Document:

exv10w19

 

Exhibit 10.19

Execution Version

PURCHASE AND SALE AGREEMENT

BETWEEN

BMC SOFTWARE TEXAS, L.P.

AND

BMC SOFTWARE, INC.

AS SELLER

AND

TPG/CALSTRS, LLC

AS PURCHASER

June 6, 2006

2101 CITY WEST BLVD.

HOUSTON, TEXAS

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section 1.

	 	Sale and Purchase
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.

	 	Purchase Price
	 	 	2	 
	 
	 	 	 	 	 	 
	Section 3.

	 	Earnest Money
	 	 	2	 
	 
	 	 	 	 	 	 
	Section 4.

	 	Delivery of Information by Seller
	 	 	2	 
	 
	 	 	 	 	 	 
	Section 5.

	 	Right of Inspection
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 6.

	 	Title
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 7.

	 	Representations, Warranties, and Covenants
	 	 	6	 
	 
	 	 	 	 	 	 
	Section 8.

	 	Conditions to Closing
	 	 	9	 
	 
	 	 	 	 	 	 
	Section 9.

	 	Closing
	 	 	10	 
	 
	 	 	 	 	 	 
	Section 10.

	 	Prorations and Closing Costs
	 	 	13	 
	 
	 	 	 	 	 	 
	Section 11.

	 	Destruction, Damage, or Taking Before Closing
	 	 	17	 
	 
	 	 	 	 	 	 
	Section 12.

	 	Termination and Remedies
	 	 	17	 
	 
	 	 	 	 	 	 
	Section 13.

	 	Indemnification
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 14.

	 	Miscellaneous
	 	 	21	 

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GLOSSARY OF DEFINED TERMS

     The location of the definition of each capitalized term used in this Agreement is set forth in
this Glossary:

	 	 	 
	Act

	 	Section 14(h)(2)
	Additional Rents

	 	Section 10(a)(2)
	Affiliate

	 	Section 7(c)
	Agreement

	 	Preamble
	Ancillary Rights

	 	Section 1(e)
	Bill of Sale

	 	Section 9(b)(2)
	BMC Building One Lease

	 	Section 9(b)(5)
	BMC Building Two Lease

	 	Section 9(b)(6)
	BMC
Inc.

BMC Lease Agreements

	 	Preamble

Section 9(b)(7)
	BMC-LP

	 	Preamble
	Buildings

	 	Section 1(b)(4)
	Business Day

	 	Section 6(a)
	Campus Land

	 	Section 1(a)
	Claims

	 	Section 14(h)(1)
	Closing

	 	Section 9(a)
	Closing Date

	 	Section 9(a)
	Closing Documents

	 	Section 7(e)
	Closing Month

	 	Section 10(a)(3)
	Confidentiality Agreement

	 	Section 5(b)
	C&W

	 	Section 10(d)
	Documents

	 	Section 4(c)
	Earnest Money

	 	Section 3
	Effective Date

	 	Preamble
	Excluded Property

	 	Section 1(c)
	Fixed Rents

	 	Section 10(a)(2)
	Garages

	 	Section 1(b)(8)
	Halliburton Tenant Lease

	 	Section 7(g)
	Improvements

	 	Section 1(b)
	Indemnified Party

	 	Section 13(d)(1)
	Indemnifying Party

	 	Section 13(d)(1)
	Information

	 	Section 4(c)
	Losses

	 	Section 13(a)
	Mandatory Cure Liens

	 	Section 6(b)
	Occupancy Agreements

	 	Section 1(d)
	Operating Expense Recoveries

	 	Section 10(a)(4)
	Other Land

	 	Section 1(f)
	Owner Records

	 	Section 4(d)
	Permitted Encumbrances

	 	Section 6(a)
	Person

	 	Section 14(f)(2)
	Personalty

	 	Section 1(c)
	Property

	 	Section 1
	Property Agreements

	 	Section 1(e)
	Purchase Price

	 	Section 2
	Purchaser

	 	Preamble
	Purchaser Claims

	 	Section 13(c)
	Purchaser Indemnified Party

	 	Section 13(a)
	Purchase’s Property Manager

	 	Section 7(i)
	Rents

	 	Section 10(a)(6)
	Restrictive Covenants

	 	Section 6(c)
	Seller

	 	Preamble
	Seller Indemnified Party

	 	Section 13(b)
	Seller’s Knowledge

	 	Section 7(d)
	Services Rents

	 	Section 10(a)(5)
	Special Warranty Deed

	 	Section 4(b)
	Survey

	 	Section 4(b)
	Taxes

	 	Section 10(a)(1)
	Telephone System

	 	Section 7(f)
	Tenant

	 	Section 1(d)
	Tenant Estoppel Certificate

	 	Section 4(f)
	Tenant Lease

	 	Section 1(d)
	Tenant Lease Assignment

	 	Section 9(b)(3)
	Tenant Leases

	 	Section 1(d)
	Tenant Notification

	 	Section 9(b)(4)
	Tenants

	 	Section 1(d)
	Third-Party Claim

	 	Section 13(d)(2)
	Title Commitments

	 	Section 4(a)
	Title Company

	 	Section 3
	Title Policy

	 	Section 9(c)(7)

ii

 

 

SCHEDULES 

	 	 	 	 	 
	1(c)

	 	–
	 	Excluded Property
	1(d)-1

	 	–
	 	Tenant Leases
	1(d)-2

	 	–
	 	Occupancy Agreements
	1(e)

	 	–
	 	Property Agreements
	7(a)(8)

	 	–
	 	Leasing Commissions and Tenant Improvement Allowances

EXHIBITS

	 	 	 	 	 
	A

	 	–
	 	Campus Land
	B

	 	–
	 	Campus Land Plot Plan
	C

	 	–
	 	Other Land
	D

	 	–
	 	Form of Restrictive Covenants
	E

	 	–
	 	Form of Bill of Sale
	F

	 	–
	 	Form of Tenant Lease Assignment
	G

	 	–
	 	Tenant Notification
	H-1

	 	–
	 	Form of BMC Building One Lease
	H-2

	 	–
	 	Form of BMC Building Two Lease
	H-3

	 	–
	 	Form of BMC Building Three/Four Lease
	I

	 	–
	 	Form of Special Warranty Deed
	J

	 	–
	 	Form of Tenant Estoppel Certificate

iii

 

 

PURCHASE AND SALE AGREEMENT

     This Purchase and Sale Agreement (this “Agreement”) is entered into as of June 6, 2006 (the
“Effective Date”) between BMC SOFTWARE TEXAS, L.P., a Texas limited partnership (“BMC-LP”) and BMC
SOFTWARE, INC., a Delaware corporation (“BMC Inc.”), (BMC-LP and BMC Inc. are collectively referred
to herein as “Seller”), and TPG/CALSTRS, LLC, a Delaware limited liability company (“Purchaser”).

     In consideration of the mutual covenants set forth herein and of the earnest money deposits
herein called for, the parties agree as follows:

Section 1. Sale and Purchase. Seller shall sell, convey, and assign to Purchaser, and
Purchaser shall purchase and accept from Seller, for the Purchase Price and on and subject to the
terms and conditions herein set forth, the following:

     (a) the four tracts or parcels of land situated in Harris County, Texas, described in
Exhibit A (collectively, the “Campus Land”), and all of Seller’s right, title, and interest
in and to all rights, privileges (including any wastewater capacity or wastewater capacity
reservations), easements, and interests appurtenant to the Campus Land, including all adjacent
streets, alleys, rights-of-way, and any adjacent strips and gores of real estate;

     (b) all buildings, driveways (including the private drive immediately south of the Campus),
walkways, wells, fences and all other improvements located on the Campus Land (the “Improvements”),
including the following buildings and garages marked on the plot plan of the Campus Land and
described in Exhibit B hereto:

          (1) the six story office building known as Building 1;

          (2) the twenty story office building known as Building 2;

          (3) the nine story office building known as Building 3;

          (4) the twenty one story office building known as Building 4 (items (1) through (4)
collectively being the “Buildings”);

          (5) the six-level garage building known as Garage 1;

          (6) the six level garage building known as Garage 2;

          (7) the six level garage building known as Garage 3; and

          (8) the seven-level garage building known as Garage 4 (items (5) through (8) collectively
being the “Garages”);

     (c) except for the property and fixtures listed on Schedule 1(c) hereto (the “Excluded
Property”), all tangible personal property and fixtures of any kind owned by Seller and attached
to or used exclusively in connection with the ownership, use, maintenance, leasing, service or

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operation of the Campus Land or the Improvements, including the underground pipes, conduits and
similar property and fixtures (the “Personalty”);

     (d) all of the landlord’s or owner’s interest in (i) the leases, demising space in the
Improvements or Campus Land (collectively, the “Tenant Leases” and, individually, a “Tenant
Lease”), including those listed on Schedule 1(d)-1 hereto; and all rents prepaid for any
period on or subsequent to the Closing Date by tenants (collectively, the “Tenants” and,
individually, a “Tenant”) and (ii) the franchises, licenses, occupancy agreements, or other
agreements providing for the use or occupancy of portions of the Campus Land, including those
listed on Schedule 1(d)-2 hereto (the “Occupancy Agreements”);

     (e) to the extent assignable by Seller, Seller’s interest in (1) the management,
construction, maintenance and service contracts or agreements listed on Schedule 1(e) (all
of the foregoing being referred to as the “Property Agreements”), (2) warranties and guaranties
relating to construction, repair or maintenance of the Improvements or Personalty, and (3)
licenses, permits, or governmental authorizations relating to the ownership or operation of the
Other Land, Campus Land and Improvements (collectively, (2) and (3) being the “Ancillary Rights”);
and

     (f) the tract(s) of land situated in Harris County, Texas adjacent to the Campus Land,
described in Exhibit C, and all of Seller’s right, title, and interest in and to all
rights, privileges, easements, and interests appurtenant to such land, including all adjacent
streets, alleys, rights-of-way, and any adjacent strips and gores of real estate, and all
improvements located thereon (collectively, the “Other Land”).

The items in (a) through (f) are herein collectively called the “Property”. All of the Property
shall be sold, conveyed, and assigned to Purchaser at Closing free and clear of all liens, claims,
easements, and encumbrances whatsoever, except for the Permitted Encumbrances.

Section 2. Purchase Price. The price for which Seller shall sell, convey, and assign the
Property to Purchaser, and which Purchaser shall pay to Seller, is Two Hundred Ninety-Five Million
Dollars ($295,000,000) (the “Purchase Price”), to be paid in cash or cash equivalents as set forth
in Section 9(b)(1).

Section 3. Earnest Money. On or before June 7, 2006, Purchaser shall deliver to
Landamerica Commonwealth Title of Houston, 5847 San Felipe, Suite 400, Houston, TX 77057 (“Title
Company”) by wire transfer of immediately available funds the amount of $15,000,000 (the “Earnest
Money”). If Purchaser does not timely deposit the Earnest Money then upon written notice by Seller
to Purchaser this Agreement shall terminate and be of no further force or effect. Title Company
shall immediately deposit the Earnest Money in an interest-bearing account until the Earnest Money
is delivered pursuant to the provisions hereof. Seller and Purchaser stipulate that Purchaser’s
agreement to so deposit the Earnest Money, is sufficient consideration to support this Agreement
notwithstanding Purchaser’s rights under Section 5. As used elsewhere in this Agreement, the
term “Earnest Money” shall mean the amount described in this Section 3, together with any interest
earned thereon.

Section 4. Delivery of Information by Seller.

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     (a) Purchaser acknowledges that it has received title commitments from Title Company in favor
of Purchaser covering the Campus Land, the Improvements and the Other Land (the “Title
Commitments”).

     (b) Purchaser acknowledges that Seller has delivered to Purchaser the surveys of the Campus
Land and the Other Land, dated February 17, 2006 prepared by Prejean & Company, Inc. (collectively,
the “Survey”). For purposes of the property description to be included in the special warranty
deed to be delivered pursuant to Section 9(c)(1) (the “Special Warranty Deed”), the field notes
prepared by the surveyor shall control any conflicts or inconsistencies with Exhibit A and
Exhibit C, and such field notes shall be incorporated herein by this reference upon their
completion and approval by Purchaser and Seller.

     (c) Purchaser acknowledges that Seller has delivered to Purchaser the following:

          (1) a copy of each Tenant Lease listed on Schedule 1(d)-1 hereto, each Occupancy
Agreement listed on Schedule 1(d)-2, and, based on Seller’s list provided to Purchaser, the
most recent version of the summary term sheet with a prospective tenant of any portion of the
Property (including any related guaranty or security) with whom Seller is in active negotiations
and each Occupancy Agreement;

          (2) a copy of each Property Agreement listed on Schedule 1(e);

          (3) a copy of the Phase I Environmental reports prepared by Terracon dated March 27, 2006
covering the Campus Land and Improvements and the Other Land;

          (4) a copy of the geotechnical report prepared by Haynes Whaley, dated April 12, 2006 with
respect to the fault located on the Campus;

          (5) financial information regarding the Property as follows: (i) operating statements covering
the last three fiscal years prior to the current fiscal year and (ii) the operating budget for the
current fiscal year;

          (6) current schedule of tenant base years and escalations, and copies of current year tenant
escalation billings;

          (7) current accounts receivable aging report; and

          (8) Property tax bills covering the last three tax years prior to the current tax year.

The documents described in this Section 4(c), and the documents listed therein, are herein
collectively called the “Documents”, and the information contained in the Documents is herein
collectively called the “Information”.

     (d) For the pendency of this Agreement, Seller shall make available at the Property for
inspection and copying by Purchaser, at Purchaser’s expense, the written files of Seller relating
to the matters listed in Section 4(c), any matter under Section 1(e)(2) for which a claim has been
made and any matters under Section 1(e)(3) as well as the maintenance records of the

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Property, and any other documents or information relating to the Property that is reasonably requested by
Purchaser (to the extent existing and within the possession or control of Seller) (the “Owner
Records”).

     (e) Seller shall reasonably cooperate with Purchaser, at no cost or additional obligation to
Seller, in connection with Purchaser’s inspections of the Property, including, without limitation,
using commercially reasonable efforts to assist Purchaser and its agents with financial audits of
Seller and/or the Property to be performed in connection with regulatory requirements applicable to
Purchaser.

     (f) Purchaser acknowledges that Seller has delivered tenant estoppel certificates (each a
“Tenant Estoppel Certificate”) by each Tenant dated not earlier than May 9, 2006, in the form of
Exhibit J hereto or otherwise in the form provided for in such Tenant’s Tenant Lease.
Purchaser has reviewed and accepted such Tenant Estoppel Certificates and deems the Tenant Estoppel
Certificates in compliance with the requirements of this Section 4(f).

Section 5. Right of Inspection.

     (a) During the pendency of this Agreement, and any period prior to the execution of this
Agreement in which the negotiation of this Agreement is in progress, Purchaser and its
representatives may have access to and inspect, at reasonable hours, the Property (other than areas
occupied by Tenants), and the Owner Records but such right of inspection shall not include the
right to make any soil testing or boring or any destructive or invasive testing of the Property;
however, in conducting such activities (1) Purchaser shall not unreasonably interfere with the
business and operations of Seller or other occupants of the Campus Land, (2) Purchaser shall give
Seller reasonable prior notice of any on-site inspections and afford Seller the opportunity to have
a representative observe the same, and (3) Seller will arrange any contacts by the Purchaser with
Tenants.

