Document:

Exhibit 10.6

STOCK PURCHASE AND
SALE AGREEMENT

BETWEEN

BEACON CAPITAL
STRATEGIC PARTNERS III, L.P. 
 

AS SELLER

AND

BEHRINGER HARVARD
OPERATING PARTNERSHIP I LP,

AS PURCHASER

Dated as of April ___,
2006

 1
 

TABLE
OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  1. 
 	
  PURCHASE AND SALE

  	
   

  	
  5

  
	
   

  	
  1.1

  	
   

  	
  Agreement of Purchase
  and Sale

  	
   

  	
  5

  
	
   

  	
  1.2

  	
   

  	
  Purchase Price

  	
   

  	
  7

  
	
   

  	
  1.3

  	
   

  	
  Payment of Purchase
  Price

  	
   

  	
  7

  
	
   

  	
  1.4

  	
   

  	
  Deposit

  	
   

  	
  7

  
	
   

  	
  1.5

  	
   

  	
  Existing Indebtedness

  	
   

  	
  7

  
	
  2. 
 	
  TITLE AND SURVEY

  	
   

  	
  8

  
	
   

  	
  2.1

  	
   

  	
  Title Examination;
  Commitment for Title Insurance

  	
   

  	
  8

  
	
   

  	
  2.2

  	
   

  	
  Survey

  	
   

  	
  8

  
	
   

  	
  2.3

  	
   

  	
  Pre-Closing “Gap” Title
  Defects

  	
   

  	
  8

  
	
  3. 
 	
  DUE DILIGENCE

  	
   

  	
  9

  
	
   

  	
  3.1

  	
   

  	
  Purchsaer Finalized
  Review

  	
   

  	
  9

  
	
   

  	
  3.2

  	
   

  	
  No Termination Right
  for Due Diligence

  	
   

  	
  9

  
	
   

  	
  3.3

  	
   

  	
  Indemnity for Access

  	
   

  	
  10

  
	
  4. 
 	
  CLOSING

  	
   

  	
  10

  
	
   

  	
  4.1

  	
   

  	
  Time and Place

  	
   

  	
  10

  
	
   

  	
  4.2

  	
   

  	
  Seller’s Obligations at
  Closing. At Closing, Seller shall:

  	
   

  	
  10

  
	
  

  	
  4.3

  	
   

  	
  Purchaser’s Obligations
  at Closing

  	
   

  	
  13

  
	
   

  	
  4.4

  	
   

  	
  Credits and Prorations

  	
   

  	
  14

  
	
   

  	
  4.5

  	
   

  	
  Closing Costs and Post
  Closing Adjustments

  	
   

  	
  17

  
	
   

  	
  4.6

  	
   

  	
  Conditions Precedent to
  Obligation of Purchaser

  	
   

  	
  18

  
	
   

  	
  4.7

  	
   

  	
  Conditions Precedent to
  Obligation of Seller

  	
   

  	
  19

  
	
   

  	
  4.8

  	
   

  	
  Efforts to Satisfy
  Conditions

  	
   

  	
  20

  
	
  5. 
 	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS OF SELLER

  	
   

  	
  20

  
	
   

  	
  5.1

  	
   

  	
  Representations and
  Warranties of Seller concerning Seller

  	
   

  	
  20

  
	
   

  	
  5.2

  	
   

  	
  Representations and
  Warranties of Seller concerning the Trust, Property Manager, Illinois Manager
  and Riverside LLC

  	
   

  	
  21

  
	
   

  	
  5.3

  	
   

  	
  Representations and
  Warranties Concerning the Property

  	
   

  	
  27

  
	
   

  	
  5.4

  	
   

  	
  Knowledge Defined

  	
   

  	
  30

  
	
   

  	
  5.5

  	
   

  	
  Seller’s Indemnity,
  Survival of Seller’s Representations and Warranties; Maximum Liability

  	
   

  	
  30

  
	
   

  	
  5.6

  	
   

  	
  Covenants of Seller

  	
   

  	
  33

  
	
   

  	
  5.7

  	
   

  	
  Tax Matters

  	
   

  	
  36

  
	
  6. 
 	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS OF PURCHASER

  	
   

  	
  39

  
	
   

  	
  6.1

  	
   

  	
  Representations and
  Warranties of Purchaser

  	
   

  	
  39

  
	
   

  	
  6.2

  	
   

  	
  Survival of Purchaser’s
  Representations and Warranties

  	
   

  	
  40

  
	
   

  	
  6.3

  	
   

  	
  Purchaser’s Indemnity;
  Maximum Liability

  	
   

  	
  40

  
	
   

  	
  6.4

  	
   

  	
  Covenants of Purchaser

  	
   

  	
  43

  
	
  7. 
 	
  DEFAULT

  	
   

  	
  45

  
	
   

  	
  7.1

  	
   

  	
  Default by Purchaser

  	
   

  	
  45

  
	
   

  	
  7.2

  	
   

  	
  Default by Seller

  	
   

  	
  45

  

 

 2
 

 

	
  8. 
 	
   

  	
   

  	
  RISK OF LOSS

  	
   

  	
  46

  
	
   

  	
  8.1

  	
   

  	
  Minor Damage

  	
   

  	
  46

  
	
   

  	
  8.2

  	
   

  	
  Major Damage

  	
   

  	
  46

  
	
   

  	
  8.3

  	
   

  	
  Definition of “Major”
  Loss or Damage

  	
   

  	
  46

  
	
   

  	
  8.4

  	
   

  	
  Uninsured Losses

  	
   

  	
  47

  
	
  9. 
 	
  COMMISSIONS

  	
   

  	
  47

  
	
   

  	
  9.1

  	
   

  	
  Brokerage Commissions

  	
   

  	
  47

  
	
  10.

  	
  DISCLAIMERS AND WAIVERS

  	
   

  	
  47

  
	
   

  	
  10.1

  	
   

  	
  No Reliance on
  Documents

  	
   

  	
  47

  
	
   

  	
  10.2

  	
   

  	
  DISCLAIMERS AND WAIVERS

  	
   

  	
  48

  
	
   

  	
  10.3

  	
   

  	
  Effect and Survival of
  Disclaimers

  	
   

  	
  2

  
	
  11. 
 	
  MISCELLANEOUS

  	
   

  	
  49

  
	
   

  	
  11.1

  	
   

  	
  Confidentiality

  	
   

  	
  49

  
	
   

  	
  11.2

  	
   

  	
  Public Disclosure

  	
   

  	
  49

  
	
   

  	
  11.3

  	
   

  	
  Discharge of
  Obligations

  	
   

  	
  50

  
	
   

  	
  11.4

  	
   

  	
  Assignment

  	
   

  	
  50

  
	
   

  	
  11.5

  	
   

  	
  Notices

  	
   

  	
  51

  
	
   

  	
  11.6

  	
   

  	
  Modifications

  	
   

  	
  52

  
	
   

  	
  11.7

  	
   

  	
  Calculation of Time
  Periods

  	
   

  	
  52

  
	
   

  	
  11.8

  	
   

  	
  Successors and Assigns

  	
   

  	
  52

  
	
   

  	
  11.9

  	
   

  	
  Entire Agreement

  	
   

  	
  52

  
	
   

  	
  11.10

  	
   

  	
  Further Assurances

  	
   

  	
  52

  
	
   

  	
  11.11

  	
   

  	
  Counterparts

  	
   

  	
  53

  
	
   

  	
  11.12

  	
   

  	
  Severability

  	
   

  	
  53

  
	
   

  	
  11.13

  	
   

  	
  Applicable Law

  	
   

  	
  53

  
	
   

  	
  11.14

  	
   

  	
  No Third Party Beneficiary

  	
   

  	
  53

  
	
   

  	
  11.15

  	
   

  	
  Captions

  	
   

  	
  53

  
	
   

  	
  11.16

  	
   

  	
  Construction

  	
   

  	
  53

  
	
   

  	
  11.17

  	
   

  	
  Termination of
  Agreement

  	
   

  	
  53

  
	
   

  	
  11.18

  	
   

  	
  Time of the Essence

  	
   

  	
  54

  
	
   

  	
  11.19

  	
   

  	
  Recordation

  	
   

  	
  54

  

 

SCHEDULES

Schedule I — List
of Defined Terms

Schedule 1.1.5 — List of Trade Names

Schedule 1.1.6 — Personal Property

Schedule 4.4.2(ix) — Tenant Improvements and Leasing Commissions

Schedule 4.4.2(xi) — Rent Abatement Schedule

Schedule 5.2.5 — Pending Litigation

Schedule 5.2.6(iii) — Tax Audits

Schedule 5.2.7 — The Trust Organizational Documents

Schedule 5.2.8 — Outstanding Indebtedness

Schedule 5.3.1 — List of Operating Agreements

Schedule 5.3.2 — Lease Schedule

 3
 

 

Schedule 5.3.3 — Violations

Schedule 5.3.6 — List of Environmental Reports

Schedule 5.3.10 — Tax Appeals

Schedule 5.6.8 — Non-Voting Shareholders

EXHIBITS

EXHIBIT A — Legal
Description

EXHIBIT 1.4 — Deposit Escrow Agreement

EXHIBIT 4.2.1 — Assignment of Shares

EXHIBIT 4.6.1 — Opinion of Goodwin Procter LLP

EXHIBIT 4.6.5 — Form of Tenant Estoppel

EXHIBIT 4.6.6 — Form of CUSCO Estoppel Letter

 4
 

 

STOCK PURCHASE AND
SALE AGREEMENT

THIS STOCK PURCHASE AND
SALE AGREEMENT (the “Agreement”) is made as of the    day of April,
2006 (the “Effective Date”), by and between Beacon Capital Strategic Partners
III, L.P., a Delaware limited partnership (“Seller”), having an address at c/o
Beacon Capital Partners LLC, One Federal Street, 26th Floor, Boston, Massachusetts 02109 and
Behringer Harvard Operating Partnership I LP, a Texas limited partnership (“Purchaser”),
having an address at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001.
A list of defined terms as well as the capitalized terms used in Agreement and Section in
the Agreement where each such term is defined is attached to this Agreement as Schedule I.

RECITALS:

A.            Seller
owns one hundred percent (100%) of the Common Shares of BCSP III Illinois
Properties Business Trust, a Maryland business trust (the “Trust”);

B.            Seller is the sole member of BCSP III Illinois Manager
LLC, a Delaware limited liability company (“Illinois Manager”);

C.            The Trust is the sole member of 222 South Riverside
Property LLC, a Delaware limited liability company (“Riverside LLC”), which
owns the Property;

D.            The
Trust is the sole member of BCSP III Illinois Property Manager, LLC, a Delaware
limited liability company (“Property Manager”);

E.             Illinois Manager is the sole non-member manager of
Riverside LLC; and

F.             Seller desires to sell to Purchaser and Purchaser
desires to acquire from Seller all of the issued and outstanding capital stock
of the Trust (the “Shares”) on the terms and conditions set forth herein.

1.     PURCHASE AND SALE

1.1          Agreement of Purchase and
Sale. Subject to the terms and conditions hereinafter
set forth, including Section 5.6.8 regarding redemption of Series A
Preferred Shareholders’ Shares, Seller agrees to sell, assign, transfer, convey
and deliver and Purchaser agrees to purchase, acquire and accept from Seller
all of the Shares. By conveying the Shares, Seller intends to convey indirectly
all of the right, title and interest of Riverside LLC in and to:

1.1.1    That
certain parcel of land more fully described in Exhibit A attached
hereto (the “Land”) and all tenements, hereditaments and privileges appurtenant
thereto, including, but not limited to, any estate, right, title, interest,
property, claim and demand in and to all streets, alleys, rights-of-way,
sidewalks, strips, gores, easements and utility lines or agreements and air
rights, development rights, water or mineral rights in connection with the Land
(collectively, the “Appurtenances”);

 5
 

 

1.1.2    All
buildings, structures, improvements and fixtures erected or located on the Land
(the “Improvements”) and all plans, specifications and architectural and other
drawings, including but not limited to CAD drawings (the “Plans”) related to
the Improvements to the extent in the possession or control of Seller as of the
date of this Agreement;

1.1.3    The
Leases to which Riverside LLC is a party;

1.1.4    All
licenses, permits, certificates and approvals issued by any public or private
authority for the construction, use, occupancy and operation of the Land,
Appurtenances, and Improvements in each case, only to the extent the same may
be transferred (collectively, the “Permits”);

1.1.5    All
intangible assets related to the Land, Appurtenances, Improvements and Personal
Property, if any, including, without limitation, any and all contract rights,
(including any surviving rights under the purchase agreement and any related
agreement through which Riverside LLC acquired the property) warranties and
guaranties, marketing materials, logos, and the non-exclusive right to all
trade names relating to the Land, Improvements and Personal Property,
including, without limitation, the trade names, if any, set forth on Schedule
1.1.5, in each case, only to the extent the same may be transferred;
provided, however, that any service marks, trademarks or other intellectual
property rights relating to the foregoing and containing references to “Beacon
Capital,” “BCSP” or any derivation thereof are specifically excluded
(collectively the “Intangible Property”);

1.1.6    All
personal property listed in Schedule 1.1.6 attached hereto and all
additional personal property owned by Riverside LLC and used or to be used in
connection with Land and the Improvements (collectively, the “Personal Property”);

1.1.7    To
the extent necessary to conduct the Trust and Riverside LLC (collectively, the “Transferred
Companies”) and their respective businesses, all non-privileged documentation
of Seller, not considered proprietary (e.g. appraisals, internal valuations,
and leasing and other operational strategies), related to the Transferred
Companies and the Property, including but not limited to minute books, Trust
Organizational Documents, books of account, financial and accounting records,
files and other data and documentation, except to the extent required by
applicable law to be retained by Seller (and in such case copies are to be made
available to Purchaser) and exclusive of any documentation relating to the
evaluation of the disposition of the Shares or the Property  (the “Transferred Documentation”); and

1.1.8    All
Operating Agreements not terminated in accordance with the provisions of Section 4.2.4
(the “Transferred Contracts”).

The items set forth in Section 1.1.1 through Section 1.1.8
above are, collectively, the “Property.”

 6
 

 

1.2          Purchase Price. Purchaser agrees
to pay Seller for the Shares the aggregate sum of TWO HUNDRED SEVENTY SEVEN
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($277,500,000.00) (the “Purchase
Price”), subject to the adjustments and pro rations set forth herein. In the
event that the net effect of the adjustments and prorations requires Seller to
make a payment to Purchaser, such payment shall be treated as a reduction in
the Purchase Price paid for the Shares. In the event that the net effect of the
adjustments and prorations requires Purchaser to make a payment to Seller, such
payment shall be treated as an increase in the Purchase Price paid for the
Shares.

1.3          Payment of Purchase Price.
The Purchase Price, as increased or decreased by prorations and adjustments as
herein provided, shall be payable in full at Closing (hereinafter defined) in
cash by wire transfer of immediately available federal funds to a bank account
designated by Seller in writing to Purchaser prior to the Closing.

1.4          Deposit
Concurrently with Purchaser’s execution and delivery of this Agreement,
Purchaser has deposited with LandAmerica National Commercial Services (the “Escrow
Agent”), having its office at 10 S LaSalle Street, Suite 2500, Chicago,
IL  60603 Attention: Tom Seifert,
telephone: (312) 553-6920, email: tseifert@landam.com:  (i) a letter of credit, in form and
substance, and issued by a financial institution reasonably acceptable to
Seller and payable to the Escrow Agent (an “Acceptable Letter of Credit”) or (ii) immediately
available funds, in each case, in the amount of Ten Million Dollars
($10,000,000.00) (the “Earnest Money”). The Escrow Agent shall hold an
Acceptable Letter of Credit or the Earnest Money and all interest earned
thereon (collectively, the “Deposit”) in accordance with the terms and
conditions of this Agreement and an escrow agreement substantially in the form
of Exhibit 1.4 attached hereto (the “Escrow Agreement”) entered
into simultaneously with the execution of this Agreement. Any interest earned
on the Earnest Money shall be reported as income of the Purchaser.

1.5          Existing Indebtedness.
As more fully set forth on Schedule 5.2.8, the Property is subject to
certain existing indebtedness, which is secured by, inter alia, a first mortgage
or deed of trust on the Property (the “Existing Indebtedness”). Purchaser, at
its election, such election to be delivered in writing to Seller no later than
that date which is five (5) Business Days after the Effective Date, shall
have the right to seek the consent of the holder of the Existing Indebtedness
to the transaction contemplated by this Agreement without causing an
acceleration of the Existing Indebtedness (the “Consent”). Seller and Purchaser
shall cooperate in good faith and shall use reasonable efforts to assist in
obtaining the Consent; provided, however, that Seller shall not be required to
incur any out-of-pocket costs or expenses in connection therewith.  If Purchaser elects not to obtain or is unable
to obtain the Consent on or before April 21, 2006, pursuant to
documentation reasonably acceptable to Purchaser and Seller, including, without

 7
 

 

limitation, estoppel provisions reasonably acceptable to Purchaser and
releases of existing guaranties and indemnities from Seller and its affiliates
in form reasonably acceptable to Seller (the “Loan Documents”), then, if the
Closing occurs, Seller shall cause the Trust to pay at Closing the then
outstanding principal balance and all other sums due and payable in connection
with the Existing Indebtedness, including, without limitation, any prepayment
penalty that may be due thereunder. If Purchaser elects to obtain and does
obtain the Consent, at Closing, Purchaser shall be entitled to deduct from the
Purchase Price otherwise payable hereunder, the then-outstanding principal
balance and other sums due and payable in connection with the Existing
Indebtedness, including any transfer fees, assumption fees, and points on
additional loan proceeds, not to exceed the amount Seller would otherwise be
obligated to pay as a prepayment premium were Purchaser to elect to not seek
the Consent, but excluding any other costs, fees or expenses of the holders of
the Existing Indebtedness, their counsel or third party consultants incurred or
payable in connection with Purchaser’s attempt to obtain the Consent the
Existing Indebtedness.

2.     TITLE AND SURVEY

2.1          Title Examination; Commitment for Title Insurance. Prior
to the date of this Agreement, Purchaser has obtained from the Escrow Agent or
an affiliate thereof (in such capacity, the “Title Company”), an ALTA title
insurance commitment dated March 7, 2006 (the “Title Commitment”) covering
the Property and a copy of each document referenced in the Title Commitment as
an exception to title to the Property. Prior to the date of this Agreement, the
Seller has provided Purchaser a copy of Riverside LLC’s existing title
insurance policy.

2.2          Survey. Prior to
the date of this Agreement, Seller has delivered to Purchaser a copy of Riverside LLC’s
existing survey. Prior to the date of this Agreement, Purchaser has ordered
from a surveyor or surveying firm, licensed by the State of Illinois, an ALTA
survey of the Property (the “Survey”) reflecting the total area of the
Property, the location of all improvements, recorded easements and
encroachments, if any, located thereon and other matters of record with respect
thereto. Purchaser shall cause the surveyor to deliver a copy of the Survey,
and any revisions thereto, to Seller and the Title Company simultaneously with
the delivery to Purchaser, which Survey shall be certified to Seller, Purchaser
and the Title Company.

2.3          Pre-Closing “Gap” Title Defects. Purchaser
may, at or prior to Closing, notify Seller in writing of any objections to
title or objections to survey matters first arising between the effective date
of Purchaser’s Title Commitment referred to above and the date on which the
transaction contemplated herein is scheduled to close. With respect to any
objections to title set forth in such notice, Seller and the Trust shall have
the right, but not the obligation, to cure such objections, provided that
Seller or the Trust shall be obligated to satisfy or discharge any Seller
Encumbrance, except to the extent Purchaser has obtained the Consent regarding
the Existing Indebtedness. Within ten (10) days after receipt of Purchaser’s
notice of objections, Seller shall notify Purchaser in writing whether Seller
or the Trust elects to attempt to cure such objections. If Seller or the Trust
elects to attempt to cure an item contained in a notice of objection from
Purchaser or is obligated to cure a Seller Encumbrance, Seller or the Trust
shall have until the date of Closing to attempt to remove, satisfy or cure the
same, and for this purpose Seller shall be entitled to a reasonable adjournment
of the Closing if additional time is required, but in 

 8
 

 

no event shall the adjournment exceed fifteen (15) Business Days after
the date for Closing set forth in Section 4.1 hereof; provided, however,
that Seller shall give not less than five (5) Business Days prior written
notice to Purchaser that Seller elects to extend date of Closing in accordance
with the terms of this sentence. If Seller or the Trust elects to attempt to
cure an item contained in a notice of objection from Purchaser, then Seller or
the Trust, as the case may be, shall use reasonable efforts to cure such item. If
Seller and the Trust elect not to cure any objections specified in Purchaser’s
notice (other than with respect to a Seller Encumbrance), or if Seller and the
Trust are unable to effect a cure prior to the Closing (or any date to which
the Closing has been adjourned) (other than with respect to a Seller
Encumbrance), Purchaser shall have the following options:  (i) to acquire the Shares, in which case
Purchaser agrees that the Property shall be subject to any matter objected to
by Purchaser which Seller is unwilling or unable to cure, without reduction of
the Purchase Price; or (ii) to terminate this Agreement by sending written
notice thereof to Seller, and upon delivery of such notice of termination, this
Agreement shall terminate and the Deposit shall be returned to Purchaser, and
thereafter neither party hereto shall have any further rights, obligations or
liabilities hereunder except to the extent that any right, obligation or
liability set forth herein expressly survives termination of this Agreement.

