other sums paid by
tenants under the Leases, shall be prorated as of the Closing Date. In the event
that, at the time of Closing, there are any past due or delinquent rents owing
by any tenants of the Property, Highwoods shall have the right to collect such
past due or delinquent rents and shall remit to Owner its pro-rata share
thereof, to the extent, and only to the extent, that the aggregate rents
received by Highwoods from each such tenant owing past due or delinquent rents
exceed the sum of (A) the aggregate rents and other sums payable by such tenant
for periods from and after the Closing Date, and (B) any reasonable and
necessary amounts expended by Highwoods to collect such past due or delinquent
rents. Highwoods shall use reasonable efforts to collect or enforce collection
of any such past due or delinquent rents from or against any tenant; provided,
Highwoods shall not be required to institute suit for collection or eviction of
such tenant, and Owner shall be responsible for any legal fees incurred by
Highwoods which attributable to the collection of rent due Owner (provided
Highwoods has no obligation to engage an attorney for such purpose). In the
event that, after Closing, Owner receives any payments of rent or other sums due
from tenants under Leases that relate to periods from and after Closing, Owner
shall promptly forward to Highwoods' its portion of such payments.

         12.04. TENANTS' OVERPAYMENT OR UNDERPAYMENT OF ESTIMATED OPERATING
                EXPENSES.

                  (a) Notwithstanding anything to the contrary contained herein,
         in the event payments received from the Building's tenants pursuant to
         the Leases for their estimated share of ad valorem taxes, insurance
         premiums, common area maintenance expenses or other operating expenses
         of the Property for the year of the Closing (the "Estimated Payments")
         exceed the actual amounts of such expenses for the year of Closing
         ("Excess Estimated Payments") and if such Excess Estimated Payments do
         not have to be reimbursed to the tenants or if the tenants do not have
         to be given credit for such Excess Estimated Payments

                                       24

<PAGE>   28



         when determining estimated payments for such expenses in future years;
         then in such event, Highwoods and Owner shall each be entitled to a
         prorated portion of the Excess Estimated Payments based upon the number
         of days in the year of Closing that each owned the Property.

                  (b) Notwithstanding anything to the contrary contained herein,
         in the event Estimated Payments are less than the actual amounts of ad
         valorem taxes, insurance premiums, common area maintenance expenses or
         other operating expenses of the Property for the year of the Closing
         ("Estimated Payments Shortfall") and if the tenants under the Leases
         are not required to reimburse the landlord under the Leases for such
         Estimated Payments Shortfall; then in such event, Highwoods and Owner
         shall each be responsible for the payment of a prorated portion of the
         Estimated Payments Shortfall based upon the number of days in the year
         of Closing that each owned the Property.

                  (c) Highwoods shall notify Owner of any Excess Estimated
         Payments which should be prorated under Subsection (a) above or of any
         Estimated Payments Shortfall which should be paid under Subsection (b)
         above, the notification shall include a calculation of the amount due
         from Highwoods to Owner in the event of any Excess Estimated Payments
         or the amount from Owner to Highwoods in the event of any Estimated
         Payments Shortfalls which should be reimbursed to Highwoods. Owner
         shall have thirty (30) days from its receipt of Highwoods' notification
         to pay Highwoods its portion of any Estimated Payments Shortfall.
         Highwoods shall remit with the notice referenced above any sums due
         from Highwoods to Owner as the result of Excess Estimated Payments.

         12.05. REAL ESTATE COMMISSIONS. All commissions owed or to be owed in
connection with the Leases, exclusive of any commissions due as the result of
the extension of the term of a Lease or the exercise of an option to renew a
Lease (collectively "Commissions Payable") shall be paid by Owner on or before
the Closing Date. All obligations to pay commissions owed or to be owed in
connection with new leases executed after the execution hereof (with the
approval of Highwoods), the extension of the term of a Lease or the exercise of
an option to renew a Lease and agreements to lease all or any part of the Land
or the Improvements, which agreements were reached prior to the Closing Date and
approved by Highwoods, but not evidenced by a written Lease prior to the Closing
Date (collectively the "Commissions Assumed"), shall be assumed by Highwoods on
the Closing Date.

