Document:

Exhibit
10.6

MEZZANINE
PLEDGE AND SECURITY AGREEMENT

THIS MEZZANINE PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of February 1, 2007, made by BREOF UVA
GP LLC, a Delaware limited liability company, BREOF UVA LLC, a Delaware limited
liability company, PPC-UVA 15th Street Limited
Partnership, a Texas limited partnership, and PPC Charlottesville GP, Inc., a
Texas corporation (each a “Pledgor” and
collectively, the “Pledgors”), and
Behringer Harvard UVA, LLC, a Delaware limited liability company (together with
its successors and assigns, “Lender”).

RECITALS

A.            Lender
has agreed to make a loan (the “Loan”) to
Pledgors in the original principal amount of Six Million Forty Thousand Dollars
($6,040,000.00) pursuant to the terms of that certain Loan Agreement, dated of
even date herewith, between Pledgors and Lender (herein, as the same may be
amended or restated from time to time, the “Loan
Agreement”); and

B.            Pledgors
are the sole partners and the legal and beneficial owners of one hundred
percent (100%) of the partnership interests in PPC Charlottesville Limited
Partnership, a Delaware limited partnership (the “Mortgagor”),
which is the owner of the leasehold interest in the Property (as defined in the
Loan Agreement); and

C.            One
of the conditions precedent to the Lender’s making of the Loan under the Loan
Agreement is Pledgors’ execution and delivery of this Agreement; and

D.            Pledgors
and Mortgagor shall derive substantial direct and indirect benefits from the
Loan.

NOW, THEREFORE, for and in consideration of the
foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:

1.             Recitals; Definitions.  The recitals set forth above are true and
correct and are incorporated herein by reference.  Capitalized terms not defined herein but
which are defined in the Uniform Commercial Code as in effect from time to time
in the Commonwealth of Virginia (the “UCC”) shall
have the meanings given them in Article 8 or Article 9, as applicable, thereof.
Other capitalized terms used but not defined herein shall have the meaning
ascribed to such term in the Loan Agreement, in each case unless the context
clearly requires otherwise.

2.             Pledge.

(a)           Grant of Security Interest.  As collateral security for the Indebtedness
and the performance of all obligations under the Loan Documents, Pledgors
presently and irrevocably pledge, hypothecate, assign, deliver and transfer to
the Lender, and grant to the Lender a continuing first priority security
interest in, all of their right, title and interest in and under the following
property (collectively, the “Collateral”)
whether now owned or hereafter acquired or coming into existence:

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(i)                                     all
of Pledgors’ right, title and interest, whether direct or indirect, whether
legal, beneficial or economic, and whether fixed or contingent, (i) as the solepartners in and to the Mortgagor, including, without
limitation, Pledgors’ right to vote on Mortgagor matters and Pledgors’ rights,
now existing or hereafter arising or acquired, to receive from time to time its
share of profits, losses, income surplus, return of capital, proceeds, fees,
preferences, payments or distributions from Mortgagor (“Pledged
Interest”);

(ii)                                  all
Instruments, certificates, or other writings evidencing Pledgors’ Pledged
Interest;

(iii)                               all
of Pledgors’ right, title and interest in, to and under, respectively, that
certain Amended and Restated Agreement of Limited Partnership of Mortgagor,
dated as of October 2005, executed by Pledgors (the “Partnership
Agreement”),and
the other organizational documents of Mortgagor;

(iv)                              all
of Pledgors’ right, title and interest in, to and under all General Intangibles
relating to or arising out of any of the foregoing; and

(v)                                 all
Proceeds of any of the foregoing.

(b)           Security for Obligations.  This Agreement secures (i) the Indebtedness
and (ii) all obligations of Pledgors under the Loan Agreement, the Note and all
of the other Loan Documents (collectively, the “Secured
Obligations”).

(c)           Perfection of Security Interest.  In furtherance of the grant of the pledge and
security interest pursuant to Section 2(a) above, Pledgors hereby agree
with Lender as follows:

(i)                                     If
the Pledged Interest is not currently represented or evidenced by certificates
or Instruments, Pledgors shall, upon the execution of this Agreement (A) cause
the Mortgagor to keep as a part of its records of ownership a copy of this
Agreement which shall evidence Pledgors’ pledge of the Pledged Interest to
Lender and all other terms contained in this Agreement, and (B) cause the
Mortgagor to agree to comply with any and all unilateral directions and other
Instructions from Lender concerning such Pledged Interest given in accordance
with this Agreement, without any further consent of (or regardless of contrary
instructions of) Pledgors or any other person.

(ii)                                  Concurrently
with the execution and delivery of this Agreement, Pledgors are delivering to
Lender assignments of partnership interests in blank (the “Assignment
of Interest”), in the form set forth on Exhibit A hereto, for
the Pledged Interest, transferring all of the Pledged Interest in blank, duly
executed by each Pledgor and 

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undated.  Lender shall have the right, at any time in
its discretion upon the occurrence and during the continuance of an Event of
Default pursuant to Section 6(a) below, to transfer to, and to designate
on the Assignment of Interest, any Person to whom the Pledged Interest is sold
in accordance with the provisions hereof.

(iii)                               To
the extent the Pledged Interest hereafter is represented or evidenced by
certificates, Instruments or other writings (other than the Partnership
Agreement) whether in bearer or registered form, Pledgors shall within three
(3) days of receipt of any such certificates, Instruments or other writings (A) deliver
to Lender such certificates, Instruments or other writings, as applicable and
(B) deliver to Lender all necessary powers, instruments of transfer or
assignment, each undated and duly executed in blank.

(iv)                              Regardless
of whether the Collateral is represented or evidenced by certificates,
Instruments or other writings, Pledgors shall do all other acts and deliver
such other documents, and cause Mortgagor to do the same, as Lender reasonably
deems necessary or desirable (or as are otherwise required by the laws of the
jurisdiction governing perfection, the effect of perfection or nonperfection or
the priority of Lender’s security interest) in order to perfect such security
interest in the Collateral.  In
furtherance of the foregoing, Pledgors hereby authorize Lender to file such UCC
financing statements against Pledgors as Lender shall deem necessary or
desirable containing a description of the Collateral pledged by Pledgors
sufficient to satisfy the requirements of Article 9 of the UCC (the “UCC Financing Statements”).

(d)           Continuing Security Interest.  This Agreement shall create a continuing
security interest in the Collateral and shall remain in full force and effect
until payment in full of all Indebtedness. 
Upon the payment in full of all Indebtedness, the security interests
granted herein shall terminate and all rights to the Collateral shall revert to
Pledgors.  Upon any such termination, the
Lender shall, at Pledgors’ sole expense, deliver to Pledgors, without any
representations, warranties or recourse of any kind whatsoever (other than that
such items are free and clear of any encumbrances or claims of Lender or anyone
claiming by, through or under Lender), all certificates, Instruments and other
writings representing or evidencing all Collateral then held by the Lender
hereunder, if any, and execute and deliver to Pledgors such documents as
Pledgors shall reasonably request to evidence such termination.

(e)           Waivers of Subrogation.  Pledgors hereby irrevocably waive any claim
or other right which they may now have or hereafter acquire against the
Mortgagor in connection with this Agreement or any other Loan Document.  If any amount shall be paid to Pledgors in
violation of the preceding sentence and the Secured Obligations shall not have
been finally paid and performed in full, such amount shall be deemed to have
been paid to Pledgors for the benefit of, and held in trust for, the Lender,
and shall 

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immediately be paid to
the Lender to be credited and applied, at Lender’s option, against the Secured
Obligations, whether matured or unmatured in such order as the Lender shall
determine.

3.             Representations and Warranties.  As of the date hereof Pledgors represent and
warrant as follows:

(a)           Organization; Authorization.  Each Pledgor has been duly formed and is
validly existing and in good standing under the laws of the state of
formation.  Each Pledgor has full power
and authority to execute this Agreement and to undertake and consummate the
transactions contemplated hereby.  This
Agreement has been duly and validly executed by or on behalf of each Pledgor
and constitutes the legal, valid and binding obligation of Pledgors and is
enforceable against Pledgors in accordance with its terms, subject, as to
enforceability, to the effect of applicable bankruptcy, insolvency and other
similar laws limiting the enforcement of creditors’ rights generally and to
general principles of equity.

(b)           Agreement Will Cause No Defaults.  The execution, delivery and performance of
this Agreement by Pledgors does not and will not violate, or contravene (i) any
term or provision of the organizational documents of Pledgors or any resolution
or vote of Pledgors, (ii) any existing license, indenture or other material
contract or agreement binding upon Pledgors or (iii) any existing law, statute,
regulation, order, decree or judgment applicable to Pledgors or its property.

(c)           Ownership, No Liens, etc.  Pledgors are the legal, record and beneficial
owner of, and have good and marketable title to the Collateral in which it
grants a security interest to Lender under this Agreement, free and clear of
all liens, security interests, options or other charges or encumbrances, other
than the security interest granted pursuant hereto.  Pledgors are the sole partners in Mortgagor.

(d)           As to Pledged Interest.  The Pledged Interest is duly authorized and
validly issued, and are fully paid and non-assessable and constitute all of the
issued and outstanding membership interests in Mortgagor.  The Pledged Interest (i) is not “financial
assets” (within the meaning of Section 8-102(a)(9) of the UCC) and (ii) is not
credited to a “securities account” 
within the meaning of Section 8-501(a) of the UCC.

(e)           Perfection.  Upon the filing of the UCC Financing
Statements referred to in Section 2(c)(iv) in the places required under the UCC
for perfection of security interests in the classes of collateral included in
the Collateral, the security interestgranted
pursuant to this Agreement will constitute a valid, perfected first priority
security interest in all of the Collateral and related proceeds in which a
security interest can be perfected by filing, enforceable against all creditors
of Pledgors and any persons purporting to purchase any Collateral or receive
any related proceeds from Pledgors, subject to the limitations in the UCC.

(f)            Authorization, Approval, etc.  No authorization, approval, or other action
by, and no notice to or filing with, any governmental authority, regulatory
body or any 

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other person (other than
any that have been obtained and provided to Lender) is required either:

(i)                                     for
the executions, delivery, and performance of this Agreement by Pledgors (other
than any authorizations and approvals that have already been received or
actions that have already been taken), or

(ii)                                  for
the exercise by the Lender of (1) the voting and other rights provided for in
this Agreement or (2) except as may be required in connection with a
disposition of the Pledged Interest by laws relating to the offering and sale
of securities generally, the remedies provided for in respect of the Collateral
pursuant to this Agreement.

4.             Covenants.

(a)           Protect Collateral.  Pledgors agree that they will own at all
times during the term of the Loan one hundred percent (100%) of the ownership
interests in Mortgagor.  Pledgors agree
that they shall not sell, assign, transfer, pledge or encumber in any other
manner the Collateral (except for the pledge to Lender hereunder or an
assignment to Lender or its designee pursuant to the Assignment of Partnership
Interests).  Pledgors shall warrant and,
at Pledgors’ expense, defend the right and title herein granted unto the Lender
in and to the Collateral (and all right, title and interest represented by the
Collateral) against the claims and demands of all persons whomsoever.

(b)           Further Assurances.  Pledgors shall, at Pledgors’ expense (i)
promptly execute and deliver, and cause the Mortgagor to promptly execute and
deliver, all further writings (including instruments of transfer or control)
reasonably requested by Lender, and (ii) promptly take all further action, and
cause the Mortgagor to promptly take all further action, that the Lender may
reasonably request; in each case, in order to perfect and protect and maintain
the perfection and priority of any security interest granted or purported to be
granted hereby or to enable the Lender to exercise and enforce its rights and
remedies hereunder with respect to any Collateral, including the rights and
remedies under Section 7(b).

(c)           Organizational Documents.  Pledgors agree that they shall not and shall
not permit any other person to amend or restate the certificate of formation of
Mortgagor without Lender’s consent including but not limited to changing the
location of its principal place of business or chief executive office, its name
or reorganizing under the laws of another jurisdiction.

(d)           Consents.  Pledgors shall execute and deliver to Lender,
upon its request at the time Lender exercises its remedies, any document
required under the organizational documents of Pledgors or otherwise reasonably
deemed necessary by Lender in order to evidence Pledgors’ consent to the Lender’s
exercising of its remedies under this Agreement, including those set forth in Section
7(a) hereof wherein Lender becomes the record, legal and beneficial owner
of the Collateral pledged under this Agreement.

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(e)           Pledged Interest.  The Pledged Interest (i) will not become “financial
assets” (within the meaning of Section 8-101(a)(9) of the UCC) and (ii) will
not be credited to a “securities account” (within the meaning of Section
8-501(a) of the UCC).  The parties agree
that the Pledged Interest constitutes “general intangibles” (as defined in
Section 9-102 of the UCC); and Pledgors agree that the Pledged Interest is not
and will not be investment company securities within the meaning of Section
8-103 of the UCC.

(f)            Subordination.  Pledgors hereby subordinate, and shall cause
any Affiliate to subordinate, any claims or liens of Pledgors or such Affiliate
against the Mortgagor of any kind (including any right of a Pledgor to a return
of any capital contributed to the Mortgagor) to all of the Secured
Obligations.  Upon the occurrence of an
Event of Default under any of the Loan Documents, Pledgors and their Affiliates
shall, upon Lender’s request, enforce any of their claims or liens as trustee
for the Lender, and shall cause any receipts to be paid over to the Lender on
account of the Secured Obligations without affecting in any manner the
liability of Pledgors under this Agreement except to the extent of such payment.

