Document:

EX-10.14 MANAGEMENT & LEASING AGREEMENT

 

Exhibit
10.14

Management and

Leasing Agreement

dated
as of December 7, 2006

between

AMREIT SSPF BERKELEY, LP,

Owner

and

AMREIT REALTY INVESTMENT CORPORATION,

Manager

 

 

Contents

	 	 	 	 	 	 	 	 	 
	MANAGEMENT AND LEASING AGREEMENT	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	1.	 	Definitions and Interpretation	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.1.	 	Interpretation 	 	 	5	 
	 
	 	1.2.	 	Accounting Terms and Determinations 	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	2.	 	Appointment and General Provisions	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.1.	 	Appointment 	 	 	6	 
	 
	 	2.2.	 	Management Duties and Authority 	 	 	6	 
	 
	 	2.3.	 	Independent Contractor	 	 	7	 
	 
	 	2.4.	 	Licenses 	 	 	7	 
	 
	 	2.5.	 	Cooperation 	 	 	7	 
	 
	 	2.6.	 	Indemnification 	 	 	8	 
	 
	 	2.7.	 	Sale and Financing 	 	 	9	 
	 
	 	2.8.	 	Representatives 	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	3.	 	Management Obligations and Authority	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1.	 	Property Management Generally 	 	 	10	 
	 
	 	3.2.	 	Management Employees 	 	 	12	 
	 
	 	3.3.	 	Rent Collection and Services with Respect to Leases 	 	 	13	 
	 
	 	3.4.	 	Services with Respect to Contracts 	 	 	16	 
	 
	 	3.5.	 	Services with Respect to Legal Requirements and Insurance Requirements	 	 	18	 
	 
	 	3.6.	 	Records and Reports 	 	 	19	 
	 
	 	3.7.	 	Bank Accounts 	 	 	26	 
	 
	 	3.8.	 	Payment of Expenses and Capital Expenditures 	 	 	28	 
	 
	 	3.9.	 	Services with Respect to Financing 	 	 	30	 
	 
	 	3.10.	 	Notification of Sale or Financing Transaction 	 	 	31	 
	 
	 	3.11.	 	Inspections 	 	 	31	 
	 
	 	3.12.	 	Limitation of Authority 	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	4.	 	Services with Respect to Property Sales and Post Sale-Closing	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	5.	 	Insurance	 	 	32	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.1.	 	Owner’s Insurance 	 	 	32	 

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	5.2.	 	Manager’s Insurance 	 	 	34	 
	 
	 	5.3.	 	Blanket Insurance 	 	 	35	 
	 
	 	5.4.	 	Policies 	 	 	35	 
	 
	 	5.5.	 	Payment of Premiums by Owner 	 	 	36	 
	 
	 	5.6.	 	Claims 	 	 	36	 
	 
	 	5.7.	 	Subrogation 	 	 	36	 
	 
	 	 	 	 	 	 	 	 
	6.	 	Manager’s Compensation	 	 	36	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.1.	 	Management Fees 	 	 	37	 
	 
	 	6.2.	 	Leasing Commissions and Expenses Generally 	 	 	37	 
	 
	 	6.3.	 	Leasing Commissions on Approved Leases 	 	 	37	 
	 
	 	6.4.	 	Leasing Commissions on Extensions and Renewals 	 	 	39	 
	 
	 	6.5.	 	Definition of Base Rent 	 	 	39	 
	 
	 	6.6.	 	Cooperating Brokers, Finders and Other Persons 	 	 	40	 
	 
	 	6.7.	 	Leasing Commissions Payable After Termination 	 	 	41	 
	 
	 	6.8.	 	No Duplication 	 	 	41	 
	 
	 	6.9.	 	No Other Fees 	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	7.	 	Term	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.1.	 	Term 	 	 	42	 
	 
	 	7.2.	 	Extension 	 	 	42	 
	 
	 	7.3.	 	Termination 	 	 	42	 
	 
	 	7.4.	 	Determination of Fees 	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	8.	 	Miscellaneous	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1.	 	Notices 	 	 	44	 
	 
	 	8.2.	 	Representations and Warranties of Manager 	 	 	45	 
	 
	 	8.3.	 	No Partnership, etc 	 	 	46	 
	 
	 	8.4.	 	Severability 	 	 	46	 
	 
	 	8.5.	 	Modification 	 	 	46	 
	 
	 	8.6.	 	Successors and Assigns 	 	 	46	 
	 
	 	8.7.	 	Limitation of Liability 	 	 	46	 
	 
	 	8.8.	 	Governing Law/Consent to Jurisdiction/Waiver of Trial by Jury 	 	 	47	 
	 
	 	8.9.	 	Confidentiality 	 	 	48	 
	 
	 	8.10.	 	Counterparts 	 	 	49	 

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	8.11.	 	Exclusive Benefit 	 	 	49	 
	 
	 	8.12.	 	Attorney’s Fees 	 	 	49	 
	 
	 	8.13.	 	Competing Properties 	 	 	49	 

	 	 	 
	Exhibits
	 	 
	 
	 	 
	Description of the Land

	 	Exhibit A
	Intentionally Omitted

	 	Exhibit B
	Sample Budget Package

	 	Exhibit C
	Intentionally Omitted

	 	Exhibit D
	Property Management Procedures

	 	Exhibit E
	Sample Reporting Package

	 	Exhibit F
	UBTI Questionnaire

	 	Exhibit G

 

 

MANAGEMENT AND LEASING AGREEMENT

     MANAGEMENT
AND LEASING AGREEMENT (this “Agreement”) dated as of December 7, 2006 by
and between AMREIT SSPF BERKELEY, L.P, a Delaware limited partnership, having an
office c/o J.P. Morgan Investment Management Inc., 245 Park Avenue, New York, New York 10167
(“Owner”), and AMREIT REALTY INVESTMENT CORPORATION, a Texas corporation having an office at 8
Greenway Plaza, Suite 1000, Houston, Texas 77046 (“Manager”).

WITNESSETH:

     WHEREAS, Owner is owner of the Property (described herein) commonly known as Berkeley Square located at Preston Road and West Park Boulevard, Plano, Texas.

     WHEREAS, Owner desires to appoint Manager as an independent contractor to manage and lease
the Property, and Manager desires to accept such appointment, upon the terms, covenants,
conditions and provisions of this Agreement.

     NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements set forth
in this Agreement and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound hereby, Owner and Manager hereby
covenant and agree as follows:

1. Definitions and Interpretation

     In this Agreement, unless otherwise specified, the following terms have the following
meanings:

“Affiliate” means with respect to any Person, any relative of the Person in question, if such
Person is an individual, or any other Person directly or indirectly controlled by, controlling or
under common control with the Person in question, or any Person who owns, directly or indirectly,
ten percent (10%) or more of the equity interest of the Person in question. For the purposes of
this definition, “control” when used with respect to any specified Person means the power to
direct the management and policies of that Person, directly or indirectly, whether through the
ownership of voting securities or other beneficial interest, by contract or otherwise; and the
terms “controlling” and “controlled” have the meanings correlative to the foregoing.

“Agreement” is defined in the Preamble.

“Approved Leasing Program” is defined in subsection 3.3(a).

“Auditor” is defined in subsection 3.6(k).

“Base Rent” is defined in Section 6.5.

 

 

“Budget” is defined in subsection 3.6(d).

“Business Day” means any day other than Saturday, Sunday or any other day on which banks or
savings and loans associations in New York, New York and Houston, Texas, are not open for
business.

“Capital Event” means any sale, Financing, Casualty or Condemnation that occurs during the Term
hereof with respect to which net capital proceeds are received by Owner.

“Capital Expenditures” means capital expenditures as determined under GAAP, except to the extent
otherwise set forth in this Agreement. Capital Expenditures will be reported on the cash basis of
accounting. Capital Expenditures shall include tenant improvements, building improvements, and
capitalizable costs related to executed Leases, including Leasing Commissions and legal fees.

“Cash Flow” means, for any period, Gross Revenue collected less Operating Expenses, Debt Service,
and Capital Expenditures paid during each period.

“Casualty” means any damage to, or destruction of the Property or any part thereof from a fire or
other casualty.

“Concentration Account” is defined in subsection 3.7(a).

“Condemnation” means any condemnation or other taking or temporary or permanent requisition of the
Property, any part thereof, any interest therein or any right appurtenant thereto, or any change of
grade affecting the Property, as the result of the exercise of any right of condemnation or eminent
domain. A conveyance in lieu or in anticipation of condemnation shall be deemed to be a
Condemnation.

“Contracts” means the agreements, contracts, documents and obligations (other than the Leases) now
or hereafter in effect and relating to the Property.

“Controlled Disbursement Account” is defined in subsection 3.7(a).

“Damages” is defined in subsection 2.6(a).

“Debt Service” means all sums payable under any Financing, including, without limitation, Interest
Expense.

“Default” means any condition or event which with the giving of notice or the lapse of time after
notice would, unless cured or waived, become an Event of Default.

“Depository” is defined in subsection 3.7(a).

“Event
of Default” is defined in subsection 7.3(b).

“Financing” means any financing or refinancing by debt, sale and leaseback or other form of
Financing with respect to the Property or any debt or other similar
monetary obligation of Owner.

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“Financing Documents” means all agreements, instruments, certificates and documents evidencing,
securing or otherwise relating to any Financing.

“Fiscal Year” means a calendar year or other period as defined by Owner, except that the first
Fiscal Year shall commence on the date hereof and end on the next succeeding December 31, and the
last Fiscal Year shall commence on the January 1st immediately preceding the date this Agreement
expires or terminates and shall end on such expiration or termination date.

“GAAP” means generally accepted accounting principles, consistently applied.

“Gross Receipts” is defined in subsection 6.1(c).

“Gross Revenues” means, for any period of reference, the gross revenues of any kind whatsoever
derived on an accrual basis of accounting, as applicable, from or in respect of the Property,
including, without limitation, all income and revenue derived from all sources whatsoever as a
result of the operation of the Property, all rents and other moneys due from tenants or licensees
as billed in accordance with the Leases, including percentage and overage rents, operating expense
pass-throughs, real estate taxes and common area maintenance charges, all refunds, rebates and
recoveries of items, if any, previously charged as deductions from gross revenue, but excluding
any proceeds of any Capital Event relating to the Property or any personal property (other than
rent loss insurance under the property, casualty or boiler policies which shall be included).

“Improvements” means the buildings, structures and other improvements now or hereafter located on
the Land.

“Initial Term” is defined in Section 7.1.

“Insurance Requirements” means all terms of any insurance policy covering or applicable to the
Property, all requirements of the issuer of any such policy and all orders, rules, regulations
and requirements of the National Board of Fire Underwriters (or any other body exercising similar
functions) now or hereafter applicable to the Property, any adjoining vaults, sidewalks, streets
or way, or any use or condition of any thereof.

“Interest Expense” means all interest payments due under any Financing.

“JPMIM” means J.P. Morgan Investment Management Inc. and any successor thereto by merger,
consolidation or in connection with the sale of all or substantially all of its assets.

“Land” means the parcel or parcels of land described in Exhibit A, located in the County of
Collin and State of Texas.

“Leases” means all leases, subleases, licenses, franchises, concessions and other occupancy
agreements now or hereafter in effect and relating to the Property, including all renewals,
extensions, amendments and other modifications thereof and all
guarantees of the obligations of the Tenants thereunder.

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“Leasing Budget” is defined in subsection 3.6(d).

“Leasing Commissions” is defined in Section 6.2.

“Legal Requirements” means all Permits, laws, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, directions and requirements of, and agreements with, governmental
bodies, agencies or officials, now or hereafter applicable to the Property, and adjoining vaults,
sidewalks, streets or right of ways or any use or condition of any thereof, including, but not
limited to all applicable environmental laws.

“Lien” means (a) any mortgage, deed of trust, deed to secure debt, lien, pledge, charge, security
interest or other encumbrance with respect to the Property (including any installment sale,
conditional sale or other title retention agreement); and (b) any easement, right of way,
servitude, reservation, restriction, possibility of reverter, license agreement, option, cloud,
claim, defect, or other title exception with respect to the Property.

“Lock Box” is defined in subsection 3.7(a).

“Lock Box Account” is defined in subsection 3.7(a).

“Management Fee” is defined in subsection 6.1 (a).

“Manager” is defined in the Preamble.

“Manager Indemnified Party” is defined in subsection 2.6(b).

“Modified Accrual Basis” is defined in subsection 3.6(h).

“Morgan” means JPMorgan Chase Bank, N.A., and its successors by merger, consolidation, or in
connection with the sale of all or substantially all of its assets, as trustee, agent or
investment advisor/manager of various collective investment funds, employee benefit plans
foundations, separate accounts, endowments or other investors.

“Non-Discretionary Items” means all real estate taxes, insurance premiums and utilities relating
to the Property.

“Notice” is defined in Section 8.1.

“Operating Expenses” means, for any period, all accrual based expenses exclusive of Interest
Expense, if applicable, and Capital Expenditures incurred with respect to the Property in
accordance with the terms of this Agreement.

“Owner” is defined in the Preamble.

“Owner’s Account” is defined in subsection 3.7(b).

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“Owner Indemnified Party” is defined in subsection 2.6(a).

“Permits” means all licenses, authorizations, certificates, variances, consents, approvals and
other permits now or hereafter relating to the Property or the use, operation, management or
leasing thereof.

“Person” means any individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political subdivision or agency
or instrumentality thereof.

“Property” means the Land and the Improvements, and their respective appurtenances, commonly known
as Berkeley Square.

“Restoration” means the protection of the Property after any Casualty or Condemnation and the
restoration, repair, replacement, rebuilding or demolition of the Property after such Casualty or
Condemnation to the extent decided by Owner.

“Security Deposit Account” is defined in subsection 3.7(a).

“Standard Lease Form” means the form of lease pursuant to which any portion of the Property shall
be leased, which shall be attached to the Approved Leasing Program and approved by Owner.

“Tenants” means the tenants, subtenants, licensees, franchisees, concessionaires and other
occupants under the Leases.

“Term” means, unless this Agreement is sooner terminated pursuant to the provisions hereof, the
Initial Term and, any extension of the Initial Term.

“Variance Threshold” means an increase in any individual line-item of expense (other than Capital
Expenditures) set forth in the then current Budget for a Fiscal Year up to the greater of Five
percent (5%) of such individual line-item of expense and Ten Thousand Dollars ($10,000) (provided
that the overall Budget for such Fiscal Year (excluding therefrom Capital Expenditures) is not
increased by more than five percent (5%)).

