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EXHIBIT 10.1




CONTRACT OF SALE




     THIS CONTRACT OF SALE (this “Contract”) is made and entered as of the Effective Date (as
hereinafter defined) by and between TR WALKER RANCH PARTNERS, LTD., a Texas limited partnership
(“Seller”), and TRIPLE NET PROPERTIES, LLC, a
Virginia limited liability company (“Buyer”).



     For and in consideration of the mutual covenants and agreements contained in this Contract
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller agree as follows:




	1.	 	PURCHASE AND SALE. Seller agrees to sell and convey to Buyer, and Buyer agrees to
buy from Seller, the Property (hereinafter defined) for the consideration and upon and
subject to the terms, provisions and conditions hereinafter set
forth. The “Property” means:






	 	(a)	 	The land situated at 14500 Blanco Road, San Antonio, Bexar County, Texas, more
particularly described in Exhibit A to this Contract (the
“Land”), together
with (i) the improvements situated on the Land commonly known as Walker Ranch
Apartments and all other structures, fixtures, buildings and improvements situated on
the Land (such buildings, structures, fixtures and improvements being herein called the
“Improvements”), (ii) any and all rights, titles, powers, privileges, easements,
licenses, rights-of-way and interests appurtenant to the Land and the Improvements,
(iii) all rights, titles, powers, privileges, licenses, easements, rights-of-way and
interests, if any, of Seller, either at law or in equity, in possession or in
expectancy, in and to any real estate lying in the streets, highways, roads, alleys,
rights-of-way or sidewalks, open or proposed; in front of, above, over, under, through
or adjoining the Land and in and to any strips or gores of real estate adjoining the
Land, and (iv) all rights, titles, powers, privileges, interests, licenses, easements
and rights-of-way appurtenant or incident to any of the foregoing, including, without
limitation, to the extent owned by Seller, all mineral, oil, gas and other hydrocarbon
substances on and under and that may be produced from the Land, as well as all
development rights, land use entitlements, air rights, water, water rights, riparian
rights, and water stock relating to the Land;
	 
	 	(b)	 	All equipment, fixtures, appliances, inventory, and other personal property of
whatever kind or character owned by Seller and attached to or installed or located on
or in the Land or the Improvements and to the extent assignable, all leasehold interest
of Seller in and to any equipment, fixtures, appliances, inventory, and other personal
property of whatever kind or character leased by Seller and attached to or installed or
located on or in the Land or the Improvements including, but not limited to, any
furniture, furnishings, drapes and floor coverings, office equipment and supplies,
heating, lighting, refrigeration, plumbing, ventilating, incinerating, cooking,
laundry, communication, electrical, dishwashing, and air conditioning equipment,
disposals, window screens, storm windows, recreational equipment, pool equipment, patio
furniture, sprinklers, hoses, tools and lawn equipment, including any personal property
owned or, to the extent assignable, leased by the current property manager (the
“Personal Property”):
	 
	 	(c)	 	All of Seller’s right, title and interest in and to all agreements, leases and
other agreements that relate to or affect the Land, the Improvements, the Personal
Property or the operation thereof, including, without limitation, tenant leases and any
guaranties of tenant leases (collectively, “Tenant Leases”) and all security deposits
actually paid to or received by Seller in connection therewith (and not as of the
Closing Date returned to or





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	 	 	 	forfeited by tenants under Tenant Leases), service and maintenance
contracts (“Service Contracts”), warranties, guaranties, bonds, licenses and
permits, but only to the extent that such Service Contracts, warranties,
guaranties, bonds, licenses and permits are assignable by Seller without any
necessary third party consent, or to the extent that all necessary third party
consents to such assignments have been obtained (provided that Seller shall not be
obligated to obtain such third party consents); and
	 
	 	(d)	 	To the extent assignable at no cost to Seller, all intangible personal
property, if any, owned by Seller and related to the Land and the Improvements,
including, without limitation: the name “Walker Ranch Apartments”.






	2.	 	CONTRACT SALES PRICE. The total purchase price for the
Property (the “Sales Price”)
shall be THIRTY MILLION SEVEN HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($30,750,000.00),
payable in cash at Closing. Payment in cash means payment by wire transfer of immediately
available federal funds (“Immediately Available
Funds”).






	3.	 	EARNEST MONEY. Within two (2) Business Days (as hereinafter defined) of the Effective
Date, Buyer shall deliver to LandAmerica Title Company, 8201 Preston Road, Suite 280, Dallas,
Texas 75225, Attention: Debbie S. Moore (Phone: (214) 368-3695,
the “Title Company”), as
escrow agent, ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($150,000.00) (by Immediately
Available Funds) as earnest money (the “Earnest Money”), which funds shall be deposited and
held by the Title Company in an interest bearing account, and Buyer shall provide such
information, including its federal identification number, as is necessary to establish such
account. If Buyer does not timely deliver the Earnest Money as provided in this Section
3, this Contract shall be null and void, and neither party shall have any rights or
obligations hereunder. If the transaction contemplated by this Contract is closed, then the
Earnest Money will be applied in payment of the Sales Price to be paid at Closing. In the
event the transaction is not closed, then the Title Company shall disburse the Earnest Money
in accordance with the provisions of this Contract.





4. CLOSING.





	 	(a)	 	The closing of the sale of the Property to Buyer (the
“Closing”) shall take
place at the Title Company on the date (the “Closing Date”) which is thirty (30) days
after expiration of the Feasibility Period (hereinafter defined). Buyer shall have a
one-time right to extend the Closing Date to a date not later than sixty (60) days
after the expiration of the Feasibility Period by (i) notifying Seller in writing of
such extension at least five (5) days prior to the then-scheduled Closing Date, and
(ii) simultaneously with delivery of the written notice of extension to Seller,
delivering to the Title Company (by Immediately Available Funds) the additional sum of
ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($150,000.00) (the
“Extension Fee”) which
funds shall be deposited and held by the Title Company in an interest bearing account.
Except as expressly provided in this Contract, the Extension Fee shall be
non-refundable to Buyer and shall be unconditionally earned by Seller, as compensation
to Seller for granting the extension of the Closing Date; provided, however, the
Extension Fee shall be applied to the Sales Price at Closing. If Buyer does not deliver
the written notice and the Extension Fee in the manner and within the time period
required above, then Buyer shall have waived its right to extend the Closing Date.
	 
	 	(b)	 	At the Closing, Seller shall deliver or cause to be delivered to Buyer, at
Seller’s sole cost and expense (except as otherwise provided in this Section
4(b)), the following:




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	 	(i)	 	A Special Warranty Deed, in the form attached hereto as
Exhibit B, duly executed and acknowledged by Seller, conveying good
and indefeasible title in fee simple to the Land and Improvements, free and
clear of any and all liens, encumbrances, easements and assessments, except
for Permitted Exceptions (hereinafter defined) and any others approved by
Buyer in writing;
	 
	 	(ii)	 	A Bill of Sale, Assignment and Assumption Agreement (the
“Bill
of Sale”), in the form attached hereto as Exhibit C, duly executed and
acknowledged by Seller;
	 
	 	(iii)	 	An Assignment of Leases and Assumption Agreement (the
“Assignment and Assumption Agreement”), in the form attached hereto as
Exhibit D, duly executed and acknowledged by Seller;
	 
	 	(iv)	 	An Owner’s Policy of Title Insurance (the “Owner’s Title
Policy”), delivered in due course by the Title Company after Closing, to be
issued by the Title Company on the standard form in use in the State of Texas,
in the full amount of the Sales Price, dated as of the Closing Date, insuring
Buyer’s fee simple title to the Land and Improvements to be good and
indefeasible subject only to Permitted Exceptions and others approved by Buyer
in writing, and the standard printed exceptions, provided, however:






	 	(1)	 	the exception as to area and boundaries may, at
the option and expense of Buyer, be deleted except for “any shortages
in area”;
	 
	 	(2)	 	the standard exception as to restrictive
covenants shall either be deleted or except only for any restrictive
covenants that are Permitted Exceptions;
	 
	 	(3)	 	the exception as to standby fees and taxes
shall be limited to standby fees and taxes for the year of Closing and
subsequent years, and subsequent assessments for prior years due to
changes in land usage or ownership;






	 	 	 	Any endorsements to the Owner’s Title Policy (except any Seller’s Curative
Endorsements, as hereinafter defined) shall also be at the sole cost and
expense of Buyer.