     (b) Purchaser shall indemnify, defend and hold Seller harmless from all costs, damages, and
liabilities arising out of Purchaser’s inspection of the Property and the foregoing information to
the extent the same result from personal injury to or death of any person or loss or physical
damage to the Property or any loss or damage to property of or any claims of any third party.
Prior to any contractor, engineer or other party on behalf of Purchaser conducting any on-site
inspection, such party will be required to furnish evidence of commercial general liability
insurance with aggregate limits of at least $3,000,000, naming the Seller as an additional insured
and otherwise comply with Seller’s standard requirements for tenant contractors. Except as
required by law, all information relating to the Property obtained by or on behalf of
Purchaser or its representatives (including without limitation employees, consultants, and
advisors) in connection with Purchaser’s activities under Section 4(d) or this Section 5, or
otherwise provided or made available to Purchaser or its representatives by Seller or its
representatives, shall be kept confidential in accordance with the terms of that certain
Confidentiality Agreement dated March 10, 2006 by and between Cushman & Wakefield of Texas, Inc.
and Thomas Properties Group, Inc. (the “Confidentiality Agreement”), unless and until the Closing
occurs. Purchaser shall indemnify, defend, and hold harmless Seller from any losses incurred as
the result of the use of such information by Purchaser or its representatives in contravention of
the terms of this Agreement or the Confidentiality Agreement. Notwithstanding the foregoing,
Purchaser may

4

 

disclose such information to its advisors, investors and lenders, provided that
Purchaser informs them of the confidential nature thereof and, in any event, Purchaser shall defend
and indemnify Seller for all losses incurred as a result of any breach by any of such parties of
the confidentiality provisions hereof. If this transaction is not consummated for any reason
whatsoever, then Purchaser shall deliver to Seller (1) all written reports, studies, data,
information and copies prepared by Purchaser’s third-party consultants regarding the physical
condition of the Property and (2) all Documents, Information, and other matters regarding the
Property furnished or made available by Seller, including all copies thereof made by or on behalf
of Purchaser or its representatives. Purchaser’s obligations under this Section 5(b) shall survive
the termination of this Agreement.

     (c) Purchaser acknowledges that it has completed its due diligence investigations with respect
to the Property prior to the date hereof.

Section 6. Title.

     (a) Purchaser acknowledges that Seller has delivered the Survey and Title Commitments to
Purchaser together with copies of the documents set forth therein. Except for the matters
described in Section 6(b) below, all matters disclosed in the Survey, Title Commitment or related
documents, together with the Tenant Leases, the Occupancy Agreements and the Restrictive Covenants,
are deemed to be “Permitted Encumbrances”. Seller shall have the right to extend the Closing Date
as reasonably needed to complete the curative actions described in Section 6(b), not to exceed
forty-five (45) days. If Seller is unable to complete such curative actions within the forty-five
(45) day period, then Purchaser, as its sole and exclusive remedy, shall have the right to
terminate this Agreement the earlier of (i) three (3) Business Days after the end of such
forty-five (45) day period or (ii) upon receiving notice from Seller that such curative action will
not be completed prior to the expiration of the forty-five (45) day period. The term “Business
Day” means any day other than a weekend or other day when nationally chartered banks in Houston,
Texas are permitted or required to be closed.

     (b) Seller at its cost shall be obligated to cure or remove (or bond around to the reasonable
satisfaction of Purchaser with respect to mechanic’s and materialmen’s liens) by Closing all
mortgages, deeds of trust, judgment liens, mechanic’s and materialmen’s liens, and other liens
against the Property (other than liens for taxes and assessments which are not delinquent, and
inchoate liens relating to Property Agreements which are not delinquent), and
other encumbrances against the Property voluntarily created by Seller after the Effective Date
(unless a lease of space in one or more of the Buildings pursuant to Section 7(b) or consented to
by Purchaser, such consent not to be unreasonably withheld or delayed with respect to matters that
are required by law) (“Mandatory Cure Liens”).

     (c) The parties acknowledge that immediately prior to Closing, BMC-LP shall execute and record
the Declaration of Easements and Restrictive Covenants attached hereto as Exhibit D (the
“Restrictive Covenants”).

     (d) Purchaser acknowledges that it has received evidence satisfactory to it that Seller has
completed the necessary curative action related to the mechanic’s lien by affidavit executed by
C.R. Williams against BMC Software Texas, LP in the amount of $12,115.40, filed April 13,

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2006, recorded in/under County Clerk’s File No. Z228647 of the Real Property Records of Harris County,
Texas.

Section 7. Representations, Warranties, and Covenants.

     (a) Seller hereby represents and warrants to Purchaser that:

          (1) Seller has full right, power, and authority to execute and deliver this Agreement and to
consummate the purchase and sale transactions provided for herein without obtaining any further
consents or approvals from, or the taking of any other actions with respect to, any third parties
(including any governmental entity), and this Agreement, when executed and delivered by Seller and
Purchaser, will constitute the valid and binding agreement of Seller, enforceable against Seller in
accordance with its terms, subject to applicable bankruptcy, insolvency or other similar laws
relating to or affecting the enforcement of creditors’ rights generally and to general principles
of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

          (2) There are no actions, suits, claims, assessments, or proceedings pending as to which
Seller has received service of process or other written notice of or, to Seller’s Knowledge,
threatened against Seller or the Property (i) in the nature of condemnation with respect to any of
the Property or (ii) that could materially adversely affect the ownership, operation, or
maintenance of the Property or Seller’s ability to perform hereunder.

          (3) All bills and other payments due with respect to the ownership, operation, and maintenance
of the Property have been paid or will be paid in the ordinary course of business, and will be
appropriately prorated and accounted for under Section 10.

          (4) Seller has not received written notice of, or otherwise has knowledge of, any existing
unsatisfied, written, enforceable claims of any governmental agency to the effect that the
construction, operation, or use of any of the Property is in violation of any applicable law,
ordinance, rule, regulation or order. To Seller’s Knowledge, no such claim or any investigation
with respect thereto is under consideration.

          (5) Seller has furnished Purchaser true and complete copies of all items listed in Section
4(c). Except for amounts provided in the reports provided to Purchaser pursuant to Section
4(c)(7), each Tenant Lease is free from default by the landlord and, to Seller’s Knowledge the
Tenant or other counterparty thereto. No Tenant Lease contains any option to purchase or grants a
Tenant any right of refusal or option to purchase the Property or any portion thereof.

          (6) Except for the rights of parties under the Tenant Leases and Occupancy Agreements, there
are no parties in possession of the Property, nor parties that have rights as tenants, or rights of
use or occupancy of the Property. Except for the agreements provided under Section 4(c)(1) through
(3) and governmental authorizations, requirements of law and Permitted Encumbrances, there are no
agreements that shall be binding on Purchaser or the Property after Closing. Each such agreement
is free from default by Seller and, to Seller’s Knowledge, the counterparty thereto.

6

 

          (7) Seller has furnished Purchaser with true and complete copies of all environmental or other
assessment reports described in Section 4(c)(3) or Section 4(c)(4) and Seller has no knowledge of
any fact or circumstance that would cause the conclusions set forth therein to be materially
inaccurate.

          (8) Except as set forth in Schedule 7(a)(8), there are no leasing commissions due and
owing, and no allowances for tenant improvements or obligations to construct tenant improvements,
with respect to the Leases, except allowances payable for space that may in the future be leased
under the terms of the Tenant Leases.

          (9) Seller is not a “foreign person” as that term is defined in Section 1445(f)(3) of the
Internal Revenue Code of the United States of America, as amended.

     (b) From the Effective Date until the Closing Date unless Purchaser otherwise consents in
writing (in Purchaser’s sole and absolute discretion), Seller shall: (1) maintain and operate the
Property in the same manner as Seller has heretofore done; (2) continue all Tenant Leases in full
force and effect and neither cancel, materially amend, nor renew any of the same (other than the
termination of leased space contemplated in Section 7(g)); (3) continue all Ancillary Rights,
Property Agreements, and insurance policies or contracts relative to the Property in full force and
effect and neither cancel, materially amend, nor renew any of the same, or enter into any new such
matters, other than (A) in the ordinary course of Seller’s business, (B) matters that will not
increase the obligations of Purchaser after the Closing, or (C) as provided for in an existing
agreement; and (4) other than as provided in this Section 7(b), not enter into any agreement or
instrument or take any action that would encumber the Property after Closing, that would bind
Purchaser or the Property after Closing and that would be outside the normal scope of maintaining
and operating the Property, other than the Restrictive Covenants; and (5) not enter into any Tenant
Lease affecting the Property other than any Tenant Lease with the prospective tenant or Affiliate
thereof under a letter of intent delivered under Section 4(c) which is substantially in accordance
with the terms of such letter of intent and generally in a lease form consistent with the Tenant
Leases (and any such lease entered into in compliance therewith shall be considered a Tenant
Lease). Notwithstanding the foregoing, from the Effective Date until the Closing Date, Seller
shall have the authority without the consent of Purchaser to take any actions reasonably necessary to respond to an emergency where property
or persons are under imminent threat.

     (c) When used in this Agreement, the term “Affiliate” shall mean, as applied to any Person,
any other Person directly or indirectly controlling, controlled by, or under common control with,
that Person.

     (d) When used in this Agreement, or in any agreement contemplated to be entered into pursuant
to this Agreement, the phrase “to Seller’s Knowledge” or derivations thereof shall mean the actual
knowledge of Keith Josey and Derek Laws, without any obligation to make investigation or inquiry
regarding the Property, and without obligation to make any investigation of the files, documents or
studies in the possession of other persons, and shall not include any knowledge which may be
imputed to Seller or of any other persons other than those referenced in this Section 7(b). If (i)
any of Seller’s representations and warranties set forth in this Section 7 are untrue in any
material, adverse respect, or (ii) at any time at or before Closing there is any

7

 

material, adverse change with respect to the matters represented and warranted by Seller pursuant to this Section 7
such that the representation or warranty is no longer accurate, then Seller shall give Purchaser
prompt written notice thereof. Seller may provide to Purchaser updated or additional schedules to
correct for such inaccuracy. If Seller notifies Purchaser prior to the Closing Date of such
inaccuracies and Seller does not cure the same before the Closing occurs then Purchaser, as its
sole remedy, may terminate this Agreement by delivering written notice to Seller at any time at or
before the Closing. If Purchaser receives such notice and does not so elect to terminate this
Agreement, then it will be deemed to have accepted the inaccuracy of such representation and
warranty disclosed to Purchaser and shall have no claim with respect thereto after Closing. All of
Seller’s representations and warranties shall survive the Closing; however, Purchaser may not
maintain an action for breach of such representations and warranties unless it shall have given
Seller written notice of such breach in reasonable detail not later than nine (9) months after the
Closing Date.

     (e) Purchaser acknowledges that Purchaser will have independently and personally inspected the
Property and that Purchaser has entered into this Agreement based upon its ability to make such
examination and inspection. Purchaser also acknowledges that there is a geological fault on the
Property, and accepts the Property with such geological fault. The Property is to be sold to and
accepted by Purchaser at Closing in its then present condition, “AS IS”, “WHERE IS”, and “WITH ALL
FAULTS”, and WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (other than the special warranty
of title to be included in the Special Warranty Deed and in any document executed and delivered to
Purchaser by Seller in connection with the Closing (“Closing Documents”) and the representations
and warranties expressly set forth in this Agreement); specifically (without limiting the
generality of the foregoing), without any warranty of (i) the value or utility of the Property,
(ii) the nature or quality of the construction, structural design or engineering of the
Improvements, (iii) the quality of the labor and materials included in the Improvements, (iv) the
existing geotechnical conditions and soil conditions existing at the Property for any particular
purpose or developmental potential, (v) the presence or absence of any hazardous substances or
matter in or on the Property, (vi) compliance of the Property with any applicable laws, regulations
or other governmental requirements, or (vii) the accuracy of any information provided by Seller to
Purchaser. EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN A CLOSING DOCUMENT, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND TO PURCHASER, INCLUDING, WITHOUT
LIMITATION, THE PHYSICAL CONDITION OF THE PROPERTY AND ANY IMPROVEMENTS LOCATED THEREON, OR THEIR
SUITABILITY FOR ANY PARTICULAR PURPOSE OR OF MERCHANTABILITY. EXCEPT AS EXPRESSLY SET FORTH HEREIN
OR IN A CLOSING DOCUMENT, IF THE CLOSING OCCURS, THEN PURCHASER, ON BEHALF OF ITSELF AND ITS
SUCCESSORS AND ASSIGNS, SHALL BE DEEMED TO HAVE WAIVED ALL LIABILITY OF, AND CLAIMS AGAINST, SELLER
WITH RESPECT TO THE PHYSICAL CONDITION OF THE PROPERTY INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL
MATTERS (AND ANY REMEDIATION, CONTRIBUTION, OR INDEMNITY OBLIGATIONS) WHETHER ARISING UNDER COMMON
LAW, STATUTE OR OTHERWISE.

     (f) Purchaser acknowledges that within a reasonable period of time after the Closing Date,
Purchaser will be installing its own telephone service, network and equipment

8

 

(“Telephone System”) in the common areas and/or the amenities of the Property, including the portion of the Telephone
System used in the security stations. Upon the installation of Purchaser’s Telephone System on the
Property, Purchaser acknowledges that Seller will be removing all of its existing telephone
equipment from the common areas and/or the amenities of the Property.

     (g) Purchaser acknowledges that the BMC Building One Lease contemplates that approximately
5,200 rentable square feet of space currently leased in Building 1 by Halliburton under the Tenant
Lease with Halliburton (the “Halliburton Tenant Lease”) will be terminated by Halliburton prior to
Closing and leased by Seller under the BMC Building One Lease. If for any reason Halliburton does
not terminate its lease of such space under the Halliburton Tenant Lease prior to the Closing, the
BMC Building One Lease shall be amended to reflect the exclusion of such space, but even in such
event, for the purpose of such modification, BMC, Inc. will still be considered to be leasing
substantially all of Building 1.

     (h) Purchaser hereby represents and warrants to Seller that:

          (1) Purchaser has full right, power, and authority to execute and deliver this Agreement and
to consummate the purchase and sale transactions provided for herein without obtaining any further
consents or approvals from, or the taking of any other actions with respect to, any third parties
(including any governmental entity), and this Agreement, when executed and delivered by Seller and
Purchaser, will constitute the valid and binding agreement of Purchaser, enforceable against
Purchaser in accordance with its terms subject to applicable bankruptcy, insolvency or other
similar laws relating to or affecting the enforcement of creditors’ rights generally and to general
principles of equity (regardless of whether enforcement is considered in a proceeding in equity or
at law).

          (2) There are no actions, suits, claims, assessments, or proceedings pending or to Purchaser’s
knowledge threatened that could materially adversely affect Purchaser’s ability to perform
hereunder.

     (i) Seller has timely and properly protested the 2006 determination of the appraised value of
the Buildings and the Project, and agrees to use reasonable efforts to pursue such protest at all
times prior to the Closing, and to keep Purchaser informed as to the status thereof and any further
hearings or actions to be taken in connection therewith.

Section 8. Conditions to Closing.

     (a) Purchaser’s obligations to consummate the Closing and to purchase the Property hereunder
are conditioned upon satisfaction of all of the following conditions, any of which may be waived by
Purchaser in its sole discretion:

          (1) The performance by Seller of its material covenants, undertakings, and agreements to be
performed by it hereunder and the truth of the material representations and warranties made in this
Agreement by Seller at the time as of which the same were made to Purchaser and as of the Closing.

9

 

          (2) As of the Closing there shall not be any of the following by or against or with respect to
Seller: (A) a case under Title 11 of the U.S. Code, as now constituted or hereafter amended, or
under any other applicable federal or state bankruptcy law or other similar law; (B) the
appointment of a trustee or receiver of any property interest; or (C) an assignment for the benefit
of creditors.

          (3) There shall not be as of the Closing any taking or threatened taking of the Property or
any part thereof by eminent domain.

          (4) The original Tenant Estoppel Certificates for each Tenant shall have been delivered to
Purchaser.

          (5) The Title Company shall be irrevocably committed to issue to Purchaser, upon payment of
applicable premiums and fees, the Title Policy.

If any of such conditions have not been satisfied at the Closing, then Purchaser may terminate this
Agreement by giving immediate written notice thereof to Seller at the Closing, in which event this
Agreement shall be terminated as provided for in Section 12. If the Closing is completed then all
such conditions shall conclusively be deemed satisfied or waived.

     (b) Seller’s obligations to consummate the Closing and to sell the Property hereunder are
conditioned upon satisfaction of all of the following conditions, any of which may be waived by
Seller in its sole discretion:

          (1) The performance by Purchaser of its material covenants, undertakings, and agreements to be
performed by it hereunder and the truth of the material representations and warranties made in this
Agreement by Purchaser at the time as of which the same were made.

          (2) That at no time prior to the Closing shall any of the following have been filed by or
against or with respect to Purchaser or a member of Purchaser with a majority
ownership interest in Purchaser: (A) a case under Title 11 of the U.S. Code, as now
constituted or hereafter amended, or under any other applicable federal or state bankruptcy law or
other similar law; (B) the appointment of a trustee or receiver of any property interest; or (C) an
assignment for the benefit of creditors.