         12.06. TENANT IMPROVEMENTS. All tenant improvement work owed or to be
owed in connection with the Leases, exclusive of any tenant improvement work
owed by Owner as the result of the extension of the term of a Lease or the
exercise of an option to renew a Lease (collectively "TI Work Payable") shall be
paid by Owner on or before the Closing Date; provided, however, that if the
amount of such TI Work Payable is not determinable as of the Closing Date, Owner
shall escrow with Highwoods' a reasonable estimate of such TI Work Payable
pursuant to the terms of an Escrow Agreement in a form reasonably acceptable to
Owner and Highwoods. All obligations to pay tenant improvement work owed or to
be owed in connection with new leases executed after the execution

                                       25

<PAGE>   29



hereof (with the approval of Highwoods), the extension of the term of a Lease or
the exercise of an option to renew a Lease and agreements to lease all or any
part of the Land or the Improvements, which agreements were reached prior to the
Closing Date and approved by Highwoods, but not evidenced by a written Lease
prior to the Closing Date (collectively the "TI Work Assumed"), shall be assumed
by Highwoods on the Closing Date.

         12.07. TENANT SECURITY DEPOSITS. All security deposits paid by tenants
under Leases, and interest accrued thereon contingently payable to such tenants
for whose account they are maintained, shall be paid to Highwoods at Closing, or
at the option of either party, credited to Highwoods against the Purchase Price
payable to Owner under Section 4 hereof. After Closing, Highwoods shall be
responsible for maintaining such security deposits in accordance with the
provisions of the Leases relevant thereto.

         12.08. SERVICE AGREEMENT PAYMENTS. All amounts payable under any of the
Service Agreements (other than service agreements not assumed by Highwoods,
which shall be payable by Owner) shall be prorated as of the Closing Date.
Highwoods does not assume any obligation under any Service Agreement for acts or
omissions that occur prior to Closing. Highwoods does not assume any obligation
under any service agreement not expressly assumed by Highwoods.

         12.09. MISCELLANEOUS ITEMS. All other items of expense and income
regarding the operation and Ownership of the Property shall be prorated as of
the Closing Date.

         12.10. SETTLEMENT AFTER CLOSING. The parties acknowledge that not all
invoices for expenses incurred with respect to the Property prior to the Closing
will be received by the Closing and that a mechanism needs to be in place so
that such invoices can be paid as received. All of the Closing Adjustments will
be done on an interim basis at the Closing and will be subject to final
adjustment in accordance with this Section 12.10. After Closing, upon receipt by
Highwoods of an invoice for the Property's operating expenses that are
attributable in whole or in part to a period prior to the Closing and that were
not apportioned at Closing, Highwoods shall submit to Owner a copy of such
invoice with such additional supporting information as Owner shall reasonably
request. Within ten (10) days of receipt of such copy, Owner shall pay to
Highwoods an amount equal to the portion of such invoice attributable to the
period ending on the Closing Date.

         12.11. EQUITABLE ADJUSTMENTS. In the event that any of the prorations
or adjustments described in this Section 12 are based upon estimated or
erroneous information, then the parties shall make between themselves any
equitable adjustment required by reason of any difference between such estimated
or erroneous amounts and the actual amounts of such sums. In making the
prorations required by this Section 12, the economic burdens and benefits of
Ownership of the Property for the Closing Date shall be allocated to Highwoods.

         12.12. PROPERTY INCOME. All other income of the Property (including
payments due under escalator clauses, tax stops, expense clauses and similar
rental adjustment clauses) accruing or relating to the period through the day
before the effective date of Closing shall be paid to Owner.

                                       26

<PAGE>   30



All other income of the Property (including payments due under escalator
clauses, tax stops, expense clauses and similar rental adjustment clauses)
accruing or relating to the period commencing on the effective date of Closing
and thereafter shall be the property of and paid to Highwoods.

