Document:

Exhibit 10.56

 

PROPERTY
MANAGEMENT AGREEMENT

 

THIS
PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of
February 1, 2007, between TRT Alliance Diehl, LLC a Delaware limited
liability company, (hereafter referred to as “Owner”), and HP Office
Management EW, LLC, an Illinois limited liability company, (hereinafter
referred to as “Property Manager”).

 

RECITALS:

 

A.                                    Owner intends to acquire 197,497 square feet of office space in one or
more buildings located at 450 – 900 East Diehl Road, Naperville, Illinois and
legally described in Exhibit A attached hereto and made a part hereof (the “Premises”).

 

B.                                    The Property Manager is experienced in the management, operation and
maintenance of properties similar to the Premises;

 

C.                                    In the event Owner acquires title to the Premises on or before February
15, 2007, Owner desires to engage the Property Manager as an
independent contractor to manage, operate, and maintain the Premises and to
provide certain financial statements and reports to Owner with respect to the
Premises and Property Manager desires to accept such engagement, all subject to
the terms and conditions of this Agreement.

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained, the
parties hereto agree as follows:

 

ARTICLE I

APPOINTMENT AND AUTHORITY OF THE PROPERTY MANAGER

 

1.1                               Term.  Provided Owner acquires the Premises on or
before February 15, 2007, Owner hereby retains Property Manager as the
exclusive property manager for the Premises commencing the date of acquisition
of the Premises by the Owner (the “Commencement Date”) and continuing until
January 31, 2008, and thereafter on a month to month basis until terminated by
either party on not less than thirty (30) days notice to the other, and Property
Manager accepts such appointment, on the terms and conditions hereinafter set
forth.  The Property Manager hereby
represents to the Owner that it is properly licensed in the State of Illinois
to perform all of the services required of it pursuant to this Agreement.

 

ARTICLE II

THE
PROPERTY MANAGER’S AGREEMENT

 

2.1                               Duties of
Manager.  The Property Manager agrees to
manage, maintain and operate the Premises so that the improvements thereon
shall be operated and maintained in keeping with building structures of its
type and age and the Budget (as defined below), to comply with the Owner’s
accounting and other instructions, to utilize the Property Manager’s staff as
necessary to manage the Premises in the best interests of the Owner, and in
connection therewith:

 

 

(a)                                  To enter into,
make and perform or supervise the performance of such contracts, agreements,
and other undertakings, and to do such other acts, as it deems necessary or
advisable for the operation, maintenance and management of the Premises pursuant
to the terms of this Agreement.  All such
contracts, agreements and undertakings shall be between the Property Manager (as
agent) for Owner and the service provider and shall provide that they are
terminable upon the earlier of thirty (30) days notice or the closing of a sale
of the Premises.  Property Manager will
not enter into any contract, agreement or undertaking with any entity
affiliated with Property Manager unless such contract, agreement or undertaking
is on commercially reasonable terms and the nature of the affiliation has been
disclosed in writing to Owner and Owner has approved the contract, agreement or
undertaking,;

 

(b)                                  To select,
employ, pay, supervise, direct and discharge all employees used in the
operation and maintenance of the Premises, and to deduct from their
compensation and keep a record of, all withholding and other taxes,
contributions and deductions required by law or contract; to carry Employer’s
Liability Insurance in an amount not less than $500,000 per occurrence and Worker’s
Compensation Insurance covering such employees in an amount sufficient to
provide statutory benefits as required by the laws of the State of Illinois or
$500,000, whichever is greater, and to use reasonable care in the selection of
such employees.  All persons employed in
connection with the operation and maintenance of the Premises shall be
employees of the Property Manager or an affiliate of the Property Manager and
subject to control by the Property Manager only and any wages, salaries or
benefits payable to such employees shall be the responsibility of Property
Manager with no right of reimbursement from Owner unless otherwise expressly
approved by Owner or unless set forth in the Budget.

 

(c)                                  To employ or
engage such managers, building engineers, accountants, and other persons
necessary or appropriate to manage and operate the Premises and to prepare the
Reports (as hereinafter defined), consistent with the Budget; all space,
services, equipment and software used, or any part thereof, shall be obtained,
employed and paid for by the Property Manager, unless set forth in the approved
Budget. The attached Exhibit D outlines the approved Budget with respect to
salaries and benefits for building managers and engineers.

 

(d)                                  At Owner’s
request and upon express mutual agreement of the parties as to reasonable
compensation to Property Manager, as further described in Exibit C, to
coordinate, supervise and arrange for the installation of improvements as may
be requested by Owner or required by any now or hereafter existing leases of
any portion of the Premises (each singly a “Lease” and collectively, the “Leases”)
with the tenants thereunder (each singly a “Tenant” and collectively, the “Tenants”)
at the inception of each Lease in accordance with plans and specifications
approved by the Owner in writing prior to the commencement of such
installation; to coordinate, supervise and arrange for the making of ordinary
repairs, improvements and alterations and performing other services to the
Premises, in accordance with plans and specifications approved by the Owner in
writing prior to the commencement of such repairs, improvements and alterations
(such installation, making of repairs, improvements and alterations is
hereinafter referred to as “Tenant Work”); provided that if Owner and Property
Manager

 

 

have not previously agreed to any additional
compensation for Tenant Work and Property Manager desires to do the same, the
Property Manager may collect a fee from the Tenant for the supervision of such
work,  subject to the Owner’s prior
written approval,  which shall not be
unreasonably withheld;.and the Property Manager shall hold the Owner harmless
from any and all claims which may be advanced by any such Tenant in connection
with Tenant Work performed under the Property Manager’s supervision.

 

(e)                                  Not to perform
any Tenant Work unless otherwise agreed between the parties;

 

(f)                                    Not to employ
or otherwise contract with any corporation or other entity in which the
Property Manager (or any subsidiary, affiliate, or related corporation) shall
have a financial interest for the purpose of performing the Tenant Work unless
such contract, is on commercially reasonable terms and the nature of the
affiliation has been disclosed in writing to Owner and Owner has approved the
contract, which such approval Owner shall not unreasonably withhold;

 

(g)                                 To maintain
current and accurate records reflecting the status of taxes, assessments, and
other charges which are or may become a lien upon any of the Premises, the
status of mortgage payments and ground lease payments (if any) and the status
of insurance premiums and fire and hazard insurance coverage with respect to
any of the Premises; if requested by the Owner, to obtain, from time to time,
all bills for the payment of such charges (including renewal premiums); and to
pay all taxes, assessments and other charges which are or may become a lien
upon any of the Premises from funds furnished by Owner and, if requested by the
Owner, all insurance premiums, mortgage payments and ground lease payments from
funds furnished by Owner, prior to the
applicable penalty or termination date, provided that the Property Manager has
knowledge of such insurance premiums, mortgages or ground leases;

 

(h)                                 To handle
complaints and requests from Tenants; and to notify the Owner promptly of any
significant or repetitive complaint made by Tenants in the Premises, to include
all work orders as an attachment to the monthly report and to notify the Owner
promptly (together with copies of supporting papers) of any notice of violation
of any governmental requirements, any defect in the Premises, any fire or other
material damage to the Premises and, in the case of any fire or other material
damage within the coverage of any insurance policies thereon, to notify the
insurance carrier promptly in accordance with the requirements of the insurance
policies and within such time that an insurance adjuster may view the damage
before any repairs are started, and to complete customary loss reports in
connection with fire or other damage to the Premises;

 

(i)                                    To notify the
Owner promptly of any personal injury or property damage occurring on the
Premises known to Property Manager and which gives rise to, or might give rise
to, a claim by the Owner, any Tenant or a third party; and to immediately
forward to the Owner any summons, subpoena, or other legal document served upon
the Property Manager relating to actual or alleged potential liability of the
Owner, the Property Manager, or the Premises;

 

 

(j)                                    To secure from
such Tenants and forward to the Owner any certificates of insurance, and
renewals thereof, required to be furnished by the terms of such Leases;

 

(k)                                To instruct
each Tenant to send all rents, revenues and other payments due or to become due
under the Leases directly to the Depository Account, (as hereinafter defined)
or to such other address as Owner may direct;

 

(l)                                    To receive and
collect rent, revenues and other payments due or to become due to the Owner by
all Tenants and licensees in the Premises and all other payments, cash or
income of any kind or nature due or to become due to the Owner on account of
the Premises which for any reason are not sent by the Tenants to the Depository
Account and to deposit the same promptly in the Depository Account, as provided
in Section 2.2 hereof, not later than the Business Day (as hereinafter
defined) following the receipt thereof. 
For the purposes of this Agreement “Business Day” shall mean any day
other than (i) a Saturday or Sunday, or (ii) a day on which banks
generally are authorized or obligated by law or executive order to be closed in
Metropolitan Chicago, Illinois.  In the
event state law requires that Tenant security deposits be held in a separate
account or if instructed to do so by the Owner or if required by such Tenant’s
Lease, such account shall be established by the Property Manager, as approved
by the Owner;

 

(m)                              To disburse
funds from the Operating Account (as hereinafter defined) to pay costs and
expenses incurred in connection with the Premises, subject to the Budget or
otherwise as authorized by the Owner;

 

(n)                                 To institute
with the prior approval of the Owner, in Owner’s name and at Owner’s cost, all legal actions or proceedings for the collection of
rent or other income from the Premises, for the enforcement of any obligations
of Tenants, licensees or others, or for the ousting or dispossessing of Tenants
or other persons therefrom.  The Owner
reserves the right to designate counsel and to control litigation of any
character affecting or arising out of the leasing or operation of the Premises,
the enforcement of rent or other obligations, and the ousting or dispossessing
of Tenants or other persons therefrom;

 

(o)                                  To advise the
Owner regarding the need, in the Property Manage’s reasonable opinion, to challenge
the real estate taxes for the Premises. The Property Manager shall furnish the
Owner with copies of all assessments notices and receipted tax bills;

 

(p)                                  To notify the
Owner immediately of any fire or other casualty, lawsuit or threat thereof
involving the Premises as and when Property Manager obtains knowledge thereof,
and to notify the Owner of any alleged violations under governmental laws,
rules, regulations, ordinances, or like provisions, whether or not relative to
the use, repair and maintenance of the Premises; the Property Manager will not
bear responsibility for any such violation or noncompliance unless such
violation or noncompliance is due to the negligence of the Property Manager or
its employees, including the failure of the Property Manager to notify the
Owner and to take appropriate action with respect to such violations or
noncompliance of which the Property Manager has actual knowledge (to the

 

 

extent authorized by the approved Budget for
such year or as otherwise approved and funded by Owner);

 

(q)                                  To the extent
furnished with funds therefore by Owner, after notice to Owner, to reasonably
comply with (i) all laws, ordinances, orders, rules, regulations and
requirements of all federal, state, municipal or other governmental authorities,
courts, commissions, boards and officers, and (ii) the provisions of any
contract which may be applicable to the Premises and the operation or
management thereof and of which the Property Manager has received a copy; and

 

(r)                                  To make
application for all consents, permits and approvals required pursuant to
applicable zoning laws as approved by the Owner, at Owner’s cost.

 

Notwithstanding anything herein to the
contrary, the Property Manager may not enter into any Lease or amend, modify,
waive or vary the terms of any Lease.

 

2.2                               Bank Accounts.  The Owner has established a depository
account (the “Depository Account”) at the bank named on Exhibit B
attached hereto and made a part hereof (which bank or any replacement bank
named by the Owner is the “Bank”), to which Depository Account all Tenants are
to send all rents, revenues and payments due or to become due under the
Leases.  The Owner has instructed the
Bank to deposit the funds so received into the Deposit Account; the Owner has
further instructed the Bank to transfer sufficient funds from the applicable
Deposit Account for the Premises to a separate Operating Account for the
Premises (the “Operating Account”), as established by the Owner at the Bank,
sufficient to cover the disbursements from the Operating Account.  The Owner shall have the right to approve the
persons having signing authority with respect to the Operating Accounts; and
provided further that any check or withdrawal for an amount of $5,000.00 or more
shall require two signatures.

 

2.3                               Reports.  The Property Manager agrees to render to the
Owner, on or before the fifth (5th) day of each month for the preceding month
(ending on the 25th day of the preceding month) in a form as
reasonably required and detailed in advance from time to time by the Owner, the
statements and the other reports listed in Exhibit E attached
hereto as to the Premises (the “Reports”).

 

2.4                               Records.  The Property Manager agrees to maintain, in
its offices in Downer’s Grove, Illinois, current and
accurate records and accounts of all transactions pertaining to the operation
of the Premises and the funds received and disbursed incident thereto, such
records and accounts to be maintained on an accrual and cash basis in accordance with generally
accepted accounting principles applied on a consistent basis from year to year,
using a computerized property management software system approved by the Owner. 
Such files, books and records shall at all times be the property of
Owner.  After the termination or
expiration of this Agreement, the Property Manager shall retain canceled checks
as to the Premises (except canceled checks forwarded to the Owner in lieu of
receipts), all employment records, and all other records with respect to the
management or operation of the Premises as provided in Section 6.2 hereof.

 

 

At all times and from time to time during the
term of this Agreement and at all times and from time to time during the period
following the expiration or termination of this Agreement while the records are
to be retained by the Property Manager in accordance with Section 6.2
hereof, the Owner and its duly authorized agents, representatives or employees
may, upon reasonable prior notice to the Property Manager, examine, audit and
copy (at Owner’s expense), during business hours or at such other times as
might be reasonable under applicable circumstances, any and all of the books,
records, files or other information of the Property Manager, or held by another
for the Property Manager or on its behalf, concerning this Agreement, the
Premises or the Owner.

 

This Section 2.4 shall survive the
termination or expiration of this Agreement.

 

2.5                               Accounting Controls.  The Property Manager shall ensure such
control over accounting and financial transactions as is reasonably required to
protect the Owner’s assets from loss or diminution due to error or fraudulent
activity on the part of the Property Manager’s associates or employees.

 

2.6                               Proposed Operating Budgets.  Not later than October 1, as to the
succeeding calendar year, the Property Manager shall prepare and submit to the
Owner, at the addresses set forth in Exhibit B, a proposed
operating budget for the promotion, operation, repair and maintenance of the
Premises.  It is understood and agreed
that, in order to prepare said operating budgets, the Property Manager must
have received a budget of leasing expenses from the leasing agent for the
Premises and the Owner will cause the leasing agents to provide to the Property
Manager a budget of leasing expenses not later than each September 15th,
commencing September 15th, 2007, as to the succeeding fiscal
year.

 

2.7                               Approved Budget.  The Owner will consider the proposed budgets
and will then consult with the Property Manager in the ensuing period prior to
the commencement of the next succeeding calendar year in order to agree on an
approved budget (the “Budget”) for the Premises for the next succeeding
calendar year.  If by January 1 of
each fiscal year, the Owner has not authorized an approved Budget as to the
Premises for such year, the Property Manager shall operate and maintain the
Premises for which no Budget has been approved pursuant to the Budget for such
Premises of the preceding calendar year, except that expenses permitted by the
previous year’s Budget for such Premises shall be increased by an additional
five percent (5%) of said previous year’s Budget for such Premises for expenses
until such approval is obtained.

 

The Property Manager shall secure the Owner’s
prior written approval for any expenditure that would result in an excess of
ten percent (10%) over the budgeted amount in any one accounting category of
the Budget for the Premises; provided, however, in the event the Property
Manager reasonably believes that an expenditure in excess of such permitted
amounts is necessary to prevent imminent harm to persons or property or to
prevent an imminent threat of suspension of services to the Premises, the
Property Manager is authorized to incur and pay such sum on behalf of the
Owner, in which case the Property Manager shall notify the Owner with
reasonable details within 24 hours after the action was taken.

 

During each calendar year the Property
Manager shall promptly inform the Owner of any major increases in costs and
expenses that were not foreseen during the budget

 

 

preparation period and thus were not reflected in the Budget for the
Premises and the Owner shall promptly consider in good faith whether the Budget
should be amended by reason thereof.

 

2.8                               Tenant Relations.  The Property Manager agrees to use the
Property Manager’s best efforts to maintain tenant relations and to induce
Tenants to renew their Leases for the Premises. 
Both parties acknowledge that the Property Manager is not performing
brokerage or leasing services pursuant to this Agreement and that the Owner may
from time to time engage one or more real estate brokers or leasing agents for
this purpose, which may or may not be the Property Manager or an affiliate of
the Property Manager, at the sole discretion of the Owner.

 

ARTICLE III

THE OWNER’S
AGREEMENTS

 

3.1                               Documents and Records.  The Owner shall promptly furnish the Property
Manager with all documents and records required to properly manage the
Premises, including but not limited to Leases, records of rental payments, loan
payment information, and copies of existing service contracts, to the extent in
the Owner’s possession.

 

3.2                               Direct Payments.  The Owner, at its option, and upon notice to
the Property Manager, may pay directly all taxes, special assessments,
insurance premiums, mortgage payments, ground lease payments and rent for the
real property in which the Premises are located.

 

ARTICLE IV

INSURANCE
AND INDEMNITY

 

4.1                               Insurance
Coverage.  The
Property Manager shall consult with the Owner and shall recommend to the Owner
insurance companies and policies for such insurance coverage as the Owner and
the Owner’s lender or lenders may require. 
During the term of this Agreement, the Owner will obtain and keep in
full force insurance meeting the requirements set forth on Exhibit F
attached hereto (or as Owner shall otherwise determine).  Such insurance shall be primary in coverage
to any similar insurance maintained by property Manager and shall name Property
Manager as an additional insured. The Property Manager, at its sole cost and expense, shall
procure and maintain the fidelity bond and the insurance, as described on Exhibit F,
in amounts not less than the amounts set forth on Exhibit F.

 

4.2                               Information.  The Property Manager shall furnish whatever
information is reasonably requested by the Owner and in Property Manager’s
possession for the purpose of determining the proper levels of insurance
coverage.

 

4.3                               Owner Indemnity.  The Property Manager agrees to use a degree
of care that would be exercised by a prudent property manager in the same or
similar circumstances in the performance of its duties and obligations
hereunder.  The Owner agrees to
indemnify, defend, and hold Property Manager harmless from and against any and
all loss, damage, or expense, including court costs and reasonable attorneys fees,
arising out of, or resulting from the good faith exercise of Property Manager’s
judgment, consistent with said standard of care, with

 

 

respect to such duties and
obligations, and the Owner shall have no claim against the Property Manager (a) by
reason of any act or omission in such exercise of such judgment relative to the
performance of said duties and obligations, provided the Property Manager was
not grossly negligent or guilty of willful misconduct and (b) for any loss
for which Owner has otherwise been reimbursed by the insurance required under Section 4.1.

 

4.4                               Property Manager Indemnity.  The Property Manager shall indemnify and save
harmless the Owner against and from all liability, suits, claims, demands and
costs by or on behalf of any person, firm, or corporation due to or arising out
of any gross negligence or willful misconduct on the part of the Property
Manager, its employees, or independent contractors, or the Property Manager’s
breach of its obligations under this Agreement.

 

4.5                               Waiver of Claims.  If any applicable insurance policy is not
invalidated by such waiver and release, the Owner and the Property Manager
hereby waive and release any claim, demand or right, including all rights of
subrogation, they and all others under them, including any insurer, might
otherwise have to recover from the other party, or their contractors or
employees, for damage to or destruction of any of their real or personal
property situated on the Premises resulting from the negligence of the other
party, or their contractors or employees, to the extent that the Owner or the
Property Manager, as the case may be, is compensated by insurance for such
damage or destruction.  If necessary, the
Owner and the Property Manager shall obtain any necessary waiver from their
respective insurers.

 

ARTICLE V

MANAGEMENT
FEES

 

5.1                               Management Fees.  As management fees for services to be
performed by the Property Manager in managing, operating and maintaining the
Premises in accordance with the provisions of this Agreement, the Owner agrees
to pay to the Property Manager compensation on the basis specified in Exhibit C.