 

For the purposes of this Agreement, a “Seller
Encumbrance” shall mean:  (i) a
mortgage or deed of trust granted or voluntarily assumed by Riverside LLC
(other than the Existing Indebtedness if Purchaser elects to assume and does
assume the Existing Indebtedness at Closing) or (ii) a judgment lien or a
mechanics or suppliers lien on the Property as a result of a judgment against
or for work performed for or material supplied to Seller, the Trust, Illinois
Manager, Property Manager or Riverside LLC prior to Closing, and not through
any action or inaction of Purchaser or any tenant of the Property or any other
person or entity. For the purposes of this Agreement, Seller and the Trust
shall be deemed to have cured a Seller Encumbrance by causing the Title Company
to insure over the underlying lien or by bonding over the lien in accordance
with legal requirements in effect in the jurisdiction where the Property is
located in a manner to be approved by 
Purchaser, such approval not to be unreasonably withheld, sufficient to
allow the Title Company to issue the Title Policy required under Section 4.5
below.

3.     DUE DILIGENCE

3.1          Purchaser Finalized Review.

Except as
expressly set forth in this Agreement, Purchaser has finalized its due
diligence review of the Property and any matters relating thereto which
Purchaser deems advisable, including, without limitation, any engineering,
environmental, title, survey, financial, operational and legal compliance
matters relating to the Property (the “Due Diligence”).

3.2          No Termination Right for Due
Diligence.

Except as
expressly set forth in this Agreement, Purchaser shall not have the right to
terminate this Agreement and obtain a refund of the Earnest Money as the result
of its 

 9
 

 

dissatisfaction
with any aspect of the Due Diligence. The Purchase Price reflects the results
of the Due Diligence.

3.3          Indemnity for Access.

During the
period beginning upon March 14, 2006 and ending at 5:00 p.m. on the
date of this Agreement, Purchaser and its employees, agents and independent
contractors had the right of reasonable access to enter the Property at no
charge for the purpose of making non-invasive tests, surveys and obtaining
other data. Purchaser agrees to restore any portion of the Property disturbed
pursuant to the rights granted in this Section to its prior condition. Purchaser
shall defend, indemnify and hold Seller and the Trust harmless from any claims,
including costs and reasonable attorneys’ fees, resulting from the acts of
Purchaser, its employees, agents or independent contractors during or resulting
from such entry and shall provide Seller and the Trust with evidence of
personal injury and property damage insurance in such form as may be reasonably
acceptable to Seller. The provisions of this Section 3.3 shall survive any
termination of this Agreement.

4.     CLOSING

4.1          Time and Place. The consummation of the transaction
contemplated hereby (“Closing”) shall be held at the offices of the Escrow
Agent or such other location as the parties shall mutually agree, on or before
2:00 p.m. Dallas, Texas time, on the first Business Day that is thirty
(30) days after the date of this Agreement, as the same may be extended
pursuant to the terms of this Agreement (the “Closing Date”). Any wires of the
Purchase Price shall be initiated by Purchaser no later than 10:00 a.m.
Dallas, Texas time on the Closing Date. At Closing, (a) Seller and
Purchaser shall perform the obligations set forth in Section 4.2 and Section 4.3
hereof, respectively, the performance of which obligations shall be concurrent
conditions, and (b) the Purchase Price, as adjusted in accordance with the
terms of this Agreement, shall be paid to Seller through the Escrow Agent. Nothing
in this Section 4.1 shall preclude a closing through the customary closing
escrow procedures approved by Seller and Purchaser. Purchaser shall have the
right to extend the Closing Date once for up to an additional thirty (30) days
upon delivery of a written notice to Seller on or before three (3) Business
Days prior to the Closing Date (the “Extension Notice”). An additional deposit
in the amount of Ten Million Dollars ($10,000,000) (the “Second Additional
Deposit”) shall be delivered to the Escrow Agent within one (1) Business
Day of the date of Purchaser’s Extension Notice if Purchaser elects to extend
Closing as provided herein, by federal wire transfer of immediately available
funds, to be held in escrow by Escrow Agent pursuant to the terms of the Escrow
Agreement. Once deposited with the Escrow Agent, the Second Additional Deposit
shall be deemed part of the Earnest Money, for an aggregate Deposit of Twenty
Million Dollars ($20,000,000.00). Seller and Purchaser hereby acknowledge that
Seller shall have no obligation to obtain updated Estoppels resulting from the
extension of the Closing Date pursuant to this Section 4.1.

4.2        Seller’s Obligations at
Closing. At Closing, Seller shall:

4.2.1    Transfer of
Shares. Transfer the Shares to Purchaser by delivering to Purchaser
evidence reasonably satisfactory to Purchaser of the transfer to Purchaser of
ownership of such 

 10
 

 

Shares on the
books and records of the Trust, together with an assignment of shares (the “Transfer
Document”) substantially in the form of Exhibit 4.2.1 attached hereto.

4.2.2    Redemption
of Preferred Shares. Cause the redemption of all shares in the Trust held
by the preferred shareholders of the Trust in accordance with Section 5.6.8.

4.2.3    Resignations
of Trustees and Officers. Deliver to Purchaser written resignations of all
of the trustees and officers of the Trust and Riverside LLC, such resignations
to be in form and substance acceptable to Purchaser in its sole discretion.

4.2.4    Termination
of Operating Agreements and Management Agreements. Deliver, or cause to be
delivered, to Purchaser evidence satisfactory to Purchaser of the termination
of the Operating Agreements for which Purchaser has delivered notice to Seller,
not less than five (5) days prior to Closing and in any event not prior to
the date of this Agreement electing to terminate such specified Operating
Agreements; provided, such Operating Agreements can be terminated prior to
Closing without penalty or premium. If any such Operating Agreement cannot be
terminated without penalty or premium prior to Closing, then such Operating
Agreement shall continue in full force and effect following Closing as an
obligation of Riverside LLC. In addition, Seller shall cause the Trust to
terminate, at Closing, any property management and leasing agreements affecting
the Property. Notwithstanding the foregoing, any Operating Agreement with an
affiliate of Seller shall be terminated effective as of Closing unless
otherwise elected by Purchaser.

4.2.5    Bringdown
Certificate. Deliver to Purchaser a certificate, dated as of the date of
Closing and executed on behalf of Seller by a duly authorized officer or agent
thereof, stating that the representations and warranties of Seller contained in
this Agreement are true and correct in all material respects as of the date of
Closing or identifying any representation or warranty which is not, or no
longer is, true and correct and explaining the state of facts giving rise to
the change. In no event shall Seller be liable to Purchaser for, or be deemed
to be in default hereunder by reason of, or shall Purchaser have the right to
terminate this Agreement on account of, any representation or warranty no
longer being true as a result of any change that occurs between the Effective
Date and the date of Closing that is beyond the reasonable control of Seller to
prevent and does not result from a breach by Seller of its covenants under this
Agreement, excepting therefrom the representations set forth in Sections 5.1
(excepting therefrom Section 5.1.4), 5.2.1, 5.2.2, 5.2.3, 5.2.6 (excepting
therefrom Section 5.2.6(iii) and 5.2.6(iv)), 5.2.7, 5.2.8, 5.2.9 and
5.2.10. If despite changes or other matters described in such certificate, the
Closing occurs, Seller’s representations and warranties set forth in this
Agreement shall be deemed to have been modified by all statements made in such
certificate and the conditions set forth in Section 4.6.2 hereof shall be
deemed satisfied.

4.2.6    Evidence of
Authority. Deliver to Purchaser copies of the authorizing resolutions of
Seller with respect to the transactions contemplated by this Agreement, which
resolutions shall be acceptable to Purchaser.

 11
 

 

4.2.7    FIRPTA.
Deliver to Purchaser an affidavit duly executed by Seller stating that Seller
is not a foreign person for purposes of Sections 897 or 1445 of the Code;

4.2.8    Delivery
of Records. Deliver to Purchaser the Leases, Operating Agreements which
will not be terminated as provided in this Agreement, Plans and Permits, if
any, in the possession of Seller, together with such leasing and property files
and records which are material in connection with the continued operation,
leasing and maintenance of the Property, provided that the leasing and property
files shall remain at the Property and be deemed delivered at Closing. In
addition, Seller shall deliver copies of the Trust Organizational Documents to
Purchaser, either at the Closing, or at such other location as is reasonably
acceptable to Purchaser and Seller.

4.2.9    Closing
Statement. Execute and deliver a counterpart original of the Closing Statement;

4.2.10  Loan
Documents. Execute and deliver counterpart originals of the Loan Documents,
to the extent applicable and such other documents as may be reasonably required
in connection with the transfer of the Existing Indebtedness or a new loan;

4.2.11  Dissolution
of Illinois Manager and Property Manager. Seller shall execute, deliver and
file, as necessary, any and all documents necessary to evidence the dissolution
of Illinois Manager and Property Manager, such dissolution , in each case,
occurring at or before the Closing;

4.2.12  Resignation
of Property Manager and Illinois Manager. Execute, deliver and file, as
necessary, any and all documents necessary to evidence the resignation of
Illinois Manager as manager of Riverside LLC;

4.2.13  Title
Matters. Deliver to the Title Company: (a) a certificate that Schedule
B, Special Exceptions, Items 7 and 8 as set forth in the Title Commitment are
not related to any past or present tenant of the Property; and (2) to the
extent Illinois law provides for statutory liens by property managers for
services in connection with off-record contracts, lien waivers from any
property manager acting on behalf of Riverside LLC; and

4.2.14  Other.
Deliver such additional documents as shall be reasonably required to consummate
the transaction as expressly contemplated by this Agreement; including, without
limitation and to the extent assignable, all indemnities, if any, for the
benefit of Riverside LLC, including, but not limited to, those contained in any
document related to the Purchase of the Property by Riverside LLC and such
reasonable evidence that any indirect or direct right, title or interest of
Riverside LLC in any security deposits and other items for which Seller have
received a credit are the indirect property of Purchaser from and after Closing
pursuant to its purchase of the Shares. In addition, Seller shall cause
Riverside LLC to deliver a customary owner’s 

 12
 

 

affidavits as
to parties in possession and mechanics’ and suppliers’ liens reasonably
requested by the Title Company.

4.3          Purchaser’s Obligations at Closing. At
Closing (or as otherwise noted in this Section 4.3), Purchaser shall:

4.3.1    Delivery
of Purchase Price. Pay to Seller the full amount of the Purchase Price, as
increased or decreased by prorations and adjustments as herein provided and
less any cash portion of the Deposit that will be applied towards the Purchase
Price at Closing, in immediately available wire transferred funds pursuant to Section 1.3
hereof;

4.3.2    Countersigned
Documents. Join Seller in execution of the instruments described in
Sections 4.2, 4.2.10 (if applicable because the Purchaser is assuming the
Loan), and 4.2.12 to the extent applicable;

4.3.3    Evidence
of Authority. Deliver to Seller copies of the authorizing resolutions of
Purchaser with respect to the transactions contemplated by this Agreement,
which resolutions shall be reasonably acceptable to Seller;

4.3.4    Tenant
Notification Letters. Deliver signed statements acknowledging to each
Tenant at the Property, Purchaser’s receipt and responsibility for each tenant’s
security deposit at Closing, if any, all in compliance with and pursuant to the
applicable provisions of applicable law, and notifying such tenant of revised
instructions for payment of its rent. The provisions of this paragraph shall
survive Closing;

4.3.5    100 Shareholders
or Evidence of Dissolution. No later than three (3) Business Days
prior to Closing, Purchaser shall deliver to Seller a written notice of its
intent to either dissolve the Trust immediately after Closing or maintain the
classification and treatment of the Trust as a REIT following Closing. If the
Purchaser intends to dissolve the Trust within seven (7) days after
Closing, Purchaser shall deliver to Seller within seven (7) days following
the Closing evidence confirming that Purchaser has dissolved the Trust. If the
Purchaser intends to maintain the classification and treatment of the Trust as
a REIT, Purchaser shall deliver evidence at Closing confirming that Purchaser
shall admit 100 shareholders into the Trust at Closing or within periods
allowed by law in order to maintain the classification and treatment of the
Trust as a REIT for the Trust’s taxable year that includes the Closing. Not
later than 3 days prior to Closing Purchaser shall deliver evidence to Seller
confirming that Purchaser’s ownership of the REIT will not cause the REIT to be
“closely held” within the meaning of Code Section 856(a)(5). The
provisions of this paragraph shall survive Closing; and

4.3.6    Other.
Deliver such additional documents as shall be reasonably required to consummate
the transactions contemplated by this Agreement.

 13
 

 

4.4        Credits and Prorations.

4.4.1    The following shall
be apportioned with respect to the Property as of 12:01 a.m., on the day
of Closing, as if Purchaser were vested with title to the Property during the
entire day upon which Closing occurs:

(i)            rents and other income from
the Property, if any, as and when collected (the term “rents” as used in this
Agreement includes all payments due and payable by tenants under the Leases
whether or not designated as rent);

(ii)           taxes (including personal
property taxes on the Personal Property) and assessments levied against the
Property, provided, however, that if any assessments are paid in installments,
then only the installments for the period that includes the Closing Dates shall
be prorated, and installments for any period after the Closing shall be the
obligation of Purchaser pursuant to its indirect ownership of Riverside LLC;

(iii)         payments under the Operating Agreements;

(iv)          gas, electricity and other
utility charges for which Seller is liable, if any, such charges to be
apportioned at Closing on the basis of the most recent meter reading occurring
prior to Closing and the most recent bills for such utility charges; and

(v)           any other operating expenses
or other items pertaining to the Property which are customarily prorated
between a purchaser and a seller of office buildings in the area in which the
Property is located.

4.4.2    Notwithstanding
anything contained in the foregoing Section 4.4.1 hereof:

(i)            (A) security deposits
under any Leases held by Riverside LLC (not applied against delinquent rents or
otherwise as provided in the Leases) shall not be prorated at Closing and
remain in the possession and control of Riverside LLC after Closing or shall be
delivered to Purchaser, and (B) Purchaser shall credit to the account of
Seller at Closing all refundable cash or other deposits posted with utility
companies serving the Property.

(ii)           Any property taxes and assessments
paid at or prior to Closing shall be prorated as follows: (i) property
taxes and assessments on the Property assessed for the 2005 calendar year, all
of which are payable in the 2006 calendar year, shall be prorated as of Closing
based upon the amounts actually paid or payable by Riverside LLC in 2006; and (ii) property
taxes and assessments on the Property assessed for the 2006 calendar year, all
of which are payable in the 2007 calendar year, will be the responsibility of
Purchaser and such taxes and assessments shall not be prorated at Closing. Seller
shall not be responsible for any increase in the assessed value of the Property
after Closing, such increased valuation and resulting increase in the taxes
actually due being the 

 14
 

 

sole
responsibility of Purchaser. Any income tax refunds that are received by the
Trust or Riverside LLC, and any amounts credited against income tax to which
the Trust, or Riverside LLC become entitled, that relate to income tax periods
or portions thereof ending on or before the date of the Closing shall be for
the account of Seller, and Purchaser shall pay over to Seller any such refund
or the amount of any such credit within 15 days after receipt or entitlement
thereto.

(iii)         Charges referred to in this Section 4.4
which are payable by any Tenant to a third party, if any, shall not be
apportioned hereunder, and Purchaser shall accept the Shares notwithstanding
that the Trust or its subsidiaries have liability for any such unpaid charges
and Purchaser and its subsidiaries shall look solely to the Tenant responsible
therefore for the payment of the same. If Seller or the Trust or its
subsidiaries shall have paid any
of such charges on behalf of any Tenant, and shall not have been reimbursed
therefore by the time of Closing, Purchaser shall credit to Seller an amount
equal to all such charges so paid by Seller. Seller shall retain all amounts
received prior to Closing from any Tenant with respect to property taxes and
assessments, but Seller shall credit to Purchaser at Closing an amount equal to
any such payments which are attributable to the period from and after Closing
consistent with the method set forth in Section 4.4.2(ii).

(iv)          Seller shall receive the
entire advantage of any discounts for the prepayment of any taxes, water rates
or sewer rents.

(v)           As to gas, electricity and
other utility charges referred to in Section 4.4.1(iv) above, Seller
may on notice to Purchaser elect to pay one or more of all of said items
accrued to the date hereinabove fixed for apportionment directly to the person
or entity entitled thereto, and to the extent Seller so elects, such item shall
not be apportioned hereunder, and Seller’s obligation to pay such item directly
in such case shall survive the Closing.

(vi)          The Personal Property is included
in this sale, without further charge. Seller shall pay any and all sales or
similar taxes payable in connection with the Personal Property and Seller shall
execute and deliver any tax returns required of it in connection therewith,
said obligations of Seller to survive Closing.

(vii)         Unpaid and delinquent rent as
of the Closing shall not be prorated, but if and when collected by Seller or
Purchaser (or Riverside LLC) after Closing shall be delivered as follows:  (a) if Seller collects any unpaid or delinquent
rent for the Property, Seller shall, within fifteen (15) days after the receipt
thereof, deliver to Purchaser any such rent which Purchaser is entitled to
hereunder relating to the date of Closing and any period thereafter, and (b) if
Purchaser or the Trust or its subsidiaries collects any unpaid or delinquent
rent from the Property, Purchaser shall, within fifteen (15) days after the
receipt thereof, deliver to Seller any such rent which Seller or the Trust or
its subsidiaries is entitled to hereunder relating to the period prior to the
date of Closing. Seller 

 15
 

 

and Purchaser
agree that (y) all rent received by any party within the first thirty (30)
day period after the date of Closing shall be applied first to delinquent rents
owed with respect to pre-Closing periods, then to rents due in the month of
Closing, and then to delinquent rents owed with respect to post-Closing
periods, and (z) all rent received by any party after the first thirty
(30) day period after the date of Closing shall be applied first to current
rentals, then to delinquent rents owed with respect to post-Closing periods and
then to delinquent rents owed with respect to pre-Closing periods, in inverse
order of maturity. Purchaser will use commercially reasonable efforts after Closing
to collect (or cause to be collected) all rents as promptly as practicable in
the usual course of the operation of the Property, provided that Purchaser
shall have no obligation to file suit or expend any material sums to collect
any delinquent rents owed with respect pre-Closing Periods. Purchaser (or
Riverside LLC) shall hold all landlord’s liens, if any, in their entirety to
enforce the payment of any delinquent rentals and Seller shall be deemed to
have transferred all of its right title and interest in such landlord’s liens,
if any.

(viii)       At Seller’s option:  (x) all cash in bank accounts or on hand
owned by either the Trust, Property Manager or Riverside LLC; (y) all
insurance refunds relating to insurance concerning the Property (which insurance
shall not be continued by Seller beyond Closing, except as provided in Article 8
hereof) and (z) all other prepaid items which are capable of being
refunded (whether prior to, upon or after Closing) on cancellation of an
Operating Agreement shall be either:  (a) distributed
to Seller immediately prior to the Closing and shall be excluded from the sale
contemplated by this Agreement or (b) credited to Seller at Closing,
except as provided above with respect to any tenant security  made by a tenant under the Leases.

(ix)          An amount equal to (i) certain
obligations of Riverside LLC to pay for tenant improvements in connection with
the Leases, and (ii) certain leasing commissions in connection with the
Leases, as more particularly set forth on Schedule 4.4.2(ix) attached
hereto, shall be credited to Purchaser at Closing. Purchaser may escrow such
funds for the purposes of paying for the obligations under the Leases,
including using such funds to apply against rent as specified in the Leases. Seller
and Purchaser agree to update Schedule 4.4.2(ix) at Closing.

(x)           An amount equal to $5,555,457
shall be credited to Purchaser in lieu of Seller entering into a Master Lease
with respect to the Property.

(xi)          An amount equal to the free
rent under the Leases, as more particularly set forth on Schedule 4.4.2(xi),
shall be credited to Purchaser at Closing. Such amount shall be adjusted
depending upon the Closing Date in the manner set forth on Schedule
4.4.2(xi).

 16
 

 

4.4.3    Seller
shall use reasonable efforts to provide Purchaser an initial draft of the
Closing Statement at least five (5) Business Days prior to Closing, which,
once agreed to, shall be the “Closing Statement.”