	 	(v)	 	Possession of the Property, subject only to the Tenant Leases
and the Permitted Exceptions;
	 
	 	(vi)	 	A non-foreign affidavit, in the form attached hereto as
Exhibit E, duly executed and acknowledged by Seller;
	 
	 	(vii)	 	A form of notice to all tenants of the Property
(“Tenant Notice Letter”) duly executed by Seller, in the form attached as Exhibit
F;
	 
	 	(viii)	 	Subject to the limitations of this Contract, a recertification of the
representations and warranties contained in Section 12;
	 
	 	(ix)	 	The most current Rent Roll (as hereinafter defined) available to Seller;




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	 	(x)	 	Evidence of its capacity and authority for the closing of this
transaction; and
	 
	 	(xi)	 	Such other documents as may be reasonably required to close
this transaction, duly executed.






	 	(c)	 	At the Closing, Buyer shall perform and deliver, at Buyer’s sole cost and
expense, the following:






	 	(i)	 	The Sales Price in Immediately Available Funds (reduced by the
amount, if any, of the Earnest Money applied for that purpose);
	 
	 	(ii)	 	The Assignment and Assumption Agreement duly executed and
acknowledged by Buyer;
	 
	 	(iii)	 	The Tenant Notice Letters duly executed by Buyer;
	 
	 	(iv)	 	Evidence of its capacity and authority for the closing of the
transaction contemplated herein; and
	 
	 	(v)	 	Such other documents as may be reasonably required to close
this transaction, duly executed.






	 	(d)	 	Seller shall pay: the premium for the Owner’s Title Policy and the cost of any
Seller’s Curative Endorsements (except the premium of the area and boundary
modification (if any) and the cost of any other endorsements shall be paid entirely by
Buyer), 1/2 of any escrow fee; fees for preparation of the conveyance documentation;
Seller’s attorneys’ fees; any costs of preparing the New Survey (as hereinafter
defined) and other expenses stipulated to be paid by Seller under other provisions of
this Contract. Buyer shall pay: survey fees (excluding the costs of preparing the New
Survey but including any costs to update or recertify the New Survey), the costs of any
endorsements related to the Owner’s Title Policy (except the cost of any Seller’s
Curative Endorsements), including the modification of the survey exception, the cost of
any mortgagee policy of title insurance (including endorsements), 1/2 of any escrow
fee; Buyer’s attorneys’ fees; and other expenses stipulated to be paid by Buyer under
other provisions of this Contract.
	 
	 	(e)	 	Assessments, current taxes, rents and maintenance fees will be prorated as of the
Closing
Date; provided, however, no prorations will be made for delinquent rents
existing as of the Closing. Proration of taxes will be made on the basis of (i) the
assessed value of the Land and Improvements for the year of Closing, if known, or the
assessed value of the Land and Improvements for the year before Closing, if such
value is not known, multiplied by (ii) the tax rates for the year of Closing, if
known, or the rates for the year before Closing, if not known, with a subsequent cash
adjustment of such proration to be made between Seller and Buyer, if necessary,
within 30 days of when actual tax figures are available. If any such charges,
expenses, and income other than taxes are unavailable at the Closing Date, then a
readjustment of these items shall be made within 30 days after the Closing. With
respect to any delinquent rentals, Buyer will make a reasonable attempt for 3 months
following Closing (but shall not be obligated) to collect the same for Seller’s
benefit after the Closing in the usual course of the operation of the Property and
such collection, if any, will be remitted to Seller promptly upon receipt by Buyer.
Nothing contained herein shall operate to require Buyer to institute any lawsuit or
other collection procedure to collect such delinquent rentals or to prohibit Seller
from any such




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	 	 	 	collection. Any sums received by Buyer from any tenants owing
delinquent rentals will be applied first to the current portion of such tenant’s
rent, then to any delinquent rentals owed with respect to the period following
Closing, and then (and only then) to delinquent rentals owed with respect to the
period before Closing. Buyer additionally agrees to pay or reimburse all usual and
customary finder’s fees, commissions and the like payable with respect to any Tenant
Leases that (1) are executed after the Effective Date and prior to the Closing Date
and (2) pursuant to which the Tenant takes occupancy of its unit on or after the
expiration of the Feasibility Period. At the Closing, Seller will pay to Buyer in
cash the amount of any security deposits actually paid to or received by Seller
under the Tenant Leases (and not as of the Closing Date returned to or forfeited by
tenants under Tenant Leases) and any prepaid rentals actually paid to or received by
Seller for periods subsequent to the Closing; provided, however, non-refundable
payments, deposits, or fees (including pet fees/deposits) collected by Seller shall
not be prorated. In making the prorations required by this Section 4, the
economic burdens and benefits of ownership of the Property for the Closing Date
shall be allocated to Buyer. The provisions of this Section 4(e) shall
survive the Closing.
	 
	 	(f)	 	Utilities and other customarily prorated expenses, including, without
limitation, water, sewer, gas, electricity, trash removal, and fire protection service,
and any contracts or agreements for services to the Property to be transferred to and
assumed by Buyer, to the extent paid for by Seller or required to be paid for by Seller
for a period after Closing, shall be prorated as of the Closing Date. Other expenses
relating to the Property up to the Closing Date and all periods prior thereto including
those required by any contract or agreement for any services to the Property and those
incurred or ordered by Seller or Seller’s agents that are not to be transferred and
assumed by Buyer, including, without limitation, insurance and administrative expenses,
shall be paid for by Seller, and Buyer shall not be liable therefor. Seller shall not
assign to Buyer, and Buyer shall not be entitled to, any deposits held by any utility
company or other company servicing the Property; instead, such deposits shall be
returned to Seller, and Buyer shall arrange and bear all responsibility to arrange with
all utility companies to have accounts styled in Buyer’s name beginning on the Closing
Date. The provisions of this Section 4(f) shall survive the Closing.
	 
	 	(g)	 	At the Closing, Seller shall deliver to Buyer (or make available at the
Property), to the extent in Seller’s possession or control, originals of the Tenant
Leases, copies of the tenant correspondence files, keys, access codes, and originals of
any other items which Seller was required to furnish or make available pursuant to
Section 7, except for Seller’s general ledger and other internal books or
records which shall be retained by Seller.
	 
	 	(h)	 	If any apartment unit is vacated five (5) days or more prior to Closing, then,
prior to Closing, Seller shall use commercially reasonable diligence to return such
unit to rentable condition in accordance with Seller’s customary cleaning, painting,
and repair standards for vacant units, including causing all appliances to be cleaned
and in working order (the condition of such an apartment unit after cleaning is
referred to herein as a “Rent Ready Condition”). Buyer shall receive a credit
for each unit that became vacant on a date that is five or more days prior to Closing
and that is not in Rent Ready Condition at Closing in an amount agreed to by Seller
and Buyer. In the event Seller and Buyer cannot agree upon the amount with respect to
any unit or units which are not in Rent Ready Condition (“Disputed Units”), the sum of
$400.00 as to each Disputed Unit shall be withheld from the Sales Price at Closing and
deposited in an escrow account (“Make Ready Escrow Account”) maintained by the
Title Company under an Escrow Agreement to be agreed




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	 	 	 	upon by Seller and Buyer at Closing. Buyer shall be entitled to
withdraw funds from the Escrow Amount as repairs are made to the Disputed Units (up
to a maximum of $400.00 per Disputed Unit) within fifteen (15) days from
presentation to the Title Company (with a copy to Seller) of a request for
disbursement accompanied by copies of paid third party invoices evidencing such
work (“Request for Disbursement”); provided, however, Seller shall have the right
to dispute such payment by sending written notice of such objection to the Title
Company and Buyer within ten (10) days following receipt of the Request for
Disbursement. The Title Company shall hold such funds in the Make Ready Escrow
Account as to the disputed Request for Disbursement until Seller and Buyer advise
the Title Company in writing as to the agreed disbursement of the disputed funds.
The balance of the Make Ready Escrow Account shall be paid to Seller upon the
earlier to occur of (i) the completion of the repairs to all of the Disputed Units;
or (ii) thirty (30) days from Closing.