 

ARTICLE VI

MISCELLANEOUS

 

6.1                               Termination.  Notwithstanding anything herein to the
contrary, this Agreement will terminate as to the Premises upon the earlier of:
(i) the date on which title to the Premises ceases, for any reason,
including without limitation a sale, a foreclosure or a conveyance in lieu of
foreclosure, to be owned by the Owner; (ii) the earliest of (A) thirty
(30) days after Property Manager receives written notice of a default in its
performance of any of the terms and conditions of this Agreement provided that
such default is continuing and remains uncured thirty (30) days after receipt
of such written notice, of (B) the date on which Property Manager makes
any assignment for the benefit of creditors, commits any act of bankruptcy, or
files a petition under any bankruptcy or insolvency law, or (C) sixty (60)
days after a petition is filed against Property Manager by another party,
provided such petition remains undismissed sixty (60) days after such filing,
or (iii) commencing February 1, 2008, thirty (30) days after Owner or
Property

 

 

Manager receives written
notice of termination of this Agreement from the other party hereto without
cause.

 

6.2                               Record Retention.  Upon the expiration or termination of this
Agreement for any reason, the parties will cooperate with each other to effect
an efficient and smooth transition of responsibility with respect to the
management and recordkeeping of the Premises and the Property Manager, as
directed by the Owner, either will (i) at the Owner’s expense, immediately
deliver all documents, files, books, paper, accounts and computer files and/or
software (if such software is owned by the Owner) relating to the Premises that
are in the Property Manager’s possession or under the Property Manager’s
control (the “Records”) to the control of the Owner, or (ii) at the Owner’s
expense, hold the Records for not less than twelve (12) months, provided,
however, that (i) if the Property Manager intends to dispose of the
Records at any time after twelve (12) months following the expiration or
termination of this Agreement, the Property Manager shall first give the Owner
written notice of its intent to dispose of the Records and offer to deliver the
Records to the Owner; unless the Owner requests that the Property Manager
dispose of the Records, by written notice to the Property Manager within thirty
(30) days following such notice from the Property Manager, the Property Manager
shall deliver the Records to the Owner immediately following the end of such
thirty (30) day period; and (ii) at any time while the Property Manager is
holding the Records following the expiration or termination of this Agreement,
the Property Manager shall deliver the Records to the Owner immediately
following written request therefore from the Owner.  The Property Manager may make and maintain
copies of such records for its files at the Property Manager’s expense.  At the Owner’s request, the Property Manager
shall notify all Tenants of any change in payment instructions and all other
parties, including but not limited to tax authorities, of any change in billing
address.

 

6.3                               Authorized Representatives.  Each of the Owner and the Property Manager
from time to time shall designate to the other in writing the duly authorized
representative or representatives of the designating party (the initial
designation being contained in Exhibit B hereto) for the purpose of this
Agreement.

 

6.4                               Notices. Any statement,
notice recommendation, request, demand, consent or approval under this
Agreement shall be in writing and shall be deemed given by the Owner when
signed by such designated person or persons (as to the Owner) and (a) delivered
personally to a representative of the Property Manager (b) when mailed by
Certified Mail, Return Receipt Requested, postage prepaid, addressed to the
Property Manager at the last designated address given to the Owner or (c) by
fax with confirmation of receipt, or if directed to the Owner, it shall be
deemed given when (a) delivered personally to a duly authorized
representative of the Owner, (b) when mailed by Certified Mail, Return
Receipt requested, postage prepaid, addressed to the Owner’s designated
representative at the last address furnished to the Property Manager or (c) by
fax with confirmation of receipt.  Either
party may, by written notice, from time to time designate a different address
or different individuals as its authorized representative or representatives.

 

6.5                               Assignment.  This Agreement may not be assigned by either
party except upon written consent of the other party and cannot be changed
orally, but only by a writing signed by both parties. Notwithstanding the
foregoing, Owner may elect to take title to the Premises in the

 

 

names of one or more different entities. In such event, this Agreement
shall be deemed to have been assigned to all of such entities, jointly and
severally. At Owner’s request, Property manager to enter into new agreements,
on the same terms and conditions as contained herein, with each of such
entities.

 

6.6                               Counterparts.  This Agreement may be executed in
counterparts, all of which, when taken together, shall constitute one and the
same original.

 

6.7                               Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois, without giving effect to the conflict of law principles of
such state.

 

[Remainder
of Page Intentionally Left Blank]

 

 

IN WITNESS
WHEREOF, the parties have executed this Property Management Agreement as of the
date first above written.

 

	
   

  	
  OWNER:

  
	
   

  	
   

  
	
   

  	
  TRT
  Alliance Diehl, LLC

  
	
   

  	
  A
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TRT Alliance
  JV I GP,

  
	
   

  	
   

  	
  a Delaware general
  partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  400-900 Diehl Associates,
  LLC,

  
	
   

  	
   

  	
  a Colorado limited
  liability company,

  
	
   

  	
   

  	
  its managing general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Alliance Real Estate Value
  Fund III, LLC,

  
	
   

  	
   

  	
  a Delaware limited
  liability company,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  AVF Management, LLC,

  
	
   

  	
   

  	
  a Colorado limited
  liability company,

  
	
   

  	
   

  	
  its managing member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       /s/
  David E. Ramsay

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROPERTY
  MANAGER:

  
	
   

  	
   

  	
   

  
	
   

  	
  HP Office
  Management EW, LLC,

  
	
   

  	
  an Illinois
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shigeru
  Mori

  	
   

  
	
   

  	
   

  	
   Shigeru Mori, Manager

  

 

 

EXHIBIT A

 

Lots 1, 2 and 3 in Washington Commons Phase I, a Planned Unit
Development, being a Subdivision of part of the South 1⁄2 of Section 6, Township
38 North, Range 10, East of the Third Principal Meridian, according to the Plat
thereof recorded April 3, 1987 as Document R87-46471, in DuPage County,
Illinois.

 

Permanent
Real Estate Index Number:  08-06-404-007

 

Address
of Real Estate: 450-550 Diehl Road, Naperville, Illinois 60563

 

 

EXHIBIT B

 

	
  1.

  	
  Name
  of Bank:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TBD

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  The
  Owner’s representative and address is:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRT Alliance Diehl, LLC

  	
   

  
	
   

  	
  c/o
  Alliance Commercial Partners, LLC

  	
   

  
	
   

  	
  165
  South Union Boulevard, Suite 510

  	
   

  
	
   

  	
  Lakewood,
  CO 80228

  	
   

  
	
   

  	
  Attn:
  Douglas McCormick

  	
   

  
	
   

  	
  Fax
  No.: 303-986-7990

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  The
  Property Manager’s representative and address is:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HP Office Management EW,
  LLC

  	
   

  
	
   

  	
  1901 Butterfield Road,
  Suite 270

  	
   

  
	
   

  	
  Downers Grove, IL 60515

  	
   

  
	
   

  	
  Attention: Mr. Gary Mori

  	
   

  
	
   

  	
  Fax No.: 630-719-5570

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Addresses
  of the Premises:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  450
  – 900 East Diehl Road

  	
   

  
	
   

  	
  Naperville,
  Illinois

  	
   

  

 

D-1

 

EXHIBIT C

 

COMPENSATION FOR SERVICES

 

1.                                      Management Fees: As full
compensation and reimbursement for performing the management services provided
for in the Agreement, the Owner agrees to pay the Property Manager during the
term of this Agreement, as management fees, a monthly amount equal to two and
one-half percent (2.5%) of the monthly gross rental collections, which shall
include base rent, additional rent and every other item referred to in the
Leases as “rent”, from the Premises. 
Provided it is not in default hereunder, Property Manager may take the
Management fee due it hereunder from the Operating Account monthly. Owner
agrees to keep the Operating Account sufficiently funded in order for the
Property Manager to be able to pay all amounts it is required to pay under this
Agreement and to pay itself the management fees and leasing fees due hereunder.

 

2.                                      Construction Management Fees.
In the event Owner requests Property Manager to provide construction management
and/or construction administrative services in connection with Tenant Work and
building capital expenditures, Owner agrees to pay Property Manager a fee as
outlined in the following schedule:

 

For projects between $10,000 and $200,000, a
fee of 3.0% of the total construction cost;

 

For projects between $201,000 and $300,000, a
fee of 2.5% of the total construction cost;

 

For projects between $301,000 and $500,000, a
fee of 2.0% of the total construction cost;

 

For projects above $500,000, a fee to be negotiated
by Owner and Property Manager;

 

For projects to be performed entirely by
tenant, a fee of 1.0% of the total construction cost.

 

 

EXHIBIT D

 

 

	
  HAMILTON
  PARTNERS

  	
   

  	
  updated:1/11/07

  

 

Salary & Benefit cost for
2007

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1.0%

  	
   

  	
   

  	
   

  	
  6%

  	
   

  	
  HEALTH

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Reimbursable

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  SALARY

  	
   

  	
  FICA

  	
   

  	
  FUTA/SUI

  	
   

  	
  Work
  Comp

  	
   

  	
  HSA

  	
   

  	
  401K

  	
   

  	
  INS

  	
   

  	
  DENTAL

  	
   

  	
  LIFE

  	
   

  	
  TOTAL

  	
   

  	
  Bidg %

  	
   

  	
  Amount

  	
   

  
	
  Washington Commons

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pat Sobleski

  	
   

  	
  MGR

  	
   

  	
  55,654

  	
   

  	
  4,258

  	
   

  	
  436

  	
   

  	
  557

  	
   

  	
  1,000

  	
   

  	
  3,339

  	
   

  	
  12,581

  	
   

  	
  915

  	
   

  	
  84

  	
   

  	
  78,823

  	
   

  	
  71

  	
  %

  	
  56,153

  	
   

  
	
  Marka Donovan

  	
   

  	
  ASST

  	
   

  	
  36,222

  	
   

  	
  2,771

  	
   

  	
  436

  	
   

  	
  362

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  39,791

  	
   

  	
  71

  	
  %

  	
  28,347

  	
   

  
	
  TOTAL Washington Commons

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  116,613

  	
   

  	
   

  	
   

  	
  84,500

  	
   

  

 

D-1

 

Washington Commons & Meridian
Lakes

 

	
   

  	
   

  	
  Budget
  for year 2007

  	
   

  	
  TOTAL

  	
   

  	
  W.C

  	
   

  
	
   

  	
   

  	
  by
  Engineer

  	
   

  	
   

  	
   

  	
  Budget

  	
   

  	
  Budget

  	
   

  
	
   

  	
   

  	
  MEEHAN

  	
   

  	
  LUSSEM

  	
   

  	
  2007

  	
   

  	
  2007

  	
   

  
	
  % Allocated to
  Washington Commons

  	
   

  	
  72.72

  	
  %

  	
  72.72

  	
  %

  	
   

  	
   

  	
   

  	
   

  
	
  % Allocated to
  Meridian Lakes

  	
   

  	
  27.28

  	
  %

  	
  27.28

  	
  %

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3 Full time Engineers

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Salaries

  	
   

  	
  $

  	
  56,783

  	
   

  	
  $

  	
  47,124

  	
   

  	
  $

  	
  103,887

  	
   

  	
  $

  	
  75,548

  	
   

  
	
  Payroll Taxes

  	
   

  	
  $

  	
  4,872

  	
   

  	
   

  	
  4,134

  	
   

  	
  $

  	
  9,006

  	
   

  	
  $

  	
  6,549

  	
   

  
	
  Insurance, Benefit Credit

  	
   

  	
  $

  	
  10,066

  	
   

  	
  $

  	
  10,066

  	
   

  	
  $

  	
  20,132

  	
   

  	
  $

  	
  14,640

  	
   

  
	
  401(k) Fixed and Matching

  	
   

  	
  $

  	
  3,406

  	
   

  	
  $

  	
  2,827

  	
   

  	
  $

  	
  6,233

  	
   

  	
  $

  	
  4,533

  	
   

  
	
   

  	
  Sub-Total

  	
   

  	
  $

  	
  75,107

  	
   

  	
  $

  	
  64,151

  	
   

  	
  $

  	
  139,258

  	
   

  	
  $

  	
  101,270

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Senior Engineer
  Supervision

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Administration Charge

  	
   

  	
  $

  	
  896

  	
   

  	
  $

  	
  896

  	
   

  	
  $

  	
  1,792

  	
   

  	
  $

  	
  1,303

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Workers Compensation

  	
   

  	
  $

  	
  3,229

  	
   

  	
  $

  	
  2,680

  	
   

  	
  $

  	
  5,909

  	
   

  	
  $

  	
  4,294

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overtime

  	
  payroll

  	
   

  	
  $

  	
  3,758

  	
   

  	
  $

  	
  6,680

  	
   

  	
  $

  	
  9,438

  	
   

  	
  $

  	
  6,863

  	
   

  
	
   

  	
  Flea Tax

  	
   

  	
  $

  	
  288

  	
   

  	
  $

  	
  434

  	
   

  	
  $

  	
  722

  	
   

  	
  $

  	
  526

  	
   

  
	
   

  	
  401(k) Fixed and
  Matching

  	
   

  	
  $

  	
  224

  	
   

  	
  $

  	
  340

  	
   

  	
  $

  	
  564

  	
   

  	
  $

  	
  410

  	
   

  
	
   

  	
  Sub-Total

  	
   

  	
  $

  	
  4,270

  	
   

  	
  $

  	
  6,454

  	
   

  	
  $

  	
  10,724

  	
   

  	
  $

  	
  7,798

  	
   

  
	
  rounding

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  -2

  	
   

  	
  $

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  83,602

  	
   

  	
  $

  	
   74,181

  	
   

  	
  $

  	
   157,681

  	
   

  	
  $

  	
   114,666

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  650-700 E. DIEHL RO

  	
   

  	
  $

  	
  39,348

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  750-900 E. DIEHL RO

  	
   

  	
  $

  	
  46,168

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  450-500 E. DIEHL RO

  	
   

  	
  $

  	
  29,130

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  114,666

  	
   

  

 

D-2

 

EXHIBIT E

 

LIST OF REPORTS

 

All books, records, and reports must be in accordance with U.S. GAAP

 

PROPERTY NAME

Owner’s Monthly Report Transmittal Form

Property Name

For the Month Ended XX/XX/20XX

 

	
  ITEM

  	
   

  	
  INCLUDED

  
	
   

  	
   

  	
   

  
	
  GAAP (Books on
  XX/31 basis):

  	
   

  	
   

  
	
  Balance
  Sheet (Accrual Basis)

  	
   

  	
  X

  
	
  Summary
  Income Statement (Accrual Basis)

  	
   

  	
  X

  
	
  Detail
  Income Statement (Accrual Basis)

  	
   

  	
  X

  
	
  Trial
  Balance (MTD & YTD)

  	
   

  	
  X

  
	
  General
  Ledger (Accrual Basis)

  	
   

  	
  X

  
	
  Bank
  Reconciliations

  	
   

  	
  X

  
	
  Accounts
  Receivable Aging

  	
   

  	
  X

  
	
  A/R Aging
  Explanations - Over 90 Days

  	
   

  	
  X

  
	
  Allowance
  for Uncollectible Rent Schedule

  	
   

  	
  X

  
	
  Accounts
  Payable Aging

  	
   

  	
  X

  
	
  Security
  Deposit Report

  	
   

  	
  X

  
	
  Rent Roll

  	
   

  	
  X

  
	
  Reconciliation
  of Rent Roll to Billing

  	
   

  	
  X

  
	
  Management
  Fee Calculation

  	
   

  	
  X

  
	
  Supporting
  Schedules for all remaining Balance Sheet
  Accounts

  	
   

  	
  X

  
	
   

  	
   

  	
   

  
	
  BUDGET (Books on
  12/31 basis):

  	
   

  	
   

  
	
  Property
  Overview

  	
   

  	
  X

  
	
  Balance
  Sheet (Cash Basis)

  	
   

  	
  X

  
	
  Summary
  Income Statement (Cash Basis)

  	
   

  	
  X

  
	
  Detail
  Income Statement (Cash Basis)

  	
   

  	
  X

  
	
  General
  Ledger (Cash Basis)

  	
   

  	
  X

  
	
  Variance
  Analysis

  	
   

  	
  X

  
	
  Leasing
  Report

  	
   

  	
  X

  
	
  Lease
  Expirations

  	
   

  	
  X

  

 

E-1

 

EXHIBIT F

 

INSURANCE REQUIREMENTS

 

1.                                      At the Owner’s expense, the
following insurance (unless otherwise directed by the Owner) shall be
maintained by the Owner and shall name Property Manager as an additional
insured:

 

(a)                                  an all risk
property insurance policy, including flood, earthquake and boiler and machinery
coverages in an amount equal to the full replacement cost of the Premises,
subject to a full replacement cost endorsement and deductibles no greater than
$50,000.00 per occurrence other than for flood or earthquake;

 

(b)                                  a commercial
general liability policy including broad form contractual and non-owned vehicle
liability coverages, which policy shall be written on an occurrence and not a
claims made basis, containing policy limits and deductibles acceptable to the
Owner, but in no event shall coverage be less than $5 million per occurrence
and $50 million annual aggregate or be subject to a per occurrence deductible
of more than $50,000.00;

 

(c)                                  coverage for
rent loss or business interruption and other usual and customary coverages in
amounts designated by the Owner;

 

(d)                                  if requested by
the Owner, environmental liability insurance in amounts and with coverages
determined by the Owner; and

 

(e)                                  Such other
insurance, coverages or limits as may be required by the Owner.

 

The Owner or the Property Manager, as the
case may be, who maintains the insurance coverages will provide to the other
party a certificate of such insurance coverages (with such changes as are
approved by the Owner), which certificate shall indicate that at least thirty
(30) days prior written notice shall be given to the Owner and the Property
Manager of cancellation or of any material changes in policy terms or
coverages.

 

2.                                      At the Property Manager’s expense:

 

(a)                                  a fidelity bond containing broad form coverage of all
officers, employees and other persons acting in any capacity for the Premises
with respect to the Premises or any funds, money documents or papers related
thereto, which bond shall protect and insure the Property Manager and the Owner
against losses, including theft, embezzlement and fraud; and

 

(b)                                  an errors and omissions insurance policy to include
coverage for all officers, employees or other persons acting in any capacity
for the management of and with respect to the Premises or the handling of
funds, money, documents and papers relating to the Premises.  Any such errors and omissions policy shall
insure and protect the Owner, at a minimum, against losses, including without

 

F-2

 

limitation, those arising from errors and
omissions and the rendering of or failure to render professional services as a
property manager. .

 

Such bond shall be in the amount of at least
$1,000,000.00.  The protection against
errors and omissions shall each be in the amount of at least $1 million per
occurrence and shall be subject to a deductible of not more than $25,000.00.

 

The Property Manager shall deliver to the
Owner a certificate of such insurance coverages indicating that at least thirty
(30) days prior written notice shall be given to the Owner and the Property Manager
of cancellation or of any material changes in policy terms or coverages.

 

F-3Exhibit 10.57

 

NOTICE
OF CONFIDENTIALITY RIGHTS:  IF YOU ARE A
NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM
THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:  YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S
LICENSE NUMBER.

 

REAL ESTATE PURCHASE AND SALE AGREEMENT

 

PRINCIPAL LIFE INSURANCE
COMPANY,

an Iowa corporation, for its Principal U.S. Property Separate Account,

formerly known as Principal Life Insurance Company, an Iowa corporation,

for its Real Estate Separate Account, SELLER

 

and

 

TRT ACQUISITIONS LLC,

a Delaware limited liability company, BUYER

 

 

INDEX TO

 

REAL ESTATE PURCHASE AND SALE AGREEMENT

 

	
  1.

  	
   

  	
  Property Included in Sale

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Purchase Price/Remedies

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Title to the Property

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Buyer’s Due Diligence

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Buyer’s Conditions to Closing

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Seller’s Conditions to Closing

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  The Closing

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Representations and Warranties

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Leasing and Indemnification

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Condition of Property

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Possession

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Tax-Deferred Exchange

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Miscellaneous

  	
   

  	
  20

  

 

 

REAL ESTATE PURCHASE AND SALE AGREEMENT

 

THIS
REAL ESTATE PURCHASE AND SALE AGREEMENT (this “Agreement”), is made as of the 8th
day of December, 2006 (the “Agreement Date”) by and between PRINCIPAL LIFE INSURANCE COMPANY, an Iowa
corporation, for its Principal U.S. Property Separate Account, formerly
known as Principal Life Insurance Company, an Iowa corporation, for its Real
Estate Separate Account, herein referred to as “Seller” and TRT ACQUISITIONS
LLC, a Delaware limited liability company, herein referred to as “Buyer.”