If any of such conditions have not been satisfied at the Closing, then Seller may terminate this
Agreement by giving immediate written notice thereof to Purchaser at the Closing, in which event
this Agreement shall be terminated as provided for in Section 12. If the Closing is completed then
all such conditions shall conclusively be deemed satisfied or waived.

Section 9. Closing.

     (a) The closing (the “Closing”) of the sale of the Property by Seller to Purchaser shall occur
on June 15, 2006 (unless otherwise extended pursuant to this Agreement) (the “Closing Date”), in
the offices of Vinson & Elkins L.L.P., commencing at 1:00 p.m. Central Time. Time is of the
essence with regard to the Closing Date. Seller shall have the option to extend the Closing Date
to a date on

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or before June 23, 2006 by providing written notice to Purchaser no later than June
13, 2006. Purchaser shall have the option to extend the Closing Date to a date on or before June
23, 2006 by providing written notice to Seller no later than June 13, 2006. Either party
delivering such written notice of extension shall include in the notice the day to which the
Closing is to be extended. Once written notice of extension to Closing is given by one party, the
other party may not provide a subsequent notice of extension with a closing date for the Closing
that pre-dates the designated date in the notice first provided. If both parties give written
notice simultaneously, the Closing Date shall be the later of the two dates provided in such
notices. At the Closing, the following, which are mutually concurrent conditions, shall occur:

     (b) Purchaser, at its expense, shall deliver or cause to be delivered to Seller the following:

          (1) United States of America funds available for immediate value (earning interest from and
including the Closing Date) in Seller’s accounts, in the amount of the Purchase Price (adjusted in
accordance with Section 10);

          (2) a Bill of Sale and Assignment (the “Bill of Sale”), fully executed and acknowledged by
Purchaser, covering the Personalty and Ancillary Rights in the form of Exhibit E hereto;

          (3) Assignment of Tenant Leases (“Tenant Lease Assignment”), fully executed and acknowledged
by Purchaser, covering the Tenant Leases and certain other agreements in the form of Exhibit
F hereto;

          (4) Notices to each Tenant in the form of Exhibit G hereto (the “Tenant
Notification”), fully executed by Purchaser;

          (5) the lease agreement with BMC Inc., as Lessee, with respect to Building 1 in the form of
Exhibit H-1 (the “BMC Building One Lease”);

          (6) the lease agreement with BMC Inc., as Lessee, with respect to Building 2 in the form of
Exhibit H-2 (the “BMC Building Two Lease”);

          (7) the lease agreement with BMC Inc., as Lessee, with respect to Buildings 3 and 4 in the
form of Exhibit H-3 (together with the BMC Building One Lease and the BMC Building Two
Lease, the “BMC Lease Agreements”);

          (8) evidence reasonably satisfactory to Seller and Title Company that the person executing the
Closing Documents on behalf of Purchaser has full right, power, and authority to do so; and

          (9) such other instruments as are customarily executed in Harris County, Texas in connection
with the conveyance of property similar to the Property.

     (c) Seller, at its expense, shall deliver or cause to be delivered to Purchaser the following:

          (1) a Special Warranty Deed, fully executed and acknowledged by each BMC-LP, conveying to
Purchaser the Campus Land, the Improvements, and the Other Land it

11

 

owns, subject only to the Permitted Encumbrances related thereto, together with all of BMC-LP’s right, title, and interest in
and to the appurtenances thereto, in the form of Exhibit I hereto, and a Special Warranty
Deed, fully executed and acknowledged by each BMC Inc., conveying to Purchaser the Other Land it
owns, subject only to the Permitted Encumbrances related thereto, together with all of BMC Inc.’s
right, title, and interest in and to the appurtenances thereto, in the form of Exhibit I
hereto;

          (2) the Bill of Sale, fully executed and acknowledged by BMC-LP;

          (3) the Tenant Lease Assignment, fully executed and acknowledged by BMC-LP;

          (4) the BMC Lease Agreements, executed by BMC Inc.;

          (5) the original Tenant Estoppel Certificates for each Tenant, copies of which were delivered
to Purchaser as described in Section 4(f);

          (6) the Tenant Notification, fully executed by BMC-LP;

          (7) an insured closing letter from Title Company in form and substance reasonably satisfactory
to Purchaser and Seller and an owner’s policy of title insurance (“Title Policy”) in the amount of
the Purchase Price issued by Title Company as agent for Commonwealth Land Title Insurance Company,
insuring that Purchaser is the owner of the Campus Land, the Improvements and the Other Land
subject only to the Permitted Encumbrances and the standard printed exceptions included in a Texas
standard form owner policy of title insurance; however, (A) the rights of parties in possession
shall be limited only to those holding under the Tenant Leases, (B) the standard survey exception
will be limited to shortages in area (at the expense of the Purchaser), and (C) the standard
exception for taxes shall be limited to the year in which the Closing occurs, and subsequent years
and subsequent assessments for prior years due to change in land usage or ownership (Purchaser may obtain at
its expense such additional endorsements as it deems necessary, so long as such endorsements do not
increase the costs or obligations of Seller);

          (8) evidence reasonably satisfactory to Purchaser and Title Company that the persons executing
and delivering the Closing documents on behalf of Seller have full right, power and authority to do
so;

          (9) certificate executed by Seller stating whether, as of the Closing Date, each of Seller’s
representations and warranties set forth in Section 7 is true and correct in all material respects;
provided, however, that if such certificate reveals that any of such representations and warranties
are not true and correct in all material respects as of the Closing Date and such is materially
adverse, then Purchaser may terminate this Agreement by giving immediate notification to Seller at
the Closing, in which event this Agreement shall be terminated as provided for in Section 12(b) or
Section 12(c), as applicable;

          (10) certificates meeting the requirements of Section 1445 of the Internal Revenue Code of
1986, executed and sworn to by Seller;

12

 

          (11) Subordination, Non-disturbance and Attornment Agreements for each BMC Lease Agreement in
substantially the form of the exhibits attached to the BMC Lease Agreements, fully executed and
acknowledged by BMC Software, Inc.; and

          (12) such other instruments as are customarily executed in Harris County, Texas in connection
with the conveyance of property similar to the Property.

     (d) If applicable at Closing, Seller and Purchaser shall execute, acknowledge, and record a
notice in compliance with Section 212.155 of the Texas Local Government Code.

     (e) Upon completion of the Closing, Seller shall deliver to Purchaser possession of the
Property free and clear of all tenancies of every kind and parties in possession, except for the
occupants under the Tenant Leases, the Occupancy Agreements and the BMC Lease Agreements, including
delivery at the Property of all original executed Tenant Leases and Property Agreements, keys and
combinations in Seller’s possession or control for locks at the Property, and all architectural
drawings, record drawings, plans, specifications, surveys, building permits, occupancy permits or
other similar items in Seller’s possession and control (or copies thereof) which Seller has
created, used, or relied upon for the construction and maintenance of the Property.

Section 10. Prorations and Closing Costs.

     (a) The following adjustments to the Purchase Price shall be made between Seller and Purchaser
and shall be prorated (as applicable) as if Purchaser owned the Property for the entire day on the
Closing Date:

          (1) All real estate taxes, personal property taxes, and other state or city taxes, charges and
assessments (collectively, “Taxes”) assessed against the Property for the calendar year in which
the Closing occurs shall be prorated as of the Closing. Taxes for the current calendar year will
be tentatively calculated using the most current assessment data and the tax rate available to
Seller for the prior year and prorated between Purchaser and Seller on the Closing Date. If upon
receiving the actual invoices of Taxes from the applicable taxing authority for the calendar year
in which Closing occurs the amount of Taxes used as the basis of the pro-ration is found to differ
from the actual amount of Taxes for the year of Closing, then there will be an adjustment to the
pro-ration based on the actual Taxes assessed.

          (2) “Fixed Rents” shall mean rents paid or payable by Tenants under their Tenant Leases on a
regular monthly (or other periodic) basis, including net or base rent, and parking fees, other than
Additional Rents. “Additional Rents” shall mean so-called “escalation rent” or additional rent
payable generally by Tenants under their Tenant Leases (other than for specific services or
amenities) based upon the amounts of, or increases in, real estate taxes, operating expenses,
management fees or other similar matters.

          (3) Fixed Rents and estimated payments of Additional Rents shall be prorated on a daily basis
over the month in which the Closing is held (“Closing Month”). Any Fixed Rents or estimated
payments of Additional Rents collected by Purchaser or Seller from a Tenant after the Closing shall
be applied (i) first, in payment of Fixed Rents owed by such Tenant, if any, for periods of time
prior to the Closing Month, (ii) second, in payment of Fixed Rents owed

13

 

by such Tenant, if any, for
the Closing Month, and (iii) third, in payment of Fixed Rents owed by such Tenant, if any, for all
periods following Closing through the month in which such amount is collected.

          (4) Seller shall provide Purchaser all information obtained by Seller related to operating
expenses for the period from January 1, 2006 through the Closing. On or before sixty (60) days
after the last date provided for in the Tenant Leases as the time for reconciliation of operating
expense charges for 2006, Purchaser will prepare a reconciliation, computed as of the Closing Time,
for actual operating expense and taxes payable pursuant to each of the Tenant Leases for calendar
year 2006 (collectively, “Operating Expense Recoveries”) and a summary of the amounts paid by
Tenants with respect to Operating Expense Recoveries. Seller shall be entitled to the Operating
Expense Recoveries attributable to the period prior to the Closing Date, and Purchaser shall be
entitled to Operating Expense Recoveries attributable to the period on and after the Closing Date.
Operating Expense Recoveries shall be deemed to accrue on an equal amount per diem, regardless of
when actual expenses occurred during the year. If any Tenants have overpaid the amounts due under
the Tenant Leases of such Tenants, the amount of the overpayment shall be refunded by Purchaser to
the applicable Tenants as required under the Tenant Leases. Purchaser and Seller shall then make
appropriate adjusting payments between themselves such that each receives the appropriate amount of
the Operating Expense Recoveries attributable to their respective periods of ownership. Purchaser
shall not, during 2006, exercise any option under any Tenant Lease to change the period used to
calculate Operating Expense Recoveries to any period other than the calendar year.

          (5) “Services Rents” shall mean specific charges or additional rents payable by Tenants under
their Tenant Leases for services or amenities specifically furnished to such
Tenants under their Tenant Leases (including, without limitation, overtime HVAC charges) and
shall be adjusted based upon the dates upon which the applicable services or amenities were
furnished. Any Services Rents collected by Purchaser or Seller from a Tenant after the Closing
shall be applied first to the oldest uncontested amounts of Services Rents due from such Tenant,
except to the extent, if any, designated by the Tenant to be applied to contested amounts, in which
event such shall be applied as so designated by the Tenant.

          (6) Fixed Rents, Additional Rents, and Service Rents are collectively called “Rents”. All
Rents for periods of time ending before the Closing Date shall be allocated solely to Seller. All
Rents for periods of time beginning on the Closing Date shall be allocated solely to Purchaser.
All Rents, less the reasonable, incremental out-of-pocket costs of collection (including reasonable
counsel fees) reasonably allocable thereto, shall be adjusted and prorated as provided above on a
cash collected basis, and the party who receives such amount shall promptly (in no event longer
than thirty (30) days after receipt) pay over to the other party the portion thereof to which it is
so entitled, net after such costs. Purchaser shall bill Tenants who owe Rents for periods prior to
the Closing on a monthly basis for a period of at least six (6) consecutive months following the
later to occur of the Closing Date or the initial billing thereof (the “Collection Period”) and
shall use commercially reasonable efforts to collect such Rents; provided, however, that Purchaser
shall have no obligation to commence any actions or proceedings to collect any such Rents. Seller
shall have no rights to collect Rents directly from Tenants after the Closing.

14

 

          (7) Until such time as all amounts of Rents required to be paid to Seller by Purchaser
pursuant to this Section 10 shall have been paid in full or the end of the Collection Period,
whichever first occurs, Purchaser shall furnish to Seller not less frequently than monthly a
reasonably detailed accounting of such amounts payable by Purchaser, which accounting shall be
delivered to Seller on or prior to the 15th day following the last day of each calendar
month from and after the calendar month in which the Closing occurs. Thereafter, Purchaser shall
furnish to Seller accountings of such amounts as they are received. Seller shall have the right,
from time to time following the Closing, on three days prior notice to Purchaser, to review
Purchaser’s records during ordinary business hours with respect to the Property to ascertain the
accuracy of such accountings. Concurrently with Purchaser billing Tenants for Rents that are to be
prorated with Seller, Purchaser shall send copies thereof to Seller.

          (8) Gas, steam, electricity, water and sewer and other public utility charges (other than any
such charges which are payable by Tenants of the Property pursuant to such Tenants’ Tenant Leases)
will be paid by Seller to the utility company for all charges due and payable up to the Closing
Date. Seller shall attempt to arrange for a final reading of all utility meters (covering gas,
water, sewer, steam and electricity) as of the Closing, except meters the charges of which are
payable by Tenants of the Property pursuant to such Tenants’ Leases. Seller and Purchaser shall
jointly execute a letter to each of such utility companies advising such utility companies of the
termination of Seller’s responsibility for such charges for utilities furnished to the Property as
of the date of the Closing and commencement of Purchaser’s responsibilities therefor from and after
such date. If a bill is obtained from any such utility company prior to the Closing Date, Seller
shall pay such bill on or before the Closing. If such bill shall not have been obtained prior to
the Closing Date, Seller shall, upon receipt of such bill, forward a copy thereof to Purchaser and
pay all such utility charges as evidenced by such bill or
bills pertaining to utilities used prior to the Closing, and Purchaser shall pay all such
utility charges pertaining to utilities used thereafter. Any bill which shall be rendered which
shall cover a period both before and after the date of Closing shall be apportioned between
Purchaser and Seller on a daily basis over the period covered by such bill.

          (9) Fees paid or payable under any license, permit, or other intangible property assignable to
Purchaser and charges and other amounts payable under any contract assigned to Purchaser pursuant
to the terms of this Agreement, including without limitation under all Property Agreements shall be
prorated as of the Closing Date except to the extent, if any, otherwise provided in this Section
10.

          (10) Matters disclosed on Schedule 7(a)(8) will be credited to Purchaser at the Closing.

          (11) No prorations will be made in relation to insurance premiums (except to the extent
covered by the proration of Operating Expense Recoveries), and Seller’s insurance policies will not
be assigned to Purchaser.

          (12) Any other item of income or expense related to the Property which is customarily prorated
upon the sale of an income-producing property in Houston, Texas shall be prorated as of the Closing
Date except to the extent, if any, otherwise provided in this Section 10.

15

 

          (13) The foregoing prorations, apportionments, and computations under this Section 10 shall be
made at the Closing based upon the information then best available to Seller and Purchaser, and
shall be reviewed and revised at least once not less than forty-five (45) but not more than ninety
(90) days after the Closing Date and as often thereafter (but no more often than once every sixty
(60) days, and not after one year after the Closing Date) as either party reasonably deems
appropriate. Purchaser shall make available to Seller all information necessary to or appropriate
for such reviews and revisions. If any such review or revision establishes a net over or under
payment by Seller or Purchaser, then the party with the net under payment shall pay the net
adjustment amount to the other party within fifteen (15) days thereafter.

          (14) Seller and Purchaser each shall make available to the other all information in their
respective possession or control relating to Rents or other amounts to be prorated or otherwise
adjusted between them.

          (15) A credit of $150,000 will be given on the closing statement for the benefit of Purchaser
at Closing.

          (16) The provisions of this Section 10 shall survive the Closing.

     (b) Seller shall pay the costs of the Survey and the premium for the Title Policy (including
without limitation any and all charges for the Title Commitment), except that Purchaser shall pay
the additional premium to limit the standard survey exception to shortages in area or any other
endorsements obtained by Purchaser. Seller and Purchaser shall pay equally any escrow or similar
fees charged by Title Company with respect to the Closing. Seller shall pay the recording charges
for title curative documents for the Mandatory Cure Liens. Purchaser
shall pay the recording charges for the Special Warranty Deed, and other documents, if any,
recorded in connection with the conveyance of the Property. Seller and Purchaser shall each bear
its respective attorney and consultant fees and expenses in connection with this Agreement and the
Closing. All other closing costs shall be borne as is customary for the sale of similar properties
in Harris County, Texas.

     (c) The Earnest Money shall be applied to the Purchase Price.