         13. LEASES, ESTOPPELS, CONTRACTS, PERMITS AND ZONING LETTERS, ETC.

         13.01. As of the Closing, the originals of all Leases shall be
delivered to Highwoods by Owner. As Highwoods shall require, and as set forth in
Section 8.01(e), Owner shall use its best efforts to obtain estoppel
certificates from tenants under the Leases in that specimen form attached hereto
as EXHIBIT H or in the form attached to any Lease which is made a part thereof;
provided, Highwoods must approve such form before it is obligated to accept
same. Such estoppel agreements shall not be materially modified and shall be
delivered by Owner to Highwoods at Closing. All security deposits held or
required to be held by Owner in connection with any Lease, together with any
prepaid rents, shall also be delivered by certified funds to Highwoods at the
time of Closing or at Highwoods' option, credited to Highwoods against the
Purchase Price due Owner under Section 4 at Closing. Prior to the Closing, Owner
shall not execute any new leases related to the Property except with the prior
written approval of Highwoods.

         13.02. Unless otherwise specified by Highwoods in writing, all
management or leasing contracts must be terminated as of the effective date of
Closing so that Highwoods or its designee shall have the exclusive right to
manage and lease the Property. With respect to any and all Service Contracts,
however, Highwoods shall have the absolute right to approve in writing prior to
or as of Closing any and all such Service Contracts which Highwoods desires to
be continued. If Highwoods approves any Service Contract, it shall be kept in
full force and effect by Owner through the Closing at which time it will be
assigned to Highwoods. In the event Highwoods does not approve in writing any
Service Contract, Owner shall be exclusively liable for all obligations under
the same.

         13.03. Owner shall use its best efforts to deliver to Highwoods prior
to Closing a letter or other certificate from the appropriate governmental
authority certifying that the use and operation of the Property now is and at
Closing will be in full compliance with applicable building codes, zoning,
subdivision and land use laws without the necessity of a special permit or
variance. Additionally, Owner shall use its best efforts to deliver to Highwoods
during the Inspection Period (i) all licenses and other permits required by any
governmental authority for the operation of the Property; and (ii) evidence that
all water, sewer, gas, electric, telephone and drainage facilities and other
utilities required by law for the normal use and operation of the Property are
installed and operating with respect thereto. Owner shall have no liability to
Highwoods for Owner's failure to deliver the items described in this Section
13.03.


                                       27

<PAGE>   31



         14. DEFAULT.

         14.01. In the event Owner defaults or fails to perform any of the
conditions or obligations of Owner under this Agreement or in the event any of
the representations and warranties contained herein are not true and correct in
all material respects as of the date hereof and as of the Closing, then
Highwoods shall be entitled to either (i) proceed in an action for damages
(which shall be limited to attorneys' fees and other costs incurred in
connection with its preparation of this Agreement and investigation of the
Property); (ii) proceed by an action in law or equity for specific performance;
or (iii) elect to terminate this Agreement by giving written notice to Owner,
and thereafter received a refund of the Earnest Money.

         14.02. In the event Highwoods defaults or fails to perform any of the
covenants or conditions or obligations of Highwoods under this Agreement the
Earnest Money shall be retained by Owner as liquidated damages, and not as a
penalty, (as it would be difficult to otherwise ascertain Owner's damages in the
event of such a default by Highwoods) and, thereafter, Highwoods shall have no
further obligations to Owner hereunder.

         15. NOTICE OF DEVELOPMENTS. After the execution hereof and prior to
Closing, Owner will give prompt written notice to Highwoods of any material
adverse change of which it acquires actual knowledge affecting the Property. If
such material adverse change was not otherwise reasonably discoverable by
Highwoods during its Inspection Period, then in that event Highwoods shall have
the right to terminate this Agreement and thereafter receive a refund of the
Earnest Money. Each party hereto will given prompt written notice to the other
party of any material development affecting the ability of such party to
consummate the transactions contemplated by this Agreement.

         16. INDEMNIFICATION.

         16.01. Highwoods agrees that as between Owner and Highwoods, from and
after the Closing, Highwoods shall be liable for all liabilities, loss, cost
and/or damage (including attorney fees) which are asserted as claims by third
parties which relate to the Property, but only if such claims arise out of acts
or omissions of Highwoods, its agents, employees, licensees or invitees
occurring after Closing which are related to the Property (including acts or
omissions relating to any Lease or other contracts and breaches thereof or
defaults thereunder, concerning such Property or the operation thereof which
occur after Closing), and then only if such claims do not relate to: (i)
obligations Owner had a duty to perform in the period prior to Closing, (ii)
liabilities for expenses incurred in the ordinary course of business or any
other money owed by Owner on the date of Closing, subject to proration and
adjustment as herein set forth, (iii) tort liabilities resulting from acts or
omissions related to the Property occurring prior to Closing, and (iv) breaches
of any contracts related to the Property if such breaches occurred prior to
Closing. The claims by third parties for loss or damage for which Highwoods
shall be responsible as set forth above are hereinafter referred to as "Claims
Against Highwoods."