(g)           Taxes and Assessments.  Pledgors shall pay, and hold Lender harmless
from any liabilities with respect to payment of, any taxes or assessments which
may be payable with respect to the Collateral (except any taxes or assessments
arising after foreclosure) or in connection with any of the interests in
Collateral created by this Agreement.

(h)           Subordination of Senior Loan if
Acquired.  If, for any reason
whatsoever, Pledgors or any Affiliate of Pledgors should acquire that certain
loan evidenced by that certain Senior Note, dated of even date herewith,
between Mortgagor and Lender (the “Senior Loan”),
Pledgors hereby agree that such person’s rights with respect to the Senior Loan
and all future advances and all modifications, amendments, increases, renewals
or extensions thereof, and all of its present and future rights, title,
security and lien interest as holder of the Senior Loan or otherwise with
respect to the Property shall be deemed unconditionally and absolutely
automatically subordinated as to right and time of payment and made junior in
priority to any Secured Obligations and/or any lien of Lender with respect to
the Loan and/or with respect to the Property, to the full extent of all
indebtedness now or hereafter secured by the Senior Loan, including any and all
future advances and all modifications, amendments, increases, renewals and
extensions of the Senior Loan from time to time (all of the foregoing are
hereinafter collectively, the “Senior Loan Interest”).  In addition, Pledgors hereby collaterally
assign and grant to Lender a security interest in any interest it may have, now
or in the future, in the Senior Loan, including the Senior Loan Interest.  In addition, Pledgors agree to cause any
Affiliate of Pledgors that should acquire the Senior Loan to immediately
collaterally assign all of such person’s rights with respect to the Senior Loan
and the Senior Loan Interest to Lender and to execute all documents reasonably
deemed necessary or beneficial by Lender to evidence and perfect a first priority
lien in same.  Each Pledgor hereby
acknowledges and agrees on behalf of itself and any such Affiliate that the
foregoing provision shall be operative without the necessity of execution of
any further documents.  Notwithstanding
the foregoing, upon the request of Lender, Pledgors hereby agree to execute or
cause the execution by any Affiliate of Pledgors of a subordination 

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agreement, in form and
content reasonably acceptable to Lender, evidencing the provisions of this
Section.

(i)            Issuance of Interests or
Securities.  Without the prior
written consent of Lender, Pledgors shall not directly or indirectly vote to
enable, or take any other action to permit, Mortgagor to issue any limited
liability company interests or to issue additional securities convertible into
or granting the right to purchase or exchange for any interests of or in
Mortgagor.

5.             The
Lender.

(a)           Lender Appointed Attorney-in-Fact.  Pledgors hereby irrevocably appoint the
Lender as Pledgors’ attorney-in-fact, with full power and authority in the name
and place of Pledgors or otherwise, (i) to take any action and to execute any
instrument which the Lender may deem necessary or advisable to perfect the
security interest granted hereby and (ii) after an Event of Default, to
exercise any and all of its rights and remedies hereunder as the legal, record
and beneficial owner of the Pledged Interest. 
The power of attorney granted pursuant to this Section 5 is
coupled with an interest and is irrevocable.

(b)           Lender May Perform.  If Pledgors fail to perform any agreement
contained herein, the Lender may cause the same to be performed and the Lender’s
reasonable expenses incurred in connection therewith shall be payable by
Pledgors.

(c)           Lender Has No Duty.  The powers conferred on the Lender hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty on it to exercise any such powers. 
Except for reasonable care of any Collateral in its possession, the
Lender shall have no duty with respect to any Collateral.

6.             Event of Default.  As used in this Agreement, an “Event of
Default” shall mean the occurrence of any one or more of the following:

(a)           Any failure in the observance or
performance by Pledgors of any of its obligations, covenants or duties with
respect to Sections 4(a) and 4(c) hereof: or

(b)           any other failure in the observance
or performance by Pledgors of any of its obligations, covenants or duties
hereunder which in the case of a failure to pay when due any amount required
under this Agreement continues for a period of 5 business days after notice of
such failure by Lender to Pledgors or with respect to any other such failure
continues for a period of twenty (20) days after notice of such failure by
Lender to Pledgors and if Pledgors promptly commence such cure within the 20
day period and diligently prosecutes the same to completion, then the cure
period shall be extended for such period of time as may be reasonably necessary
to effect a cure but in no event shall such period exceed 60 days; or

(c)           any representation or warranty made
by Pledgors herein proves to be false or misleading in any material respect; or

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(d)           the occurrence of an Event of Default
as defined in the Loan Agreement or in the Note.

7.             Remedies.

(a)           Certain Remedies.  If any Event of Default shall have occurred
and be continuing:

(i)                                     Lender
shall have the right, without any further action or consent of Pledgors to
immediately direct the Mortgagor to identify the Lender or its designee on its
books and records as the record, legal and beneficial owner of the Pledged
Interest in full substitution of Pledgors. 
The Lender or its designee shall thereafter have the sole right to
exercise all rights, privileges, options and powers relating to the Pledged Interests.

(ii)                                  The
Lender shall have the right, without the necessity of becoming the record and
legal owner of the Pledged Interest as provided in Section 7(a)(i), to
exercise in its sole discretion the voting power and all other rights of
ownership with respect to any Pledged Interests.  All proceeds of the Collateral shall
immediately be paid to Lender and shall be applied by Lender in accordance with
the terms hereof.

(iii)                               The
Lender shall have all of the rights and remedies of a secured party under the
UCC.  In the exercise of such rights and
remedies Lender may, without notice except as specified below, sell the
Collateral or any part thereof at one or more public or private sales held at
any of the Lender’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Lender may deem reasonable.  Pledgors agree that any private sale may
result in prices and other terms less favorable then if such sale were a public
sale.  Pledgors agree that, to the extent
notice of sale shall be required by law, at least ten (10) days’ prior notice
to Pledgors of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.  The Lender shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given.  The Lender may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.

(b)           Compliance with Restrictions.  In any public or private sale of any of the
Collateral, the Lender is authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to comply with, or otherwise avoid any violation of
applicable law regarding any public or private 

 8
 

sale, including any
required approval of the sale or of the purchaser by any governmental
regulatory authority or official.  Such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner. 
The Lender shall not be liable or accountable to Pledgors for any price
reduction resulting from, or expense incurred as a result of, Lender’s
compliance with any such limitation or restriction.  The Lender shall be under no obligation to
delay any sale of any of the Collateral for the period of time necessary to
permit the Mortgagor or Pledgors to register such Collateral for public sale
under the Securities Act of 1933, as amended from time to time, or under
applicable state securities laws.

(c)           Application of Proceeds.  All cash proceeds received by the Lender in
respect of any sale of all or any part of the Collateral may be held by the
Lender as additional Collateral security for, or then or at any time thereafter
be applied in whole or in part by the Lender against all or any part of the
Secured Obligations in such order as the Lender shall elect.  Any surplus of such cash or cash proceeds
held by the Lender and remaining after payment in full of all the Secured
Obligations shall be paid over to Pledgors or to whomsoever may be lawfully
entitled to receive such surplus.

(d)           Indemnity and Expenses.  Pledgors hereby agree to indemnify and hold
harmless the Lender and its agents, representatives and independent contractors
from and against any and all claims, losses and liabilities arising out of or
resulting from this Agreement (including enforcement of this Agreement and actions taken to perfect the security interest
in the Collateral), except claims, losses or liabilities to the extent
resulting from the Lender’s or its agents’, representatives’ and independent
contractors’ gross negligence or willful misconduct.  Upon demand, Pledgors agree to pay to the Lender
the amount of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the
Lender may incur, together with interest thereon at the rate of twelve and
one-half percent (12 1⁄2 %) per annum from the date incurred until the date paid,
in connection with the exercise or enforcement of any of the rights of the
Lender hereunder (including a sale of the Collateral) as well as the failure by
Pledgors to perform or observe any of the provisions hereof.

(e)           Remedies Cumulative.  No remedy or right of the Lender hereunder,
under any of the Loan Documents or otherwise available under applicable law or
in equity, shall be exclusive of any other right or remedy.  Each such remedy or right shall be in
addition to every other remedy or right now or hereafter existing under
applicable law or in equity.  No delay in
the exercise of, or omission to exercise, any remedy or right after any Event
of Default shall impair any such remedy or right or be construed as a waiver of
any such Event of Default or an acquiescence thereto, nor shall it affect any
subsequent Event of Default of the same or different nature.  Every remedy or right may be exercised
concurrently or independently and when and as often as may be deemed necessary
by Lender.

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8.             Miscellaneous

(a)           Amendments.  No amendment to or waiver of any provision of
this Agreement nor consent to any departure by Pledgors herefrom shall in any
event be effective unless the same shall be in writing and signed by the
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it is given.

(b)           Protection of Collateral.  The Lender may take any action which the
Lender reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.

(c)           Notices.  Any notice, election, communication, request,
approval or other document or demand required or permitted under this Agreement
shall be in writing and shall be given in the manner provided in the Loan
Agreement.  The addresses of the parties
for such purpose (subject to change upon notice) are as follows:

If to Lender:                                                                               Behringer
Harvard UVA, LLC

15601 Dallas Parkway, Suite 600

Addison, Texas 75001

Attn: Chief Legal Officer

Facsimile: (214) 655-1610

with copy to:                                                                          Powell
& Coleman, L.L.P.

8080 North Central Expressway, Suite 1380

Dallas, Texas 75206

Attn: Carol D. Satterfield

Facsimile: (214) 373-8768

If to Borrowers:                                                             PPC-UVA
15th Street Limited Partnership

and PPC Charlottesville GP, Inc.,

c/o Phoenix Property Company

2626 Howell St., Suite 800

Dallas, Texas 75204

Attn: Jason P. Runnels

Facsimile: (214) 880-0320

with copy to:                                                                          Brookfield
Real Estate Opportunity Fund

BCE Place, 181 Bay St., Suite 300

Toronto, Ontario

Canada M5J 2T3

Attn: David Arthur

Facsimile: (416) 359-8650

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and with copy to:                                                   Stutzman,
Bromberg, Esserman & Plifka

2323 Bryan St., Suite 2200

Dallas, Texas 75201

Attn: John J. Reoch, Jr.

Facsimile: (214) 969-4999

(d)           Section Captions.  Section captions used in this Agreement are
for convenience of reference only, and shall not affect the construction of
this Agreement.

(e)           Severability.  Wherever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

(f)            Entire Agreement.  This Agreement and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and supersede any prior agreements, written or oral,
with respect thereto.

(g)           Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the substantive law of the Commonwealth of
Virginia without regard to the application of choice of law principles.  Pledgors and Lender each hereby consent to
the personal jurisdiction of the state courts of the Commonwealth of Virginia
located in Albemarle County, Virginia in any action that may be commenced to
enforce rights hereunder.

(h)           Waiver of Jury Trial.  PLEDGORS HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THAT PLEDGORS MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT, OR ANY OTHER
STATEMENTS OR ACTIONS RELATED HERETO. 
PLEDGORS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE
LENDER TO DISBURSE THE LOAN AND TO ENTER INTO THE OTHER LOAN DOCUMENTS.  BY ITS ACCEPTANCE OF THIS AGREEMENT LENDER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT LENDER MAY
HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH
THIS AGREEMENT, OR ANY OTHER STATEMENTS OR ACTIONS RELATED HERETO.

(i)            Successors and Assigns.  This Agreement shall inure to the benefit of
Lender and its respective successors, assigns and representatives and shall
bind Pledgors and their respective successors, assigns and representatives.

(j)            Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same document.

 11
 

(k)           Irrevocable Authorization and
Instruction to Mortgagor.  Pledgors
authorize and instruct the Mortgagor to comply with any instruction received by
it and given by Lender in accordance with this Agreement concerning the
Collateral or this Agreement.

(l)            Sole and Absolute Discretion.  Any option, consent, approval, discretion or
similar right of Lender set forth in this Agreement may be exercised by Lender
in its sole, absolute and unreviewable discretion, unless the provisions of
this Agreement specifically require another standard for such option, consent,
approval, discretion or similar right.

(m)          Assignment of Interest.  Without limiting any rights of Lender set
forth herein, Lender agrees to hold the Assignment of Interest in trust until
such time as Lender exercises its rights with respect to the Assignment of
Interest as set forth in this Agreement. When the Indebtedness is paid in full
and if Lender has not exercised its rights under this Agreement with respect to
the Assignment of Interest, Lender shall, at Pledgors request, return to
Pledgors or destroy the Assignment of Interest.