     (d) The parties acknowledge that Seller has engaged Cushman & Wakefield as its broker (“C&W”)
in connection with the sale of the Property, and Seller will pay any amounts owing to C&W in
accordance with a separate agreement executed between Seller and C&W. Any broker retained by
Purchaser shall be paid by Purchaser. As provided for in the Texas Real Estate License Act,
Purchaser is advised to have an abstract of title with regard to the Property examined by an
attorney of its choice, or to obtain a policy of title insurance. Seller shall defend, indemnify,
and hold harmless Purchaser, and Purchaser shall defend, indemnify, and hold harmless Seller, from
and against all claims by third parties for brokerage, commission, finders, or other fees relative
to this Agreement or the sale of the Property, and all court costs, attorneys’ fees, and other
expenses arising therefrom, and alleged to be due by authorization of the indemnifying party.

16

 

Section 11. Destruction, Damage, or Taking Before Closing. If, before Closing, all or any material
part of the Other Land, Campus Land, Improvements or Personalty are destroyed or damaged, or become
subject to condemnation or eminent domain proceedings, then Seller shall promptly notify Purchaser
thereof and with respect to damage or destruction, Seller shall promptly commence repairs in
accordance with Seller’s practice. If this Agreement is not terminated by Purchaser as provided
below, then Purchaser shall be entitled to all insurance proceeds or condemnation awards payable as
a result of such damage or taking and, to the extent the same may be necessary or appropriate,
Seller shall assign, without recourse, to Purchaser at Closing Seller’s rights to such proceeds or
awards and Seller shall pay to Purchaser the amount of any deductible. At Closing, Purchaser shall
reimburse Seller for the cost of all repairs paid for by Seller and assume outstanding repair
contracts, and Purchaser shall accept the Property subject to the unrepaired damage. If the damage
or taking is material and within thirty (30) days of receipt of Seller’s notice respecting the
damage, destruction, or taking (but in no event later than the Closing) Purchaser notifies Seller
of its intent to terminate this Agreement, then Purchaser shall be deemed to have terminated this
Agreement. For the purposes of this Section 11, damage or a taking shall be considered to be
“material” if the cost to repair the improvements damaged, or if the value of the portion of the
Other Land, Campus Land, Improvements, or Personalty taken, in either case exceeds $3,000,000.00 in
value, or, in the case of a taking, if the portion of the Other Land, Campus Land, Improvements, or
Personalty taken are such that they materially adversely affect the ability to use the remainder
for the purposes for which they are presently used.

Section 12. Termination and Remedies.

     (a) If Purchaser fails to consummate the purchase of the Property pursuant to this Agreement
for any reason other than termination hereof pursuant to a termination right granted in this
Agreement or a material breach or default by Seller, or if Purchaser is otherwise in material
breach or default under this Agreement, then Seller may, as Seller’s sole and exclusive remedy,
terminate this Agreement by notifying Purchaser thereof, in which event Title Company shall deliver
the Earnest Money to Seller as liquidated damages, whereupon neither Purchaser nor Seller shall
have any further rights or obligations hereunder, except for those which survive the termination of
this Agreement. In addition to the foregoing, Seller shall also be entitled to recover all
expenses, including reasonable attorney’s fees and litigation costs, incurred in connection with
enforcing its rights with respect to a breach hereof by Purchaser. The provision for payment of
liquidated damages in this Section 12(a) has been included because, in the event of a breach by
Purchaser, the actual damages to be incurred by Seller can reasonably be expected to approximate
the amount of liquidated damages called for herein and because the actual amount of such damages
would be difficult if not impossible to measure accurately.

     (b) If Purchaser terminates this Agreement pursuant to an express right, including without
limitation pursuant to Section 7(d), Section 8(a), or Section 11, then Title Company shall return
the Earnest Money to Purchaser, whereupon neither party hereto shall have any further rights or
obligations hereunder, except for those which survive the termination of this Agreement.

     (c) If Seller fails to consummate the sale of the Property pursuant to this Agreement for any
reason other than termination hereof pursuant to a termination right granted in this

17

 

Agreement or a material breach or default by Purchaser, or if Seller is otherwise in material breach or default
under this Agreement at or prior to the Closing, then Purchaser may, as its exclusive remedies
therefor: (1) terminate this Agreement by notifying Seller thereof, in which case Title Company or
Seller shall return the Earnest Money to Purchaser and neither party hereto shall have any further
rights or obligations hereunder, except for those which survive the termination of this Agreement;
or (2) enforce specific performance of the obligations of Seller hereunder. In addition to the
foregoing, Purchaser shall also be entitled to recover all expenses, including reasonable
attorney’s fees and litigation costs, incurred in connection with enforcing its rights with respect
to a breach hereof by Seller. PURCHASER HEREBY WAIVES ANY RIGHT TO PURSUE A CLAIM FOR DAMAGES
(INCLUDING WITHOUT LIMITATION ANY ACTUAL, SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR
EXEMPLARY DAMAGES), OR ANY OTHER REMEDY AVAILABLE, AT LAW OR IN EQUITY, IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT AS PROVIDED IN SECTION 13(C).

     (d) Without implying that Purchaser has any such rights, Purchaser waives any and all claims
it has or may have in connection with this Agreement, or the matters contemplated herein, against
the partners or shareholders of Seller, and notwithstanding anything in this Agreement to the
contrary, it is expressly understood and agreed that Seller’s partners, shareholders, officers,
directors, employees and agents shall not be personally liable to Purchaser, or its successors or
assigns, for the payment of any money judgment obtained for a failure to perform or pay any
covenant or obligation on the part of Seller to be performed or paid under this Agreement, it being
expressly agreed that any money judgment recovered against
Seller shall be satisfied only out of, and the sole and exclusive recourse of Purchaser as a
result of such default shall be against, the assets of Seller.

     (e) TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, ALL PARTIES WAIVE THE RIGHT TO A
JURY IN THE EVENT OF LITIGATION.

     (f) THE LIMITATIONS ON REMEDIES AND RECOURSE SET FORTH IN SECTION 13(C), THIS SECTION 12, AND
ELSEWHERE IN THIS AGREEMENT SHALL APPLY EVEN IN THE EVENT OF THE NEGLIGENCE, BREACH, STRICT
LIABILITY OR OTHER LEGAL FAULT OF THE DEFAULTING OR BREACHING PARTY.

     (g) Notwithstanding anything in this Agreement to the contrary, and without implying that
Seller has any such right, it is expressly understood and agreed that Purchaser’s members, manager,
partners, shareholders, officers, directors, employees and agents shall not be personally liable to
Seller, or its successors or assigns, for the payment of any money judgment obtained for a failure
to perform or pay any covenant or obligation on the part of Purchaser to be performed or paid under
this Agreement, it being expressly agreed that Seller’s sole and exclusive recourse as a result of
such default shall be against the Earnest Money and, as to the right to recover enforcement costs
under Section 12(a), the assets of Purchaser.

18

 

     (h) Title Company shall not disburse the Earnest Money to either party unless and until so
instructed by both Seller and Purchaser, but such shall not preclude Title Company from
interpleading the Earnest Money to the registry of a court. Whenever either party is entitled to
all or any part of the Earnest Money, the other party shall promptly instruct Title Company, in
writing, to make such disbursement or, in the event of a good faith dispute, shall promptly give
written notice thereof to the other party and to Title Company specifying such dispute in
reasonable detail.

     (i) The provisions of this Section 12 shall survive the Closing and any termination of this
Agreement.

Section 13. Indemnification.

     (a) Seller Indemnities. If Closing occurs, Seller agrees to indemnify, defend and
hold harmless Purchaser and its respective parents and Affiliates, and each of their officers and
directors, successors (collectively “Purchaser Indemnified Party”) and assigns from and against any
and all demands, suits, penalties, obligations, damages, claims, losses, liabilities, payments,
costs and expenses (for purposes of this Section 13, “Losses”), that are incurred by or awarded
against any Purchaser Indemnified Party, including reasonable legal, accounting, and other expenses
in connection therewith (if and to the extent allowable under applicable law), which arise out of,
are in connection with, or relate to any breach of the representations or warranties made by Seller
in Section 7 of this Agreement or in any certificate delivered by Seller at Closing; provided,
however, that for purposes of determining whether a breach of such representation or warranty has
occurred or the amount of Losses incurred in connection
therewith, any limitation or qualification as to materiality set forth in such representation
and warranty shall be disregarded. The obligations of Seller under this Section 13(a) shall
survive Closing or termination of this Agreement.

     (b) Purchaser Indemnities. If Closing occurs, Purchaser agrees to indemnify, defend
and hold harmless Seller and its respective parents and Affiliates, and each of their officers and
directors, successors (collectively “Seller Indemnified Party”) and assigns from and against any
and all Losses, that are incurred by or awarded against any Seller Indemnified Party, including
reasonable legal, accounting, and other expenses in connection therewith (if and to the extent
allowable under applicable law), which arise out of, are in connection with, or relate to any
breach of the representations or warranties made by Purchaser in Section 7 of this Agreement or in
any certificate delivered by Purchaser at Closing; provided, however, that for purposes of
determining whether a breach of such representation or warranty has occurred or the amount of
Losses incurred in connection therewith, any limitation or qualification as to materiality set
forth in such representation and warranty shall be disregarded. The obligations of Purchaser under
this Section 13(b) shall survive Closing or termination of this Agreement.

     (c) Purchaser Claims. In the event of any breach of Seller’s representations and
warranties under Section 7 or other breach of this Agreement, or any breach of Seller’s title
warranties or other liabilities or obligations under the documents delivered by Seller to Purchaser
as part of the Closing (collectively, “Purchaser Claims”), which, in any case, first becomes known
to Purchaser after the Closing (Section 12(c) being applicable if such first becomes known to
Purchaser at or prior to the Closing), then Purchaser’s sole remedy and recourse will be

19

 

to collect any damages including reasonable attorney’s fees, but excluding any damages waived pursuant to
Section 12(c) to which it is entitled from Seller and by giving written notice thereof to Seller
and Title Company not later than the first anniversary of the Closing Date. Purchaser shall be
deemed to have waived all Purchaser Claims as to which Purchaser fails to give notice on or before
the last day of such first anniversary of the Closing Date. Any such notice of Purchaser Claims
shall include a description thereof in reasonable detail and Purchaser’s good faith estimate of the
loss expected to result therefrom. In no event (1) may Purchaser assert damages hereunder unless
such Purchaser Claims exceed, in the aggregate, $100,000 or more and (2) may Purchaser Claims in
the aggregate exceed, and in no event will Seller’s liability therefor exceed, in the aggregate,
(including Seller’s liabilities under the Tenant Lease Assignment or any other Closing Document)
$7,500,000. The provisions of this Section 13(c) shall survive the Closing.

     (d) Indemnification Procedures.

          (1) Seller or Purchaser, as the case may be (for purposes of this Section 13 an “Indemnified
Party”), shall give the indemnifying party under Section 13(a) or Section 13(b) as applicable (for
purposes of this Section 13, an “Indemnifying Party”), prompt written notice of any matter which it
has determined has given or could give rise to a right of indemnification under this Agreement
stating the amount of the Loss, if known, and method of computation thereof, containing a reference
to the provisions of this Agreement in respect of which such right of indemnification is claimed or
arises; provided, however, that the failure to provide such notice shall not release the
Indemnifying Party from its obligations under this Section 13 except to the extent the Indemnifying
Party is prejudiced by such failure.

          (2) If any third party shall notify an Indemnified Party with respect to any matter (a
“Third-Party Claim”) that may give rise to a claim for indemnification against the Indemnifying
Party under this Section 13, then the Indemnified Party shall promptly (and in any event within
five Business Days after receiving notice of the Third-Party Claim) notify the Indemnifying Party
thereof in writing; provided, however, that the failure to provide such notice shall not release
the Indemnifying Party from its obligations under this Section 13 except to the extent the
Indemnifying Party is prejudiced by such failure.

          (3) The Indemnifying Party will have the right to assume and thereafter conduct the defense of
the Third-Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party;
provided, that the Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third-Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably) unless the judgment or proposed settlement
involves only the payment of money damages for which the Indemnifying Party is liable hereunder and
does not impose an injunction or other equitable relief upon the Indemnified Party. Unless and
until the Indemnifying Party assumes the defense of the Third Party Claim as provided in Section
13(d)(2), however, the Indemnified Party may defend against the Third-Party Claim in any manner it
may reasonably deem appropriate. In no event will the Indemnified Party consent to the entry of
any judgment or enter into any settlement with respect to the Third-Party Claim without the prior
written consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or
delayed).

20

 

     Section 14. Miscellaneous.

     (a) Notices. All notices provided or permitted to be given under this Agreement must
be in writing and may be served by (a) depositing same in the United States mail, addressed to the
party to be notified, postage prepaid and registered or certified with return receipt requested,
(b) delivering the same in person to such party, whether by personal delivery, (c) delivering the
same by a commercial service including without limitation Federal Express, Airborne, and UPS, or
(d) facsimile copy transmission. Notice given in accordance herewith shall be effective upon
delivery to the address of the addressee. For purposes of notice, the addresses of the parties
shall be as follows:

	 	 	 
	If to Seller, to:

	 	BMC Software, Inc.
	 

	 	2101 City West Blvd.
	 

	 	Houston, Texas 77042
	 

	 	Attention: Director of Corporate Real Estate
	 

	 	Telephone: 713-918-8800
	 

	 	Telecopy: 713-918-5112
	 
	 	 
	          with a copy to:

	 	BMC Software, Inc.
	 

	 	2101 City West Blvd.
	 

	 	Houston, Texas 77042
	 

	 	Attention: General Counsel
	 

	 	Telephone: 713-918-8800
	 

	 	Telecopy: 713-918-1110
	 
	 	 
	 

	 	Cushman & Wakefield of Texas, Inc.
	 

	 	1300 Post Oak Blvd., Suite 2700
	 

	 	Houston, Texas 77056-3054
	 

	 	Attention: Scott Wegmann, Executive Managing Director
	 

	 	Telephone: 713-877-8261
	 

	 	Telecopy: 713-877-1965
	 
	 	 
	 

	 	Vinson & Elkins L.L.P.
	 

	 	1001 Fannin, Suite 2300
	 

	 	Houston, Texas 77002-6760
	 

	 	Attention: Glenn L. Pinkerton
	 

	 	Telephone: 713-758-2701
	 

	 	Telecopy: 713-615-5755
	 
	 	 
	If to Purchaser, to:

	 	TPG/CalSTRS, LLC
	 

	 	c/o Thomas Properties Group, Inc.
	 

	 	515 South Flower St., 6th Floor
	 

	 	Los Angeles, CA 90071
	 

	 	Attention: Todd L. Merkle
	 

	 	Telephone: 213-633-1900
	 

	 	Telecopy: 213-633-4760

21

 

	 	 	 
	          with a copy to:

	 	Cox, Castle & Nicholson LLP
	 

	 	2049 Century Park East, 28th Floor
	 

	 	Los Angeles, CA 90067
	 

	 	Attention: Douglas P. Snyder, Esq.
	 

	 	Telephone: 310-277-4222
	 

	 	Telecopy: 310-277-7889

Any party hereto may change its address for notice by giving at least ten (10) days’ prior written
notice thereof to the other party.

     (b) Assigns; Beneficiaries. Neither party may assign its rights under this Agreement
nor may Purchaser delegate its duties hereunder without the prior written consent of the other,
which the other may grant or withhold in its sole discretion; provided, however, that Purchaser may
assign its rights under this Agreement to an Affiliate. No assignment by Purchaser or Seller shall
relieve the assignor of its liabilities and obligations under this Agreement. Should Purchaser
assign this Agreement or delegate its duties without the prior written consent of Seller, other
than as permitted, then in addition to all the rights, remedies, and recourses available at law or
in equity, Seller may terminate this Agreement and retain any amount of the Earnest Money
that has been deposited at the time of such assignment. This Agreement is for the sole
benefit of Seller and Purchaser, and no third party is intended to be a beneficiary of this
Agreement.

     (c) Governing Law. This Agreement shall be governed and construed in accordance with
the laws of the State of Texas.