	5.	 	FEASIBILITY STUDY AND INSPECTION.






	 	(a)	 	Buyer is granted the right to conduct engineering and/or market and economic
feasibility studies of the Property and a physical inspection of the Property,
including studies or inspections to determine the existence of any environmental
hazards or conditions (collectively, the “Feasibility
Study”) during the period (the
“Feasibility Period”) commencing on the Effective Date and ending at 5:00 p.m., Dallas,
Texas time on May 5, 2006. With Seller’s permission, after Seller has received advance
notice sufficient to permit it to schedule in an orderly manner Buyer’s examination of
the Property and to provide at least twenty-four (24) hours advance written notice to
any affected tenants, Buyer or its designated agents may enter upon the Property for
purposes of analysis or other tests and inspections deemed necessary by Buyer for the
Feasibility Study; provided, however, Buyer is not permitted to perform any intrusive
testing, including, without limitation, a Phase II environmental assessment or boring,
without (i) submitting to Seller the scope and inspections for such testing; and (ii)
obtaining the prior written consent of Seller which may be withheld in Seller’s sole
and absolute discretion. Buyer shall not alter the physical condition of the Property
without notifying Seller of its requested tests, and obtaining the written consent of
Seller to any physical alteration of the Property. Buyer will exercise its best efforts
to conduct or cause to be conducted all inspections and tests in a manner and at times
which will not unreasonably interfere with any tenant’s use and occupancy of the
Property. If Buyer determines, in its sole judgment, that the Property is not suitable
for any reason for Buyer’s intended use or purpose, or is not in satisfactory
condition, then Buyer may terminate this Contract by written notice to Seller prior to
expiration of the Feasibility Period, in which case the Earnest Money will be returned
to Buyer, and neither party shall have any further right or obligation hereunder other
than as set forth herein with respect to rights or obligations that survive
termination. If the Contract is not terminated in the manner and within the time
provided in this Section 5, the condition provided in this Section 5(a)
and any and all objections with respect to the Feasibility Study shall be deemed to
have been waived by Buyer for all purposes. The Feasibility Study shall be at Buyer’s
sole cost and expense.
	 
	 	(b)	 	Buyer shall promptly restore the Property to its original condition if damaged
or changed due to the tests and inspections performed by Buyer, free of any mechanic’s
or materialman’s liens or other encumbrances arising out of any of the inspections or
tests, and shall provide Seller, at no cost to Seller, with a copy of the results of
any tests and inspections made by Buyer, excluding any market and economic feasibility
studies.




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	 	 	 	Buyer shall keep confidential the results of any tests and inspections
made by Buyer, and shall not disclose said results to any third parties; other than
Buyer’s officers, directors, employees, affiliates, counsel, investment advisors,
potential lenders, partners, investors and participants and their advisors and other
representatives (collectively “Buyer Group”), and the Buyer Group shall be
informed to treat such information confidentially and in accordance with the terms
and conditions of this Contract. Buyer hereby indemnifies and holds Seller harmless
from all claims, liabilities, damages, losses, costs, expenses (including, without
limitation, reasonable attorneys’ fees), actions and causes of action arising out of
or in any way relating to the Feasibility Study performed by Buyer, its agents,
independent contractors, servants and/or employees, including those caused by or in
any way contributed to by the negligence of Seller, its agents, independent
contractors, servants and/or employees; provided such indemnity shall not extend to
the gross negligence or willful misconduct of the Seller, its agents, independent
contractors, servants and/or employees. Buyer further waives and releases any
claims, demands, damages, actions, causes of action or other remedies of any kind
whatsoever against Seller for properly damages or bodily and/or personal injuries to
Buyer, its agents, independent contractors, servants and/or employees arising out of
the Feasibility Study or use in any manner of the Property. Buyer shall procure and
continue in force from and after the date Buyer first enters the Property, and
continuing throughout the term of this Contract, Comprehensive General Liability
Insurance with a combined single limit of not less than One Million Dollars
($1,000,000) per occurrence, or Commercial General Liability Insurance, with limits
of not less than One Million Dollars ($1,000,000) per occurrence and Two Million
Dollars ($2,000,000) per event. Seller and Thompson Realty Corporation shall be
included as an additional insured(s) under such comprehensive general liability or
commercial general liability coverage. Such insurance shall include: (i) personal
injury liability with employee and contractual exclusions removed; and (ii) a waiver
of subrogation in favor of Seller without exception for the negligence of any
additional insured. Buyer will not be permitted to come onto the Property unless and
until Buyer has provided to Seller a certificate of insurance evidencing such
coverage, the additional insured status of Seller, and such waiver of subrogation.
The provisions of this Section 5(b) shall survive the Closing or any
termination of this Contract and are not subject to any liquidated damage limitation
on remedies, notwithstanding anything to the Contrary in this Contract.
	 
	 	(c)	 	During the Feasibility Period, Buyer shall review all Service Contracts
provided by Seller. Buyer shall notify Seller prior to the expiration of the
Feasibility Period of those Service Contracts that it disapproves, and Seller shall,
at Seller’s expense, terminate such disapproved Service Contracts effective not later
than the Closing Date. All Service Contracts not disapproved by Buyer during the
Feasibility Period shall be deemed to have been approved by Buyer, and Buyer shall
assume and be liable for any and all obligations under the respective Service
Contracts extending past the Closing Date. Notwithstanding the foregoing, Buyer shall
be deemed to have approved and shall have no right to reject those Service Contracts
that, by their terms, cannot be terminated by Seller without the payment of a penalty,
termination fee, or other charge.






	6.	 	TITLE APPROVAL.






	 	(a)	 	Seller has previously delivered to Buyer and Buyer acknowledges receipt of: a
Commitment for Title Insurance with copies of all recorded instruments affecting the
Property and recited as exceptions in said Commitment for Title Insurance
(collectively, the “Commitment”). Within fifteen (15) days of the Effective Date,
Seller shall, at





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	 	 	 	Seller’s sole cost and expense provide to Buyer a current “as-built”
survey (“New Survey”) which shall depict the location of the new swimming pool and
pool house upon the Land. New Survey must: (1) be prepared by a Registered
Professional Land Surveyor; (2) be in a form reasonably acceptable to the Title
Company; (3) set forth a legal description of the Lands by metes and bounds or by
reference to a platted lot or lots; (4) show that the New Survey was made on the
ground with corners marked with monuments either found or placed; (5) show any
discrepancies or conflicts in boundaries, and any visible encroachments; (6) contain
the surveyor’s certificate that the Survey is true and correct; and (7) show the
location and size of all of the following on or immediately adjacent to the Land, if
any, if recorded or visible and apparent: (a) buildings, (b) building set back lines
(as shown on any recorded plat, but not as may be described in any restrictive
covenants or zoning ordinances), (c) streets and roads, (d) 100-year flood plain
(approximate location), (e) improvements, (f) encroachments, (g) easements, (h)
recording information of recorded easements, (i) pavements, (j) protrusions, (k)
fences, (1) rights-of-way, and (m) any markers or other visible evidence of
utilities. Any area of the Property within the 100-year flood plain will be shown on
the Survey as the approximate location of the 100-year flood plain as defined by the
Federal Emergency Management Agency or other applicable governmental authority. If
Buyer has an objection to items disclosed in the Commitment or the New Survey, then
Buyer will be entitled to give Seller written notice of its objections for a period
of ten (10) Business Days following the receipt of the New Survey. If Buyer gives
timely written notice of its objections, then Seller may, but shall not have any
obligation to, cure such objections for a period of five (5) days from the date
Seller receives Buyer’s notice (“Seller’s Cure Period”). Seller shall utilize
reasonable diligence to cure any errors in the Commitment, provided Seller shall not
have any obligation to expend any money, to incur any contractual or other
obligations, or to institute any litigation in pursuing such efforts other than to
remove at Closing financing liens of an ascertainable amount created by, through, or
under Seller; further provided, notwithstanding the foregoing, Seller is required to
cure any objection that may be cured by performance of the following acts: (A)
satisfaction of any mortgages placed upon the Property by Seller or expressly
assumed by Seller as a lien to secure indebtedness; or (B) causing the release of
any mechanic’s liens placed upon the Property by a third party in connection with
work performed or alleged to have been performed on the Property by, or at the
request of, Seller (collectively “Monetary Encumbrances”). At Seller’s option,
Seller may elect to cure an objection made by Buyer by causing the Title Company to
issue an endorsement to “insure over” such objection (“Seller’s Curative
Endorsement”). If any objection is not satisfied during Seller’s Cure Period, then
Buyer shall elect not later then five (5) days after the expiration of Seller’s Cure
Period, but in any event on or before expiration of the Feasibility Period, as its
sole and exclusive remedy to either: (i) terminate this Contract, in which case the
Earnest Money shall be refunded to Buyer, and neither party will have any further
rights or obligations pursuant to this Contract, other than as set forth herein with
respect to rights or obligations that survive termination; or (ii) waive the
unsatisfied objection (which shall thereupon become a Permitted Exception) and
proceed to Closing. Any exception to title not objected to by Buyer in the manner
and within the time period specified in this Section 6(a) shall be deemed
accepted by Buyer. Buyer may, at Buyer’s sole cost and expense, obtain an update of
the New Survey (“Updated Survey”). If the Updated Survey shows exceptions not
previously shown on the New Survey (individually a “New Exception” and
collectively the “New Exceptions”). Buyer may object to such New Exceptions in
accordance with the mechanism contained in this Section 6(a); provided Buyer
shall have no right to object to any New Exception if the New Exception (i) is a
utility service easement (“Service Easement”) whereby the public utility provides





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	 	 	 	utility service to any portion of the Improvements and the
Improvements do not encroach into the boundaries of the Service Easement; or (ii)
reflects the addition of paving, sidewalks, pool decking or landscaping and such
additional of paving, sidewalks, pool decking or landscaping does not cause the
Property to violate applicable law or applicable restrictions. The phrase
“Permitted Exceptions” means those exceptions to title set forth in the
Commitment or the New Survey or the Updated Survey and that have been accepted or
deemed accepted by Buyer. Buyer shall notify Seller in writing of any failure of the
Commitment or New Survey to satisfy the requirements of this
Section 6(a) within ten (10) days after the Commitment and New Survey are received by Buyer,
and if Buyer fails to do so, then they shall be deemed to satisfy such requirements.
	 