                                       28

<PAGE>   32



         In this regard, Highwoods agrees to indemnify and hold harmless Owner
from and against all loss and damage (including costs and attorney fees)
incurred by Owner as the result of Claims Against Highwoods.

         Highwoods is not assuming any obligation of the Owner related to the
Property which exists on the date of Closing except for executory obligations of
Owner which are specifically identified and set forth herein as being assumed by
Highwoods.

         Nothing in this Section 16.01 shall be construed to limit Highwoods'
indemnity obligation set forth in Section 5.04 hereof, which indemnity
obligation shall be in addition to those indemnity obligations of Highwoods set
forth in this Section 16.01.

         16.02. Owner agrees that as between Owner and Highwoods, Owner shall be
liable for all liabilities, loss, cost and/or damage (including attorney fees)
which are asserted as claims by third parties and which relate to the Property,
but only if such claims arise out of acts or omissions of Owner, its agents,
employees, licensees or invitees, which occurred prior to Closing and are
related to the Property (including acts or omissions relating to any Lease or
other contracts and breaches thereof and defaults thereunder, concerning such
Property or the operation thereof which occurred prior to Closing), including
but not limited to: (i) obligations Owner had a duty to perform prior to
Closing, (ii) liabilities for expenses incurred in the ordinary course of
business or any other money owed by Owner on the date of Closing, subject to
proration and adjustment as herein set forth, (iii) tort liabilities resulting
from acts or omissions related to any of the Property occurring prior to
Closing, and (iv) breaches of any contracts by Owner related to the Property if
such breaches occurred prior to Closing, but not including (i) obligations Owner
has a duty to perform after Closing, but which were not required to be performed
before Closing, (ii) liabilities incurred for expenses incurred in the ordinary
course of business after Closing or any other money owed by Owner after the
Closing, the liability for which was incurred after Closing or before Closing
with consent of Highwoods, (iii) tort liabilities resulting from acts or
omissions related to the Property occurring after the Closing, and (iv) breaches
of any contracts related to the Property if such breach occurred after the
Closing. The claims by third parties for loss or damage for which Owner shall be
responsible as set forth above are hereinafter referred to as "Claims Against
Owners."

         In this regard, Owner agrees to indemnify and hold harmless Highwoods
from and against all loss and damage (including costs and attorney fees)
incurred by Highwoods as a result of Claims Against Owners.

         16.03. Any party entitled to indemnification under this Agreement (the
"Indemnified Party") shall, within ten (10) days after the receipt of notice of
the assertion or imposition of any claim (but in no event later than ten (10)
days prior to the date any response or answer is due in any proceeding) in
respect of which indemnity may be sought from the party against whom an
indemnity obligation is asserted pursuant to this Agreement (the "Indemnifying
Party"), notify the Indemnifying Party in writing of the receipt of existence of
such claim. The omission of the Indemnified Party to notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability in respect of
such

                                       29

<PAGE>   33



claim which it may have to the Indemnified Party on account of this Agreement,
except, however, the Indemnifying Party shall be relieved of liability to the
extent that the failure to so notify (a) shall have caused prejudice to the
defense of such claim, or (b) shall have increased the costs or liability of the
Indemnifying Party by reason of the inability or failure of the Indemnifying
Party (because of the lack of prompt notice from the Indemnified Party) to be
involved in any investigations or negotiations regarding any such claim, nor
shall it relieve the Indemnifying Party from any other liability which it may
have to the Indemnified Party. In case any such claim shall be asserted or
commenced against an Indemnified Party and it shall notify the Indemnifying
Party thereof, the Indemnifying Party shall be entitled to participate in the
negotiation or administration thereof and, to the extent it may wish, to assume
the defense thereof with counsel reasonably satisfactory to the Indemnified
Party, and, after notice from the Indemnifying Party to the Indemnified of its
election so to assume the defense thereof, which notice shall be given within
thirty (30) days of its receipt of such notice from such Indemnified Party, the
Indemnifying Party will not be liable to the Indemnified Party hereunder for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation. In the event that the Indemnifying Party does not wish to assume
the defense, or conduct settlement of any claim, the Indemnified Party shall not
settle such claim without the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld or delayed. Nothing in this paragraph
shall be construed to mean that Highwoods shall be responsible for any
obligations, acts or omissions of Owner prior to Closing, except for those
obligations and liabilities expressly assumed by Highwoods pursuant to this
Agreement.