     (d) Entire Agreement; Counterparts. This Agreement is the entire agreement between
Seller and Purchaser concerning the sale of the Property, and no modification hereof or subsequent
agreement relative to the subject matter hereof shall be binding on either party unless reduced to
writing and signed by the party to be bound. All prior term sheets and letters of intent are
hereby terminated. All Exhibits attached hereto are incorporated herein by this reference for all
purposes. This Agreement may be executed in multiple counterparts, each of which will be
considered an original and all of which together shall constitute one agreement. The parties
executing or joining in this Agreement may sign separate signature pages and it shall not be
necessary for all parties to sign all signature pages, but rather the signature pages may be
combined.

     (e) Rule of Construction; No Waiver. Purchaser and Seller acknowledge that each
party, with its legal counsel, has reviewed and negotiated this Agreement and that the rule of
construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any amendments hereto. No provision of
this Agreement shall be deemed to have been waived by either party unless the waiver is in writing
and signed by that party. No custom or practice which may evolve between the Purchaser and Seller
during the term of this Agreement shall be deemed or construed to waive or lessen the right of
either of the parties hereto to insist upon strict compliance of the terms of this Agreement. The
submission of drafts of this Agreement or comments or revisions thereto shall not constitute an
offer, counter-offer, or acceptance; and no party shall be bound hereby or entitled to rely hereon
unless and until this Agreement has been executed and delivered

22

 

by Seller and Purchaser. Unless
otherwise specified, “herein” shall mean in this Agreement and references herein to Schedules or
Exhibits shall mean Schedules or Exhibits to this Agreement.

     (f) Certain Interpretive Matters. In this Agreement, unless the context otherwise
requires:

          (1) the singular number includes the plural number and vice versa;

          (2) reference to any individual, partnership, joint venture, corporation, limited liability
company, trust, association or unincorporated organization, any governmental authority, or any
other entity (a “Person”) includes such Person’s successors and assigns but, if applicable, only if
such successors and assigns are permitted by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity;

          (3) reference to any gender includes each other gender;

          (4) reference to any agreement (including this Agreement), document or instrument means such
agreement, document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms hereof;

          (5) reference to any Article, Section, Schedule or Exhibit means such Article, Section,
Schedule or Exhibit of or to this Agreement, and references in any Article, Section, Schedule,
Exhibit or definition to any clause means such clause of such Article, Section, Schedule, Exhibit
or definition;

          (6) “hereunder,” “hereof,” “hereto” and words of similar import are references to this
Agreement as a whole and not to any particular section or other provision hereof or thereof;

          (7) “including” (and with correlative meaning “include”) means including without limiting the
generality of any description preceding such term;

          (8) relative to the determination of any period of time, “from” means “from and including,”
“to” means “to but excluding” and “through” means “through and including”;

          (9) reference to any law (including statutes and ordinances) means such law as amended,
modified codified or reenacted, in whole or in part, and in effect from time to time, including
rules and regulations promulgated thereunder; and

          (10) any agreement, instrument, insurance policy, statute, regulation, rule or order defined
or referred to herein or in any agreement or instrument that is referred to herein means such
agreement, instrument, insurance policy, statute, regulation, rule or order as from time to time
amended, modified or supplemented, including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes, regulations, rules or orders) by succession of comparable
successor statutes, regulations, rules or orders and references to all attachments thereto and
instruments incorporated therein.

     (g) No Recording. Neither this Agreement nor any memorandum hereof shall be recorded
in any public records.

     (h) Mandatory Arbitration of Post-Closing Claims.

23

 

          (1) Any and all claims, counterclaims, demands, causes of action, disputes, controversies, and
other matters in question arising after the Closing out of or relating to this Agreement, any
provision hereof, the alleged breach thereof, or in any way relating to the subject matter of this
Agreement or the relationship between the parties created by this Agreement, involving the parties
and/or their respective representatives, including without limitation Purchaser Claims (all of
which are referred to herein as “Claims”), even though some or all of such Claims allegedly are
extra-contractual in nature, whether such Claims sound in contract, tort, or otherwise, at law or
in equity, under state or federal law, whether provided by statute or the common law, for damages
or any other relief, shall be resolved by binding arbitration.

          (2) It is the intention of the parties to this Agreement that the arbitration shall be
conducted pursuant to the Texas General Arbitration Act, Tex. Civ. Prac. & Rem. Code
Section 171.001 et seq. (the “Act”) as such Act is modified by this Section 14(h). The validity,
construction, and interpretation of this Section 14(h), and all procedural aspects of the
arbitration conducted pursuant to this Section 14(h), including but not limited to, the
determination of the issues that are subject to arbitration (i.e., arbitrability), the scope of the
arbitrable issues, allegations of “fraud in the inducement” to enter into this Agreement or this
arbitration provision, allegations of waiver, laches, delay or other defenses to arbitrability, and
the rules governing the conduct of the arbitration (including the time for filing an answer, the time
for the filing of counterclaims, the times for amending the pleadings, the specificity of the
pleadings, the extent and scope of discovery, the issuance of subpoenas, the times for the
designation of experts, whether the arbitration is to be stayed pending resolution of related
litigation involving third parties not bound by this arbitration agreement, the receipt of
evidence, the award of attorney’s fees to the extent permitted by law or this Agreement and the
like), shall be decided by the arbitrator. In deciding the substance of the parties’ Claims, the
arbitrator shall refer to the substantive laws of the State of Texas for guidance (excluding Texas
choice-of-law principles that might call for the application of some other State’s law). Provided,
however, it is expressly agreed that notwithstanding any other provision in this Agreement to the
contrary, the arbitrator shall have absolutely no authority to award treble, exemplary or punitive
damages of any type under any circumstances regardless of whether such damages may be available
under Texas law, the law of any other State, or federal law, or under the Act, or under the
Commercial Arbitration Rules of the American Arbitration Association, the parties hereby waiving
their right, if any, to recover treble, exemplary or punitive damages in connection with any such
Claims.

          (3) The arbitrator rendering judgment upon disputes between parties as provided in this
Section 14(h) shall, after reaching judgment and award, prepare and distribute to the parties a
writing describing the findings of fact and conclusions of law relevant to such judgment and award
and containing an opinion setting forth the reasons for the giving or denial of any award. The
award of the arbitrator shall be final and binding on the parties, and judgment thereon may be
entered in a court of competent jurisdiction.

          (4) The arbitration proceeding shall be conducted in Houston, Harris County, Texas. The party
initiating the arbitration shall notify the American Arbitration Association and the other party of
any Claim and within thirty days of the notice of initiation of the arbitration procedure, an
arbitrator experienced in legal contract interpretation and real estate shall be selected in
accordance with the American Arbitration Association Rules, such arbitrator to be reasonably
satisfactory to the other party. The arbitration proceeding shall be commenced

24

 

promptly and
conducted expeditiously, with Seller and Purchaser each being allocated one-half of the time for
the presentation of its case. Unless otherwise agreed to by the parties, an arbitration hearing
shall be conducted on consecutive days. The arbitrator is instructed that time is of the essence
in the arbitration proceeding, and that the arbitrator shall have the right and authority to issue
monetary sanctions against either of the parties if, upon a showing of good cause, that party is
unreasonably delaying the proceeding. The arbitrator shall render its judgment or award within
fifteen (15) calendar days following the conclusion of the hearing. Recognizing the express desire
of the parties for an expeditious means of dispute resolution, the arbitrator shall limit or allow
the parties to expand the scope of discovery as may be reasonable under circumstances.

          (5) To the fullest extent permitted by law, the arbitration proceeding and the judgment award
by the arbitrator shall be maintained in confidence by the parties.

          (6) All fees of the arbitrator, and attorney fees and other costs of arbitration, shall be
awarded by the arbitrator.

          (7) The provisions of this Section 14(h) shall survive the Closing and any termination of this
Agreement.

     (i) Further Assurances. Each party agrees that it will without further consideration
execute and deliver such other documents and take such other action, whether prior or subsequent to
Closing , as may be reasonably requested by the other party in order to carry out the intent and
purposes of this Agreement. The provisions of this Section 14(i) shall survive Closing.

     (j) Public Disclosures. Neither Purchaser nor Seller will make any public
announcement, press release or discuss with the media the terms and conditions of this Agreement
and all other agreements executed in connection herewith without the approval of the other party,
but notwithstanding the foregoing, Purchaser and Seller each acknowledge that either Party may
disclose such terms and conditions of this Agreement or any other agreement executed in connection
with this Agreement without consulting the other Party if required to do so by any federal, state
or local law, ordinance, rules or regulations (including regulations promulgated by any applicable
securities exchange), court orders, governmental directives or judicial interpretations.

     (k) Joint and Several. The obligations of BMC-LP and BMC Inc. under this Agreement
shall be joint and several.

[Signatures follow on the next page.]

25

 

     Executed as of the date first set forth above.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	SELLER:	 	 	 	BMC SOFTWARE TEXAS, L.P.,	 	 
	 	 	 	 	a Texas limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	BMC Software Texas, Inc.,	 	 
	 

	 	 	 	 	 	a Texas corporation, its general partner	 	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	By: /s/ STEPHEN B. SOLCHER	 	 
	 

	 	
 

	 	 
	 

	 	Name:
	 	Stephen B. Solcher	 	 
	 

	 	Title:
	 	VP and Secretary	 	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	BMC SOFTWARE, INC., a Delaware	 	 
	 	 	corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By: /s/ STEPHEN B. SOLCHER	 	 
	 

	 	
 

	 	 
	 

	 	Name:
	 	Stephen B. Solcher	 	 
	 

	 	Title:
	 	SVP, Chief Financial Officer & Treasurer	 	 

	 	 	 	 	 	 	 	 	 
	PURCHASER:	 	 	 	TPG/CALSTRS, LLC,
	 	 	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Thomas Properties Group Limited Partnership, a
	 	 	 	 	 	 	Maryland limited partnership, its Managing

Member
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By: Thomas Properties Group, Inc., a
Delaware corporation, its General Partner

	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By: /s/ TODD L. MERKLE
	 

	 	 	 	 	 	
 

	 

	 	 	 	 	 	Name:
	 	Todd L. Merkle
	 

	 	 	 	 	 	Title:
	 	VP

Signature Page to Purchase and Sale Agreementexv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made as of June 6, 2006, by and between Aether
Holdings, Inc., a Delaware corporation (the “Company”), and Robert W. D’Loren (the “Executive”),
each a “Party” and collectively the “Parties.” Unless otherwise indicated, capitalized terms used
herein are defined in Section 2.1.

     WHEREAS, the Company has determined that it is in the best interests of the Company and its
shareholders to enter into an employment agreement with the Executive and the Executive is willing
to serve as an employee of the Company.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein,
including the Option Grant, as defined below, it is agreed by and between the Executive and the
Company as follows:

ARTICLE I

EMPLOYMENT TERMS

     1.1 Employment. The Company will employ the Executive, and the Executive accepts
employment with the Company, upon the terms and conditions set forth in this Agreement for the
period beginning on the Effective Date and ending as provided in Section 1.4(a) hereof (the
“Employment Period”).

     1.2 Position and Duties.

     (a) Generally. The Executive shall serve as the Chief Executive Officer of the
Company and, in such capacity shall be responsible for the general management of the business,
affairs and operations of the Company, shall perform such duties as are customarily performed by a
chief executive officer of a company and shall have such power and authority as shall reasonably be
required to enable him to perform his duties hereunder; provided, however, that in exercising such
power and authority and performing such duties, he shall at all times be subject to the authority,
control and direction of the Board of Directors of the Company (the “Board”). The Executive shall
at all times be the most senior executive of the Company. Without limitation on any of the
foregoing, the Executive shall have senior management authority and responsibility with respect to
the management and operations of the Company and its business, including implementation of the
business strategy of the Company consistent with strategy and policies approved by the Board.
Immediately following the Effective Date, the Company shall take all necessary and appropriate
action to appoint Executive as a member of the Board, and the Company shall nominate the Executive
for re-election as a director at each election of directors that occurs during the Employment
Period.

     (b) Duties and Responsibilities. The Executive shall report to the Board and shall
devote his full business time and attention to the business and affairs of the Company and its
Subsidiaries. The Executive shall perform his duties and responsibilities in a diligent,
trustworthy, businesslike and efficient manner and shall use his best efforts during the Employment
Period to protect, encourage and promote the best interests of the Company and its stockholders.
The Executive shall not engage in any other business activities that could reasonably be expected
to conflict with the Executive’s duties, responsibilities and obligations

 

 

hereunder (it being agreed that the Executive’s management of his personal investments will
not be deemed to violate this provision, subject to compliance with the Company’s ethics and other
applicable policies and provided that such activities do not interfere in any material respect with
the performance of his obligations to the Company); provided, that the Executive may serve on the
board of directors of (i) those entities set forth on Schedule 1.2(b) hereof, (ii) any
not-for-profit, civic or charitable entities so long as such activities do not interfere
individually or in the aggregate with the Executive carrying out his responsibilities and
performing his obligations to the Company, consistent with his position and the terms of this
Agreement and (iii) subject to such limitations as the Board may reasonably impose, other
for-profit entities where such service is intended to advance the business interests of the Company
and does not create a conflict of interest.

     (c) Principal Office. The principal place of performance by the Executive of his
duties hereunder shall be the Company’s principal executive offices in New York, New York, although
the Executive may be required to travel outside of the area where the Company’s principal executive
offices are located in connection with the business of the Company.

     1.3 Compensation.

     (a) Base Salary. The Executive’s base salary shall be $750,000.00 per annum (the
“Base Salary”). The Base Salary payable for Fiscal Year 2006 shall be pro rated based on the
number of days from and including the Effective Date through and including December 31, 2006. The
Base Salary will be payable to the Executive by the Company in regular installments in accordance
with the Company’s general payroll practices. The Executive shall receive such increases (but not
decreases) in his Base Salary as the Board, or the compensation committee of the Board, may approve
in its sole discretion from time to time; provided that the Executive’s Base Salary will be
reviewed for potential upward adjustment not less often than annually.

     (b) Annual Bonus. Executive shall be eligible for an annual bonus (the “Annual Bonus”)
pursuant to the terms set forth in the 2006 Management Bonus Plan (the “Plan”). For the avoidance
of doubt, the Plan provides that the Annual Bonus payable to the Executive shall be no less than
50% of the Bonus Pool (as such term is defined in the Plan) for the applicable Fiscal Year, subject
to satisfaction of the performance standards required therein, and for any Fiscal Year in which the
Employment Period begins after the first day of such Fiscal year or ends before the last day of
such Fiscal Year, the amount available under the Plan may be pro rated based upon the portion of
the Fiscal Year not worked by the Executive. The Annual Bonus shall be payable 50% in cash and 50%
in shares of restricted common stock of Company (the “Bonus Shares”), unless otherwise agreed to by
the Executive, which if agreed shall be binding on the Company. Bonus Shares shall be issued
pursuant to the terms of any applicable Company equity incentive plan that has been approved by the
Company’s stockholders and is subject to an effective registration statement on Form S-8. The
Bonus Shares will vest in three equal installments on each of the first, second and third
anniversaries of grant, subject to the Executive’s continued employment with the Company on each
vesting date, and further subject to accelerated vesting under the applicable incentive plan, the
applicable grant agreement and the terms of this Agreement. The Bonus Shares shall be valued, for
purposes of determining the number to be granted to the Executive, based on a 30-day moving average
of the last reported sale price of Company’s common stock as reported on the Nasdaq (or such other
exchange or

2

 

market on which Company’s common stock is then traded), measured over the 30 trading days
immediately prior to the grant date. The Annual Bonus shall be awarded to the Executive on the
earlier of (i) March 15 of each year, with respect to the prior Fiscal Year, or (ii) the date of
filing of the Company’s annual report on Form 10-K for the prior Fiscal Year.

     (c) Withholding. All payments made under this Agreement (including Base Salary, bonus
payments, and other amounts) shall be subject to withholding for income taxes, payroll taxes and
other legally required deductions.

     (d) Automobile Allowance. The Company will furnish the Executive with an automobile
appropriate for his level of position and shall pay all of the related expenses for gasoline,
insurance, maintenance and repairs, up to a maximum of $2,000 per month.

     (e) Expenses. The Company will reimburse the Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement that are consistent
with the Company’s policies in effect at that time with respect to travel, entertainment and other
business expenses, subject to the Company’s requirements with respect to reporting and
documentation of such expenses.