4.4.4    The
provisions of this Section 4.4 shall survive Closing.

4.5          Closing Costs and Post Closing Adjustments.

4.5.1    Closing
Costs. Seller shall pay for the cost of preparing the Transfer Document,
for all matters relating to the clearing of title which Seller elects or is
required to cure, the fees and costs associated with the assignment of all
transferable warranties, one-half of any Escrow Agent’s fee which may be
charged by the Escrow Agent or Title Company and the fees of any counsel
representing it in connection with this transaction. Seller shall pay all title
examination fees of Title Company and for the cost of the premium for the
standard coverage portion of the coverage owner’s policy of title insurance to
be issued to Purchaser by the Title Company at Closing (the “Title Policy”),
without endorsements and the costs of the Survey. Purchaser shall pay (u) the
fees of any counsel representing Purchaser in connection with this transaction;
(v) the premium for any endorsements requested by Purchaser to the Title
Policy; (w) one-half of any Escrow Agent’s fee; and (x) the costs of
the Survey. In connection with the transfer of the Shares, Purchaser shall be
responsible for paying City of Chicago transfer taxes, if any, and Seller shall
be responsible for paying county and state transfer taxes, if any. All other
costs and expenses incident to this transaction and the closing thereof shall
be paid by the party incurring the same. The provisions of this Section 4.5
shall survive Closing.

4.5.2    Post
Closing Adjustments. Seller has completed its reconciliation for charges
paid in calendar year 2005 for percentage rents, escalation charges for real
estate taxes, insurance, parking charges, marketing fund charges, operating
expenses, maintenance escalation rents or charges, cost-of-living increases or
other charges of a similar nature (“Additional Rents”) charged to Tenants under
the Leases. Seller agrees to directly reimburse the applicable tenant  (as opposed to credit future rent) for the
amounts of Additional Rent calculated by Seller as being due to such tenant for
the calendar year 2005. With respect to any Additional Rent (including
Additional Rent collected by Landlord for the period from January 1, 2006
through Closing) which is not finally adjusted between the landlord and any
tenant under any Lease until after the Closing Date, then Purchaser shall submit
to Seller, within thirty (30) days after the Additional Rents have been finally
adjusted between landlord and the tenants, a supplemental statement covering
any such Additional Rents or any other items which have been finally adjusted
between the landlord and such tenants, containing a calculation of the
adjustments of such Additional Rents. In the event Seller or the landlord is
obligated to reimburse a tenant for Additional Rent for calendar year 2005 in
an amount in excess of the amount paid by Seller as described above or with
respect to Additional Rent paid during the period from January 1, 2006
through Closing, then Seller shall reimburse Purchaser for such amount within
thirty (30) days after receipt of the supplemental statement. If Purchaser or
the landlord recovers any Additional Rent from any tenant attributable to
calendar year 2005 or the period from January 1, 2006 

 17
 

 

through
Closing, then Purchaser shall pay such amount to Seller within thirty (30) days
of collecting such payments. With respect to each item of Additional Rent, each
party will shall make available to the other party during regular business
hours the records relating to such items for inspection or audit by such party
or its representatives.

4.6          Conditions Precedent to Obligation of
Purchaser. The obligation of Purchaser to consummate
the transaction hereunder shall be subject to the fulfillment on or before the
date of Closing of all of the following conditions. If the following conditions
are not satisfied on or before the date of Closing, subject to any extension
right contained herein, then Purchaser may either:  (i) elect to terminate this Agreement by
written notice to Seller, in which event the Deposit shall be returned to
Purchaser and parties hereto shall have no further obligations hereunder,
except for those which by their terms survive the termination of this
Agreement, (ii) pursue its remedies provided for in Article 7 hereof
or (iii) waive any of the following conditions without adjustment to the
Purchase Price:

4.6.1    Purchaser
shall have received the opinion of Goodwin Procter LLP dated as of the Closing
Date, together with copies of any supporting representation letters delivered
in connection with such opinion in a form reasonably satisfactory to Purchaser
and Seller, regarding the Trust’s organization and operation in conformity with
the requirements for qualification and taxation as a real estate investment
trust pursuant to Section 856-857 of the Code (“REIT”) at all times
beginning on the date of the Trust’s formation through December 31, 2005
and for the period from January 1, 2006 until the Closing. Such opinion
shall be substantially in the form attached hereto as Exhibit 4.6.1,
which such opinion shall be based on customary assumptions and representations
(including an assumption that for purposes of the opinion the Trust’s taxable
year ended at the Closing, and an assumption that the Trust satisfied the
distribution requirement described in Code Section 857(a)(1) for the
hypothetical short taxable year beginning January 1, 2006 and ending at
the Closing), and shall be subject to such changes or modifications from the
language in such form opinion as deemed necessary or appropriate by Goodwin
Procter LLP and reasonably satisfactory to Purchaser;

4.6.2    Seller
shall have delivered to Purchaser all of the items required to be delivered to
Purchaser pursuant to the terms of this Agreement, including but not limited
to, those provided for in Section 4.2 hereof;

4.6.3    Subject
to Section 4.2.5, all of the representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects
as of the date of Closing, provided that in the event Seller is unable to state
that the representations and warranties of Seller are true and correct in all
material respects as of the date of Closing, Seller shall have the right to
cure the condition preventing Seller from making such statement, and the
Closing Date shall be extended for a period of up to fifteen (15) days to allow
Seller to cure such condition;

 18
 

 

4.6.4    Seller
shall have performed and observed, in all material respects, all covenants and
agreements of this Agreement to be performed and observed by Seller as of the
date of Closing; and

4.6.5    Purchaser’s
receipt at least three (3) days prior to the Closing (the “Estoppel Return
Date”) of estoppel certificates substantially in the form of Exhibit 4.6.5,
with such additional information or modifications reasonably approved by
Purchaser, or in such form as required to conform to any specific requirements
in the applicable Lease (i) from (a) each tenant leasing 30,000 or
more rentable square feet of floor area in the Improvements (a “Major Tenant”)
and (b) tenants under Leases representing seventy-five percent (75%) of
the rentable square feet of floor area in the aggregate, including Major
Tenants but excluding rentable square feet of floor area not currently subject
to any Lease, (ii) which confirm the documents constituting the Lease of
each such tenant, and (iii) which do not (x) allege the existence of
any default by Seller or any unperformed obligation by Seller, (y) recite
any material fact which contradicts the Lease Schedule, or (z) disclose
the existence of any delinquent fixed rent, additional rent or other material
charges payable by the relevant tenant, in each case which is not disclosed in
the Lease Schedule.

(i)            Promptly
following the date of this Agreement, Seller shall request estoppel
certificates from all tenants of the Improvements in the form attached hereto
as Exhibit 4.6.5
or in the form specified in the applicable Lease and Seller shall use
commercially reasonable efforts to obtain estoppel certificates from all such
tenants.

(ii)           If
Purchaser receives any tenant estoppel certificate, it shall promptly provide a
copy thereof to Seller, and if Seller obtains any tenant estoppel certificate,
it shall promptly provide a copy thereof to Purchaser. Any tenant estoppel
certificates which do not comply with the provisions set forth in the first
sentence of this Section 4.6.5 shall be subject to Purchaser’s approval in
its reasonable discretion. Unless Purchaser objects to any such estoppel
certificate and terminates this Agreement as a result thereof within five (5) Business
Days of receipt of such estoppel certificate, Purchaser shall be deemed to have
approved such estoppel certificate and shall purchase the Property subject to
all matters set forth in such estoppel certificate. If Purchaser has not
received acceptable tenant estoppel certificates from tenants representing 75% of
the rentable square footage, excluding rentable square footage not then subject
to any Lease, by the Estoppel Return Date, then Seller may provide estoppel
certificates executed by Seller meeting the requirements of the first sentence
of this Section 4.6 for tenants leasing up to 10% of the rentable square
footage other than Major Tenants, and such Seller estoppel certificates shall
be deemed to be acceptable. If Purchaser has not received acceptable (or deemed
acceptable) tenant estoppel certificates as provided herein on or before the
Closing Date, then Purchaser at its sole option may (i) waive the tenant
estoppel condition and proceed to closing, (ii) extend the Closing Date
for a period of up to fourteen (14) days to allow the Seller 

 19
 

 

more time to obtain
additional estoppel certificates, or (iii) terminate this Agreement by
giving written notice thereof to Seller, with a copy to Escrow Agent, by 5:00 P.M.
on the Closing Date, whereupon this Agreement shall automatically terminate and
the Deposit shall be returned to Purchaser, and Seller and Purchaser shall have
no further obligations or liabilities to each other under this Agreement except
as otherwise provided herein. If Purchaser elects to extend the Closing Date
pursuant to clause (ii) of the preceding sentence and Purchaser still has
not received acceptable (or deemed acceptable) tenant estoppel certificates as
provided herein on or before the expiration of the fourteen (14) day extension
period, then Purchaser may elect one of the options set forth in clauses (i) and
(iii) of the preceding sentence.

4.6.6    Purchaser’s
receipt, by the Estoppel Return Date, of an estoppel letter substantially in
the form of Exhibit 4.6.6 from Chicago Union Station Company, CUSCO
and National Railroad Passenger Company (collectively the “Station Real Estate
Owner”) regarding the status of and compliance with that certain 2001 Easement
and Operating Agreement and related easements (the “Air Rights Agreement”)
between the Station Real Estate Owner and Riverside LLC. Within three (3) Business
Days of the Effective Date, Seller shall promptly thereafter submit such
estoppel letter to the Station Real Estate Owner and thereafter use
commercially reasonable efforts to obtain an executed estoppel letter from the
Station Real Estate Owner by the Estoppel Return Date.

4.7          Conditions Precedent to
Obligation of Seller.

The obligation of Seller to consummate the
transaction hereunder shall be subject to the fulfillment on or before the date
of Closing of all of the following conditions. If the following conditions are
not satisfied on or before the date of Closing, subject to any
extension right contained herein, then Seller may either:  (i) elect to terminate this Agreement by
written notice to Purchaser, in which event the Deposit shall be returned to
Purchaser and parties hereto shall have no further obligations hereunder,
except for those which by their terms survive the termination of this
Agreement, (ii) pursue its remedies provided for in Article 7 hereof
or (iii) waive any of the following conditions without adjustment to the
Purchase Price:

4.7.1    Seller
shall have received the Purchase Price as adjusted, pursuant to, and payable in
the manner provided for, in this Agreement.

4.7.2    Purchaser
shall have delivered to Seller all of the items required to be delivered to
Seller pursuant to the terms of this Agreement, including, but not limited to,
those provided for in Section 4.3 hereof.

4.7.3    All
of the representations and warranties of Purchaser contained in this Agreement
shall be true and correct in all material respects as of the date of Closing.

 20

 

 

                4.7.4       Purchaser shall have performed
and observed, in all material respects, all covenants and agreements of this
Agreement to be performed and observed by Purchaser as of the date of Closing.

                4.8          Efforts to Satisfy
Conditions. Each of Seller and Purchaser shall use all
reasonable efforts to satisfy any conditions precedent to Closing set forth in
this Agreement and within their reasonable control.

5.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

5.1          Representations and Warranties of Seller concerning
Seller. Seller represents and warrants to Purchaser as to
itself that the statements contained in this Section 5.1 are correct and
complete as of the Effective Date and will be correct and complete as of the
date of Closing:

                                5.1.1       Organization. Seller is duly
organized, validly existing and in good standing under the laws of the State of
Delaware.

                                5.1.2       Authority. Seller has all requisite
authority and power to execute and deliver this Agreement, to sell the Shares
in accordance with and subject to the terms and conditions of this Agreement,
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized or will be prior to
Closing duly and validly authorized by all requisite action by Seller, subject
to the provisions of Section 11.6 hereof. This Agreement has been duly and
validly executed and delivered by Seller, and, assuming this Agreement has been
duly authorized, executed and delivered by Purchaser, constitutes the valid and
binding agreement of Seller, subject to the provisions of Section 11.6
hereof.

                                5.1.3       Consents and Approvals. Neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which Seller is subject, nor will
it conflict with any of the organizational documents of Seller or breach any
agreement to which Seller is bound or result in the creation or imposition of
any Lien upon or the with respect to any of the assets of the Trust or
Riverside LLC. Any consents, authorizations or notices from or to any third
party that are required for Seller to execute and deliver and this Agreement
and to consummate the transactions contemplated under this Agreement have been
received.

                                5.1.4       No Litigation. There is no action,
suit, arbitration, unsatisfied order or judgment, governmental investigation or
proceeding pending against Seller, which, if adversely determined, could
individually or in the aggregate which could in any material way interfere with
the consummation by Seller of the transaction contemplated by this Agreement.

 20
 

 

 

                                5.1.5       Ownership of Shares. Seller holds the
legal and beneficial ownership of the Shares, free and clear of any
restrictions on transfer (other than restrictions under federal and state
securities laws), taxes, security interests, options, warrants, purchase
rights, liens, claims, encumbrances or contracts. Seller is not a party to any
voting trust, proxy or other agreement or understanding with respect to voting
of any capital stock of the Trust that will survive Closing.

                                5.1.6       FIRPTA. Seller is not a foreign
person for purposes of Sections 897 or 1445 of the Code. Purchaser will have no
federal income tax withholding obligation, and hereby agrees that it shall not
make any federal income tax withholdings, with respect to the payment of the
Purchase Price to Seller.

                                5.1.7       Terrorist Organizations Lists. Seller
is not acting, directly or indirectly, for or on behalf of any person or entity
named by the United States Treasury Department as a Specifically Designated National
and Blocked Person, or for or on behalf of any person designated in Executive
Order 13224 as a person who commits, threatens to commit, or supports terrorism.
Seller is not engaged in the transaction contemplated by this Agreement
directly or indirectly on behalf of, or facilitating such transaction directly
or indirectly on behalf of, any such person or entity.

                                5.1.8       No
Bankruptcy. No petition in bankruptcy (voluntary or otherwise), assignment
for the benefit of creditors, or petition seeking reorganization or arrangement
or other action under federal or state bankruptcy laws has been filed or
commenced or is pending or contemplated against Seller.

5.2          Representations and Warranties of Seller concerning
the Trust, Property Manager, Illinois Manager and Riverside LLC. Seller
represents and warrants to Purchaser that the statements contained in this Section 5.2
are correct and complete as of the Effective Date and will be correct and
complete as of the date of Closing:

                5.2.1       Organization
and Authority.

(i)            The Trust is a business
trust duly organized, validly existing and in good standing under the laws of
the State of Maryland with full corporate power and authority to carry on its
business as now being and heretofore conducted.

(ii)           Riverside LLC is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware with full corporate power and authority to
carry on its business as now being and heretofore conducted. Riverside LLC is
qualified to do business in the State of Illinois.

(iii)         Property Manager is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware with full corporate power and authority to
carry on its business as now 

 21
 

 

 

being and
heretofore conducted. Property Manager is qualified to do business in the State
of Illinois.

 

(iv)          Illinois Manager is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware with full corporate power and authority to
carry on its business as now being and heretofore conducted. Illinois Manager
is qualified to do business in the State of Illinois.

                                5.2.2       Consents and Approvals. Neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which the Trust, Property Manager,
Illinois Manager or Riverside LLC is subject, nor will it conflict with any of
the organizational documents of the Transferred Companies or breach any
agreement to which either of the Transferred Companies is bound or result in
the creation or imposition of any Lien upon or the with respect to any of the
assets of the Trust or Riverside LLC. Any consents, authorizations or notices
from or to any third party that are required in order to consummate the
transactions contemplated under this Agreement have been received.

                                5.2.3       Capitalization
and Ownership.

(i)            The authorized capital stock
of the Trust consists of 2,000 shares, $.01 par value of which 1,000 are
classified as common shares and 1,000 are classified as preferred shares. Of
the 1,000 preferred shares of the Trust, 800 are classified as Series A
Preferred Shares. As of the Closing Date, and following the redemption of the Series A
Preferred Shares of the Non-Voting Shareholders pursuant to Section 5.6.8,
the Shares will represent all of the issued and outstanding capital stock of
the Trust. The Shares have been duly authorized and validly issued and are
fully paid. Since the organization of the Trust, Seller and the Non-Voting
Shareholders (hereinafter defined) have been and currently are the only
shareholders of the Trust.

(ii)           The
Trust is the sole member of Riverside LLC.

(iii)         The
Trust is the sole member of Property Manager.

(iv)          There are no outstanding or
authorized options, warrants, purchase rights, subscription rights or other
commitments that could require the Trust, Property Manager, Illinois Manager or
Riverside LLC to issue, sell or otherwise cause to become outstanding any
additional capital stock of the Trust or membership interests in Property
Manager or Riverside LLC that will be effective at Closing.

(v)           Except as provided in clauses
(ii) and (iii) of this Section 5.2.3, neither the Trust nor
Riverside LLC own or have any contract to acquire 

 22
 

 

any equity
interests or other securities of any entity or any direct or indirect equity or
ownership interest in any other business.

 

                                5.2.4       Financial Statements. Seller has
previously delivered to Purchaser unaudited financial statements consisting of
the balance sheets and operating statements for the Trust and Riverside LLC for
the year ending December 31, 2005 (collectively, the “Financial Statements”).
The Financial Statements have been prepared from the books and records of the
Trust and Riverside LLC. The Financial Statements have been prepared in
accordance with GAAP, consistently applied and present fairly in all material
respects the financial condition of the Trust and Riverside LLC as of the dates
set forth therein. Neither the Trust nor Riverside LLC have any liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent, or otherwise but excluding therefrom liabilities or
obligations based upon or arising out of: (i) environmental matters (other
than claims for bodily injury or personal injury but not property damage),
including, without limitation, any obligation to remediate any Hazardous
Substances; (ii) the physical condition of the Property, including,
without limitation, patent and latent defects, title and zoning matters,
governmental approvals, valuation, and compliance of the Property with laws,
other than claims for bodily injury or personal injury or property damage; (iii) any
obligations contained in the documents evidencing the Outstanding Indebtedness,
or (iv) tax matters, except in each case to the extent of a breach of an
express representation and warranty or covenant of the Seller in this
Agreement), except for liabilities or obligations reflected or reserved against
in the most recent balance sheet of the Trust and Riverside LLC, as applicable,
or which would not reasonably be expected to have a material adverse effect on
the Trust, Riverside LLC or the value of the Property, delivered to Purchaser
as part of the Financial Statements and current liabilities incurred in the
ordinary course of business since the date thereof.  Since the date of the most recent balance
sheets of the Trust and Riverside LLC delivered to Purchaser, there has not
been any material adverse change in the business, operations, properties,
assets, or the financial condition of the Trust and Riverside LLC, and, to
Seller’s knowledge, no event has occurred or circumstance exists that would
reasonably be expected to result in such a material adverse change.

                                5.2.5       No Litigation. Except as set forth on
Schedule 5.2.5, other than landlord-tenant suits and judgment against
tenants, in each case for defaults by tenants under the Leases for which the
defendants have not made a counterclaim, there is no action, suit, arbitration,
unsatisfied order or judgment, governmental investigation or proceeding pending
or, to the Seller’s knowledge, threatened in writing, against the Property, the
Trust or Riverside LLC or the transactions contemplated by this Agreement. 

                                5.2.6       Tax
Representations.

(i)            The Trust, Property Manager
and Riverside LLC have paid all Taxes required to be paid by them as of the
date hereof.

(ii)           The Trust qualified as a REIT
under Sections 856 through 860 of the Code at all times beginning on the date
of the Trust’s formation through December 31, 2005. But for the redemption
of the Series A Preferred 

 23
 

 

 

Shares in accordance with
Section 5.6.8, the Trust will be owned and operated through the Closing in
a manner that will permit it to qualify as a REIT for its taxable year
beginning January 1, 2006. If the Trust’s taxable year beginning on January 1,
2006 was treated as ending immediately prior to the Closing, the Trust would
satisfy the requirements of Code Section 856(c) for such taxable year
ending with the Closing.

(iii)         The Trust, Property Manager and
Riverside LLC timely filed all federal and state income Tax Returns and, to
Seller’s knowledge, all other material Tax Returns that they were required to
file. All taxes shown on such Tax Returns as being owed by the Trust, Property
Manager and Riverside LLC have been paid or will be paid. There are no pending
or, to the best of Seller’s knowledge, threatened claims by any governmental
authority in any jurisdiction, including but not limited to any jurisdiction
where the Trust, Property Manager or Riverside LLC does not file tax returns
that the Trust, Property Manager or Riverside LLC is or may be subject to
taxation by that jurisdiction. Except as shown on Schedule 5.2.6(iii),
Seller has not received notice of any audits of such Tax Returns. None of the
Trust, Property Manager or Riverside LLC have been given or requested any
waivers or extensions (or is or would be subject to a waiver or extension given
by any other Person) of any statute of limitations relating to the payment of
Taxes or the filing of any Tax Returns. The charges, accruals, and reserves
with respect to Taxes on the respective books of the Trust, Property Manager or
Riverside LLC are adequate and are at least equal to the liability of the
Trust, Property Manager and Riverside LLC for Taxes. There exists no proposed
tax assessment against the Trust, Property Manager or Riverside LLC except as
disclosed in the most recent balance sheets of the Trust, Property Manager and
Riverside LLC delivered to Purchaser. All Taxes that the Trust, Property
Manager and Riverside LLC were required by Legal Requirements to withhold or
collect have been duly withheld or collected and, to the extent required, have
been paid to the proper Governmental Body or other Person.  All Tax Returns filed by the Trust, Property
Manager and Riverside LLC are true, correct, and complete in all material
respects.