         17. OTHER PROVISIONS.

         17.01. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which, taken together,
shall constitute one and the same instrument.

         17.02. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties, and supersedes all prior and contemporaneous understandings
and agreements, whether oral or in writing, between the parties respecting the
subject matter hereof. There are no representations, agreements, arrangements or
understandings, oral or in writing, between or among the parties to this
Agreement relating to the subject matter of this Agreement which are not fully
expressed in this Agreement.

         17.03. CONSTRUCTION. The provisions of this Agreement shall be
construed as to their fair meaning, and not for or against any party as the
source of the language in question. Headings used in this Agreement are for
convenience of reference only and shall not be used on construing this
Agreement.

         17.04. APPLICABLE LAW. This Agreement shall be governed by the laws of
the State of North Carolina. Time is of the essence in the Closing of this
transaction.


                                       30

<PAGE>   34



         17.05. SEVERABILITY. If any term, covenant, condition or provision of
this Agreement, or the application thereof to any person or circumstance, shall
to any extent be held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, covenants, conditions or
provisions of this Agreement, or the application thereof to any person or
circumstance, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby.

         17.06. WAIVER OF COVENANTS, CONDITIONS AND REMEDIES. The waiver by one
party of the performance of any covenant, condition or promise under this
Agreement shall not invalidate this Agreement nor shall it be considered a
waiver by it of any other covenant, condition or promise under this Agreement.
The waiver by either or both parties of the time for performing any act under
this Agreement shall not constitute a waiver of the time for performing any
other act or an identical act required to be performed at a later time.

         17.07. EXHIBIT. All schedules or exhibits to which reference is made in
this Agreement are deemed incorporated into this Agreement and made a part
hereof, whether or not actually attached.

         17.08. AMENDMENT AND ASSIGNMENT. This Agreement may be amended at any
time by the written agreement of Highwoods and Owner. All amendments, changes,
revisions and discharges of this Agreement, in whole or in part, and from time
to time, shall be binding upon the parties despite any lack of legal
consideration, so long as the same shall be in writing and executed by the
parties hereto. No party may assign this Agreement or any interest herein
without the prior written approval of the other party, provided Highwoods may
assign its rights and obligations under this Agreement to an entity controlled
by Highwoods or its general partner.

         17.09. RELATIONSHIP OF PARTIES. The parties agree nothing contained
herein shall constitute either party the agent or legal representation of the
other for any purpose whatsoever, nor shall this Agreement be deemed to create
any form of business organization between the parties hereto, nor is either
party granted any right or authority to assume or create any obligations or
responsibility on behalf of the other party, nor shall either party be in any
way liable for any debt of the other.

         17.10. FURTHER ACTS. Each party agrees to perform any further acts and
to execute, acknowledge and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement.

         17.11. CONFIDENTIALITY. Notwithstanding anything to the contrary
contained elsewhere herein, Highwoods and Owner each hereby acknowledge that
this transaction shall be treated as confidential. In connection therewith,
Highwoods and Owner further acknowledge that neither will disclose any of the
contents or information contained in or obtained as a result of any
investigation, financial or otherwise, undertaken or done pursuant to this
Agreement, to the public or any third party (except advisors to Highwoods and
Owner in this transaction) without a bona fide interest in any transaction
contemplated by this Agreement.