1.1. Interpretation.

     In this Agreement, unless otherwise specified, (i) singular words include the plural
and plural words include the singular; (ii) words which import a number of constituent parts,
things or elements, including the terms “Land”, “Improvements” and “Property” shall be construed
as referring separately to each constituent part, thing or element thereof, as well as to all of
such constituent parts, things or elements as a whole; (iii) words importing any gender include
the other genders; (iv) references to any Person include such Person’s successors and assigns; (v)
the word “successors”, when it refers to an individual, includes the heirs, devisees, legatees,
executors, administrators and personal representatives of such individual; (vi) references to any
statute or other law include all rules, regulations and orders adopted or made thereunder and all
statutes or other laws amending, consolidating or

5

 

replacing the statute or law referred to; (vii) references to any agreement or other document
include all subsequent amendments or other modifications thereof entered into in accordance with
the provisions thereof; (viii) the words “approve”, “consent” or “agree”, and any derivations
thereof or words of similar import, mean the prior written approval, consent or agreement of the
Person holding the right to approve, consent or agree; (ix) the words “include” and “including”,
and words of similar import, shall be deemed to be followed by the words “without limitation”; (x)
the words “hereto”, “herein” and “hereunder”, and words of similar import, refer to this Agreement
in its entirety; (xi) the Schedules and Exhibits hereto are part of this Agreement and are
incorporated herein by reference; (xii) the words “Article”, “Section”, “Schedule” or “Exhibit”
refer to the articles, sections, schedules and exhibits of and to this Agreement; (xiii) headings
of Articles, Sections, Schedules, Exhibits and paragraphs are inserted as a matter of convenience
and shall not affect the construction of this Agreement; and (xiv) no inference in favor or against
any Person shall be drawn from the fact that such Person or its attorneys drafted any portion
hereof.

1.2. Accounting Terms and Determinations.

     In this Agreement, unless otherwise specified, (i) all accounting terms used herein shall be
interpreted, (ii) all accounting determinations hereunder shall be made and (iii) books, records,
financial statements and reports required to be kept and delivered hereunder shall be kept and
prepared in accordance with GAAP, except for changes directed or approved by Owner
contemporaneously herewith or subsequently. Changes from GAAP are detailed in subsection 3.6(h).

2. Appointment and General Provisions

2.1. Appointment.

     Subject to the provisions of this Agreement, Owner hereby appoints Manager as an independent
contractor to manage, operate, maintain, repair and lease, on an exclusive basis, the Property
while this Agreement remains in effect, and Manager hereby accepts such appointment.

2.2. Management Duties and Authority.

	 	(a)	 	During the Term of this Agreement, and subject to the provisions of this
Agreement and the written directions of Owner as herein provided, Manager shall
manage, operate, maintain, repair and lease the Property on behalf of Owner in a first
class manner consistent with the Budget (to the extent Owner provides the funds
required therefor) and in a manner intended to maximize the Cash Flow and the long
term preservation of the value of the Property and the investment goals and objectives
of Owner, subject to and within the Budget. During the Term of this Agreement and
subject to the provisions hereof and the Budget (to the extent Owner provides the
funds requested therefor), Manager shall provide all services reasonably necessary,
proper, desirable or appropriate for the successful management, maintenance, repair,
leasing and

6

 

	 		 	operation of the Property, including the duties and services specified in this
Agreement.
	 
	 	(b)	 	In connection with the performance of its duties and obligations under this
Agreement, (i) Manager shall be entitled to rely upon any and all written
approvals or instructions delivered by Owner to Manager, (ii) Manager shall
not be liable for its failure to act, or delay in acting, when and to the extent
Manager’s obligation or authority to act is limited by the provisions of this
Agreement requiring the written approval of or direction from Owner and such
written approval or direction is not provided or is not timely provided, and
(iii) Manager shall not be liable for its failure to act, or delay in acting, when
and to the extent Manager’s failure to act, or delay in acting, is caused by
Owner’s failure to provide, or delay in providing, funds necessary to manage,
operate, maintain, repair, and lease the Property in accordance with the terms
of this Agreement and the Budget.
	 
	 	(c)	 	Notwithstanding the provisions of Section 8.1, Manager acknowledges and
agrees that any requirement for written approval or instruction by Owner
pursuant to this Agreement may be given by e-mail correspondence.

2.3. Independent Contractor.

     Except as otherwise herein provided (including by way of illustration Manager’s execution of
contracts pursuant to subsection 3.1(b) hereinbelow), Manager’s relationship to Owner hereunder is
that of an independent contractor, and neither Manager nor Owner shall represent to any other
Person that Manager’s relationship to Owner hereunder is other than that of an independent
contractor. All persons employed by Manager or any Affiliates of Manager in connection with the
operation and maintenance of the Property shall be employees solely of Manager or its Affiliate and
not of Owner and all arrangements with such employees are solely the concern of Manager.

2.4. Licenses.

     Manager represents, warrants and covenants that it and its personnel are, and while this
Agreement remains in effect, Manager and its personnel shall continue to be, fully licensed and
qualified, to the extent required by applicable law, to perform Manager’s duties and obligations
hereunder. Manager shall fully comply with all applicable Legal Requirements relating to the
performance of its duties and obligations hereunder.

2.5. Cooperation.

     Manager shall consult with Owner at Owner’s request and to the extent necessary or
appropriate to enable Manager to perform its duties and obligations hereunder. Manager shall
conduct meetings between Owner and Manager from time to time as necessary or appropriate to enable
Manager to perform its duties and obligations hereunder or as requested by Owner. Each party shall
cooperate fully in all matters relating to the management, operation, maintenance, repair and
leasing of the Property and the defense of any claim, action or

7

 

proceeding relating thereto or to this Agreement, and Manager shall promptly respond to all
requests for information by Owner, including furnishing all documents and services relating
thereto required by Owner in connection with the operation of the Property.

2.6. Indemnification.

	 	(a)	 	Manager shall indemnify, defend and hold harmless Owner, and
its stockholders, members, partners, directors, officers, managers, employees,
agents and Affiliates (each an “Owner Indemnified Party”), from and against
any and all unaffiliated third-party claims, actions, suits, proceedings, losses,
damages, liabilities, costs and expenses, including reasonable attorneys’ fees
and disbursements (“Damages”) (including Damages relating to violations of
environmental Legal Requirements), arising out of or resulting from the acts or
omissions of Manager and its directors, officers, employees, contractors,
subcontractors and agents, which constitute gross negligence, fraud,
malfeasance, breach of fiduciary duty, willful, reckless or criminal misconduct,
a breach of this Agreement or any actions of Manager beyond the scope of the
authority conferred upon Manager hereunder. Manager shall have the right to
defend, and shall defend, at its expense and by counsel of its own choosing
(subject to Owner’s approval of such counsel, not to be unreasonably
withheld), against any claim or liability to which the indemnity agreement set
forth in this subsection 2.6(a) would apply. Notwithstanding the foregoing, if
(i) Manager has failed or refused to defend, indemnify and hold harmless
Owner and any Owner Indemnified Party after written notice to Manager, (ii)
an Event of Default by Manager exists, (iii) Owner or any Owner Indemnified
Party to be defended hereunder reasonably determines that a conflict of interest
exists, or (iv) Owner reasonably determines that Manager is insufficiently
liquid or creditworthy to adequately defend or pay the amount of any Damages
when due, Owner, or such Owner Indemnified Party may, in its sole and
absolute discretion, engage its own attorney and other professionals to defend
or assist it with respect to such matters, and, at the option of Owner or such
Owner Indemnified Party, its attorney shall control the resolution of such
matters. Manager shall not have the authority to settle any claim or liability
that is the subject of the indemnification agreement provided for in this
subsection 2.6(a) without first obtaining Owner’s prior written consent, such
consent not to be unreasonably withheld. Manager or Owner, as applicable,
shall regularly apprise the other of the status of all proceedings.
	 
	 	(b)	 	Owner shall indemnify, defend (through attorneys selected by Owner) and hold
harmless Manager and its partners, members, stockholders, managers,
directors, officers, employees and agents (each a “Manager Indemnified
Party”) from and against any claims made by unaffiliated third parties in
connection with the good faith performance by Manager of its duties in
accordance with the terms of this Agreement, except that the obligation to
indemnify, defend and hold harmless shall not apply in the case of the acts or
omissions of Manager or any Manager Indemnified Party which constitute

8

 

	 	 	 	gross negligence, fraud, malfeasance, breach of fiduciary duty, willful, reckless or
criminal misconduct, a breach of this Agreement or any actions beyond the scope of
the authority conferred upon Manager hereunder. Owner shall have the right to
defend, and shall defend, at its expense and by counsel of its own choosing against
any claim or liability to which the indemnity agreement set forth in this subsection
2.6(b) would apply. Any settlement of any such claim or liability by Owner shall be
subject to the reasonable approval of Manager. The right of Manager or any Manager
Indemnified Party being defended hereunder to defend or settle any such claim shall
be limited to those cases where Owner has failed or refused to defend after written
notice to Owner or to where Manager or any Manager Indemnified Party to be defended
hereunder reasonably determines that a conflict of interest exists. Notwithstanding
the foregoing, if (i) Owner has failed or refused to defend, indemnify and hold
harmless Manager and any Manager Indemnified Party after written notice to Owner or
(ii) an Event of Default by Owner exists, Manager, or such Manager Indemnified Party
may, in its sole and absolute discretion, engage its own attorney and other
professionals to defend or assist it with respect to such matters, and, at the
option of Manager or such Manager Indemnified Party, its attorney shall control the
resolution of such matters. Owner shall not have the authority to settle any claim
or liability that is the subject of the indemnification agreement provided for in
this subsection 2.6(b) without first obtaining Manager’s prior written consent, such
consent not to be unreasonably withheld. Owner or Manager, as applicable, shall
regularly apprise the other of the status of all proceedings.
	 
	 	(c)	 	The provisions of this Section 2.6 shall survive the expiration or
termination of this Agreement.

2.7. Sale and Financing.

     Except as may be agreed to in writing by Owner and Manager, Manager shall not be entitled to
any compensation, commissions or other fee, with respect to any Capital Event relating to the
Property or any interest therein or any obligation or debt relating to the Property.

2.8. Representatives.

	 	(a)	 	Whenever any consent, approval or other action of Owner is required or
permitted hereunder, such consent, approval or other action shall be effective if
given or taken by Temra Wollman or such other person designated by
PTC/BSQ Acquisition Company LLC. Owner may change such
representatives at any time by notice to Manager pursuant to Section 8.1
hereof.
	 
	 	(b)	 	Whenever any consent, approval or other action of Manager is required or
permitted hereunder, such consent, approval or other action shall be effective if
given or taken by Stephen Hefner, H. Kerr Taylor, C. Chad Braun or Brett

9

 

	 	 	 	Treadwell acting individually on behalf of Manager. Such representatives may be
changed by Manager with Owner’s prior written consent, which shall not be
unreasonably withheld or delayed.

3.    Management Obligations and Authority

3.1. Property Management Generally.

	 	(a)	 	Manager shall, at the expense of Owner (except as set forth herein), manage,
operate and care for the Property in a first class manner, in accordance with the
Budget (to the extent Owner provides the funds required therefor), and the Property’s
condition and the terms of any Financing (provided Manager is notified in writing of
the requirements of such Financing) and do all things necessary, desirable or
appropriate therefor or customarily performed by managing agents of properties similar
to the Property. Without limiting the generality of the foregoing, Manager shall:

	 	(i)	 	implement the Budget;
	 
	 	(ii)	 	make and renew all Contracts for water, sanitary and storm
sewer, drainage, electricity, steam, gas, telephone, fuel, cleaning, garbage
removal, pest control, security and other utilities and all other services
necessary or appropriate for the management and operation of the Property in
accordance with the Budget unless otherwise provided herein;
	 
	 	(iii)	 	purchase all supplies, inventories, provisions and equipment
necessary or appropriate for the maintenance, management and operation of the
Property in accordance with the Budget unless otherwise provided herein;
	 
	 	(iv)	 	monitor the real estate tax assessments of the Property and
the reasonableness thereof in comparison with the assessments of similar
properties; advise Owner of any material increase in real estate taxes;
consult with, and make recommendations to, Owner concerning the real estate
tax assessments of the Property and, at the expense of Owner, take such action
(or assist Owner’s tax consultant in taking such action) with respect thereto
as Owner may direct in writing;
	 
	 	(v)	 	provide regular, systematic inspections of the Property,
consult with, and make recommendations to, Owner concerning the condition of
the Property and the necessity for maintenance, repair, alteration or
Restoration thereof; at the expense of Owner, provide through Manager’s (or
its Affiliates’) employees or third party contractors all work, labor and
services necessary or appropriate to maintain and repair the Property in a
first class condition in accordance with the Budget and the requirements of
any Financing, Contract, Lease, Legal

10

 

	 	 	 	Requirement or Insurance Requirement unless otherwise provided herein; promptly
notify Owner upon learning that the condition of the Property fails to meet said
first class standard of maintenance and repair or any standard of maintenance and
repair required under any Financing, Contract, Lease, Legal Requirement or
Insurance Requirement; take such action as Owner may direct in writing with
respect to the maintenance, repair, alteration, addition or Restoration of or to
the Property; make all Contracts for such maintenance, repair, alteration,
addition or Restoration of or to the Property and monitor and enforce the
performance of such Contracts;
	 
	 	(vi)	 	promptly, and in no event later than two (2) Business Days after the date on
which Manager learns of any Casualty or Condemnation (or threatened Condemnation),
provide Owner with notice in reasonable detail of such Casualty or Condemnation (or
threatened Condemnation); and thereafter promptly investigate and consult with, and
make recommendations to, Owner with respect thereto; make (subject to Owner’s
approval) a complete and timely written report to the appropriate insurance company
as to all accidents, claims for damage relating to the ownership, operation and
maintenance of the Property, any damage or destruction to the Property and the
estimated cost of repair thereof and prepare (for Owner’s approval) any and all
reports required by any insurance company in connection therewith; and timely file
all such reports with the insurance company as required under the terms of the
applicable insurance policy and furnish a final copy of such report to Owner;
	 
	 	(vii)	 	take such actions, without regard to the funds available therefor, as
Manager in good faith believes are necessary or appropriate in light of an emergency
threatening imminent and immediate personal injury or imminent material physical
damage. Manager shall, no later than twenty-four (24) hours after the time Manager
learns of any such emergency, provide Owner with notice in reasonable detail of the
emergency and the actions taken by Manager in connection therewith;
	 
	 	(viii)	 	perform (or arrange for the performance of) the other services required to be
performed hereunder or under any Financing in accordance herewith and/or the
Financing, as applicable; and
	 
	 	(ix)	 	promptly, and in no event later than two (2) Business Days after the date on
which Manager receives any written offers for the purchase of all or any part of the
Property, notify Owner and furnish Owner said written offer.

	 	(b)	 	All Contracts and purchases made hereunder at the expense of Owner (whether or not
specifically requiring the approval of Owner pursuant hereto) shall be

11

 

	 	 	 	made in the name of Owner and executed directly by Owner or, at Owner’s written
authorization and direction, with Manager executing same solely as Owner’s agent,
and Owner shall retain title to all property purchased hereunder at the expense of
Owner. Manager shall use commercially reasonable efforts to ensure that all
Contracts made hereunder contain a provision satisfactory to Owner limiting the
liability of Owner thereunder to the Property.
	 