9.             Accommodation.  Pledgors have executed and delivered this
Agreement as an accommodation and in order to induce Lender to make the
Loan.  Accordingly, to the fullest extent
permitted by law, Pledgors agree that they shall not assert or take advantage
of, and hereby waive, all the following:

(a)           Any right to require Lender to (i)
proceed against the Mortgagor or any other person or (ii) to proceed against or
exhaust any other security held by Lender at any time or (iii) to pursue any
other remedy in Lender’s power before exercising any right or remedy under this
Agreement;

(b)           Any defense that may arise by reason
of:

(i)                                     Any
of the matters set forth in Section 2(e) hereof (as more particularly provided
in such section); or

(ii)                                  The
release, suspension, discharge or impairment of any of Lender’s rights against
the Mortgagor or any other party against whom Lender might assert a claim,
whether such release, suspension, discharge or impairment is explicit, tacit or
inadvertent; or

(iii)                               Lender’s
failure to pursue any other remedies available to Lender that would reduce the
Secured Obligations or the obligations under the Senior Loan; or

(iv)                              The
lack of authority of the Mortgagor or any other person or persons; or

 12
 

(v)                                 The
failure of Lender to file or enforce a claim against the estate (in either
administration, bankruptcy or any other proceedings) of Mortgagor or any other
person or persons;

(c)           Demand, protest and notice of any
kind, including, without limitation, the following notices (but excluding any
and all rights of grace, notice or opportunity for cure expressly provided in
the Loan Documents):

(i)                                     Notice
of the evidence, creation or incurring of any new or additional indebtedness or
obligation under the Loan Documents; or

(ii)                                  Notice
of any action or non-action on the part of Mortgagor or Lender in connection
with any of the Senior Loan or any of the collateral security the Senior Loan;
or

(iii)                               Notice
of payment or non-payment by Pledgors of the Secured Obligations;

(d)           Any right to assert against the
Lender any defense arising by reason of any claim or defense based upon an
election of remedies by the Lender;

(e)           Any rights arising because of
Pledgors’ payment or satisfaction of the Secured Obligations against (i) the
Mortgagor, by way of subrogation to the rights of Lender or otherwise or (ii)
any other guarantor or any other party obligated to pay any of the indebtedness
secured hereby, by way of contribution or reimbursement or otherwise;

(f)            Any duty on the part of Lender to
disclose to Pledgors any default under the Loan Documents;

(g)           Any duty on the part of Lender to
disclose to Pledgors any facts Lender may now know or may hereafter know about
the Mortgagor regardless of whether Lender (i) has reason to believe that any
such facts materially increase the risk beyond the risk which Pledgors intend
to assume by executing this Agreement, (ii) has reason to believe that these
facts are unknown to or (iii) has a reasonable opportunity to communicate such
facts to Pledgors.  Pledgors shall be
fully responsible for being and keeping informed of the financial condition of
the Mortgagor or any successor in interest of the Mortgagor and of all
circumstances bearing on the risk of non-payment of any of the Senior Loan; or

(h)           Subject to the other express
provisions hereof and of applicable law regarding the manner of sale, any right
to object to the release of any portions of the collateral (including the
Collateral) from the lien of this Agreement or the Loan Documents
notwithstanding the fact that such releases may be made without Lender’s having
received any or adequate consideration therefor.

Lender may, without demand or notice to or consent of
Pledgors (i) release any party now or hereafter liable for the performance of
the Secured Obligations, (ii) extend the time for the performance of the
Secured Obligations, (iii) accept additional security for the Secured 

 13
 

Obligations, and (iv)
alter, substitute or release any property securing such payment or performance.

Before executing this Agreement, Pledgors have made
such independent legal and factual inquiries and investigations as Pledgors
deemed necessary or desirable with respect to the ability of Mortgagor to
perform all its obligations under the Senior Loan Documents.  Pledgors have relied solely on such
independent inquiries and investigations in entering into this Agreement.

The provisions of this Section 9 shall be in
addition to, and shall not in any manner limit or alter, the provisions of Section
2(e) and (f).

[Signatures Follow
on Next Page]

 14

WITNESS the following signatures and seals with the
intent that this shall be deemed an instrument under seal.

	
  

  	
  PLEDGORS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BREOF UVA GP LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven Ganeless

  	
  (SEAL)

  	
   

  
	
   

  	
  Name:

  	
   Steven Ganeless

  	
   

  
	
   

  	
  Title:

  	
   Authorized Signing Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BREOF UVA LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven Ganeless

  	
  (SEAL)

  	
   

  
	
   

  	
  Name:

  	
   Steven Ganeless

  	
   

  
	
   

  	
  Title:

  	
   Authorized Signing Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PPC-UVA 15TH STREET LIMITED PARTNERSHIP,

  
	
   

  	
  a Texas limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PPC Charlottesville GP, Inc.,

  	
   

  
	
   

  	
   

  	
  a Texas corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Jason P. Runnels 

  	
  (SEAL)

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Jason P. Runnels

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Vice President

  	
   

  
												

 

	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PPC CHARLOTTESVILLE GP, INC.,

  	
   

  
	
   

  	
  a Texas corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Jason P. Runnels 

  	
  (SEAL)

  	
   

  
	
   

  	
  Name:

  	
   Jason P. Runnels

  	
   

  
	
   

  	
  Title:

  	
   Vice President

  	
   

  
							

 

 

	
  

  	
  LENDER

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD UVA, LLC

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gerald J. Reihsen, III 

  	
  (SEAL)

  	
   

  
	
   

  	
   

  	
   Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
   SecretaryExhibit
10.7

CONTRIBUTION AGREEMENT

by and among

BREOF TCU GP LLC

and

BREOF TCU LLC

and

PHOENIX BERRY STREET LIMITED PARTNERSHIP

and

PHOENIX G.P. XVIII, INC.

and

BEHRINGER HARVARD TCU, LLC

February 1, 2007

CONTRIBUTION AGREEMENT

This CONTRIBUTION AGREEMENT (this “Agreement”) is
entered into as of February 1, 2007, by and among (i) BREOF TCU GP
LLC, a Delaware limited liability company, (ii) BREOF TCU
LLC, a Delaware limited liability company, (iii) PHOENIX BERRY STREET LIMITED PARTNERSHIP, a Texas limited
partnership, and (iv) PHOENIX G.P. XVIII, INC., a
Texas corporation (each a “Transferor” and
collectively the “Transferors”)and
BEHRINGER HARVARD TCU, LLC, a Delaware
limited liability company (the “BH Investor”).

RECITALS:

WHEREAS, Transferors own, directly, 100% of the
membership interest (the “Project Owner Membership
Interest”) of Berry Street Limited Partnership, a Texas limited
partnership (the “Project
Owner”), which Project Owner Membership Interest constitutes all of
the issued and outstanding equity interests in the Project Owner; and

WHEREAS, the Project Owner holds that certain
leasehold interest in that certain ground lease (“Ground Lease”)
for that certain parcel of real property located in Tarrant County, Texas more
particularly described on Exhibit B attached hereto and made a part
hereof for all purposes (“Land”); and

WHEREAS, prior to the Closing Date, the Project Owner
will construct and complete that certain student housing project (the “Project”) to be located on the Land; and

WHEREAS, in connection with the construction of the
Project, Project Owner has entered into a Construction Loan Agreement with
Wachovia Bank (the “Senior Lender”),
providing for a loan in the amount of Thirty Eight Million Two Hundred Fifty
Thousand Dollars ($38,250,000.00) secured, in part, by a first lien deed of
trust on the Project (such loan and the documents evidencing and securing such
loan being collectively referenced as the “Construction Loan”);
and

WHEREAS, Transferors and BH Investor wish to enter
into a joint venture evidenced by a limited partnership (“Transferee”);
and

WHEREAS, Transferors wish to cause the transfer to
Transferee of the leasehold interest in the Ground Lease and the other property
set forth herein subject to the Construction Loan in exchange for fifty percent
(50%) of the Membership Interest in Transferee (the “Transfer”) upon the terms and
conditions, and for the consideration, hereinafter set forth; and

WHEREAS, BH Investor wishes to contribute cash to
Transferee in exchange for fifty percent (50%) of the Membership Interest in
Transferee; and

WHEREAS, the capitalized terms used in these Recitals
and the other Sections in this Agreement are defined in Exhibit A.

NOW, THEREFORE, in consideration of the foregoing, the
covenants contained herein and for other good and valuable consideration, the
parties hereto agree as follows:

 1
 

ARTICLE I.

TRANSFER

1.1           Transfer.

(a)           Transfer. 
Subject to the terms and conditions hereinafter set forth, Transferors
agree to or to cause Project Owner to, sell, convey, transfer and assign to
Transferee all right, title and interest of Project Owner and/or Transferors in
the following:

(1)           that certain leasehold interest in that certain
tract or parcel of land situated in the City of Ft. Worth, Tarrant County,
Texas more particularly described by metes and bounds on Exhibit B
attached hereto and made a part hereof, together with all and singular the
rights and appurtenances pertaining to such property, including any right,
title and interest in and to adjacent streets, alleys or rights-of-way (the
property described in clause (1) of this Section 1.1(a) being herein
referred to collectively as the “Land”);

(2)           the buildings and other improvements on the Land,
including specifically, without limitation, that certain apartment building and
retail shops (the property described in clause (2) of this Section 1.1(a)
being herein referred to collectively as the “Improvements”);

(3)           the Personal Property upon the Land or within the
Improvements;

(4)           all right, title and interest in all oral or
written agreements pursuant to which any portion of the Land or Improvements is
used or occupied by anyone other than Project Owner and/or Transferors (the
property described in clause (4) of this Section 1.1(a) being herein
referred to collectively as the “Leases”);
and

(5)           all right, title and interest in and to
(i) all assignable contracts and agreements relating to the upkeep,
repair, maintenance or operation of the Land, Improvements or Personal Property
which will extend beyond the date of Closing (as such term is defined in Section 1.3
hereof) (collectively, the “Operating
Agreements”); (ii) all warranties and guaranties (express or
implied) issued in connection with the Improvements or the Personal Property;
(iii) all licenses, permits, certificates of occupancy and other consents or
approvals from governmental authorities or private parties which relate to the
Land, Improvements, or Personal Property; (iv) all other intangible property
associated with the use or operation of the Land, Improvements or Personal
Property, including specifically, without limitation, the use of any and all
trade names, logos, web domain names, phone numbers and other intellectual
property used in the operation of the Land, Improvements or Personal Property,
provided, however, that the use of the name “Grandmarc” shall be limited to use
solely in connection with the Project; and (v) all plans, specifications,
drawings (including CAD drawings), reports, studies, books, records and other
documents pertaining to the Land, Improvements or Personal Property (the
property described in this Section 1.1(a)(5) being sometimes herein
referred to collectively as the “Intangibles”).

 2
 

(b)           Contributed Property Defined.  The Land, the Improvements, the Personal
Property, the Leases and the Intangibles are hereinafter sometimes referred to
collectively as the “Contributed Property”.

(c)           Permitted Exceptions.  The Contributed Property shall be conveyed
subject to the matters which are deemed Permitted Exceptions.

(d)           Treatment as Contribution.  The transfer, conveyance and assignment of
the Contributed Property subject to the Construction Loan shall constitute a
capital contribution to Transferee.

(e)           BH Investor. 
Subject to the terms and conditions hereinafter set forth, BH Investor
agrees to contribute cash to Transferee in the amount set forth in Section
1.2(b) below (the “BH Contribution”).The
BH Contribution shall constitute a capital contribution to Transferee.

1.2          Consideration.

(a)           Transferors.  In consideration of Transferors’ contribution
of the Contributed Property subject to the Construction Loan, Transferors shall
each receive an interest as a partner of Transferee as more fully set forth in
that certain limited partnership agreement of Transferee in substantially the
form attached hereto as Exhibit C (the “LP Agreement”).  In
connection with the foregoing, the parties hereby acknowledge and agree that,
for purposes of this Agreement and as more fully set forth in the LP Agreement,
the Transferors or their assigns shall each receive a credit to their capital
account equal to Eight Million One Hundred Twenty-Five Thousand Dollars
($8,125,000.00).

(b)           BH Investor.  In consideration of BH Investor’s
contribution of cash in the amount of Eight Million One Hundred Twenty-Five
Thousand Dollars ($8,125,000.00), BH Investor shall receive an interest as a
partner of Transferee as more fully set forth in the LP Agreement.  In connection with the foregoing, the parties
hereby acknowledge and agree that, for purposes of this Agreement and as more
fully set forth in the LP Agreement, the BH Investor shall receive a credit to
its capital account equal to Eight Million One Hundred Twenty-Five Thousand
Dollars ($8,125,000.00).

1.3          Closing.

(a)           Time.  The Closing of the transaction contemplated
herein (the “Closing”) shall be
held, unless the parties otherwise mutually agree, on the later of (i) August
15, 2007 or (ii) within 30 calendar days after the date of delivery of the
Completion Notice provided that prior to the closing, all of the Conditions to
Close set forth in Section 1.4 have been met and the Closing Deliveries
set forth in Section 1.5 have been delivered.  Notwithstanding the foregoing, if a mechanics lien(s) is filed against
the Project, and Project Owner is actively contesting such mechanics lien(s),
the Closing Date may be extended by either BH Investor or Transferors for up to
60 additional calendar days to permit Project Owner to remove such mechanics
lien(s) as a lien against the Project or Transferors may purchase or cause to
be purchased a bond in the amount of 150% of the lien amount and proceed to
Closing.

 3
 

(b)           Completion Notice. 
Promptly following the Completion Date, Transferors shall deliver to BH
Investor a written notice (the “Completion
Notice”) certifying that the Completion Date has occurred.  BH Investor shall then specify a Closing Date
pursuant to Section 1.3(a) above.

(c)           Business Day.  Notwithstanding the foregoing Section
3.1(a), if the Closing Date would occur on a day which is not a Business
Day, then the Closing Date shall be delayed until the second Business Day
thereafter.

(d)           Closing.  Based upon the
representations, warranties and covenants, and subject to the terms, provisions
and conditions contained in this Agreement, at the Closing, Transferors shall
contribute the Contributed Property to Transferee subject only to the Permitted
Exceptions and BH Investor shall contribute the BH Contribution to Transferee.

(e)           Closing Accommodation Transactions.  As
a condition precedent to the Closing, the parties acknowledge that the
transactions set forth on Exhibit D attached hereto and made a part
hereof, must be completed in the order set forth on Exhibit D prior to
the Closing.