	 	(b)	 	After the Effective Date, Seller shall not intentionally or deliberately place
on the Property any encumbrance (references to “encumbrance” include any lien,
encumbrance, or other exception to title) other than new Tenant Leases as permitted by
the terms of this Contract. If prior to the Closing Date title to the Property becomes
subject to any encumbrance other than a Permitted Exception, then Seller may (but
shall not be obligated to) attempt to cure such encumbrance; provided Seller shall be
obligated to remove any Monetary Encumbrance. If Seller is unable or unwilling to cure
any such encumbrance, then Buyer may, as its sole and exclusive remedy either: (i)
terminate this Contract by written notice to Seller whereupon the Earnest Money and
any Extension Fee shall be returned to Buyer, and neither party will have any right or
obligation hereunder other than as set forth herein with respect to rights or
obligations that survive termination; or (ii) proceed to Closing without receiving any
credit against or reduction of the Sales Price whereupon Buyer shall be deemed to have
accepted such encumbrance as an exception to title (which shall thereupon become a
Permitted Exception).






	7.	 	SUBMISSION MATTERS.






	 	(a)	 	To the extent that Seller has not already done so, Seller shall within five
(5) business days deliver to Buyer copies of the following (the
“Submission Matters”),
to the extent (and only to the extent) that such items are available and in Seller’s
actual possession:






	 	(i)	 	revenue and expense reports, or equivalent, in the form
prepared by the property manager for the most recent twenty-four (24) months
(“Operating Reports”);
	 
	 	(ii)	 	copies of any Service Contracts which are currently in effect;
	 
	 	(iii)	 	the aged delinquency report(s) for the previous twelve (12)
months, in the form prepared by the property manager;
	 
	 	(iv)	 	Seller’s most current Owner’s Title Policy (with the amount of
the coverage removed);
	 
	 	(v)	 	an inventory of the Personal Property, which inventory shall
identify which items are leased and which items are owned by, as appropriate,
the Seller or Seller’s property manager;
	 
	 	(vi)	 	a rent roll, as of a recent date in the form provided to
Seller by its property manager (“Rent Roll”);





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	 	(vii)	 	copies of all tax (real and personal property) bills for the
current year and the immediately preceding year together with the current tax
assessment information;
	 
	 	(viii)	 	copies of all utility bills for the most recent twelve (12) months;
	 
	 	(ix)	 	the Phase I Environmental Site Assessment prepared by
Raba-Kistner Consultants, Inc., Project NO. ASF99-163-00, dated September,
1999 (“Existing Environmental Report”); and
	 
	 	(x)	 	the insurance claim report for any insurance claims made with
regard to the Property in the most recent twelve (12) months.






	 	(b)	 	In addition, Seller has or will cause to be made available to Buyer for
inspection at the Property the following (the “Additional Submission Matters”),
to the extent (and only to the extent) that such items are available and in Seller’s
actual possession or control:






	 	(i)	 	copies of any plans and specifications;
	 
	 	(ii)	 	maintenance records for the Property;
	 
	 	(iii)	 	tenant correspondence files;
	 
	 	(iv)	 	books and records for the Property;
	 
	 	(v)	 	copies of Tenant Leases;
	 
	 	(vi)	 	copies of any certificates of occupancy; and

	 
	 	(vii)	 	copies of any warranties or guaranties applicable to the Property.






	 	(c)	 	As soon as practicable, Seller shall provide to Buyer a written report dated
within 30 days of the Effective Date by a licensed pest control agent showing no
visible property damage or infestation from termites or other pests
(“Termite Report”).
If the Termite Report shows any visible property damage or infestation from termites or
other pests, Seller shall either repair such damage prior to the Closing or Buyer shall
have the option to either: (i) terminate this Contract, in which case the Earnest Money
shall be refunded to Buyer, and neither party will have any further rights or
obligations pursuant to this Contract, other than as set forth herein with respect to
rights or obligations that survive termination; or (ii) waive the unsatisfied objection
and proceed to Closing.
	 
	 	(d)	 	Any failure of Seller to timely deliver any of the Submission Matters or make
available any of the Additional Submission Matters will not extend the Feasibility
Period beyond the period prescribed in Section 5(a) hereof, and Buyer’s sole
and exclusive remedy on account of any such failure will be to terminate this Contract
prior to the expiration of the Feasibility Period in accordance with the provisions of
such Section 5(a). Except as expressly provided in Section 12 hereof,
Seller makes no representation or warranty, express or implied, as to the accuracy or
completeness of the information contained in the Submission Matters or the Additional
Submission Matters.
	 
	 	(e)	 	The non-public Submission Materials, the Additional Submission Matters and the
Termite Report (together with any other information regarding the Property made





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	 	 	 	available to Buyer) are confidential and shall not be distributed or disclosed by Buyer to any
person or entity, except as may be required by law, provided that Buyer may disclose the
Submission Materials to the Buyer Group provided such parties are made aware of the confidential
nature of such information. If the transaction evidenced hereby fails to close for any reason
whatsoever, Buyer shall return to Seller all copies of the Submission Materials which Seller or
its agents may have delivered to Buyer (together with any other information regarding the Property
made available to Buyer).






	8.	 	BROKER’S FEE. Buyer and Seller represent and warrant to each other that no real
estate commissions, finders’ fees, or brokers’ fees have been or will be incurred in
connection with the sale of the Property by Seller to Buyer other than William M. Woodall P.C.
(“Broker”). Seller shall pay a commission to Broker pursuant to a separate agreement between
Seller and Broker. Such commissions shall be deemed earned and shall be due and payable only
if, as and when the sale contemplated by this Contract is consummated. Buyer and Seller shall
indemnify, defend and hold each other harmless from any claim, liability, obligation, cost or
expense (including attorneys’ fees and expenses) for fees or commissions relating to Buyer’s
purchase of the Property asserted against either party by any broker or other person (other
than the Broker) claiming by, through or under the indemnifying party or whose claim is based
on the indemnifying party’s acts. The terms and provisions hereof supersede in their
entirety any prior agreements or understandings of any kind or character between Seller
and Broker with respect to the payment of a commission, finder’s fee or other sum in
connection with the sale of the Property. The provision of this Section 8 shall
survive the Closing or any termination of this Contract.






	9.	 	LIMITATION OF SELLER’S REPRESENTATIONS AND WARRANTIES.






	 	(a)	 	BUYER ACKNOWLEDGES THAT EXCEPT FOR ANY EXPRESS WARRANTIES AND
REPRESENTATIONS CONTAINED IN THIS CONTRACT OR ANY INSTRUMENT, DOCUMENT, OR AGREEMENT
TO BE DELIVERED TO BUYER AT CLOSING, BUYER IS NOT RELYING ON ANY WRITTEN, ORAL,
IMPLIED, OR OTHER REPRESENTATIONS, STATEMENTS, OR WARRANTIES BY SELLER OR ANY AGENT
OF SELLER OR ANY REAL ESTATE BROKER OR SALESMAN. ALL PREVIOUS WRITTEN, ORAL, IMPLIED,
OR OTHER STATEMENTS, REPRESENTATIONS, WARRANTIES, OR AGREEMENTS, IF ANY, ARE MERGED
HEREIN. EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER SHALL NOT HAVE ANY LIABILITY TO
BUYER, AND BUYER SHALL RELEASE SELLER FROM ANY LIABILITY (INCLUDING, WITHOUT
LIMITATION, CONTRACTUAL AND/OR STATUTORY ACTIONS FOR CONTRIBUTION OR INDEMNITY), FOR,
CONCERNING, OR REGARDING: (A) THE NATURE AND CONDITION OF THE PROPERTY, INCLUDING,
WITHOUT LIMITATION, THE SUITABILITY THEREOF FOR ANY ACTIVITY OR USE; (B) ANY
IMPROVEMENTS OR SUBSTANCES LOCATED THEREON; OR (C) THE COMPLIANCE OF THE PROPERTY
WITH ANY LAWS, RULES, ORDINANCES, OR REGULATIONS OF ANY GOVERNMENT OR OTHER BODY.
EXCEPT AS EXPRESSLY PROVIDED IN SECTION 12, SELLER HAS NOT MADE, DOES NOT
MAKE, AND EXPRESSLY DISCLAIMS, ANY WARRANTIES, REPRESENTATIONS, COVENANTS OR
GUARANTEES, EXPRESSED OR IMPLIED, OR ARISING BY OPERATION OF LAW, AS TO THE
MERCHANTABILITY, HABITABILITY, QUANTITY, QUALITY, OR ENVIRONMENTAL CONDITION OF THE
PROPERTY OR ITS SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE. BUYER
AFFIRMS THAT IT: (I) HAS OR WILL HAVE HAD THE OPPORTUNITY TO HAVE INVESTIGATED AND
INSPECTED THE PROPERTY AND IS FAMILIAR AND