     (f) Vacation; Holiday Pay and Sick Leave. The Executive shall be entitled to four (4)
weeks’ paid vacation in each calendar year, which if not taken during any year may be carried
forward to any subsequent year. Executive shall receive holiday pay and paid sick leave as
provided to other executive employees of the Company. Upon cessation of Executive’s employment for
any reason, Executive shall receive pay for all accrued and unused vacation, calculated at his base
salary rate in effect at the time of the cessation of his employment, provided that the amount of
vacation that Executive shall be entitled to accrue during the Term shall be in accordance with
Company policy.

     (g) Additional Benefits. During the Employment Period, the Executive shall be
entitled to participate (for himself and, as applicable, his dependents) in the group medical,
life, 401(k) and other insurance programs, employee benefit plans and perquisites which may be
adopted by the Board, or the compensation committee of the Board, from time to time, for
participation by the Company’s senior management or executives, as well as dental, life and
disability insurance coverage, with payment of, or reimbursement for, such insurance premiums by
the Company, subject to, in all cases, the terms and conditions established by the Board with
respect to such plans (collectively, the “Benefits”); provided, however, that the Board, in its
reasonable discretion, may revise the terms of any Benefits so long as such revision does not have
a disproportionately negative impact on the Executive vis-à-vis other Company employees, to the
extent applicable.

     (h) Life Insurance. The Company shall use its best efforts to obtain and maintain in
full force and effect during the Employment Period a term life insurance policy covering the life
of the Executive for the benefit of his designee(s) in the amount of $5,000,000.

     (i) Indemnification. The Executive shall be entitled to indemnification by the
Company in the same circumstances and to the same extent as the other executive officers and
directors of the Company, which indemnification shall in no event be less favorable to the

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Executive than the fullest scope of indemnification permitted by applicable Delaware law (or
any such greater scope of indemnification provided by agreement or by the terms of the Company’s
Certificate of Incorporation or By-Laws to any executive officer or director of the Company). The
Executive shall also be named as an additional insured under the directors’ and officers’ liability
insurance policy maintained by the Company and shall be entitled to the same level of coverage
provided thereby to the other executive officers and directors of the Company.

     (j) Stock Options. On the Effective Date, the Executive shall receive a grant (the
“Option Grant”) of nonqualified options to purchase 2,686,976 shares of Company’s common stock,
each with an exercise price equal to the fair market value of the Company’s common stock on the
date of grant, and a 10-year term (the “Stock Options”). The Stock Options shall be granted
pursuant to and be subject to the terms of Company’s 1999 Equity Incentive Plan (the “Plan”) and
customary grant agreements. The Stock Options shall vest and become exercisable in equal amounts
on the first, second and third anniversaries of the Effective Date, subject to the Executive’s
continued employment with the Company on each vesting date, and further subject to accelerated
vesting under the 1999 Equity Incentive Plan, the grant agreement and the terms of this Agreement;
provided that in the event of the Executive’s termination by the Company without Cause, the
Executive’s resignation with Good Reason or upon a Change of Control (as defined below), the
Executive shall immediately be fully vested in all of the Stock Options. Except as provided in the
preceding sentence, any unvested options shall be forfeited upon termination of this Agreement,
and any options that are vested but unexercised upon termination shall be subject to the terms and
conditions of the 1999 Equity Incentive Plan or, if applicable, the last sentence of Section 1.4(c)
hereof. In the event that the Company elects from time to time during the Employment Period to
award to its senior management or executives, generally, options to purchase shares of the
Company’s stock pursuant to any stock option plan or similar program, the Executive shall be
entitled to participate in any such stock option plan or similar program on a basis consistent with
the participation of other senior management or executives of the Company.

     (k) Warrant. On the Effective Date, the Executive shall receive a warrant (the
“Warrant Grant”) a warrant to purchase 125,000 shares of Company’s common stock, each with an
exercise price equal to fair market value on the grant date, and a 10-year term (the “Warrant”).
The Warrant shall vest and become exercisable in equal amounts on the first, second and third
anniversaries of the Effective Date, subject to the Executive’s continued employment with the
Company on each vesting date, and further subject to accelerated vesting and forfeiture on the
same terms and conditions as set forth under the 1999 Incentive Plan and the terms of this
Agreement; provided that in the event of the Executive’s termination by the Company without Cause,
the Executive’s resignation with Good Reason or upon a Change of Control (as defined below), the
Executive shall immediately be fully vested in the Warrant. Except as provided in the preceding
sentence, any unvested warrants shall be forfeited upon termination of this Agreement, and any
warrants that are vested but unexercised upon termination shall be subject to the terms and
conditions of the 1999 Equity Incentive Plan, as if it applied to the Warrant, or, if applicable,
the last sentence of Section 1.4(c) hereof. The shares of the Company’s Common Stock underlying
the Warrant shall be registered pursuant to the terms of that certain Registration Rights Agreement
(as defined in the Merger Agreement).

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     1.4 Term and Termination.

     (a) Duration. The Employment Period shall commence on the Effective Date and the
initial term shall terminate three (3) years from the Effective Date (the “Term”), unless earlier
terminated by the Company or the Executive as set forth in this Section 1.4. The Term
shall renew automatically for one-year periods, unless either party gives the other party written
notice of its intention not to renew the Agreement no later than 90 days prior to the expiration of
the then current Term. The Employment Period shall be terminated prior to the then-applicable
expiration of the Term upon the first to occur of (i) termination of the Executive’s employment by
the Company for Cause, (ii) termination of the Executive’s employment by the Company without Cause,
(iii) the Executive’s resignation with Good Reason, (iv) the Executive’s resignation other than for
Good Reason, or (v) the Executive’s death or Disability. The Executive shall not terminate the
Employment Period, with or without Good Reason, unless he gives the Company written notice that he
intends to terminate the Employment Period at least 90 days prior to the Executive’s proposed
Termination Date. As a condition to Executive receiving any payments or benefits under Section
1.4(b) or Section 1.4(c), the Executive shall execute and deliver to the Company the Mutual General
Release in the form attached hereto as Exhibit A (upon receipt of which and provided that
Executive does not revoke such release within the applicable revocation period, the Company shall
sign the Mutual General Release).

     (b) Severance Upon Termination Without Cause, Upon Resignation by the Executive For Good
Reason or Failure to Renew Term. If the Employment Period is terminated by the Company without
Cause or if the Executive resigns for Good Reason, or if the Company fails to renew the Term (in
which case termination of the Executive’s employment shall be effective at the expiration of the
then-current Term), then the Executive will be entitled to receive (1) any unpaid Base Salary
through and including the date of termination or resignation and any other amounts, including any
declared but unpaid Annual Bonus, or other entitlements then due and owing to the Executive as of
the Termination Date; (2) an amount equal to the Executive’s Base Salary (at the rate in effect on
the date the Executive’s employment is terminated) for the greater of the remainder of the Original
Term or a two-year period following the Executive’s termination of employment as described in this
Section 1.4(b), payable in (A) substantially equal installments over the lesser of (i) a
six-month period immediately following such termination, or (ii) such shorter period that is the
longest period permissible in order for the payments not to be considered “nonqualified deferred
compensation” under Section 409A of the Code or any regulations, rulings or other regulatory
guidance issued thereunder, or, if such payment terms would not satisfy the requirements of Section
409A of the Code and the regulations, rulings and other regulatory guidance issued thereunder, or
(B) a lump sum on the date that is six months following the Executive’s “separation from service”
(within the meaning of Section 409A of the Code) occurring in connection with such termination and
(3) continue to participate in the Company’s group medical plan on the same basis as he previously
participated or receive payment of, or reimbursement for, COBRA premiums (or, if COBRA
coverage is not available, reimbursement of premiums paid for other medical insurance in an amount
not to exceed the COBRA premium) for a two-year period following the Executive’s termination of
employment; provided that if the Executive is provided with health insurance coverage by a
successor employer, any such coverage by the Company shall cease (each of (1), (2) and (3) referred
to as the “Severance Payment”). The Executive also shall be entitled to receive payment for all
reimbursable expenses or other entitlements then due and owing to the Executive as of the

5

 

Termination Date. If the Executive breaches his obligations under Section 1.6, 1.7, 1.8 or
1.9 of this Agreement, the Company’s obligation to make any Severance Payments and provide any
Benefits shall cease as of the date of such breach; provided, that if the Executive cures such
breach within 10 days of receiving written notice from the Company of such breach (which notice the
Company shall provide promptly to the Executive after learning of such breach), the Company shall
promptly pay all Severance Payments not made during such period of dispute and resume making
Severance Payments and providing Benefits promptly following such cure.

     (c) Severance upon a Change of Control. Anything contained herein to the contrary
notwithstanding, in the event the Executive’s employment hereunder is terminated within twelve (12)
months following a Change of Control (as defined in the 1999 Equity Incentive Plan) by the Company
without Cause or by the Executive with Good Reason, the Executive shall be entitled to receive the
Severance Payment as described in sub-section (b) above; provided, however, that in lieu of the
calculation contained in Section 1.4(b)(2), Executive shall be entitled to receive an amount equal
to $100 less than three times the sum of (i) the Executive’s Base Salary (at the rate in effect on
the date of termination) and (ii) the Annual Bonus (which, for this purpose, shall be deemed to
equal the product of (A) the percentage of the Bonus Pool (as such term is defined in the Plan)
that the Executive was awarded in the most recently completed Fiscal Year, multiplied by (B) four
times the net income reported by the Company in the last complete fiscal quarter prior to the
effective date of termination of the Executive’s employment); provided, however, that if such lump
sum severance payment, either alone or together with other payments or benefits, either cash or
non-cash, that the Executive has the right to receive from the Company, including, but not limited
to, accelerated vesting or payment of any deferred compensation, options, stock appreciation rights
or any benefits payable to the Executive under any plan for the benefit of employees, would
constitute an “excess parachute payment” (as defined in Section 280G of the Internal Revenue Code
of 1986), then such lump sum severance payment or other benefit shall be reduced to the largest
amount that will not result in receipt by the Executive of an “excess parachute payment.” The
determination of the amount of the payment described in this subsection shall be made by the
Company’s independent auditors at the sole expense of the Company. For purposes of clarification
the value of any options described above will be determined by the Company’s independent auditors
using a Black-Scholes valuation methodology. If within twelve (12) months after the occurrence of
a Change of Control, the Company shall terminate the Executive’s employment without Cause or the
Executive terminates his employment with Good Reason, then notwithstanding the vesting and
exercisability schedule in any stock option or other grant agreement between the Company and the
Executive, all unvested stock options, shares of restricted stock and other equity awards granted
by the Company to the Executive pursuant to any such agreement shall immediately vest, and all such
stock options shall become exercisable and shall remain exercisable for the lesser of 180 days
after the effective date of termination of the Executive’s employment or the remaining term of the
applicable option.

     (d) Death and Disability. In the event of the Company terminates this Agreement due
to the death of the Executive, the Company shall pay the Executive his Base Salary through the date
of termination, at the rate then in effect, and all expenses or accrued Benefits arising prior to
such termination which are payable to the Executive pursuant to this Agreement through the date of
termination. In the event of the Company terminates this Agreement due to the Disability of the
Executive, the Company shall pay to the Executive a lump sum cash payment in an amount

6

 

equal to the present value of the Base Salary that would have been payable to the Executive
during the remainder of the original Term had the Agreement not been so terminated, together with
all expenses and accrued Benefits arising prior to such termination which are payable to the
Executive pursuant to this Agreement through the date of termination. Any other rights and
benefits the Executive may have under employee benefit plans and programs of the Company generally
in the event of the Executive’s Disability shall be determined in accordance with the terms of such
plans and programs. In the event of Executive’s death, any rights and benefits that the
Executive’s estate or any other person may have under employee benefit plans and programs of the
Company generally in the event of the Executive’s death shall be determined in accordance with the
terms of such plans and programs.

     (e) Salary and Other Payments Through Termination. If the Executive’s employment with
the Company is terminated during the Term (i) by the Company for Cause or (ii) by the Executive
other than for Good Reason, the Executive will be entitled to receive his Base Salary through the
Termination Date, but will not be entitled to receive any Severance Payments or Benefits after the
Termination Date. The Executive shall be entitled to receive payment for all reimbursable expenses
or other entitlements then due and owing to the Executive as of the Termination Date.

     (f) Other Rights. Except as set forth in this Section 1.4, all of the
Executive’s rights to receive Base Salary, Benefits and Annual Bonuses hereunder (if any) which
accrue or become payable after the termination of the Employment Period shall cease upon such
termination.

     (g) Continuing Benefits. Notwithstanding Section 1.4(f), termination pursuant
to this Section 1.4 shall not modify or affect in any way whatsoever any vested right of the
Executive to benefits payable under any retirement or pension plan or under any other employee
benefit plan of the Company, and all such benefits shall continue, in accordance with, and subject
to, the terms and conditions of such plans, to be payable in full to, or on account of, the
Executive after such termination.

     (h) No Duty of Mitigation. The Executive shall not be required to mitigate the amount
of any payment provided for in this Article I by seeking other employment or otherwise.

     1.5 Key Man Life Insurance. The Company shall have the right to purchase in the
Executive’s name a “key man” life insurance policy naming the Company or any of its Subsidiaries as
the sole beneficiary thereunder. The Executive agrees to take all reasonable measures necessary to
effect the foregoing, including without limitation submitting to a physical examination for the
purpose of determining eligibility therefore and cooperating with any matters related to the
application for, and if obtained, the maintenance of, such insurance policy. If Executive is found
ineligible for some reason for such “key man” life insurance either at the inception of his
employment or at anytime thereafter, this ineligibility will not affect Executive’s employability
under this Agreement or constitute Cause for termination of Executive’s employment.

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     1.6 Confidential Information.

     (a) The Executive shall not disclose or, directly or indirectly, use at any time, during the
Employment Period or thereafter, any Confidential Information (as defined below) of which the
Executive is or becomes aware, whether or not such information is developed by him, alone or with
others, except to the extent that (i) such disclosure or use is required by the Executive’s
performance of the duties assigned to the Executive by the Board, (ii) the Executive is required by
subpoena or similar process to disclose or discuss any Confidential Information, provided, that in
such case, the Executive shall promptly inform the Company in writing of such event, shall
cooperate with the Company in attempting to obtain a protective order or to otherwise limit or
restrict such disclosure to the greatest extent possible, and shall disclose only that portion of
the Confidential Information as is strictly required, or (iii) such Confidential Information is or
becomes generally known to and available for use by the public, other than as a result of any
action or inaction directly or indirectly by the Executive. At the Company’s expense, the
Executive shall take all appropriate steps to safeguard Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft. The Executive acknowledges that the
Confidential Information obtained by him during the course of his employment with the Company is
the sole and exclusive property of the Company and its Subsidiaries, as applicable.

     (b) The Executive understands that the Company and its Subsidiaries will receive from third
parties confidential or proprietary information (“Third Party Information”) subject to a duty on
the part of the Company and its Subsidiaries to maintain the confidentiality of such information
and to use it only for certain limited purposes. During the Employment Period and in the period
specified in such confidentiality agreements, and without in any way limiting the provisions of
Section 1.6(a) above, the Executive will hold Third Party Information in confidence,
consistent with the obligations applicable to Confidential Information of the Company generally,
and will not disclose to anyone (other than personnel and agents of the Company or its Subsidiaries
who need to know such information in connection with their work for the Company or its
Subsidiaries) or use, except in connection with his work for the Company or its Subsidiaries, Third
Party Information unless expressly authorized by the Board in writing.

     (c) As used in this Agreement, the term “Confidential Information” means information that is
not generally known to the public and that is related in any way to the actual or anticipated
business of the Company, its Subsidiaries, its Affiliates or any of their respective predecessors
in interest, including but not limited to (i) business development, growth and other strategic
business plans, (ii) properties available for acquisition, financing development or sale, (iii)
accounting and business methods, (iv) services or products and the marketing of such services and
products, (v) fees, costs and pricing structures, (vi) designs, (vii) analysis, (viii) drawings,
photographs and reports, (ix) computer software, including operating systems, applications and
program listings, (x) flow charts, manuals and documentation, (xi) data bases, (xii) inventions,
devices, new developments, methods and processes, whether patentable or unpatentable and whether or
not reduced to practice, (xiii) copyrightable works, (xiv) all technology and trade secrets, (xv)
confidential terms of material agreements and customer relationships, and (xvi) all similar and
related information in whatever form or medium. Confidential Information shall not include any
information that has become generally available to the public prior to the date the Executive
proposes to disclose or use such information or general know-how of the Executive. Confidential
Information also expressly excludes

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Executive’s general know-how and business contacts to the extent that the use of such
information does not violate or breach the terms of Section 1.9.