1.4          Conditions
to the Closing.

(a)           Joint Condition. 
The obligations of each party to consummate the transactions provided
for in this Agreement are subject to the condition that on the Closing Date
there shall be no action, suit or proceeding (other than such an action, suit
or proceeding directly or indirectly instituted by a party to this Agreement)
shall be threatened or pending, and no injunction, order, decree or ruling
shall be in effect, seeking to restrain or prohibit, or to obtain damages or
other relief in connection with, the execution and delivery of this Agreement
or the consummation of the transactions contemplated by this Agreement.

(b)           BH Investor’s Conditions to Closing.  The obligations of BH Investor to consummate
the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions:

(1)           Transferors’ Representations True.  Transferors’ representations and warranties
made in this Agreement shall be true and correct in all material respects as of
the Closing Date, except as affected by the transactions contemplated hereby,
and Transferors shall have delivered to BH Investor a closing certificate to
that effect.

(2)           Transferors’ Compliance with Agreement.  Transferors, in all material respects, shall
have performed each agreement, and shall have complied with each covenant, to
be performed or complied with by it on or prior to the Closing Date under this
Agreement, and Transferors hall have delivered to BH Investor a closing
certificate to that effect.

The closing certificates to
be delivered by Transferors referred to in Sections 1.4(b)(1) and (2)
are referred to herein collectively as the “Transferors
Closing Certificate.”

 4
 

(c)           Transferors’ Conditions to Closing.  The obligations of Transferors to consummate
the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions:

(1)           BH Investor’s Representations True.  BH Investor’s representations and warranties
made in this Agreement shall be true and correct in all material respects as of
the Closing Date, except as affected by the transactions contemplated hereby,
and BH Investor shall have delivered to Transferors a closing certificate to
that effect.

(2)           BH Investor’s Compliance with Agreement.  BH Investor, in all material respects, shall
have performed each agreement, and complied with each covenant to be performed
or complied with by it on or prior to the Closing Date under this Agreement,
and BH Investor shall have delivered to Transferors a closing certificate to
that effect.

The closing certificates to
be delivered by BH Investor referred to in Sections 1.4(c)(1) and (2)
are referred to herein collectively as the “BH
Investor Closing Certificate.”

1.5          Closing
Deliveries of Transferors.

At the Closing, Transferors shall deliver or cause
Project Owner to deliver to BH Investor, as appropriate, the following, all of
which shall be in a form reasonably satisfactory to BH Investor:

(a)           The Transferors Closing Certificate.

(b)           A certificate of the Secretary of
each Transferor certifying true and correct copies of the required resolutions
of each Transferor duly authorizing the execution, delivery and performance of
this Agreement and all related documents and agreements, such resolutions being
in full force and effect as of the Closing Date and such other evidence as BH
Investor or the Title Company shall reasonably require to evidence the
authority of Transferors,

(c)           A fully executed copy of the LP
Agreement dated as of the Closing Date.

(d)           An executed assignment of Ground
Lease in the form attached hereto as Exhibit E , a written consent from
the lessor under the Ground Lease approving such assignment and evidence of
payment to the lessor under the Ground Lease of any transfer fee required
pursuant to the Ground Lease.

(e)           An executed Bill of Sale and
Assignment (the “Bill of Sale”) in
the form attached hereto as Exhibit F.

(f)            An executed Assignment and
Assumption of Contracts (the “Assignment of
Contracts”) in the form attached hereto as Exhibit G.

 5
 

(g)           A certificate dated within thirty
(30) days of the Closing Date, of the Secretary of State of the State in which
each Transferor was formed establishing that each Transferor is in existence
and is in good standing in such state.

(h)           A letter to each tenant of the Project in the form of Exhibit
H attached hereto and made a part hereof.

(i)            A FIRPTA Affidavit in the form of Exhibit I
attached hereto and made a part hereof, duly executed by Transferor.

(j)            A current rent roll for the Project certified by
Transferors to be true and correct as of the Closing Date.

(k)           A “bills paid affidavit” verifying that there are no
unpaid bills, expenses or claims with respect to the Project and indemnifying
BH Investor from any loss or liability relating to such matters.

(l)            A certificate from the Architect of the Project stating
that the design of the Project is in compliance with all applicable laws.

(m)          Original Leases, original Operating Agreements and all
other documents described in Section 1.1 hereof.

(n)           Possession and occupancy of the Project, subject to the
Permitted Exceptions.

(o)           All available keys (including security deposit box keys)
or access cards used with respect to the Project in Transferor’s possession.

(p)           The Title Policy pursuant to Section 1.6 hereof.

(q)           If available under local practice,
certificates from
the taxing authorities of the State of Texas and from Tarrant County, Texas, or
other evidence dated within thirty (30) days prior to the Closing Date,
evidencing that Project Owner has paid all property and other state and local
taxes due and owing.

(r)            The written consent of Senior Lender
to the transfer if required and executed assumption documents in connection
with the Construction Loan in form and substance reasonably acceptable to BH
Investor.

(s)           A certificate executed by Transferors
listing the Contracts.

(t)            Such other instruments and documents
as are reasonably requested by Transferee to carry out and effect the purpose
and intent of this Agreement.

1.6          Closing
Deliveries of BH Investor.

At the Closing, BH Investor shall deliver to
Transferors the following, which shall be in a form reasonably satisfactory to
Transferors:

 6
 

(a)           The BH Investor Closing Certificate.

(b)           A certificate of the Secretary of BH Investor
certifying true and correct copies of the required resolutions of BH Investor
duly authorizing the execution, delivery and performance of this Agreement and
all related documents and agreements, such resolutions being in full force and
effect as of the Closing Date and such other evidence as Transferee,
Transferors or the Title Company shall reasonably require to evidence the
authority of BH Investor

(c)           Executed counterparts to the document
set forth in Section 1.5(c) above.

(d)           Such other instruments and documents
as are reasonably requested by Transferors and/or Title Company to carry out
and effect the purpose and intent of this Agreement.

1.7          Title
and Survey.

(a)           Commitment for Title Insurance.  Transferor
shall deliver to BH Investor and the surveyor described in Section 1.8(b)
below (a) a current title commitment (the “Title
Commitment”) covering the Project, showing all matters affecting
title to the Project and binding Republic Title of Texas, Inc., 2626 Howell
Street, 10th Floor,
Dallas, Texas 75204, Attn: Jeanne Ragland (the “Title Company”) to issue at Closing an Owner’s Policy of Title
Insurance, on the form customarily used in the area in which the Project is
located, in the full amount of the appraised value of the, and (b) legible
copies of all instruments (the “Exception
Instruments”) referenced in the Title Commitment.

(b)           Survey.  Transferors shall, at
Transferors’ expense, furnish to BH Investor a current Survey (the “Survey”) of the Project prepared by a
reputable and duly licensed surveyor or surveying firm which (a) locates all
easements (whether of record or apparent from an inspection of the Project) and
rights-of-way on or adjacent to the Project (identified by recording data, if
applicable), (b) shows the Improvements situated on the Land and the dimensions
of all buildings thereon, (c) show the location and size of all streets
(existing or proposed) on or adjacent to the Project, (d) shows any
encroachments or protrusions, railroads, rivers, creeks, or other water
courses, fences, utilities (including size and location), and other matters
located on or affecting the Project (and any recording information relating
thereto), (e) sets forth the number of square feet comprising the Project,
together with a legal description of the boundaries of the Project by metes and
bounds; (f) certifies that the Land does not lie within the 100-year flood
plain as established by the U.S. Army Corps of Engineers, (g) contains a
certification by the surveyor in the form of Exhibit J attached hereto,
and (h) in general, complies with the standards for an American Land Title
Association survey.

(c)           Obligation to Cure Liens.  Notwithstanding
anything to the contrary contained in this Article 1.7, if at Closing
there are any Money Liens against all or any part of the Project, Transferors
shall cause the same to be discharged of record.  Notwithstanding the foregoing, Transferors
shall not be required to remove any lienevidencing the existing
financing with Senior Lender which is being assumed by Transferee.

 7
 

(d)           Owner’s Policy of Title Insurance.  At Closing, Transferor shall cause the Title Company to issue to
Transferee the Title Policy covering the Project, in the full amount of the
appraised value of the Project, on the form customarily used in the area in which
the Project is located, insuring that Transferee is the owner of the leasehold
title to the Project, subject only to the Permitted Exceptions, and with the
standard printed exceptions modified as follows: (a) the exception for
restrictive covenants shall either be deleted or shall list specific
restrictions; (b) the exception for ad valorem taxes shall reflect only taxes
for the current year and subsequent years, and subsequent assessments for prior
years due to changes in land usage or ownership, and shall be endorsed “not yet
due and payable”; (c) there shall be no exception for “visible and apparent
easements,” for “public or private roads” or the like; (d) there shall be no
exception for “rights of parties in possession,” although there may be an exception
for Leases specifically described in the Title Policy and for tenants as
tenants only under residential leases and under retail leases; and (e) any
reference to submitting claims under the Title Policy to arbitration shall be
deleted.

1.8          Actions
of the Parties Pending Closing.

(a)           Reasonable Best Efforts.  Each of the parties will use their reasonable
best efforts to obtain all necessary consents and approvals and to cause the
conditions to the obligations of the parties hereunder to be satisfied and to
cause the Closing to be consummated as promptly as practicable, and will
cooperate with one another in connection with the foregoing.

(b)           Conduct of Business.  The Transferors shall, at their expense
(taking into account the use by the Project Owner of the proceeds of the
Construction Loan to fund such construction), cause the Project Owner to
construct and complete the Project on the Land, in substantial accordance with
the Plans and in accordance with the requirements of the Mezzanine Loan.  From the execution of this Agreement until
the Closing, Transferors will cause the Project Owner to operate in the
ordinary course of business consistent with the prudent construction and
operation of the Project and in accordance the requirements of the Mezzanine
Loan. Without limitation, the Project Owner shall not take any action, or fail
to take any action, as a result of which any of the changes or events listed in
Section 2.10(a) (“Changes”)
would occur.  Transferors shall maintain
and preserve the Project Owner and its business, franchises and authorizations,
and use commercially reasonable efforts to maintain and preserve its prospects,
goodwill and advantageous business relationships.  Transferors will cause Project Owner to (i)
maintain and operate the Project in a manner consistent with that of a first
class student living facility, reasonable wear and tear and damage from
casualty excepted, (ii) continue all insurance policies relative to the Project
(or if such insurance is canceled or expires, comparable insurance consistent
with similar projects in the Tarrant County metropolitan area) in full force
and effect, (iii) after the Completion Date not remove any item of Personal
Property from the Land or Improvements unless replaced by a comparable item of Personal
Property, (iv) maintain all permits, licenses and occupancy certificates,
including, without limitation, all development, building and use permits and
certificates of occupancy, (v) perform, when due, all material obligations
under any and all material agreements relating to the Project and otherwise in
accordance with applicable laws, ordinances, rules, and regulations, including
compliance with environmental laws and architectural barrier laws including but
not limited to the Americans with 

 8
 

Disabilities
Act, the Fair Housing Amendment Act, the HUD/FHAA Guidelines and the HUD Design
Manual, (vi) comply with all requirements such that any tax abatements or tax
credits are realized and (vii) promptly forward to BH Investor any material
notices of violations Governmental Requirements or Restrictions which
Transferors receive or become aware. 
Transferors will not permit either Project Owner or Transferee to have
any employees.  Transferors will comply
with all terms of the Mezzanine Loan.

(c)           Access.  During the term of this Agreement, BH
Investor, and its agents, consultants and designees shall have reasonable
access to the Project for purposes of observing, testing and inspecting the
work.  No such observation, test or
inspection or failure to do so shall relieve Transferors from their obligations
under this Agreement.  In exercising its
access rights, BH Investor shall exercise and shall cause its designees to
exercise due care and to endeavor not to increase the cost of the General
Contractor’s performance beyond de minimis amounts or to delay to any material
extent the work on the Project.  BH
Investor shall indemnify, defend and hold harmless Transferors and Project
Owner from and against all liability, loss, cost or expense (including
reasonable attorneys’ fees and expenses of litigation) arising from any
wrongful acts committed by Transferee or its designees, agents or consultants
while on the Land.

(d)           Ownership of the Project. 
Transferors’ shall not permit Project Owner to sell or dispose of the
Project or any portion thereof except for Permitted Dispositions.  Transferors will not permit any Liens,
encumbrances or other title exceptions (other than the Permitted Exceptions and
normal utility easements, solely for benefit of the Project, incident to the
development and operation of the Project) to encumber the Land or the Project.

(e)           Service Contracts.  Transferors will not permit Project Owner to
enter into any Service Contracts other than those described on Exhibit L
unless either (i) such Service Contract is terminable on not more than
30 days notice without the payment of any termination fee or penalty or
(ii) such Service Contract has been approved in writing by BH Investor.

(f)            Utility Contracts. 
Transferors will not permit Project Owner to enter into any agreement
with any utility company (public or private) to provide utility services to the
Project unless either (i) such utility contract is terminable on
not more than 30 days notice without the payment of any termination fee or
penalty or (ii) such utility contract has been approved in writing by BH
Investor except as set forth on Exhibit L attached hereto.

(g)           VCP Certificate.  Transferors and BH Investor agree that any
costs or liabilities incurred in the pursuit of a Voluntary Cleanup Program
Final Certificate of Completion from the Texas Commission on Environmental
Quality shall be shared equally with Transferors bearing fifty percent (50%)
and BH Investor bearing fifty percent (50%).

1.9          Termination
Prior to Closing.

(a)           Reasons for Termination.  This Agreement may be terminated before the
Closing:

 9
 

(1)           By Mutual Consent. 
By the mutual consent of BH Investor and Transferors.