 

RECITALS:

 

WHEREAS,
Seller desires to sell certain improved real property along with certain
related personal and intangible property, and Buyer desires to purchase said
real, personal and intangible property on the terms and conditions set forth
herein;

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual undertakings set
forth herein, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Buyer and Seller hereby agree
as follows:

 

1.                                       Property
Included in Sale. Seller hereby agrees to sell and convey to Buyer, and
Buyer hereby agrees to purchase from Seller, the following:

 

(a)                                  That
certain real property commonly known as HEB Marketplace, 5601 Bandera Road,
Leon Valley, Texas and more particularly described in Exhibit A attached hereto
(the “Real Property”);

 

(b)                                 Seller’s
interest in all rights, privileges and easements appurtenant to the Real
Property, including, without limitation, all minerals, oil, gas and other
hydrocarbon substances as well as all development rights, air rights, water,
water rights (and water stock, if any) relating to the Real Property and any
easements, rights-of-way or other appurtenances used in connection with the
beneficial use and enjoyment of the Real Property;

 

(c)                                  Seller’s
interest in all improvements and fixtures located on the Real Property,
including all buildings and structures presently located on the Real Property,
all apparatus, equipment and appliances used in connection with the operation
or occupancy of the Real Property, such as heating and air conditioning systems
and facilities used to provide any utility services, refrigeration,
ventilation, garbage disposal, recreation or other services on the Real
Property (all of which are collectively referred to as the “Improvements”); and

 

(d)                                 Seller’s
interest in all tangible and intangible personal property (“Personal Property”)
owned by Seller and used in the ownership, use and operation of the Real
Property and Improvements (the tangible personal property, if any, being listed
on Exhibit E), all copyrights, logos, designs, trademarks, service marks, trade
names (excepting those including the name “Principal”), including, without
limitation, the right to use any trade name “HEB Marketplace”  now used in connection with the Real Property
and all goodwill associated with the Property, the plans and specifications
relating to the Property, all warranties relating to the Real Property or the
Personal Property, all Service Contracts (as hereinafter defined) to the extent
Buyer agrees to assume the same as provided below, all licenses, permits and
other

 

1

 

written authorizations necessary for the
zoning, land use, operation, ownership, construction and maintenance of the
Property, all tenant files and all other files and records related to the
management and operation of the Property which are currently in the possession
of Seller or Seller’s property manager, and all claims and causes of action
arising out of or in connection with the Property (other than claims solely
related to Seller’s ownership of the Property including claims for delinquent
rent for periods prior to the month in which the Closing occurs, unless
otherwise specifically provided below), but excluding all proprietary
information of Seller and its managing agent including computer software (but
not the data pertaining to the operation of the Property) and related licenses
and appraisals.

 

All of the items referred to in subparagraphs
(a), (b), (c) and (d) above are hereinafter collectively referred to as the “Property.”

 

2.                                       Purchase
Price/Remedies.

 

(a)                                  The
total purchase price (the “Purchase Price”) for the Property is Twenty-nine
Million Six Hundred Thousand and 00/100 Dollars ($29,600,000.00). The Purchase
Price is payable by wire transfer of immediately available funds in U.S.
dollars via the federal bank wire transfer system deliverable no later than
12:00 p.m. Central on the Closing Date (as defined herein) to Chicago Title Insurance
Company, Attn:  Paulette Stevenson,
Campbell Mithun Tower, 222 South Ninth Street, Suite 3250, Minneapolis,
Minnesota 55402 (telephone: 612.339.5370; fax: 612.339.6743) (the “Title
Company”) at Closing. For purposes of this Agreement, Title Company shall cause
the Title Policy (hereinafter defined) to be issued by Chicago Title Insurance
Company.

 

(b)                                 Within
two (2) business days after the Agreement Date, Buyer shall deposit into escrow
with the Title Company the sum of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00) as the earnest money deposit (the “Initial Deposit”) payable by
wire transfer of immediately available funds in U.S. dollars via the federal
bank wire transfer system. Provided that Buyer has not terminated this
Agreement prior to the Approval Date, Buyer shall deposit an additional Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) as the additional
earnest money deposit (the “Additional Deposit”) within one (1) business day
after the Approval Date. (The Initial Deposit and the Additional Deposit are
collectively referred to herein as the “Deposit”.)  Any interest earned by the Deposit shall be
considered part of the Deposit. Except as otherwise provided in this Agreement,
the Deposit shall be held by the Title Company in a federally insured interest
bearing account or money market account typically used by the Title company and
applied against the cash portion of the Purchase Price at Closing.

 

(c)                                  In
the event the purchase and sale provided for under this Agreement does not
close due to a breach by Buyer of its obligations, Buyer and Seller hereby
agree that Seller will be damaged thereby. Therefore, Seller and Buyer hereby
agree that the Deposit shall represent and be liquidated damages payable to
Seller in such event as a fair and reasonable sum to recompense Seller in light
of Seller’s removal of the Property from the market and the costs incurred,
labor and services performed and the loss of its bargain, all of which are
difficult to ascertain. These liquidated damages shall constitute Seller’s sole
and exclusive remedy except for those certain indemnifications rights of Seller
by Buyer otherwise specifically provided for in this Agreement.

 

 

(d)                                 In
the event that Seller shall be in default hereunder, Buyer’s sole and exclusive
remedy shall be either:  (i) deliver a
written notice to Seller within three (3) business days of learning of such
default, stating with particularity the alleged default of Seller and the
action required by Seller to cure such default, and stating Buyer’s intent to
terminate this Agreement if the default is not cured, whereupon Seller shall
have seven (7) business days after receipt of such written notice in which to
cure the alleged default to Buyer’s reasonable satisfaction and to thereby
prevent termination of this Agreement (and the Approval Date, if then applicable,
and the Closing Date shall be delayed, if necessary, until the end of such
seven (7) business day period), or in the event such default is not cured
within such seven (7) business day period, terminate this Agreement by written
notice to Seller and the Title Company, in which case the Deposit shall be returned
to Buyer; or (ii) if Seller’s default results from its failure to transfer
possession and title to the Property to Buyer at Closing, enforce specific
performance. In the event of termination pursuant to item (i), Seller agrees to
reimburse Buyer for its reasonable and verifiable out of pocket due diligence
expenses up to a maximum of Seventy-five Thousand and 00/100 Dollars
($75,000.00), including but not limited to title and survey expenses, third
party report expenses and reasonable attorney’s fees. In no event under (i) or
(ii) above shall Seller be liable to Buyer for any actual, punitive,
speculative, consequential or other damages, unless Seller defeats Buyer’s
right to specific performance by conveying the Property to a third party at or
prior to Closing.

 

(e)                                  Independent
Contract Consideration. Contemporaneously with its execution and delivery
of the Earnest Money to the Escrow Agent, Buyer hereby delivers to Seller, and
Seller hereby acknowledges the receipt of a check in the amount of One Hundred
and 00/100 Dollars ($100.00) (the “Independent Contract Consideration”) which
amount the parties bargained for and agreed to as consideration for Seller’s
grant to Buyer of Buyer’s exclusive right to purchase the Property pursuant to
the terms hereof and the Seller’s execution, delivery and performance of this
Agreement. This Independent Contract Consideration is in addition to and
independent of any other consideration or payment provided in this Agreement,
is non-refundable under any circumstances, and shall be retained by Seller
notwithstanding any other provisions of this Agreement in consideration of the
rights and options granted by Seller under this Agreement.

 

3.                                       Title to the
Property. At the Closing, Seller shall convey to Buyer and Buyer shall accept
marketable and insurable fee simple title to the Real Property, all rights,
privileges and easements appurtenant thereto, and to the Improvements, by duly
executed and acknowledged Special Warranty Deed attached hereto as Exhibit H
(the “Deed”). Evidence of delivery of marketable and insurable fee simple title
shall be the issuance of a current TLTA Owner’s Policy of Title Insurance,
including deletion of standard printed exceptions, with the survey exception
deleted except for “shortages in area” (the “Title Policy”), in the full amount
of the Purchase Price by the Title Company, insuring fee simple title to the
Real Property, Improvements, and appurtenant rights, privileges and easements,
in the Buyer.

 

4.                                       Buyer’s Due
Diligence. Buyer shall be allowed to conduct the following due diligence
prior to purchasing the Property:

 

(a)                                  Buyer’s
review of title to the Property as shown on an existing preliminary title
report (the “Title Report”) from the Title Company, copies of all underlying
title exceptions

 

 

shown in the Title Report and an as-built
survey showing the location of all improvements and recorded easements on the
Property as of the date such survey was prepared (the “Survey”), all of which
have been delivered by Seller with the other Due Diligence Items. Within seven (7)
business days after the later of (i) Buyer’s receipt of the Title Report, the
last of the underlying documents and the Survey (the “Title Documents”), and
(ii) the Agreement Date, Buyer may approve or disapprove (in its sole and absolute
discretion) the Title Documents for the Property by delivering written notice
to Seller (“Buyer’s Title Notice”) specifying each title defect or matter for
which Buyer is requesting a cure by Seller (“Title Defect”) and each Title
Company requirement (“Title Requirement”) which Buyer is requesting Seller to
satisfy in order for the Title Policy to be issued for the Property at Closing.
Buyer may obtain an updated Survey (the “Updated Survey”), and in the event the
Updated Survey discloses a title defect or matter that was not disclosed by the
Survey, Buyer may deliver an amended Buyer’s Title Notice (“Amended Buyer’s
Title Notice”), which shall include a copy of the Updated Survey, to Seller
specifying each additional Title Defect and/or Title Requirement which Buyer is
requesting Seller to satisfy in order for the Title Policy to be issued for the
Property at Closing, provided such Amended Buyer’s Title Notice is delivered to
Seller on or before the earlier of (i) the date five (5) business days after
Buyer’s receipt of the Updated Survey, and (ii) December 26, 2006. Buyer’s
failure to deliver Buyer’s Title Notice or Amended Buyer’s Title Notice to
Seller within the time periods specified above shall be a conclusive
presumption that Buyer has approved the Title Documents and the Updated Survey,
if any, and this Agreement shall remain in full force and effect. Within five
(5) business days after receiving Buyer’s Title Notice or Amended Buyer’s Title
Notice, but in the case of the Amended Buyer’s Title Notice, if any, no later
than December 29, 2006, Seller shall deliver to Buyer written notice (“Seller’s
Title Notice”) of those Title Defects which Seller covenants and agrees to
either eliminate or cure to Buyer’s satisfaction by the Closing Date and those
Title Requirements which Seller agrees to satisfy by the Closing Date. Seller’s
failure to deliver Seller’s Title Notice to Buyer within the time period
specified above shall be deemed to constitute Seller’s election not to
eliminate or cure any such Title Defect or to satisfy any such Title
Requirements. If Seller elects (or is deemed to have elected) not to eliminate
or cure any Title Defects or to not satisfy any Title Requirements, the Buyer
shall have the right, by written notice delivered to Seller on or before (i)
the date five (5) business days after receipt of the applicable Seller’s Title
Notice, (ii) the date five (5) business days after the expiration of the time
period during which Seller is entitled to deliver (x) Seller’s Title Notice and
(y) in the case of where Seller has received an Amended Buyer’s Title Notice,
an additional Seller’s Title Notice, and (iii) the Approval Date, whichever
occurs first, to either (i) waive its prior notice as to the Title Defects
which Seller has elected not to cure and those Title Requirements which Seller
has elected not to satisfy, or (ii) terminate this Agreement as provided later
in this section. Buyer’s failure to deliver any written notice on or before
such date shall be a conclusive presumption that Buyer has approved the Title
Documents and the Updated Survey, if any, and this Agreement shall remain in
full force and effect. Notwithstanding anything to the contrary contained
herein, Seller shall be obligated to satisfy, release and remove on or before
the Closing Date at Seller’s expense: 
(i) any mortgages, deeds of trust or deeds to secure debt encumbering
the Property and (ii) any mechanics or materialmen’s liens, judgment liens or
tax liens for delinquent taxes or those currently due and payable, in all cases
encumbering the Property, other than those caused by Buyer or any tenant (with
respect to its leasehold interest in the Property).

 

 

(b)                                 Buyer’s
review of the operating statements of the Property only for the previous two
(2) calendar years as well as the current calendar year-to-date, provided same
are available and in Seller’s actual possession.

 

(c)                                  Buyer’s
review of copies of any tenant leases, and any amendments and modifications
thereto, and tenant files which are currently in the possession of Seller or
Seller’s property manager, any outstanding written lease proposals and Buyer’s interview
of the tenants at the Property, provided that a representative of Seller shall
be present during any such interviews.

 

(d)                                 Buyer’s
review of copies of any site plans and building drawings and specifications
currently in the possession of the Seller.

 

(e)                                  Buyer’s
review of copies of any management, leasing, maintenance and service agreements
currently in force (the “Service Contracts”) and in the possession of the
Seller. Buyer shall provide written notice to Seller no less than three (3)
business days prior to the Approval Date of those agreements Buyer wishes to
assume. In the absence of such notice, Seller shall terminate all agreements at
no cost to Buyer, but in any event shall terminate the management agreement and
all leasing agreements.

 

(f)                                    Buyer’s
review of certain environmental reports prepared for Seller and currently in
the possession or control of Seller as set forth on Exhibit K. Seller is
providing such reports to Buyer for informational purposes only and Buyer shall
not rely on such reports in determining whether to purchase the Property. In
the event the transaction contemplated herein does not close for any reason
whatsoever, Buyer shall immediately return the reports to Seller.

 

The items referred to above in subparagraphs 4(a)-(f) and any other items provided
by Seller to Buyer shall be collectively referred to as the “Due Diligence
Items.”  Seller has provided the Due
Diligence Items set forth above as well as those additional items listed on
Exhibit L, and Buyer hereby acknowledges receipt thereof as of November 15,
2006.

 

(g)                                 Buyer’s
review of the physical and environmental characteristics and condition of the
Property. Seller agrees to provide Buyer access to the Property following the
Agreement Date for the purpose of performing, at Buyer’s sole cost and expense,
studies, physical inspections, investigations and tests on the Property (the “Tests”)
provided that no such Tests shall be conducted without at least two (2)
business days prior written notice to Seller and Seller’s prior approval of
such Tests, which approval shall not be unreasonably withheld. Seller’s
execution of this Agreement shall constitute its consent to a non-invasive
Phase I environmental site assessment being performed on the Property. All
forms of invasive Tests are prohibited without Seller’s prior written consent,
which consent may be granted or withheld in Seller’s sole discretion. Invasive
Tests hereunder include, but are not limited to any tests or testing beyond a
Phase I environmental site assessment, such as collecting or testing asbestos,
water, radon, soil or air samples. Buyer’s access is further conditioned on
Buyer providing Seller with certificates of insurance from Buyer’s contractors listing
Seller as an additional insured on all insurance policies evidencing that those
Buyer’s agents or contractors performing the Tests on site have insurance in
types and amounts satisfactory to Seller as determined by Seller in its
reasonable discretion as more specifically set forth on Exhibit J attached
hereto and

 

 

hereby made a part hereof. Notwithstanding
the foregoing, only Buyer’s environmental consultants shall be required to
provide Seller with certificates of insurance listing Seller as an additional
insured with respect to the Professional Liability coverages set forth on
Exhibit J. Buyer shall be required to conduct such Tests in a manner as to not to
unreasonably disturb or interfere with the current use of the Property and upon
completion of such Tests, Buyer agrees at its sole cost to restore the Property
to the condition it was in immediately prior to such Tests, including, but not
limited to the immediate removal of anything placed on the Property in
connection with such Tests. Copies of any reports, letters or other written
information generated as a result of such Tests shall be provided to Seller if
the sale contemplated by this Agreement does not close for any reason. Seller
acknowledges that such reports shall not be certified to Seller and that Buyer
will make no representation or warranty with respect to the truth or accuracy
of such reports. BUYER SHALL INDEMNIFY,
DEFEND (WITH COUNSEL REASONABLY SATISFACTORY TO SELLER), PROTECT, AND HOLD
SELLER HARMLESS FROM AND AGAINST ANY AND ALL LIABILITY, LOSS, COST, DAMAGE
(OTHER THAN A CONSEQUENTIAL DAMAGE), OR EXPENSE (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS’ FEES AND COSTS) WHICH SELLER MAY SUSTAIN OR INCUR BY REASON OF OR IN
CONNECTION WITH ANY TESTS MADE BY BUYER OR BUYER’S AGENTS OR CONTRACTORS
RELATING TO OR IN CONNECTION WITH THE PROPERTY, OR ENTRIES MADE BY BUYER OR ITS
AGENTS OR CONTRACTORS ONTO THE PROPERTY. Notwithstanding any
provision to the contrary in this Agreement, the indemnity obligations of Buyer
under this Agreement shall survive any termination of this Agreement or the
delivery of the deed and the transfer of title pursuant to this Agreement.

 

If on or before 5:00 p.m. Central on December
29, 2006 (the “Approval Date”), Buyer disapproves the purchase of the Property
for whatever reason by providing Seller with written notice of such disapproval,
this Agreement shall terminate without any liability on the part of either
party, except for Buyer’s indemnity obligations set forth in paragraph 4 above.
In the event of such termination, the Deposit shall be returned to Buyer. Buyer
shall return to Seller all Due Diligence Items and any copies of same or
certify that it has destroyed the same. If by 5:00 p.m. Central on the Approval
Date Buyer approves the purchase of the Property, subject to the remaining
terms of this Agreement, by providing Seller with written notice, then this
Agreement shall remain in full force and effect, Buyer shall deposit the
Additional Deposit as set forth in paragraph 2(b) above, and the Deposit shall
be held by the Title Company and credited to Seller as provided herein. If by
5:00 p.m. Central on the Approval Date Buyer fails to deliver any written
notice, either approving or disapproving of the purchase of the Property, there
shall be a conclusive presumption that Buyer has approved the purchase of the
Property, subject to the remaining terms of this Agreement, this Agreement
shall remain in full force and effect, Buyer shall deposit the Additional
Deposit as set forth in paragraph 2(b) above, and the Deposit shall be held by
the Title Company and credited to Seller as provided herein.

 

5.                                       Buyer’s
Conditions to Closing. The following conditions are conditions precedent to
Buyer’s obligation to purchase the Property:

 

(a)                                  Seller
maintaining the Property in its present condition until Closing, reasonable
wear and tear excepted. In the event that, prior to Closing, the Property, or
any part thereof, is destroyed or materially damaged, and such damage exceeds
$150,000.00, or if

 

 

condemnation proceedings are commenced
against the Property, Buyer shall have the right, exercisable by giving notice
of such decision to Seller within ten (10) business days after receiving
written notice of such damage, destruction or condemnation proceedings, to
terminate this Agreement, in which case neither party shall have any further
rights or obligations hereunder In the event of such termination, the Deposit
shall be returned to Buyer. If Buyer elects to accept the Property in its then condition,
all proceeds of insurance or condemnation awards payable to Seller by reason of
such damage, destruction or condemnation shall be paid or assigned to Buyer and
Seller shall credit the Purchase Price to the extent of any deductible under
any policies of insurance, which credit shall not exceed the amount of such
damages. In the event the casualty damage to the Property is $150,000.00 or
less, Buyer shall accept the Property in its then condition and proceed with
the purchase, in which case Buyer shall accept payment or assignment of
applicable insurance proceeds, if any, from policies of insurance maintained
and paid for by Seller covering the Property, together with a credit against
the Purchase Price in the amount of the deductible under Seller’s insurance
policy, if any, up to the amount necessary to make the necessary repairs or
restorations. Seller shall also pay to Buyer any insurance proceeds collected
by Seller for rent loss from existing tenants applicable to the period after
the Closing Date, provided that the amount to be paid, if any, shall not exceed
the amount received by Seller from Seller’s insurance for loss of rent
applicable to the period after the Closing Date, if any. Buyer acknowledges
that Seller has no obligation to carry any such insurance for loss of rent.

 

(b)                                 Delivery
by Seller at Closing of the Deed.

 

(c)                                  Commitment
by the Title Company to issue the Title Policy as set forth in paragraph 3.

 

(d)                                 Delivery
by Seller of an Assignment and Assumption of Leases in the form attached hereto
as Exhibit B.