(iv)          No dispute or claim concerning
any liability for taxes of the Trust, Property Manager or Riverside LLC has
either been claimed or raised by any governmental authority in writing.

(v)           None of the Trust, Property
Manager or Riverside LLC is a party to a tax allocation or sharing agreement. None
of the Trust, Property Manager or Riverside LLC is entitled to any adjustment
under Section 481 of the Code.

(vi)          The Trust has not made any
election under Notice 88-19, 1988-1 C.B. 486, or Treasury
Regulation Section 1.337 (d)-5, Section 1.337(d)-6 or Section 1.337(d)-7
and the Trust would not be subject to any tax on the net built in gain
attributable to any property held by the Trust, Property Manager or Riverside
LLC under rules similar to Section 1374 of the Code and the 

 24
 

 

 

regulations
thereunder or the regulations under Section 337 of the Code if such
property were sold as of the Closing Date.

(vii)         At Closing, none of the Trust,
Property Manager or Riverside LLC shall own any interest in another entity,
including without limitation any interest in a corporation, partnership, trust
or limited liability company, other than, in the case of the Trust, Riverside
LLC.

(viii)       Property Manager and Riverside LLC
each are treated as a disregarded entity for federal income tax purposes.

(ix)          Seller has or will within
three (3) Business Days of the Effective Date make available to Purchaser
correct and complete copies of all Tax Returns filed by the Trust, Property
Manager and Riverside LLC since the date of formation of such companies, as
applicable.

(x)           The beneficial ownership of
the Trust has been and will be held by more than 100 persons at all times
during the current taxable year of the Trust beginning on January 1, 2006
until the redemption of the Trust’s Series A Preferred Shares pursuant to Section 5.6.8.

(xi)          If the Trust’s taxable year
beginning January 1, 2006 ended immediately prior to the Closing, the
Trust would not satisfy the adjusted gross income requirements of Code Section 542(a) for
such hypothetical short year.

(xii)        If the Trust’s taxable year
beginning on January 1, 2006 ended with the Closing, no more than 3% of
the gross income for the Trust for such period would be derived from the sources
not described in Code Section 856(c)(2) of the Code.

(xiii)       The Trust has never been involved
in a merger, consolidation, liquidation or reorganization with any other entity.
The Trust has no C Corporation earnings and profits.

(xiv)        At all times since the formation
of the Trust, more than 50% of the beneficial interests in the Trust have been
owned indirectly (through Seller and one or more tiers of U.S. LLCs or
partnerships or trusts) by a Maryland corporation (that has intended to qualify
as a REIT) and individuals who are U.S. citizens.

                                5.2.7       Organizational Documents. Schedule
5.2.7 identifies each document pursuant to which the Trust, Property
Manager and Riverside LLC is each organized and governed (collectively, the “Trust
Organizational Documents.”)  As of the
Effective Date, the Trust Organizational Documents are in full force and
effect, and correct and complete copies of all of the Trust Organizational
Documents have been delivered or will be delivered promptly after the execution
and delivery hereof by Seller to Purchaser. In addition, Seller will deliver,
or cause to be delivered promptly after the execution and delivery hereof, all
minute books and similar records (as applicable) and 

 25
 

 

 

such correspondence that
may reveal a material liability at the entity level for the Trust and Riverside
LLC (other than materials relating to the evaluation of the disposition of the
Shares or the Property). The minute books and stock record books of the Trust
made available to Purchaser are complete and correct in all material respects. The
minute books of the Trust, Property Manager and Riverside LLC contain accurate
and complete records of all meetings held of, and corporate or limited
liability company action taken by, the shareholders, members, managers, officers
and board of directors, as applicable, of the Trust and Riverside LLC, and, as
applicable to the conduct of the business of the Trust and Riverside LLC or the
ownership or operation of the Property, by the officers, board of directors and
committees of Illinois Manager and Property Manager, and no meeting of any such
shareholders, members, managers, officers or directors have been held for which
minutes have not been prepared and are not contained in such minute books. There
have been no amendments to any of the Trust Organizational Documents since the
date of delivery of such documents to Purchaser. At the Closing, possession of
all of those books and records will be delivered to Purchaser.

                                5.2.8       Indebtedness.
Schedule 5.2.8 lists each line of credit, loan facility or other
financing and any capital indebtedness of any nature of the Trust or Riverside
LLC, whether with banks, financial institutions or other Persons (the “Outstanding
Indebtedness”). As of the Effective Date and except as set forth on Schedule
5.2.8, neither the Trust nor Riverside LLC has any indebtedness outstanding
and has not given any guaranty, indemnity, comfort letter or other assurance of
payment or security of any nature for or otherwise agreed to become directly or
contingently liable for, any obligation of any other Person. True, correct and
complete copies of the documents evidencing the Outstanding Indebtedness have
been or will be provided to Purchaser. As of the Effective Date, all sums due
and owing with respect to the Outstanding Indebtedness have been paid in full.

                                5.2.9       Employees; Employee Benefit Plans. Neither
the Trust nor Riverside LLC has ever maintained, sponsored, participated in,
administered or contributed to any employee benefit arrangement. No individuals
have been or are presently employed full-time or part-time by the Trust or
Riverside LLC.

                                5.2.10     No
Bankruptcy. No petition in bankruptcy (voluntary or otherwise), assignment
for the benefit of creditors, or petition seeking reorganization or arrangement
or other action under federal or state bankruptcy laws has been filed or
commenced or is pending or contemplated against the Trust, Riverside LLC or
Property Manager.

                                5.2.11     [Intentionally omitted]

                                5.2.12     Compliance with Laws. Excluding Laws
relating to the physical or environmental condition of the Property, to Seller’s
knowledge, each of the Trust and Riverside LLC are in compliance with all Laws
applicable to it except where any noncompliance would not, in the aggregate,
reasonably be expected to result in a material adverse effect on either the
Trust or Riverside LLC.

 26
 

 

 

5.3          Representations and Warranties Concerning the
Property. Seller represents and warrants to Purchaser
that the statements contained in this Section 5.3 are correct and complete
as of the Effective Date:

                5.3.1       Operating
Agreements and Plans. Except for the agreements listed on Schedule 5.3.1
(the “Operating Agreements”), there are no other material service or supply
contracts, warranties, or agreements related to the use, ownership or operation
of the Property entered into by or, to Seller’s knowledge, on behalf of Seller,
the Trust, Riverside LLC, Illinois Manager or Property Manager, nor are there
any other contracts for which the Trust, Riverside LLC, Illinois Manager or
Property Manager are a party. Seller has made available to Purchaser a correct
and complete copy of all Operating Agreements and Plans and their respective
amendments. To Seller’s knowledge, the Operating Agreements are in full force
and none of the Trust, Property Manager, Illinois Manager or Riverside LLC, nor
any other party to the Operating Agreements, is in default under the Operating
Agreements in any material respect.

                                5.3.2       Leases. The
schedule of leases for the Property attached hereto as Schedule 5.3.2, (the
“Lease Schedule”) reflects (i) all leases, occupancy licenses, and other
occupancy agreements or tenancies affecting the Property and, to the Seller’s
knowledge, approved subleases (collectively, the “Leases”); (ii) all
outstanding obligations of Riverside LLC to construct or pay for tenant
improvements in connection with the Leases; (iii) any outstanding leasing
commissions in connection with the Leases; and (iv) all security deposits
under the Leases and any application. Each of the Leases is in full force and
effect and neither Riverside LLC nor to Seller’s knowledge the Tenant is in
default under any Lease (beyond any applicable grace or cure period), and there
are no rent delinquencies of more than thirty (30) days. Neither Seller nor any
of Property Manager, Illinois Manager or Riverside LLC has received written
notice from any tenant under the Leases of any unperformed obligation of the
landlord under any of the Leases, including, without limitation, failure of the
landlord to construct any required tenant improvements. Neither Seller nor any
of Property Manager, Illinois Manager or Riverside LLC has been advised in
writing of any claims or disputes giving rise to any setoff by any Tenant under
the Leases. To the best of Seller’s knowledge, with respect to the Leases as of
the date hereof, all tenant improvement allowances have been paid and all
tenant improvements have been completed. There are no brokers’ commissions,
finders’ fees, or other charges payable or to become payable to any third party
on behalf of Seller as a result of or in connection with the Leases, including,
without limitation, any unexecuted options to expand or renew, except as set
forth on Schedule 5.3.2 , and except as set forth in the Master Lease. The
copies of the Leases previously delivered by or on behalf of Seller to
Purchaser are true, correct and complete copies of the Leases. No tenant has
provided to Riverside LLC, Property Manger, Illinois Manager or Seller a letter
of credit securing any of the tenant’s obligations under its Lease. The
termination of any Lease prior to Closing by reason of the tenant’s default or
the termination of such Lease shall not affect the obligations of Purchaser
under this Agreement in any manner or entitle Purchaser to an abatement of or
credit against the Purchase Price or give rise to any other claim on the part
of Purchaser.

 27
 

 

 

                                5.3.3       No Violations. Except
as set forth on Schedule 5.3.3, to Seller’s knowledge, none of Seller,
the Trust, Property Manager or Riverside LLC has received, any written
notification from any Governmental Body or public authority (i) that the
Property is in violation of any applicable fire, health, building, use,
occupancy or zoning laws where such violation remains outstanding and, if
unaddressed, would have a cost to remedy in excess of $5,000 or (ii) that
any work is required to be done upon or in connection with the Property, where
such work remains outstanding and, if unaddressed, would have a cost to
complete in excess of $5,000. None of Seller, the Trust, Property Manager or
Riverside LLC Seller has received any notice of actual or threatened
cancellation or suspension of any certificates of occupancy for any portion of
the Real Property.

                                5.3.4       Taxes and
Assessments. Seller has not filed, has not permitted the Trust, Property
Manager or Riverside LLC to file, and has not retained anyone to file, notices
of protests against, or to commence action to review, real property tax
assessments against the Property.

                                5.3.5       Condemnation. To
Seller’s knowledge, none of Seller, the Trust, Property Manager or Riverside
LLC has received, prior to the Effective Date, any written notification from
any governmental or public authority regarding condemnation or similar
governmental proceedings relating to the Property that are pending or
threatened which could have a material adverse effect on the Property taken as
a whole.

5.3.6    Environmental
Matters. Except as set forth in the environmental reports listed in Schedule
5.3.6, copies of which have previously been delivered to Purchaser or as
otherwise disclosed to Purchaser, to Seller’s knowledge, none of Seller, the
Trust, Property Manager or Riverside LLC has received written notification that
any governmental or quasi-governmental authority has determined that there are
any violations of environmental statutes, ordinances or regulations affecting
the Property. As used herein, “Hazardous Substances” means all hazardous or
toxic materials, substances, pollutants, contaminants, or wastes currently
identified as a hazardous substance or waste in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (commonly known as “CERCLA”),
as amended, the Superfund Amendments and Reauthorization Act (commonly known as
“SARA”), the Resource Conservation and Recovery Act (commonly known as “RCRA”),
or any other federal, state or local legislation or ordinances applicable to
the Property.

5.3.7    Defect
Notices. To Seller’s knowledge, none of Seller, the Trust, Property
Manager, Illinois Manager or Riverside LLC have received any notice from the
holder of any mortgage presently encumbering the Property, any insurance
company which has issued a policy with respect to the Property or from any
board of fire underwriters claiming any defects or deficiencies in the Property
or suggesting or requesting the performance of any repairs, alterations or
other work to the Property, which have not been cured.

5.3.8    Utilities. To Seller’s knowledge, none of Seller,
the Trust, Property Manager, Illinois Manager or Riverside LLC has received any
written notice of 

 28
 

 

 

actual or threatened reduction or curtailment of any utility service
currently supplied to the Real Property.

5.3.9    Condemnation.
 To Seller’s knowledge, none of Seller,
the Trust, Property Manager, Illinois Manager or Riverside LLC has received any
notice of any condemnation proceeding or other proceedings in the nature of
eminent domain in connection with the Property which are currently pending, and
to Seller’s knowledge no such proceedings are currently threatened.

5.3.10  Municipal
Improvements. To Seller’s knowledge: (i) all street paving, curbing,
sanitary sewers, storm sewers and other municipal or other governmental
improvements which have been constructed or installed have been paid for and
will not hereafter be assessed; (ii) and all assessments heretofore made
have been paid in full; and (iii) there are no private contractual
obligations relating to the installation of or connection to any sanitary
sewers or storm sewers or other municipal improvements.

5.3.11  Special
Assessments/Tax Appeals. To
Seller’s knowledge and except as shown on any tax bills delivered to Purchaser
and/or in the Title Commitment, none of Seller, the Trust, Property Manager,
Illinois Manager or Riverside LLC has received any notice of any special assessment
which affects the Property. Except as shown on Schedule 5.3.11, there
are no pending tax appeals with respect to real property taxes or assessments
against the Property.

5.3.12  No
Other Purchase Rights. No person, firm or entity, other than Purchaser has
any right to acquire the Shares or any interest in the Property or any part
thereof.

5.3.13  Insurance.
The Commercial General Liability Policy with Liberty Mutual, #TB1-111-253539-024
and all Commercial Umbrella Policies providing coverage for the benefit of the
Trust or Riverside LLC or with respect to the Property (collectively, the “Liability
Policies”) includes Riverside LLC as a Named Insured and the Property is a
scheduled location under the Liability Policies. Each of the Liability Policies
expressly provide that except with respect to the Limits of Insurance (as
defined in the Liability Policies) and any rights or duties assigned in the
Coverage Part (as defined in the Liability Policies) to the first Named
Insured, the insurance applies (i) as if Riverside LLC were the only Named
Insured and (ii) separately to each insured against whom a claim is made
or suit is brought. To Seller’s knowledge, none of Seller, Riverside LLC,
Property Manager or Illinois Manager have received (A) any refusal of coverage
or any notice that a defense will be afforded with reservation of rights, or (B) any
notice of cancellation or any other indication that any Liability Policy is no
longer in full force and effect or will not be renewed. All premiums for the
Liability Policies that are due have been paid and Riverside LLC and the Trust
have otherwise performed all of their respective obligations under the
Liability Policies. There is no deductible under the Liability Policies.

 29
 

 

 

                5.4          Knowledge
Defined. References to the “knowledge” or “best knowledge”
of Seller or words of similar import shall refer only to the actual knowledge
of the Designated Employee and shall not be construed, by imputation or
otherwise, to refer to the knowledge of any affiliate of Seller, to any
property manager, or to any other officer, director, agent, manager,
representative or employee of Seller or any affiliate of Seller or to impose
upon such Designated Employee any duty to investigate the matter to which such
actual knowledge, or the absence thereof, pertains. As used herein, the term “Designated
Employees” shall refer to Philip J. Brannigan, Seller’s asset manager for
the Property, and Jessica Hughes, the employee of Seller with primary
responsibility for coordinating the transactions contemplated herein.

5.5          Seller’s Indemnity, Survival of Seller’s
Representations and Warranties; Maximum Liability.

5.5.1    Survival.
The representations and warranties contained in Section 5.3 hereof, as
updated by the certificates of Seller to be delivered in accordance with Section 4.2.5
hereof, and the covenants set forth in this Agreement to be performed by Seller
between the Effective Date and the Closing Date, shall survive Closing for a
period of twelve (12) months (the “Property Representation Expiration Date”). The
representations and warranties of Seller set forth in Sections 5.1 and 5.2
hereof shall survive Closing for a period of twelve (12) months (the “Remaining
Representation Expiration Date”) in each case as updated by the certificate of
Seller to be delivered to Purchaser at Closing in accordance with Section 4.2.5
hereof.

5.5.2    Seller’s Indemnification
Obligations. Subject to the other provisions of this Section 5.5, from
and after the Closing until the Property Representation Expiration Date or the
Remaining Representation Expiration Date, as applicable (which Remaining
Representation Expiration Date shall be applicable to any claims under Sections
5.5.2(iii) and 5.7.1 below), Seller shall indemnify and hold harmless
Purchaser, Riverside LLC and the Trust (as Riverside LLC and the Trust are
constituted after Closing) and Purchaser’s officers, directors, affiliates,
members, partners, representatives, agents, and any successors or assigns of
Purchaser (the “Purchaser Indemnified Party”) from and against any costs or
expenses (including, without limitation, taxes and reasonable attorneys’ fees),
judgments, liabilities, fines, losses, claims and damages (collectively, “Damages”),
as incurred, to the extent they arise out of or are a result of:

(i)            the breach or any inaccuracy
in any of the representations and warranties of Seller contained in this
Agreement;

(ii)           any breach or default by
Seller of any covenant or agreement of Seller hereunder;

(iii)         third-party
claims against any Purchaser Indemnified Party arising out of events that occur
prior to the Closing and during the period of ownership by Seller of the Trust
and which purport to be related to any obligation or liability of the Property
Manager, Illinois Manager, the Trust or Riverside LLC 

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(as the Trust
and Riverside LLC are constituted prior to Closing), including, without
limitation, contractual and tort claims and/or liabilities and the litigation
referred to in Schedule 5.2.5, provided that the foregoing shall not
include (and, except to the extent provided for in Sections 5.5.2(i) and
5.5.2(ii), Seller shall not be obligated to indemnify the Purchaser Indemnified
Party for) claims based upon or arising out of: 
(w) environmental matters (other than claims for bodily injury or
personal injury based on events prior to Closing, but not property damage),
including, without limitation, any obligation to remediate any Hazardous
Substances, or (x) the physical condition of the Property, including,
without limitation, patent and latent defects, title and zoning matters,
governmental approvals, valuation, and compliance of the Property with laws,
other than third-party claims for bodily injury, personal injury or property
damage based on events prior to Closing; (y) any obligations contained in
the documents evidencing the Outstanding Indebtedness, or (z) tax matters,
except in each case to the extent of a breach of an express representation and
warranty of the Seller in this Agreement.

                                5.5.3       Notice and
Resolution of Claims. No claim for indemnification under Section 5.5.2
shall be actionable or payable (a) to the extent Purchaser received a
proration, adjustment or credit at Closing for such claim; (b) if the
claim in question results from or is based on a condition, state of facts or
other matter which was known to any Purchaser Indemnified Party (other than the
Trust, Property Manager or Riverside LLC as constituted prior to Closing) prior
to or at Closing (it being agreed that any written information delivered to
Purchaser prior to or at Closing is deemed to be known to any Purchaser
Indemnified Party but shall not vary Seller’s representations and warranties
except to the extent provided in Section 4.2.5); (c) if the claim
results from a breach of any representation, warranty or covenant of Purchaser
or any successor to or assignee of Purchaser; (d) unless and until the
valid claims under this Section 5.5 collectively aggregate more than THREE
HUNDRED THOUSAND DOLLARS ($300,000) (the “Deductible”), in which event, subject
to Section 5.5.3, only the amount of such claims over and above the
Deductible shall be actionable; or (e) unless written notice containing a
description of the specific nature of such claim shall have been given by any
Purchaser Indemnified Party to Seller (x) promptly after it has notice of
such claim (provided that the failure to provide such notice shall not affect
the obligations of Seller unless and only to the extent that Seller are
actually prejudiced thereby) and (y) in all events prior to the Property
Representation Expiration Date or the Remaining Representation Expiration Date,
as applicable. The foregoing is not intended to limit any duty of any Purchaser
Indemnified Party to mitigate damages to the extent required under applicable
law.

In the event that such
claim involves a claim by a third party against the Purchaser Indemnified Party
which seeks Damages in an amount in respect of which indemnification pursuant
to this Section 5.5 would be available, Seller shall have fifteen (15)
days after receipt of such notice to decide whether Seller will undertake,
conduct and control, through counsel of Seller’s choosing (subject to the
reasonable approval of the Purchaser Indemnified Party) and at its own expense,
the settlement or defense thereof (including, without limitation, the defense
thereof by any insurer and any claims against any insurer and the conduct and
control of any claims against any insurer with respect to 

 31
 

 

 

such third party claim),
and if Seller so decides, the Purchaser Indemnified Party shall cooperate with
Seller in connection therewith, provided; that the Purchaser Indemnified Party
may participate in such settlement or defense through counsel chosen by it ,
and provided further, that the reasonable fees and expenses of such separate
counsel shall be borne by the Purchaser Indemnified Party unless:  (a) the employment of such separate
counsel shall have been approved by Seller in connection with the settlement or
defense of such action, (b) Seller shall not have employed counsel
reasonably satisfactory to the Purchaser Indemnified Party to direct the
settlement or defense of such action, or (c) the Purchaser Indemnified
Party shall have reasonably concluded that there may be defenses available to
it which are different from or additional to those available to Seller, in any
of which events the reasonable fees and expenses of such separate counsel shall
constitute Damages hereunder. Seller shall have the sole right to settle or
compromise any action which Seller determines to undertake, conduct and control
as aforesaid, subject to the approval of the appropriate Purchaser Indemnified
Party in its sole and absolute discretion, if the amount of the settlement
would not serve to release all of the Purchaser Indemnified Parties from all
liability in connection with such claim. In the event Seller does not undertake
to conduct and control the defense of any claim, no Purchaser Indemnified Party
shall settle the same without the prior written approval of Seller, not to be
unreasonably withheld, conditioned or delayed.