                                       31

<PAGE>   35



         17.12. BROKER COMMISSIONS. Owner shall pay all real estate commissions
which are due Tribek Properties as a result of the transaction contemplated by
this Agreement. Other than amounts owed by Owner to Tribek Properties, each
party warrants to the other that no person, firm or individual is entitled to or
has a claim for a commission or fee arising out of this transaction.
Accordingly, each party shall and does hereby indemnify and hold harmless the
other from and against any claim for any consulting fee, finder's fee,
commission, or like compensation, including reasonable attorney's fees in
defense thereof, payment in connection with any transaction contemplated hereby
and asserted by any party arising out of any act or agreement of such party.

         17.13. NOTICE. All notices and demands which either party is required
or desires to give to the other shall be given in writing by personal delivery,
express courier service, certified mail, return receipt requested, or by
telecopy to the address or telecopy number set forth below for the respective
parties. All notices and demands so given shall be effective upon the delivery
of the same to the party to whom notice or demand is given, if personally
delivered, or if sent by telecopy, and on the day following the deposit in U.S.
Mail or with an express courier service or upon receipt, whichever is earlier,
if sent by express courier service or certified mail, return receipt requested.

         OWNER:                   Yager/Kuester Public Fund Limited Partnership
                                  12201 Steele Creek Road
                                  P. O. Box 412080
                                  Charlotte, NC 28241-8834
                                  Attention:  Jerry Haynes
                                  Telephone: (704/588-4074)
                                  Telecopy:  (704/588-2570)

         With copy to:            Philip S. Chubb, Esquire
                                  Shumaker Loop & Kendrick, LLP
                                  227 West Trade Street, Suite 2150
                                  Charlotte, NC 28202
                                  Telephone: (704/375-0057)
                                  Fax:       (704/332-1197)

         HIGHWOODS:               Highwoods/Forsyth Limited Partnership
                                  4944 Parkway Plaza Boulevard, Suite 250
                                  Charlotte, NC 28217
                                  Attention:  Tom Cochran
                                  Telephone:  (704/357-8873)
                                  Telecopier: (704/357-1342)


                                       32

<PAGE>   36



         With copy to:              Thomas T. Crumpler
                                    Allman Spry Leggett & Crumpler, P.A.
                                    380 Knollwood Street
                                    P. O. Drawer 5129
                                    Winston-Salem, NC 27113-5129
                                    Telephone:  910/722-2300
                                    Telecopier: 910/721-0414

         17.14. PRESS RELEASES. Owner and Highwoods agree that they will not
make any public statement, including without limitation, any press release, or
any private statement with respect to this Agreement and the transactions
contemplated hereby without first allowing the other party an opportunity to
review such statement and render an approval thereof. It is the intention of
this subparagraph that Highwoods and Owner must agree as to the timing and
content of any information contained in any public statement or press release
regarding the transaction contemplated hereby. The parties agree to exercise
reasonableness when asked to consent to the content of any such press release or
other public or private statement regarding this transaction. Notwithstanding
the above, Highwoods may make, without the consent of Owner, any public
disclosure related to this transaction required by the federal securities laws
(such as the filing as a Form 8-K); however, Highwoods shall furnish Owner a
copy of any such disclosure prior to the dissemination.

         IN WITNESS WHEREOF, the parties have duly executed this Agreement by
their hands and under seal affixed hereto as of the date and year first above
written.


              [The Remainder of Page is Intentionally Left Blank -
                      The Next Page is the Signature Page]




                                       33

<PAGE>   37



                                SIGNATURE PAGE TO
                          CONTRACT OF SALE AND PURCHASE
                                     BETWEEN
                YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP AND
                      HIGHWOODS/FORSYTH LIMITED PARTNERSHIP


                         YAGER/KUESTER PUBLIC FUND LIMITED                (SEAL)
                         PARTNERSHIP, A NORTH CAROLINA LIMITED PARTNERSHIP


                            By:  FSK LIMITED PARTNERSHIP                  (SEAL)
                                 GENERAL PARTNER



                                 By:   /s/ Faison S. Kuester              (SEAL)
                                       -----------------------------------
                                       Faison S. Kuester, General Partner
                                       of FSK Limited Partnership


                            By:  DRY LIMITED PARTNERSHIP,                 (SEAL)
                                 GENERAL PARTNER



                                 By:   /s/ Dexter R. Yager, Sr.           (SEAL)
                                       -----------------------------------
                                       Dexter R. Yager, Sr., General Partner
                                       of DRY Limited Partnership