 

(e)                                  Delivery
by Seller of an Assignment of Warranties, Guaranties and Service Contracts in
the form attached hereto as Exhibit G.

 

(f)                                    Performance
by Seller as and when required by this Agreement of each and every term,
covenant, condition and agreement required to be performed by Seller pursuant
to this Agreement.

 

(g)                                 Buyer
has not terminated this Agreement prior to or concurrently with the Approval
Date.

 

(h)                                 Delivery
by Seller on or before Closing of Tenant Estoppel Certificates in the form
prescribed in tenant’s lease, or in the absence of a prescribed form, in the
form attached hereto as Exhibit M, for the following named tenants HEB, Old
Navy, and Office Depot (“Major Tenants”) and for additional tenants such that
Buyer receives Tenant Estoppel Certificates for tenants occupying ninety
percent (90%) of the total rentable square footage of the Property inclusive of
the aggregate rentable square feet leased to the Major Tenants. Notwithstanding
the foregoing, if Seller delivers a completed Tenant Estoppel Certificate in
the form attached hereto as Exhibit M to a tenant and such tenant deletes or
modifies the language contained in paragraphs 7, 14 or 16 thereof, fails to
obtain a lease guarantor’s signature or otherwise modifies

 

 

such Tenant Estoppel Certificate so that the
estoppel delivered by such tenant complies with its obligations with respect
thereto under its lease, Buyer agrees to accept such Tenant Estoppel
Certificate (with such deletion(s) and/or modification(s)) as if it had been
delivered in the form attached hereto as Exhibit M, notwithstanding such
deletion(s) and/or modification(s). If required by Buyer’s proposed lender,
Seller shall deliver a Subordination, Non-Disturbance and Attornment Agreement
(“SNDA”) prepared by Buyer in the form prescribed in such tenant’s lease, or in
the absence of a prescribed form, in substantially the form attached hereto as
Exhibit O, to (i) Office Depot of Texas, L.P., (ii) HEB Grocery Company, LP,
and (iii) Trading Zone Inc. (“SNDA Major Tenants”) and to all other tenants of
the Property requested by Buyer. Seller shall use best efforts to obtain SNDAs
from the SNDA Major Tenants, provided that Seller’s failure to obtain SNDAs
from the SNDA Major Tenants or any other tenant(s) of the Property shall not be
a failure of a condition precedent to Closing.

 

(i)                                     The
representations and warranties of Seller contained in paragraph 8 shall be true
and correct in all material respects as of Closing.

 

In the event that the conditions set forth
above in this paragraph 5 are not satisfied (and Buyer is not otherwise in
default of its obligations set forth in paragraphs 7(c) and 7(d) of this
Agreement), Buyer may terminate this Agreement, subject to paragraph 2(d)
hereof, or waive satisfaction of the condition and close escrow in either
instance by giving written notice to Seller. In the event of such termination,
for reasons described in (b) – (h) above,
the Deposit shall be returned to Buyer.

 

6.                                       Seller’s
Conditions to Closing. The following conditions are conditions precedent to
Seller’s obligation to sell the Property:

 

(a)                                  The
approval of the applicable committee of Seller (the “Committee”), which
approval Buyer acknowledges Seller will not seek until the Approval Date has
passed and Buyer has failed to exercise its right of termination of this
Agreement under paragraph 4. Seller makes no representation with regard to the
likelihood of approval of this Agreement or the transaction contemplated herein
by its Committee. Seller shall have until January 5, 2007 to obtain such
approval by its Committee. If for any reason Seller’s Committee does not
approve this Agreement or the transaction contemplated herein, this Agreement
shall terminate, the Title Company shall return the Deposit to Buyer and neither
party shall have any further obligations or rights hereunder. Notwithstanding
the above, in the event of such termination, Seller agrees to reimburse Buyer
for its reasonable and verifiable out of pocket due diligence expenses up to a
maximum of Seventy-five Thousand and 00/100 Dollars ($75,000.00), including but
not limited to title and survey expenses, third party report expenses and
reasonable attorney’s fees.

 

(b)                                 Delivery
by Buyer at Closing of the Purchase Price, an executed Assignment and Assumption
of Leases in the form attached hereto as Exhibit B and an executed Assignment
of Warranties, Guaranties and Service Contracts in the form attached hereto as
Exhibit G.

 

(c)                                  Performance
by Buyer as and when required by this Agreement of those and terms, covenants,
conditions and agreements specifically related to Buyer’s obligations contained
in this Agreement.

 

 

(d)                                 The
representations and warranties of Buyer contained in paragraph 8 shall be true
and correct in all material respects as of Closing.

 

In the event that the conditions in this
paragraph 6 are not satisfied, Seller may elect, at its sole discretion, to
terminate this Agreement or waive satisfaction of the condition and close
escrow. In the event of such termination, for reasons described in (b), (c) or
(d) above, the Deposit shall be retained by Seller as liquidated damages and
shall be non-refundable to the Buyer.

 

7.                                       The Closing.

 

(a)                                  The
Closing hereunder shall be held and delivery of all items to be made at the
Closing under the terms of this Agreement shall be made at the offices of the
Title Company on January 16, 2007 (unless extended as specifically provided for
herein), or such other date prior thereto as Buyer and Seller may mutually
agree in writing; provided, however, should such date fall during the final two
(2) business days of any calendar month, the date shall automatically be
extended to the first business day of the following calendar month such that
Closing will not occur during the final two (2) business days of any calendar
month (the “Closing Date”). Buyer shall have a one-time right to extend the
Closing Date until January 26, 2007, provided that on or before January 9,
2007, Buyer gives Seller notice of such extension and deposits an additional
non-refundable deposit in the amount of One Hundred Thousand and 00/100 Dollars
($100,000.00) with the Title Company. Except as otherwise provided herein, such
date may not be extended without the prior written approval of both Seller and
Buyer. In the event the Closing does not occur on or before the Closing Date,
the Title Company shall, subject to the provisions of paragraph 2, and unless
it is notified by both parties to the contrary, within three (3) business days
after the Closing Date, return to the depositor thereof items which it may have
been deposited pursuant to this Agreement. Any such return shall not, however,
relieve either party hereto of any liability it may have for its wrongful
failure to close.

 

(b)                                 At
or before the Closing, Seller shall deliver to escrow the following:

 

(i)                                     the
Deed conveying to the Buyer the Property as required by paragraph 3 above;

 

(ii)                                  originals
or copies, if originals are not available, of all leases (and amendments
thereto, if any) in Seller’s possession or control and covering any portion of
the Property, any non cash security deposits relating thereto in Seller’s
possession or control and an executed Assignment and Assumption of Leases in
the form attached hereto as Exhibit B;

 

(iii)                               Seller’s
Non-Foreign Certification in the form attached as Exhibit C;

 

(iv)                              notices
to the tenants at the Property in the form attached as Exhibit D, executed by
Seller;

 

(v)                                 an
executed Assignment of Warranties, Guaranties and Service Contracts in the form
attached hereto as Exhibit G; and

 

 

(vi)                              an
executed Bill of Sale in the form attached hereto as Exhibit I.

 

Buyer may waive compliance on Seller’s part
under any of the foregoing items by an instrument in writing.

 

(c)                                  At
or before the Closing, Buyer shall deliver to escrow the Purchase Price, an
executed Assignment and Assumption of Leases in the form attached hereto as
Exhibit B and an executed Assignment of Warranties, Guaranties and Service
Contracts in the form attached hereto as Exhibit G.

 

(d)                                 Seller
and Buyer shall each deposit such other instruments as are reasonably required
by the escrow holder to close the escrow and consummate the purchase of the
Property in accordance with the terms hereof.

 

(e)                                  Prorations

 

(i)                                     In
each proration set forth below, the portion thereof applicable to the period beginning
at 12:01 a.m. on the Closing Date shall be credited to Buyer and the portion
thereof applicable to the period ending prior to such time shall be credited to
Seller (such that income and expenses run to Buyer starting on the Closing
Date). Prorations shall be calculated on the basis of a 12 month year with each
month having thirty (30) days.

 

(A)                              Collected
Rent and Other Lease Amounts. All collected rent, collected tenant
reimbursements for Operating Expenses (as defined below), and other collected income
for the month of Closing under leases in effect on the Closing Date shall be
prorated as of the Closing Date. Buyer shall be credited with any rent and
other income collected by Seller before the Closing Date but applicable to any
period of time from and after the Closing Date. Uncollected rent and other
income shall not be prorated on the Closing Date. Any rent received by Seller
after the Closing Date with respect to time periods from and after the Closing
Date shall be delivered to Buyer within ten (10) days of Seller’s receipt. Buyer
shall apply rent and other income from tenants that are collected after the
Closing Date first to the obligations then owing to Buyer for its period of
ownership and to those reasonable attorney fees incurred by Buyer in collecting
said amount, remitting the balance, if any, to Seller. Buyer will make
reasonable efforts, without suit, to collect any delinquent rents from tenants in
occupancy at the Property on the Closing Date and applicable to any periods
before the Closing Date. Seller may pursue collection as to any rent not
collected by Buyer after 60 days following the Closing Date after written
notice to Buyer, provided that Seller shall have no right to terminate any
lease or any tenant’s occupancy under any lease in connection therewith. Seller
is not restricted in any way from collecting any rent or other income owed by
past tenants who are no longer in occupancy on the Closing Date. Any payments
from tenants in consideration for terminating their lease, which terminations
shall require Buyer’s approval, such approval not to be unreasonably withheld,
shall be prorated between Buyer and Seller on the Closing Date based upon the
revenue from such terminated Leases which would have been received by Seller
after the effective date of the termination, assuming the lease had remained in
effect, and prior to Closing and the revenue which would have been received by
Buyer for the remaining term of the terminated Leases from and after the
Closing Date, assuming the lease had remained in effect.

 

 

(B)                                Operating
Expenses. Taxes, insurance, utilities (to the extent not paid directly by
tenants), common area maintenance and other operating costs and expenses in
connection with the ownership, operation, maintenance and management of the
Real Property (collectively “Operating Expenses”) shall also be prorated as of
the Closing Date as set forth in Paragraph 7(e)(i)(A) above and 7(e)(i)(D)
below. Those Operating Expenses being paid directly by tenants shall not be
prorated. Operating Expenses that are not payable by tenants either directly or
reimbursable under the leases shall be prorated between Seller and Buyer on an
accrual basis.

 

(C)                                Taxes
and Assessments. Real estate taxes and assessments imposed by any
governmental authority shall be prorated as of the Closing Date based upon the
tax bill(s) received for and applicable to the period(s) in which the Closing
Date occurs; or, to the extent such tax bill(s) and applicable amount(s) are
not available by the Closing Date, based on the most recent ascertainable
assessed values and tax rates. Seller shall receive a credit for any taxes and
assessments paid by Seller for the tax period during which the Closing Date
occurs from the Closing Date to the end of the applicable taxing period. All
refunds or tax savings relating to real estate taxes or assessments shall inure
to the benefit of Seller if such refunds or tax savings relate to any period
for which Seller owned the Property, unless such amounts are to be refunded to
tenants at the Property as of Closing. Buyer shall remit to Seller any such
refund or tax savings relating to such period and due Seller promptly upon
Buyer’s receipt, after deducting any amounts due to tenants under the Leases. Any
additional taxes or assessments relating to the tax year(s) in which the
Closing occurs or prior years, arising out of a change in the use of the
Property after Closing or a change in ownership shall be assumed by Buyer
effective as of the Closing Date and paid by Buyer when due and payable, and
Buyer shall indemnify Seller from and against any and all such taxes, which
indemnification obligation shall survive the Closing.

 

(D)                               Final
Adjustments After Closing. If final prorations for those items addressed
herein cannot be made on the Closing Date, then Buyer and Seller agree to
allocate such items on an accrual basis as soon as invoices or bills are
available, but with such final adjustment(s) to be made no later than
forty-five (45) days after the Closing Date. Expenses shall be received and paid
by the parties on an accrual basis with respect to their period of ownership. Seller
shall not, however, be charged for any increase in Operating Expenses due to
increased costs incurred or caused by Buyer subsequent to the Closing.

 

Seller,
as landlord under the leases, may be currently collecting from tenants under
the Leases additional rent or charges to cover Operating Expenses. Upon written
request by either Seller or Buyer within forty-five (45) days after the Closing
Date, the parties agree to then promptly calculate any amounts collected from
the tenants to be prorated as compared to the amounts that should have been
collected for the Seller’s period of ownership. Specifically, the amount to be
prorated shall be determined by calculating the difference between such tenant’s
or tenants’ account balances for collections of reimbursable Operating Expenses
for the lease year including the Closing Date relative to the amounts of actual
Operating Expenses reimbursable to Seller during such period. Upon such
request, the parties shall reasonably estimate Operating Expenses for Seller’s
period of ownership if final bills are not available. Buyer shall be
responsible for administering all reconciliations and other adjustments with
such tenants in accordance with the

 

 

leases
for 2007 provided Seller furnishes Buyer the appropriate records. Seller shall
be responsible for reconciliations for 2006.

 

Payments
in connection with such final adjustments shall be due within fifteen (15) days
of mutual agreement of the amount(s) due, except for amounts to be collected
from tenants, which amounts shall be paid to Seller promptly after collection
from the applicable tenant. Each party shall have reasonable access to, and the
right to inspect and audit the other party’s supporting documentation to
confirm the final prorations, provided at least three (3) business days’
advance notice is given by the auditing party to the audited party.

 

(ii)                                  Leasing
Commissions and Cost of Tenant Finish. At Closing, Buyer shall assume the
obligation to pay all leasing commissions and the costs of tenant finish
disclosed in the Due Diligence Items for lease expansions or renewals exercised
after the Agreement Date. Seller shall be responsible for all leasing
commissions and tenant finish for tenants which have executed leases on or
prior to the Agreement Date. Any leasing commissions and costs of tenant finish
with regard to new leases of the Property entered into subsequent to the
Agreement Date and prior to Closing (the “New Leases”) shall be prorated
between Buyer and Seller on the Closing Date based upon the revenue from such
New Leases received by Seller prior to Closing and the revenue to be received
by Buyer for the term of the New Leases commencing on the Closing Date.

 

(iii)                               Tenant
Deposits. All cash tenant security deposits actually received by Seller
(and interest thereon if required by law or contract to be earned thereon) and not
applied to tenant obligations under the leases as of the Approval Date shall be
transferred or credited to Buyer at Closing or placed in escrow for Buyer’s
benefit, if required by law. All non-cash security deposits shall be
transferred into the name of Buyer at Seller’s cost and expense and until transferred,
Seller agrees to call such non-cash deposits and deliver the proceeds to Buyer
provided Buyer certifies that the applicable tenant is in default under its
lease and Buyer is entitled to the security deposit and Buyer indemnifies and
holds Seller harmless from all loss, cost and expenses, including attorney’s
fees, arising out of calling such non-cash deposit. As of the Closing, Buyer
shall assume Seller’s obligations related to tenant security deposits received
by Buyer or credited against the Purchase Price. Buyer will indemnify, defend,
and hold Seller harmless from and against all demands and claims made by
tenants with respect to any security deposits so received or credited against
the Purchase Price and will reimburse Seller for all attorneys’ fees incurred
or that may be incurred as a result of any such claims or demands as well as
for all loss, expenses, verdicts, judgments, settlements, interest, costs and
other expenses incurred or that may be incurred by Seller as a result of any
such claims or demands by tenants.

 

(iv)                              Utility
Deposits. Buyer shall take all steps necessary to effectuate the transfer
of all utilities to its name as of the Closing Date, and where necessary, post
deposits with the utility companies. Seller shall ensure that all utility
meters are read as of the Closing Date and amounts payable as of such date paid.
Seller shall be entitled to recover any and all deposits held by any utility
company as of the Closing Date.

 

(v)                                 Insurance.
The fire, hazard, and other insurance policies relating to the Property shall
be cancelled by Seller as of the Closing Date and shall not, under any
circumstances, be assigned to Buyer. All unearned premiums for fire and any
additional hazard

 

 

insurance premium or other
insurance policy premiums with respect to the Property shall be retained by
Seller.

 

(f)                                    The
costs incurred in this transaction shall be allocated as follows:

 

(i)                                     Seller
shall pay standard rates for the Title Policy. Buyer shall pay for any special
endorsements including a survey endorsement to the Title Policy and deletion of
the standard printed exceptions other than “shortages in area”.

 

(ii)                                  Buyer
shall pay the cost of any recording fees applicable to the sale.

 

(iii)                               Buyer
shall pay the cost of any update of the Survey.

 

(iv)                              Buyer
and Seller shall split any escrow fees and/or costs.

 

(v)                                 Each
party shall pay its own legal fees and expenses.

 

8.                                       Representations
and Warranties.

 

(a)                                  Seller
hereby represents and warrants to Buyer as follows:

 

(i)                                     Seller
is a corporation duly organized and validly existing under the laws of the
State of Iowa and is in good standing under the laws of the state in which the
Property is located.

 

(ii)                                  All
closing documents executed by Seller which are to be delivered to Buyer at the
Closing are or at the Closing will be duly authorized, executed, and delivered
by Seller, are or at the Closing will be legal, valid, and binding obligations
of Seller, are sufficient to convey title, and do not violate any provisions of
any agreement to which Seller is a party or to which it is subject.

 

(iii)                               Except
as otherwise disclosed to Buyer in the Due Diligence Items, to the Seller’s
Knowledge (as hereinafter defined), there are no liens, security interests,
covenants, conditions, restrictions, rights-of-way, easements or encumbrances
of any kind or character whatsoever, encumbering the Property other than those
set forth in the Title Report and/or Survey.

 

(iv)                              Except
as set forth on Exhibit N, there is no pending litigation which materially
affects the use and operation of the Property or Seller’s ability to fulfill
all of its obligations under this Agreement.

 

(v)                                 Except
as otherwise provided in the Due Diligence Items, to the Seller’s Knowledge,
Seller has not received any written notice from a governmental entity of a
claim that the Property does not comply with all laws, ordinances, rules and
regulations.

 

(vi)                              Seller
is not a foreign corporation, foreign partnership, foreign trust or foreign
estate (as defined in the Internal Revenue Code (“Code”)).

 

 

(vii)                           Except
as otherwise provided in the Due Diligence Items, to the Seller’s Knowledge,
there is no existing condemnation action with respect to the Property which
would materially affect the use and operation of the Property.

 

(viii)                        To Seller’s
Knowledge, Seller has provided true and correct copies of all leases and
amendments thereto and there are no leases except as shown on the rent roll
delivered to Buyer as part of the Due Diligence Items. To Seller’s Knowledge,
Seller has provided Buyer true and correct copies of all Service Contracts.

 

(ix)                                Seller
and each person or entity owning an interest in Seller is (A) (x) not currently
identified on the Specially Designated Nationals and Blocked Persons List
maintained by the Office of Foreign Assets Control, Department of the Treasury
(“OFAC”) and/or on any other similar list maintained by OFAC pursuant to any
authorizing statute, executive order or regulation (collectively, the “List”),
and (y) not a person or entity with whom a citizen of the United States is
prohibited to engage in transactions by any trade embargo, economic sanction,
or other prohibition of United States law, regulation, or Executive Order of
the President of the United States, (B) none of the funds or other assets of
Seller constitute property of, or are beneficially owned, directly or indirectly,
by any Embargoed Person (as hereinafter defined), (C) no Embargoed Person has
any interest of any nature whatsoever in Seller (whether directly or
indirectly), and (D) Seller has implemented procedures, and will consistently
apply those procedures, to ensure the foregoing representations and warranties
remain true and correct at all times.

 

The term “Embargoed Person” means any person, entity or government subject
to trade restrictions under U.S. law, including but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders
or regulations promulgated thereunder with the result that the investment in
Seller is prohibited by law or Seller is in violation of law.

 

Seller also shall require, and shall take
reasonable measures to ensure compliance with the requirement, that no person
who owns any other direct interest in Seller is or shall be listed on any of
the Lists or is or shall be an Embargoed Person. This Section shall not apply
to any person to the extent that such person’s interest in the Seller is
through a U.S. Publicly-Traded Entity. As used in this Agreement, “U.S.
Publicly-Traded Entity” means a Person (other than an individual) whose
securities are listed on a national securities exchange, or quoted on an
automated quotation system, in the United States, or a wholly-owned subsidiary
of such a person.