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	 	 	 	SATISFIED WITH THE PHYSICAL CONDITION OF THE PROPERTY; AND (II) HAS MADE OR WILL HAVE AN
OPPORTUNITY TO MAKE ITS OWN DETERMINATION AS TO THE MERCHANTABILITY, QUANTITY, QUALITY, AND
CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE POSSIBLE PRESENCE OF TOXIC OR
HAZARDOUS SUBSTANCES OR WASTE OR OTHER ENVIRONMENTAL CONTAMINATION AND THE PROPERTY’S
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE. BUYER HEREBY ACCEPTS THE PROPERTY
IN ITS PRESENT CONDITION (INCLUDING ENVIRONMENTAL CONDITIONS) ON AN “AS IS,” “WHERE IS,”
AND “WITH ALL FAULTS” BASIS. BUYER FURTHER ACKNOWLEDGES THAT WITHOUT THIS ACCEPTANCE, THIS
SALE WOULD NOT BE MADE AND THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS CONTRACT, SELLER WILL
NOT UNDER ANY CIRCUMSTANCES HAVE ANY OBLIGATION WHATSOEVER TO UNDERTAKE ANY REPAIR,
ALTERATION, REMEDIATION, OR OTHER WORK OF ANY KIND WITH RESPECT TO ANY PORTION OF THE
PROPERTY. BUYER AND ITS SUCCESSORS AND ASSIGNS HAVE, AND SHALL BE DEEMED TO HAVE, ASSUMED
ALL RISK AND LIABILITY WITH RESPECT TO THE PRESENCE OF TOXIC OR HAZARDOUS SUBSTANCES OR
WASTE OR OTHER ENVIRONMENTAL CONTAMINATION ON OR WITHIN OR UNDER THE SURFACE OF THE
PROPERTY, WHETHER KNOWN OR UNKNOWN, APPARENT, NON-APPARENT OR LATENT, AND WHETHER EXISTING
PRIOR TO, AT, OR SUBSEQUENT TO, TRANSFER OF THE PROPERTY. EXCEPT AS EXPRESSLY SET FORTH IN
THIS CONTRACT, BUYER AND ITS SUCCESSORS AND ASSIGNS HEREBY RELEASE SELLER OF AND FROM ANY
AND ALL RESPONSIBILITY, LIABILITY, OBLIGATIONS, AND CLAIMS, KNOWN OR UNKNOWN, INCLUDING,
WITHOUT LIMITATION, ANY OBLIGATION TO TAKE THE PROPERTY BACK OR REDUCE THE PRICE, OR
ACTIONS FOR CONTRIBUTION OR INDEMNITY, THAT BUYER OR ITS SUCCESSORS AND ASSIGNS MAY HAVE
AGAINST SELLER OR THAT MAY ARISE IN THE FUTURE, BASED IN WHOLE OR IN PART, UPON THE
PRESENCE OF TOXIC OR HAZARDOUS SUBSTANCES OR WASTE OR OTHER ENVIRONMENTAL CONTAMINATION ON
OR WITHIN OR UNDER THE SURFACE OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, ALL
RESPONSIBILITY, LIABILITY, OBLIGATIONS, AND CLAIMS THAT MAY ARISE UNDER THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT, AS AMENDED 42 U.S.C. § 9601 ET
SEQ. BUYER FURTHER ACKNOWLEDGES THAT THE PROVISIONS OF THIS DISCLAIMER AND RELEASE HAVE
BEEN FULLY EXPLAINED TO BUYER AND THAT BUYER FULLY UNDERSTANDS AND ACCEPTS SAME. THE
PROVISIONS OF THIS DISCLAIMER AND RELEASE SURVIVE CLOSING.
	 
	 	(b)	 	Except as otherwise specifically stated in this Contract, Buyer agrees that Seller shall not
be responsible or liable to Buyer for any construction defects, errors, omissions, or on
account of any other conditions affecting the Property, as Buyer is purchasing the Property
AS IS, WHERE IS, and WITH ALL FAULTS. Buyer or anyone claiming by, through or under Buyer,
hereby fully releases Seller, its employees, officers, directors, representatives, attorneys
and agents from any claim, cost, loss, liability, damage, expense, demand, action or cause of
action arising from or related to any construction defects, errors, omissions, or other
conditions affecting the Property. Buyer further acknowledges and agrees that this release
shall be given full force and effect according to each of its expressed terms and provisions,
including, without limitation, those relating to





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	 	 	 	unknown and suspected claims, damages and causes of action. This covenant
releasing Seller shall be a covenant running with the Property and shall be binding
upon Buyer, its successors and assigns. Subject to consummation of this Contract,
Seller hereby assigns to Buyer, without recourse or representation of any nature,
effective upon Closing, any and all claims that Seller may have against any third
party for any such errors, omissions or defects in the Property. As a material
covenant and condition of this Contract, Buyer agrees that in the event of any such
construction defects, errors, omissions or on account of any other conditions
affecting the Property, Buyer shall look solely to Seller’s predecessors in title
or to such contractors and consultants as may have contracted for work in
connection with the Property for any redress or relief. Upon the assignment by
Seller of its claims, Buyer releases Seller of all rights, express or implied,
Buyer may have against Seller arising out of or resulting from any errors,
omissions or defects in the Property. Buyer further understands that some of
Seller’s predecessors in title may have filed petitions under the bankruptcy code
and Buyer may have no remedy against such predecessors, contractors or consultants.
This waiver and release of claims shall survive the Closing.






	10.	 	DEFAULT.






	 	(a)	 	Seller’s Remedies. If Buyer fails to perform its obligations pursuant
to this Contract at or prior to Closing for any reason except failure by Seller to
perform here under, or if prior to Closing any one or more of Buyer’s representations
or warranties are breached in any material respect, then Seller shall be entitled, as
its SOLE and EXCLUSIVE remedy (except as provided in
Sections 5(b) and 8), to
terminate this Contract and retain the Earnest Money as liquidated damages and not as
penalty, in full satisfaction of claims against Buyer hereunder. Seller and Buyer
agree that Seller’s damages resulting from Buyer’s default are difficult, if not
impossible, to determine, and the Earnest Money is a fair estimate of those damages and
has been agreed to in an effort to cause the amount of such damages to be certain.
Notwithstanding anything in this Section 10(a) to the contrary, in the event
of Buyer’s default or termination of this Contract, Seller shall have all remedies
available at law or in equity if Buyer or any party related to or affiliated with Buyer
is asserting any claims or right to the Property that would otherwise delay or prevent
Seller from having clear, indefeasible and marketable title to the Property.
	 
	 	(b)	 	Buyer’s Remedies. If Seller fails to perform its obligations pursuant
to this Contract for any reason except failure by Buyer to perform hereunder, or if
prior to Closing any one or more of Seller’s representations or warranties are breached
in any material respect, then Buyer shall elect, as its SOLE and EXCLUSIVE remedy, to
either: (i) terminate this Contract by giving Seller timely written notice of such
election prior to or at Closing and recover the Earnest Money and any Extension Fee,
together with Buyer’s actual, third party, out of pocket costs and expenses incurred in
connection with Buyer’s Feasibility Study, up to a maximum cumulative reimbursement not
to exceed $25,000.00; or (ii) enforce specific performance; provided, however, if— and
only if— the remedy of specific performance is not available to Buyer due to Seller’s
prior sale of the Property to a third party, then Buyer shall have the additional
remedy of terminating the Agreement and recovering from Seller an amount equal to the
sum of Buyer’s documented, out-of- pocket third party costs paid or incurred in
connection with the acquisition of the Property, or (iii) waive said failure or breach
and proceed to Closing. Notwithstanding anything herein to the contrary, Buyer shall be
deemed to have elected to terminate this Contract if Buyer fails to deliver to Seller
written notice of its intent to file a claim or assert a cause of action for specific
performance against Seller on or before fifteen (15)





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	 	 	 	business days following the scheduled Closing Date or, having given such
notice, fails to file a lawsuit asserting such claim or cause of action in Bexar
County, Texas, within two (2) months following the scheduled Closing Date. In no
event or circumstance shall Buyer be entitled to any consequential or punitive
damages. Buyer’s remedies shall be limited to those described in this Section
10(b).