                         HIGHWOODS/FORSYTH LIMITED                        (SEAL)
                         PARTNERSHIP, A NORTH CAROLINA LIMITED PARTNERSHIP


                            By:  HIGHWOODS PROPERTIES, INC., A            SEAL)
                                 MARYLAND CORPORATION, GENERAL PARTNER


                                 By:    /s/ Thomas F. Cochran             (SEAL)
                                        ----------------------------------
                                        Thomas F. Cochran
                                        Senior Vice President




                                       34

<PAGE>   38


                                  EXHIBITS LIST

A                 Description
B                 Personal Property Schedule
C                 Leases to be Assigned to Highwoods
C-1               Prospective Leases
C-2               Terms of Prospective New Leases
D                 Service Contracts to be Assumed by Highwoods
E                 Intentionally Left Blank
F                 Upfittings, Construction, Decoration and Alteration Work Not
                    Finished by Owner
F-1               Owner's Obligation(s) to Pay Brokerage or Leasing Commissions
                    or Agency or Management Fees
G                 List of Agreements Entered into by Owner which Affect Title
H                 Form Tenant Estoppel Certificate
H-1               Form of BB&T Lease
I                 Form Bill of Sale
J                 Form Assignment of Leases
K                 Form Assignment and Assumption of Service Contracts
K-1               Form Assignment of Owner's Interest in Miscellaneous Contracts
                    and Intangibles



         Any exhibits not attached to this Agreement at the time of the
execution hereof shall be attached within ten (10) days after its execution, and
when attached, shall be considered a part hereof as if it were attached on the
date this Agreement was executed. Additionally, any documents required to be
delivered upon the execution of this Agreement may be delivered within ten (10)
days of the execution hereof and upon such delivery, shall be deemed to have
been delivered in accordance with the terms of this Agreement.


                                       35


<PAGE>   39

                              AMENDMENT TO CONTRACT
                              OF SALE AND PURCHASE


         This Amendment to Contract of Sale and Purchase is made this 9th day of
March, 1998 between Yager/Kuester Public Fund Limited Partnership, a North
Carolina limited partnership, and Highwoods/Forsyth Limited Partnership, a North
Carolina limited partnership.

                              W I T N E S S E T H:

         WHEREAS, the above partnerships are parties to that Contract of Sale
and Purchase dated January 23, 1998 (the "Purchase Agreement") regarding the
purchase and sale of certain real property located in Greenville, South
Carolina, as more particularly described therein.

         WHEREAS, the parties desire to amend Section 7 of the Purchase
Agreement to permit Purchaser additional time to complete its inspections
regarding the physical condition of the improvements at the Premises.

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

         1. Section 7 of the Purchase Agreement is hereby amended to provide
that Purchaser shall have up to and including March 31, 1998 to complete its
inspection as to the physical condition of the property. All other inspections,
investigations and due diligence matters shall terminate as of today in
accordance with said Section 7, and the closing shall take place on April 9,
1998. Purchaser also agrees to provide Owner with written notice of any adverse
findings resulting from its due diligence review of the Premises no later than
the close of business on Wednesday, March 25, 1998.

         2. Except as otherwise expressly modified by the terms of this
amendment, the Purchase Agreement shall remain unchanged and in full force and
effect.

         IN WITNESS WHEREOF, Owner and Purchaser have executed this Amendment as
of the date first above written.

                            YAGER/KUESTER PUBLIC FUND LIMITED             (SEAL)
                            PARTNERSHIP, a North Carolina limited
                            partnership

                                  By:   FSK Limited Partnership           (SEAL)
                                           General Partner

                                  By: /s/ Faison s. Kuester, Jr.          (SEAL)
                                     ---------------------------
                                     Faison S. Kuester, Jr., General Partner of
                                     FSK Limited Partnership




<PAGE>   40

                            HIGHWOODS/FORSYTH LIMITED                     (SEAL)
                            PARTNERSHIP, a North Carolina limited partnership

                            By:     HIGHWOODS PROPERTIES, INC., a         (SEAL)
                                    Maryland corporation, general partner

                                             By: /s/ Thomas E. Cochran    (SEAL)
                                                --------------------------
                                                Senior Vice President
                                                --------------------------

                                       2