	 	(c)	 	All Contracts made with any Affiliate of Manager must be approved by Owner
in writing and shall be at competitive market terms and rates and not more than
would be charged by an independent third party.
	 
	 	(d)	 	Notwithstanding anything to the contrary contained herein, Manager shall not,
and shall not have the authority to, make any Contract or purchase of the type
described in this Section 3.1 (except as expressly provided
in subsection 3.1(a)(vii) above, relating to emergency circumstances) unless such
Contract or purchase is:

	 	(i)	 	(A) contained within the then current Budget and, in the case
of a Contract, is terminable without termination fee, premium or penalty by
Owner upon not more than thirty (30) days notice or (B) does not provide or
allow for aggregate consideration payable thereunder in excess of $10,000; or
	 
	 	(ii)	 	is pre-approved in writing by Owner.

	 	(e)	 	In making any Contract or purchase hereunder, Manager shall
use commercially reasonable efforts to obtain favorable discounts for Owner and
all such discounts, rebates or commissions under any Contract or purchase
order made hereunder shall inure to the benefit of Owner. As provided in the
Budget, and at Owner’s expense, Manager shall make payments under any
such Contract or purchase order at such date or otherwise in compliance with
such Contract or purchase order to enable Owner to take advantage of any such
discount.

3.2. Management Employees.

	 	(a)	 	Manager shall have in its employ (or provide through one or more third-party
contractors approved by Owner) at all times sufficient staff of capable personnel for
the proper leasing, management, maintenance and operation of the Property in accordance
with the terms of this Agreement. If such personnel are employees of Manager, all
matters pertaining to such personnel, including their employment, supervision,
compensation, promotion and discharge, shall be the responsibility of Manager. All
salaries, wages and other compensation of personnel employed by Manager, including fringe
benefits, shall be expenses solely of Manager (and Manager
shall be responsible for all payroll and other taxes and all other deductions paid
or made and/or required by law, and for preparing and filing all returns and other
documents required

12

 

	 	 	 	under federal or local laws), subject to subsection 3.2(b) below.
	 
	 	(b)	 	Manager shall in no event be reimbursed for any of Manager’s employees engaged
in the management, operation, or maintenance of the Property, including, without
limitation, the gross salary or wages including reasonable bonuses and vacation pay,
payroll taxes, insurance, worker’s compensation, or Manager’s standard sick pay or
benefits and payroll burdens of Manager’s employees required to properly, adequately,
safely and economically manage, operate and maintain the Property. In addition, in no
event shall Manager be reimbursed for costs associated with Manager’s central office
general and administrative personnel or Manager’s leasing personnel. The number of the
employees and amounts of their compensation may be adjusted annually and an
appropriate pro rata share therefor shall be reflected in the Budget.
	 
	 	(c)	 	Manager shall fully comply with all Legal Requirements relating to worker’s
compensation, social security, unemployment insurance, wages, hours, working
conditions and other matters pertaining to Manager’s personnel. Manager shall
indemnify, defend and hold harmless Owner and any Owner Indemnified Party from and
against any and all Damages, relating to Manager’s failure to comply with this
subsection 3.2(c), and Manager’s obligations to indemnify, defend and hold harmless
under this subsection 3.2(c) shall survive the termination or expiration of this
Agreement.
	 
	 	(d)	 	Manager shall be solely responsible for its personnel in the event of the
termination of this Agreement.
	 
	 	(e)	 	Manager shall promptly notify Owner of any pending changes in the Manager’s
business, business ownership, or in on site or off site personnel for the Property. At
Owner’s discretion Owner may approve persons presented for key positions in leasing,
operations, management/general management, and accounting.
	 
	 	(f)	 	Manager shall promptly notify Owner of any pending changes in location of
property manager facilities supporting the management of the Property.

	3.3.	 	Rent Collection and Services with Respect to Leases.

	 	(a)	 	Manager shall use commercially reasonable efforts to cause the Property to be
fully rented to qualified tenants, and in connection therewith shall: consult Owner
with respect to rental and renewal of occupancy space to qualified tenants and
propose, supervise and implement a leasing program which shall include leasing
parameters, including, rents, tenant improvement allowances, free rent periods and
other tenant concessions with respect to the Property, which leasing program shall
include the then current year’s Leasing Budget and shall be subject to the prior
written approval of Owner (once approved, the “Approved Leasing Program”); cooperate
with licensed real estate brokers having clients interested in renting space in the
Property; advertise the

13

 

	 	 	 	Property; and order and purchase all signs, renting plans, price lists, booklets,
circulars and advertising to offer space in the Property for rent, all subject to Owner’s
approval and at Owner’s expense. All Leases shall be on the Standard Form of Lease.
Manager shall revise the Standard Form of Lease at Owner’s written direction. The form,
content and terms of all Leases and the acceptability of all tenants shall be subject to
approval of Owner and all Leases shall be in Owner’s name and executed by Owner unless
Owner expressly in writing authorizes and directs Manager, as Owner’s property manager, to
execute a Lease. Manager shall cooperate with legal counsel designated and retained by
Owner to negotiate all Leases. All legal costs and expenses incurred to negotiate said
Leases shall be paid by Owner. Manager shall act as Owner’s exclusive agent in the leasing
of the Property or at the direction of Owner, Manager shall contract with a third party
licensed real estate brokerage firm to act as Owner’s exclusive agent in the leasing of
the Property pursuant to an agreement approved by Owner. Manager represents that it is
duly licensed to provide such leasing services.
	 
	 	(b)	 	Without Owner’s prior written consent, Manager shall not permit any Person to occupy any
space in the Property unless such occupancy is pursuant to a written Lease on the Standard
Form of Lease and in compliance with the leasing parameters approved under the Approved
Leasing Program. In addition, unless expressly provided in an approved Lease or Manager
otherwise has obtained Owner’s prior written consent, Manager shall not permit any Tenant to
take occupancy in any space at the Property unless such Tenant has delivered to Manager or
Owner (A) the security deposit, if any, required under the terms of such Tenant’s Lease, (B)
a current certificate of insurance in compliance with the terms and provisions of such
Tenant’s Lease, and (C) any rent required to be paid prior to the Tenant’s taking occupancy
of its demised premises. Manager shall supervise all tenant improvements and the moving in
and out of all Tenants in a manner which causes a minimum of disturbance to the operations of
the other Tenants.
	 
	 	(c)	 	Manager shall, at the expense of Owner, use commercially reasonable efforts to ensure that
the Tenants receive the services required to be provided by Owner under their Leases, to duly
and punctually observe and perform on behalf of Owner all of Owner’s obligations under the
Leases, and to enforce, preserve and keep unimpaired the rights of Owner and the obligations
of the Tenants under the Leases.
	 
	 	(d)	 	Manager shall bill the Tenants for the rents and other charges (on a monthly basis unless
otherwise provided pursuant to the terms of any Lease) payable under their Leases and shall
use commercially reasonable efforts to collect and enforce the collection of all rents and
other charges payable by the Tenants under their Leases. No later than one hundred twenty
(120) days after the end of each calendar year (or such earlier date as required pursuant to
the terms of any Lease), Manager shall prepare and submit to Tenants, the final operating

14

 

	 	 	 	expense and real estate tax expense recovery reconciliations for such year. Manager shall
have Tenants send payments directly to the Lock Box. Manager shall immediately deposit all
rents and other sums collected by Manager in the Lock Box Account.
	 
	 	(e)	 	Manager and Owner shall promptly notify the other upon learning of any monetary default or
other event of default or event which, with the giving of notice or the passage of time or
both, might constitute a default or event of default by any Tenant under its Lease. In the
event of any default or event of default by any Tenant, Manager shall consult with Owner
concerning the action to be taken with respect thereto and, at the expense of Owner, take
such action as Owner shall direct with respect to such default or event of default, including
(with the prior consent of Owner) cooperating with Owner’s counsel to institute legal
proceedings in the name of Owner for the collection of rents and other charges, payable by,
and the enforcement of the other obligations of, the Tenants under their Leases and for the
dispossession of any Tenants in default under their Leases. Owner shall designate, retain and
pay the attorneys for any such legal proceedings. Without the prior written consent of Owner,
Manager shall not settle any such legal proceedings or any claim for delinquent rents or
other charges payable by or for the enforcement of any other obligation of any Tenant under
its Lease.
	 
	 	(f)	 	Without the consent of Owner, Manager (i) shall not receive or collect any rents for more
than one month in advance (plus security deposits), (ii) shall not waive, excuse, condone,
discount, set off, compromise or in any manner release or discharge any Tenant (or any
guarantor under any guaranty of any Lease) from its obligations under its Lease (or such
guaranty); (iii) shall not cancel, terminate or consent to the surrender of any Lease; (iv)
shall not commence any action, suit or proceedings for the collection of rent, for removal or
for the dispossession of any Tenant or exercise any right of recapture provided in any Lease;
(v) shall not modify, or in any way alter the provisions of any Lease in a manner which would
reduce the rent thereunder, shorten the term thereof, impose additional obligations on the
landlord thereunder, or reduce the obligations of the Tenant thereunder; (vi) shall not
relocate any Tenant within the Property; (vii) shall not consent to any modification of the
express purposes for which any Tenant’s premises have been leased; and (viii) shall not
consent to any subletting of any part of the Property, to any assignment of any Lease by any
Tenant thereunder, or to any assignment or further subletting of any sublease.
	 
	 	(g)	 	Each of Manager and Owner shall promptly notify the other upon receiving any notice under
any Lease (and furnish a copy of the notice received by it with its notice to the other) or
upon learning of any default or event, which, with the giving of notice or passage of time or
both, might constitute a default or event of default by Owner under any Lease or in Manager’s
reasonable judgment would otherwise directly and imminently impair the rights of Owner,

15

 

	 	 	 	or directly and imminently reduce, release or discharge the obligations of any
Tenant under any Lease. In the event of any such condition, default or event of
default, Manager shall consult with Owner, and at the expense of Owner, take such
action as Owner shall direct in writing.
	 
	 	(h)	 	Manager shall be responsible, at the expense of Owner and in Owner’s name, for
the giving of all notices and statements required to be given to Tenants of the
Property under the terms of the respective Tenants’ Leases and for the giving of all
other notices necessary to accomplish the proper management of the Property in
accordance herewith.
	 
	 	(i)	 	Manager shall consider and advise Owner from time to time as to appropriate or
desirable rules and regulations or any additional rules and regulations required to be
made under the Leases with Tenants of the Property or for the better or more efficient
operation of the Property. Manager shall ensure that all Tenants of the Property are
informed with respect to such rules, regulations and notices as may be promulgated by
Owner or Manager.
	 
	 	(j)	 	Manager shall maintain accurate records of all security deposits held by
Owner, including the amount of each security deposit, the party from whom each
security deposit is collected, interest earned on each security deposit (if any), the
amount of such interest required (if applicable law so required) to be paid to each
Tenant with respect to such Tenant’s security deposit, and the date(s) upon which
Manager collected each security deposit. Manager shall deliver a monthly report to
Owner which indicates when a refund of all or any portion of a security deposit is
required and has been approved by Manager, and Manager shall keep an accurate record
of all refunds.
	 
	 	(k)	 	Manager shall perform such additional services and undertake such additional
obligations as Owner may reasonably request from time to time and as are usual and
customary for managers of properties similar to the Property and are consistent with
Manager’s obligation to manage, operate, maintain, repair and lease the Property in
accordance with the terms and provisions of this Agreement, without additional
compensation therefor.

	3.4.	 	Services with Respect to Contracts.

	 	(a)	 	Unless otherwise provided herein, Manager shall, at the expense of Owner, in
accordance with the Budget (to the extent Owner provides the funds required therefor),
duly and punctually pay and perform on behalf of Owner all of Owner’s obligations under
the Contracts and use commercially reasonable efforts to enforce, preserve and keep
unimpaired the rights of Owner and the obligations of other parties under the
Contracts.
	 
	 	(b)	 	Each of Manager and Owner shall promptly notify the other upon learning of any
default, or event of default or event which, with the giving of notice or the passage
of time or both, might constitute a default or an event of default by any

16

 

	 	 	 	other party under any Contract. In the event of any default or event of default by any
other party under any Contract, Manager shall consult with Owner concerning the action to
be taken with respect thereto and, at the expense of Owner, take such action as Owner
shall direct in writing with respect to such default or event of default.
	 
	 	(c)	 	Without the consent of Owner, Manager (i) other than as provided in Section 3.1 hereof,
shall not enter into any Contract or modify, or in any way alter, the provisions of any
Contract and (ii) shall not take any action, or omit to take any action or give any notice,
the taking, omission or giving of which might (a) result in the reduction, release or
discharge of any other party to any Contract from its obligations thereunder, (b) consent to
any other party to any Contract to assign or otherwise transfer its rights or obligations
thereunder, or (c) except in the circumstances described in subsection 3.1(a)(vii), result in
an expenditure in excess of the budgeted amount set forth in the Budget.
	 
	 	(d)	 	Each of Manager and Owner shall promptly notify the other upon receiving any notice under any
Contract (and furnish a copy of the notice received by it with its notice to the other party)
or upon learning of any default, event of default or condition which, with the giving of
notice or the passage of time or both, would result in a default or event of default by Owner
under any Contract or otherwise impair the rights of Owner, or reduce, release or discharge
the obligations of any other Person, under any Contract. In the event of any such notice,
condition, default or event of default, Manager shall consult with Owner concerning the action
to be taken with respect thereto and, at the expense of Owner, shall take such reasonable
action with respect thereto as Owner shall direct in writing.
	 
	 	(e)	 	Manager shall not enter into any Contract on behalf of Owner unless (1) such Contract
contains a clause whereby the service provider agrees to indemnify, defend and hold Owner, its
partners, shareholders, members or other beneficial owners, and Manager (and their respective
legal and beneficial owners, shareholders, partners, members, officers, managers, directors,
agents, employees, subsidiaries, and affiliates) harmless from and against all claims,
actions, suits, proceedings, losses, damages, liabilities, costs and expenses (including
without limitation, reasonable attorneys’ fees and disbursements) arising out of, resulting
from or in connection with the acts or omissions of the service provider and its directors,
officers, employees, contractors, subcontractors and agents, which constitute negligence,
fraud, breach of the service agreement, breach of fiduciary duty, willful, reckless or
criminal misconduct or any actions of the service provider beyond the scope of authority
conferred upon the service provider pursuant to the terms of the Contract, and (2) such
Contract is terminable without a termination fee, premium or penalty in the event that the
Property is sold or the Property is foreclosed or transferred by deed in lieu of foreclosure.