 

The foregoing representations and warranties
of Seller shall be in full force and effect on the Agreement Date and at the
Closing. Such representations and warranties shall be deemed to have been
reaffirmed and restated by Seller as of the Closing Date, except for any
material change in any of the foregoing representations or warranties or any
material breach thereof that occurs and which is expressly disclosed by Seller
to Buyer in writing at any time and from time to time prior to the Closing
(each a “Disclosure” and collectively, the “Disclosures”), which
Disclosures shall thereafter be updated by Seller prior to the Closing Date. If
any change in any of the foregoing representations or any breach of any of the
foregoing warranties or agreements is a material change or breach, and Seller
does not elect to cure such matters within

 

 

twenty (20)
business days after Seller’s receipt of a written request from Buyer to do so,
or does not agree in writing within said twenty (20) business day period to
indemnify Buyer against and hold Buyer harmless from any and all losses,
liabilities, claims, costs and expenses incurred by Buyer as a result thereof
then, notwithstanding anything contained herein to the contrary, Buyer, at its
sole option, and as its sole remedy, may either (a) close and consummate the
transaction contemplated by this Agreement, without reduction in the Purchase
Price or (b) terminate this Agreement by written notice to Seller, whereupon
the Title Company shall return the Deposit to Buyer and the parties shall have
no rights or obligations hereunder, except for those which expressly survive
any such termination. Such election shall be made by Buyer within five (5)
business days after receipt of notice from Seller that Seller has elected not
to cure or indemnify Buyer with respect to such material change or breach. Failure
of Buyer to cause Seller to receive notice of such election of Buyer within
such five (5) business days period shall conclusively be construed as Buyer’s
having elected alternative (a) above. The Closing Date shall be postponed
automatically, if necessary, to permit the full running of such cure period. The
term “Seller’s Knowledge” as used herein means the actual knowledge (and
not the implied or constructive knowledge) without any duty of investigation or
inquiry of the following person:  Joe
Wanninger, Asset Manager. All representations and warranties made by Seller in
this Agreement shall survive the Closing for a period of nine (9) months and
written notification of any claim arising therefrom must be received in writing
by Seller within such nine (9) month period or such claim shall be forever
barred and Seller shall have no liability with respect thereto. The aggregate
liability of the Seller, with respect to all claims hereunder, shall not exceed
Three Hundred Thousand and 00/100 Dollars ($300,000.00). Notwithstanding the
foregoing, no representation and warranty made in this Agreement by Seller
shall survive the Closing relative to any matters disclosed in the Due
Diligence Item or known to Buyer to be untrue or incorrect and of which Seller
is not notified by Buyer prior to or at the Closing. Buyer is deemed to have
constructive knowledge of all information contained in the Due Diligence Items
that could be reasonably inferred from such Due Diligence Items but not
otherwise.

 

(b)                                 Buyer
hereby represents and warrants to Seller as follows:  (i) Buyer is a limited liability company,
duly organized and validly existing under the laws of the State of Delaware and
is in good standing under the laws of the State in which the Property is
located; (ii) all documents executed by Buyer which are to be delivered to
Seller at Closing are or at the Closing will be duly authorized, executed, and
delivered by Buyer, and are or at the Closing will be legal, valid, and binding
obligations of Buyer, and do not and at the Closing will not violate any
provisions of any agreement to which Buyer is a party or to which it is
subject; (iii) Buyer shall furnish all of the funds for the purchase of the
Property (other than funds supplied by institutional lenders which will hold
valid mortgage liens against the Property) and such funds will not be from
sources of funds or properties derived from any unlawful activity; and (iv)
Buyer is a sophisticated investor with substantial experience in investing in
assets of the same type as the Property and has such knowledge and experience
in financial and business matters that Buyer is capable of evaluating the
merits and risks of an investment in the Property.

 

(c)                                  Buyer
represents and warrants that (i) Buyer and its affiliates (A) are not currently
identified on the List, and (B) are not persons or entities with whom a citizen
of the United States is prohibited to engage in transactions by any trade
embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States, (ii) none
of the funds or other assets of Buyer constitute property of, or are

 

 

beneficially owned, directly or indirectly, by
any Embargoed Person, and (iii) Buyer has implemented procedures, and will
consistently apply those procedures, to ensure the foregoing representations
and warranties remain true and correct at all times.

 

Buyer also shall require, and shall take
reasonable measures to ensure compliance with the requirement, that no person
who owns any other direct interest in Buyer is or shall be listed on any of the
Lists or is or shall be an Embargoed Person. This Section shall not apply to
any person to the extent that such person’s interest in the Buyer is through a
U.S. Publicly-Traded Entity.

 

9.                                       Management, Leasing
and Indemnification.

 

(a)                                  Between
the Agreement Date and the Closing, Seller shall:

 

(i)                                     operate
the Property in the same manner as before the making of this Agreement, the
same as though Seller were retaining the Property,

 

(ii)                                  keep
and perform all of the obligations to be performed by it as landlord under any
Lease or applicable law,

 

(iii)                               not
permit or consent to any new loans affecting the Property,

 

(iv)                              not
without first obtaining the written consent of Buyer enter into any Service
Contracts (unless such contracts may be terminated at or prior to Closing at no
cost to Buyer),

 

(v)                                 promptly
notify Buyer of any condemnation, environmental, zoning or other land use
regulation proceedings, any notices of violations of any applicable laws and
any litigation that arises out of the ownership of the Property, in each case
to the extent Seller obtains actual knowledge thereof,

 

(vi)                              maintain
or cause to be maintained, at Seller’s sole cost and expense, all polices of
insurance currently in effect with respect to the Property (or comparable
replacements thereof),

 

(vii)                           deliver
to Buyer copies of all operating statements prepared in the ordinary course of
business within thirty (30) days after Seller’s preparation thereof relating to
periods prior to Closing, even if prepared after Closing,

 

(viii)                        deliver to
Buyer copies of any bills for real estate taxes and personal property taxes and
copies of any notices pertaining to real estate taxes, assessments or other
matters of material importance to the Property that are received by Seller
after the Agreement Date, even if received after Closing, and

 

(ix)                                not
create any new encumbrance or lien affecting the Property.

 

(b)                                 Buyer acknowledges
that Seller may continue its leasing activity, without Buyer’s approval,
through the Approval Date, but may not terminate any existing lease without

 

 

Buyer’s approval, such approval not to be
unreasonably withheld. Seller shall promptly provide Buyer with all leasing
proposals, letters of intent, and proposed leases received or prepared by
Seller prior to the Approval Date, and will use commercially reasonable efforts
to keep Buyer informed of Seller’s leasing activity prior to the Approval Date.
After the Approval Date, Seller shall submit any prospective leases and any
modifications, amendments, or renewals (which are not pre-approved per the
terms of the lease) to Buyer for Buyer’s reasonable consent which shall be
deemed given if not received in writing by Seller within five (5) business days
of Seller’s written request for consent. Any costs of tenant finish and lease
commissions with regard to new leases or renewal of current leases of the
Property entered into subsequent to the Agreement Date and prior to Closing
(the “New Leases”), be prorated between Buyer and Seller at Closing, provided
the leases are approved in accordance with this paragraph, and subject to the
prorations provisions of paragraph 7(e) above. BUYER SHALL INDEMNIFY SELLER AND SELLER SHALL BE FULLY RELEASED FROM ANY
AND ALL LIABILITY ARISING AS A RESULT OF ANY FUTURE LEASING COMMISSIONS DUE
UNDER ANY LEASING COMMISSION AGREEMENTS AFFECTING THE PROPERTY PROVIDED SUCH
AGREEMENTS ARE INCLUDED IN THE DUE DILIGENCE ITEMS. “Future Leasing Commissions” shall be limited to
those commissions resulting from the renewal or extension of any existing
lease, the exercise of any options under an existing lease or the execution of
a new lease after the Closing Date, and shall not include any commissions due
and owing on or before the Agreement Date under the terms of any leases or
leasing commission agreements in existence on the Agreement Date. Seller shall
indemnify Buyer and Buyer shall be fully released from all liability arising as
a result of any commissions due and owing on or before the Agreement Date under
the terms of any leases or leasing commission agreements in existence on the
Agreement Date.

 

10.                                 Condition of
Property. From and after the Approval Date, Buyer will be deemed to have
approved the physical and environmental characteristics and condition of the
Property, as well as the economic characteristics of the Property. Except as
otherwise expressly provided in paragraph 8(a) herein, Buyer hereby waives any
and all defects in the physical, environmental and economic characteristics and
condition of the Property which would be disclosed by such inspection. Buyer
further acknowledges that neither Seller nor any of Seller’s officers or
directors, nor Seller’s employees, agents, representatives, or any other person
or entity acting on behalf of Seller (hereafter, for the purpose of this
paragraph, such persons and entities are individually and collectively referred
to as the “Seller”), except as otherwise expressly provided in paragraph 8(a)
herein, have made any representations, warranties or agreements (express or
implied) by or on behalf of Seller as to any matters concerning the Property,
the economic results to be obtained or predicted, or the present use thereof or
the suitability for Buyer’s intended use of the Property, including, without limitation,
the following:  suitability of the
topography; the availability of water rights or utilities; the present and
future zoning, subdivision and any and all other land use matters; the
condition of the soil, subsoil, or groundwater; the purpose(s) to which the
Property is suited; drainage; flooding; access to public roads; or proposed
routes of roads or extensions thereof. Buyer acknowledges and agrees that the
Property is to be purchased, conveyed and accepted by Buyer in its present
condition, “as is” and that no patent or latent defect in the physical or
environmental condition of the Property whether or not known or discovered,
shall affect the rights of either party hereto. Any documents furnished to
Buyer by Seller relating to the Property including, without limitation, rent
rolls, service agreements, management contracts, maps, surveys, studies, pro
formas, reports and other information,

 

 

including but not limited to the Due
Diligence Items, shall be deemed furnished as a courtesy to Buyer but without
warranty from Seller, except as otherwise expressly provided in paragraph 8(a)
herein. All work done in connection with preparing the Property for the uses
intended by Buyer including any and all fees, studies, reports, approvals,
plans, surveys, permits, and any expenses whatsoever necessary or desirable in
connection with Buyer’s acquiring, developing, using and/or operating the
Property shall be obtained and paid for by, and shall be the sole
responsibility of Buyer. Upon the Approval Date Buyer will have investigated
and will be deemed to have knowledge of operative or proposed governmental laws
and regulations including land use laws and regulations to which the Property
may be subject and shall acquire the Property upon the basis of its review and
determination of the applicability and effect of such laws and regulations. Except
as otherwise expressly provided in paragraph 8(a) herein, Buyer has neither
received nor relied upon any representations concerning such laws and
regulations from Seller.

 

EXCEPT FOR CLAIMS OF
FRAUD OR WILLFUL MISREPRESENTATION ON THE PART OF SELLER, THOSE REPRESENTATIONS
AND WARRANTIES EXPRESSLY SET FORTH HEREIN AND THOSE POST-CLOSING OBLIGATIONS OF
SELLER SPECIFICALLY CONTAINED HEREIN, BUYER, ON BEHALF OF ITSELF AND ITS
EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, ATTORNEYS AND OTHER REPRESENTATIVES,
AND EACH OF THEM, HEREBY RELEASES SELLER FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION, OBLIGATIONS, DAMAGES AND LIABILITIES OF ANY NATURE
WHATSOEVER, WHETHER ALLEGED UNDER ANY STATUTE, COMMON LAW OR OTHERWISE,
DIRECTLY OR INDIRECTLY, ARISING OUT OF OR RELATED TO THE CONDITION, OPERATION
OR ECONOMIC PERFORMANCE OF THE PROPERTY.

 

By signing in the space provided below in
this paragraph 10, Buyer acknowledges that it has read and understood the
provisions of this paragraph 10.

 

	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  TRT ACQUISITIONS LLC, a

  
	
   

  	
  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DCTRT Real Estate Holdco LLC, a

  
	
   

  	
   

  	
  Delaware limited liability company,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty Operating

  
	
   

  	
   

  	
   

  	
  Partnership LP, a Delaware limited partnership,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty

  
	
   

  	
   

  	
   

  	
   

  	
  Trust Inc., a Maryland corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its general partner

  

 

 

	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  

 

BUYER ACKNOWLEDGES AND
AGREES AND THE DEED SHALL PROVIDE THAT SELLER HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, OTHER THAN
THOSE EXPRESSLY CONTAINED IN THE DEED OR IN THIS AGREEMENT, PROMISES,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS
OR IMPLIED, ORAL OR WRITTEN CONCERNING OR WITH RESPECT TO:  (i) THE VALUE, QUALITY OR CONDITION OF THE
PROPERTY; (ii) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND
USES WHICH BUYER MAY CONDUCT THEREON; (iii) THE COMPLIANCE OF THE PROPERTY WITH
ANY APPLICABLE LAWS OR RESTRICTIVE COVENANTS; (iv) THE HABITABILITY,
SUITABILITY, MERCHANTABILITY, MARKETABILITY OR FITNESS FOR PARTICULAR PURPOSE
OF THE PROPERTY; (v) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS
INCORPORATED INTO THE PROPERTY; (vi) THE MANNER, QUALITY, STATE OF REPAIR OR
LACK OF REPAIR OF THE PROPERTY; OR (vii) ANY OTHER MATTER OF ANY KIND WITH
RESPECT TO THE PROPERTY. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE
MAXIMUM EXTENT PERMITTED BY LAW THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN
IS MADE ON AN “AS IS” AND “WITH ALL FAULTS” CONDITION AND BASIS WITH ALL FAULTS
AND DEFECTS. IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN
ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT ALL THE PROPERTY IS SOLD BY
SELLER AND PURCHASED BY BUYER SUBJECT TO THE FOREGOING.

 

11.                                 Possession. Buyer
shall have the right of possession on the Closing Date, provided, however, that
Seller shall allow authorized representatives of Buyer reasonable access to the
Property for the purposes of satisfying Buyer with respect to satisfaction of
any conditions precedent to the Closing contained herein.

 

12.                                 Tax-Deferred
Exchange. Buyer and Seller agree that, at either Buyer’s or Seller’s sole
election, this transaction shall be structured as an exchange of like-kind
properties under Section 1031 of the Internal Revenue Code of 1986, as amended
(the “Code”), and the regulations and proposed regulations thereunder. The
parties agree that if either wishes to make such election, it must do so prior
to the Closing Date. If either so elects, the other shall reasonably cooperate,
provided any such exchange is consummated pursuant to an agreement that is
mutually acceptable to Buyer and Seller and which shall be executed and
delivered on or before the Closing Date. The electing party shall in all events
be responsible for all costs and expenses related to the Section 1031 exchange
and shall fully indemnify, defend and hold the other harmless from and against
any and all liability, claims, damages, expenses (including reasonable
attorneys’ and paralegal fees and reasonable attorneys’ and paralegal fees on
appeal), proceedings and causes of action of any kind or nature whatsoever
arising out of, connected with or in any manner related to such 1031 exchange
that would not have been incurred by the non-electing party if the transaction
were a purchase for cash. The provisions of the immediately

 

 

preceding sentence shall survive closing and
the transfer of title to subject Property to Buyer. Notwithstanding anything to
the contrary contained in this paragraph: 
any such Section 1031 exchange shall be consummated through the use of a
facilitator or intermediary so that Buyer shall in no event be requested or
required to acquire title to any property other than the Property.

 

13.                                 Miscellaneous.

 

(a)                                  Notices.
Any notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to be an adequate and sufficient notice if given in
writing and service is made either by (i) personal delivery, in which case the
service shall be deemed received the date of such personal delivery, (ii)
nationally recognized overnight air courier service, next day delivery,
prepaid, in which case the notice shall be deemed to have been received one (1)
business day following delivery to such nationally recognized overnight air
courier service, or (iii) at the time of being sent by facsimile if delivery
thereof is confirmed by sender’s receipt of a transmission report, generated by
sender’s facsimile machine, which confirms that the facsimile was successfully
transmitted in its entirety and provided the facsimile was forwarded prior to
5:00 Central, and to the following addresses or facsimile numbers:  

	
   

  	
  If to Seller:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Principal Life Insurance Company

  	
   

  
	
   

  	
  c/o Principal Real Estate Investors, LLC

  	
   

  
	
   

  	
  801 Grand Avenue

  	
   

  
	
   

  	
  Des Moines, Iowa 50392

  	
   

  
	
   

  	
  Attn: 

  	
  Emily J. Kell

  	
   

  
	
   

  	
  Fax: 

  	
  866-850-4022

  	
   

  
	
   

  	
  Phone: 

  	
  515-247-0610

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Principal Real Estate Investors, LLC

  	
   

  
	
   

  	
  c/o Closing Department

  	
   

  
	
   

  	
  801 Grand Avenue

  	
   

  
	
   

  	
  Des Moines, Iowa 50392-5590

  	
   

  
	
   

  	
  Attn: 

  	
  Amy Corwin

  	
   

  
	
   

  	
  Fax: 

  	
  866-840-7679

  	
   

  
	
   

  	
  Phone: 

  	
  515-247-0795

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  and a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Thompson Hine LLP

  	
   

  
	
   

  	
  10 West Broad Street, Suite 700

  	
   

  
	
   

  	
  Columbus, Ohio 43215-3435

  	
   

  
	
   

  	
  Attn: 

  	
  Darrel R. Davison

  	
   

  
	
   

  	
  Fax: 

  	
  614-469-3361

  	
   

  
	
   

  	
  Phone: 

  	
  614-469-3231

  	
   

  

 

 

	
   

  	
  If to Buyer:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRT Acquisitions LLC

  	
   

  
	
   

  	
  c/o Dividend Capital Total Realty Trust

  	
   

  
	
   

  	
  618 17th Street, Suite 1700

  	
   

  
	
   

  	
  Denver, Colorado 80202

  	
   

  
	
   

  	
  Attn: 

  	
  Gregory M. Moran

  	
   

  
	
   

  	
  Fax: 

  	
  303-869-4602

  	
   

  
	
   

  	
  Phone:

  	
  303-8533858

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Seyfarth Shaw LLP

  	
   

  
	
   

  	
  131 South Dearborn Street, Suite 2400

  	
   

  
	
   

  	
  Chicago, Illinois 60603

  	
   

  
	
   

  	
  Attn: 

  	
  Joel D. Rubin

  	
   

  
	
   

  	
  Fax:

  	
  312-460-7600

  	
   

  
	
   

  	
  Phone:

  	
  312-460-5600

  	
   

  

 

or such other address as either party may
from time to time specify in writing to the other.

 

(b)                                 Brokers
and Finders. Neither party has had any contact or dealings regarding the
Property, or any communication in connection with the subject matter of this
transaction, through any licensed real estate broker, entity, agent, commission
salesperson, or other person who will claim a right to compensation or a
commission or finder’s fee as a procuring cause of the sale contemplated herein,
except for Holliday Fenoglio Fowler, whose commission shall be paid by Seller. In
the event that any company, firm, broker, agent, commission salesperson or
finder perfects a claim for a commission or finder’s fee based upon any such
contract, dealings or communication, the party through whom the company, firm,
broker, agent, commission salesperson or finder makes his claim shall be
responsible for said commission or fee and all costs and expenses (including
reasonable attorneys’ fees) incurred by the other party in defending against
the same. No commission shall be paid or become payable unless the Closing
actually occurs. The provisions of this subparagraph (b) shall survive Closing
and any termination, cancellation or rescission of this Agreement.

 

(c)                                  Successors
and Assigns. This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors, heirs, administrators
and assigns and may be assigned by Buyer to an affiliated entity provided that
(i) Buyer shall remain jointly and severally liable for the obligations
contained in this Agreement; (ii) Buyer and any assignee, by accepting
assignment of this Agreement, expressly agrees to defend and indemnify Seller
from any litigation arising out of the assignment; (iii) no further assignment
shall occur without the prior written consent of the Seller; (iv) written
notice of the assignment, including the name of the Assignee, is provided to
Seller no fewer than ten (10) business days prior to Closing; and (v) Buyer
shall provide to Seller at Closing an Assignment and Assumption of Real Estate
Purchase and Sale Agreement in the form attached hereto as Exhibit F, executed
by both Buyer and Assignee. This Agreement shall not be assigned by Seller.