(2)           By BH Investor. 
By BH Investor after compliance with the procedure set forth in this Section
1.9, if (i) any of Transferors’ representations or warranties contained in
this Agreement is or becomes untrue in any material respect, (ii) Transferors
fail to perform any of their covenants or agreements contained in this
Agreement in any material respect or (iii) Transferors fail to provide any of
the Closing Deliveries set forth in Section 1.5 herein.

(3)           By Transferors. 
By Transferors after compliance with the procedure set forth in this Section
1.9, if (i) any of BH Investor’s representations or warranties contained in
this Agreement is or becomes untrue, in any material respect, (ii) BH Investor
fails to perform its covenants or agreements contained in this Agreement in any
material respect or (iii) BH Investor fails to provide any of the Closing
Deliveries set forth in Section 1.6 herein.

(4)           Outside Date. 
By BH Investor if the Closing Date shall not have occurred on or before
December 31, 2007.

(5)           Mezzanine Loan. 
By BH Investor if there is any default by Mezzanine Borrower pursuant to
the documents evidencing or securing the Mezzanine Loan after any applicable
notice and cure period contained therein; provided BH Investor shall still be
entitled to pursue any rights and remedies pursuant to the Mezzanine Loan.

(b)           Notice of Problems; Termination.  BH Investor or Transferors (the “Notifying Party”) will promptly give
written notice to the other (the “Receiving
Party”) if it becomes aware of the occurrence or failure to occur,
or the impending or threatened occurrence or failure to occur, of any fact or
event that would cause or constitute, or would be likely to cause or constitute
(i) any of its representations or warranties contained in this Agreement being
or becoming untrue in any material respect, (ii) its failure to perform in any
material respect any covenants or agreements contained in this Agreement, (iii)
its failure to provide any of the Closing Deliveries or (iv) any condition to
the obligations of the Receiving Party to consummate the transactions provided
for in this Agreement being or becoming impossible to satisfy.  No such notice shall affect the
representations, warranties, covenants, agreements or conditions of the parties
hereunder, or prevent any party from relying on the representations and
warranties contained herein.

The Notifying Party shall
have 30 days from the date of said notice to cure any matter referred to in Sections
1.9(b)(i), (ii) or (iii) provided that the cure period shall
not extend beyond December 31, 2007. 
Upon receipt of a notice referred to in Section 1.9(b)(iv), or
the failure of the Notifying Party so to cure a matter referred to in Sections
1.9(b)(i), (ii) or (iii), the Receiving Party may terminate
this Agreement by written notice to the Notifying Party.

(c)           Effect of Termination.  Upon termination of this Agreement pursuant
to this Article, no party shall have any continuing obligation to the other
party arising out of this 

 10
 

Agreement, or out of actions taken in connection
with this Agreement; provided, however, that (i) no such termination shall
relieve a party of liability for breach of, or misrepresentation under, or
nonperformance of this Agreement prior to such termination, provided that such
liability shall not include consequential, special, punitive or exemplary
damages (ii) no such termination shall affect the rights and obligations under
the Mezzanine Loan, and (iii) Article IV and Article V of this
Agreement and the indemnification obligations under this Agreement shall
survive termination of this Agreement.

(d)           Additional Notice and Cure.  If Transferors fail to pay when due any
monetary amount needed to comply with the provisions of Section 1.8(b)
hereof, Transferors shall have a period of five business days after written
notice of such failure by BH Investor to cure or if Transferors fail to perform
any non-monetary covenant or obligation contained in Section 1.8(b)
hereof, Transferors shall have a period of 20 days after written notice by BH
Investor of such failure to cure unless such failure is not reasonably
susceptible of cure within 20 days and in such event if Transferors promptly
commence such cure and diligently pursue the same to completion, the cure
period shall be extended for such period of time that is reasonably necessary
to effect such a cure but in no event shall such period exceed 60 days.

1.10        Casualty
and Condemnation.

(a)           Transferors shall give BH Investor
prompt notice of any fire or other casualty affecting the Project.  BH Investor or its designated agents may
enter upon the Project from time to time during normal business hours and upon advance
notice to Transferors in accordance with this Agreement for the purpose of
inspecting any such casualty.

(b)           In the event of loss or damage to the Project
or any portion thereof (the “premises in
question”) which is not “major” (as hereinafter defined), this
Agreement shall remain in full force and effect provided Project Owner performs
any necessary repairs or, at Transferors’ option, reduces the cash portion of
the BH Contribution in an amount equal to the cost of such repairs, Transferors
thereby retaining all of Transferors’ right, title and interest to any claims
and proceeds Project Owner may have with respect to any casualty insurance
policies or condemnation awards relating to the premises in question.  In the event that Project Owner elects to
perform repairs upon the Project, Project Owner shall use reasonable efforts to
complete such repairs promptly and the date of Closing shall be extended a
reasonable time (but in no event more than thirty (30) days unless such repairs
are not capable of being completed within thirty days and Transferors are
causing Project Owner to diligently pursue the completion of such repairs, in
which case the time shall be extended up to one hundred eighty (180) days) in
order to allow for the completion of such repairs.

(c)           In the event of a “major” loss or damage, BH Investor may
terminate this Agreement by written notice to Transferors.  If BH Investor does not send written notice
to Transferors that BH Investor has elected to proceed with Closing within ten (10)
days after Transferors send BH Investor written notice of the occurrence of
major loss or damage, then BH Investor shall be deemed to have elected to
terminate this Agreement.  If BH Investor
sends notice to Transferors within such ten (10) day period that BH Investor
desires to proceed with Closing, this Agreement shall remain in effect,
provided that Transferors shall 

 11
 

assign to Transferee at Closing all of Transferor’s
right, title and interest to any resulting insurance proceeds (including any
rent loss insurance applicable to any period on or after the Closing due
Transferors as a result of such major loss or damage.  Upon Closing, full risk of loss with respect
to the Project shall pass to Transferee and Transferee shall receive a credit
at Closing for any deductible amount under such insurance policies.  For purposes of this Sections 1.10, “major”
loss or damage refers to the following: 
(i) loss or damage to the Project or any portion thereof such that the
cost of repairing or restoring the premises in question to a condition
substantially identical to that of the premises in question prior to the event
of damage would be, in the certified opinion of a mutually acceptable
architect, equal to or greater than Five Hundred Thousand Dollars ($500,000.00),
and (ii) any loss due to a condemnation that adversely impacts the use or
operation of the Project or that involves more than a de minimis amount of the
Land.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF TRANSFERORS

Transferors hereby
represent and warrant on their own behalf and on behalf of Project Owner, to BH
Investor.

2.1          Existence;
Good Standing.

(a)           Each Transferor is duly organized, validly existing and in
good standing under the laws of its state of organization, and has the
requisite power and authority to carry on its business as conducted since the
date of its formation.

(b)           Project Owner is a Texas limited
partnership duly organized, validly existing and in good standing under the
laws of its state of organization, and has the requisite power and authority to
carry on its business as conducted since the date of its formation.  The Project Owner is duly qualified to do
business in Texas and is in good standing in the State of Texas, the only
jurisdiction in which it is required to be so qualified or otherwise conducts
operations.

2.2          Title
to Project Owner Membership Interest.

Transferors (i) are the sole record and beneficial
owners and (ii) have good and valid title to the Project Owner Membership
Interest, free and clear of any and all Liens, except in connection with the
Mezzanine Loan and the Construction Loan.

2.3          Power
and Authority.

(a)           Transferors have the full legal right, power and authority
to enter into this Agreement and all agreements and other documents executed
and delivered by it pursuant to this Agreement and to cause Project Owner to
and the other transactions contemplated hereby or thereby.

(b)           Transferors have duly and properly taken all action
required by law and by its Certificate of Formation and Operating Agreement or
comparable organizational documents (“Organizational
Documents”) to authorize the execution, delivery and performance of
this 

 12
 

Agreement and any related documents and the
consummation of the Membership Interest Purchase and the other transactions
contemplated hereby and thereby.

(c)           This Agreement and all agreements and documents executed
by Transferors and delivered to Transferee in connection herewith have been
duly executed and delivered by Transferors and constitute the legal, valid and
binding obligations of Transferors, enforceable against Transferors in
accordance with their respective terms.

2.4          No
Violation.

The execution and delivery of this Agreement, and the
agreements executed and delivered by Transferors in connection herewith, do
not, and the consummation of the actions contemplated hereby or thereby will
not, (a) violate, contravene or conflict with any provision of the
Organizational Documents of the Project Owner or Transferors, (b) violate,
contravene or conflict with any provisions of, result in the acceleration of
any obligation under, constitute a default or breach under, or give any right
of termination or cancellation under, any mortgage, Lien, lease, agreement,
note, instrument, debenture, license, order, arbitration award, judgment or decree
to which any of the Project Owner or Transferors are a party or by which any of
the Project Owner or Transferors are bound, (c) violate, contravene or conflict
with any law, rule or regulation applicable to any of the Project Owner or
Transferors, or (d) result in any Lien, other than pursuant to the Construction
Loan or Mezzanine Loan, on any of the Project Owner’s or Transferors’ assets.

2.5          Consents.

No consent, authorization, permit, license or filing
with any governmental authority, lender, lessor, landlord, manufacturer,
supplier or other person or entity, except for Senior Lender and the lessor
under the Ground Lease, is required to authorize, or is required in connection
with, the execution and delivery by Transferors of this Agreement and the agreements
and documents contemplated hereunder to be entered into by the Transferors or
the transfer of the Contributed Property.

2.6          Legal
Proceedings.

None of the Project Owner, nor any of its assets are
subject to any pending, nor do Transferors or the Project Owner have knowledge
of any threatened, action, suit, litigation, governmental investigation,
condemnation or other proceeding against or relating to or affecting the
Project Owner or the Transferors or any of their respective assets or the transactions
contemplated by this Agreement (excluding immaterial tort litigation which is
fully insured by Project Owner’s liability insurance and routine litigation
regarding enforcement of Tenant Leases). 
To Transferor or Project Owner’s knowledge, no basis for any such
action, suit, litigation, governmental investigation, condemnation or other
proceeding exists.

2.7          Brokers
and Finders Fees.

No person is entitled to any fee from either the
Project Owner or Transferors as a broker or finder in connection with the
transfer of the Contributed Property.

 13

 

2.8          Licenses
and Permits.

The Project Owner possesses all discretionary
approvals from Governmental Authorities to permit development of the Project
and will, as part of the development of the Project, obtain all additional
Governmental Authorizations necessary or appropriate for the development and
construction of the Project.  The Project
Owner is not in default, nor has it received any written notice of, nor is
there, to the knowledge of Transferors or the Project Owner, any threat to
revoke or challenge any such Governmental Authorizations.  None of the Project Owner or the Transferors
with respect to the Project Owner or the Project has been notified by any
person or authority that such person or authority has rescinded, restricted, or
not renewed, or intends to rescind, restrict or not renew, any Governmental
Authorizations or that penalties or other disciplinary action has been, is
threatened to, or will be assessed or taken against the Project Owner or the
Project.

2.9          Property.

(a)           Parties in Possession.  There are no parties in possession of any
portion of the Project except Project Owner and tenants under the Tenant Leases
or the Retail Leases.

(b)           Service Contracts.  The Service Contracts delivered to BH
Investor are true, correct and complete copies of all material contracts and
agreements relating to the ownership, operation or leasing of the Project
entered into by Project Owner (except Tenant Leases, the documents evidencing
the Construction Loan, the documents or agreements described or listed on the
Permitted Exceptions).

(c)           Rollback Taxes.  No part of the Land has been assessed for
real estate taxes during the preceding five (5) years (i) by using “agricultural
use” value within the meaning of TEX. Const.art. XIII, 1-d to value the Land or
any part thereof, or (ii) by treating the Land or any part thereof as “open
space land devoted to timber production on the basis of its productive capacity”
or “open space land devoted to farm or ranch purposes on the basis of its
productive capacity” within the meaning of TEX. Const. art. XIII, 1-d-1, or
(iii) by treating the Land or any part thereof as “land designated for
agricultural use” within the meaning of TEX. TAX CODE ANN. 23.41-23.46 (Vernon
1982, as amended); or, (iv) by treating the Land or any part thereof as “qualified
open space land” within the meaning of TEX. TAX CODE ANN. 23.51-23.57 (Vernon
1982, as amended); or, (v) by treating the Land or any portion thereof as “Qualified
Timber Land” within the meaning of TEX. TAX CODE ANN. 23.71-23.79 (Vernon 1982,
as amended).

(d)           Utilities.  All utilities required for the construction
and operation Project, including, without limitation, storm sewer, sanitary
sewer, natural gas, water, electricity and telephone are available in adequate
capacity to the Land.

(e)           Equipment.  All machinery, equipment, computer hardware
and software, vehicles or other Personal Property owned by the Project Owner
for the conduct of the businesses of the Project Owner (i) have been maintained
by Transferors or the Project Owner in accordance with customary maintenance
practices and (ii) are in good condition and repair.

 14
 

(f)            Contracts.  On the Closing Date, the only written
agreements, contracts, notes, bonds, debentures, indentures, mortgages,
promises and understandings to which the Project Owner is a party or assignee
(the “Contracts”) will be only of
the type that are Permitted Obligations. 
The Project Owner is not in breach or default of any material provision
of any Contract such that the breach or default would have a material adverse
impact on the development, use and/or economic benefit of the Project, nor has
Transferors or the Project Owner received any notice or other communication
alleging such a breach or default.  None
of the Transferors or the Project Owner has received any notice of termination
or other indication that any party to any Contract will terminate, fail to
renew, fail to recognize the validity of, any material Contract.  All rights of the Project Owner under the
Contracts will be enforceable by the Transferee after the Closing without the
consent or agreement of any other party.