17

 

	3.5.	 	Services with Respect to Legal Requirements and Insurance Requirements.

	 	(a)	 	Manager shall, at the expense of Owner, duly and punctually comply on behalf of
Owner with all Legal Requirements and Insurance Requirements applicable to the Property
and the management and operation thereof that are made known to Manager and obtain,
keep in force and keep unimpaired the rights of Owner under all Permits necessary or
appropriate with respect to the Property. Manager shall cooperate with Owner, PTC/BSQ
Holding Company LLC (“Parent”) and each of the members of Parent in the management and
operation of the Property in a manner intended to avoid the realization of “unrelated
business taxable income” within the meaning of Section 511 et seq. of the Internal
Revenue Code of 1986, as amended.
	 
	 	(b)	 	Manager shall use its best efforts to, and shall cooperate with Owner, Parent
and each of the members of Parent in order to, manage and operate the Property in a
manner intended to avoid the realization of “unrelated business taxable income” within
the meaning of Section 511 et. seq. of the Internal Revenue Code of 1986, as amended.
	 
	 	(c)	 	If during the Term, Manager becomes aware of the existence of hazardous
materials or wastes, toxic substances or wastes, asbestos or asbestos-bearing
materials and the like at, in, on or under the Property, Manager shall immediately
notify Owner of the condition, both orally and in writing. Owner shall exclusively
determine such further course of action with respect to such hazardous condition.
Manager shall not have the authority or the obligation to supervise or oversee any
work involving remediation of any hazardous or potentially hazardous wastes or
conditions unless specifically hired by Owner to do so pursuant to a separate
agreement between Owner and Manager. Manager shall always use its best efforts to
prevent and detect the occurrence or existence of any hazardous condition at the
Property and shall cooperate with Owner in connection therewith, provided that Owner
shall be responsible for any extraordinary costs incurred by Manager in connection
with such best efforts.
	 
	 	(d)	 	Each of Manager and Owner shall promptly notify the other upon receiving any
written notice with respect to any Legal Requirement or Insurance Requirement (and
furnish a copy of the notice received by it with its notice to the other party) or upon
learning of any default, event of default or condition which, with the giving of notice
or the passage of time or both, might constitute a default or event of default by Owner
under any Legal Requirement or Insurance Requirement or otherwise impair the rights of
Owner under any Permit. In the event of any such notice, condition, default or event of
default, Manager shall consult with Owner concerning the action to be taken with
respect thereto and, at the expense of Owner, shall take such action with respect
thereto as Owner shall direct in writing.

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	 	(e)	 	As long as the failure to promptly comply with any notice concerning any Legal
Requirement or Permit shall not subject Manager to any criminal, administrative or
civil liability, Owner may stay Manager’s remedial action with respect to such
notice by instituting, or directing Manager to cooperate with legal counsel to
institute, in Owner’s name, appropriate legal or other proceedings to contest such
notice.
	 
	 	(f)	 	Manager may appear in or commence legal or other proceedings on behalf of Owner
in Owner’s name only upon the direction of Owner, it being understood that Owner will
pay any legal fees and costs in connection therewith.
	 
	 	(g)	 	Manager shall maintain current certificates of insurance from all Tenants in
compliance with types of coverage, limits of coverage and deductible limits all as
specified in the Leases.

	3.6.	 	Records and Reports.

         All reporting to Owner under this Agreement will be performed substantially in accordance
with the Property Management Procedures Exhibits delivered by Owner to Manager prior to the date
hereof, copies of which are attached hereto as Exhibit E (the “Property Management
Procedures Exhibits”). All reporting to Owner will be completed in a hard copy format and on a CD.
In addition, Manager will submit certain information electronically using the Approved Software:

	 	(a)	 	Standard Property Manager Reporting Period. Manager shall consider the
monthly reporting period to cover the current calendar month. Manager is
expected to close the reporting period as follows:

	 	1)	 	Soft close of the general ledger on the 26th day of
the month, at which time processing of receipts and disbursements will be
cutoff.
	 
	 	2)	 	During the next five (5) days, Manager will adjust Property
books and records by preparing and posting any necessary and normal
adjustments for accrued revenues and expenses and other adjustments as
necessary for the period from the 27th through the last day of the
month.
	 
	 	3)	 	Hard (final) close of the general ledger on the last of the month.
	 
	 	4)	 	Electronic transmission to Owner or Owner’s representative of
general ledger and Tenant Lease information, and any other related information
which Owner may reasonably require in writing at least five (5) days in
advance, on the last day of the month.

	 	 	Owner reserves the right to modify reporting requirements and due dates as it deems
necessary.

	 	(b)	 	Property Management Software. Manager will use the property management

19

 

	 	 	 	software currently in use by Manager or such other software approved by Owner in its
reasonable discretion (the “Approved Software”) (provided that Management Reports Inc.
property management software (“MRI”) and Yardi Systems Inc. property management software
are hereby approved by Owner), and will provide data from such software to Owner in a
format that can be converted to use with MRI. Manager will submit, on a date to be
determined by the Owner, a monthly electronic download of selected financial and
operational data, including general ledger and lease information, using either the
distributive processing function of MRI or data extract routines identified and/or
provided by Owner. The database structure, system type, and property number will be
provided by Owner and will not be modified without the consent of Owner. Owner will
provide Manager with a standard chart of accounts, Tenant charge (billing) codes, and
report formats which are to be used unless otherwise approved in writing by Owner. Manager
will submit, on a date to be determined by Owner, a monthly electronic download of
selected financial and operational data, including general ledger and lease information.
Owner reserves the right to periodically modify its software and reporting requirements.
	 
	 	(c)	 	Distribution of Cash Flows. Manager shall remit to Owner, at a date to be determined
by Owner but no later than the 20th of the current month, the Net Cash Flow
generated from operating and investing and financing activities for the previous month in
accordance with wire transfer instructions provided by Owner.
	 
	 	(d)	 	Budget. Not later than sixty (60) days prior to the beginning of each Fiscal Year,
Manager shall submit to Owner for its approval proposed annual budget prepared on a Modified
Accrual Basis for the Property for the ensuing Fiscal Year. The proposed annual budget shall
set forth on a monthly basis Manager’s good faith estimates of: (i) Gross Revenues, Operating
Expenses, and Interest Expense for the Property for such year, all in detail reasonably
satisfactory to Owner, (ii) the recommended Capital Expenditures and extraordinary expenses
for such year described in reasonable detail, (iii) the recommended leasing expenditures for
such year (the “Leasing Budget”), (iv) Cash Flow from the Property, (v) liability in the
succeeding Fiscal Year for real estate taxes, (vi) the amount of Debt Service becoming due and
payable during the next succeeding Fiscal Year in connection with all Financings or advances
in connection with the Property (to the extent such information is provided to Manager by
Owner), (vii) wages, salaries, and other compensation to be paid to employees of Manager
working at or on the Property, as well as the status of any negotiations affecting said wages,
salaries and other compensation, (viii) the extent of completion of any uncompleted
Improvements to the Property, together with a projection of the costs of constructing such
Improvements to be incurred during the next succeeding Fiscal Year, (ix) the current legal
status of pending or threatened suits concerning the Property (or any portion thereof) of
which Manager has

20

 

	 	 	 	knowledge and (x) such other information as Owner may reasonably require. The Budget shall
be in the format and detail as outlined in the sample budget package attached hereto as
Exhibit C or as required by and satisfactory to Owner. The rent roll shall be in
columnar form, with each Tenant listed separately and showing for each Tenant the (i) name
of such Tenant, (ii) floor or suite number, (iii) term of its Lease, (iv) total rent to be
collected and (v) the total rent broken down into various categories such as base rent,
storage rent, operating expense recoveries or common area charges (and the percentage of
the Tenant’s share thereof), license fees, real estate tax reimbursements (and the
percentage of the Tenant’s share thereof) and any other rent or charges. Manager shall
also submit to Owner with the submission of the Budget, a written narrative discussion of
significant events in the relevant market where the Property is located which shall
highlight the Property’s position in its relevant market and discuss matters such as
vacancy, new construction and rental trends. The proposed annual budget for any Fiscal
Year once submitted by Manager and thereafter approved by Owner, shall herein be referred
to as the “Budget”.
	 
	 	(e)	 	Quarterly Review and Reforecast. The Budget shall be revised by Manager quarterly
within forty-five (45) days after the end of each of the first, second, and third quarters of
each Fiscal Year if the overall net operating income variance on a year to date basis exceeds
fifteen percent (15%), if the capital expenditure variance exceeds ten percent (10%), or if,
in Manager’s opinion, event(s) have occurred or are anticipated to occur which will
significantly affect the Budget.
	 
	 	(f)	 	Budget Approval. Owner shall approve, disapprove or comment on the proposed annual
budget within thirty (30) days after Owner’s receipt of such proposed annual budget. Owner
may approve, disapprove or modify any proposed annual budget in whole or in part.
	 
	 	(g)	 	Operation Within Budget. Manager shall use, manage and operate the Property strictly
in accordance with the then-current Budget (subject to the Variance Threshold as provided
herein), provided that, without Owner’s prior approval, Manager may incur expenses in excess
of the Budget in the event of an emergency requiring immediate action to avoid imminent
personal injury or imminent material property damage. If the proposed annual budget or a
proposed revision to the current Budget is disapproved by Owner in whole or in part, or not
approved prior to the commencement of the ensuing Fiscal Year, Manager shall continue to
manage and operate the Property pursuant to the prior year’s Budget or the then current Budget
in the case of a proposed revision pursuant to subsection 3.6(e) (except for non-recurring
expenditures and Capital Expenditures which shall be deemed removed from such prior year’s
Budget) until Manager and Owner can resolve their differences, provided, however, that Manager
shall, unless otherwise directed by Owner, be authorized to pay, as an expense of the
Property, all Non-Discretionary Items

21

 

	 	 	 	(as defined in Section 1 of this Agreement). Manager has the authority to expend funds as
provided in Section 3.8 in accordance with the provisions of the current Budget, provided
that Manager shall not be required to expend its own funds if there are insufficient funds
available in the Concentration Account and the Controlled Disbursement Account to pay the
Operating Expenses. Manager’s failure to operate, manage, maintain, repair or lease the
Property in a first class manner and otherwise in accordance with the provisions of this
Agreement shall be excused (and Manager shall not be in default of such duties or
obligations) if Manager is prevented from or delayed in doing so due to Owner’s failure to
approve the Budget and/or Owner’s failure to provide funds for expenditures in accordance
with the approved Budget.
	 
	 	(h)	 	Books and Records.

	 	(i)	 	Manager shall maintain, and keep at its main office accurate books, records
and accounts of the management, operation and financial condition of the Property’s
operations. Such books, records and accounts shall be prepared and kept on a Modified
Accrual Basis. “Modified Accrual Basis” shall be defined as follows:

     1. Gross Revenues on an accrual basis excluding GAAP straight line rental income
adjustment.

     2. Operating Expenses on an accrual basis.

     3. Interest Expense on an accrual basis.

     4. Mortgage principal payments on a cash basis.

     5. Capital Expenditures including leasing costs such as tenant improvements and
Leasing Commissions will be reflected on a cash basis.

     6. Depreciation and amortization expenses, with the exception of amortization of
deferred financing costs, are not to be recorded. At the discretion of Owner, Manager
may be required to separately maintain and update the depreciation, amortization, and
straight line rent schedules and make them available to Owner or Owner’s auditors or
tax preparers.

	 	(ii)	 	Owner shall at all times retain title to the information constituting such
books, records and accounts. Manager shall, during the Term, retain such books,
records and accounts. Any and all computer programs, software and hardware not the
property of Owner utilized by Manager to maintain such books, records and accounts
shall in all events remain the property of Manager.
	 
	 	(iii)	 	Upon reasonable written notice to Manager, Owner may, at its expense,

22

 

	 	 	 	inspect, audit and copy such books, records and accounts during regular business
hours on a periodic or continuing basis by accountants retained by, or other
representatives of Owner, and Manager shall cooperate fully with Owner in
connection with the same.

	 	(i)	 	Monthly Reports. Manager shall furnish to Owner the following monthly reports, which
reports shall be prepared on a Modified Accrual Basis, showing monthly and year to date
activity and which shall be furnished (without notice or demand by Owner) not later than
fifteen (15) days after the end of the monthly reporting period in the format as outlined in
the Sample Reporting Package attached hereto as Exhibit F or as required by and
satisfactory to Owner:

	 	(i)	 	a statement of Cash Flow setting forth the calculation of the Cash Flow from
the Property relating to operating, investing and financing activities, including the
distribution of Cash Flow during the reporting period;
	 
	 	(ii)	 	a detailed operating statement of profit and loss showing on a Modified
Accrual Basis the Gross Revenues, Operating Expenses, Interest Expense and on a cash
basis Capital Expenditures of the Property according to pre-determined categories, in
a format which will allow for comparison to, and show variances from, the Budget on a
monthly and Fiscal Year to date basis.
	 
	 	(iii)	 	a balance sheet in a format which will allow for comparison to, and show
variances from, the Budget on a Fiscal Year to date basis;
	 
	 	(iv)	 	an accounts receivable activity statement itemizing for the reporting period
the opening rents receivable balance, the collected and billed rents, the closing
rents receivable balance and any advanced rent and security deposit balances;
	 
	 	(v)	 	a check register, itemizing by check number and payee each disbursement made
during the reporting period;
	 
	 	(vi)	 	an aged accounts receivable schedule, itemizing all outstanding accounts
receivable as of the end of the reporting period and written comments addressing
efforts, or other actions, that Manager has taken to collect past due balances
exceeding thirty (30) days;
	 
	 	(vii)	 	Intentionally Omitted;
	 
	 	(viii)	 	a narrative summary of the operations of the Property during the reporting period,
highlighting all significant occurrences and any anticipated problems and narrative
explanations of all material variances exceeding the greater of ten percent (10%) and
Twenty-Five

23

 

	 	 	 	Thousand Dollars ($25,000), of an individual line item of income or expense
(actual compared to Budget) for the reporting period on a monthly and Fiscal Year
to date basis;
	 
	 	(ix)	 	a detailed calculation of the Management Fee;
	 
	 	(x)	 	a current rent roll;
	 
	 	(xi)	 	a tenant billing report (billing register);
	 
	 	(xii)	 	bank statements and reconciliation for the Lock Box Account,
Concentration Account, Controlled Disbursement Account, and Security Deposit
Account;
	 
	 	(xiii)	 	proof of cash (identifying opening cash balances, cash received, cash disbursed and
cash contributed or distributed during the month);
	 
	 	(xiv)	 	an aged accounts payable schedule;
	 
	 	(xv)	 	a Capital Expenditure report including (A) leasing costs which lists capital
projects budgeted, (B) budgeted amount, (C) latest estimates of cost, (D) amounts
expended to date, with narrative explanation of variances to the Budget, (E) amounts
to be spent to complete and completion status, and (F) Capital Expenditures and
leasing costs incurred but not paid;
	 
	 	(xvi)	 	a detailed trial balance;
	 
	 	(xvii)	 	a written report describing any written offers received by Manager for the purchase
of all or any part of the Property;
	 
	 	(xviii)	 	a leasing report detailing leasing activity and vacancy for the current month;
	 
	 	(xix)	 	a property summary report;
	 
	 	(xx)	 	Intentionally Omitted;
	 
	 	(xxi)	 	a depreciation and amortization expense schedule, if applicable;
	 
	 	(xxii)	 	tenant sales report, if applicable; and
	 
	 	(xxiii)	 	a schedule of all transactions with Manager or an Affiliate of Manager.