	11.	 	ATTORNEYS’ FEES. Any party to this Contract who is the prevailing party in any
legal proceeding against the other party brought under or with respect to this Contract or
transaction shall be additionally entitled to recover court costs and reasonable attorneys’
fees from the non-prevailing party.
	 
	12.	 	REPRESENTATIONS AND WARRANTIES OF SELLER.






	 	(a)	 	Seller hereby represents and warrants to Buyer, which representations and
warranties shall be deemed made by Seller to Buyer as of the Effective Date and also
as of the Closing Date:






	 	(i)	 	To Seller’s knowledge, there are no parties in possession of
any portion of the Property except Seller and tenants under Tenant Leases;
	 
	 	(ii)	 	To Seller’s knowledge, except as provided in the Rent Rolls,
neither Seller nor any tenant is in default of any material obligation
pursuant to the terms of the Tenant Leases;
	 
	 	(iii)	 	Seller has, or on the Closing Date will have, the partnership
power and authority to sell and convey the Property as provided in this
Contract and to carry out Seller’s obligations hereunder, and that all
requisite partnership action necessary to authorize Seller to enter into this
Contract and to carry out Seller’s obligations hereunder has been, or on the
Closing Date will have been, taken;
	 
	 	(iv)	 	To Seller’s knowledge, the Operating Reports are true and correct in all
material respects;
	 
	 	(v)	 	Seller has received no written notice from any government
agency having jurisdiction over the Land or Improvements that either considers
the construction of the Improvements or the operation or use of the Property to
be in violation of any law, ordinance, regulation or order;
	 
	 	(vi)	 	Without any other investigation or inquiry of any kind, except
as may be lawfully located on the Property and except as disclosed in the
Existing Environmental Report, to Seller’s knowledge, there are no Hazardous
Materials in, attributable to or affecting the Land or Improvements. As used
herein, a “Hazardous Material” means any hazardous, toxic or dangerous
waste, substance or material, pollutant or contaminant, as defined for
purposes of any Environmental Laws or any other federal, state or local law,
ordinance, rule, regulation or other enforcement vehicle applicable to the
Property, or any substance which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous, or
any substance which contains gasoline, diesel fuel or other petroleum
hydrocarbons, polychlorinated biphenyls (PCBs), or radon gas, urea
formaldehyde, asbestos or lead. “Environmental Laws” means all
federal, state and local laws, ordinances, rules and regulations now or
hereafter in force,





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	 	 	 	as amended from time to time, and all federal and state court decisions,
consent decrees and orders interpreting or enforcing any of the foregoing, in any
way relating to or regulating human health or safety, or industrial hygiene or
environmental conditions, or protection of the environment, or pollution or
contamination of the air, soil, surface water or groundwater, and includes the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. § 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §
6901, et seq., and the Clean Water Act, 33 U.S.C. § 1251, et seq.;
	 
	 	(vii)	 	There are no actions, suits or proceedings pending for which Seller has
received service of process, before or by any judicial, administrative or union body,
any arbiter or any governmental authority, against or affecting Seller or the
Property. To Seller’s knowledge, Seller has not received any written notice of a
pending or threatened eminent domain or similar proceeding that would affect the Land
or Improvements;
	 
	 	(viii)	 	Seller is not a “foreign person” as defined in Section 1445 of the Internal Revenue
Code of 1986, as amended, and the Income Tax Regulations thereunder;
	 
	 	(ix)	 	Neither Seller, nor any of its affiliates, nor any of their respective
partners, members, shareholders or other equity owners, and none of their respective
employees, officers, directors, representatives or agents, is, nor will they become, a
person or entity with whom U.S. persons or entities are restricted from doing business
under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of
the Treasury (including those named on OFAC’S Specially Designated and Blocked
Persons List) or under any statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is
not and will not engage in any dealings or transactions or be otherwise associated
with such persons or entities;
	 
	 	(x)	 	To Seller’s knowledge, there are no lease brokerage agreements, leasing
commission agreements or other agreements providing for payments of any amounts for
leasing activities or procuring tenants with respect to the Property other than as
disclosed in the Submission Matters or as set forth in the Tenant Leases;
	 
	 	(xi)	 	To Seller’s knowledge, this Contract does not and the transaction
contemplated in this Contract will not violate any provision of any agreement or
judicial order to which Seller is a party or to which Seller or the Property is
subject; and
	 
	 	(xii)	 	Seller does not currently have any employees.






	 	(b)	 	Whenever the phrases “to Seller’s actual
knowledge,” “to Seller’s knowledge,” or “to
the best of Seller’s knowledge” or any similar phrase is used herein, such phrases
shall be deemed to mean the present, actual knowledge (as opposed to the imputed knowledge),
without inquiry or investigation, of such fact or condition by W. T. Field, (President of
Thompson Realty Development Corporation, the corporate general partner of Seller) (“Seller’s
Representative”). The representations and warranties contained in Section 12(a) are
the representations and warranties of Seller and in no event or circumstances





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	 	 	 	will be construed as either the individual representations and warranties of
Seller’s Representative or to create any individual liability for Seller’s
Representative.
	 
	 	(c)	 	It shall be a condition precedent to Buyer’s obligations hereunder that as of
the date of Closing, all of Seller’s representations and warranties shall be true and
correct in all material respects. If the representations and warranties of Seller which
to Sellers actual knowledge were true and correct when made are not true and correct in
all material respects on the date of Closing, then Buyer may, at its option, (a) waive
such condition and close this transaction in accordance with the terms and provisions
of this Contract or, (b) terminate this Contract by notice in writing to Seller and
receive back the Earnest Money whereupon neither party shall have any further rights or
obligations pursuant to this Contract, other than as set forth herein with respect to
rights or obligations that survive termination.
	 
	 	(d)	 	Subject to the provisions of Section 12(e), the representations and
warranties of Seller made in Section 12(a) shall survive the Closing for a
period of six (6) months (the “Survival Period”). Buyer shall have the right to bring
an action against the Seller on the breach of a representation or warranty hereunder,
but only on the following conditions: (i) the Buyer first learns of the breach after
Closing and files such action within the Survival Period, and (ii) Buyer shall not have
the right to bring a cause of action for a breach of a representation or warranty
unless the damage to such party on account of such breach (individually or when
combined with damages from other breaches) equals or exceeds Twenty-Five Thousand and
No/100 Dollars ($25,000.00). Furthermore, Buyer agrees that the maximum liability of
Seller for the alleged breach of any or all representations or warranties set forth in
this Contract is limited to Two Hundred Thousand and No/100 Dollars ($200,000.00). The
provisions of this Section 12(d) shall survive the Closing.
	 
	 	(e)	 	If any representation or warranty above is known by Buyer prior to Closing to
be untrue and is not remedied by Seller prior to Closing, Buyer may as Buyer’s sole and
exclusive remedy, either (i) terminate this Contract whereupon the Earnest Money and
any Extension Fee shall be refunded to Buyer, and neither party shall have any further
rights or obligations pursuant to this Contract, other than as set forth herein with
respect to rights or obligations that survive termination, or (ii) waive its objections
and close the transaction without any reduction or credit against the Sales Price.
The foregoing representations and warranties shall not survive the Closing.






	13.	 	COVENANTS OF SELLER. From the Effective Date until Closing, Seller shall:






	 	(a)	 	Maintain and operate the Property in its current state and condition,
reasonable wear and tear and damage from casualty excepted.
	 
	 	(b)	 	Continue all insurance policies relative to the Property in
full force and effect.
	 
	 	(c)	 	Not remove any item of Personal Property from the Land or Improvements unless
replaced by a comparable item of Personal Property, except for any dead landscaping,
which Seller shall have no obligation to replace.
	 
	 	(d)	 	Refrain from entering into any contracts, or other agreements (excluding
leases) regarding the Property (other than contracts in the ordinary and usual course
of business





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	 	 	 	and which are cancelable by the owner of the Property within thirty (30)
days after giving notice thereof without penalty).
	 
	 	(e)	 	Seller shall conduct its leasing activities in the normal course of business.
All new Tenant Leases shall be on the form of lease currently used by Seller or such
other form as may be approved by Buyer and Seller. All new leases shall be entered into
in conformity with the lease guidelines (“Lease Guidelines”) attached hereto as
Exhibit G, including lease term, rental rates and leasing concessions, or as
otherwise proposed by Seller and approved by Buyer. Seller will not grant any move-in
incentive to tenants greater those provided in the Lease Guidelines.
	 
	 	(f)	 	Perform Seller’s material obligations under the Tenant Leases, in accordance
with Seller’s prior operations.
	 