 

 

(d)                                 Amendments
and Terminations. Except as otherwise provided herein, this Agreement may
be amended or modified by, and only by, a written instrument executed by Seller
and Buyer.

 

(e)                                  Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the state in which the Property is located.

 

(f)                                    Merger
of Prior Agreements. This Agreement supersedes all prior agreements and
understandings between the parties hereto relating to the subject matter
hereof.

 

(g)                                 Enforcement.
In the event either party hereto fails to perform any of its obligations under
this Agreement or in the event a dispute arises concerning the meaning or
interpretation of any provision of this Agreement, the defaulting party or the
party not prevailing in such dispute, as the case may be, shall pay any and all
costs and expenses incurred by the other party in enforcing or establishing its
rights hereunder, including, without limitation, court costs and reasonable
attorneys’ fees. Buyer and Seller both acknowledge each has been advised by
counsel as to their respective rights, duties and obligations in this Agreement
and have had ample opportunity to negotiate same. Thus, both Buyer and Seller
acknowledge that any ambiguity in this Agreement should not necessarily be resolved
against the drafter of this Agreement.

 

(h)                                 Time
of the Essence. Time is of the essence of this Agreement.

 

(i)                                     Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed
to be an original, but such counterparts when taken together shall constitute
but one Agreement.

 

(j)                                     Survivability.
Except as otherwise provided herein, the covenants contained in this Agreement
shall survive the closing of the purchase and sale and shall not be deemed
merged in the deed, but shall remain in full force and effect.

 

(k)                                  No
Recordation. Neither Seller nor Buyer shall record this Agreement or
memorandum thereof in or among the land or chattel records of any jurisdiction.

 

(l)                                     Proper
Execution. The submission by Seller to Buyer of this Agreement in unsigned
form shall have no binding force and effect, shall not constitute an option,
and shall not confer any rights upon Buyer or impose any obligations on Seller
irrespective of any reliance thereon, change of position or partial performance
until Seller shall have executed this Agreement and the Deposit shall have been
received by the Title Company.

 

(m)                               Computation
of Time. The time in which any act is to be done under this Agreement is
computed by excluding the first day, and including the last day, unless the
last day is a holiday or Saturday or Sunday, and then that day is also excluded.
Unless expressly indicated otherwise, (a) all references to time shall be
deemed to refer to Central time, and (b) all time periods shall expire at 5:00
p.m. Central time.

 

(n)                                 Limitation
of Liability. The liability of Principal Life Insurance Company hereunder
is limited to the assets of its Principal U.S. Property Separate Account.

 

 

(o)                                 Information and Audit Cooperation. Within
seventy-five (75) days after the Closing Date, Seller shall allow Buyer’s
auditors access to the books and records of Seller relating to the operation of
the Property for the two (2) year period prior to the Closing Date to enable
Buyer to comply with any financial reporting requirements applicable to Buyer,
upon at least three (3) business days prior written notice to Seller. In
addition, Seller shall provide Buyer’s designated independent auditors a
representation letter regarding the books and records of the Property in
substantially the form attached hereto as Exhibit P.

 

[The remainder of
this page is intentionally left blank.]

 

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.

 

	
   

  	
  Seller:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINCIPAL LIFE INSURANCE COMPANY,
  an Iowa

  corporation, for its Principal U.S. Property Separate Account,

  formerly known as Principal Life Insurance Company, an Iowa

  corporation, for its Real Estate Separate Account

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC, a

  
	
   

  	
   

  	
  Delaware limited liability
  company, its authorized

  
	
   

  	
   

  	
  signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Amy M. Corwin

  
	
   

  	
   

  	
   

  	
  Senior Closing Consultant

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ G. Kent Jurgensan

  
	
   

  	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
  Closing

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Buyer:

  
	
   

  	
   

  
	
   

  	
  TRT ACQUISITIONS LLC, a

  
	
   

  	
  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DCTRT Real Estate Holdco LLC, a

  
	
   

  	
   

  	
  Delaware limited liability company,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty Operating

  
	
   

  	
   

  	
  Partnership LP, a Delaware limited partnership,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty

  
	
   

  	
   

  	
   

  	
   

  	
  Trust Inc., a Maryland corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Buyer’s Tax Identification Number: 

  	
   

  
										

 

 

EXHIBIT “A”

 

Legal Description

 

Lot
11, Block 1, New City Block 510, Bandera Center Subdivision, Unit 5, an
addition to the City of Leon Valley, Bexar County, Texas according to the map
or plat thereof, recorded in Volume 9520, Page 196, Deed and Plat Records of
Bexar County, Texas.

 

A-1

 

EXHIBIT “B”

 

ASSIGNMENT AND ASSUMPTION
OF LESSOR’S INTEREST IN LEASES

 

THIS
ASSIGNMENT AND ASSUMPTION OF LESSOR’S INTEREST IN LEASES (this “Assignment”) by
and between PRINCIPAL LIFE INSURANCE COMPANY, an Iowa corporation, for its
Principal U.S. Property Separate Account, formerly known as Principal Life
Insurance Company, an Iowa corporation, for its Real Estate Separate Account
(hereinafter called “Assignor”)
and                     ,
a Delaware limited liability company (hereinafter called “Assignee”).

 

WITNESSETH:

 

WHEREAS,
Assignor as lessor entered into those certain lease agreements as more
particularly set out in Exhibit “B” attached hereto (herein called the
“Leases”); and

 

WHEREAS,
Assignor now desires to transfer and assign to Assignee all of Assignor’s
interest in and to the lessor’s rights, obligations and interest under the
Leases.

 

NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration in hand paid to Assignor, the receipt and sufficiency of which is
hereby acknowledged, Assignor does hereby grant, convey, transfer and assign to
Assignee, its successors and assigns, all of Assignor’s interest in the Leases,
covering all or portions of the real property described in Exhibit “A” attached
hereto and made a part hereof. Assignor is also hereby assigning and
transferring to Assignee any security deposits held by Assignor under the
Leases. Assignee hereby assumes any and all obligations of Assignor under such
leases first arising from and after Closing and agrees to perform all of the
terms, covenants, and conditions of the Leases on part of Assignor required
therein to be performed after Closing.

 

ASSIGNEE ACKNOWLEDGES AND AGREES
AND THE DEED SHALL PROVIDE THAT ASSIGNOR HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, OTHER THAN
THOSE EXPRESSLY CONTAINED IN THE DEED AND THAT CERTAIN REAL ESTATE PURCHASE AND
SALE AGREEMENT BETWEEN PRINCIPAL LIFE INSURANCE COMPANY AND TRT ACQUISITIONS
LLC DATED      , 2006 (WHICH PURCHASE AND
SALE AGREEMENT REPRESENTATIONS AND WARRANTIES SHALL SURVIVE THE DATE OF THIS
ASSIGNMENT FOR A PERIOD OF NINE (9) MONTHS), PROMISES, AGREEMENTS OR GUARANTIES
OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR
WRITTEN CONCERNING OR WITH RESPECT TO: 
(i) THE VALUE, QUALITY OR CONDITION OF THE PROPERTY; (ii) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH ASSIGNEE
MAY CONDUCT THEREON; (iii) THE COMPLIANCE OF THE PROPERTY WITH ANY APPLICABLE
LAWS OR RESTRICTIVE COVENANTS; (iv) THE HABITABILITY, SUITABILITY,
MERCHANTABILITY, MARKETABILITY OR FITNESS FOR PARTICULAR PURPOSE OF THE
PROPERTY; (v) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS
INCORPORATED INTO THE PROPERTY; (vi) THE MANNER, QUALITY, STATE OF

 

B-1

 

REPAIR OR LACK OF REPAIR
OF THE PROPERTY; OR (vii) ANY OTHER MATTER OF ANY KIND WITH RESPECT TO THE
PROPERTY. ASSIGNEE FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT
PERMITTED BY LAW,  THE SALE OF THE
PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN “AS IS” AND “WITH ALL FAULTS”
CONDITION AND BASIS WITH ALL FAULTS AND DEFECTS.

 

This
Assignment may be executed in counterparts, each of which shall be deemed to be
an original, but such counterparts when taken together shall constitute but one
agreement.

 

EXECUTED
as of this     day
of                  ,
200  .

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  PRINCIPAL LIFE INSURANCE COMPANY, 
  an

  
	
   

  	
  anIowa corporation, for its Principal U.S. Property Separate

  
	
   

  	
  Account, formerly known as Principal Life Insurance Company,

  
	
   

  	
  Iowa corporation, for its Real Estate Separate Account

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  PRINCIPAL REAL ESTATE INVESTORS, LLC, a

  
	
   

  	
   

  	
  Delaware limited liability company, its authorized

  
	
   

  	
   

  	
  signatory

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

B-2

 

	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  TRT ACQUISITIONS LLC, a

  
	
   

  	
  Delaware limited liability company 

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DCTRT Real Estate Holdco LLC, a

  
	
   

  	
   

  	
  Delaware limited liability company,

  
	
   

  	
   

  	
  its sole member 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty Operating

  
	
   

  	
   

  	
   

  	
  Partnership LP, a Delaware limited partnership,

  
	
   

  	
   

  	
   

  	
  its sole member 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty

  
	
   

  	
   

  	
   

  	
   

  	
  Trust, Inc., a Maryland corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  

 

B-3

 

EXHIBIT “C”

 

NON-FOREIGN CERTIFICATION

 

To
inform TRT ACQUISITIONS LLC, a Delaware limited liability company (“Buyer”),
that withholding of tax under Section 1445 of the Internal Revenue Code of
1986, as amended (“Code”) will not be required upon the transfer of the legal
title to certain real property which will be transferred to Buyer by PRINCIPAL
LIFE INSURANCE COMPANY, an Iowa corporation, for its Principal U.S. Property
Separate Account, formerly known as Principal Life Insurance Company, an Iowa
corporation, for its Real Estate Separate Account (“Seller”), the undersigned
hereby certifies the following on behalf of Seller:

 

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

 

2.                                       Seller’s U.S.
employer identification/social security number is 42-0127290; and

 

3.                                       Seller’s office
address is:

 

c/o
Principal Real Estate Investors, LLC

801 Grand Avenue

Des Moines, Iowa 50392-5590

 

4.                                       Seller is not a
disregarded entity as defined in § 301.7701-3 of the Income Tax Regulations.

 

Seller
understands that this Certification, as required by §1.1445-2-(b)(2)(iii) of
the Income Tax Regulations, may be disclosed to the Internal Revenue Service by
Buyer and that any false statement contained herein could be punished by fine,
imprisonment, or both.

 

Under
penalties of perjury I declare that I have examined this Certification and to
the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this document on behalf of
Seller.

 

[The remainder of
this page is intentionally left blank.]

 

C-1

 

Dated:                           200  .

 

	
   

  	
  PRINCIPAL LIFE INSURANCE COMPANY, an

  
	
   

  	
  Iowa corporation, for its Principal U.S. Property Separate

  
	
   

  	
  Account, formerly known as Principal Life Insurance

  
	
   

  	
  Company, an Iowa corporation, for its Real Estate Separate

  
	
   

  	
  Account

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE INVESTORS, LLC, a 

  
	
   

  	
   

  	
  Delaware limited liability company, its authorized

  
	
   

  	
   

  	
  signatory

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
					

 

C-2

EXHIBIT “D”

 

Notice to Tenant

 

RE:  HEB Marketplace, 5601 Bandera Road, Leon
Valley, Texas

 

Dear                           :

 

Please
be advised that
effective                       ,
200  , Principal Life Insurance Company has sold the above-referenced
project
to                 .
Effective                           ,
200  , all future rental payments should be sent to the following:

 

 

 

 

 

Any
questions regarding maintenance and management of the property should be
[addressed as provided above/addressed to]:

 

 

 

 

 

Should
your lease require notice of a change of landlord’s address, please consider this your notice. The
landlord’s notice address is now [the same as above/:]

 

 

[The remainder of
this page is intentionally left blank.]

 

D-1

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  PRINCIPAL LIFE INSURANCE
  COMPANY, an

  
	
   

  	
  Iowa corporation, for its
  Principal U.S. Property Separate

  
	
   

  	
  Account, formerly known as
  Principal Life Insurance

  
	
   

  	
  Company, an Iowa corporation,
  for its Real Estate Separate

  
	
   

  	
  Account

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC, a

  
	
   

  	
   

  	
  Delaware limited liability
  company, its authorized

  
	
   

  	
   

  	
  signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

NOTE TO BUYER: 
PLEASE PROVIDE THE NECESSARY INFORMATION FOR THIS DOCUMENT TO SELLER AS
SOON AS AVAILABLE

 

D-2

 

EXHIBIT “E”

 

TANGIBLE PERSONAL PROPERTY

 

	
  1.

  	
   

  	
  28 – 4’
  Natural Pine Building Front Wreaths with Deluxe Ornamentation and Bows

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  11 – Double Custom Silk-Screened Banners, 2-Color on Marine Acrylic

  
	
   

  	
   

  	
  (Total of 11 poles, 22 Banners)*

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  11 – Double Premium Banner Brackets

  

 

	
   

  	
   

  	
  *  Green Sunbrella Banner with
  Tree and Happy Holidays

  

 

E-1

 

EXHIBIT “F”

 

ASSIGNMENT AND ASSUMPTION
OF

REAL ESTATE PURCHASE AND SALE AGREEMENT

 

THIS
ASSIGNMENT AND ASSUMPTION OF REAL ESTATE PURCHASE AND SALE AGREEMENT (this
“Assignment”) is made and entered into
this      day
of                        ,
200  , by and between TRT ACQUISITIONS LLC, a Delaware limited liability
company (“Assignor”),
and                                        ,
a(n)                                        (“Assignee”).

 

WHEREAS,
Assignor entered into that certain Real Estate Purchase and Sale Agreement
dated as of December     , 2006 (“Purchase Agreement”)
for that certain real property known as HEB Marketplace, 5601 Bandera Road,
Leon Valley, Texas, with PRINCIPAL LIFE INSURANCE COMPANY, an Iowa corporation,
for its Principal U.S. Property Separate Account, formerly known as Principal
Life Insurance Company, an Iowa corporation, for its Real Estate Separate
Account (“Seller”), and

 

WHEREAS,
Assignor wishes to assign to Assignee its rights pursuant to the Purchase
Agreement, relating to the purchase of that certain real property, with all improvements
and appurtenances thereto more particularly described in the Purchase
Agreement.

 

NOW,
THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Assignor hereby assigns to Assignee all of Assignor’s right, title and interest
in and to the Purchase Agreement in order to expressly confer upon Assignee all
of the benefits of a successor, assign or nominee of Assignor under the
Purchase Agreement.

 

Nothing
in this Assignment shall be deemed to release Assignor from being directly
liable to Seller under the Purchase Agreement.

 

By
executing this Assignment, Assignee hereby accepts the assignment of and
assumes the obligations set forth in the Purchase Agreement, as aforesaid.

 

Assignor
will indemnify, defend and hold harmless Seller for any damages, including
attorneys fees and litigation costs from any suit, claim, demand or proceeding
arising out of the Assignment or by a breach of this Assignment.

 

Assignor
hereby covenants and warrants to Seller that Assignee is the only assignee of
the Purchase Agreement and Assignee hereby covenants and warrants to Seller
that (i) Assignee is in good standing under the laws of the State in which the
Property is located; (ii) all documents executed by Assignee which are to be
delivered to Seller at Closing are or at the Closing will be duly authorized,
executed, and delivered by Assignee, and are or at the Closing will be legal,
valid, and binding obligations of Assignee, and do not and at the Closing will
not violate any provisions of any agreement to which Assignee is a party or to
which it is subject; (iii) Assignee shall furnish all of the funds for the
purchase of the Property (other than funds supplied by institutional lenders
which will hold valid mortgage liens against the Property) and such funds will
not be from sources of funds or properties derived from any unlawful activity;
and (iv)

 

F-1

 

Assignee
is a sophisticated investor with substantial experience in investing in assets
of the same type as the Property and has such knowledge and experience in
financial and business matters that Assignee is capable of evaluating the
merits and risks of an investment in the Property.

 

This
Assignment shall be governed by, and construed in accordance with, the laws of
the State of Texas. This Assignment may be executed in counterparts, including
facsimile counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same instrument.

 

IN
WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
executed as of the date and year first set forth herein.

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  TRT ACQUISITIONS LLC, a

  
	
   

  	
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DCTRT Real Estate Holdco LLC, a

  
	
   

  	
   

  	
  Delaware limited liability company,

  
	
   

  	
   

  	
  its sole member 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty Operating

  
	
   

  	
   

  	
   

  	
  Partnership LP, a Delaware limited partnership,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty

  
	
   

  	
   

  	
   

  	
   

  	
  Trust, Inc., a Maryland corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
   

  	
  , a(n)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
								

 

F-2

 

	
   

  	
  Consented to by Seller:

  
	
   

  	
   

  
	
   

  	
  PRINCIPAL LIFE INSURANCE
  COMPANY, an

  
	
   

  	
  Iowa corporation, for its
  Principal U.S. Property Separate

  
	
   

  	
  Account, formerly known as
  Principal Life Insurance

  
	
   

  	
  Company, an Iowa corporation,
  for its Real Estate Separate

  
	
   

  	
  Account

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE INVESTORS,
  LLC, a

  
	
   

  	
   

  	
  Delaware limited liability
  company, its authorized

  
	
   

  	
   

  	
  signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

F-3

 

EXHIBIT “G”

 

ASSIGNMENT OF WARRANTIES,
GUARANTIES AND SERVICE CONTRACTS

 

THIS
ASSIGNMENT OF WARRANTIES, GUARANTIES AND SERVICE CONTRACTS (this “Assignment”),
made as of the     day
of                    ,
200  , by PRINCIPAL LIFE
INSURANCE COMPANY, an Iowa corporation, for its Principal U.S. Property
Separate Account, formerly known as Principal Life Insurance Company, an Iowa
corporation, for its Real Estate Separate Account, hereinafter referred
to as “Assignor,” to TRT ACQUISITIONS LLC, a Delaware limited liability
company, hereinafter referred to as “Assignee.”

 

WITNESSETH:

 

FOR
VALUE RECEIVED, Assignor hereby grants, transfers and assigns to Assignee all
of Assignor’s interest in and to any and all warranties and guaranties,
management agreements, maintenance and service agreements, and equipment
leases, if any, to the extent such warranties and guaranties, agreements and
leases are assignable, pertaining to any construction, repairs, equipment,
personal property, intangible property and improvements located on the real
property described in Exhibit “A” attached hereto in Bexar County, Texas.
Assignee hereby assumes any and all obligations of Assignor under such
warranties and guaranties, agreements and leases and agrees to perform all of
the terms, covenants, and conditions on the part of Assignor required therein
to be performed, and in the case of agreements and leases, only those
obligations of Assignor which first arise from and after Closing.

 

Assignor
will cooperate with Assignee to secure performance by any warrantor for any
work which the Assignee believes should be performed by any warrantor pursuant
to such guaranties or warranties.

 

This
Assignment shall be binding upon and inure to the benefit of the parties
hereto, their successors and assigns.

 

This
Assignment may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute but one and the
same instrument.

 

[The remainder of
this page is intentionally left blank.]

 

G-1

 

EXECUTED
as of this     day
of                     ,
200  .

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  PRINCIPAL LIFE INSURANCE
  COMPANY, an

  
	
   

  	
  Iowa corporation, for its
  Principal U.S. Property Separate

  
	
   

  	
  Account, formerly known as
  Principal Life Insurance

  
	
   

  	
  Company, an Iowa corporation,
  for its Real Estate Separate

  
	
   

  	
  Account

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC, a

  
	
   

  	
   

  	
  Delaware limited liability
  company, its authorized

  
	
   

  	
   

  	
  signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  TRT ACQUISITIONS LLC, a

  
	
   

  	
  Delaware limited liability company 

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DCTRT Real Estate Holdco LLC, a

  
	
   

  	
   

  	
  Delaware limited liability company, its

  
	
   

  	
   

  	
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty Operating

  
	
   

  	
   

  	
   

  	
  Partnership LP, a Delaware limited partnership,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Dividend Capital Total Realty

  
	
   

  	
   

  	
   

  	
   

  	
  Trust, Inc., a Maryland corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  

 

G-2

 

EXHIBIT “H”

 

DEED

 

NOTICE OF
CONFIDENTIALITY RIGHTS:  IF YOU ARE A
NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM
THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:  YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S
LICENSE NUMBER.