	 	(j)	 	Quarterly Reports.

	 	(i)	 	Within three (3) Business Days prior to the end of each quarter of each
Fiscal Year Manager shall furnish to Owner (i) a leasing schedule

24

 

	 	 	 	containing a summary of lease expirations by year for a ten (10) year period, (ii)
a fixed asset list of all tools, equipment, furniture, artwork, etc., located at
the Property and owned by Owner, (iii) a survey of market conditions and
competition, (iv) an update of the then current Approved Leasing Program, (v) a
completed UBTI questionnaire in the form attached hereto as Exhibit G, and
(vi) an asset overview report.
	 
	 	(ii)	 	In addition to the foregoing, Manager shall furnish to Owner, within sixty
(60) days after the end of each calendar quarter during the Term hereof, an unaudited
profit and loss statement and a balance sheet for the Property prepared in accordance
with GAAP with respect to the immediately preceding calendar quarter.
	 
	 	(iii)	 	Intentionally Omitted.

	 	(k)	 	Annual Reports.

	 	(i)	 	In addition to the regular monthly reports and quarterly reports to be
provided to Owner pursuant to the terms hereof, Manager shall furnish to Owner on an
annual basis, a report of minimum base rental payments for existing Leases year by
year for a prospective period of five (5) years with an additional amount
representing the remaining total rental payments over the Lease term exceeding that
five (5) year period. Such annual periods shall coincide with the calendar year. Such
annual reports shall be due five (5) Business Days before the annual period ending
September 30th. Owner, at its discretion, may modify the timing and
frequency of this request.
	 
	 	(ii)	 	Manager shall cooperate with Owner’s Auditor, at Owner’s discretion, in the
preparation of a year end statement of the Property in connection with the continuing
operations of the Property, including a balance sheet and the related statements of
income and cash flows, which shall be furnished not later than seventy-five (75) days
after the end of each Fiscal Year.

	 	 	Each of the reports provided to Owner by Manager pursuant to this Agreement shall be prepared on a
Modified Accrual Basis, and, at the option of Owner, shall be audited by an accounting firm
selected by Owner (the “Auditor”). Owner shall be responsible for arranging for such audit and
Manager shall coordinate with Owner’s Auditor and cooperate and be responsible for the preparation
of Owner’s audited financial statements. A draft of the Auditor’s report for each Fiscal Year
shall be submitted to Owner for approval by Owner before it is finalized. The final Auditor’s
report shall be submitted to Owner within ninety (90) days following the end of each Fiscal Year.

	 	(1)	 	Tax Matters Reporting.

	 	(i)	 	Manager shall coordinate with Owner’s accountants and cooperate in

25

 

	 	 	 	the preparation of Owner’s tax return including, but not limited to,
supplying necessary information for preparation of such tax return. The tax
return will be prepared by Owner’s accountants on a timely basis and the
cost of preparation and filing of the tax return will be borne by Owner.
Owner’s accountant shall prepare, where applicable, Federal, state and
local income and net worth tax returns only.
	 
	 	(ii)	 	As requested by Owner Manager shall complete all tax related
surveys and questionnaires which Owner may annually require.
	 
	 	(iii)	 	Manager shall prepare all state and local personal property
and other tax returns, as required by law, which are not prepared by Owner’s
accountant.

	 	(m)	 	Accounting Policies and Procedures. Notwithstanding anything to the
contrary contained herein, Manager shall prepare and deliver all reports in accordance
with, and shall otherwise comply with, Owner’s accounting policies and procedures as
reasonably adopted from time to time. Manager acknowledges receipt of a copy of
Owner’s current accounting policies and procedures.
	 
	 	(n)	 	Periodic Reports/Procedures. Manager shall cooperate with Owner’s
personnel or Owner’s accounting firm in regard to random test basis procedures which
will be performed on short notice (less than thirty (30) days) in regard to the
evaluation of the Manager’s system of internal control and accuracy of financial books
and records.
	 
	 	(o)	 	Credit Feasibility. As requested by Owner, Manager may be required to
provide and update a report summarizing the credit worthiness of existing tenants at
the Property and prospective tenants prior to lease execution.
	 
	 	(p)	 	Other Reports. Such other reports as Owner may reasonably request.
	 
	 	(q)	 	Certification. All quarterly, monthly and annual reports shall be
certified by the President, Chief Financial Officer, or Vice President of the Manager.

	3.7.	 	Bank Accounts.

	 	(a)	 	Manager shall maintain, at Owner’s specific request, a Lock Box (the “Lock
Box”) in the name of Owner for the Property for the collection of rents. In addition,
Manager shall maintain the following bank accounts in the name of Owner: a lockbox
account (the “Lock Box Account”), a concentration account (the “Concentration Account”)
with an automatic daily short-term investment sweep feature, a controlled disbursement
account (the “Controlled Disbursement Account”), and an interest bearing account for
tenant security deposits (the “Security Deposit Account”).

	 	 	The Lock Box Account, the Concentration Account, the Controlled Disbursement

26

 

	 	 	Account, and the Security Deposit Account shall be maintained in the name of Owner at a bank as
determined by Owner (the “Depository”). At Owner’s discretion, the Concentration Account, the
Controlled Disbursement Account, and the Security Deposit Account may be in the name of Manager as
managing agent for Owner. All bank accounts shall require two authorized signatories to draw on
such accounts for payments in excess of Twenty Five Thousand Dollars ($25,000). The Manager’s
representatives specified in or pursuant to subsection 2.8(b) or such other officers of Manager as
Manager shall designate, subject to Owner’s approval, shall be empowered to draw upon such
accounts. The Owner’s representatives specified in, or pursuant to, subsection 2.8(a) shall also
be, and hereby are, empowered to draw upon such accounts. In addition, Owner, acting through its
representatives specified in or pursuant to subsection 2.8(a), shall have, and is hereby granted,
the authority to terminate the authority of Manager and its officers and representatives to draw
upon such accounts. All funds deposited in such accounts or otherwise held by or in the name of
Manager for the account of Owner shall be held by Manager in trust and shall not be commingled with
Manager’s other funds. Manager shall in no event have any liability in the event that the
Depository should fail, go into receivership or conservatorship or if such funds are otherwise not
available for reasons beyond Manager’s reasonable control. Manager shall indemnify and hold
harmless Owner from and against any and all Damages occurring by reason of any unauthorized
application by Manager or its directors, officers, employees or representatives of any such funds
held for the account of Owner.

	 	(b)	 	Manager shall cause the transfer of funds in the Lock Box Account to the Concentration
Account on a daily basis. Subject to the terms of this Agreement, Manager shall cause the
transfer of funds in the Concentration Account to the Controlled Disbursement Account to the
extent necessary to pay for expenses pursuant to Section 3.8 below. Monthly, on a
pre-determined date or dates at Owner’s discretion, Manager shall cause the transfer of all of
the available excess funds in the Concentration Account to an account in the name of Owner to
be maintained at a bank determined by Owner (the
“Owner’s Account”).
	 
	 	(c)	 	Manager shall ensure that security deposits are deposited promptly in the Security Deposit
Account. As needed, Manager shall withdraw such amounts from the Security Deposit Account as
are necessary to (i) repay a security deposit (or portion thereof) to a Tenant as required
pursuant to the terms of such Tenant’s Lease; and (ii) cause the transfer of a forfeited
security deposit (or portion thereof) to Owner’s Account.
	 
	 	(d)	 	Notwithstanding anything to the contrary contained herein, in the event that the Lender
shall require cash management procedures in connection with any Financing, and such
procedures are made known to Manager in writing, Manager agrees, at Owner’s expense, to
comply with such procedures and further agrees that the cash management procedures set forth
herein shall be

27

 

	 	 	 	deemed revised to the extent necessary to comply with such Lender-promulgated
procedures.

	3.8.	 	 Payment of Expenses and Capital Expenditures.

	 	(a)	 	Manager shall pay all expenses of operating the Property from the Controlled
Disbursement Account including, without limitation, Operating Expenses,
Debt Service and Capital Expenditures, to the extent there are sufficient funds
in such Controlled Disbursement Account to pay such amounts. All such
expenses shall be paid in the order provided for in subsection 3.8(c) below. At
the discretion of Owner, Capital Expenditures may be required to be approved
by Owner prior to payment or be funded separately by Owner. If Owner elects
to fund the Capital Expenditures separately, Capital Expenditures are to be
requested based on actual expenditures and supported by actual invoices. If
and when a requisition is made, Manager must provide the following:

	 	(i)	 	an itemization by category of the Capital Expenditure;
	 
	 	(ii)	 	within each Capital Expenditure type (i.e. tenant
improvements, Leasing Commissions or building improvements) a brief summary by
Tenant or type of improvement which indicates what was previously spent, the
current request and the estimated amount to complete the project;
	 
	 	(iii)	 	a comparison to the original Budget with an explanation for
any variance; and
	 
	 	(iv)	 	copies of supporting invoices.

	 	(b)	 	If the funds on deposit in the Concentration Account and the Controlled
Disbursement Account are insufficient or projected to be insufficient to cover the
amounts necessary to pay the Operating Expenses, Debt Service and Capital Expenditures
for such month, Manager shall promptly notify Owner, and Owner shall, in its sole and
absolute discretion, make up such negative cash flow by depositing an amount equal to
the deficit in the Concentration Account. If requested by Owner in writing, Manager
may, but shall not be obligated to, advance Manager’s own funds on behalf of Owner to
make up any negative cash flow; and, if Manager makes any such advance from Manager’s
own funds at the request of Owner, Owner shall reimburse Manager for any such advance
plus interest thereon at the rate per annum publicly announced by the Depository as
its base or prime rate, from the date of such advance to but not including the date of
such reimbursement.
	 
	 	(c)	 	Manager shall use the Controlled Disbursement Account to pay when due the
following items in the following order of priority (to the extent there are sufficient
funds in such Controlled Disbursement Account to pay such amounts):

28

 

	 	(i)	 	all real estate taxes as and when they become due, and, in any event before
the date on which interest and/or any penalty becomes payable with respect thereto
and, if directed by Owner, insurance premiums as and when they become due and
payable with respect to the Property;
	 
	 	(ii)	 	if applicable, Debt Service;
	 
	 	(iii)	 	all utility charges as and when they become due and payable with respect to
the Property;
	 
	 	(iv)	 	all proper charges due and payable under the Contracts;
	 
	 	(v)	 	all amounts necessary to purchase supplies, tools, uniforms and other
materials necessary for the proper maintenance and operation of the Property;
	 
	 	(vi)	 	all other fees, costs and expenses payable pursuant to this Agreement,
including the Management Fee and other amounts due to Manager under this Agreement;
and
	 
	 	(vii)	 	all Capital Expenditures for such period.

	 	 	 	To the extent there are not sufficient Funds in the Controlled Disbursement Account to pay
the amounts owing to Manager under subsection 3.8(c)(vi) above, Owner shall be obligated
to pay such amounts, which obligation shall survive the expiration or termination of this
Agreement.
	 
	 	(d)	 	Subject to the immediately succeeding sentence and subsection 3.2(b), Owner shall reimburse
Manager for all actual out-of-pocket expenses incurred and paid by Manager in connection with
the management, maintenance, repair and operation of the Property pursuant to the Budget. Such
expenses shall not include (except as specifically provided herein or in the Schedules
attached hereto) (i) the Manager’s central office overhead or other central office general,
leasing or administrative personnel or other expenses, (ii) travel expenses to and from the
Property, (iii) the costs of providing the reports and documents to be provided pursuant to
the provisions hereof, other than the costs and expenses incurred by Manager’s on-site staff
and the Auditor’s services hereunder, (iv) costs and expenses (including overhead)
attributable to services rendered by off site personnel of Manager or its Affiliates in
connection with the management, leasing and operation of the Property, except to the extent
such services are expressly set forth in, and are in accordance with, the Budget, or (v) costs
and expenses of Manager set forth in subsection 3.2(b).
	 
	 	(e)	 	Except as provided in subsection 3.1(b)(vii), Manager shall not make any disbursements
without Owner’s approval, for those costs and expenses which would result in variances of
actual Fiscal Year to date expenses exceeding the

29

 

	 	 	 	budgeted amounts (subject to the Variance Threshold) set forth in the then current
Budget.

	3.9.	 	Services with Respect to Financing.

	 	(a)	 	Manager shall, at the expense of Owner, in accordance with the Budget, duly
and punctually pay and perform on behalf of Owner all of those Owner’s obligations so
requested by Owner for any Financing, to the extent Manager is informed in writing of
such requirements, and use its commercially reasonable efforts to comply with all of
the terms and provisions of the Financing Documents.
	 
	 	(b)	 	Each of Manager and Owner shall promptly notify the other upon learning of any
default, or event of default or event which, with the giving of notice or the passage
of time or both, might constitute a default or an event of default under any Financing.
Manager shall consult with Owner concerning the action to be taken with respect thereto
and, at the expense of Owner, take such action as Owner shall direct.
	 
	 	(c)	 	Without the consent of Owner, Manager (i) shall not modify, or in any way
alter, the provisions of any Financing Documents and (ii) shall not take any action,
or omit to take any action or give any notice, the taking, omission or giving of which
might result in the occurrence of a default by Owner under any Financing Documents.
	 
	 	(d)	 	Each of Manager and Owner shall promptly notify the other upon receiving any
notice under any Financing (and furnish a copy of the notice received by it with its
notice to the other party) of any default, event of default or condition which, with
the giving of notice or the passage of time or both, might result in a default or
event of default by Owner under any Financing. Manager shall consult with Owner
concerning the action to be taken with respect thereto and, at the expense of Owner,
shall take such action as Owner shall direct.
	 
	 	(e)	 	Manager shall prepare all information, schedules and reports and provide any
and all materials required by (or requested by Lender and approved by Owner) any
Financing Documents, including, without limitation, preparing rent rolls, obtaining
tenant estoppel certificates, providing copies of Leases, preparing historic income
and expense data for Financings and providing debt covenant compliance information
including, but not limited to, rent rolls, annual Budget, audited financial
statements, debt service coverage ratio calculations.