     1.7 Inventions and Patents. Executive acknowledges that all discoveries, concepts,
ideas, inventions, innovations, improvements, developments, products, methods, processes,
techniques, programs, designs, analyses, drawings, reports, patents, copyrightable works and mask
works (whether or not including any Confidential Information) and all issuances, registrations or
applications related thereto, all other proprietary information or intellectual property and all
similar or related information (whether or not patentable) conceived, developed, contributed to,
made, or reduced to practice by Executive (either alone or with others) while employed by Company
or any of its Subsidiaries or Affiliates or any of their respective predecessors in interest
(including prior to the date of this Agreement) or using the materials, facilities or resources of
the Company or any of its Subsidiaries or Affiliates or any of their respective predecessors in
interest (collectively, “Company Works”) is the sole and exclusive property of the Company and its
Subsidiaries. Executive hereby assigns all right, title and interest in and to all Company Works to
the Company and its Subsidiaries and waives any moral rights he may have therein, without further
obligation or consideration. Any copyrightable work prepared in whole or in part by the Executive
will be deemed “a work made for hire” under Section 201(b) of the 1976 Copyright Act, and the
Company and its Subsidiaries shall own all of the rights comprised in the copyright therein. The
Executive shall promptly and fully disclose in writing all Company Works to the Company and shall
cooperate with the Company and its Subsidiaries to protect, maintain and enforce the Company’s and
its Subsidiaries’ interests in and rights to such Company Works (including, without limitation,
providing reasonable assistance in securing patent protection and copyright registrations and
executing all affidavits, assignments, powers-of-attorney and other documents as reasonably
requested by the Company, whether such requests occur prior to or after termination of the
Executive’s employment with the Company).

     1.8 Delivery of Materials Upon Termination of Employment. As requested by the Company
from time to time and in any event upon the termination of the Executive’s employment with the
Company , the Executive shall promptly deliver to the Company, or at the Company’s election
destroy, all copies and embodiments, in whatever form or medium, of all Confidential Information,
Company Works and other property and assets of the Company and its Subsidiaries in the Executive’s
possession or within his control (including, but not limited to, office keys, access cards, written
records, notes, photographs, manuals, notebooks, documentation, program listings, flow charts,
magnetic media, disks, diskettes, tapes computers and handheld devices (including all software,
files and documents thereon) and any other materials containing any Confidential Information or
Company Works) irrespective of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such materials have been
delivered to the Company or destroyed, as applicable.

     1.9 Non-Compete and Non-Solicitation Covenants.

     (a) The Executive acknowledges and agrees that the Executive’s services to the Company and its
Subsidiaries are unique in nature and that the Company and its Subsidiaries would be irreparably
damaged if the Executive were to provide similar services to any Person competing with the Company
and its Subsidiaries or engaged in the Business. The Executive

9

 

further acknowledges that, in the course of his employment with the Company, he will become
familiar with the Company’s and its Subsidiaries’ trade secrets and with other Confidential
Information. During the Noncompete Period, he shall not, directly or indirectly, whether for
himself or for any other Person, permit his name to be used by or participate in any business or
enterprise (including, without limitation, any division, group or franchise of a larger
organization) that engages or proposes to engage in the Business in the Restricted Territories,
other than the Company and its Subsidiaries or except as otherwise directed or authorized by the
Board. For purposes of this Agreement, the term “participate in” shall include, without
limitation, having any direct or indirect interest in any Person, whether as a sole proprietor,
owner, stockholder, partner, member, joint venturer, creditor or otherwise, or rendering any direct
or indirect service or assistance to any Person (whether as a director, officer, supervisor,
employee, agent, consultant or otherwise). Nothing herein will prohibit the Executive from mere
passive ownership of not more than five percent (5%) of the outstanding stock of any class of a
publicly held corporation whose stock is traded on a national securities exchange or in the
over-the-counter market. As used herein, the phrase “mere passive ownership” shall include voting
or otherwise granting any consents or approvals required to be obtained from such Person as an
owner of stock or other ownership interests in any entity pursuant to the charter or other
organizational documents of such entity, but shall not include, without limitation, any involvement
in the day-to-day operations of such entity.

     (b) During the Nonsolicitation Period, the Executive will not directly, or indirectly through
another Person, solicit, induce or attempt to induce any customer, supplier, licensee, or other
business relation of the Company or any of its Subsidiaries to cease doing business with the
Company or any of its Subsidiaries, or solicit, induce or attempt to induce any person who is, or
was during the then-most recent 12-month period, a corporate officer, general manager or other
employee of the Company or any of its Subsidiaries to terminate such employee’s employment with the
Company or any of its Subsidiaries, or hire any such person unless such person’s employment was
terminated by the Company or any of its Subsidiaries, or in any way interfere with the relationship
between any such customer, supplier, licensee, employee or business relation and the Company or any
of its Subsidiaries. The Executive acknowledges and agrees that the Company and its Subsidiaries
would be irreparably damaged if the Executive were to breach any of the provisions contained in
this Section 1.9(b).

     (c) Executive acknowledges that this Agreement, and specifically, this Section 1.9,
does not preclude Executive from earning a livelihood, nor does it unreasonably impose limitations
on Executive’s ability to earn a living. In addition, Executive agrees and acknowledges that the
potential harm to the Company of its non-enforcement outweighs any harm to Executive of its
enforcement by injunction or otherwise.

     1.10 Enforcement. If, at the time of enforcement of Section 1.6, 1.7,
1.8, 1.9 or 1.10, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the Parties agree that, to the extent permitted by
applicable law, the maximum period, scope or geographical area reasonable under such circumstances
will be substituted for the Noncompete Period, scope or area. Because the Executive’s services are
unique and because the Executive has access to Confidential Information and Company Works, the
Parties agree that money damages would be an inadequate remedy for any breach of Section
1.6, 1.7, 1.8, 1.9 or 1.10. Therefore, in the event of a
breach or threatened breach of Section 1.6, 1.7, 1.8, 1.9 or
1.10, the

10

 

Company or any of its Subsidiaries or any of their respective successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or
prevent any violations of, the provisions hereof (without posting a bond or other security). The
Parties hereby acknowledge and agree that (a) performance of the services of the Executive
hereunder may occur in jurisdictions other than the jurisdiction whose law the Parties have agreed
shall govern the construction, validity and interpretation of this Agreement, (b) the law of the
State of New York shall govern construction, validity and interpretation of this Agreement to the
fullest extent possible, and (c) Section 1.6, 1.7, 1.8, 1.9 or
1.10 shall restrict the Executive only to the extent permitted by applicable law.

     1.11 Survival. Sections 1.6, 1.7, 1.8 and 1.9 and
1.10 will survive and continue in full force in accordance with their terms notwithstanding
any termination of the Employment Period.

     1.12 Consideration. The Executive hereby agrees and acknowledges that the Option
Grant constitutes good and valuable consideration for the covenant and obligations incurred by
Executive pursuant to Section 1.9.

ARTICLE III

DEFINED TERMS

     2.1 Definitions. For purposes of this Agreement, the following terms will have the
following meanings:

          “Business” means the business of (i) acquiring or licensing, for sale, licensing or
sublicensing (or other commercial exploitation) intellectual property including trademarks and
service marks, including in connection therewith the acquisition of intellectual property-intensive
companies, (ii) providing, structuring or assisting others in providing or obtaining whole company
or asset-backed securitization financings involving intellectual property or (iii) activities
related or ancillary to, or that support, any of the foregoing.

          “Cause” means with respect to the Executive, the occurrence of one or more of the following:
(i) indictment of a felony involving moral turpitude, misappropriation of Company property,
embezzlement of Company funds, violation of the securities laws or dishonesty, (ii) persistent and
repeated refusal to comply with no less than three written directives of the Board with respect to
an item that the Board reasonably deems material to the business, prospects and/or operations of
the Company or requiring the Executive, in his reasonable judgment, after consultation with
counsel, to act in a manner inconsistent with his fiduciary obligations; (iii) reporting to work
under the influence of alcohol or illegal drugs, or the use of illegal drugs (whether or not at the
workplace) or (iv) any willful breach of Section 1.6, 1.7, 1.8 or 1.9 of this Agreement.
Notwithstanding the foregoing, termination by the Company for Cause (other than pursuant to clause
(i) above) shall not be effective until and unless (i) Executive fails to cure such alleged act or
circumstance within 30 days of receipt of notice thereof, to the satisfaction of the Board in the
exercise of its reasonable judgment (or, if within such 30-day period the Executive commences and
proceeds to take all reasonable actions to effect such cure, within such reasonable additional time
period (no longer than 60 days) as may be necessary), and (ii) notice of intention to terminate for
Cause has been given by the Company

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within sixty (60) days after the Board learns of the act, failure or event constituting
“Cause,” and (iii) the Board has voted (at a meeting of the Board duly called and held as to which
termination of Executive is an agenda item) by a vote of at least a two-thirds of the members of
the Board (other than Executive) to terminate Executive for Cause after Executive has been given
notice of the particular acts or circumstances which are the basis for the termination for Cause
and has been afforded an opportunity to appear with counsel and present his positions at such
meeting and to present his case thereat, and (iv) the Board has given notice of termination to
Executive within five days after such meeting voting in favor of termination.

          “Code” means the Internal Revenue Code of 1986 and the Treasury regulations thereunder, each
as amended from time to time.

          “Disability” shall have the meaning set forth in a policy or policies of long-term disability
insurance, if any, the Company obtains for the benefit of itself and/or its employees. If there is
no definition of “disability” applicable under any such policy or policies, if any, then the
Executive shall be considered disabled due to mental or physical impairment or disability, despite
reasonable accommodations by the Company and its Subsidiaries, to perform his customary or other
comparable duties with the Company or its Subsidiaries immediately prior to such disability for a
period of at least 120 consecutive days or for at least 180 non-consecutive days in any 12-month
period.

          “Effective Date” means the date of the closing of the merger contemplated by the Merger
Agreement, provided that there shall be no Effective Date (and this Agreement shall be incapable of
being delivered to the Company) if at or prior to the closing of the merger, Executive is Disabled
or has been indicted of a felony involving moral turpitude or violation of the securities laws.

          “Fiscal Year” means the fiscal year of the Company and its Subsidiaries.

          “Good Reason” means the occurrence, without the Executive’s written consent, of one or more of
the following events: (i) the Company reduces the amount of Executive’s Base Salary, (ii) the
Company requires that the Executive relocate his principal place of employment to a site that is
more than 50 miles from the Company’s offices in New York City or if the Company changes the
location of its headquarters with the consent of Executive to a location that is more than 50 miles
from such location, (iii) the Company materially reduces the Executive’s responsibilities or
removes the Executive from the position of Chief Executive Officer other than pursuant to a
termination of his employment for Cause, or upon the Executive’s death or Disability, (iv) if the
Executive has presented to the Board non-binding letters of intent for at least three potential
acquisitions consistent with the acquisition parameters and plans set forth in the business plan
agreed to by the Executive and the Board, the Company’s failure to enter into a definitive
agreement for any acquisition within one year of the Effective Date, except where such failure (a)
results from the Executive’s inability to negotiate terms acceptable to him and to the target that
are consistent with the Company’s business plan and the overall acquisition parameters agreed to by
the Executive and the Board or (b) reflects decisions not to pursue acquisitions in light of the
results of due diligence indicating that proposed acquisitions should not or cannot be completed on
the negotiated terms and conditions, (v) the failure of the Board or its nominating committee at
any time to nominate Executive for election

12

 

or re-election by the shareholders of the Company to the Company’s Board of Directors, (vi)
the failure or unreasonable delay of the Company to provide to the Executive any of the payments or
benefits contemplated hereby or (vii) the Company otherwise materially breaches the terms of this
Agreement; provided that no such event shall constitute Good Reason hereunder unless (a) the
Executive shall have given written notice to the Company of the Executive’s intent to resign for
Good Reason within 30 days after the Executive becomes aware of the occurrence of any such event,
which notice shall describe in reasonable detail the event or events constitution the basis for the
Executive’s intention to resign for Good Reason and (b) such event or occurrence, if a breach
susceptible to cure, shall not have been cured or otherwise shall not have been resolved to the
Executive’s reasonable satisfaction, in each case within 30 days of the Company’s receipt of such
notice. In such case the Executive’s resignation shall become effective on the 61st day
after the Company’s receipt of the aforementioned notice.

          “Merger Agreement” means that certain Agreement and Plan of Merger, by and among the Company,
UCC Capital Corporation, UCC Consulting Corp., UCC Servicing, LLC, AHINV Acquisition Corp., the
Company and the Executive, in his capacity as Securityholders’ Representative, dated as of June 6,
2006.

          “Noncompete Period” means the Employment Period and 24 months thereafter; provided that, in
the event, but only in the event, the Executive’s employment hereunder is terminated by the Company
without Cause or by the Executive with Good Reason, “Noncompete Period” shall mean the Employment
Period and 12 months thereafter.

          “Nonsolicitation Period” means the Employment Period and 24 months thereafter.

          “Person” means an individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated organization, or
the United States of America any other nation, any state or other political subdivision thereof, or
any entity exercising executive, legislative, judicial, regulatory or administrative functions of
government.

          “Restricted Territories” means the United States and its territories and possessions in which
the Company engages in the Business as of the Termination Date.

          “Subsidiary” means, with respect to any Person, any corporation, limited liability company,
partnership, association, or business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers, or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a limited liability company, partnership, association,
or other business entity (other than a corporation), a majority of partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a limited liability
company, partnership, association, or other business entity (other than a corporation) if such
Person or Persons shall be allocated a majority of limited liability company,

13

 

partnership, association, or other business entity gains or losses or shall be or control any
managing director or general partner of such limited liability company, partnership, association,
or other business entity. For purposes hereof, references to a “Subsidiary” of any Person shall be
given effect only at such times that such Person has one or more Subsidiaries, and, unless
otherwise indicated, the term “Subsidiary” refers to a Subsidiary of the Company.

          “Termination Date” means the effective date of the Executive’s termination of employment with
the Company.

          “UCC” means, collectively, UCC Capital Corporation, a New York corporation UCC Consulting
Corp., a New York corporation, UCC Servicing, LLC, a New York limited liability company and each of
their respective Subsidiaries and Affiliates.

     2.2 Other Definitional Provisions.

     (a) Section references contained in this Agreement are references to sections in this
Agreement, unless otherwise specified. Each defined term used in this Agreement has a comparable
meaning when used in its plural or singular form. Each gender-specific term used in this Agreement
has a comparable meaning whether used in a masculine, feminine or gender-neutral form.

     (b) Whenever the term “including” (whether or not that term is followed by the phrase “but not
limited to” or “without limitation” or words of similar effect) is used in this Agreement in
connection with a listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation on, or an exclusive
listing of, the items within that classification.

ARTICLE III

MISCELLANEOUS TERMS

     3.1 Defense of Claims. The Executive agrees that, during the Employment Period, and
for a period of six months after termination of the Executive’s employment, upon request by the
Company, the Executive shall reasonably cooperate with the Company in connection with any matters
the Executive worked on during his employment with the Company and any related transitional
matters. In addition, during the Employment Period and thereafter, the Executive agrees to
reasonably cooperate with the Company in the defense of any claims or actions that may be made by
or against the Company that affect the Executive’s prior areas of responsibility or involve matters
about which the Executive has knowledge, except if the Executive’s reasonable interests are adverse
to the Company in such claim or action and provided that after the Employment Period such level of
cooperation shall be reasonable and shall take due account of the Executive’s work and personal
commitments. The Company agrees to promptly reimburse the Executive for all of the Executive’s
reasonable travel and other direct expenses incurred, or to be reasonably incurred, to comply with
the Executive’s obligations under this Section 3.1.