 

SPECIAL WARRANTY
DEED

 

	
  STATE OF IOWA

  	
   

  	
  §

  	
   

  	
   

  
	
   

  	
   

  	
  §

  	
   

  	
  KNOW ALL MEN BY THESE PRESENTS:

  
	
  COUNTY OF POLK

  	
   

  	
  §

  	
   

  	
   

  

 

THAT PRINCIPAL LIFE INSURANCE COMPANY, an
Iowa corporation, for its Principal U.S. Property Separate Account, formerly
known as Principal Life Insurance Company, an Iowa corporation, for its Real
Estate Separate Account (“Grantor”),
for and in consideration of the sum of Ten and No/100 Dollars cash and other
good and valuable consideration paid in hand, the receipt and sufficiency of
which is hereby acknowledged, by TRT ACQUISITIONS LLC, a Delaware limited
liability company (“Grantee”), whose address is                                                                   ,
HAS GRANTED, BARGAINED, SOLD and CONVEYED, and by these presents DOES GRANT,BARGAIN, SELL and CONVEY unto Grantee all that certain land situated in
Bexar County, Texas, and described on Exhibit “A” which is attached hereto and
incorporated herein by reference for all purposes, together with all of
Grantor’s right, title and interest in and to all appurtenances thereof or in
anywise appertaining thereto and all of Grantor’s right, title and interest in and
to all buildings, structures, fixtures and improvements located thereon (said
land, real property, rights, improvements and appurtenances being herein
together referred to as the “Property”).

 

This
conveyance and the warranties of title herein are expressly made subject to the
liens, encumbrances, easements and other exceptions set forth on Exhibit “B”
attached hereto and incorporated herein by this reference for all purposes to
the extent the same are valid and subsisting and affect the Property.

 

BY ITS ACCEPTANCE OF THIS DEED, GRANTEE ACKNOWLEDGES AND AGREES THAT,
EXCEPT AS OTHERWISE SPECIFICALLY STATED IN THIS CONVEYANCE, GRANTOR
SPECIFICALLY DISCLAIMS ANY REPRESENTATION, WARRANTY (OTHER THAN WARRANTIES OF
TITLE AS EXPRESSLY PROVIDED AND LIMITED HEREIN AND IN THAT CERTAIN REAL ESTATE
PURCHASE AND SALE AGREEMENT BETWEEN PRINCIPAL LIFE INSURANCE COMPANY AND TRT
ACQUISITIONS LLC DATED AS
OF                   ,
2006, WHICH PURCHASE AND SALE AGREEMENT REPRESENTATIONS AND WARRANTIES SHALL
SURVIVE THE DATE OF THIS CONVEYANCE FOR A PERIOD OF NINE (9) MONTHS), AGREEMENT
OR GUARANTY OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED,
ORAL OR WRITTEN CONCERNING OR WITH RESPECT TO: (a) THE

 

H-1

 

VALUE, QUALITY OR CONDITION OF
THE PROPERTY; (b) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES
AND USES WHICH GRANTEE MAY CONDUCT THEREON; (c) THE COMPLIANCE OF THE PROPERTY
WITH ANY APPLICABLE LAWS OR RESTRICTIVE COVENANTS; (d) THE HABITABILITY, SUITABILITY,
MERCHANTABILITY, MARKETABILITY OR FITNESS FOR PARTICULAR PURPOSE OF THE
PROPERTY; (e) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS
INCORPORATED INTO THE PROPERTY; (f) THE MANNER, QUALITY, STATE OF REPAIR OR
LACK OF REPAIR OF THE PROPERTY; OR (g) ANY OTHER MATTER OF ANY KIND WITH
RESPECT TO THE PROPERTY. GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT TO THE
MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR
HEREIN IS MADE ON AN “AS IS” AND “WITH ALL FAULTS” CONDITION AND BASIS WITH ALL
FAULTS AND DEFECTS.

 

TO
HAVE AND TO HOLD the property unto Grantee, and Grantee’s successors and
assigns forever, and Grantor does hereby bind Grantor, and Grantor’s successors
and assigns, to WARRANT and FOREVER DEFEND, all and singular the Property unto
Grantee and Grantee’s successors and assigns, against every person whomsoever
lawfully claiming or to claim the same or any part thereof, by, through, or
under Grantor, but not otherwise, but subject, however, as aforesaid, to the
matters set forth on Exhibit B hereto.

 

Ad
valorem taxes have been paid through the year 200  , and ad valorem
taxes for the year 200   have been prorated and assumed by Grantee.

 

EXECUTED
effective as of this     day
of                              ,
200  .

 

	
   

  	
  GRANTOR:

  
	
   

  	
   

  
	
   

  	
  PRINCIPAL LIFE INSURANCE
  COMPANY, an

  
	
   

  	
  Iowa corporation, for its
  Principal U.S. Property Separate

  
	
   

  	
  Account, formerly known as
  Principal Life Insurance

  
	
   

  	
  Company, an Iowa corporation,
  for its Real Estate Separate

  
	
   

  	
  Account 

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC, a

  
	
   

  	
   

  	
  Delaware limited liability
  company, its authorized

  
	
   

  	
   

  	
  signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

H-2

 

	
  STATE OF IOWA

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS:

  
	
  COUNTY OF POLK

  	
  )

  	
   

  

 

On
this      day
of                  ,
200  , before me, the undersigned, a Notary Public in and for the
said State, personally
appeared                                   and                                   ,
to me personally known to be the identical persons whose names are subscribed to
the foregoing instrument, who being by me duly sworn, did say that they are
the                                   and                                   ,
respectively, of PRINCIPAL REAL ESTATE INVESTORS, LLC, a Delaware limited
liability company, authorized signatory of PRINCIPAL LIFE INSURANCE COMPANY, an
Iowa corporation; that the instrument was signed on behalf of the corporation
by PRINCIPAL REAL ESTATE INVESTORS, LLC, as authorized signatory of PRINCIPAL
LIFE INSURANCE COMPANY, by authority of the Board Of Directors of PRINCIPAL
LIFE INSURANCE COMPANY; and that the aforesaid individuals each acknowledged
the execution of the foregoing instrument to be the voluntary act and deed of
PRINCIPAL REAL ESTATE INVESTORS, LLC, as authorized signatory of said corporation,
by it and by them voluntarily executed.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public in and for said State

  
	
   

  	
  My Commission Expires:

  
	
   

  	
  [Affix Notarial Stamp or
  Seal]

  

 

Upon recordation, please return to:

 

Darrel R. Davison, Esq.

Thompson Hine LLP

10 West Broad Street, Suite 700

Columbus, Ohio 43215-3435

 

H-3

 

EXHIBIT “I”

 

BILL OF SALE

 

PRINCIPAL
LIFE INSURANCE COMPANY, an Iowa corporation, for its Principal U.S. Property
Separate Account, formerly known as Principal Life Insurance Company, an Iowa
corporation, for its Real Estate Separate Account, whose mailing address is 801
Grand Avenue, Des Moines, Iowa, 50392, hereinafter referred to as “Grantor,”
for and in consideration of the sum of Ten Dollars ($10.00) and other good and
valuable consideration to it in hand paid by TRT ACQUISITIONS LLC, a Delaware
limited liability company, hereinafter referred to as “Grantee,” receipt of
which is hereby acknowledged, does hereby BARGAIN, SELL, GRANT, CONVEY AND
TRANSFER and by these presents has BARGAINED, SOLD, GRANTED, CONVEYED AND
TRANSFERRED unto the said Grantee, its successors and assigns, all tangible
personal property owned by Grantor and now existing or hereafter placed on or
installed in the real property described on Exhibit “A” attached hereto and
made a part hereof by reference, and used as a part of or in connection with
the business now or hereafter conducted thereon, said tangible personal
property to include, but not limited to, the right to use any trade name (excepting
those including the name “Principal”) used in connection with the real property
improvements and fixtures, all machinery, equipment, account or contract
rights, and inventory (the “Personal Property”) located on or used in
connection with the property described on the attached Exhibit “A.”  The Personal Property is bargained, sold,
granted, conveyed and transferred by Grantor AS IS, WHERE
IS, AND WITHOUT ANY WARRANTIES OF WHATSOEVER NATURE, EXPRESS OR IMPLIED, EXCEPT
AS EXPRESSLY SET FORTH HEREIN, IT BEING THE INTENTION OF GRANTOR EXPRESSLY TO
NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE,
WARRANTIES CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION
OF THE PROPERTY CONVEYED HEREUNDER, OR BY ANY SAMPLE OR MODEL THEREOF, AND ALL
OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE TEXAS UNIFORM
COMMERCIAL CODE.

 

GRANTEE ACKNOWLEDGES AND AGREES AND THE DEED SHALL PROVIDE THAT GRANTOR
HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, OTHER THAN THOSE EXPRESSLY CONTAINED IN THE DEED
AND THAT CERTAIN REAL ESTATE PURCHASE AND SALE AGREEMENT BETWEEN PRINCIPAL LIFE
INSURANCE COMPANY AND TRT ACQUISITIONS LLC
DATED       , 2006 (WHICH PURCHASE AND SALE
AGREEMENT REPRESENTATIONS AND WARRANTIES SHALL SURVIVE THE DATE OF THIS
CONVEYANCE FOR A PERIOD OF NINE (9) MONTHS), PROMISES, AGREEMENTS OR GUARANTIES
OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR
WRITTEN CONCERNING OR WITH RESPECT TO: 
(i) THE VALUE, QUALITY OR CONDITION OF THE PROPERTY; (ii) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH GRANTEE
MAY CONDUCT THEREON; (iii) THE COMPLIANCE OF THE PROPERTY WITH ANY APPLICABLE
LAWS OR RESTRICTIVE COVENANTS; (iv) THE HABITABILITY, SUITABILITY,
MERCHANTABILITY,

 

I-1

 

MARKETABILITY OR FITNESS FOR
PARTICULAR PURPOSE OF THE PROPERTY; (v) THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS INCORPORATED INTO THE PROPERTY; (vi) THE MANNER,
QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; OR (vii) ANY OTHER
MATTER OF ANY KIND WITH RESPECT TO THE PROPERTY. GRANTEE FURTHER ACKNOWLEDGES
AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW,  THE SALE OF THE PROPERTY AS PROVIDED FOR
HEREIN IS MADE ON AN “AS IS” AND “WITH ALL FAULTS” CONDITION AND BASIS WITH ALL
FAULTS AND DEFECTS.

 

TO
HAVE AND TO HOLD the same, unto the said Grantee, its successors and assigns
forever. Grantor does hereby warrant title to the Personal Property, and
covenants and agrees to and with Grantee, its successors and assigns to defend
the Personal Property hereby sold unto Grantee, its successors and assigns,
against all claims by persons who lawfully claim any interest in the Personal
Property by, through or under Grantor, but not otherwise.

 

EXECUTED
AS OF THIS      day
of         , 200  .

 

	
   

  	
  PRINCIPAL LIFE INSURANCE
  COMPANY, an

  
	
   

  	
  Iowa corporation, for its
  Principal U.S. Property Separate Account,

  
	
   

  	
  formerly known as Principal
  Life Insurance Company, an Iowa

  
	
   

  	
  corporation, for its Real
  Estate Separate Account

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC, a

  
	
   

  	
   

  	
  Delaware limited liability
  company,

  
	
   

  	
   

  	
  its authorized signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

I-2

 

EXHIBIT “J”

 

ACCESS INSURANCE
REQUIREMENTS

 

	
  Type

  	
   

  	
  Limits

  
	
   

  	
   

  	
   

  
	
  Worker’s
  Compensation Employer’s Liability

  	
   

  	
  $Statutory

  
	
   

  	
   

  	
   

  
	
  General
  Liability

  	
   

  	
  $1,000,000/occurrence

  
	
   

  	
   

  	
  $1,000,000/aggregate

  
	
   

  	
   

  	
   

  
	
  Automobile
  Liability

  	
   

  	
  $1,000,000/person

  
	
   

  	
   

  	
  $1,000,000/occurrence

  
	
   

  	
   

  	
   

  
	
  Professional
  Liability

  	
   

  	
  $1,000,000/occurrence

  
	
   

  	
   

  	
  $1,000,000/aggregate

  
	
   

  	
   

  	
   

  
	
  Pollution
  Liability

  	
   

  	
  $1,000,000/occurrence

  
	
   

  	
   

  	
  $1,000,000/aggregate

  

 

Buyer
will guarantee that its agents and contractors maintain the aforesaid coverages
throughout the term of this Agreement. Furthermore, any coverage written on a
“Claims Made” basis shall be kept in force, either by renewal, or the purchase
of an extended reporting period, for a minimum period of three (3) years
following the termination of this Agreement. Nothing herein contained shall in
any way limit Buyer’s liability under this Agreement or otherwise.

 

J-1

 

EXHIBIT “K”

 

ENVIRONMENTAL REPORTS

 

Phase
I Environmental Site Assessment, prepared by Envirotest, Inc., dated February
14, 2002

 

K-1

 

EXHIBIT “L”

 

DUE DILIGENCE ITEMS

 

1.                                      Leases

 

1.a.                            Rent Roll

 

   Dated: 11/14/06

 

1.b.                            Leases

 

	
  File

  Pos.

  	
   

  	
  Tenant
  Name

  	
   

  	
  Lease
  Date/Amend Dates

  	
   

  	
  Other
  Documents

  
	
  1.

  	
   

  	
  First Cash, Ltd.

  	
   

  	
  Lease dated 4/1/03

  	
   

  	
  Change in Signage Letter dated 6/25/03

  
	
  2.

  	
   

  	
  Hung Tang d/b/a Vicky Nails

  	
   

  	
  Lease dated 6/24/01; First Amendment dated 3/16/04

  	
   

  	
   

  
	
  3.

  	
   

  	
  My Style, Inc. d/b/a Great Clips

  	
   

  	
  Lease dated 1/14/00; First Amendment dated 2/28/05

  	
   

  	
  Guaranty of Lease dated 1/14/00; Pylon Sign Agreement dated 11/30/01

  
	
  4.

  	
   

  	
  GameStop.com successor-in- interest to Babbage’s Etc., LLC

  	
   

  	
  Lease dated 10/6/98; Amendment to Lease dated 5/9/01; Lease
  Modification and Extension Agreement dated 12/20/01; Lease Modification Agreement
  dated 3/25/02; Second Amendment dated 8/9/04

  	
   

  	
   

  
	
  5.

  	
   

  	
  Roger Z. Ramos d/b/a American Postal Center – TERM 

  EXPIRED – TENANT VACATED

  	
   

  	
  Lease dated 6/4/01

  	
   

  	
  Letter dated 2/1/06 regarding non-renewal

  
	
  6.

  	
   

  	
  Blockbuster Inc. assigned to Trading Zone Inc.

  	
   

  	
  Lease dated 9/28/04; Term Expiration Agreement dated 3/8/05

  	
   

  	
  Lease Assignment dated 9/28/04; Memorandum of Lease dated 9/28/04

  
	
  7.

  	
   

  	
  Mychal R. Johnson and Florice Johnson d/b/a Lone Star Liquor assigned
  to Michael Forbes d/b/a Fiesta Liquor Stores

  	
   

  	
  Lease dated 6/28/99; First Amendment dated 8/16/04

  	
   

  	
  Guaranty of Lease dated 6/9/99; Assignment of Lease dated 2/13/01

  

 

 

2

 

	
  File

  Pos.

  	
   

  	
  Tenant
  Name

  	
   

  	
  Lease
  Date/Amend Dates

  	
   

  	
  Other
  Documents

  
	
  8

  	
   

  	
  Cleaning Ideas, Inc. assigned to Cleaning Ideas Corp.

  	
   

  	
  Lease dated 12/10/92; First Amendment dated 2/13/04

  	
   

  	
  Assignment and Acceptance dated 8/3/99

  
	
  9

  	
   

  	
  Office Depot, Inc. assigned to Office Depot of Texas, L.P.

  	
   

  	
  Lease dated 3/20/90; First Amendment dated 5/28/04

  	
   

  	
  Assignment and Assumption dated 10/1/98; Occupancy Agreement dated
  12/5/03

  
	
  10

  	
   

  	
  Kids Outlet, LLC

  	
   

  	
  Lease dated 9/8/05

  	
   

  	
   

  
	
  11

  	
   

  	
  Sally Beauty Company, Inc. d/b/a Sally Beauty Supply

  	
   

  	
  Lease dated 7/28/97; Lease Amendment No. 1 dated 2/2/04

  	
   

  	
  Agreement Setting Lease Term dated 1/14/98; Pylon Sign Agreement
  dated 3/1/98; Renewal Letter dated 5/31/02

  
	
  12

  	
   

  	
  The Gap, Inc. d/b/a Old Navy

  	
   

  	
  Lease dated 8/30/96

  	
   

  	
  Renewal Option Letter dated 6/8/06

  
	
  13

  	
   

  	
  HEB Grocery Company, LP

  	
   

  	
  Lease dated 3/28/02; First Amendment dated 7/13/06

  	
   

  	
   

  

 

	
  1 .c.

  	
   

  	
  Exclusive Leasing Agreement

  	
   

  	
  Enclosed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.d.

  	
   

  	
  2005 CAM Reconciliations

  	
   

  	
  Enclosed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.e.

  	
   

  	
  Sales Reports

  	
   

  	
  Enclosed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Financial Reports

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.a. Budget 1/06 to 12/06

  	
   

  	
  Enclosed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.b. Operating Statements:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2003

  	
   

  	
  Comparative Income Statement to 12/03

  
	
   

  	
   

  	
  2004

  	
   

  	
  Comparative Income Statement to 12/04

  
	
   

  	
   

  	
  2005

  	
   

  	
  Comparative Income Statement to 12/05

  
	
   

  	
   

  	
  2006

  	
   

  	
  Comparative Income Statement to 10/06

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.c. Tax Bills:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2003

  	
   

  	
  Bexar County Account Number 04428 701-0110

  
	
   

  	
   

  	
  2004

  	
   

  	
  Bexar County Account Number 04428-701-0110

  
	
   

  	
   

  	
  2005

  	
   

  	
  Bexar County Account Number 04428-701-0110

  
	
   

  	
   

  	
  2006

  	
   

  	
  Bexar County Account Number 04428-701-0110

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.d. 2005 Capital Expenditures

  	
   

  	
  Schedule of Building Improvements

  
	
   

  	
   

  	
   

  	
   

  	
  Schedule of Lease Commissions

  
	
   

  	
   

  	
   

  	
   

  	
  Schedule of Tenant Improvements

  

 

3

 

3.                                      Engineering
Reports

 

	
   

  	
  3a.

  	
  Soils – Not Applicable

  
	
   

  	
  3b.

  	
  Environmental – Phase I Environmental Site Assessment

  
	
   

  	
   

  	
  Prepared by: Envirotest, Inc.

  	
  Date 2/14/02

  
	
   

  	
  3c.

  	
  Asbestos Survey – Not Applicable

  
	
   

  	
  3d.

  	
  Seismic – Not Applicable

  
	
   

  	
  3e.

  	
  Roof – Not Applicable

  
	
   

  	
  3f.

  	
  Other – Not Applicable

  

 

4.                                      Servicing
Contracts

 

4a/b.                    Management/Leasing
Agreement

 

	
  Contractor

  	
   

  	
  Date

  Amend Date

  	
   

  	
  Cancelable

  	
   

  	
  Notice

  required

  	
   

  	
  No. of
  Days

  	
   

  
	
  Reata Real Estate Services, LLC

  	
   

  	
  10/13/05; 10/19/05

  	
   

  	
  Yes

  	
   

  	
  Yes

  	
   

  	
  30

  	
   

  

 

4c.                                Janitorial
- Not Applicable

 

4d.                               Landscaping

 

	
  Contractor

  	
   

  	
  Date

  Amend Date

  	
   

  	
  Cancelable

  	
   

  	
  Notice

  required

  	
   

  	
  No. of
  Days

  	
   

  
	
  Horton Horticulture Inc.