	 	(g)	 	Provide to Buyer copies of current rent rolls in the same form as the Rent Roll
which will be deemed to supplement the Rent Roll promptly following receipt by Seller.
	 
	 	(h)	 	Provide to Buyer copies of updated operating statements as received by Seller
in accordance with its current course of business.
	 
	 	(i)	 	Apply any security or other deposits except in the ordinary course of Seller’s
business in accordance with Seller’s prior operations.






	14.	USE OF PROPERTY. Seller has not claimed the benefit of laws permitting a special
use valuation for the purposes of payment of ad valorem taxes on the Property. If a previous
owner claimed such benefit and, after the purchase is closed, Buyer changes the use of the
Property from its present use and the same results in the assessment of additional taxes, such
additional taxes will be the obligation of the Buyer, notwithstanding that some or all of such
additional taxes may relate back to the period prior to Closing.






	15.	CONDEMNATION. Seller agrees to give Buyer prompt notice of any condemnation action
affecting the Land, the Improvements or the Personal Property between the Effective Date and
the Closing Date. If prior to the Closing Date condemnation proceedings are commenced against
any material portion of the Property, then this Contract shall terminate and the Earnest Money
and any Extension Fee shall be refunded to Buyer. A “material portion of the Property” as used
herein shall mean at least ten percent (10%) of the square footage of the structural
Improvements or parking such that the Property does not comply with applicable law, or loss or
relocation of the primary entrance to the Property, or loss or relocation of the primary
entrance sign for the Property. If prior to the Closing Date condemnation proceedings are
commenced against less than a material portion of the Property, then this Contract shall not
terminate, but at Closing Seller shall assign to Buyer any condemnation award and the Sales
Price shall not be reduced.






	16.	DAMAGE TO PROPERTY. Seller agrees to give Buyer prompt notice of any fire or other
casualty affecting the Land, the Improvements or the Personal Property between the Effective
Date and the Closing.






	 	(a)	 	If prior to the Closing either (i) the Property is damaged by an uninsured
casualty costing TWO-HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00) or more to
repair and Seller is unwilling or unable to repair such damage on or prior to the
Closing; or (ii) the Property is damaged by fire or other casualty which is insured
that would cost TWO-HUNDRED FIFTY-THOUSAND AND NO/100 DOLLARS ($250,000.00) or




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	 	 	 	more to repair, then in any such event, either Buyer or Seller may, at its
option, elect to terminate this Contract by written notice to the other party within
twenty (20) days after the date of Seller’s notice to Buyer of the casualty or at
the Closing, whichever is earlier, in which case the Earnest Money and any Extension
Fee shall be refunded to Buyer, and neither party shall have any further rights or
obligations hereunder, other than as set forth herein with respect to rights and
obligations that survive termination. If neither Buyer nor Seller timely makes its
election to terminate this Contract, then the Closing shall take place as provided
herein without reduction of the Sales Price (except for (i) the amount equal to
Seller’s deductible under its insurance policies and (ii) the amount, be in no event
more than TWO-HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00) of the estimated
cost to repair any uninsured casually), and there shall be assigned to Buyer at the
Closing all interest of Seller in and to any casualty insurance proceeds, including,
to the extent assignable the proceeds of any business interruption or loss of rental
insurance.
	 
	 	(b)	 	If prior to the Closing there shall occur damage to the Property caused by fire
or other casualty which is insured that would cost less TWO-HUNDRED FIFTY-THOUSAND AND
NO/100 DOLLARS ($250,000.00) to repair, then in any such event, Buyer shall have no
right to terminate this Contract, but there shall be assigned to Buyer at Closing all
interest of Seller in and to any casualty insurance proceeds that may be payable to
Seller on account of any such occurrence, including, to the extent assignable the
proceeds of any business interruption or loss of rental insurance and the Sales Price
shall be reduced by an amount equal to Seller’s deductible under its insurance
policies.
	 
	 	(c)	 	Seller and Buyer both agree to use the Seller’s insurance adjuster’s assessment
to determine the amount of damages.






	17.	REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Seller,
which representations and warranties shall be deemed made by Buyer to Seller as of the
Effective Date and also as of the Closing Date:






	 	(a)	 	Buyer has the full right, power and authority to purchase the Property as
provided in this Contract and to carry out Buyer’s obligations hereunder, and that all
requisite action necessary to authorize Buyer to enter into this Contract and to carry
out Buyer’s obligations hereunder has been taken.
	 
	 	(b)	 	Neither Buyer, nor any of its affiliates, nor any of their respective partners,
members, shareholders or other equity owners, and none of their respective employees,
officers, directors, representatives or agents, is, nor will they become, a person or
entity with whom U.S. persons or entities are restricted from doing business under
regulations of OFAC (including those named on OFAC’s Specially Designated and Blocked
Persons List) or under any statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action and is not and
will not engage in any dealings or transactions or be otherwise associated with such
persons or entities.






	 	 	Notwithstanding anything herein to the contrary, any breach by Buyer of any of the
foregoing representations or warranties shall constitute a default by Buyer hereunder, and
Seller may thereupon, at its option, terminate this Contract by giving written notice
thereof, in which event




Contract of Sale — Walker Ranch Apartments



18









 






	 	 	the Earnest Money shall be paid to Seller as liquidated damages, and neither Buyer
nor Seller shall have any further rights or liabilities hereunder, except as otherwise
provided herein.






	18.	 	MISCELLANEOUS.






	 	(a)	 	All notices, demands, and requests and other communications required or
permitted hereunder shall be in writing and shall be deemed to be delivered when
actually received by telecopy or personal delivery or, if earlier and regardless
whether actually received or not, (i) upon deposit with a nationally recognized
overnight courier for next business day delivery, charges prepaid, or (ii) upon three
(3) business days following deposit in a regularly maintained receptacle for the United
States mail, registered or certified, postage prepaid, in either such event to be
addressed to the addressee as follows:




If to Seller:



TR Walker Ranch Partners, Ltd.

c/o Thompson Realty Corporation

2505 N. Plano Road, Ste 3000

Richardson, TX 75082

Attention: W. T. Field (Tom), President

Phone (972) 644-2400

Fax (972) 644-2411



with a copy to:



Thompson
Realty Corporation

2505 N. Plano Road, Ste 3000

Richardson, TX 75082 

Attention: Kelly P. B. Drablos, Esq.

Vice President and Legal Counsel

Phone (972) 644-2400 

Fax (972) 644-2411



with an additional copy to:



Haynes and Boone, L.L.P.

 2505 N. Plano Road, Suite 4000 

Richardson, Texas 75082

Attention: Richard K. Martin, Esq.

Phone:(972)739-8634

Facsimile: (972)692-9114



If to Buyer:



Triple Net Properties, LLC

c/o ROC Realty Advisors, LLC 

1606 Santa Rosa Drive, Suite 109

Richmond, Virginia 23229

Attention: Gus R. Remppies

Phone:(804)225-1082 

Facsimile: (804) 285-1376




19









 







with a copy to:



Hirschler Fleischer

701 East Byrd Street, 15th Floor

Richmond, VA 23219

Attention: David F. Belkowitz, Esq.

Phone: (804) 771-9546

Facsimile: (804) 644-0957





	 	(b)	 	This Contract shall be construed under and in accordance with the laws of the State of Texas,
and all obligations of the parties created hereunder are performable in Bexar County, Texas.
	 
	 	(c)	 	This Contract shall be binding upon and inure to the benefit of the parties hereto, their
respective heirs, executors, administrators, legal representatives, successors, and
permitted assigns.
	 
	 	(d)	 	In case any one or more of the provisions contained in this Contract shall for any reason be
held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this Contract shall be
construed as if such invalid, illegal, or unenforceable provision had never been contained
herein. Furthermore, in lieu of any such invalid, illegal or unenforceable provision, there
shall be automatically added to this Contract a provision as similar to such illegal, invalid
or unenforceable provision as may be possible and be legal, valid and enforceable.
	 
	 	(e)	 	This Contract, together with the Inspection Agreement dated as of March 15, 2006, by and
between Seller and Purchaser, constitutes the sole and only agreement of the parties hereto
with respect to the subject matter hereof and supersedes any prior understandings or written
or oral agreements between the parties respecting the subject matter hereof and cannot be
changed except by their written consent.
	 
	 	(f)	 	Time is of the essence with this Contract.
	 
	 	(g)	 	Words of any gender used in this Contract shall be held and construed to include any other
gender, and words in the singular number shall be held to include the plural, and vice versa,
unless the context requires otherwise.
	 
	 	(h)	 	In accordance with the requirements of the Texas Real Estate License Act, Buyer is hereby
advised by Broker that (i) Buyer should be furnished with or obtain a policy of title
insurance or have the abstract covering the Property examined by any attorney of its own
selection, and (ii) unless otherwise agreed to in writing by the parties hereto, Broker is
being paid by Seller and is representing Seller in this transaction.
	 