     3.2 Nondisparagement. The Executive agrees to refrain from (i) making, directly or
indirectly, any derogatory comments concerning the Company or its Subsidiaries or any current or
former officers, directors, employees or shareholders thereof or (ii) taking any other action with
respect to the Company or its Subsidiaries which is reasonably expected to result, or does

14

 

result in, damage to the business or reputation of the Company, its Subsidiaries or any of its
current or former officers, directors, employees or shareholders. The Company agrees to refrain
from (i) making, directly or indirectly, any derogatory comments concerning the Executive or (ii)
taking any other action with respect to the Executive which is reasonably expected to result, or
does result in, damage to the reputation of the Executive. Notwithstanding anything to the
contrary contained herein, nothing in this Agreement shall prohibit or restrict either party from,
truthfully and in good faith: (i) making any disclosure of information required by law; (ii)
providing information to, or testifying or otherwise assisting in any investigation or proceeding
brought by, any federal regulatory or law enforcement agency or legislative body, any
self-regulatory organization, or the Company’s or the Executive’s designated legal, compliance or
human resources officers; or (iii) filing, testifying, participating in or otherwise assisting in a
proceeding relating to an alleged violation of any federal, state or municipal law relating to
fraud, or any rule or regulation of the Securities and Exchange Commission or any self-regulatory
organization.

     3.3 Source of Payments. All payments provided under this Agreement, other than
payments made pursuant to a plan which provides otherwise and except as otherwise provided herein,
shall be paid in cash from the general funds of the Company, and no special or separate fund shall
be established, and no other segregation of assets shall be made, to assure payment. The Executive
shall have no right, title or interest whatsoever in or to any investments which the Company or its
Subsidiaries may make to aid the Company in meeting its obligations hereunder. To the extent that
any person acquires a right to receive payments from the Company hereunder, such right shall be no
greater than the right of an unsecured creditor of the Company.

     3.4 Notices. Any notice provided for in this Agreement must be in writing and must be
either personally delivered, mailed by first class mail (postage prepaid and return receipt
requested), sent by reputable overnight courier service (charges prepaid) or sent by facsimile
(with receipt confirmed) to the recipient at the address or facsimile number indicated below:

	 	 	 
	To the Company:
	 
	 	 
	Aether Holdings, Inc.
	621 E. Pratt Street, Suite 601
	Baltimore, MD 21202
	Telephone:

	 	(443) 573-9400 
	Telecopy:

	 	(443) 573-9418 
	Attention:

	 	Chief Executive Officer
	 
	 	 
	With copies to:
	 
	 	 
	Kirkland & Ellis LLP
	655 Fifteenth Street, N.W.
	Suite 1200
	Washington, D.C. 20005
	Telephone:

	 	(202) 879-5000 
	Telecopy:

	 	(202) 879-5200 
	Attention:

	 	Mark D. Director, Esq.

15

 

	 	 	 
	To the Executive:
	 
	 	 
	Robert W. D’Loren
	1330 Avenue of the Americas, 40th Floor
	New York, NY 10019
	Telephone:

	 	(212) 277-1101 
	Telecopy:

	 	(212) 277-1160 
	 
	 	 
	With copies to:
	 
	Littman Krooks LLP
	655 Third Avenue, 20th Floor
	New York, NY 10017
	Telephone:

	 	(212) 490-2020 
	Telecopy:

	 	(212) 490-2990 
	Attention:

	 	Mitchell C. Littman, Esq.

or such other address or to the attention of such other Person as the recipient Party will have
specified by prior written notice to the sending Party. Any notice under this Agreement will be
deemed to have been given when so delivered or sent or, if mailed, five days after deposit in the
U.S. mail.

     3.5 Severability. Subject to the express provisions of Section 1.10 relating
to certain specified changes, whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.

     3.6 Complete Agreement. This Agreement embodies the complete agreement and
understanding among the Parties with regard to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the Parties, written
or oral, which may have related to the subject matter hereof in any way. To the extent that this
Agreement provides greater benefits to the Executive than available under the Company’s employee
handbook or other corporate policies, then this Agreement shall prevail.

     3.7 Counterparts. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one and the same
agreement.

     3.8 Assignment. Without the Executive’s consent, the Company may not assign its
rights and obligations under this Agreement except (i) to a “Successor” (as defined below) or (ii)
to an entity that is formed and controlled by the Company or any of its Subsidiaries. This
Agreement is personal to the Executive, and the Executive shall not have the right to assign the
Executive’s interest in this Agreement, any rights under this Agreement or any duties imposed under
this Agreement, nor shall the Executive have the right to pledge, hypothecate, transfer,

16

 

assign or otherwise encumber the Executive’s right to receive any form of compensation
hereunder without the prior written consent of the Board. As used in this Section 3.8,
“Successor” shall include any Person that at any time, whether by purchase, merger or otherwise,
directly or indirectly acquires all or substantially all of the assets of, or ownership interests
in, the Company and its Subsidiaries.

     3.9 Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by the Company, the Executive, and their respective heirs, successors
and permitted assigns.

     3.10 Choice of Law. This Agreement and the performance of the parties hereunder shall
be governed by the internal laws (and not the law of conflicts) of the State of New York. Any claim
or controversy arising out of or in connection with this Agreement, or the breach thereof, shall be
adjudicated exclusively by the Supreme Court, New York County, State of New York, or by a federal
court sitting in Manhattan in New York City, State of New York. The parties hereto agree to the
personal jurisdiction of such courts and agree to accept process by regular mail in connection with
any such dispute.

     3.11 Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE
PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL),
EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING
TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

     3.12 Legal Fees and Court Costs. In the event that any action, suit or other
proceeding in law or in equity is brought to enforce the provisions of this Agreement, and such
action results in the award of a judgment for money damages or in the granting of any injunction in
favor of the Company, all expenses (including reasonable attorneys’ fees) of the Company in such
action, suit or other proceeding shall be paid by the Executive. In the event that any action, suit
or other proceeding in law or in equity is brought to enforce the provisions of this Agreement, and
such action results in the award of a judgment for money damages or in the granting of any
injunction in favor of the Executive, all expenses (including reasonable attorneys’ fees and travel
expenses) of the Executive in such action, suit or other proceeding shall be paid by the Company.

     3.13 Remedies. Subject to the provisions of Section 3.1, each Party will be
entitled to enforce its rights under this Agreement specifically, to recover damages and costs
caused by any breach of any provision of this Agreement and to exercise all other rights existing
in its favor. Nothing herein shall prohibit any arbitrator or judicial authority from awarding
attorneys’ fees or costs to a prevailing Party in any arbitration or other proceeding to the extent
that such arbitrator or authority may lawfully do so.

     3.14 Amendment and Waiver. The provisions of this Agreement may be amended or waived
only with the prior written consent of the Company and the Executive, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement will affect the validity, binding
effect or enforceability of this Agreement.

17

 

     3.15 Third Party Beneficiaries. This Agreement will not confer any rights or remedies
upon any Person other than the Parties and their respective successors and permitted assigns and
other than, in the event of the Executive’s death, his estate, to which all of Executive’s rights
and remedies set forth herein shall accrue.

     3.16 The Executive’s Representations. The Executive hereby represents and warrants to
the Company that (a) the execution, delivery and performance of this Agreement by the Executive do
not and shall not conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which the Executive is a party or by which he is bound,
(b) the Executive is not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other Person (or other agreement with any other person
containing a restriction on the Executive’s right to do business or obligating him to do business
with any other Person on a priority or preferential basis), (c) upon the execution and delivery of
this Agreement by the Company, this Agreement shall be the valid and binding obligation of the
Executive, enforceable in accordance with its terms and (d) upon the execution and delivery of this
Agreement by the Company, Executive shall not be in violation of clause (i) set forth in the
definition of Cause and shall not be Disabled.

     3.17 Amendment to Comply with Section 409A of the Code. To the extent that this
Agreement or any part thereof is deemed to be a nonqualified deferred compensation plan subject to
Section 409A of the Code and the Treasury Regulations (including proposed regulations) and guidance
promulgated thereunder, (a) the provisions of this Agreement shall be interpreted in a manner to
the maximum extent possible to comply in good faith with Code Section 409A and (b) the parties
hereto agree to amend this Agreement for purposes of complying with Code Section 409A promptly upon
issuance of any Treasury regulations or guidance thereunder, provided, that any such amendment
shall not materially change the present value of the benefits payable to the Executive hereunder or
otherwise materially adversely affect the Executive, the Company, or any affiliate of the Company,
without the consent of such party.

[END OF PAGE]

[SIGNATURE PAGE FOLLOWS]

18

 

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

	 	 	 	 	 
	 	AETHER HOLDINGS, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	David S. Oros 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 
	 	ROBERT W. D’LOREN
 	 

 

 

EXHIBIT A

FORM OF MUTUAL RELEASE

     I, Robert W. D’Loren, on behalf of myself and my heirs, successors and assigns, in
consideration of and subject to the performance by Aether Holdings, Inc., a Delaware corporation
(together with its Subsidiaries, the “Company”), of its material obligations under the Employment
Agreement, dated as of June ___, 2006 (the “Employment Agreement”) and Sections 3, 4, 7, 8, 10 and
12 below, do hereby release and forever discharge as of the date hereof the Company and its
Subsidiaries, all present and former directors, officers, agents, representatives, employees,
successors and assigns of the Company and its Subsidiaries, and all direct or indirect owners of
each of foregoing (collectively, the “Released Parties”) to the extent provided below.

	1,.	 	I understand that certain of the payments or benefits paid or granted to me under Section
1.4(b) and Section 1.4(c) of the Employment Agreement represent, in part, consideration for
signing this Mutual General Release and are not salary, wages or benefits to which I was
already entitled. I understand and agree that I will not receive the payments and benefits
specified in Section 1.4(b) or Section 1.4(c) of the Employment Agreement (other than for any
other unpaid compensation, benefits and expenses to which I am entitled thereunder for
employment prior to termination) unless I execute this Mutual General Release and do not
revoke this Mutual General Release within the time period permitted hereafter or breach this
Mutual General Release.
	 
	2.	 	Except as provided in paragraph 6 below, and except for compensation and benefits and equity
ownership in the Company I am entitled to under the terms of the Employment Agreement, I
knowingly and voluntarily release and forever discharge the Released Parties from any and all
claims, controversies, actions, causes of action, cross-claims, counter-claims, demands,
debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages,
claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in
equity, both past and present (through the date of this Mutual General Release) and whether
known or unknown, suspected, or claimed against the Released Parties which I, my spouse, or
any of my heirs, executors, administrators or assigns, may have, which arise out of or are
connected with my employment with, or my separation from, the Company (including, but not
limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights
Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment
Act of 1967, as amended (including the Older Workers Benefit Protection Act) (except as
provided in paragraph 6 below); the Equal Pay Act of 1963, as amended; the Americans with
Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Civil Rights Act of
1866, as amended; the Worker Adjustment Retraining and Notification Act; the Employee
Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair
Labor Standards Act; or their state or local counterparts; or under any other federal, state
or local civil or human rights law, or under any other local, state, or federal law,
regulation or ordinance; or under any public policy, contract or tort, or under common law; or
arising under any policies, practices or procedures of the Company; or any claim for wrongful
discharge, breach of contract, infliction of

 

 

	 	 	emotional distress, defamation; or any claim for costs, fees, or other expenses, including
attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to
herein as the “Claims”).
	 
	3.	 	This Release is mutual, and the Company hereby expressly releases Robert W. D’Loren, his
successors, assigns, heirs, executors and administrators (“D’Loren Parties”) from all claims
and to the same extent as described in the preceding Section 2.
	 
	4.	 	The Parties represent and acknowledge that they have not assigned or transferred or purported
to assign or transfer, to any person or entity, any right, claim, demand, cause of action, or
other matter mentioned or implied by this Mutual General Release.
	 
	5.	 	I represent, warrant and covenant to each of the Released Parties that at no time prior to or
contemporaneous with his execution of this Mutual General Release have I knowingly engaged in
any wrongful conduct against, on behalf of or as the representative or agent of the Company.
Each Party represents, warrants and covenants to each of the other Parties that at no time
prior to or contemporaneous with his or its execution of this Mutual General Release has any
Party filed or caused or knowingly permitted the filing or maintenance, in any state, federal
or foreign court, or before any local, state, federal or foreign administrative agency or
other tribunal, any charge, claim or action of any kind, nature and character whatsoever
(“Claim”), known or unknown, suspected or unsuspected, that is pending on the date hereof
against the other Parties which is based in whole or in part on any matter referred to in
Sections 2 and 3 above; and, subject to each Party’s performance under this Mutual
General Release, to the maximum extent permitted by law each Party shall be prohibited from
filing or maintaining, or causing or knowingly permitting the filing or maintaining, of any
such Claim in any such forum.
	 
	6.	 	I agree that this Mutual General Release does not waive or release any rights or claims that
I may have under the Age Discrimination in Employment Act of 1967 which arise after the date I
execute this Mutual General Release. I acknowledge and agree that my separation from
employment with the Company in compliance with the terms of the Employment Agreement shall not
serve as the basis for any claim or action (including, without limitation, any claim under the
Age Discrimination in Employment Act of 1967).
	 
	7.	 	In signing this Mutual General Release, the Parties acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned or implied. The
Parties expressly consent that this Mutual General Release shall be given full force and
effect according to each and all of its express terms and provisions, including those relating
to unknown and unsuspected Claims (notwithstanding any state statute that expressly limits the
effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any,
as well as those relating to any other Claims hereinabove mentioned or implied. The Parties
acknowledge and agree that this waiver is an essential and material term of this Mutual
General Release and that without such waiver the Parties would not have agreed to the terms of
the Employment Agreement. The Parties further agree that in the event a claim is brought in
violation of this Mutual General Release, this Mutual General Release shall serve as a
complete defense to such Claims. I further agree that I am not aware of any pending charge or

 

 

	 	 	complaint of the type described in paragraph 2 as of the execution of this General Release.
	 
	8.	 	The Parties agree that neither this Mutual General Release, nor the furnishing of the
consideration for this Mutual General Release, shall be deemed or construed at any time to be
an admission by any Released Party or the Executive of any improper or unlawful conduct.
	 
	9.	 	I agree that I will forfeit all cash amounts payable by the Company pursuant to the
Employment Agreement that would not have otherwise been paid but for my signing this Mutual
General Release if I challenge the validity of this Mutual General Release.
	 
	10.	 	The Parties agree that this Mutual General Release is confidential and agree not to disclose
any information regarding the terms of this Mutual General Release to any third party, except
any tax, legal or other counsel consulted regarding the meaning or effect hereof or as
required by law and except that the Company may disclose this Mutual General Release to its
affiliates and their representatives. The Executive may also disclose information contained
herein to his immediate family. The Parties will instruct each of the foregoing not to
disclose the same to anyone.
	 
	11.	 	Any non-disclosure provision in this Mutual General Release does not prohibit or restrict me
(or my attorney) or the Company or its attorney from responding to any inquiry about this
Mutual General Release or its underlying facts and circumstances by any governmental entity.
	 
	12.	 	The Parties specifically acknowledge their continuing obligations to one another under the
Employment Agreement, including without limitation under Section 1.6, Section 1.7, Section
1.8, Section 1.9 and Section 3.1 of the Employment Agreement.
	 
	13.	 	Whenever possible, each provision of this Mutual General Release shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Mutual
General Release is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or any other jurisdiction, but this Mutual General
Release shall be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
	 
	14.	 	Capitalized terms used but not defined herein shall have the meaning given such terms in the
Employment Agreement.

BY SIGNING THIS MUTUAL GENERAL RELEASE, I REPRESENT AND AGREE THAT:

a. I HAVE READ IT CAREFULLY;

b. I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT
LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED; TITLE VII OF
THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963; THE

 

 

AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED;

c. I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

d. I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER
CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

e. I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE, SUBSTANTIALLY IN ITS
FINAL FORM ON ______ __, ___, TO CONSIDER IT, AND THE CHANGES MADE SINCE THE
______ __, ___VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE
REQUIRED 21-DAY PERIOD;

f. THE CHANGES TO THE AGREEMENT SINCE ______ __, ___ EITHER ARE NOT MATERIAL OR WERE
MADE AT MY REQUEST.

g. I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND
THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
EXPIRED;

g. I HAVE SIGNED THIS MUTUAL GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY
COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

h. I AGREE THAT THE PROVISIONS OF THIS MUTUAL GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED
OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE
COMPANY AND BY ME.

	 	 	 	 	 
	 	 	 
	Date  ______, ___, ___ 	
 	 
	 	Robert W. D’Loren 	 
	 	 	 
	 

 

 

     Acknowledged and agreed as of the date first written above:

	 	 	 	 	 
	AETHER HOLDINGS, INC.

 	 	 
	By:  	
 	 	 
	 	Name:  	 	 	 
	 	Title:

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