(g)           Structure.  The foundation, walls and all structural
components of the Improvements are structurally sound and Seller has no
knowledge of any material defects or damage to any of the foregoing.

(h)           Pending Action.  There is no pending condemnation,
expropriation, eminent domain, litigation, administrative action or other legal
proceeding affecting all or any portion of the Property, and Transferors have
not received any written or oral notice of any of the same and has no knowledge
that any such proceeding is contemplated.

(i)            Leases.  The Leases are in full force and effect and
no default on the part of Project Owner exists. All repairs, alterations, and
other work required to be performed by Project Owner under the Leases have been
fully performed and paid for in full by Project Owner.

(j)            Obligations.  All obligations of Project Owner arising from
the ownership and operation of the Project and business operated thereon, including
but not limited to salaries, taxes, charges, operating expenses and the like,
have been paid as they became due or will be paid at or prior to Closing.  Except for obligations for which provisions
are herein made for proration or other adjustment at Closing, there will be no
obligations of Project Owner with respect to the Project outstanding as of the
Closing Date.

(k)           No Rights.  No person or entity has the right to acquire
the Project except that the lessor under the Ground Lease has the right to the
surrender of the Project by the lessee under the Ground Lease upon the
termination of the Ground Lease.

2.10        Conduct
of Business.

(a)           Changes.  Since their date of formation neither of the
Project Owner nor Transferors have (i) authorized or issued any equity securities; granted any
option or right to purchase any equity securities; issued any security
convertible into equity securities; granted any registration rights; or
purchased, redeemed, retired, or otherwise acquired any equity securities; (ii)
amended its organizational documents other than to change its name;
(iii) sold or transferred any assets except in the ordinary course of
business consistent with the construction and operation of the Project;
(iv) mortgaged or pledged any assets or been 

 15
 

subjected to any Lien or
other encumbrance other than pursuant to the Construction Loan, the Mezzanine
Loan and the Permitted Exceptions; (v) incurred or become subject to any
debt, liability or lease obligation, other than pursuant to the Construction Loan
or the Mezzanine Loan, or, with respect to the Project Owner, the Permitted
Obligations; (vi) incurred obligations or entered into contracts other
than the Construction Loan, the Mezzanine Loan or the Permitted Obligations or
construction contracts for the Project; (vii) suffered any damage,
destruction or loss of any assets that would adversely impact the operation or
use of the Project; (viii) waived or relinquished any material rights or
canceled or compromised any material debt or claim owing to it, in either case,
without adequate consideration or not in the ordinary course of business
consistent with the construction and operation of the Project; or
(ix) agreed to do any of the foregoing.

(b)           No Adverse Change.  Since the date of formation of the Project
Owner, the Project Owner has conducted its business only in the ordinary course
for the acquisition of the Land and the construction and operation of the
Project consistent with prevailing industry practices.

2.11        Books
and Records.

The Project Owner’s books and records, including
without limitation all financial records, business records, minute books and
equity transfer records, (a) are complete and correct in all material
respects and all transactions to which the Project Owner is or has been a party
are accurately reflected therein, (b) have been maintained in accordance with
customary and sound business practices in the Project Owner’s industry, and
(c) accurately reflect the assets, liabilities, financial position and
results of operations of the Project Owner in all material respects.  All computer-generated reports and
other computer data included in such books and records are complete and correct
in all material respects and were prepared in accordance with sound business
practices based upon authentic data.

2.12        Compliance
with Laws.

None of the Project Owner or the Transferors with
respect to the Project Owner or the Project has violated any judgment, writ,
decree, order, law, statute, rule or regulation to which it is subject or a
party, or by which the businesses or assets of the Project Owner are bound or
affected (collectively, “Legal Requirements”), other than any Legal Requirement the
violation of which would not have a materially adverse effect on the Project
Owner.  None of the Project Owner or the
Transferors with respect to the Project Owner or the Project has received
notice of any actual, alleged or potential violation of a Legal Requirement by
the Project Owner or the Transferors with respect to the Project Owner or the
Project other than violations that have been corrected and for which no legal
action is pending or threatened.  The
Project has been constructed in a good and workmanlike manner and is in
compliance with all architectural barrier requirements including but not limited
to the Americans with Disabilities Act, the Fair Housing Amendment Act, the
HUD/FHAA Guidelines and the HUD Design Manual. 
None of the Project Owner or the Transferors with respect to the Project
Owner or the Project, nor any of their former or current officers, directors,
employees (which Project Owner is not permitted to have pursuant to the terms
of this Agreement), agents or representatives (acting on behalf of the Project
or the Project Owner) has made or agreed to make, directly or indirectly, any
(i) bribes or kickbacks, illegal political contributions, payments from
funds not recorded on books 

 16
 

and records, or funds to governmental officials (or
any such official’s family members or affiliates) for the purpose of affecting
their action or the action of the government they represent, to obtain
favorable treatment in securing business or licenses or to obtain special
concessions, (ii) illegal payments from corporate funds to obtain or
retain business or (iii) payments from corporate funds to governmental
officials for the purpose of affecting their action or the action of the
government they represent, to obtain favorable treatment in securing business
or licenses or to obtain special concessions.

2.13        Environmental
Matters.

(a)           None of the Project Owner, nor the
Transferors with respect to the Project or the Project Owner, has received
notice of any obligation, liability, order, settlement, judgment, injunction or
decree relating to or arising under Environmental Laws which has not been
resolved to the satisfaction of the appropriate Governmental Authorities.  .

(b)           To Transferor’s knowledge, the
Project Owner’s use, handling, manufacture, treatment, processing, storage,
generation, Release, discharge and disposal of Hazardous Materials in
connection with past operations materially complied with applicable
Environmental Laws then in effect.

(c)           For purposes of this Agreement:

(1)           “Environmental Laws” collectively shall mean all present
and future laws (whether common law, statute, rule, order, regulation or
otherwise), permits, and other requirements or guidelines of governmental
authorities applicable to the Project and relating to the environment and
environmental conditions or to any Hazardous Materials or Hazardous Materials
Activity (including the Comprehensive Environmental Response Compensation, and
Liability Act of 1980, 42 U.S.C. §§ 9601 et seq., the Federal
Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. §§ 6901 et
seq., the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et
seq., the Clean Air Act, 33 U.S.C. §§ 7401 et seq., the Clean Air Act,
42 U.S.C. §§ 7401 et seq., the Toxic Substances Control Act, 15
U.S.C. §§ 2601-2629, the Safe Drinking Water Act, 42 U.S.C.
§§ 300f-300j, the Emergency Planning and Community Right-To-Know
Act, 42 U.S.C. §§ 1101 et seq., the Clean Water Act, 33 U.S.C. §
1251 et seq. and any so-called “Super Fund” or “Super Lien” law,
environmental laws administered by the Environmental Protection Agency, or any
similar state and local laws and regulations, as well as all amendments thereto
and all regulations, orders, decisions, and decrees now or hereafter
promulgated thereunder).

(2)           “Environmental Liabilities” means, all liabilities, obligations,
responsibilities, remedial actions, losses, damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand
by any other person arising under any Environmental Law.

 17
 

(3)           “Release” means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing
or migrating into or through the environment or any natural or man-made
structure.

2.14        No Bankruptcy.

No bankruptcy, insolvency, rearrangement or similar
action involving the Project Owner or Transferors, whether voluntary or
involuntary, is pending or threatened, and neither the Project Owner nor
Transferors have ever: (i) filed a voluntary petition in bankruptcy; (ii) been
adjudicated a bankrupt or insolvent or filed a petition or action seeking any
reorganization, arrangement, recapitalization, readjustment, liquidation,
dissolution or similar relief under any federal bankruptcy act or any other
laws; (iii) sought or acquiesced in the appointment of any trustee, receiver or
liquidator of all or any substantial part of its properties, the Project or any
portion thereof; or (iv) made an assignment for the benefit of creditors or
admitted in writing its or his inability to pay its or his debts generally as
the same become due.

2.15        Terrorism.

To Transferors knowledge, none of Transferors or
Project Owner, nor any of their respective partners, members, shareholders or
other equity owners, and none of their respective employees, officers,
directors, representatives or agents, (i) is a person or entity with whom U.S.
persons or entities are restricted from doing business under regulations of the
Office of Foreign Asset Control (“OFAC”)
of the Department of the Treasury (including those named on OFAC’s Specially
Designated and Blocked Persons List) or under any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or
Support Terrorism), or other governmental action relating to terrorist
activities or money laundering and (ii) is engaged in any dealings or
transactions or be otherwise associated with such persons or entities.

2.16        Full
Disclosure.

The representations and warranties of the Transferors
contained in this Agreement and the instruments, documents, certificates and
schedules delivered herewith contain no untrue statement of a material fact
and, when taken together as a whole, do not omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF BH INVESTOR

BH Investor hereby represents and warrants to
Transferors as follows:

3.1          Existence.

BH Investor is a Delaware limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has the requisite power and authority to own its assets
and to carry on its business as it is now being conducted.

 18
 

3.2          Power
and Authority.

(a)           BH Investor has the full legal right,
power and authority to enter into this Agreement and all agreements and other
documents executed and delivered by it pursuant to this Agreement and to
consummate the joint venture and other transactions contemplated hereby or
thereby;

(b)           BH Investor has duly and properly
taken all action required by law and its Organizational Documents to authorize
the execution, delivery and performance of this Agreement and any related
documents and the consummation of the joint venture; and

(c)           This Agreement and all agreements and
documents executed by BH Investor and delivered to Transferors in connection
herewith have been duly executed and delivered by BH Investor and constitute
the legal, valid and binding obligations of BH Investor enforceable against BH
Investor in accordance with their respective terms.

3.3          No
Violation.

The execution and delivery of this Agreement and the
agreements executed and delivered by BH Investor pursuant to this Agreement, do
not, and the consummation of the actions contemplated hereby or thereby will
not, (i) violate, contravene or conflict with any provision of the
Organizational Documents of BH Investor, (ii) violate, contravene or conflict
with any provisions of, result in the acceleration of any obligation under,
constitute a default or breach under, or give any right of termination or
cancellation under, any material mortgage, Lien, lease, agreement, rent,
contract, note, instrument, debenture, license, order, arbitration award,
judgment or decree to which BH Investor is a party or by which BH Investor is
bound, or (iii) violate, contravene or conflict with any law, rule or
regulation to which BH Investor is subject.

3.4          Brokers
and Finders Fees.

No person is entitled to any fee from BH Investor as a
broker or finder as a result of creation of the joint venture.

3.5          No Bankruptcy.

No bankruptcy, insolvency, rearrangement or similar
action involving BH Investor, whether voluntary or involuntary, is pending or
threatened, and BH Investor has never: (i) filed a voluntary petition in
bankruptcy; (ii) been adjudicated a bankrupt or insolvent or filed a petition or
action seeking any reorganization, arrangement, recapitalization, readjustment,
liquidation, dissolution or similar relief under any federal bankruptcy act or
any other laws; (iii) sought or acquiesced in the appointment of any trustee,
receiver or liquidator of all or any substantial part of its properties; or
(iv) made an assignment for the benefit of creditors or admitted in writing its
or his inability to pay its or his debts generally as the same become due.

3.6          Terrorism.

To BH Investor’s knowledge, neither BH Investor, or
any of its respective partners, members, shareholders or other equity owners,
and none of their respective employees, officers, directors, 

 19
 

representatives or agents, (i) is a person or entity
with whom U.S. persons or entities are restricted from doing business under
regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including
those named on OFAC’s Specially Designated and Blocked Persons List) or under
any statute, executive order (including the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action
relating to terrorist activities or money laundering and (ii) is engaged in any
dealings or transactions or be otherwise associated with such persons or
entities.

3.7          Full
Disclosure

The representations and warranties of the Transferors
contained in this Agreement and the instruments, documents, certificates and
schedules delivered herewith contain no untrue statement of a material fact
and, when taken together as a whole, do not omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.

ARTICLE IV.

CLOSING AND POST-CLOSING AGREEMENTS

4.1          Further
Action.

From and after the Closing, each party hereto shall
perform such further acts and execute such documents, and otherwise cooperate
with the other parties hereto, as may be reasonably required to effectuate the
creation of the joint venture and the other transactions contemplated hereby.

4.2          Prorations
and Closing Costs.

The following provisions shall govern the
apportionment of income and expenses with respect to the Project between
Transferors and Transferee:

(a)           Real estate taxes and assessments and
personal property taxes shall be prorated at Closing.

(b)           Expenses under the Operating
Agreements shall be prorated between Transferors and Transferee at Closing.

(c)           Transferors shall arrange for final
meter readings on all utilities at the Project to be taken on the day preceding
Closing.  Transferors shall be
responsible for the payment of utilities used through the day preceding the
Closing Date and Transferee shall be responsible for the payment of utilities
used on or after the Closing Date.  With
respect to any utility for which there is no meter, the expenses for such
utility shall be prorated between Transferors and Transferee at Closing based
upon the most current bill for such utility. 
Any deposits for utilities shall inure to the benefit of and be deemed
assigned to Transferee.  Transferors and
BH Investor shall cooperate to cause the transfer of utility company accounts
from Transferors to Transferee.