	 	(i)	 	The covenants, indemnification obligations and the waiver and release by Buyer set forth in
Sections 5(b), 9(b) and 10, and the covenants and indemnification obligations of
Buyer and Seller set forth in Sections 4(e), 4(f) and 8, shall survive consummation
of Closing and any termination or cancellation of this Contract, notwithstanding any contrary
provisions hereof.
	 
	 	(j)	 	The parties may execute this Contract in one or more identical counterparts, all of which
when taken together will constitute one and the same instrument.




20









 






	 	(k)	 	The parties hereto acknowledge that the parties and their respective counsel
have each reviewed and revised this Contract, and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Contract or any
amendments or exhibits hereto.
	 
	 	(1)	 	“Business Day” shall mean a date which is not a Saturday, Sunday or holiday
observed by federally chartered banks in the State of Texas, whenever any
determination is to be made or action to be taken on a date specified in this
Contract if such date falls upon a date which is not a Business Day, the date for
such determination or action shall be extended to the first Business Day immediately
thereafter.






	19.	 	ASSIGNMENT. Buyer may not assign this Contract without Seller’s prior written
consent, such consent to be given or denied in Seller’s sole and absolute discretion; provided
no consent of Seller shall be required in connection with the assignment of the Contract at
least five (5) Business Days prior to the Closing Date to any entity controlled by or managed
by Triple Net Properties, LLC. In event of any assignment of this Contract, Buyer shall
promptly provide a copy of such assignment to Seller.






	20.	 	NONREFUNDABLE CONSIDERATION. Contemporaneously with the execution and delivery of
this Contract, Buyer has delivered to Seller and Seller hereby acknowledges the receipt of a
check in the amount of One Hundred Dollars ($100.00) (“Independent Contract
Consideration”), which amount the parties bargained for and agreed to as consideration
for Buyer’s exclusive right to inspect and purchase the Property pursuant to this Contract and
for Seller’s execution, delivery and performance of this Contract. The Independent Contract
Consideration is in addition to and independent of any other consideration or payment provided
in this Contract, is nonrefundable, and it is fully earned and shall be retained by Seller
notwithstanding any other provision of this Contract.






	21.	 	WAIVER OF CONSUMER RIGHTS. Buyer, after consultation with an attorney of its own
selection (which counsel was not directly or indirectly identified, suggested or selected by
Seller or any agent of Seller) hereby voluntarily waives its rights under the Deceptive Trade
Practices — Consumer Protection Act (Section 17.41, et seq., Business and Commerce Code), a
law that gives consumers special rights and protections. Buyer hereby acknowledges to Seller
that Buyer and Seller are not in a significantly disparate bargaining position.






	22.	 	AUDIT. If Buyer, subject to the limitations of this Contract, assigns this Contract
to a publicly registered company promoted by Buyer (the “Registered Company”) and
the Registered Company acquires the Property pursuant to this Contract, Seller acknowledges
that the Registered Company is required to make certain filings with the Securities and
Exchange Commission (the “SEC Filings”) that relate to the most recent pre-acquisition fiscal
year (the “Audited Year”) for the Property. To assist the Registered Company in preparing the
SEC Filings, Seller agrees to provide the Registered Company with the following:






	 	(a)	 	Access to bank statements for the Audited Year;
	 
	 	(b)	 	Rent Roll as of the end of the Audited Year;

	 
	 	(c)	 	Operating Statements for the Audited Year;
	 
	 	(d)	 	Access to the general ledger for the Audited Year;




21









 






	 	(e)	 	Cash receipts schedule for each month in the Audited Year;
	 
	 	(f)	 	Access to invoice for expenses and capital improvements in the Audited Year;
	 
	 	(g)	 	Copies of all insurance documentation for the Audited Year; and
	 
	 	(h)	 	Copies of accounts receivable aging as of the end of the Audited Year
and an explanation for all accounts over 30 days past due as of the end of the
Audited Year.






	 	 	The provisions of this Section 22 shall survive Closing.
	 
	23.	 	BUYER’S CONDITIONS PRECEDENT. If any of the following conditions precedent to Buyer’s
obligations under this Contract is not satisfied, then Buyer may, at its option, waive such
condition and close this transaction, or, as Buyer’s sole and exclusive remedy, terminate this
Contract, in which event the Earnest Money shall be returned to Buyer, and neither party shall
have any further rights or obligations hereunder except other than as set forth herein with
respect to rights or obligations which survive termination:






	 	(a)	 	Each of the representations and warranties made by Seller in Section
12 shall be true and correct in all material respects when made and as of the
Closing Date.
	 
	 	(b)	 	Seller shall have performed or complied in all material respects with each
obligation and covenant required by applicable laws and by this Contract to be
performed or complied with by Seller on or before the Closing.
	 
	 	(c)	 	Seller shall have performed or complied in all material respects with each
material obligation and covenant required to be performed by Seller pursuant to the
Tenant Leases and the Service Contracts; provided that if Seller is in default of any
such obligation, Seller shall be afforded an opportunity to either cure such default
or to escrow at Closing an amount reasonably necessary to effect such cure.
	 
	 	(d)	 	Title to the Property and the other assets to be transferred hereunder shall
be delivered to Buyer in the manner required under Section 6.
	 
	 	(e)	 	From the expiration of the Feasibility Period to the Closing Date, there has
been no unlawful introduction of Hazardous Materials that would materially and
adversely affect the environmental condition of the Property from that which existed
at the expiration of the Feasibility Period.






	 	 	 	If any of the above described conditions precedent to Buyer’s obligations hereunder is not
satisfied, Buyer may, at its option, (A) waive such condition and close this transaction
with no reduction in the Sales Price, or (B) terminate this Contract by notice in writing
to Seller in which event the Earnest Money and any Extension Fee shall be returned to
Buyer, and neither party shall have any further rights or obligations hereunder except
other than as set forth herein with respect to rights or obligations which survive
termination.
	 
	 	24.	 	EFFECTIVE DATE. The “Effective Date” of this Contract shall be the date an original
of this Contract (or original counterparts of this Contract) are executed by both Seller and
Buyer.




22









 











Remainder of Page Intentionally Left Blank.

Signature Pages Follow.




Contract of Sale — Walker Ranch Apartments




23









 








     EXECUTED
in multiple originals effective as of the Effective Date.



	 	 	 	 	 	 	 	 	 
	 	 	SELLER:
	 
	 	 	 	 	 	 	 	 
	 	 	TR WALKER RANCH PARTNERS, LTD.,
	 	 	a Texas limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	TRDC Walker Partners, Ltd.,
	 	 	 	 	a Texas limited partnership, its general partner
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Thompson Realty Development

Corporation, a Texas corporation, its

general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ W.T. Field
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	W. T. Field
	 

	 	 	 	 	 	Title:
	 	President
	 	 	 	 	 	 	Date signed: May 4, 2006






	 	 	 	 	 
	 	 	BUYER:
	 
	 	 	 	 
	 	 	TRIPLE NET PROPERTIES, LLC, a Virginia limited liability

company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ LOUIS ROGERS
	 

	 	 	 	 
	 

	 	Name:
	 	LOUIS ROGERS
	 

	 	Title:
	 	PRESIDENT
	 	 	Date signed: May 2, 2006
	 
	 	 	 	 
	 	 	BROKER:
	 
	 	 	 	 
	 	 	The Broker executes this Contract for the sole purpose of
acknowledging and consenting to Section 8. The
Broker shall not be a necessary party to any Amendment of
this Contract.
	 
	 	 	 	 
	 	 	WILLIAM M. WOODALL, P.C.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 	 	Date signed:                     , 2006






Contract of Sale—Walker Ranch Apartments

Signature Pages




 









 








	 	 	 	 	 
	 	 	TITLE COMPANY:
	 
	 	 	 	 
	 	 	Receipt of $150,000.00 Earnest Money
is acknowledged.
	 
	 	 	 	 
	 	 	LANDAMERICA TITLE COMPANY
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 	 	Date signed:                     , 2006





EXHIBITS:




	 	 	 	 	 
	Exhibit A

	 	-
	 	Property Description
	Exhibit B

	 	-
	 	Special Warranty Deed
	Exhibit C

	 	-
	 	Bill of Sale, Assignment and Assumption Agreement
	Exhibit D

	 	-
	 	Assignment of Leases and Assumption Agreement
	Exhibit E

	 	-
	 	Non-Foreign Affidavit
	Exhibit F

	 	-
	 	Tenant Notice Letter
	Exhibit G

	 	-
	 	Lease Guidelines






Contract of Sale — Walker Ranch Apartments

Signature Pages