Seller and the Purchaser
Indemnified Party shall cooperate reasonably in all aspects of any
investigation, defense, pretrial activities, trial, compromise, settlement or
discharge of any claim in respect of which indemnity is sought pursuant to this
Section 5.5, including, but not limited to, by providing the other party
with reasonable access to employees and officers (including as witnesses) and
other reasonable non-privileged information.

5.5.4    Sole
Recourse; Maximum Liability. Purchaser, on behalf of each Purchaser
Indemnified Party, agrees that (i) its sole recourse in the event of a
breach of any representation, covenant or warranty made by Seller hereunder or
any claim for Damages, in each case if Closing has occurred, shall be solely to
Seller, and not to any of its affiliates or any officers, directors, agents or
representatives of Seller or its affiliates, provided that Seller maintains a
net worth at least equal to the Seller Liability Cap through the Remaining
Representation Expiration Date to satisfy its indemnity obligations hereunder,
and (ii) Seller’s maximum aggregate liability to Purchaser, pursuant to
this Agreement if the Closing has occurred, shall not otherwise exceed THREE
MILLION DOLLARS ($3,000,000) (the “Seller Liability Cap”). Notwithstanding the
foregoing, the Seller Liability Cap, as to any breach of Sections 5.2.6(ii),
(vi), (x), (xi), (xii) and (xiii), and 5.6.6 shall not exceed FIFTEEN MILLION
DOLLARS ($15,000,000). Purchaser further agrees to first use all reasonable
efforts to seek recovery under any insurance policies, service contracts and
Leases applicable to such claim prior to seeking recovery from Seller, and
Seller shall not be liable to Purchaser for that portion of Purchaser’s claim
which is satisfied from such insurance policies, service contracts or Leases. Seller
agrees that it will maintain a net worth of at least $15 million through the
Remaining Representations Expiration Date. Seller hereby waives its rights to
indemnification from the Trust and/or Riverside LLC in connection 

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with its liabilities accruing prior to the Closing, other than to the
extent covered by existing insurance, including, without limitation, so called “D&O
Coverage.”

5.6          Covenants of Seller. Except as
otherwise provided for in this Agreement or hereafter agreed to in writing by
Purchaser, Seller hereby covenants with Purchaser as follows:

                                5.6.1       Conduct of Business
Pending Closing. From the Effective Date until the Closing or earlier
termination of this Agreement, Seller shall use reasonable efforts to operate
and maintain or cause the Property to be operated and maintained in a manner
generally consistent with the manner in which the Property has been operated
and maintained prior to the Effective Date, subject to reasonable wear and tear,
casualty and taking by eminent domain and shall keep on hand sufficient
materials, supplies, equipment, inventory and other personal property for the
efficient operation and management of the Property in a manner as currently
operated, and shall perform when due, all of Seller’s obligations under the
Leases and other contracts affecting the Property in each case in all material
respects, and otherwise in accordance with applicable laws, ordinances, rules and
regulations affecting the Property. From and after the date of this Agreement,
Seller will not permit the Trust, Property Manager or Riverside LLC to apply
any security deposits held pursuant to the Leases without the prior consent of
Purchaser, which consent shall not be unreasonably withheld, conditioned or
delayed. Seller shall refrain from (and cause Property Manager, Illinois
Manager and Riverside LLC to refrain from) transferring any of the Property, or
creating on the Real Property any easements; provided, however, that nothing
herein shall preclude Seller from (i) replacing any equipment, supplies or
machinery in the ordinary course of operating the Property or (ii) entering
into any easements or other documents required by any applicable governmental
or quasi-governmental authority or provider of utility services.

                                5.6.2       Operating Agreements.From
and after the date of this Agreement until the Closing Date or earlier
termination of this Agreement, Seller shall not permit the Trust, Property
Manager or Riverside LLC to modify, extend, renew or, cancel (in any case,
except as a result of a default by the other party thereunder) any Operating
Agreements, or enter into any new Operating Agreements unless cancelable on
thirty (30) or fewer days’ notice without payment of a premium or penalty,
without Purchaser’s prior written consent in each instance, which consent shall
not be unreasonably withheld, conditioned or delayed.

                                5.6.3       Insurance. From
and after the Effective Date until the date of Closing or earlier termination
of this Agreement, Seller shall cause the Trust, Illinois Manager, Property
Manager and Riverside LLC to keep in full force and effect the insurance
policies in effect on the Effective Date or policies providing similar (but no
less) coverage. At Closing, Seller shall assign to Purchaser all of its rights
under the Liability Policies with respect to any claims relating to the period
prior to Closing (whether such claims are made before or after Closing)
relating to the Property, Riverside LLC or the Trust, including, but not
limited to, the right to submit claims directly to the applicable insurer. Seller
shall provide Purchaser with all information reasonably required for Purchaser
to submit any claims related to a period prior to Closing, including 

 33
 

 

 

any deadlines or other
conditions under the applicable Liability Policies and will reasonably
cooperate with Purchaser in the submission, processing and resolution of such
claims. To the extent that any assignment of rights under the Liability Polices
is not permitted by the express terms of the Liability Policies or applicable
law, then upon receipt of notice from Purchaser regarding any pre-Closing
claims subject to coverage under the Liability Policies, Seller shall timely
submit such claims to the applicable insurer upon request of Purchaser and be
responsible for processing and resolution of such claims with the applicable
insurer as directed by Purchaser at its expense, provided that no claim will be
settled or compromised without Purchaser’s consent in its sole and absolute
discretion, if the settlement will not serve to release all applicable
Purchaser Indemnified Parties and the Property from all liability in connection
with such claims. Seller and Purchaser shall not take any action to limit,
invalidate or reduce any coverage that is provided under the Liability Policies
as of Closing with respect to any pre-Closing claims. Notwithstanding the
foregoing, to the extent that any claims are made in connection with Seller’s
obligations hereunder, including its obligation to indemnify Purchaser, Seller
shall have all rights of control and resolution of such claims as set forth in Section 5.5.3.
To the extent any claims are made against the Property, Riverside LLC or the
Trust relating to a period prior to the time Riverside LLC owned the Property,
Seller shall cooperate with Purchaser in directing those claims to the prior
Owner of the Property. The foregoing covenants in this Section 5.6.3, with
the exception of the first sentence, shall survive closing.

                                5.6.4       Investments. Unless
this Agreement is terminated prior to Closing, Seller shall not cause or permit
the Trust, Illinois Manager, Property Manager or Riverside LLC to make any
investment in, any loan to, or any acquisition of the securities of any other
Person, or make any acquisition of any new assets or incur any new indebtedness
(or series of related capital investments, loans and acquisitions), except for
trade payables incurred in the ordinary course of business.

                                5.6.5       REIT Compliance.
Except as set forth in Section 5.6.8, Seller shall take all commercially
reasonable steps, or forbear from taking steps, necessary prior to the Closing
to ensure that the Trust’s ownership and operation through the Closing would
permit the Trust to qualify as a REIT for the Trust’s taxable year that
includes the Closing.

                                5.6.6       No Transfer of Assets;
Mergers or Acquisitions. Unless this Agreement is terminated prior to
Closing, Seller shall not cause or permit the Trust, Illinois Manager, Property
Manager or Riverside LLC to: (i) sell, transfer, further encumber, assign
or otherwise dispose of the Property or any portion thereof or (ii) merge
or consolidate with or acquire all or substantially all of the assets or
business of any Person.

                                5.6.7       No Amendments to
Organizational Documents. Unless this Agreement is terminated prior to
Closing, Seller shall not cause or permit the Trust, Property Manager or
Riverside LLC to amend their respective organizational documents in any
material respect except that the Trust shall be permitted to amend its Declaration

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of Trust to the extent
necessary to permit the consummation of this Agreement and in form and
substance provided to Purchaser as reasonably approved by Purchaser.

                                5.6.8       Redemption of Series A
Preferred Shareholders’ Shares. Seller and Purchaser shall make mutually
satisfactory arrangements to cause the Trust, at Closing, to redeem the Series A
Preferred Shares in the Trust held by the parties identified on Schedule
5.6.8 attached hereto (the “Non-Voting Shareholders”), such that, following
such redemptions, the Seller’s Shares constitute one hundred percent (100%) of
the issued and outstanding shares in the Trust. Seller shall provide Purchaser
reasonable evidence of such redemption.

                                5.6.9       Leases. Except
as expressly provided herein, Seller shall, and shall cause each of Property
Manager, Illinois Manager and Riverside LLC to, refrain from amending any
existing Lease without Purchaser’s written approval, as provided below,
provided that Purchaser shall have no ability to interfere with the administration
by Seller, Property Manager, Illinois Manager or Riverside LLC of any existing
Lease as required by the terms of such Lease. In addition, except as expressly
provided herein, neither Seller nor any of Property Manager, Illinois Manager
and Riverside LLC shall enter into any new leases with respect to the Property
(each, a “Proposed New Lease”), without Purchaser’s written approval, as
provided below in this Section 5.6.10. Seller shall furnish Purchaser with
a true and complete copy of any Proposed New Lease into which Seller or
Property Manager, Illinois Manager or Riverside LLC desires to have Riverside
LLC enter and such financial information with respect to the proposed tenant as
Seller, Property Manager, Illinois Manager or Riverside LLC may have in their
possession. Purchaser shall have five (5) Business Days from receipt of
such Proposed New Lease to approve or disapprove the same, which approval shall
not be unreasonably withheld, conditioned or delayed. In the event that
Purchaser does not approve any such Proposed New Lease, Purchaser shall notify
Seller, in writing, of such disapproval prior to expiration of the aforesaid
five (5) Business Day period, stating in such written notification under
what conditions, if any, Purchaser’s approval would be forthcoming and
Purchaser’s agreement to approve such Proposed New Lease if such conditions are
satisfied. All costs of tenant improvements and leasing commissions payable
after Closing with respect to any lease with respect to the Real Property executed
between the date of this Agreement and the Closing Date shall be paid by
Purchaser.

                                5.6.10     Audit by Purchaser. Purchaser
has advised Seller that Purchaser must cause to be prepared up to three (3) years
of audited financial statements and the interim period between from January 1,
2006 through Closing in respect of the Property in compliance with the policies
of Purchaser and certain laws and regulations, including, without limitation,
Securities and Exchange Commission Regulation S-X, Rule 3-14. Seller
agrees to use reasonable efforts to cooperate with Purchaser’s auditors in the
preparation of such audited financial statements (it being understood and
agreed that the foregoing covenant shall survive the Closing). Without limiting
the generality of the preceding sentence (a) Seller shall, during normal
business hours, allow Purchaser’s auditors reasonable access to such books and
records maintained by Seller, Property Manager and Riverside LLC (and any other
manager of the Property) in respect of the Property as necessary to prepare
such audited financial statements; (b) Seller shall use

 35
 

 

 

reasonable efforts to
provide to Purchaser such financial information and supporting documentation as
are necessary for Purchaser’s auditors to prepare audited financial statements;
(c) if Purchaser or its auditors require any information that is in the
possession of the party from which Seller purchased the Property, Seller shall
contact such prior owner of the Property and use commercially reasonable
efforts to obtain from such party the information requested by Purchaser; (d) Seller
will make available for interview by Purchaser and Purchaser’s auditors, the
manager of the Property or other agents or representatives of Seller
responsible for the day-to-day operation of the Property and the keeping of the
books and records in respect of the operation of the Property; and (e) if
Seller has audited financial statements with respect to the Property, Seller
shall promptly provide Purchaser’s auditors with a copy of such audited
financial statements. If after the Closing Date Seller obtains an audited
financial statement in respect of the Property for a fiscal period prior to the
Closing Date that was not completed as of the Closing Date, then Seller shall
promptly provide Purchaser with a copy of such audited financial statement. The
foregoing covenants shall survive Closing.

5.6.11  Recycled
Entity. In order to facilitate the financing of the Property by Purchaser,
to the extent a lender requires representations and warranties relating
Riverside LLC and the conduct of its business for the period from the formation
of Riverside LLC through the Closing similar in nature to those required by
Standard & Poor’s for recycled entities in its May 1, 2003
publication relating to U.S. CMBS Legal and Structured Finance Criteria, Seller
shall cooperate in good faith to submit a certification to Purchaser of such
facts, to the extent the same are true or indicate which facts or requirements
are not true or are qualified.

5.6.12  Purchaser’s
Financing. Seller agrees that to the extent reasonably requested by
Purchaser, Seller will consider and reasonably cooperate with in good faith any
modifications to the existing structure of the Trust and Riverside LLC that do
not have any adverse tax, economic or other consequences to Seller, so that
Purchaser meets lender requirements for financing the Property.

5.7          Tax Matters.

5.7.1    Seller shall indemnify and hold harmless
each Purchaser Indemnified Party from and against any Damages as incurred, to
the extent they arise out of or are a result of any taxes, including, without
limitation, interest, penalties and additions thereto (other than (x) transfer
taxes, stamp taxes or other taxes assessed in connection with the sale or
transfer of stock, a property or any interest therein, or any other tax, for
which responsibility is allocated to Purchaser in accordance with Section 4.5
of this Agreement or (y) any real property taxes or assessments for which
responsibility is allocated to Purchaser in accordance with the terms of this
Agreement) imposed on the Trust, Property Manager, Illinois Manager, or
Riverside LLC relating to taxable periods or portions thereof ending on or
before the date of the Closing or
allocable to the portion thereof through the date of the Closing pursuant to
this paragraph, other than arising from (i) a breach of Purchaser’s
obligations under this Agreement, (ii) a failure by Purchaser to make
sufficient distributions following the Closing, eligible for dividends paid
deductions, to eliminate any income tax liability of 

 36
 

 

 

the Trust for the Trust’s taxable year that includes the Closing, or (iii) a
failure by Purchaser to maintain Riverside and Property Manager as a
partnership or a disregarded entity for tax purposes. If the Closing Date is
other than the last day of a taxable period of the Trust, the tax attributable
to the operations of the Trust, Property Manager or Riverside LLC for the portion of the period up to and
including the date of the Closing shall be (i) in the case of all taxes
based on or in respect of income, the tax computed on the basis of the taxable
income or loss of the entity for such partial period ending on or before the
date of Closing as determined from its books and records, and (ii) in the
case of all other taxes (other than those 
allocated pursuant to Section 4.4.1(ii)), on the basis of the
actual activities of the entity for such partial period ending on or before the
date of Closing as determined from its books and records. Except as otherwise
provided herein, Seller shall not be responsible for any taxes attributable to
income or activity on the Closing Date and after the Closing Date.

5.7.2    Seller
shall prepare or cause to be prepared, at the cost and expense of Seller, on a
timely basis (including any automatically available extensions) tax returns for
the Trust, Property Manager and Riverside LLC (including the applicable 1099s,
K-1s or similar schedules and reports which are part of or derived from
any such tax returns) for federal and state income, unincorporated business
taxable income or any similar type of net income tax applicable to any said
entity for all such tax returns which are due prior to or for taxable or other
relevant periods ending before January 1, 2006, and, if Purchaser elects pursuant
to Section 4.3.5 to dissolve the REIT within seven (7) days after
Closing, for the taxable period that includes the Closing Date.

All such tax returns shall in all events be
prepared in a manner consistent with the prior tax returns as to all continuing
elections, characterizations and other matters and, to the extent applicable,
the structure and intent of the relevant underlying documents and this
Agreement and otherwise in accordance with applicable law. All such tax returns
shall be provided to the other party at least 45 days prior to the date any
such tax return is due (including any automatically available extensions),
which other party shall have 30 days after receipt of each tax return to review
such tax return and comment thereon. Upon the expiration of such 30 day period,
the party receiving and reviewing such tax return, if acceptable, shall
promptly sign and file, or cause to be signed and filed, such tax return
pursuant to this Section 5.7.2. In the event there is a dispute between
the parties in regards to the approval of a tax return, the parties shall
appoint a mutually acceptable “Big Four” accounting firm to resolve such
dispute prior to the expiration of such 45 day period.

Each party hereto shall
make available, or cause to be made available, to the other party all the
relevant and necessary books and records to enable such party to prepare or
review, as the case may be, all such tax returns subject to the standards of
the preceding provisions and otherwise consistent with Section 5.7.4 below
and the other applicable provisions of this Agreement.

5.7.3    Purchaser
shall prepare and file, or cause to be prepared and filed, at the expense of
Purchaser, on a timely basis (including all automatically available extensions)
all tax returns of the Trust, Property Manager (if such entity is not dissolved

 37
 

 

 

at Closing) and Riverside LLC other than those provided for in Section 5.7.2
above. In the case of any such return for a period that includes the Closing,
Purchaser shall provide Seller the proposed tax return at least 45 days prior
to the date such tax return is due (including any automatically available
extensions), which Seller shall have 30 days after receipt of such tax return
to review and comment thereon. All such tax returns shall be prepared in a
manner consistent with the prior tax returns as to all continuing elections,
characterizations and other matters and, to the extent applicable, the
structure and intent of the relevant underlying documents and this Agreement
and otherwise in accordance with applicable law. Purchaser shall pay or cause
the Trust, Property Manager and Riverside LLC to pay all taxes shown to be due
and payable thereon.

5.7.4    Without
limiting the foregoing, after the Closing, Seller and Purchaser shall:

(i)            assist (and cause their
respective affiliates to assist) the other in preparing any tax returns which
such other person is responsible for preparing and filing in accordance with
this Section 5.7;

(ii)           cooperate fully, as and to
the extent reasonably requested by the other party, in connection with the
preparation of the tax returns pursuant to this Section 5.7 and in
connection with any steps or procedures required to be undertaken in compliance
with Sections 856 through 860 of the Code and the Treasury Regulations
promulgated thereunder;

(iii)         cooperate fully in preparing
for any audits of, or litigation, administrative or other proceedings and any
other disputes with taxing authorities regarding any tax returns with respect
to the Trust, Property Manager and Riverside LLC or otherwise with respect to
taxes that may be imposed upon or otherwise payable by the Trust, Property
Manager or Riverside LLC;

(iv)          make available to the other
party and to any governmental entity as reasonably requested all information,
records, and documents of the Trust, Property Manager and Riverside LLC
relating to taxes;

(v)           provide timely notice to the
other party in writing of any pending or threatened tax audits or assessments
with respect to the Trust, Property Manager or Riverside LLC for taxable
periods for which such other party may have a liability for taxes under this
Agreement;

(vi)          furnish each other with copies
of all correspondence received from any governmental entity in connection with
any tax audit or information request with respect to any taxable period for
which the other party may have a liability for taxes under this Agreement;

(vii)         provide the other party with
timely notice of the commencement of any audit by any governmental entity or of
any judicial proceeding involving a governmental entity that relates to any
liability for taxes, 

 38
 

 

 

or any
transaction or activity of the Trust, Property Manager or Riverside LLC for
which the other may have a liability for taxes under this Agreement;

(viii)       as applicable, prepare and/or
file, or cause to be prepared and/or filed, all tax returns, all such tax
returns to be prepared in a manner consistent with the prior tax returns as to
all continuing elections, characterizations and other matters and, to the
extent applicable, the structure and intent of the relevant underlying
documents and this Agreement and otherwise in accordance with applicable law.

Notwithstanding anything
in this Section 5.7.4 or in Section 5.5.3 to the contrary, all
aspects of any audit, litigation or other proceeding with respect to taxes
attributable to a taxable year ending before January 1, 2006 shall be
controlled by and be the sole responsibility of the Seller. If the Purchaser
elects, by written notice pursuant to Section 4.3.5 to dissolve the REIT
within seven (7) days after Closing, all aspects of any audit, litigation
or other proceeding with respect to taxes attributable to a taxable year
commencing on or after January 1, 2006 shall be controlled by and be the
sole responsibility of the Seller. If the Purchaser elects, by written notice
pursuant to Section 4.3.5 to maintain the classification and treatment of
the Trust as a REIT, all aspects of any audit, litigation or other proceeding
with respect to taxes attributable to a taxable year commencing on or after January 1,
2006 shall be controlled by and be the sole responsibility of the Purchaser. Notwithstanding
any indication in this Agreement to the contrary, neither Seller nor Purchaser
shall settle any audit, litigation or other proceeding relating to a period
ending prior to the Closing Date or for the taxable year of the Trust beginning
January 1, 2006 if such settlement is based, in whole or in part, on the
conclusion that the Trust did not qualify as a real estate investment trust
satisfying the requirements of Sections 856 through 860 of the Code at all
times during such periods.

5.7.5    Purchaser
covenants and agrees with Seller that:  (i) Purchaser
will treat the purchase of the Shares contemplated by this Agreement for all
income tax purposes as a purchase of shares of a real estate investment trust,
and (ii) Purchaser will not make an election pursuant to Section 338(g) of
the Code with respect to the Trust.