	3.10.	 	Notification of Sale or Financing Transaction.
	 
	 	 	Notwithstanding anything to the contrary set forth in this Agreement, it shall be a
material covenant of Manager under this Agreement that Manager deliver a written notice to
J.P. Morgan Investment Management Inc., 245 Park Avenue, New York, New York 10167, Attn:
Benjamin G. Gifford (Fax: (212) 648-2261) and Temra

30

 

	 	 	Wollman (Fax: (212) 648-2266) promptly upon becoming aware that any Person (including,
without limitation, any employee or agent of Owner) is offering or otherwise marketing the
Property for sale or offering the Property as collateral in connection with or arising from
any financing transaction. Manager’s failure to comply with the foregoing covenant shall
constitute a material default under this Agreement, entitling Owner to terminate this
Agreement upon notice to Manager.
	 
	3.11.	 	Inspections.
	 
	 	 	Manager acknowledges that during the Term, designated representatives of firms other than
Owner or affiliated companies, may, with Owner’s prior written consent, have reason to
review and examine during normal business hours the accounting books and records, the Lease
files, revenue, operating expenses, Tenant sales information, and other property data that
is under the control of Manager, and Manager will reasonably cooperate with these designated
representatives. Manager further acknowledges that these services are included within the
scope of this Agreement and that no additional fees are required over and above the basic
management fee contained within this Agreement.
	 
	3.12.	 	Limitation of Authority.
	 
	 	 	Notwithstanding any provision of this Agreement to the contrary, Manager shall not, without
prior approval by Owner: (a) convey, transfer, assign, pledge, hypothecate or encumber or
otherwise Lien any property or asset of Owner; (b) except as expressly provided herein,
retain attorneys on behalf of Owner; (c) enter into any dealings concerning the Property or
with Tenants of space in the Property for Manager’s own account; (d) pledge the credit of
Owner, except for purchases made in the ordinary course of business of operating the
Property or as otherwise contemplated pursuant to this Agreement in conformity with the
Budget; and (e) borrow money or execute any promissory note or other obligation or mortgage,
security agreement or other encumbrance in the name of or on behalf of Owner. The
limitations set forth in this Section 3.12 shall be in addition to all other restrictions on
the authority of Manager set forth in this Agreement.
	 
	4.	 	Services with Respect to Property Sales and Post Sale-Closing.
	 
	 	 	In regard to any potential sale of the Property, Manager shall cooperate with Owner during
the due diligence process and, as reasonably necessary, perform the following duties and
obligations during and after the sale process:

	 	(i)	 	Prepare current rent rolls, copies of Leases, historic income
and expense data and such other materials necessary to offer the Property for
sale.
	 
	 	(ii)	 	Process information requests as necessary and as requested by
Owner, or due diligence requests of potential buyers, including access to
Lease files, financial statements, service contracts, and supporting billing
and

31

 

	 	 	 	disbursement documentation.

	 	(iii)	 	Prepare and provide schedules and support for closing
adjustments including revenue and expense prorations and, if necessary,
reconciliations of estimated billed recoverable expenses versus actual.
	 
	 	(iv)	 	Prepare final accounting for the sale of the Property and, as
necessary, participate in the fieldwork and preparation of the financial
statements or audited financial statements to be prepared by the Auditor. The
fieldwork would include, but not be limited to, providing access to the
Property’s books and records and having qualified personnel available to
answer any questions which may arise during the fieldwork.
	 
	 	(v)	 	As necessary Manager shall prepare the final expense and
recoverable expense reconciliations regarding the proration of revenues and
expenses for the sale of the Property.
	 
	 	(vi)	 	Manager shall process any invoices, if applicable and as
approved by Owner, for payments made relating to property expenses for a period
of ninety (90) days after the sale date.
	 
	 	(vii)	 	Manager shall prepare, upon the request of Owner, a final
schedule of distributions to be made.
	 
	 	(viii)	 	After processing property disbursements and distributions, Manager shall
close all bank accounts for which it has authorization.

	 	 	These post-closing duties and obligations may span a period covering approximately ninety
(90) days. The Management Fees covering the period of the Owner’s interest in the property
will represent the only compensation which Manager will receive for these services.
	 
	5.	 	Insurance
	 
	5.1.	 	Owner’s Insurance.

         Owner shall maintain in full force and effect with respect to the Property and any personal
property of Owner located at the Property and used in connection therewith, insurance policies
satisfactory to Owner issued by insurance companies, which have an A.M. Best General Policyholder’s
Service rating of not less than “A- VIII” (or otherwise satisfactory to Owner), which are
licensed, or approved to do business, in the state in which the Property is located and which are
otherwise satisfactory to Owner. At the request of Owner, Manager shall obtain same at Owner’s
expense, subject to the review and acceptance of all coverage by Owner. If requested by Owner, such
policies shall provide the following coverages:

	 	  (a)	 	All Risk property damage insurance including, without limitation, fire,
flood, sprinkler leakage, water damage and earthquake, if applicable and available at

32

 

	 	 	 	commercially reasonable rates, in an amount and with an agreed amount endorsement
sufficient to prevent Owner from becoming a co-insurer in any loss under the policy or
equal to the replacement cost of the Property, the lesser of the two, and a deductible
approved by Owner. The policies of insurance carried in accordance with this subsection
5.1(a) shall contain (i) a replacement cost endorsement without deduction for depreciation
or obsolescence and (ii) a waiver of subrogation clause, all in form satisfactory to
Owner.
	 
	 	(b)	 	Rental value insurance on the Property, if applicable, with a minimum twelve (12) month
indemnity period.
	 
	 	(c)	 	Business Interruption Insurance, if applicable, on an eighty percent (80%) Gross Earnings
Form, with a minimum twelve (12) month indemnity period and including ordinary payroll
coverages.
	 
	 	(d)	 	Commercial General and Excess Liability Insurance, written on an occurrence basis, including
blanket contractual liability, products and completed operations and personal injury coverage
with a combined single limit for any one occurrence of $15,000,000 or such higher limit as
Owner may from time to time request. Such requirement may be satisfied by a layering of
Commercial General Liability, Umbrella and Excess Liability policies, but in no event will
the liability insurance be written for an amount less than $15,000,000 combined single limit
for bodily injury and property damage liability.
	 
	 	(e)	 	Boiler and Machinery Breakdown Direct Damage Insurance and third party liability coverage
(if not covered under the Commercial General Liability Policy) with full comprehensive
coverage on a repair and replacement basis for all HVAC equipment, electrical equipment,
boilers and machinery which form a part of the Property including Business Interruption
Coverage for Loss of Rental Income in connection therewith in accordance with subsection
5.1(c) hereof.
	 
	 	(f)	 	During the course of any construction or repair of Improvements or during the course of
Restoration on the Property (other than Tenant leasehold Improvements), Builder’s Risk
Insurance on a completed value basis and on a non reporting form against “all risks of
physical loss,” including flood (if available at commercially reasonable rates), earthquake
(if available at commercially reasonable rates), collapse and transit coverage (if available
at commercially reasonable rates), during construction of such Improvements or Restoration,
with deductibles satisfactory to Owner, covering the replacement cost value of work performed
and the equipment, supplies and materials furnished (unless such equipment, supplies and
materials are required to be insured by contractors or vendors) and rent loss insurance for a
period not less than twelve (12) months in an amount satisfactory to Owner. Such policy of
insurance shall contain a “permission to occupy upon completion of work or occupancy”
endorsement, a waiver of coinsurance or an agreed amount

33

 

	 	 	 	endorsement and an agreement by the insurer that following a loss, the insurer will
pay to the insured (i) the full value of the loss (less the deductible) provided
Owner is required to or elects to rebuild or (ii) the actual cash value of the loss
in the event Owner is not required to or does not elect to rebuild.

	 	(g)	 	Such other insurance with respect to the Property, in such amounts as Owner
(or any lender in connection with a Financing) from time to time may require against
such other insurable hazards which at the time are commonly insured against in respect
of property similar to the Property.

     
Manager shall submit all insurance policies it obtains on behalf of Owner pursuant to this
Section 5.1 for Owner’s review and approval.

	 	 
	5.2.	 	Manager’s Insurance.

     Manager shall, at the expense of Manager, maintain in full force and effect insurance
policies with respect to the employees of Manager satisfactory to Owner issued by insurance
companies which have an A.M. Best General Policyholder’s Service rating of not less than “A-,VIII”
which are licensed in the state in which the Property is located and which are otherwise
satisfactory to Owner. Such policies shall provide the following coverage:

	 	(a)	 	Worker’s compensation and employer’s liability insurance subject to the
statutory limits of the state in which the Property is located. Manager shall provide
Owner with a certificate evidencing such coverage with the following provisions: (i)
coverage for injury, death or occupational disease of Manager’s employees arising out
of or in the scope of employment; and (ii) employees’ liability insurance with a limit
of at least $1,000,000 per each accident and per each employee.
	 
	 	(b)	 	Comprehensive automobile liability insurance covering owned, non-owned, and
hired vehicles in an amount not less than $ 1,000,000 combined single limit for bodily
injury and property damage. Such requirements may be satisfied by layering of
comprehensive automobile liability, umbrella and excess liability policies.
	 
	 	(c)	 	Fidelity bond and computer crime insurance with an annual limit of a minimum of
$5,000,000 for each director, officer, employee or agent of Manager associated with the
management of the Property including the handling of receipts and disbursements.
	 
	 	(d)	 	Commercial general and umbrella liability insurance, written on an occurrence
basis, in an amount not less than $1,000,000 and $10,000,000, respectively. Such
umbrella liability insurance shall apply in excess of the commercial general liability
insurance and the insurance required in subsections 5.2(a) and 5.2(b).
	 
	 	(e)	 	Professional liability insurance with an annual limit not less than $5,000,000

34

 

	 	 	 	per occurrence and in the aggregate with an extended period of indemnity. Such
insurance policy shall survive the termination or expiration of this Agreement for
a minimum two (2) years following the expiration or termination of this Agreement.

	5.3.	 	Blanket Insurance.

     Manager may effect any coverage required under this Article 5 under a blanket insurance
policy satisfactory to Owner, provided that (i) any such policy of blanket insurance either shall
specify therein, or the insurer under such policy shall certify to Owner, (A) the maximum amount
of the total insurance afforded by the blanket policy allocated to the Property and (B) any
sub-limits in such blanket policy applicable to the Property, which amounts shall not be less than
the amounts required pursuant to this Article 5; (ii) any such policy of blanket insurance shall
comply in all respects with the other provisions of this Article 5; and (iii) the protection
afforded under any policy of blanket insurance hereunder shall be no less than that which would
have been afforded under a separate policy or policies relating only to the Property.

	5.4.	 	Policies.

	 	(a)	 	The insurance maintained under Section 5.1 shall name Owner as the Insured,
and Manager as additional insured as their interests may appear. Such insurance may
also be extended to name other persons as Owner may specify, from time to time, as
additional insureds as their interests may appear.
	 
	 	(b)	 	The insurance maintained under Section 5.2 shall name Manager as the insured
thereunder. The insurance maintained under subsections 5.2(b) and (d) shall name Owner
and such other persons as Owner may specify, from time to time, as additional insureds
as their interests might appear.
	 
	 	(c)	 	All insurance maintained under this Article 5 shall provide that (i) no
cancellation or reduction thereof shall be effective until at least thirty (30) days
after receipt by Owner and Manager of written notice thereof; and (ii) all losses
shall be payable notwithstanding any act or negligence of Manager or any Tenant or
their partners, directors, officers, employees or agents which might, absent such
agreement, result in a forfeiture of all or part of such insurance payment and
notwithstanding (a) the occupation or use of the Property for purposes more hazardous
than permitted by the terms of such policy, or (b) any foreclosure or other action or
proceeding taken pursuant to the provision of any mortgage with respect to the
Property or (c) any change in title or ownership of the Property. In the event of a
Financing all insurance shall comply with the terms of such Financing.
	 
	 	(d)	 	Manager shall furnish to Owner, without notice or demand, not later than
fifteen (15) days prior to the expiration date of each policy required to be maintained
hereunder, certificates of insurance or other evidence satisfactory to Owner of the
renewal thereof, and evidence satisfactory to Owner of

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	 	 	 	payment of the premiums therefor. Upon Owner’s request, Manager shall deliver a
copy of each policy certified to be a true copy by the insurer or insurance broker
with respect to such policy.

	5.5.	 	Payment of Premiums by Owner.

     If Manager fails to maintain the insurance required to be maintained under this Article 5
(including the insurance on behalf of Owner that Owner may request pursuant to Section 5.1) or
fails to deliver evidence of insurance, Owner may, but shall not be obligated to, obtain such
insurance and pay the premiums therefor and in the case of the insurance described in Section 5.2
or the duplication of any other insurance described in Article 5, Manager shall, on demand,
reimburse Owner for all sums advanced and expenses incurred in connection therewith other than in
connection with insurance on behalf of Owner.

	5.6.	 	Claims.

     In the event of a loss related to the Property under any of the insurance policies described
in Section 5.1 and subsections 5.2(b), and (d), Manager shall, if Manager has knowledge of the
loss, promptly and timely after learning of same, file a claim on behalf of Owner (and Manager if
such party is also an insured) and use its commercially reasonable efforts and due diligence to
monitor such claim on behalf of such insured party and cooperate fully with any appointed
representatives, consultants and adjusters retained by or on behalf of the insurance companies’
interests.

	5.7.	 	Waiver.

     Owner shall waive all rights of claims against Manager under its property insurance policies
referred to in Section 5.1 and represents to Manager that such waiver of claims will not affect
the effectiveness of coverage of such policies; and Owner will obtain an endorsement, if
necessary, to confirm that the waiver of claims herein granted will in no manner affect the
coverage of such policies.

	6.	 	Manager’s Compensation
	 
	6.1.	 	Management Fees.

	 	(a)	 	Owner shall pay Manager, and Manager shall accept, as compensation for
Manager’s management services during the Term a fee (“Management Fee”) on a monthly
basis in an amount equal to four percent (4%) of Gross Receipts actually collected by
Manager during that month.
	 
	 	(b)	 	The Management Fee for any month shall be paid as an Operating Expense on or
prior to the last day of the month to which it relates. Subject to Section 3.8(c),
Manager is hereby authorized to pay itself the Management Fee from the Controlled
Disbursement Account. To the extent there are insufficient funds in the Controlled
Disbursement Account, after compliance with the payment priority subsections of said
Section 3.8(c), to pay the Management

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	 	 	 	Fee, Owner shall be obligated to pay the Management Fee.

	 	(c)	 	For the purposes of this Section 6.1, the term “Gross Receipts” shall mean all
amounts actually collected as rents or other charges for use or occupancy of space or
facilities in the Property, including furniture rental, forfeited security deposits
(but only to the extent such forfeited security deposits are applied against rents
owed under the Lease in question and are not used for other purposes), percentage
rent, common area charges, reimbursements for utilities, reimbursement for taxes,
tenants’ charges, late charges and other miscellaneous income with respect to the
Property, but excluding other receipts, such as (i) all amounts collected from any
parking facility, interest or investment income, (ii) security deposits (unless and
until applied against rents as provided above), (iii) insurance proceeds (except for
rent loss insurance proceeds), (iv) tax refunds, (v) Condemnation awards, (vi)
dividends on insurance policies, (vii) any lease buy out, pick up or any other
consideration received by Owner for accepting a surrender or other termination or
cancellation of a Lease, voluntary or otherwise; and (viii) proceeds of any other
Capital Event.