(d)           Basic rents (“Basic Rent”)
and additional rent relating to escalation and pass-throughs of operating
and other similar expenses (“Additional Rent”)
shall be prorated 

 20
 

between Transferors and
Transferee based upon Basic Rent and Additional Rent actually collected.  All prepaid Basic Rent, Additional Rent and
other income from the Property shall be credited to Transferee at Closing, to
the extent same is attributable to a period of time after Closing.  With respect to Additional Rent which is paid
based upon an estimate, with an end-of-year accounting and adjustment, after
Closing Transferors and Transferee shall make any adjustments to the proration
of such items made at Closing at such time as the final tax and operating
expenses numbers become available and such end-of-year accountings are
completed.  Any Additional Rent which may
be due Transferors as a result of such re-prorations shall be paid by
Transferee to Transferor if and when such Additional Rent is collected by
Transferee.

(e)           Basic Rent and Additional Rent which
is delinquent and remains uncollected at Closing shall not be prorated between
Transferors and Transferee at Closing. 
At Closing, Transferors shall furnish to Transferees a schedule of
delinquent Basic Rent and Additional Rent due under the Leases.  Transferee shall pay Transferors’ prorata share
of any delinquent Basic Rent and Additional Rent if and when collected by
Transferee; provided, however, that Transferee shall have no obligation to
collect or pursue the collection of same. 
It is understood and agreed that any Basic Rent or Additional Rent
collected by Transferee after Closing shall be applied first to currently due
Basic Rent and Additional Rent. 
Transferee shall hold all landlord’s liens in the entireties thereof to
enforce the payment of rentals to which Transferee is entitled, and Transferors
shall be deemed to have transferred to Transferee all of such landlord’s liens.

(f)            All security
deposits and other deposits payable to tenants under the Leases shall be
credited to Transferee at Closing.

(g)           The prorations described in this Section
4.2 shall be made as of 12:01 a.m. on the Closing Date, as if Transferee
were vested with title to the Property during the entire day upon which Closing
occurs.  All prorations described in this
Section 4.2 shall be effected by increasing or decreasing, as the case
may be, the amount of cash to be paid by Transferee to Transferor at
Closing.  Transferors and Transferee
agree to adjust between themselves after Closing any errors or omissions in the
prorations made at Closing; provided, however, that such prorations shall be
deemed final and not subject to further post Closing adjustments if no such
adjustments have been requested within one (1) year after the Closing Date.

(h)           Transferors
shall pay (a) the fees of any counsel representing it in connection with
this transaction; (b) the basic premium for the Title Policy; (c) the cost of
the Survey; and (d) one-half (1/2) of any escrow fee which may be
charged by the Title Company.  BH
Investor shall pay (x) the cost of any endorsement to the Title Policy desired
by BH Investor (y) the fees of any counsel representing BH Investor in
connection with this transaction; and (z) one-half (1/2) of any escrow
fees charged by the Title Company.  All
other costs and expenses incident to this transaction and the closing thereof
shall be paid by the party incurring same

4.3          Audit.

BH Investor has advised Transferors that Transferee
must cause to be prepared up to three (3) years of audited financial statements
beginning in 2007 in respect of the Project in compliance with the 

 21
 

policies of Transferee and certain laws and
regulations, including, without limitation, Securities and Exchange Commission
Regulation S-X. Transferors agree to use reasonable efforts to cooperate with
Transferee’s auditors in the preparation of such audited financial statements
(it being understood and agreed that the foregoing covenant shall survive the
Closing). Without limiting the generality of the preceding sentence
(i) Transferors shall, during normal business hours, allow Transferee’s
auditors reasonable access to such books and records maintained by Transferors
(and Transferors’ manager of the Project) in respect of the Project as
necessary to prepare such audited financial statements; (ii) Transferors shall
use reasonable efforts to provide to Transferee such financial information and
supporting documentation in the possession of Transferors or as are necessary
for Transferee’s auditors to prepare audited financial statements; (iii) if
Transferee or its auditors require any information that is in the possession of
the party from which Transferors purchased the Project, Transferors shall
contact such prior owner of the Project and use commercially reasonable efforts
to obtain from such party the information requested by Transferee; (iv) Transferors
will make available for interview by Transferee and Transferee’s auditors the
agents or representatives of Transferors responsible for the day-to-day
operation of the Project and the keeping of the books and records in respect of
the operation of the Project; and (v) if Transferors have audited financial
statements with respect to the Project, shall promptly provide Transferee’s
auditors with a copy of such audited financial statements. If after the Closing
Date Transferors obtain an audited financial statement in respect of the
Project for a fiscal period prior to the Closing Date that was not completed as
of the Closing Date, then Transferors shall promptly provide Transferee with a
copy of such audited financial statement, and the foregoing covenant shall
survive Closing.  It shall be a condition
precedent to the obligations of BH Investor under this Agreement that
Transferors shall have materially complied with the covenants set forth in this
Section 4.3 as of the Closing Date. 
BH Investor shall be liable for all reasonable costs incurred in
connection with this Section 4.3.

ARTICLE V.

REMEDIES

5.1          BH
Investor’s Remedies.

(a)           Survival of Representations and Warranties.  All representations and warranties
of Transferors (i) under Article II of this Agreement and (ii) set forth
in the Transferors Closing Certificate shall survive the Closing for nine (9)
months following the Closing. 
Notwithstanding the preceding sentence, any representation or warranty
in respect of which indemnity may be sought under this Section 5.1 shall
survive the time at which it would otherwise terminate pursuant to the
foregoing provisions of this Section 5.1, if notice of the inaccuracy or
breach thereof giving rise to such right to indemnity shall have been given to
the Transferors by BH Investor
prior to such time.  Any liability as a
result of a breach of a representation or warranty shall not exceed One Million
Dollars ($1,000,000.00).  The
consummation of the Closing shall not affect the other covenants and
obligations of the parties hereto.

(b)           Indemnification of BH Investor.  Transferors shall
indemnify, defend and hold harmless BH
Investor from and against and in respect of, and promptly reimburse such
entities for the amount of, any and all losses, costs, fines, liabilities,
deficiencies, obligations, claims, penalties, damages, settlements, awards and
expenses (including without limitation reasonable expenses of investigation and
defense, and reasonable legal fees and expenses) 

 22
 

(collectively “Losses”)
resulting from, in connection with or arising out of, directly or indirectly:

(1)           subject to Section 5.1(a),
any breach of any representation or warranty of Transferors in this Agreement,
including any certificate or document delivered by Transferors in connection
with the transactions contemplated hereby;

(2)           any breach of any covenant or
obligation made by Transferors in this Agreement, including any certificate or
document delivered by Transferors in connection with the transactions
contemplated hereby;

(3)           subject to Section 5.3,
if the Closing occurs, (i) any activity or event involving the Project and
occurring before Closing, other than as a consequence of acts, or when under a
duty to act, omissions of BH
Investor or any of its affiliates or any of their respective
representatives, consultants or contractors, (ii) failure of the Project Owner
to perform any obligation under any Contract prior to Closing, (iii)
misapplication of deposits prior to Closing, or (iv) any liability or
obligation of the Project Owner existing as of Closing other than Permitted
Obligations;

(4)           any liability or loss of any
type arising out of work performed on the Project by Project Owner or by
Project Owner’s agents and contractors including all construction and developer
related liability; and

(5)           any action, suit or proceeding
relating to any of the foregoing.

The obligations
of Transferors under Section 5.1(b) shall survive the Closing for nine
(9) months following the Closing. 
Notwithstanding the preceding sentence, any indemnity which may be
sought under this Section 5.1(b) shall survive the time at which it
would otherwise terminate pursuant to the foregoing provisions of this Section
5.1(b), if notice of the inaccuracy or breach thereof giving rise to such
right to indemnity shall have been given to the Transferors by BH Investor prior to such time.  Any liability as a result of an obligation to
indemnify pursuant to Section 5.1(b)(2),(3), (4) or (5), respectively,
shall not exceed One Million Dollars ($1,000,000.00).

(c)           Specific Performance.  It
is understood that Transferors’ breach of this Agreement may materially and
irreparably harm BH Investor,
and that money damages may accordingly not be an adequate remedy for any breach
of this Agreement, and that BH Investor,
in its sole discretion and in addition to any other remedies it may have at law
or in equity may apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance or other
injunctive relief in order to enforce or prevent any violations of this
Agreement.

5.2          Transferors’
Remedies.

Transferors’ sole and exclusive remedy for any BH
Investor breach of, misrepresentation under, or nonperformance of this
Agreement, or any other act or omission of BH Investor or its affiliates
related to this Agreement or the transactions contemplated hereby including,
without limitation, the 

 23
 

failure of BH Investor to consummate the transactions
contemplated hereby, shall be to terminate this Agreement, and Transferors
shall have no other remedy at law or equity pursuant to this Agreement or
otherwise against any person or entity, any such other remedy being expressly
waived. BH Investor’s breach of, misrepresentation under, or nonperformance of
this Agreement, or any other act or omission of Transferee or its affiliates
related to this Agreement or the transactions contemplated hereby, shall not
affect the rights and obligations under the Mezzanine Loan.  Notwithstanding the foregoing, in the event
that this Agreement has not been terminated pursuant to Section 1.9
(other than termination pursuant to Section 1.9(a)(3) or pursuant to Section
1.9(a)(4) only in the event that the failure to close is not due to a
default by Transferors) and Transferors are not in default and have materially
complied with all obligations under this Agreement, in the event that BH
Investor does not contribute the consideration set forth in Section 1.2(b)
hereto, Transferors shall receive a credit in connection with the repayment of
the Mezzanine Loan in the amount of One Million Five Hundred Thousand Dollars
($1,500,000.00).

5.3          Arbitration.

Except with respect to any action by BH Investor
for specific performance of this Agreement or any other action for injunctive
relief, which actions shall be commenced and resolved in a court of competent
jurisdiction, and except as otherwise expressly provided herein, any
controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled by binding arbitration in Dallas, Texas,
by a single arbitrator reasonably satisfactory to BH Investor and
Transferors (provided, however, that if BH Investor and Transferors are unable
to agree upon a mutually satisfactory arbitrator, then the arbitrator shall be
selected in accordance with the applicable rules of the American Arbitration
Association), in accordance with the rules of the American Arbitration
Association governing large, complex commercial disputes then in effect.  BH Investor and Transferors will share
equally the total expense charged by the American Arbitration Association and
the arbitrator related to such arbitration as those expenses become due; but
each party shall bear its own legal, accounting and all of its other fees and
expenses related to the arbitration. 
Such arbitration and determination shall be final and binding on BH
Investor and Transferors, judgment may be entered upon such determination and
award in any court having jurisdiction thereof, and BH Investor and Transferors
agree that no appeals shall be taken therefrom except as set forth in 9 U.S.C.
§10.  Notice of a demand for arbitration
of any dispute subject to arbitration by one party shall be made in writing and
simultaneously served on the other parties and filed with the American
Arbitration Association.  The parties
agree that after any such notice has been filed, they shall, before the hearing
thereof, make discovery and disclosure of all matters relevant to such dispute,
to the extent and in the manner provided by the applicable rules of the
American Arbitration Association.  The
arbitrator’s determination with respect to discovery shall be final and
conclusive.  Discovery and disclosure
shall be completed no later than ninety (90) days after filing of such notice
of arbitration unless extended by the arbitrator upon a showing of good cause
by a party to the arbitration.  The
arbitrator may consider any evidence which is relevant to the subject matter of
such dispute even if such evidence might also be relevant to an issue or issues
not subject to arbitration hereunder.

 24
 

ARTICLE VI.

GENERAL

6.1          Entirety
and Modification.

This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes any and all prior agreements and understandings, whether oral or
written, between the parties hereto relating to such subject matter.  No modification, alteration, amendment,
waiver or supplement to this Agreement shall be valid or effective unless the
same is in writing and signed by all parties hereto.

6.2          Assignment;
Successors and Assigns.

Except as specifically provided otherwise in this
Agreement, neither this Agreement nor any interest herein shall be assignable
(voluntarily, involuntarily, by judicial process, operation of law or
otherwise), in whole or in part, by any party without the prior written consent
of the other parties hereto, and any such attempted assignment shall be null
and void.  Notwithstanding the foregoing,
BH Investor may, without the consent of any other party assign its rights and
obligations under this Agreement to an Affiliate of BH Investor; provided,
however, no such assignment shall affect the rights and obligations of BH
Investor to Transferors under this Agreement. 
This Agreement shall be binding upon and inure to the benefit of the respective
parties hereto and their successors and permitted assigns.

6.3          Expenses.

Except as otherwise provided herein BH Investor and
Transferors shall each pay their own respective fees and expenses incurred in
connection with the negotiation, execution, delivery and performance of this
Agreement.

6.4          Notices.

Any and all notices and
other communications hereunder shall be in writing addressed to the parties at
the addresses specified below or such other addresses as a party may direct by
notice given in accordance with this Section, and shall be delivered in one of
the following manners (a) by personal delivery, in which case notice shall be
deemed to have been duly given when delivered; or (b) by reputable delivery
service (including, by way of example and not limitation, Federal Express, UPS
and DHL) which makes a record of the date and time of delivery, in which case
notice shall be deemed to have been duly given on the date indicated on the
delivery service’s record of delivery:

If to Transferors, to:

BREOF Holdings, LLC

181 Bay Street, Suite 300

Toronto, Ontario M5J 2T3

Canada
Attn: David Arthur

 25
 

with a
copy to:

Phoenix Property Company

2626 Howell Street, Suite 800

Dallas, Texas 75204

Attn: Jason P. Runnels

With an additional copy to:

Stutzman, Bromberg, Esserman & Plifka

2323 Bryan Street, Suite 2200

Dallas, Texas 75201

Attn: John J. Reoch, Jr.