5.7.6    Notwithstanding
any other provision of this Agreement to the contrary, the obligations of
Seller and Purchaser set forth in this Section 5.7 shall be unconditional
and absolute, and shall remain in full force and effect indefinitely.

6.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER

6.1          Representations
and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as of the Effective Date:

                                6.1.1       Organization. Purchaser
is a limited liability company duly organized validly existing, and in good
standing under the laws of the State of Delaware.

                                6.1.2       Power and Authority.
Purchaser has all requisite, power and authority to execute and deliver this
Agreement, to acquire the Shares as provided in this 

 

 39

 

 

Agreement and to carry
out Purchaser’s obligations hereunder, and all requisite action necessary to
authorize Purchaser to enter into this Agreement and to carry out its
obligations hereunder have been, or by the Closing will have been, taken. The
person signing this Agreement on behalf of Purchaser is authorized to do so.

                                6.1.3   Consents
and Approvals; No Violations.   Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will violate any statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge or other restriction of any government, governmental
agency or court to which Purchaser is subject, nor will it conflict with any of
the organizational documents of Purchaser.

                                6.1.4   No
Litigation.   There is no action, suit,
arbitration, unsatisfied order or judgment, government investigation or
proceeding pending against Purchaser which, if adversely determined, could
individually or in the aggregate materially interfere with the consummation of
the transactions contemplated by this Agreement.

                                6.1.5   Investment
Intent.   Purchaser acknowledges that
the Shares have been offered and will be sold to Purchaser pursuant to an
exemption from registration under the Securities Act and all applicable state
securities laws. Purchaser is an “accredited investor” within the meaning of
Regulation D promulgated under the Securities Act and is purchasing the
Interests for investment purposes and has no present intent to distribute,
resell, pledge or otherwise dispose of any of such Shares other than in full
compliance with applicable federal and state securities laws. Purchaser has had
the opportunity to review such documents and to ask such questions of Seller as
Purchaser has deemed pertinent to its decision to invest in the Shares.
Purchaser is fully capable of assessing the risks associated with ownership of
the Shares.

       6.2   Survival of Purchaser’s
Representations and Warranties.   The
representation and warranties of Purchaser set forth in Section 6.1.5
hereof and all covenants of Purchaser contained herein shall survive Closing
and shall be a continuing representation, warranty and covenant without
limitation. All other representations and warranties of Purchaser shall survive
Closing for a period of twelve months. Notwithstanding the foregoing, in the
event of an assignment of this Agreement pursuant to Section 11.4, the
representation made Section 6.1.1 shall be made so as to conform to the
facts of assignee’s organizational status.

       6.3   Purchaser’s Indemnity;
Maximum Liability.

6.3.1   Purchaser’s
Indemnification Obligations.   Subject
to the other provisions of this Section 6.3, from and after the Closing
until the Property Representation Expiration Date or the Remaining
Representation Expiration Date, as applicable (which Remaining Representation
Expiration Date shall be applicable to any claims under Sections 6.3.1(iii) and
6.4.1 below), Purchaser shall indemnify and hold harmless Seller and Seller’s
officers, directors, affiliates, members, partners, representatives, agents,
and any successors or assigns of Seller (the “Seller Indemnified Party”) from
and against any costs or expenses (including, without limitation, taxes and 

 40
 

 

reasonable
attorneys’ fees), judgments, liabilities, fines, losses, claims and damages
(collectively, “Damages”), as incurred, to the extent they arise out of or are
a result of:

(i)            the breach or any inaccuracy
in any of the representations and warranties of Purchaser contained in this
Agreement;

(ii)           any breach or default by
Purchaser of any covenant or agreement of Purchaser hereunder;

(iii)         third party
claims against any Seller Indemnified Party arising out of events that occur on
or after the Closing and during the period of ownership by Purchaser and which
purport to be related to any obligation or liability of the Property Manager,
the Trust or Riverside LLC (as the Trust and Riverside LLC are constituted on
and after the Closing), including, without limitation, contractual and tort
claims and/or liabilities, provided that the foregoing shall not include (and,
except to the extent provided for in Sections 6.3.1(i) and 6.3.1(ii),
Purchaser shall not be obligated to indemnify the Seller Indemnified Party for)
claims based upon or arising out of:  (w) environmental
matters (other than claims for personal injury but not property damage),
including, without limitation, any obligation to remediate any Hazardous
Substances, or (x) the physical condition of the Property, including,
without limitation, patent and latent defects, title and zoning matters,
governmental approvals, valuation, and compliance of the Property with laws,
other than third-party claims for personal injury or property damage; (y) any
obligations contained in the documents evidencing the Outstanding Indebtedness,
or (z) tax matters, except in each case to the extent of a breach of an
express representation and warranty of Purchaser in this Agreement.

                                6.3.2   Notice
and Resolution of Claims.   No claim
for indemnification under Section 6.3.1 shall be actionable or payable (a) to
the extent Seller received a proration, adjustment or credit at Closing for
such claim; (b) if the claim in question results from or is based on a
condition, state of facts or other matter which was known to any Seller
Indemnified Party prior to or at Closing; (c) if the claim results from a
breach of any representation, warranty or covenant of Seller or any successor
to or assignee of Purchaser; (d) unless and until the valid claims under
this Section 6.3 collectively aggregate more than the Deductible, in which
event, subject to Section 6.3.3, only the amount of such claims over and
above the Deductible shall be actionable; or (e) unless written notice
containing a description of the specific nature of such claim shall have been
given by any Seller Indemnified Party to Purchaser (x) promptly after it
has notice of such claim (provided that the failure to provide such notice
shall not affect the obligations of Purchaser unless and only to the extent
that Purchaser is actually prejudiced thereby) and (y) in all events prior
to the Property Representation Expiration Date or the Remaining Representation
Expiration Date, as applicable. The foregoing is not intended to limit any duty
of any Seller Indemnified Party to mitigate damages to the extent required
under applicable law.

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In the event that such
claim involves a claim by a third party against the Seller Indemnified Party
which seeks Damages in an amount in respect of which indemnification pursuant
to this Section 6.3 would be available, Purchaser shall have fifteen (15)
days after receipt of such notice to decide whether Purchaser will undertake,
conduct and control, through counsel of Purchaser’s choosing (subject to the
reasonable approval of the Seller Indemnified Party) and at its own expense,
the settlement or defense thereof, and if Purchaser so decides, the Seller
Indemnified Party shall cooperate with Purchaser in connection therewith,
provided; that the Seller Indemnified Party may participate in such settlement
or defense through counsel chosen by it, and provided further, that the
reasonable fees and expenses of such separate counsel shall be borne by the
Seller Indemnified Party unless:  (a) the
employment of such separate counsel shall have been approved by Purchaser in
connection with the settlement or defense of such action, (b) Purchaser
shall not have employed counsel reasonably satisfactory to the Seller
Indemnified Party to direct the settlement or defense of such action, or (c) the
Seller Indemnified Party shall have reasonably concluded that there may be
defenses available to it which are different from or additional to those
available to Purchaser, in any of which events the reasonable fees and expenses
of such separate counsel shall constitute Damages hereunder. Purchaser shall
have the sole right to settle or compromise any action which Purchaser
determines to undertake, conduct and control as aforesaid, subject to the
approval of the appropriate Seller Indemnified Party in its sole and absolute
discretion, if the amount of the settlement would not serve to release all of
the Seller Indemnified Parties from any liability in connection with such claim.
In the event Purchaser does not undertake to conduct and control the defense of
any claim, no Seller Indemnified Party shall settle the same without the prior
written approval of Purchaser, not to be unreasonably withheld, conditioned or
delayed.

Purchaser and the Seller
Indemnified Party shall cooperate reasonably in all aspects of any
investigation, defense, pretrial activities, trial, compromise, settlement or
discharge of any claim in respect of which indemnity is sought pursuant to this
Section 6.3, including, but not limited to, by providing the other party
with reasonable access to employees and officers (including as witnesses) and
other reasonable non-privileged information.

6.3.3   Sole
Recourse; Maximum Liability.   Seller,
on behalf of each Seller Indemnified Party, agrees that (i) its sole
recourse in the event of a breach of any representation, covenant or warranty
made by Purchaser hereunder or any claim for Damages, in each case if Closing
has occurred, shall be solely to Purchaser, and not to any of its affiliates or
any officers, directors, agents or representatives of Purchaser or its
affiliates, provided that Purchaser maintains a net worth at least equal to the
Purchaser Liability Cap through the Remaining Representation Expiration Date to
satisfy its indemnity obligations hereunder, and (ii) Purchaser’s maximum
aggregate liability to Seller, pursuant to this Agreement if the Closing has
occurred, shall not otherwise exceed THREE MILLION DOLLARS ($3,000,000) (the “Purchaser
Liability Cap”). Notwithstanding the foregoing, the Purchaser Liability Cap, as
to any breach of Section 6.4.2 and 6.4.3 shall not exceed FIFTEEN MILLION
DOLLARS ($15,000,000). Seller further agrees to first use all reasonable
efforts to seek recovery under any insurance policies and service contracts
applicable to such claim prior to seeking recovery from

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Purchaser, and Purchaser shall not be liable to Seller for that portion
of Seller’s claim which is satisfied from such insurance policies and service
contracts. Purchaser agrees that it will maintain a net worth of at least $15
million through the Remaining Representations Expiration Date.

6.4   Covenants of Purchaser.   Purchaser
hereby covenants with Seller:

6.4.1   that
Purchaser shall furnish to Seller copies of any third party reports received by
Purchaser in connection with any inspection of the Property for the presence of
Hazardous Substances. Purchaser hereby assumes full responsibility for such
inspections and, except for claims based on representations or warranties
contained in Section 5.3.6 or based on Section 5.5.2(iii) hereof
irrevocably waives any claim against Seller arising from the presence of
Hazardous Substances on the Property. Purchaser shall also furnish to Seller,
without representation or warranty, express or implied, copies of any other
third party reports received by Purchaser relating to any other inspections of
the Property conducted on Purchaser’s behalf, if any (including, specifically,
without limitation, any reports analyzing compliance of the Property with the
provisions of the Americans with Disabilities Act (“ADA”), 42 U.S.C. §12101, et
seq., if applicable), but excluding any appraisals or other evaluations of
value.

6.4.2   Ownership
in Compliance with the REIT Rules.   As
of the Closing and after giving effect to the acquisition of the Shares by
Purchaser and at all times during the portion of the taxable year of the Trust
that begins as of the Closing and ends after the Closing, not more than fifty
percent (50%) in value of the outstanding shares of beneficial interest of the
Trust will be owned, directly or indirectly, or through the application of the
attribution rules of Code section 544 (as modified by Code section
856(h)(1)(B)), by five (5) or fewer individuals (defined in Code section
542(a)(2) (as modified by Code section 856(h)(3)) to include certain
entities). The Purchaser will either (i) liquidate the Trust before the
Trust violates the requirements of Code Sections 856(a)(5) and 856(b) for
the taxable year that includes the Closing, or (ii) cause the beneficial
ownership of the Trust to be held by more than 100 persons on or before the
date on which such ownership must be implemented in order to satisfy the
requirements of Code Sections 856(a)(5) and 856(b) for the taxable
year that includes the Closing. Notwithstanding the foregoing, in the event
that Purchaser is unable to cause the beneficial ownership of the Trust to be
held by more than 100 persons prior to the liquidation of the Trust, Purchaser
shall liquidate the Trust no later than seven (7) days following the
Closing Date. As used in this Agreement, “liquidate” shall mean liquidate the
Trust for federal income tax purposes.

6.4.3    Continuation
of REIT Election.

(i)            Purchaser covenants that
after the Closing it will take all necessary steps, or forebear from taking
steps (or cause the Trust to take (or forebear from taking such steps, as the
case may be) as may be needed) to maintain the classification and treatment of
the Trust as a REIT for the Trust’s taxable year that includes the Closing
(whether such taxable year terminates on

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December 31,
2006 or prior to December 31, 2006 as a result of the liquidation of the
Trust after Closing but prior to December 31, 2006).

(ii)           Purchaser covenants that it
will take all steps within its control (including for example, causing the
Trust to make distributions that qualify for the dividends paid deductions set
forth in Section 857(b)(2)(B) of the Code and Section 561 of the
Code) such that the Trust satisfies the 90% distribution requirement of Code Section 857(a)(1) and
the Trust’s real estate investment trust taxable income (as defined in Section 857(b)(2) of
the Code) will be reduced to zero for the taxable year of the Trust that
includes the Closing.

(iii)         Purchaser covenants and agrees
that prior to January 1, 2007, the Trust shall not acquire, accept
transfer of, or hold, or allow any subsidiary to acquire, accept transfer of,
or hold, any assets other than the property that the Trust holds immediately
prior to the Closing.

(iv)          Purchaser covenants that the
Trust will not take any action that is inconsistent with the Trust’s status as
a REIT for periods ending on or before December 31, 2005.

6.4.4   Subsequent
Filings.   Promptly after
Closing, Purchaser shall cause to be filed in the states of Delaware, Maryland
and Illinois name change certificates to delete from the legal name of the
Trust any reference to “Beacon Capital” or “BCSP” and Purchaser shall provide
evidence to Seller of such filings promptly thereafter.

6.4.5   Tax
Matters.   To cooperate
with Seller to the extent provided for in Section 5.7, including, without
limitation, causing the tax returns to be signed by Purchaser, as applicable.

6.4.6   Information
regarding Purchaser’s Potential Compliance with REIT Status.   Following the Closing, Purchaser
shall promptly provide such information as is reasonably requested by Seller or
Seller’s third-party consultants with respect to Purchaser’s ability to cause
the Trust to maintain its status as a REIT for the Trust’s taxable year that
includes the Closing, including, without limitation, an opinion of Purchaser’s
counsel, substantially in the form attached hereto as Exhibit 4.6.1
(modified as reasonably needed to reflect the fact that Purchaser’s counsel
will address post-Closing REIT compliance and modified to provide that, with
respect to periods prior to the Closing Date, Purchaser’s counsel may rely on
the opinion of Goodwin Proctor LLP dated as of the Closing Date and described
in Section 4.6.1), regarding the Trust’s conformity, since the Closing
Date, with the requirements for qualification and treatment as a REIT during
its taxable year that includes the Closing (whether such taxable year
terminates on December 31, 2006 or prior to December 31, 2006 as a
result of the liquidation of the Trust after Closing but prior to December 31,
2006).

The provisions of this Section 6.4
shall survive Closing.

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7.     DEFAULT

7.1   Default
by Purchaser.   In the event that
Purchaser defaults in its obligations to consummate the transactions
contemplated by this Agreement for any reason other than:  (x) Seller’s default hereunder, (y) a
failure of a condition precedent to Purchaser’s obligations hereunder or (z) the
permitted termination of this Agreement by Seller or Purchaser as herein
expressly provided, prior to Closing, Seller shall have the right to terminate
this Agreement and receive, liquidate (by Escrow Agent drawing upon the Acceptable
Letters of Credit) and retain the Deposit as liquidated damages and as Seller’s
sole and exclusive remedy for a breach of Purchaser’s obligations under this
Agreement prior to Closing. Thereafter, except for Purchaser’s obligations
which by their terms survive the termination of this Agreement, Seller and
Purchaser shall have no further obligations to each other. Purchaser and Seller
acknowledge that the damages to Seller in the event of a breach of this
Agreement prior to Closing would be difficult or impossible to determine, that
the amount of the Deposit represents the parties best and most accurate
estimate of the damages that would be suffered by Seller if the transactions
contemplated by this Agreement should fail to close and that such estimate is
reasonable under the circumstances existing as of the date of this Agreement
and under the circumstances that Seller and Purchaser reasonably estimate would
exist at the time of such breach. Notwithstanding the foregoing, if Purchaser
fails to perform its obligations pursuant to this Agreement that survive
Closing or the earlier termination of this Agreement, then Seller shall be
entitled to pursue any and all remedies available at or law or in equity, as a
result of such default, including, without limitation the right to recover
damages against Purchaser, including, without limitation, damages suffered by
Seller and/or its direct and indirect partners as a result of the Trust not
qualifying as a REIT for the Trust’s taxable year beginning January 1,
2006, subject to Section 6.3. The provisions of this Section 7.1
shall survive Closing. With respect to any default by Purchaser after Closing,
Seller acknowledges and agrees that Seller’s sole remedy shall governed by the
terms of Section 6.2 hereof.

7.2   Default
by Seller.   In the event that Seller
defaults in its obligations to consummate the transactions contemplated by this
Agreement for any reason other than:  (x) Purchaser’s
default hereunder, (y) a failure of a condition precedent to Seller’s
obligations hereunder or (z) the permitted termination of this Agreement
by Seller or Purchaser as herein expressly provided, Purchaser shall be
entitled, as its sole remedy, either (a) to receive the return of the
Deposit, which return and reimbursement shall operate to terminate this
Agreement and release Seller from any and all liability hereunder, or (b) to
enforce specific performance of Seller’s obligation to execute the documents
required to convey the Shares to Purchaser, it being understood and agreed that
the remedy of specific performance shall not be available to enforce any other
obligation of Seller hereunder. Purchaser expressly waives its rights to seek
damages of any kind in the event of Seller’s default hereunder prior to Closing.
Purchaser shall be deemed to have elected to terminate this Agreement and
receive back the Deposit if Purchaser fails to file suit for specific
performance against Seller in a court having jurisdiction in Maryland, on or
before sixty (60) days following the date upon which Closing was to have
occurred. With respect to any default by Seller after Closing,

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Purchaser acknowledges and agrees that Purchaser’s sole remedy shall
governed by the terms of Section 5.5 hereof.

8.     RISK OF LOSS

8.1   Minor Damage.   In the event of
loss or damage to the Property which is not “major”, this Agreement shall
remain in full force and effect provided Seller performs any necessary repairs
or, at Seller’s option, provides that all right, title and interest to any
claims and proceeds the Trust or its subsidiaries may have with respect to any
casualty insurance policies or condemnation awards relating to the Property are
assigned to Purchaser or retained by the Trust or Riverside LLC. In the event
that Seller elects to have Riverside LLC perform repairs upon the Property,
Seller shall use reasonable efforts to cause such repairs to be completed
promptly and the date of Closing shall be extended a reasonable time in order
to allow for the completion of such repairs. If Seller elects to cause a
casualty claim to remain in the Trust or its subsidiaries, the Purchase Price
shall be reduced by an amount equal to the deductible amount under the
applicable insurance policy, and, subject to Seller’s rights under Section 8.4,
the amount of any uninsured loss. Upon Closing, full risk of loss with respect
to a casualty or condemnation to the Property shall pass to Purchaser due to
its ownership of the Trust and its subsidiaries.

8.2   Major
Damage.   In the event of a “major”
loss or damage, Purchaser may terminate this Agreement by written notice to
Seller, in which event the Deposit shall be returned to Purchaser. If Purchaser
does not elect to terminate this Agreement within ten (10) days after
Seller sends Purchaser written notice of the occurrence of major loss or
damage, then Seller and Purchaser shall be deemed to have elected to proceed
with Closing, in which event Seller shall, at Seller’s option, either (a) perform
or cause Riverside LLC to perform any necessary repairs, or (b) take such
steps to ensure that the Trust or Riverside LLC retains all of Seller’s right,
title and interest to any claims and proceeds Seller, the Trust and Riverside
LLC may have with respect to any casualty insurance policies or condemnation
awards relating to the Property, notwithstanding the transactions contemplated
by this Agreement. In the event that Seller elects to perform repairs upon the
Property, Seller shall use reasonable efforts to complete such repairs promptly
and the date of Closing shall be extended a reasonable time in order to allow
for the completion of such repairs. If Seller elects to assign a casualty claim
to Purchaser, the Purchase Price shall be reduced by an amount equal to the
deductible amount under Seller’s insurance policy, and, subject to Seller’s
rights under Section 8.4, the amount of any uninsured loss. Upon Closing,
full risk of loss with respect to a casualty or condemnation to the Property
shall pass to Purchaser due to its ownership of the Trust and Riverside LLC.

8.3   Definition
of “Major” Loss or Damage.   For
purposes of Sections 8.1 and 8.2, “major” loss or damage refers to the
following:  (i) loss or damage to
the Property or any portion thereof such that the cost of repairing or
restoring the Property to a condition substantially identical to that of the
Property prior to the event of damage would be, in the opinion of an architect
selected by Seller and reasonably approved by Purchaser, equal to or greater
than TEN MILLION DOLLARS ($10,000,000), (ii) any loss due to a
condemnation which permanently and materially impairs the current use of

 46
 

 

the Property or results in a reduction in the value of the Property in
excess of TEN MILLION DOLLARS ($10,000,000), as determined by reference to the
amount of the condemnation award, or (iii) any material loss, through
condemnation, of access, parking or development or air rights relating to the
Property as reasonably determined by Purchaser, or if the proposed condemnation
would result in the loss of or a change in the Property’s status as a legally
conforming use. If Purchaser does not give notice to Seller of Purchaser’s
reasons for disapproving an architect within five (5) Business Days after
receipt of notice of the proposed architect, Purchaser shall be deemed to have
approved the architect selected by Seller.