	6.2.	 	Leasing Commissions and Expenses Generally.

     Owner shall pay, and Manager shall accept, the leasing commissions (the “Leasing
Commissions”) and expenses hereinafter specified as and for Manager’s full compensation and
reimbursement for the leasing/brokerage services to be rendered and the expenses to be incurred by
it hereunder in connection with the leasing of the Property.

	6.3.	 	Leasing Commissions on Approved Leases.

	 	(a)	 	If a new Lease with a new Tenant is approved by Owner and the same is
executed and delivered while this Agreement is in effect by or on behalf of
both the Tenant and Owner, then Owner shall pay to Manager within the times
hereinafter specified, a Leasing Commission with respect to such Lease to be
determined and computed as follows;

	 	(i)	 	an amount equal to (A) if no cooperating broker is involved,
the lesser of the market rate or four percent (4%) and (B) if a cooperating
broker is involved, the lesser of the market rate or two percent (2%), of the
Base Rent payable under, and during the first ten (10) years of the non
cancelable primary term of such Lease, other than upon the extension or
renewal thereof.
	 
	 	(ii)	 	No commission is payable for primary lease terms in excess of
ten (10) years.

	 	(b)	 	The Leasing Commission described in subsection 6.3(a) shall be payable as
follows:

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	 	(i)	 	Fifty percent (50%) of such commission shall be due and payable upon
the execution and delivery of the Lease by or on behalf of both the Tenant
and Owner; and
	 
	 	(ii)	 	Fifty percent (50%) of such commission shall be due and
payable when tenant improvements, if any, have been completed, the Tenant
occupies the leased space, a certificate of occupancy has been issued for the
leased space and a copy has been delivered to Owner and the Tenant commences
payment of regularly scheduled monthly rent.

	 	(c)	 	Unless otherwise agreed for a specific Lease, if a Lease provides that the
Tenant shall have the right to cancel the Lease prior to the expiration of the term
thereof, the Leasing Commission described in subsection 6.3(a) shall be determined and
computed only upon the non-cancelable portion of the term. If the Tenant elects not to
cancel the Lease and if the right to cancel relates to the first five (5) years of the
term, an additional Leasing Commission determined and computed for the balance of the
primary term as described in subsection 6.3(a) shall be payable when the right to
cancel expires, but if the right to cancel relates to a period after the first five (5)
years of the term, the Tenant’s election not to cancel shall be treated as an extension
of the Lease, and an additional Leasing Commission determined and computed as
described in Section 6.4 shall be payable when the option to cancel expires.
	 
	 	(d)	 	In addition, Owner shall reimburse Manager for:

	 	(i)	 	the reasonable actual out-of pocket costs of all advertising
plans and promotional materials approved by Owner; and
	 
	 	(ii)	 	the cost of all reasonable attorneys’ fees incurred in the
leasing of any space at the Property, provided that, in each case, the use of
outside attorneys and fees payable thereto have been approved in advance by
Owner (such attorneys to be retained and paid by Owner).

	 	 	Manager shall not be entitled to reimbursement from Owner for any costs or expenses of any
kind or nature, except to the extent specifically set forth in this Section 6.3 (D).
	 
	6.4.	 	Leasing Commissions on Extensions and Renewals.

     With respect to an extension or renewal of a Lease, whether under a Lease with an existing
Tenant, or a modification or extension of an existing Lease, and when the Tenant occupies the
leased space with respect to such extension, then Owner shall pay to Manager a Leasing Commission
with respect to any such extension or renewal equal to fifty percent (50%) of the Leasing
Commission that would have been determined and computed to be payable for a new Lease with a new
Tenant under subsection 6.3(a) with respect to the Base Rent due during the extension or renewal
term; provided that, regardless of whether a co-broker was involved, such Leasing Commission shall
be calculated as if no co-broker was involved. The Leasing Commissions payable by Owner pursuant to
this Section 6.4 shall be

38

 

payable one hundred percent (100%) upon the execution and delivery of the applicable Lease
amendment or renewal by or on behalf of both the Tenant and Owner (including, if applicable, by
Manager on behalf of Owner in accordance with the provisions hereof).

	6.5.	 	Definition of Base Rent.

     For the purpose of computing any Leasing Commission due and payable hereunder, the term “Base
Rent” shall mean the fixed rent stated in the Lease in question (regardless of how such rent is
denominated), but excluding the following items of additional rent (regardless of how such items
are denominated and whether or not they are identified separately from the fixed rent under such
Lease or payable as part of, or an increase in, the fixed rent):

	 	(a)	 	any additional rent payable pursuant to any escalation provision in such Lease
and representing the Tenant’s share of Owner’s operating costs and expenses, real
estate taxes, utilities, insurance and the like or any increase therein, including any
escalation provision which is determined on the basis of any consumer price or other
index;
	 
	 	(b)	 	any additional rent representing reimbursement to Owner for electricity, gas,
oil or other utility charges or service paid by Owner in respect to the Tenant’s
leased space which are not to be provided by Owner during regular building hours
pursuant to the applicable standard form of lease;
	 
	 	(c)	 	any additional rent representing (i) special tenant services, which in the
judgment of Owner, exceed those normal services provided to all Tenants or (ii) an
amortization of the Tenant’s contribution to the Owner for tenant finish which is
non-standard tenant finish or unique to a specific Tenant’s use or occupancy, or any
increase in the base rent (over the prevailing base rent quoted by Owner to other
prospective Tenants) which represents an amortization of the cost of such tenant
finish;
	 
	 	(d)	 	reimbursements to Owner for advances made pursuant to a Lease;
	 
	 	(e)	 	rent for parking;
	 
	 	(f)	 	any additional rent payable for space based upon a percentage of sales or gross
receipts, except that, in the case of a Lease which provides that only a percentage
rent and no base rent, is payable either for a specified period of time or for the
entire term of such Lease, the base rent shall be deemed to be the amount to be
determined by Owner and Manager in good faith prior to entering into any such Lease;
	 
	 	(g)	 	any damages, penalty payment, service charge, late charge or cancellation
policy and/or interest relating to any of the foregoing;

39

 

	 	(h)	 	rent for services or facilities available to a Tenant at locations other than
the Tenant’s leased space at the Property (including any storage space rental);
	 
	 	(i)	 	rentals payable upon continuation of a Lease on a month-to-month basis;
	 
	 	(j)	 	any consideration received by Owner for the sale or lease of any personal
property or fixtures used in connection with the Property;
	 
	 	(k)	 	amounts payable, by reason of direct payment by a Tenant for electricity,
heat, air conditioning, utilities, supplies and/or other goods and services;
	 
	 	(1)	 	any lease buy-out, pick-up or any other consideration received by Owner for
accepting a surrender or other termination or cancellation of a lease, voluntary or
otherwise;
	 
	 	(m). 	 	any sublease or other profits received by Owner as a result of subleasing or
assignments done by a tenant;
	 
	 	(n)	 	any security deposit or payment of rent in advance as security; and
	 
	 	(o)	 	any other rent which is not base rent.

	6.6.	 	Cooperating Brokers, Finders and Other Persons.

	 	(a)	 	In the case of each Lease entered into with the participation of a cooperating
broker Owner shall pay or cause to be paid the Leasing Commissions set forth in a
separate agreement between Owner and the cooperating broker. Any payment of a Leasing
Commission to Manager or a cooperating broker shall include and cover any salesperson
of either of them who may be entitled to share in such commission.
	 
	 	(b)	 	Except as specified in subsection 6.6(a) with respect to a Leasing Commission
which is to be paid to a cooperating broker, and except as provided for in the last
sentence of subsection 3.3(a), if applicable, Manager shall be solely responsible for
commissions, fees, charges and expenses of all brokers, sales persons, finders and
other persons involved in procuring or producing Tenants for, or negotiating Leases
with respect to, the Property; and Manager shall indemnify, defend and hold harmless
Owner from and against any and all claims for commissions, fees, charges or expenses of
any and all brokers, sales persons, finders and other persons, and any and all Damages,
relating thereto, except in any such case, to the extent of Owner’s wrongful acts or
omissions. The provisions of this subsection 6.6(b) shall survive the expiration or
termination of this Agreement.

40

 

	6.7.	 	Leasing Commissions Payable After Termination.

     Manager shall be entitled to receive the Leasing Commissions specified herein with respect to
any Lease or renewal, extension or expansion of an existing Lease for which it commenced
negotiations during the Term, provided that (a) Manager lists such Lease in a certificate delivered
to Owner within ten (10) days after the termination of this Agreement and (b) such Lease or
renewal, extension or expansion of an existing Lease is executed and delivered by the Tenant and
Owner within ninety (90) days after the termination of this Agreement. Owner shall negotiate in
good faith with the Tenant or prospective Tenant in question in an effort to consummate the
extension or expansion of Lease in question within said ninety (90) day period. Except as expressly
provided in this Section 6.7, no Leasing Commission shall be payable to Manager with respect to (i)
any new Lease entered into after the termination or expiration of this Agreement or (ii) any
renewal, extension or expansion option contained in any Lease if such option is exercised by the
Tenant after the termination or expiration of this Agreement. Notwithstanding the foregoing or
anything to the contrary contained herein, no Leasing Commissions provided for in this Section 6.7
shall be payable to Manager if this Agreement is terminated as a result of (a) the sale of the
Property to a third party or (b) Manager’s default hereunder (but in each case without affecting
Manager’s right to receive commissions earned prior to the date of termination).

	6.8.	 	No Duplication.

     No fees or reimbursement of expenses paid by Owner hereunder shall be duplicative of any
other amounts paid by Owner under this Agreement, or any other agreement to which Manager or any
Affiliate of Manager and Owner or any Affiliate of Owner are parties.

	6.9.	 	No Other Fees.

     Manager acknowledges and agrees that it shall not be entitled to any fees or commissions for
the performance of its duties and obligations under this Agreement except for the Management Fee,
and the Leasing Commissions.

	7.	 	Term
	 
	7.1.	 	Term.

     The Term shall commence as of the date hereof and shall expire on the first (1st) anniversary
of the date hereof (the “Initial Term”), unless extended or sooner terminated as hereinafter
provided.

	7.2.	 	Extension.

     After the expiration of the Initial Term, subject to termination under Section 7.3, the term
of this Agreement shall be automatically extended for an additional one (1) year period.

41

 

	7.3.	 	Termination.

	 	(a)	 	In the event of the sale of all or substantially all of the Property by Owner
(including any sale by agreement, foreclosure or otherwise), this Agreement shall
terminate upon the consummation of such sale.
	 
	 	(b)	 	If any one or more of the following events (each an “Event of Default”) shall
occur and be continuing:

	 	(i)	 	if Manager shall assign this Agreement or delegate its duties
hereunder without the consent of Owner;
	 
	 	(ii)	 	if any material license or qualification held by Manager and
necessary for the performance of its duties or services hereunder shall be
terminated or suspended, and such termination or suspension, as the case may
be, is not reversed within thirty (30) days following notice thereof by the
applicable licensing authority or Owner;
	 
	 	(iii)	 	if Manager or any of its directors, officers or employees
shall misappropriate any funds of Owner or otherwise be guilty of gross
negligence, willful misconduct, bad faith fraud, malfeasance or breach of
fiduciary duty, reckless or criminal misconduct in connection with Manager’s
duties hereunder;
	 
	 	(iv)	 	if Manager shall fail to pay any amount payable to Owner under
this Agreement when due and such default shall continue for five (5) days
after written notice thereof to Manager;
	 
	 	(v)	 	(a) if Manager shall fail to comply with any provision of this
Agreement (other than those described in subsection 7.3(b)(i) through (iv) and
(vi) through (viii)) and such Default shall continue for ten (10) days after
notice of such Default is given by Owner to Manager; (b) or, if such Default
cannot reasonably be cured within such ten (10) day period, if Manager shall
fail to commence the curing of such Default within such ten (10) day period
(and to notify Owner within such ten (10) day period that Manager has commenced
such cure and will prosecute such cure diligently and complete the same, which
notice shall specify Manager’s estimate of the time period within which such
cure will be completed) or, thereafter, shall fail to prosecute such cure
diligently and complete the same within sixty (60) days; (c) or if, after the
ten (10) day period described in clause (a) of this subsection 7.3(b)(v), Owner
is subject to any criminal liability or unbonded civil liability, or the
Property is subject to any unbonded Lien or Owner or the Property is subject to
any material risk of loss by reason of Manager’s failure to comply with such
provision of this Agreement;
	 
	 	(vi)	 	if Manager shall fail to follow any lawful direction of Owner with

42

 

	 	 	 	respect to the Property which direction complies with this Agreement and such
Default shall continue for five (5) Business Days after notice of such Default
given by Owner to Manager;

	 	(vii)	 	(a) if Manager shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidation, custodian or
other similar official of its or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to authorize any of
the foregoing; or (b) if an involuntary case or other proceeding shall be commenced
against Manager seeking liquidation, reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency, reorganization or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver, liquidate,
custodian or other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and unstayed for a
period of ninety (90) days; or (c) if an order for relief shall be entered against
Manager under any bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect; or
	 
	 	(viii)	 	if there shall be a dissolution or termination of the corporate existence of
Manager by merger, consolidation or otherwise;

	 	 	then, following the occurrence of any such Event of Default, Owner shall have the right to
terminate this Agreement by notice to Manager and to exercise any and all other rights and
remedies available under this Agreement and at law or in equity.

	 	(c)	 	Notwithstanding anything to the contrary contained herein, Owner shall have the right to
terminate this Agreement upon thirty (30) days’ prior written notice to Manager, with or
without cause.
	 
	 	(d)	 	In the case of an Event of Default under subsections 7.3 (b)(vii)(a) or (c), the notice of
termination shall be deemed to have been given upon the occurrence of such Event of Default.
	 
	 	(e)	 	Following the expiration or termination of this Agreement, Manager shall cooperate fully
with Owner and Owner’s agent and representatives to effectuate an orderly transition in
connection with the management and/or operation of the Property. Upon the expiration or
termination of this Agreement, or as otherwise provided in Article 4, Manager shall deliver
to Owner any (i) monies owed to Owner and/or tenant security deposits held or

43

 

	 	 	 	received by Manager for Owner’s account, (ii) a final accounting within thirty (30)
days after the last day of the calendar month in which such termination occurs,
(iii) all books, records, Leases, Contracts, agreements, and other documents and
instruments in Manager’s possession or control relating to the Property, or the
management or operation thereof, (iv) the unused inventory of all supplies,
materials, tools and equipment used in connection with the management and/or
operation of the Property, and (v) all keys to any locks on the Property then in the
possession of Manager, together with any plans and specifications pertaining to the
Property then in the possession of Manager. The provisions of this subsection 7.3(e)
shall survive the expiration or termination of this Agreement.