  	
   

  	
  2/10/06

  	
   

  	
  Yes

  	
   

  	
  Yes

  	
   

  	
  30

  	
   

  

 

4e.                                HVAC
Maintenance – Not Applicable

 

4f.                                 Trash
– Not Applicable

 

4g.                                Pest
Control

 

	
  Contractor

  	
   

  	
  Date

  Amend Date

  	
   

  	
  Cancelable

  	
   

  	
  Notice

  required

  	
   

  	
  No. of
  Days

  	
   

  
	
  Pest Shield Pest Control, Inc.

  	
   

  	
  1/17/06

  	
   

  	
  Yes

  	
   

  	
  Yes

  	
   

  	
  30

  	
   

  

 

4h.                               Elevator
Maintenance – Not Applicable

 

4

 

4i.                                   Other

 

	
  Contractor

  	
   

  	
  Date

  Amend Date

  	
   

  	
  Cancelable

  	
   

  	
  Notice

  required

  	
   

  	
  No. of
  Days

  	
   

  
	
  Alamo Lot Maintenance, Ltd., L.L.P.
  (Sweeping Only)

  	
   

  	
  11/21/05

  	
   

  	
  Yes

  	
   

  	
  Yes

  	
   

  	
  30

  	
   

  
	
  Malley & Malley, L.P. d/b/a Longhorn
  Lot Maintenance

  	
   

  	
  12/1/05

  	
   

  	
  Yes

  	
   

  	
  Yes

  	
   

  	
  30

  	
   

  
	
  Security Agreement

  	
   

  	
  11/1/05

  	
   

  	
  Yes

  	
   

  	
  Yes

  	
   

  	
  30

  	
   

  

 

	
  5.

  	
  Warranties/Guaranties

  	
  American Roofing & Metal Co.

  	
   

  	
   

  
	
   

  	
   

  	
  Empire Roofing of Austin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Zoning Information

  	
  Property Zoned B3 – Commercial District

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Building Permit

  	
  Not Applicable

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  License Agreements

  	
  Southwestern Bell Telephone Easement/Survey

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Indemnities

  	
  Not Applicable

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Title Commitment

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title Company: Chicago Title Insurance
  Company

  Commitment No.: 44-903-80-691701

  NBU#: 100616769

  Issued: 3/14/06

  Effective Date: 2/16/06

  Revision No. 1:       Issued 3/31/06

  Exception Documents:   Attached

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Survey

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Surveyor: Collins & Associates prepared
  for Hayes & Matthews, Inc.

  Contact Name: Virgil T. Collins

  Job No. 23164

  Survey Date: 3/22/06

  	
   

  	
   

  

 

5

 

	
  12.

  	
  As-built - plans/specifications

  	
  Available

  
	
   

  	
   

  	
   

  
	
   

  	
  (Note: only one copy will be provided to
  Buyer)

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Certificates of Occupancy 

  	
  Enclosed

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Other/Miscellaneous

  	
   

  

 

6

 

EXHIBIT “M”

 

TENANT ESTOPPEL
CERTIFICATE

 

Date:

 

From:

	
   

  
	
  (“Tenant”)

  
	
   

  
	
   

  
	
  To:

  
	
   

  
	
  (“Buyer”)

  
	
   

  
	
   

  
	
  (“Landlord”)

  
	
   

  
	
   

  
	
  (“Lender”)

  

 

Re:

 

Gentlemen:

 

The undersigned (the “Tenant”)
has executed and entered into that certain lease agreement (the “Lease”) with
(          ) (“Landlord”) attached hereto as Exhibit A
and made a part hereof for all purposes with respect to certain space known as
(          ) (“Premises”) located at
(          ) (“Property”). The Tenant understands
that Landlord, the owner of the Property and the Landlord’s interest in the
Lease, intends to sell, transfer, assign, and convey such Property, and
Landlord’s interest in all tenant leases with respect to such Property, to
(          ) or its assigns
(“Buyer”), who will rely on this
certificate in connection with its purchase of the Property. The Tenant also
understands that
(          )(“Lender”) intends to make a loan to
Buyer secured by, among other things, a mortgage or deed of trust on the
Property and an assignment of rents under the Lease, and that Lender will rely
on this certificate in connection with its loan to Buyer.

 

With respect to the Lease and such sale and loan transactions, the
Tenant is pleased to inform you of the following, with the intention that you,
the Buyer, Lender and/or its affiliates and assigns, may rely fully thereon:

 

1.                                      A
true and correct executed copy of the Lease and all amendments thereto is
attached hereto as Exhibit A.

 

2.                                      The
Lease represents the results of bona fide arms-length negotiations between the
parties, is in full force and effect, and has been modified, supplemented, or
amended only in the following respects:

 

3.                                      The
Tenant is the current tenant under the Lease and is the only occupant in actual
occupancy of its leased premises under the Lease comprising approximately
(          ) square feet.

 

4.                                      The
Tenant is in full and complete possession of the Premises, and such possession
has been delivered by Landlord, or its predecessor in title, pursuant to the
Lease and has been accepted by Tenant. Tenant

 

M-1

 

has not assigned,
transferred, pledged, mortgaged, sublet, licensed, concessioned, vacated,
discontinued its business, nor entered into any agreement to transfer any of
Tenant’s interest or any right of use or occupancy in the Leased Premises,
except:

 

5.                                      The
initial term of the Lease commenced on
(        ), and excluding renewals or
extensions, ends on
(             ).

 

6.                                      Tenant’s
proportionate share of expenses
is           %. Tenant
has paid Landlord all amounts due through the month in which this Certificate
has been dated, which payments are comprised of the following:

 

a.
security deposit of
$           ;

 

b. monthly base
rent, which is currently
$           , not
including any expense reimbursement for tenant improvements or rental charges
based on a percentage of sales;

 

c. monthly
additional rent, which is currently
$           imposed in
connection with Tenant’s obligation, if any, to contribute to the payment of
real estate taxes, insurance premiums, common area maintenance and other
charges due under the Lease.

 

d. all other
monthly additional rent, for the following items for the following amounts;
[LIST ITEM AND AMOUNT, SUCH AS PERCENTAGE RENT, LANDLORD IMPROVEMENTS,
REIMBURSEMENTS, ETC.]

 

	
  ITEM:

  	
   

  	
  $

  
	
  ITEM:

  	
   

  	
  $

  
	
  ITEM:

  	
   

  	
  $

  

 

[If none, write “NONE”]

 

7.                                      Tenant’s
year-to-date gross sales for
January       though December       are
$       and were
$       for the prior period
January       through
December       .

 

8.                                      Rent
and CAM with respect to the Lease has been paid by Tenant through
(              ).

 

9.                                      There
are no concessions, bonuses, free months’ rental, rebates, abatements,
allowances or other matters affecting the rental for Tenant, except as follows:

 

10.                               Tenant has no early
termination, expansion, renewal or extension options under its Lease or
otherwise except as follows:

 

11.                               Tenant has no right of first
refusal, option or other right to lease or purchase the Premises or Property,
nor does Tenant have any right to unilaterally terminate the Lease.

 

12.                               There are no known
events or conditions existing which, with or without notice or the lapse of
time, or both, could constitute a monetary or other default of the Landlord
under the Lease, or entitle the Tenant to offsets or defenses against the
prompt current payment of rent or CAM, and there are no lawsuits, actions,
claims or other proceedings pending against the Landlord under the Lease either
brought by Tenant or to which Tenant is a party.

 

 

13.                               Tenant is not in default
under any terms, conditions or covenants of the Lease to be performed or
complied with by Tenant, and no event has occurred and no circumstance exists
which, with the passage of time or the giving of notice by Landlord, or both,
would constitute such a default.

 

14.                               There are no actions,
whether voluntary or otherwise, pending or threatened against Tenant (or any
guarantor of Tenant’s obligations pursuant to the Lease) under the Bankruptcy
or insolvency laws of the United States or any state thereof, and there are no
attachments, executions, assignments for the benefit of creditors, or voluntary
or involuntary proceedings under the U.S. Bankruptcy Code or any other debtor
relief laws pending or threatened against Tenant.

 

15.                               All improvements
required to be made by the Landlord under the terms of the Lease have been
completed in all respects and to the satisfaction of Tenant, are open for the
use of Tenant, and all tenant improvement allowances have been fully paid or
applied, as the case may be, except as follows:

 

16.                               Tenant has not generated, used, stored, spilled, disposed of or
released any hazardous substances at, on or in the Premises. “Hazardous
Substances” means any flammable, explosive, toxic, carcinogenic, mutagenic, or
corrosive substance or waste, including volatile petroleum products and
derivatives. To the best of Tenant’s knowledge, no asbestos or polychlorinated
biphenyl (“PCB”) is located at, on or in the Premises. “Hazardous Substances”
shall not include those materials which are technically within the definition
set forth above but which are contained in pre-packaged office supplies,
cleaning materials or personal grooming items or other items which are sold for
consumer or commercial use and typically used in other similar buildings or
space.

 

17.                               Tenant has not received
notice to pay rent to someone other than the Landlord.

 

18.                               The
correct name and mailing address of Tenant for notice purposes under the Lease
is as follows:

 

 

 

 

19.                               The party executing this
Certificate on behalf of Tenant represents that he/she has been authorized to
do so on behalf of Tenant.

 

Dated: 
                     ,
2006.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT NAME

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  

 

 

LEASE
GUARANTOR:

 

The
undersigned hereby (a) ratifies and reaffirms its obligations under that
certain [Guaranty] dated as
of           ,
20   (the “Lease Guaranty”), a true and correct copy of which
has been delivered to Lender, (b) confirms that the Lease Guaranty is in full
force and effect and has not been modified (except for such modifications
delivered to Lender), and (c) certifies that the statements made by Tenant
herein are true and correct.

 

 

	
   

  	
   

  
	
  [Lease Guarantor]

  

 

 

EXHIBIT “N”

 

PENDING LITIGATION

 

None

 

N-1

 

EXHIBIT “O”

 

SUBORDINATION, NON-DISTURBANCE AND

ATTORNMENT AGREEMENT

 

THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT is made as of
this     day
of                     ,
200_, by and among COUNTRYWIDE COMMERCIAL REAL ESTATE FINANCE, INC., a
California corporation, (together with its successors and assigns, “Mortgagee”),                        ,
a                        (together
with its successors and assigns, “Tenant”),
and                        ,
a                        (together
with its successors and assigns, “Landlord”).

 

RECITALS

 

A.                                    Landlord
is the owner of those certain premises commonly known
as                        ,
more particularly described in Exhibit A attached hereto (the “Real
Estate”);

 

B.                                    Mortgagee
is now or will be the owner and holder of a note (the “Note”) evidencing
a loan (the “Loan”) made by Mortgagee to Landlord, and a [mortgage]
[deed of trust] (the “Mortgage”) securing the Loan, in each case
executed by Landlord to Mortgagee;

 

C.                                    The
Mortgage constitutes or will constitute a first lien upon, among other things,
the Real Estate and the current and future improvements (the “Improvements”)
situated thereon (collectively, the “Property”);

 

D.                                    Under
the terms of a certain Lease (the “Lease”)
dated                        ,
Landlord leased to Tenant the Real Estate and the Improvements, or a portion
thereof, as more particularly described in the Lease; and

 

E.                                     The
parties are entering into this Agreement as a condition of Mortgagee’s
agreement to make the Loan evidenced by the Note.

 

AGREEMENTS

 

1.                                      Subordination.
The Lease is and at all times shall be subordinate to the Mortgage and to all
substitutions, renewals, modifications and amendments of and to the Mortgage
(including, without limitation, any of the foregoing which increase the
indebtedness secured thereby). Without limiting the generality of the
foregoing, Tenant acknowledges that Mortgagee has a claim superior to Tenant’s
claim for insurance proceeds, if any, received with respect to the Improvements
or the Property.

 

2.                                      Non-Disturbance.
In the event of foreclosure of the Mortgage (by judicial process, power of sale
or otherwise) or conveyance in lieu of foreclosure, which foreclosure, power of
sale, or conveyance occurs prior to the expiration date of the Lease, including
any

 

 

extensions and
renewals of the Lease now provided thereunder, and so long as Tenant is not in
default under any of the terms, covenants and conditions of the Lease beyond
any applicable grace or cure period, Mortgagee agrees on behalf of itself, its
successors and assigns, and on behalf of any purchaser at such foreclosure (“Purchaser”)
that Tenant shall not be disturbed in the quiet and peaceful possession of the
premises demised under the Lease, subject to the terms and conditions of the
Lease.

 

3.                                      Attornment.
In the event of foreclosure of or other execution on the Mortgage or conveyance
in lieu of foreclosure, which foreclosure, execution or conveyance occurs prior
to the expiration date of the Lease, including any extensions and renewals of
the Lease now provided thereunder, Tenant shall attorn to Mortgagee or
Purchaser and recognize Mortgagee or Purchaser as Tenant’s landlord under the
Lease, and so long as Tenant is not in default under any of the terms,
covenants and conditions of the Lease beyond any applicable grace or cure
period, Mortgagee or Purchaser shall recognize and accept Tenant as its tenant
thereunder, whereupon the Lease shall continue, without further agreement, in
full force and effect as a direct lease between Mortgagee or Purchaser and
Tenant for the remaining term thereof, together with all extensions and
renewals now provided thereunder, upon the same terms, covenants and conditions
as therein provided, and Mortgagee or Purchaser shall thereafter assume and
perform all of Landlord’s subsequent obligations, as landlord under the Lease,
and Tenant shall thereafter make all rent payments directly to either Mortgagee
or Purchaser, as the case may be, subject to the limitations contained in
Section 4 below.

 

4.                                      Limitation of
Liability. Notwithstanding anything to the contrary contained herein or in
the Lease, in the event of foreclosure of or other execution on the Mortgage
(by judicial process, power of sale or otherwise) or conveyance in lieu of
foreclosure, Mortgagee or Purchaser, as the case may be, shall in no event or
to any extent:

 

(a)                                 be
liable to Tenant for any past act, omission or default on the part of any prior
landlord (including Landlord) and Tenant shall have no right to assert the same
or any damages arising therefrom as an offset, claim or defense against
Mortgagee, Purchaser, or the successors or assigns of any of them;

 

(b)                                 be
subject to any offsets or defenses which Tenant might have against any prior
landlord;

 

(c)                                  be
liable to Tenant for any payment of rent more than thirty (30) days in advance
or any security deposit or any other sums deposited with any prior landlord
(including Landlord) and not delivered to Mortgagee;

 

(d)                                 be
liable for any construction obligations under the Lease; or

 

(e)                                  be
bound by any cancellation, surrender or amendment of the Lease not consented to
by Mortgagee.

 

5.                                      Cure by
Mortgagee of Landlord Defaults. Tenant agrees to give Mortgagee a copy of
any notice of default served upon Landlord. Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
the Lease, then Mortgagee have an additional thirty (30) days after its receipt
of notice within which to cure such

 

 

default or if
such default cannot be cured within that time, then such additional time as may
be necessary to cure such default shall be granted if within such thirty (30)
days Mortgagee has commenced and is diligently pursuing the remedies necessary
to cure such default (including, but not limited to, commencement of
foreclosure proceedings necessary to effect such cure), in which event the
Lease shall not be terminated while such remedies are being so diligently pursued.

 

6.                                      Notices.
All notices, demands and requests given or required to be given hereunder shall
be in writing and shall be deemed to have been properly given when personally
served, delivered by nationally recognized overnight courier service, or if sent
by U.S. registered or certified mail, postage prepaid, addressed as follows:

 

	
  Mortgagee:

  	
   

  	
  Countrywide Commercial Real Estate Finance, Inc.

  
	
   

  	
   

  	
  4500 Park Granada, MS CH-143

  
	
   

  	
   

  	
  Calabasas, California 91302

  
	
   

  	
   

  	
  Attention:

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  
	
   

  	
   

  	
   

  
	
  Landlord:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  

 

7.                                      Binding Effect.
The terms, covenants and conditions hereof shall inure to the benefit of and be
binding upon the parties hereto, and their respective heirs, executors,
administrators, successors and assigns.

 

8.                                      Modification.
This Agreement may not be modified orally or in a manner other than by an
agreement signed by the parties hereto or their respective successors in
interest.

 

9.                                      Choice of Law.
This Agreement shall be governed by the internal law (and not the law of
conflicts) of the State in which the Property is located.

 

10.                               Counterparts. This
Agreement may be executed in two or more counterparts which, when taken
together, shall constitute one and the same original.

 

[Signatures
commence on following page]

 

 

WITNESS the due execution of this instrument
by the parties hereto the day and year first above written.

 

	
   

  	
  MORTGAGEE:

  
	
   

  	
   

  
	
   

  	
  COUNTRYWIDE COMMERCIAL REAL

  
	
   

  	
  ESTATE FINANCE, INC., a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  a

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  a

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

	
  STATE OF

  	
  )

  
	
   

  	
   

  
	
  COUNTY OF

  	
  )

  

 

I HEREBY CERTIFY that on this day before me, an officer duly qualified
to take acknowledgments, personally appeared on               and
who personally acknowledged themselves to be the               and               of               and
who executed the foregoing instrument and who acknowledged before me that they
executed the same freely and voluntarily and for the purposes therein
expressed, made by virtue of a resolution of its Board of Directors.

 

WITNESS my hand and
official seal.

 

 

	
   

  	
  Signature

  	
   

  	
  (Seal)

  

 

 

	
  STATE OF

  	
  )

  
	
   

  	
   

  
	
  COUNTY OF

  	
  )

  

 

I HEREBY CERTIFY that on this day before me, an officer duly qualified
to take acknowledgments, personally appeared on               and
who personally acknowledged themselves to be the               and               of               and
who executed the foregoing instrument and who acknowledged before me that they
executed the same freely and voluntarily and for the purposes therein
expressed, made by virtue of a resolution of its Board of Directors.

 

WITNESS my hand and
official seal.

 

 

	
   

  	
  Signature

  	
   

  	
  (Seal)

  

 

 

	
  STATE OF

  	
  )

  
	
  COUNTY OF

  	
  )

  

 

I HEREBY CERTIFY that on this day before me, an officer duly qualified
to take acknowledgments, personally appeared on               and
who personally acknowledged themselves to be the               and               of               and
who executed the foregoing instrument and who acknowledged before me that they
executed the same freely and voluntarily and for the purposes therein
expressed, made by virtue of a resolution of its Board of Directors.

 

WITNESS my hand and
official seal.

 

 

	
   

  	
  Signature

  	
   

  	
  (Seal)

  

 

 

EXHIBIT A

 

Legal Description

 

 

EXHIBIT P

 

Form of Audit Letter

 

[Auditor]

 

 

 

 

Dear Sirs:

 

We are writing at your request to confirm our understanding that your
audit of the Statement of Revenue and Certain Expenses for the year ended             ,
200  , was made for the purpose of expressing an opinion as to
whether the statement of operating income presents fairly, in all material
respects, the results of operations of HEB Marketplace, 5601 Bandera Road, Leon
Valley, Texas (the “Project”) in conformity with generally accepted accounting
principles.

 

Certain representations in this letter are described as being limited
to matters that are material. Items are considered material if they involve an
omission or misstatement of accounting information that, in light of
surrounding circumstances, makes it probable that the judgment of a reasonable
person relying on the information would be changed or influenced by the
omission or misstatement. An omission or misstatement that is monetarily small
in amount could be considered material as a result of qualitative factors.

 

The following representations are made exclusively to the auditor of
the Project. In connection with your December 31, 200_ audit we confirm, to our
actual knowledge, with respect to our daily operations and without independent
inquiry or investigation, the following representations made during your audit:

 

1.                                      We
have made available to you all financial records and related data concerning
this Project, which are in our possession.

 

2.                                      We
are not aware of any:

 

a.                                      Irregularities
involving any member of management or employees that could have a materially
adverse effect on the statement of operating income.

 

b.                                      Notices
of violations of laws or regulations, the effects of which should be considered
for disclosure in the financial statements or as a basis for recording a loss
contingency.

 

c.                                       Material
events that have occurred subsequent to             ,
200   that would require material adjustment to the statement of
operating income.

 

3.                                      There
are no material transactions that have not been properly recorded in the
accounting records underlying the financial statements.

 

[Appropriate signature line]

 

P-1

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