8.4   Uninsured
Losses.   Notwithstanding the
foregoing, in the event of a loss or damage to the Property, for which no
insurance or other third party compensation is available to reimburse the cost
to remedy such loss or damage and such uninsured loss exceeds FIVE MILLION
DOLLARS ($5,000,000), then within ten (10) days of Seller sending written
notice to Purchaser of such uninsured loss, Seller shall either elect to:  (1) terminate this Agreement, in which
event the Deposit shall be returned to Purchaser, or (2) give a credit to
Purchaser at Closing equal in amount to the cost to remedy the uninsured loss,
as reasonably determined by Seller and Purchaser, provided that if the parties
are unable to agree on the amount of the uninsured loss to be credited against
the Purchase Price, either party may terminate the Agreement.

9.     COMMISSIONS

9.1   Brokerage
Commissions.   In the event the
transaction contemplated by this Agreement is consummated, but not otherwise,
Seller agrees to pay to Eastdil (“Broker”) at Closing a brokerage commission
pursuant to a separate written agreement between Seller and Broker. Each party
agrees that should any claim be made for brokerage commissions or finder’s fees
by any broker or finder other than Broker by, through or on account of any acts
of said party or its representatives, said party will indemnify and hold the
other party free and harmless from and against any and all loss, liability,
cost, damage and expense in connection therewith. The provisions of this
paragraph shall survive Closing or earlier termination of this Agreement.

10.   DISCLAIMERS AND WAIVERS

10.1   No Reliance on Documents.   Except
as expressly stated herein, Seller makes no representation or warranty as to
the truth, accuracy or completeness of any materials, data or information
delivered by Seller to Purchaser in connection with the transaction
contemplated hereby. Purchaser acknowledges and agrees that all materials, data
and information delivered by Seller to Purchaser in connection with the
transaction contemplated hereby are provided to Purchaser as a convenience only
and that any reliance on or use of such materials, data or information by
Purchaser shall be at the sole risk of Purchaser, except as otherwise expressly
stated herein. Without limiting the generality of the foregoing provisions,
Purchaser acknowledges and agrees that (a) any environmental or other
report with respect any Property which is delivered by Seller to Purchaser
shall be for general informational purposes only, (b) Purchaser shall not
have

 47
 

 

any right to rely on any such report
delivered by Seller to Purchaser, but rather will rely on its own inspections
and investigations of the Properties and any reports commissioned by Purchaser
with respect thereto, and (c) neither Seller, any affiliate of Seller nor
the person or entity which prepared any such report delivered by Seller to
Purchaser, shall have any liability to Purchaser for any inaccuracy in or
omission from any such report.

10.2   DISCLAIMERS AND WAIVERS.   EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT
SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO
THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS
AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE,
ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION,
UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS,
THE COMPLIANCE OF THE PROPERTY WITH LAWS, THE TRUTH, ACCURACY OR COMPLETENESS
OF ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY
OTHER MATTER OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES
THAT UPON CLOSING PURCHASER SHALL ACCEPT THE PROPERTY “AS IS, WHERE IS, WITH
ALL FAULTS,” EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS
AGREEMENT. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, PURCHASER
HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY,
ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE INTERESTS OR THE PROPERTIES OR RELATING THERETO
(INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES
DISTRIBUTED WITH RESPECT TO THE PROPERTIES AND THE INTERESTS) MADE OR FURNISHED
BY SELLER OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO
REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR
IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT. PURCHASER
REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO
CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE
PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY TO
SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR
NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR
TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON
SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS
AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS,
WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT.
UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING
BUT NOT

 48
 

 

LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE
PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY
PURCHASER’S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO
HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER’S OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL
CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES,
DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT
COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER
MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER’S OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR
ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL
CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION,
ANY ENVIRONMENTAL LAWS AND THE ADA) AND ANY AND ALL OTHER ACTS, OMISSIONS,
EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTIES, EXCEPT TO THE EXTENT
EXPRESSLY PROVIDED FOR ELSEWHERE HEREIN INCLUDING, WITHOUT LIMITATION, TO THE
EXTENT PROVIDED IN SECTION 5.5 HEREOF.

10.3   Effect and Survival of Disclaimers.   Seller
and Purchaser acknowledge that the compensation to be paid to Seller for the
Shares has been decreased to take into account that the Shares are being sold
subject to the provisions of this Article 10. Seller and Purchaser agree
that the provisions of this Article 10 shall survive Closing.

11.   MISCELLANEOUS

11.1   Confidentiality.   Purchaser
and its representatives shall hold in strictest confidence all data and
information obtained with respect to Seller, the Trust, Illinois Manager,
Property Manager or Riverside LLC (collectively, the “Seller Parties”) or its
business, whether obtained before or after the execution and delivery of this
Agreement, and shall not disclose the same to others; provided, however, that
it is understood and agreed that Purchaser may disclose such data and
information to the employees, consultants, accountants and attorneys of
Purchaser provided that such persons are informed of the confidentiality
provisions and are directed  to treat
such data and information confidentially. In addition, to the extent that
Purchaser determines that Purchaser is required to notify any federal, state or
local governmental agency, or any other party, with respect to the conditions
at the Property or as otherwise discovered by Purchaser, Purchaser shall notify
Seller immediately, and Seller shall make such disclosures as Seller deems
appropriate. If Seller determines that Seller will not make a disclosure and
Purchasers feel that such disclosure is still required by law and notify Seller
to that effect, then Seller shall hire an independent consultant reasonably
acceptable to Seller and Purchaser to determine whether or not such disclosure
is required and such determination will be binding upon both Seller and Purchaser.
In the event this Agreement is terminated or Purchaser fails to perform
hereunder, Purchaser shall promptly return to Seller any statements, documents,
schedules, exhibits or other written 

 49
 

 

information obtained from the Seller Parties
in connection with this Agreement or the transaction contemplated herein. It is
understood and agreed that, with respect to any provision of this Agreement
which refers to the termination of this Agreement and the return of the Deposit
to Purchaser, such Deposit shall not be returned to Purchaser unless and until
Purchaser has fulfilled its obligation to return to Seller any materials
delivered to Purchaser by Seller. In the event of a breach or threatened breach
by Purchaser or its agents or representatives of this Section 11.1, the
Seller Parties shall be entitled to seek an injunction restraining Purchaser or
its agents or representatives from disclosing, in whole or in part, such
confidential information. Nothing herein shall be construed as prohibiting
Seller from pursuing any other available remedy at law or in equity for such
breach or threatened breach. Notwithstanding the foregoing provisions or
anything else to the contrary contained in this Agreement: (i) the
foregoing covenant of confidentiality shall not be applicable to any
information published by Seller as public knowledge or otherwise available in
the public domain; (ii) Purchaser shall be permitted to disclose such
information as may be recommended by Purchaser’s legal counsel in order to
comply with all financial reporting, securities laws, court order, subpoena and
other legal requirements applicable to Purchaser, including any required
disclosures to the Securities and Exchange Commission; and (iii) any duty
of confidentiality set forth in this Agreement shall terminate upon Closing. The
provisions of this Section 11.1 shall survive the termination of this
Agreement prior to the Closing.

11.2   Public Disclosure.   Any
press release to the public of information with respect to the sale
contemplated herein or any matters set forth in this Agreement will be made
only in a form approved by Purchaser and Seller and their respective counsel
(such approval not to be unreasonably withheld), provided, however, either
party shall have the right after Closing to issue a press release announcing
the sale of the Shares and the resulting ownership and control of the Property
without prior written approval of the other so long as the press release does
not expressly disclose the economic terms hereof. Notwithstanding the foregoing,
Purchaser, Purchase and Seller and their respective agents may make such
disclosures as are required by law or in connection with non-public marketing
efforts or internal reporting requirements, including, without limitation,
reports by either party to their respective investors. The provisions of this Section 11.2
shall survive Closing.

11.3   Discharge of Obligations.   The
purchase of the Shares by Purchaser shall be deemed to be a full performance
and discharge of every representation and warranty made by Seller herein and
every agreement and obligation on the part of Seller to be performed pursuant
to the provisions of this Agreement, except those which are herein specifically
stated to survive Closing.

11.4   Assignment.   Purchaser
may not assign its rights under this Agreement without first obtaining Seller’s
written approval, which approval may be given or withheld in Seller’s sole
discretion. Any transfer, directly or indirectly, of any stock, partnership
interest or other ownership interest in Purchaser without Seller’s written
approval, which approval may be given or withheld in Seller’s sole discretion,
shall constitute a default by Purchaser under this Agreement. Notwithstanding
the foregoing, Purchaser shall have the right to assign its rights under this
Agreement, without first

 50
 

 

obtaining Seller’s written approval, to any wholly-owned subsidiary of
Purchaser. In the event Seller’s written approval is given to an assignment of
this Agreement, or if Purchaser assigns this Agreement as otherwise permitted,
Purchaser shall nevertheless remain liable for the performance of all covenants
and conditions of this Agreement, and, in the case of an assignment, such
liability shall be joint and several. The provisions of this Section 11.4
shall survive Closing.

11.5   Notices.   Any
notice pursuant to this Agreement shall be given in writing by (a) personal
delivery, or (b) reputable overnight delivery service with proof of
delivery, or (c) United States Mail, postage prepaid, registered or
certified mail, return receipt requested, or (d) legible facsimile
transmission sent to the intended addressee at the address set forth below, or
to such other address or to the attention of such other person as the addressee
shall have designated by written notice sent in accordance herewith, and shall
be deemed to have been given either at the time of personal delivery, or, in
the case of expedited delivery service or mail, as of the date of first
attempted delivery at the address and in the manner provided herein, or, in the
case of facsimile transmission, as of the date of the facsimile transmission
provided that an original of such facsimile is also sent to the intended
addressee by means described in clauses (a), (b) or (c) above. Notices
sent by a party’s attorney shall constitute notice from the applicable party. Unless
changed in accordance with the preceding sentence, the addresses for notices
given pursuant to this Agreement shall be as follows:

If to Seller:

Beacon Capital Strategic Partners III, L.P.

c/o Beacon Capital Partners

One Federal Street

Boston, MA 02110

Attn: William A. Bonn, Esq.

TELECOPY: (617) 457-0499

with a copy to:

Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Attn: Christopher B. Barker, Esq.

TELECOPY:  (617) 227-8591

If to Purchaser:

Harvard Property Trust, LLC

15601 Dallas Parkway. Suite 600

Addison, Texas 75001

Attention: Jon Dooley

TELECOPY:  214-655-1600

 51
 

 

 

with a copy to:

Powell & Coleman, LLP

8080 North Central Expressway

Suite 1380

Dallas, Texas  75206

Attention: Michael L. McCoy, Esq.

TELECOPY:  214-373-8768

The provisions of this Section 11.5 shall survive
Closing.

11.6   Modifications.   This
Agreement cannot be changed orally, and no executory agreement shall be
effective to waive, change, modify or discharge it in whole or in part unless
such executory agreement is in writing and is signed by the parties against
whom enforcement of any waiver, change, modification or discharge is sought.

11.7   Calculation of Time Periods.   Unless
otherwise specified, in computing any period of time described in this Agreement,
the day of the act or event after which the designated period of time begins to
run is not to be included and the last day of the period so computed is to be
included, unless such last day is not a Business Day, in which event the period
shall run until the end of the next day which is a Business Day. For the
purposes of this Agreement, a “Business Day” shall mean any day of the week
other than Saturday, Sunday or a day on which banking institutions in Boston,
Massachusetts, are obligated or authorized by law or executive action to be
closed to the normal transaction of banking business. The final day of any such
period shall be deemed to end at 5 p.m., local time in the Commonwealth of
Massachusetts. The provisions of this Section 11.7 shall survive Closing.

11.8   Successors and Assigns.   The
terms and provisions of this Agreement are to apply to and bind the permitted
successors and assigns of the parties hereto.

11.9   Entire
Agreement.   This Agreement, including
the Exhibits, contains the entire agreement between the parties pertaining to
the subject matter hereof and fully supersedes all prior written or oral
agreements and understandings between the parties pertaining to such subject
matter.

11.10   Further Assurances.   Each
party agrees that it will without further consideration execute and deliver
such other documents and take such other action, whether prior or subsequent to
Closing, as may be reasonably requested by the other party to consummate more
effectively the purposes or subject matter of this Agreement. Without limiting
the generality of the foregoing, (i) Purchaser shall, if requested by
Seller, execute acknowledgments of receipt with respect to any materials
delivered by Seller to Purchaser with respect to the Property or the Interests,
and (ii) Seller shall cooperate with Purchaser in connection with all
filings necessary to change the registered agent of the Trust and Riverside LLC
to a registered agent designated by Purchaser in each state where the
Transferred Companies are formed and doing business. The provisions of this Section 11.10
shall survive Closing.

 52
 

 

 

11.11   Counterparts.   This
Agreement may be executed in counterparts, and all such executed counterparts
shall constitute the same agreement. It shall be necessary to account for only
one such counterpart in proving this Agreement. This Agreement may be executed via
facsimile or by sending copies of the executed Agreement via email followed by
regular mail of the originals and shall be considered executed and binding upon
receipt of the fax or email of the signature page of the last of the party’s
signature to this Agreement.

11.12   Severability.   If
any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid or unenforceable, the remainder of this Agreement
shall nonetheless remain in full force and effect.

11.13   Applicable
Law.   THIS AGREEMENT IS PERFORMABLE IN
THE STATE OF MARYLAND AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE SUBSTANTIVE FEDERAL LAWS OF THE UNITED STATES AND THE
LAWS OF SUCH STATE. SELLER AND PURCHASER HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF MARYLAND IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING SHALL BE HEARD AND DETERMINED IN A STATE OR FEDERAL COURT SITTING IN
THE STATE OF MARYLAND. PURCHASER AND SELLER AGREE THAT THE PROVISIONS OF THIS SECTION 11.13
SHALL SURVIVE THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT.

11.14   No Third Party Beneficiary.   The
provisions of this Agreement and of the documents to be executed and delivered
at Closing are and will be for the benefit of Seller and Purchaser only and are
not for the benefit of any third party, and accordingly, no third party shall
have the right to enforce the provisions of this Agreement or of the documents
to be executed and delivered at Closing.

11.15   Captions.   The
section headings appearing in this Agreement are for convenience of reference
only and are not intended, to any extent and for any purpose, to limit or
define the text of any section or any subsection hereof.

11.16   Construction.   The
parties acknowledge that the parties and their counsel have reviewed and
revised this Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any exhibits or
amendments hereto.

11.17   Termination of Agreement.   It
is understood and agreed that if either Purchaser or Seller terminate this
Agreement pursuant to a right of termination granted hereunder, such
termination shall operate to relieve Seller and Purchaser from all obligations
under this Agreement, except for such obligations as are specifically stated
herein to survive the termination of this Agreement.

 53
 

 

 

11.18   Time of the Essence.   Time
is of the essence of this Agreement and all covenants and deadlines hereunder. Without
limiting the foregoing, Purchaser and Seller hereby confirm their intention and
agreement that time shall be of the essence of each and every provision of this
Agreement, notwithstanding any subsequent modification or extension of any date
or time period that is provided for under this Agreement. The agreement of
Purchaser and Seller that time is of the essence of each and every provision of
this Agreement shall not be waived or modified by any conduct of the parties,
and the agreement of Purchaser and Seller that time is of the essence of each
and every provision of this Agreement may only be modified or waived by the
express written agreement of Purchaser and Seller that time shall not be of the
essence with respect to a particular date or time period, or any modification
or extension thereof, which is provided under this Agreement.

11.19   Recordation.   This
Agreement may not be recorded or registered with any local land records office
and any attempt to do so shall be of no effect whatsoever. Any attempt to so
record or register this Agreement or a memorandum thereof by Purchaser shall be
considered a default by Purchaser pursuant to Section 7.1 and Seller may
terminate this Agreement and retain the Deposit.

 54
 

 

 

IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the Effective Date.

 

	
  

  	
  PURCHASER:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD
  OPERATING

  PARTNERSHIP I LP, a Texas limited

  partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Behringer Harvard REIT I, Inc.

  
	
   

  	
   

  	
  a Maryland corporation,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SELLER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BEACON CAPITAL STRATEGIC

  PARTNERS III, L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BCP Strategic Partners III, LLC, its

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Beacon Capital Partners, LLC, its

  
	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
							

 

 55
 

 

Schedule I

List of Defined
Terms

“Acceptable Letter of Credit” — See Section 1.4.

“ADA” — See Section 6.4.1.

“Additional Funds” —See Section 1.4.

“Agreement” — See Introductory Paragraph.

“Appurtenances” —See Section 1.1.1.

“Beacon Capital” — See Section 6.4.4.

“BCSP” — See Section 6.4.4.

“Broker” — See Section 9.1.

“Business Day” — See Section 11.7.

“CERCLA” — See Section 5.3.6.

“Closing” — See Section 4.1.

“Closing Date” —See Section 4.1.

“Closing Statement” — See Section 4.4.3.

“Code” means the Internal Revenue Code of 1986, as
amended, and all rules and regulations promulgated thereunder.

“Damages” — See Section 5.5.2.

“Deposit” — See Section 1.4.

“Designated Employees” — See Section 5.4.

“Earnest Money” — See Section 1.4.

“Effective Date” — See Introductory Paragraph.

“Escrow Agent” — See Section 1.4.

“Escrow Agreement” — See Section 1.4.

 56
 

 

 

“Estoppel Return Date” —See Section 4.6.5.

“Existing Indebtedness” — See Section 1.5.

“Extension Notice” —See Section 4.1.

“Hazardous Substances” — See Section 5.3.6.

“Illinois Manager” — See Recital B.

“Improvements” — See Section 1.1.2.

“Intangible Property” — See Section 1.1.5.

“Land” — See Section 1.1.1.

“Leases” — See Section 5.3.2.

“Lease Schedule” — See Section 5.3.2.

“Legal Requirement” means
any federal, state, local, municipal, foreign, international, multinational, or
other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute, or treaty.

“Lien” means any
lien, judgment, mortgage, deed of trust, charge, option, contractual restriction
on transfer, security interest, tax lien, pledge, encumbrance, conditional sale
or title retention arrangement, broker’s lien, mechanic’s or materialman’s lien
or any other claim against the Property (or any portion thereof), as the case
may be, or any agreement to create or confer any of the foregoing, in each case
whether arising by agreement or under any statute, law, governmental ordinance,
rule, regulation, decree, order or requirement of any governmental authority
now or hereafter existing or otherwise.

“Loan Documents” — See Section 1.5.

“Major Tenant” —See Section 4.6.5.

“Non-Voting Shareholders” — See Section 5.6.8.

“Operating Agreements” — See Section 5.3.1.

“Outstanding Indebtedness” — See Section 5.2.8.

“Permits” — See Section 1.1.4.

“Personal Property” — See Section 1.1.6.

 57
 

 

 

“Plans” —See Section 1.1.2.

“Property” — See Section 1.1.

“Property Manager” — See Recital D.

“Property Representation Expiration Date” — See Section 5.5.1.

“Purchase Price” — See Section 1.2.

“Purchaser” — See Introductory Paragraph.

“Purchaser Indemnified Party” — See Section 5.5.2.

“RCRA” — See Section 5.3.6.

“REIT” — See Section 4.6.1.

“Remaining Representation Expiration Date” — See Section 5.5.1.

“Riverside LLC” — See Recital C.

“SARA” — See Section 5.3.6.

“Seller” — See Introductory Paragraph.

“Seller Encumbrance” — See Section 0.

“Seller Parties” — See Section 11.1.

“Shares” — See Recital F.

“Survey” — See Section 2.2.

“Tax” means any tax (including any income tax, capital
gains tax, value-added tax, sales tax, transfer tax, property tax, gift tax, or
estate tax), levy, assessment, tariff, duty (including any customs duty),
deficiency, or other fee, and any related charge or amount (including any fine,
penalty, interest, or addition to tax), imposed, assessed, or collected by or
under the authority of any Governmental Body or payable pursuant to any
tax-sharing agreement or any other contract relating to the sharing or payment
of any such tax, levy, assessment, tariff, duty, deficiency, or fee.

“Tax Return” means any
return (including any information return), report, statement, schedule, notice,
form, or other document or information filed with or submitted to, or required
to be filed with or submitted to, any Governmental Body in connection with the

 58
 

 

determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or
enforcement of or compliance with any Legal Requirement relating to any Tax.

“Title Commitment” — See Section 2.1.

“Title Company” — See Section 2.1.

“Title Policy” —See Section 4.5.

“Trust” — See Recital A.

“Trust Financial Statements” — See Section 5.2.4.

“Trust Organizational Documents” — See Section 5.2.7.

 59

 

 

Schedule 1.1.5

List of Trade
Names

Property known as:

1.                                       222
South Riverside Plaza;

2.                                       Union
Station Multiplex; and

3.                                       444
West Jackson Boulevard.