If to BH Investor, to:

BEHRINGER HARVARD TCU, LLC

c/o Behringer Harvard Funds

15601 Dallas Parkway, Suite 600

Addison, Texas 72001

Attn: Mark T. Alfieri

with a copy to:

Behringer Harvard Funds

15601 Dallas Parkway, Suite 600

Addison, Texas 72001

Attn: Chief Legal Officer

with an
additional copy to:

Powell & Coleman, L.L.P.

8080 North Central Expressway, Suite 1380

Dallas, Texas 75026

Attn: Carol D. Satterfield

6.5          Severability;
Reformation.

In case any provision of this Agreement shall be
invalid, illegal or unenforceable, such provision shall be reformed to best
effectuate the intent of the parties and permit enforcement thereof, and the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. 
If such provision is not capable of reformation, it shall be severed
from this Agreement and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

 26
 

6.6          No
Waiver.

A party’s failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement.  The rights granted all parties herein are
cumulative and shall not constitute a waiver of a party’s right to assert all
other legal remedies available to it under the circumstances.

6.7          Headings.

The headings of this Agreement are inserted for
convenience and identification only, and are in no way intended to describe,
interpret, define or limit the scope, extent or intent hereof.

6.8          Counterparts;
Facsimiles.

This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. 
This Agreement and any other document or agreement executed in
connection herewith (other than any document for which an originally-executed
signature page is required by law) may be executed by delivery of a facsimile
copy of an executed signature page with the same force and effect as the
delivery of an originally-executed signature page.

6.9          Governing
Law.

This Agreement shall be governed in all respects by,
construed, interpreted and applied in accordance with the internal laws of the
State of Texas, without regard to principles of conflicts of laws that would
refer the matter to the laws of another jurisdiction.

6.10        Joint
and Several Liability.

If more than one person has executed this agreement as
a “Transferor”, the representations, covenant, warranties and obligations of
all such persons hereunder shall be joint and several.

[Signatures Follow on
Next Page]

 27

 

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

	
  

  	
  TRANSFERORS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BREOF TCU GP LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Ganeless

  	
   

  
	
   

  	
  Name:

  	
  Steven Ganeless

  	
   

  
	
   

  	
  Title:

  	
  Authorized Signing Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BREOF TCU LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Ganeless

  	
   

  
	
   

  	
  Name:

  	
  Steven Ganeless

  	
   

  
	
   

  	
  Title:

  	
  Authorized Signing Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PHOENIX BERRY STREET LIMITED

  PARTNERSHIP,

  	
   

  
	
   

  	
  a Texas limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Phoenix G.P. XVIII, Inc.,

  
	
   

  	
   

  	
  a Texas corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jason P. Runnels

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jason P. Runnels

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PHOENIX G.P. XVIII, INC.,

  	
   

  
	
   

  	
  a Texas corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason P. Runnels

  	
   

  
	
   

  	
  Name:

  	
  Jason P. Runnels

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
														

 

 

 

	
  

  	
  BH INVESTOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD TCU, LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Secretary

  
				

 

 

EXHIBIT A

DEFINITIONS

For purposes of the
Agreement to which this is an exhibit, the terms underlined in the paragraphs
of this exhibit shall have the meaning set forth next to the underlined term.

Affiliate.  As to any person or entity, any corporation, limited
liability company or other business organization or person who or which
directly or indirectly through one or more intermediaries (a) is owned or
controlled by such person or entity, (b) owns or controls such person or entity
or (c) is under substantially common control with such person or entity.

Agreement.  This Contribution Agreement, its Exhibits and
any written amendments to this Contribution Agreement (including an amendment
changing Exhibits) that may be executed from time to time by Transferors and BH
Investor.

Architect.  HKS, Inc.

BH Contribution.  Defined in Section 1.1(e).

BH Investor.  Defined in the preamble of this Agreement.

BH Investor Closing
Certificate.  Defined
in Section 1.4(b).

Business Day.  Monday through Friday of each calendar week,
exclusive of federal holidays.

Changes.  Defined in Section 1.8(b).

Closing.  Defined in Section 1.3(a).

Closing Date.  The date of the Closing.

Code.  The Internal Revenue Code of 1986, as
amended.

Completion Date.  The date of satisfaction of the following:
(a) the issuance of the final certificate of occupancy for the Project, (b) the
issuance of a certificate of substantial completion from the Architect for the
Project, (c) receipt of a contractor’s release and the receipt of lien waivers
or similar evidence of payment from the General Contractor and all major
subcontractors (i.e., subcontractors whose contract amount exceeds Two Hundred
Fifty Thousand Dollars ($250,000.00)) for the Project to BH Investor’s
reasonable satisfaction.  If Senior Lender
shall deem the Project substantially complete, then the date of such
determination by the Senior Lender shall be the Completion Date.

Completion Notice.  Defined in Section 1.3(b).

Construction Loan.  Defined in the Recitals.

Contracts.  Defined in Section 2.9(f).

 A-1
 

Contributed Property.  Defined in Section 1.1(b).

Environmental Laws.  Defined in Section 2.13(c).

Environmental Liabilities.  Defined in Section 2.13(c)(2).

Exception Instruments.  Defined in Section 1.7(a).

General Contractor.  C.D. Henderson Construction Services, Ltd.

Governmental Authorities.  Any and all federal, state, county, city,
town, other municipal corporation, governmental or quasi-governmental board,
agency, authority, department or body having jurisdiction over the Land or the
Project.

Governmental
Authorizations.  The
permits, variances, approvals and other actions which under Governmental
Requirements applicable to the Project have been or must be issued, granted, or
taken by Governmental Authorities in connection with the Project.

Governmental
Requirement(s). 
Building, zoning, subdivision, traffic, parking, land use, Environmental
Laws, occupancy, health, accessibility for disabled and other applicable laws,
statutes, codes, ordinances, rules, regulations, requirements, and decrees, of
any Governmental Authorizations pertaining (a) to the Improvements,
Project or Land or (b) to the use and operation of the Project for its
intended purpose.  This term shall
include the conditions or requirements of Governmental Authorizations.

Ground Lease.  Defined in the Recitals.

Hazardous Materials.  At any time, (i) asbestos and any asbestos
containing material, (ii) any substance that is then defined or listed in, or
otherwise classified pursuant to, any Environmental Laws or any applicable laws
or regulations as a “hazardous substance”, “hazardous material”, “hazardous
waste”, “infectious waste”, “toxic substance”, “toxic pollutant” or any other
formulation intended to define, list, or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, or “EP toxicity”, or (iii)
any petroleum and drilling fluids, produced waters, and other wastes associated
with the exploration, development or production of crude oil, natural gas, or
geothermal resources or (iv) petroleum products, polychlorinated biphenyls,
urea formaldehyde, radon gas, radioactive matter and medical waste.

Hazardous Materials
Activity.  Any actual
use, packaging, labeling, treatment, leaching, spill, cleanup, storage,
holding, existence, release, threatened release, emission, discharge,
generation, processing, treatment, abatement, removal, disposition, handling or
transportation of any Hazardous Materials from, under, into or on the Project.

Improvements.  Defined in Section 1.1(a)(2).

Land.  Defined in Section 1.1(a)(1).

Leases.  Defined in Section 1.1(a)(4).

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Legal Requirements.  Defined in Section 2.12.

Liens.  Any claims, liens, mortgages, pledges,
security interests, charges, covenants, options, claims, voting arrangements,
restrictions on transfer, or other restrictions or encumbrances of any nature
whatsoever.

Losses.  Defined in Section 5.1(b).

LP
Agreement.  Defined in Section 1.2(a).

Mezzanine Loan.  That certain Mezzanine Loan between BH
Investor as Lender and Transferors, in the amount of Eight Million One Hundred
Twenty-Five Thousand Dollars ($8,125,000.00).

Money Liens.  Mortgages, statutory liens and any and all
other liens or charges on the Project.

Notifying Party.  Defined in Section 1.9(b).

Operating Agreements.  Defined in Section 1.1(a)(5).

Organizational Documents.  Defined in Section 2.3(b).

Permitted Dispositions:  Any of the following: (i) a Tenant Lease of
an individual dwelling unit for a term of two years or less not containing an
option to purchase; (ii) the sale of obsolete, worn out or damaged property or
fixtures that is contemporaneously replaced by items of equal or better
function and quality, which are free of liens, encumbrances and security
interests other than Permitted Exceptions; (iii) the sale (including through
consumption) of personal property in the ordinary course of business that is
contemporaneously replaced by items of equal or better function and quality;
(iv) the grant of an easement if, before the grant, BH Investor determines
(which determination must be made reasonably) that the easement will not
materially affect the operation or value of the Project; and (v) the creation
of (1) a lien for taxes, assessments or other governmental charges or levies
that are not then due and payable or that are being contested in good faith and
in accordance with applicable statutory procedures or (2) a mechanic’s, lien
against the Project which is bonded off, released of record or otherwise
remedied to BH Investor’s reasonable satisfaction within 30 days of the date of
creation.

Permitted Exceptions.  All of (a) those matters of title and survey
which affect the Project and are described on the existing title policy issued
in connection with the Project, (b) liens for taxes, assessments or other
governmental charges, impositions or levies that are not then due and payable,
(c) liens for taxes, assessments or other governmental impositions or levies
that are being contested in good faith and, at Closing, Transferors have
provided security reasonably acceptable to Transferee necessary to discharge
such liens, (d) mechanics’, materialmen’s, or judgment liens against the
Project which are being contested in good faith and, at Closing, Transferors
have provided security reasonably acceptable to Transferee necessary to
discharge such liens, (e) Leases entered into on the terms allowed by this
Agreement, (f) other matters approved by BH Investor, and (g) matters created
by BH Investor, Transferee or any of their respective affiliates or any of
their respective representatives, consultants or contractors.

 A-3
 

Permitted Obligations.  Liabilities or obligations of the Project
Owner in connection with (a) Service Contracts, (b) Permitted Exceptions, (c)
Tenant Leases, (d) liabilities allocable to Transferee based on proration
credit to Transferee, and (e) Governmental Authorizations; provided, however,
liabilities or obligations arising from any breach of, or default under, the
foregoing prior to the Closing shall not be Permitted Obligations.

Personal Property.  All of Project Owner’s right, title and
interest in and to (a) Plans; (b) Governmental Authorizations issued,
granted or pending with respect to the Project; (c) studies, reports, surveys
and other informational materials relating to the Land or the Project,
including any “as-built” plans and CAD drawings; (d) all equipment, fixtures,
appliances, inventory, computers, computer hardware, computer software, and
other personal property of whatever kind or character owned by Project Owner
and attached to or installed or located on or in the Land or the Improvements,
including, without limitation, furniture, furnishings, drapes and floor
coverings, office equipment and supplies, heating, lighting, refrigeration,
plumbing, ventilating, incinerating, cooking, laundry, communication,
electrical, dishwashing, and air conditioning equipment, disposals, window
screens, storm windows, recreational equipment, pool equipment, patio
furniture, sprinklers, hoses, tools and lawn equipment; and (e) all of Project
Owner’s right, title, and interest in and to (i) all permits, licenses
(excluding software licenses), approvals, utility rights, development rights
and similar rights related to the Project, or any portion thereof, whether
granted by Governmental Entities or private persons, (ii) all telephone numbers
and exchanges serving the Project, or any portion thereof, (iii) all business
and goodwill of Transferors related to the Project, or any portion thereof,
(iv) all site plans, surveys, soil and substrata studies, architectural
drawings, plans and specifications, engineering plans and studies, floor plans,
landscape plans and other plans or studies of any kind that relate to the
Project, or any portion thereof, (v) all leasing materials and brochures,
ledger cards, leasing records, leasing applications, tenant credit reports and
maintenance and operating records related to the operation of Project, or any
portion thereof, (vi) all warranties and guaranties (express or implied) issued
in connection with, or arising out of (A) the purchase and repair of all
furniture, fixtures, equipment, inventory, and other tangible personal property
owned by Project Owner and attached to and located in or used in connection
with the Project; or (B) the construction of any of the improvements located on
the Project, or any portion thereof, and expressly including any warranty or
guaranty from the General Contractor.

Plans.  The plans and specifications described in Exhibit
K.

Project.  A collective reference to (a) the
Improvements and (b) the Land.

Project
Owner.  Defined in the
Recitals.

Project
Owner Membership Interest. 
Defined in the Recitals.

Receiving Party.  Defined in Section 1.9(b).

Release.  Defined in Section 2.13(c).

Residential Tenants.

Restrictions.  Any and all restrictions, easements,
conditions, covenants and other agreements recorded against the Land or
Improvements.

 A-4
 

Retail Tenants.

Senior Lender.  Defined in the Recitals.

Service Contracts.  All service and maintenance contracts which
relate to or affect the Project or the operation thereof.  A list of the existing Service Contracts is
attached as Exhibit L.

Survey.  Defined in Section 1.7(b).

Tenant Leases.  All tenant leases which relate to or affect
the Project or the operation thereof.

Title Company.  Defined in Section 1.7(a).

Title Policy.  The owner title policy issued by the Title
Company with regard to the Project.

Transfer.  Defined in the Recitals.

Transferee.  Defined in the preamble of this Agreement.

Transferor(s).  Defined in the preamble of this Agreement.

Transferors Closing
Certificate.  Defined
in Section 1.4(b).

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