 60
 

 

 

Schedule 1.1.6

Personal Property

 61
 

 

 

Schedule 4.4.2(ix)

 

Tenant
Improvements and Leasing Commissions

 62
 

 

 

Schedule 4.4.2(xi)

 

Rent Abatement
Schedule

 63
 

 

 

Schedule 5.2.5

Pending Litigation

NONE

 64
 

 

 

Schedule 5.2.6(iii)

Tax Audits

NONE

 65
 

 

 

Schedule 5.2.7

The Trust Organizational
Documents

1.                                       BCSP
III Illinois Properties Business Trust Declaration of Trust dated May 24,
2004

2.                                     BCSP
III Illinois Manager LLC Limited Liability Company Agreement dated as of May 24,
2004

3.                                       BCSP
III Illinois Property Manager LLC Limited Liability Company Agreement dated as
of May 24, 2004

4.                                       222
South Riverside Property LLC Limited Liability Company Agreement dated as of May 24,
2004

 66
 

 

 

Schedule 5.2.8

Outstanding Indebtedness

 

	
  Title Holder

  	
   

  	
  Originating Lender

  	
   

  	
  Date of Loan

  	
   

  	
  Original Principal Amount

  
	
  222 South
  Riverside Property LLC

  	
   

  	
  Metropolitan
  Life Insurance Company

  	
   

  	
  June 3,
  2004

  	
   

  	
  $145,500,000.00

  

 67
 

 

 

Schedule 5.3.1

List of Operating
Agreements

 68
 

 

 

Schedule 5.3.2

Lease Schedule

 69
 

 

 

Schedule 5.3.3

Violations

 

NONE

 70
 

 

 

Schedule 5.3.6

List of Environmental
Reports

 

That certain report of
Haley & Aldrich (File No. 31035-000) dated May 25,
2004.

 71
 

 

 

Schedule 5.3.10

Tax Appeals

 

NONE

 72
 

 

 

Schedule 5.6.8

Non-Voting Shareholders

 73
 

 

 

EXHIBIT A

Legal Description

 74
 

 

 

EXHIBIT 1.4

Escrow Agreement

 75
 

 

 

ESCROW AGREEMENT

This
Escrow Agreement (this “Agreement”) is made and entered into this         
day of April, 2006, by and among Beacon Capital Strategic Partners III, L.P. (“Seller”),
Behringer Harvard Operating Partnership I LP (“Purchaser”), and
LandAmerican National Commercial Services (“Escrow Agent”).

WITNESSETH

WHEREAS, Seller
and Purchaser entered into that certain Stock Purchase and Sale Agreement (the “P&S
Agreement”) of even date herewith;

WHEREAS, Purchaser
has deposited with Escrow Agent either (i) a letter of credit, in form and
substance, and issued by a financial institution reasonably acceptable to
Seller and payable to Escrow Agent (the “Letter of Credit”), or (ii) immediately
available federal funds, and all interest earned thereon (the “Earnest Money”),
in each case, in the amount of Ten Million Dollars ($10,000,000) (collectively,
the “Deposit”); and

WHEREAS, Seller
and Purchaser desire to have Escrow Agent hold the Deposit in escrow as
required under the P&S Agreement pursuant to the terms thereof.

NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby covenant and agree as follows:

1.             Seller and Purchaser hereby appoint
LandAmerica National Commercial Services to act as Escrow Agent hereunder.

2.             Purchaser has deposited the Deposit
with Escrow Agent as required by the P&S Agreement. Escrow Agent agrees to
hold and disburse the Deposit as hereinafter provided.

3.             Escrow Agent shall invest the
Earnest Money in an interest-bearing savings or money market account or short
term U.S. Treasury Bills or similar cash equivalent securities, as Purchaser
may direct.

4.             Upon written notification from
Seller and Purchaser that the contemplated sale under the P&S Agreement is
to be consummated, Escrow Agent shall apply the Earnest Money toward the
Purchase Price or return the Letter of Credit, as the case may be.

 76
 

 

5.             Upon written notification from
Purchaser that Purchaser is terminating the P&S Agreement in accordance
with the P&S Agreement, then Escrow Agent shall deliver the Deposit or
Letter of Credit, as applicable, to Purchaser. Upon written notification from
Seller and Purchaser that the contemplated sale shall not take place for any
other reason, Escrow Agent shall disburse the Deposit in accordance with
written instructions from Seller and Purchaser, which instructions shall be in
accordance with and governed by the P&S Agreement.

6.             The parties hereto covenant and
agree that Escrow Agent, in performing any of its duties under this Agreement,
shall not be liable for any loss, costs or damage which it may incur as a
result of serving as the escrow agent hereunder, except for any loss, costs or
damage arising out of its willful default or gross negligence.

7.             Accordingly, Escrow Agent shall not
incur any liability with respect to (a) any action taken or omitted to be
taken in good faith upon advice of its counsel given with respect to any
questions relating to its duties and responsibilities, or (b) to any
action taken or omitted to be taken in reliance upon any document, including
any written notice of instruction provided for in this Agreement, not only as
to its due execution and the validity and effectiveness of its provisions, but
also to the truth and accuracy of any information contained therein, which
Escrow Agent shall in good faith believe to be genuine, to have been signed or
presented by a proper person or persons and to conform with the provisions of
this Agreement.

8.             Seller and Purchaser hereby agree
to indemnify and hold harmless Escrow Agent against any and all losses, claims,
damages, liabilities and expenses, including without limitation, reasonable
costs of investigation and attorneys’ fees and disbursements which may be
imposed upon or incurred by Escrow Agent in connection with its serving as the
escrow agent hereunder, except for any loss, cost or damage arising out of its
willful default or gross negligence.

9.             In the event of a dispute between
any of the parties hereto, including any dispute regarding the application
under the P&S Agreement of the Deposit, Escrow Agent shall be entitled to
tender unto the registry or custody of any court of competent jurisdiction all
money or property in its hands held under the terms of this Agreement, together
with such legal pleadings as it deems appropriate, and thereupon be discharged.

10.           Any escrow fee to be charged by
Escrow Agent is to borne one-half (1/2) by Seller and one-half (1/2) by
Purchaser.

11.           This Agreement may be executed in
counterparts, and all such executed counterparts shall constitute the same
agreement. It shall be necessary to account for only one such counterpart in
proving this Agreement.

[Remainder of Page Intentionally
Left Blank]

 77
 

 

IN WITNESS WHEREOF, Seller, Purchaser and Escrow Agent
have executed this Agreement as of the day and year first above written.

	
  

  	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD OPERATING

  
	
   

  	
   

  	
  PARTNERSHIP I LP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  Behringer Harvard REIT I, Inc., its General
  Partner 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President

  

 

	
  

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  BEACON CAPITAL STRATEGIC PARTNERS III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BCP Strategic Partners III, LLC, its

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Beacon Capital Partners, LLC, its

  
	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  

 

	
  

  	
  ESCROW AGENT:

  
	
   

  	
   

  
	
   

  	
  LANDAMERICA NATIONAL COMMERCIAL

  
	
   

  	
  SERVICES

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 78
 

 

 

EXHIBIT 4.2.1

Form of Assignment
of Shares

 79
 

 

ASSIGNMENT AND ASSUMPTION
AGREEMENT

This Assignment and Assumption Agreement (this “Assignment”)
dated as of                
       , 2006 by and between Beacon Capital
Strategic Partners III, L.P., a Delaware limited partnership (“Assignor”)
and Behringer Harvard Operating Partnership I LP, a Texas limited partnership (“Assignee”).

In consideration of the
mutual promises hereinafter set forth and in the Stock Purchase and Sale
Agreement dated as of April __, 2006 (the “Purchase Agreement”) and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor and Assignee, intending to be legally bound
hereby, agree as follows:

1.             Assignor hereby assigns, transfers
and conveys to Assignee all of its right, title and interest in and to one
hundred percent (100%) of the Common Shares of BCSP III Illinois Properties
Business Trust (the “Company”) and all rights and interests related thereto
(the “Assigned Interests”), effective as of the date hereof.

2.             Assignee hereby accepts the
transfer and assignment of the Assigned Interests and, effective as of the date
hereof, assumes and agrees to perform each and every duty, obligation and liability
of Assignor, if any, with respect to the Assigned Interests, in accordance with
the terms and conditions of this Assignment and the Purchase Agreement

3.             This Assignment may be executed in
one or two counterparts, each of which shall be an original but all of which
taken together shall constitute one instrument. In addition, any counterpart
signature page may be executed by any party wheresoever such party is
located, and may be delivered by telephone facsimile transmission, and any such
facsimile transmitted signature pages may be attached to one or more
counterparts of this Assignment, and such faxed signature(s) shall have
the same force and effect, and be as binding, as original signatures executed
and delivered in person.

4.             This Assignment shall be binding
upon and shall inure to the benefit of the respective heirs, administrators,
executors, successors and permitted assigns of Assignor and Assignee. This
Assignment shall not be modified, waived, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver,
modification, discharge or termination is sought.

5.             This Assignment shall be governed
by the laws of the State of Maryland without giving effect to the principles of
conflicts of law thereof.

6.             Capitalized terms not otherwise
defined herein shall have the meanings assigned thereto in the Purchase
Agreement.

 80
 

 

 

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

	
  

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  BEACON CAPITAL STRATEGIC PARTNERS III, L.P., 

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BCP Strategic Partners III, LLC, its General Partner
  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Beacon Capital Partners, LLC, its

  
	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  

 

	
  

  	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD OPERATING

  
	
   

  	
   

  	
  PARTNERSHIP I LP, a Texas limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  Behringer Harvard REIT I, Inc., a Maryland
  corporation, its general partner 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President

  

 81
 

 

EXHIBIT 4.6.1

Opinion of Goodwin
Procter  LLP

 82

 

EXHIBIT 4.6.5

Form of Tenant
Estoppel

[Address of Purchaser]

[Address of Lender]

RE: [Name and Address of Property]

Gentlemen:

Reference
is made to that certain [Lease Agreement] dated
as of                  
     ,         
between                                 ,
a           , as landlord (“Landlord”),
and the undersigned, as tenant (“Tenant”), demising premises at the
captioned address more particularly described in the Lease (the “Premises”).
The lease, together with all amendments thereto included in Schedule 1
attached hereto, is herein referred to as the “Lease”. Tenant hereby
represents to the Benefited Parties (as herein defined) that the following statements
are true and correct as of the date hereof:

1.             A true, correct and complete copy
of the Lease (including all amendments) is attached hereto as Schedule 1.
The undersigned is the Tenant under the Lease for space at the Premises
covering                  
rentable square feet.

2.             The Lease is in full force and
effect and has not been amended, modified, supplemented or superseded except as
indicated in Schedule 1. There are no understandings, contracts, agreement or
commitments of any kind whatsoever with respect to the Premises, except as
expressly provided in the Lease.

3.             The term of the Lease commenced on                        ,
and expires on                              ,
subject to any rights of Tenant to extend the term as provided therein. The base
rent presently being charged is $            .
All rentals, charges, additional rent and other obligations on the part of the
undersigned have been paid to and including                   ,
200  . No rental, other than for the current month, has been paid in
advance. The undersigned has accepted possession and now occupies the Premises
and is currently open for business. In addition to the fixed minimum Base Rent,
the Tenant pays its pro-rata share of real estate taxes and operating expenses
in excess of a base stop of                      .

4.             Tenant has paid to Landlord a
security deposit in the amount of $                       .
Tenant has no claim against Landlord for any other security, rental, cleaning
access card, key or other deposits or any prepaid rentals.

 

5.             Landlord is not in any respect in
default in the performance of the terms and provisions of the Lease, nor does
any state of facts or condition exist which, with the giving of notice or the
passage of time, or both, would result in such a default. All conditions under
the Lease to be performed by Landlord have been satisfied. Without limiting the
generality of the foregoing, all improvements to be constructed in the Premises
by Landlord have been completed to the satisfaction of Tenant and accepted by
Tenant and any tenant construction allowances have been paid in full, and all
duties of an inducement nature required of Landlord in the Lease have been
fulfilled to Tenant’s satisfaction. Tenant has no claim against Landlord by
reason of any restriction, encumbrance or defect in title of the Premises of
which Tenant has actual knowledge.

6.             There currently is no defense,
offset, lien, claim or counterclaim by or in favor of Tenant against Landlord
under the Lease or against the obligations of Tenant under the Lease
(including, without limitation, any rentals or other charges due or to become
due under the Lease) and Tenant is not contesting any such obligations, rentals
or charges. To Tenant’s knowledge, all leasing commissions due in respect of
the current term of the Lease have been paid.

 7.            Tenant
has no renewal, extension or expansion option, no right of first offer or right
of first refusal and no other similar right to renew or extend the term of the
Lease or expand the property demised thereunder except as may be expressly set
forth in the Lease. Tenant has no right to lease or occupy any parking spaces
within the Property except as set forth in the Lease. Tenant is entitled to no
free rent nor any credit, offsets or deductions in rent, nor other leasing
concessions other than those specified in the Lease.

8.             Tenant is not in any respect in
default in the performance of the terms and provisions of the Lease nor does
any state of facts or condition exist which, with the giving of notice or the
passage of time, or both, would result in such a default. Without limiting the
generality of the foregoing, Tenant is current in its rental obligation under
the Lease.

9.             The undersigned has not received
notice of a prior transfer, assignment, hypothecation or pledge by Landlord of
any of Landlord’s interest in the Lease other than to the holder of any first
mortgage on the captioned property.

10.           There are no liens recorded against
the Premises with respect to work performed by or on behalf of Tenant or
materials supplied to the demised property.

11.           Tenant has not assigned the Lease nor
sublet all or any part of the Premises, except as shown on Schedule 1 attached
hereto and made a part hereof for all purposes.

The above certifications
are made to the Benefited Parties knowing that the Benefited Parties will rely
thereon in making an investment in the Premises. For purposes hereof, the term “Benefited
Parties” means the addressees of this letter and all of the

 

following: (a) Harvard Property Trust, LLC, a
Delaware limited liability company and its successors, assigns, and designees
(including, without limitation, any tenant in common purchasers); and (b) any
lender to which any party described in the foregoing clause (a) grants a
deed of trust, mortgage or other lien upon the Premises.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  	
  ,

  
	
   

  	
  a

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
								

 

EXHIBIT 4.6.6

Form of CUSCO
Estoppel LetterJune 8 8K Exhibit 10.50

                                                Exhibit 10.50

Severance Agreement

A.Centillium Agrees:

Centillium agrees that, no later than five (5) business days after the Effective Date of this Severance Agreement (see
paragraph C.3., below), it shall provide you with:

(i) a lump sum payment in the gross amount of $108,604.83, less all applicable tax withholdings; 

(ii) medical, dental, and vision coverage under the Company's health care group plans ("Health Care Benefits") until the earlier of
September 30, 2006 and the date upon which you become covered under another employer's group health, dental and vision plan (the
"Covered Period"); provided that if continued receipt of the Health Care Benefits is not permitted by the applicable health care group
plans, the Company will then reimburse you for the COBRA premiums for the same such benefits for the Covered Period.

B.You Agree:

1.You agree and represent that:

a.You have received all wages earned, including accrued but not used PTO, through the Termination Date and you are
not entitled to any further amounts, benefits or compensation of any kind from Centillium except pursuant to this Severance
Agreement.

b.You understand that, even if you did not sign this Severance Agreement, you are bound by, and have continuing
obligations under, the Centillium Communications, Inc. Employment, Confidential Information and Invention Assignment Agreement
("CIIA") signed by you in connection with your employment with the Company.

c.You have returned to the Company all items of property paid for or provided by the Company for your use during
employment with the Company including, but not limited to, any laptops, computer and office equipment, software programs, cell
phones, pagers, access cards and keys, and credit and calling cards.

d.You have returned to the Company all documents (electronic and paper) created and received by you during your
employment with the Company, and you have not retained any such documents, except you may keep your personal copies of (i)
documents evidencing your hire, compensation, benefits, stock options and termination (including this letter); (ii) any materials
distributed generally to stockholders of the Company, and (iii) your copy of the CIIA.

e.You have submitted a final request for reimbursement of reasonable and necessary business, travel and
entertainment expenses incurred by you in the course and scope of your employment with the Company and after payment of those
expenses, you do not have any other expenses incurred but not yet paid for which you might have been entitled to reimbursement.

f.You have transitioned to your manager all information and documents concerning your work and pending work for
the Company.

 g.You understand that you must exercise your
option shares, if any, that were vested as of the Termination Date before expiration of the post-termination exercise period specified in
your stock option agreement(s), and that it is your responsibility to timely and properly exercise those options or they will terminate and
cannot be reinstated.

2.You waive and release and promise never to assert any claims or causes of action,
whether or not now known, against Centillium or its predecessors, successors, subsidiaries, officers, directors, agents, employees and
assigns, with respect to any act, event or omission prior to the Effective Date of this Severance Agreement (per paragraph C.3, below),
including but not limited to, any matter arising out of or connected with your hire or employment with Centillium or the termination of that
employment, including without limitation, claims of wrongful discharge, emotional distress, defamation, fraud, breach of contract, breach
of the covenant of good faith and fair dealing, any claims of discrimination or harassment based on sex, age, race, national origin,
disability or on any other basis, under Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment and Housing
Act, the California Labor Code, the Age Discrimination in Employment Act of 1967, as amended, and all other laws and regulations
relating to employment, except any claims you may have for any benefit entitlements vested as of the Termination Date,
pursuant to written terms of any the Company employee benefit plans.

You also expressly waive and release any and all rights and benefits conferred upon you under Section 1542 of the Civil Code
of the State of California which reads as follows:

A general release does not extend to claims which the creditor (i.e., you) does not know or suspect to exist in his favor at
the time of executing the release, which, if known by him, must have materially affected his settlement with the debtor (i.e., the
Company).

You agree and understand that if, hereafter, you discover facts different from or in addition to those which you now know or believe
to be true, that the waivers of this paragraph B.2. shall be and remain effective in all respects notwithstanding such different or
additional facts or the discovery thereof.

3.You agree that you will not make any negative or disparaging statements or comments, either as fact or as opinion,
about Centillium or its successor, including but not limited to its employees, officers, directors, products or services, operations,
performance and other similar information concerning Centillium.

4.You agree that you will not disclose to any other person the fact or terms of the Severance Agreement offered by this
letter, except that you may disclose such information to your spouse, and to your attorney and accountant in order for such individuals
to render services to you, provided that they agree to keep confidential and not disclose neither the fact nor terms of the
Severance Agreement offered by this letter.

C.Centillium and You Agree:

1.Nothing contained in this Severance Agreement shall constitute or be treated as an admission by you or by
Centillium, or any current or former employee of Centillium, of liability or any wrongdoing or of any violation of law.

2.In the event that either you or the Company sues to enforce any term or condition of this letter agreement, the prevailing
party in such legal action shall be entitled to recover attorneys' fees and costs reasonably incurred.

3.You may have twenty-one (21) days after you received this letter within which to review and consider, to discuss with an
attorney of your own choosing, and to decide whether or not to sign this Severance Agreement. In addition, for the period of seven (7)
days after the date you sign this Severance Agreement, you may revoke it. Attached to this Severance Agreement is a copy of data on
the ages of employees in the same organizational unit who have been offered severance benefits and who have not been offered
benefits. You also have been provided with the selection criteria. If you wish to revoke this Severance Agreement, you must deliver
written notice of your revocation, no later than the seventh day after you signed this Severance Agreement, to:
Human Resources

   Centillium Communications, Inc.

   215 Fourier Avenue

   Fremont, CA 94539

   Attention: Tony Webster

   Facsimile: 510-771-3951

The Effective Date of this Severance Agreement will be the eighth day after you have signed it, provided that you have not
revoked it and you have delivered it to Centillium. 

4.Except for any benefit entitlements vested as of the Termination Date, pursuant to written terms of
any the Company employee benefit plans, and any promissory note or other debt obligations you owe the Company, this Severance
Agreement renders null and void any and all prior agreements, written or otherwise, between you and Centillium. This letter shall
constitute the full and complete agreement between you and Centillium regarding the subject matters covered, and cannot be changed
except by a subsequent written agreement signed by you and a duly authorized officer of Centillium.

If you accept the terms of the Severance Agreement section of this letter, please indicate your agreement and acceptance by
signing below on the enclosed copy of this letter and returning that signed copy to me at Human Resources, Centillium
Communications, Inc., 215 Fourier Avenue, Fremont, CA 94539 (or Fax 510-771-3951).

Sincerely,

 

 

Tony Webster

   Vice President, Human Resources

 

Acceptance:

 

I acknowledge that: (a) I have read and understand this Severance Agreement; (b) I have been advised to and have had an
opportunity to consult with an attorney of my own choosing regarding this Severance Agreement; and (c) I sign this Severance
Agreement, knowingly and voluntarily and without duress, with full appreciation that I am giving up important rights and at no time in the
future may I pursue any of the rights I have waived and released herein. 

 

	
Dated: __________________
	 	
____________________________________

	 	 	
         [Employee]

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