	7.4.	 	Determination of Fees.

     All fees and other sums payable by Owner to Manager hereunder (except as otherwise provided
herein) shall cease and be determined (subject to claims by Owner for Damages in connection with
defaults by Manager) as of the expiration or termination of this Agreement, but the obligation to
pay such determined but unpaid fees and reimbursements shall survive the expiration or termination
of this Agreement. Management Fees for partial months shall be pro rated on the basis of the
number of days in said month. Leasing Commissions are deemed to be earned at the time of lease
execution and shall be paid in accordance with Sections 6.3,
6.4, 6.5, 6.6 and 6.7.

	8.	 	Miscellaneous
	 
	8.1.	 	Notices.

     All notices, requests, permissions, waivers and other communications (individually and
collectively, a “Notice”) to either party hereunder shall be in writing and, unless otherwise
specified herein, shall be delivered by hand, facsimile, United States registered or certified
mail, return receipt requested, United States Express Mail, Federal Express, Airborne Express or
any other national overnight express delivery service (in each case postage or delivery charges
paid by the party giving such communication) addressed to the party to whom such communication is
given at its address or facsimile number set forth below:

If to Owner, to:

c/o J.P. Morgan Investment Management Inc.

245 Park Avenue

New York, New York 10167

Attention: Temra Wollman

Facsimile: 212-648-2266

If to Manager, to:

44

 

8 Greenway Plaza, Suite 1000

Houston, Texas 77046 
Attention:
Stephen Hefner 
Facsimile:
713-850-0498

     Unless otherwise specified herein, each such Notice addressed and given as set forth above
shall be effective (i) the date of receipt of such Notice, or attempted delivery of such Notice,
if receipt is refused; and (ii) if sent by mail as aforesaid, the date which is seventy-two (72)
hours after such Notice is deposited in the mail, postage prepaid as aforesaid. Any party listed
above may change its address under this Section 8.1 by notice to the other parties listed above
provided that no such address shall be located outside of the United States of America. As a
condition to the effectiveness of any Notice delivered by facsimile, a confirmation copy of such
Notice must also be delivered by hand, United States registered or certified mail, return receipt
requested, United States Express Mail, FedEx, Airborne Express or any other national overnight
express delivery service.

	8.2.	 	Representations and Warranties of Manager.

     Manager represents and warrants to Owner that (i) Manager is a corporation, duly organized and
validly existing and in good standing under the laws of the State of Texas and has all requisite
power and authority to carry on its business as now conducted and to execute, deliver and perform
its obligations under this Agreement; (ii) the execution, delivery and performance by Manager of
this Agreement are within its power, have been authorized by all necessary corporate action and do
not contravene any provision of its by-laws or articles of incorporation; (iii) this Agreement has
been duly executed and delivered by Manager; (iv) this Agreement is a valid and binding obligation
of, Manager; (v) the execution, delivery and performance by Manager of this Agreement do not
conflict with or result in a breach of any of the provisions of, or constitute a default under, any
bond, note or other evidence of indebtedness, indenture, mortgage, deed of trust, loan agreement or
similar instrument, any Lease or any other material agreement or contract by which Manager, or its
activities or the Property is bound or any applicable law or order, rule or regulation of any court
or governmental authority having jurisdiction over Manager, its activities or the Property; and
(vii) no order, permission, consent, approval license (other than those already held by Manager),
authorization, registration or filing by or with any governmental authority having jurisdiction
over Manager, its activities or the Property is required for the execution, delivery or performance
by Manager of this Agreement.

	8.3.	 	No Partnership, etc.

     Nothing in this Agreement shall be construed as making Owner or Manager partners, joint
ventures or members of a joint enterprise or as creating between Owner and Manager any employer
employee relationship.

	8.4.	 	Severability.

     If any provision of this Agreement or the application thereof to any Person or circumstances
shall be held invalid or unenforceable, the other provisions of this Agreement

45

 

or the application of such provision to other Persons or circumstances shall not be effected
thereby but shall continue to be valid and enforceable to the fullest extent permitted under
applicable law.

	8.5.	 	Modification.

     Except as specified herein, no provision of this Agreement shall be modified, waived or
terminated except by an instrument in writing signed by the party against whom such modification,
waiver or termination is to be enforced.

	8.6.	 	Successors and Assigns.

	 	(a)	 	This Agreement shall be binding upon and inure to the benefit of Manager and
Owner and their respective successors and assigns, and all references in this
Agreement to “Manager” and “Owner” shall include the respective successors and assigns
of such parties.
	 
	 	(b)	 	Notwithstanding the foregoing, Manager shall not assign this Agreement or
delegate its duties and obligations hereunder without the prior written consent of
Owner, which consent may be granted or withheld in the sole and absolute discretion of
Owner.

	8.7.	 	Limitation of Liability.

     Notwithstanding anything to the contrary, if Manager shall recover any judgment against Owner
in connection with this Agreement, Manager shall look solely to Owner’s interest in the Property
for the collection or enforcement of any such judgment, and no other assets of Owner shall be
subject to levy, execution or other process for the satisfaction or enforcement of such judgment,
and neither Owner nor any Person having an interest in Owner shall be liable for any deficiency.

	8.8.	 	Governing Law/Consent to Jurisdiction/Waiver of Trial by Jury.

     THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND ENTERED INTO BY OWNER AND MANAGER
IN THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED BY THIS AGREEMENT, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY,
PERFORMANCE AND ENFORCEABILITY, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH
PARTY HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY

46

 

CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST EITHER PARTY HERETO ARISING OUT OF OR RELATING
TO THIS AGREEMENT MAY ONLY BE INSTITUTED IN A FEDERAL OR STATE COURT IN THE STATE OF NEW YORK,
COUNTY OF NEW YORK, AND EACH PARTY WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED
ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING. OWNER AND MANAGER
HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. MANAGER DOES HEREBY DESIGNATE AND APPOINT

CT CORPORATION SYSTEM

111 EIGHTH AVENUE, 13TH FLOOR

NEW YORK, NEW YORK 10011

(212) 894-8940

     AS SUCH PARTY’S AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND
ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE
COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO SUCH PARTY IN THE MANNER PROVIDED HEREIN
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH PARTY IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH PARTY (I) SHALL GIVE PROMPT NOTICE TO THE OTHER
PARTY OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME
TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS),
AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK, OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

     EACH PARTY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH ITS COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
ANY ACTION BROUGHT WITH RESPECT TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY
PARTY TO THIS

47

 

AGREEMENT. EACH PARTY AGREES THAT IT SHALL NOT SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE,
ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.

     These provisions shall not be deemed to have been modified in any respect or relinquished by
either party hereto except by a written instrument executed by such party.

	8.9.	 	Confidentiality.

     Manager covenants and agrees that references to Owner shall identify Owner as AmREIT SSPF
Berkeley, LP. Manager covenants and agrees to obtain the approval of Owner, which approval may be
withheld in Owner’s sole discretion, before referencing or identifying Owner in brochures, signs,
tombstones, advertisements or other items placed in general circulation regarding the Property, or
any part thereof, or Manager or Owner. Manager covenants and agrees with Owner that Manager will
not disclose to any third party the participation of JPMIM or its Affiliates in the transactions
contemplated hereby (other than to any entity controlled by or under common control with Manager or
as consummation of the transactions contemplated hereby) except with the approval of Owner or
Morgan, which approval may be withheld in Owner’s or Morgan’s sole discretion.

     Each party agrees, for itself and all persons retained or employed by such party in
performing its obligations hereunder, to hold in confidence and not to use or disclose to others
any confidential or proprietary information of the other party heretofore or hereafter disclosed
to such party, except where the other party specifically authorizes such party to disclose any
such confidential or proprietary information to others or such disclosure reasonably results from
the performance of such party’s obligations hereunder. The provisions of this Section shall
survive the expiration or termination of this Agreement.

	8.10.	 	Counterparts.

     This Agreement may be signed in any number of counterparts, each of which shall be deemed to
be an original, with the same effect as if the signatures thereto and hereto were on the same
instrument.

	8.11.	 	Exclusive Benefit

     Neither this Agreement nor any provision hereof nor any service, relationship or other matter
alluded to herein shall inure to the benefit of any third party (except a successor or assign of
Owner and its mortgagees, if any), to any trustee in bankruptcy, to any assignee for the benefit
of creditors, to any receiver by reason of insolvency, to any other fiduciary or officer
representing a bankrupt or insolvent estate of either party, or to the creditors or claimants in
such an estate. Without limiting the generality of the foregoing sentence, it is specifically
understood and agreed that insolvency or bankruptcy of either party hereto shall, at the option of
the other party, void all rights of such insolvent or bankrupt party hereunder (or as many of such
rights as the other party shall elect to void) except to receive any moneys which are due to the
insolvent or bankrupt party.

48

 

	8.12.	 	Attorney’s Fees.

     If either party hereto shall obtain a judgment against the other party in connection with a
dispute arising under or in connection with this Agreement (whether in an action or through
arbitration), such party shall be entitled to recover its court (or arbitration) costs, and
reasonable attorneys’ fees and disbursements incurred in connection therewith and in any appeal or
enforcement proceeding thereafter, in addition to all other recoverable costs.

	8.13.	 	Competing Properties.

     Except as set forth in this paragraph, each party may own, invest in, develop, operate, manage
and/or lease properties which compete with the Property and the other party shall have no interest
in such competing properties and this Agreement shall not apply to any such competing properties.
Manager hereby covenants and agrees that so long as this Agreement remains in force, Manager will
not become manager and/or leasing agent for any other retail properties located in the same
geographic area as the Property, without giving Owner at least thirty (30) days prior written
notice.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, Owner and Manager have executed and delivered this Agreement as of the
date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	AMREIT SSPF BERKELEY, LP
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	AmREIT SSPF Berkeley GP, LLC,

its general partner
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	PTC/BSQ Holding Company LLC,

its managing member
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	AmREIT MIG III PTC/BSQ, LLC,

its managing member
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Chad C. Braun
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Chad C. Braun
	 

	 	 	 	 	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	AMREIT REALTY INVESTMENT CORPORATION
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Chad C. Braun
	 	 	 	 	 
	 	 	Name:	 	Chad C. Braun	 	 
	 	 	Title:	 	Vice President	 	 

50EX-10.15 LOAN ASSUMPTION AGREEMENT

 

 Exhibit
10.15

Return to:

Republic Title of Texas,
Inc. 
2626 Howell Street, 10th
Floor 
Dallas TX 75204

Cross Reference:

Clerks File No. 2004-0182656

Collin County, Texas Public Records

Capmark Loan #99-1072814

Loan Assumption Agreement

     This Loan Assumption Agreement (this “Agreement”) is made and entered into as of
December 7, 2006 (the “Effective Date”) by and between Berkeley Center, Ltd., a Texas
limited partnership (“Prior Owner”); William L. Hutchinson, an individual resident of Texas (“Prior
Guarantor”); AmREIT SSPF Berkeley, LP, a Delaware limited partnership (“Borrower”); AmREIT
Monthly Income & Growth Fund III, Ltd., a Texas limited partnership
(“New Guarantor”); and LaSalle Bank National Association as Trustee for the Registered Holders of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2005-CIBC12 (“Lender”).

RECITALS

     A. Prior Owner was the maker of that certain Promissory Note, dated December 15,
2004 (the “Note”), in the original principal amount of Eighteen Million One Hundred Thousand and
00/100 Dollars ($18,100,000.00) and payable to the order of CIBC Inc. (“Former Lender”).The loan
evidenced by the Note is herein referred to as the “Loan.”

     B. The Note is secured by that certain Deed of Trust Assignment of Leases and Rents and
Security Agreement, dated December 15, 2004 (the “Mortgage”), executed by Prior Owner to Robert
Galperin (the “Trustee”) for the benefit of Former Lender and recorded under Clerk’s File No.
2004-0182656 in the Official Records of Collin County, Texas (the “Public Records”). The Mortgage
encumbers certain real property described on Exhibit A attached hereto and by this
reference incorporated herein (together with all other property, real and personal, encumbered by
the Mortgage, the “Property”).

     C. The Loan is further evidenced by (i) that certain Cross-Collateralization,
Cross-Contribution and Cross-Default Agreement with Modification of Deed of Trust, dated
December 15, 2004, as amended by that certain First Amendment to Cross-Collateralization,
Cross-Contribution and Cross-Default Agreement with Modification of Deed of Trust, dated June 3, 2005 (collectively, the “Cross-Default Agreement”), executed by Prior Owner and PTC Dunhill
Holdings, Ltd. in favor of Former Lender and (ii) that certain Assignment of Leases and Rents,
dated December 15, 2004, executed by Prior Owner in favor of Former Lender;

     D. In connection with the Loan, Prior Owner also delivered, or caused to be delivered, the
following documents to Former Lender:

          (1) those certain UCC Financing Statements (collectively, the “Prior UCC”) naming
Prior Owner as Debtor therein, and Former Lender as Secured Party therein, and filed in
the Public Records and in the records of the Secretary of State of Texas;

 

 

     D. In connection with the Loan, Prior Owner also delivered, or caused to be delivered,
the following documents to Former Lender:

     (1)
those certain UCC Financing Statements (collectively, the “Prior UCC”) naming Prior
Owner as Debtor therein, and Former Lender as Secured Party therein, and filed in the Public
Records and in the records of the Secretary of State of Texas;

     (2) that certain Hazardous Substance Indemnity Agreement (the “Prior Environmental
Agreement”) dated December 15, 2004, executed by Prior Owner and Prior Guarantor for the
benefit of Former Lender;

     (3)
that certain Indemnity and Guaranty Agreement, dated December 15, 2004, and
Reaffirmation of Guaranty, dated June 3, 2005 (collectively, the “Prior Carve Out
Guaranty”), executed by Prior Guarantor for the benefit of Former Lender;

     (4) that certain Cash Management Agreement (the “Prior Cash Management Agreement”)
dated December 15, 2004, between Prior Owner, Former Lender and Dunhill Property Management
Services, Inc. (the “Former Manager”);

     (5) that certain Manager’s Subordination Agreement (the “Prior Manager’s Agreement”),
between Former Manager and Former Lender;

     (6) that certain Escrow Agreement (the “Escrow Agreement”), dated December 15, 2004,
executed “by Prior Owner, LandAmerica Commonwealth Title of Dallas, Inc., and Former Lender;

     (7)
that certain Closing Certificate (the “Closing Certificate”) dated December 15,
2004, executed by Prior Owner in favor of Former Lender;

     (8) that certain Certificate (Lease Form) (the “Lease Form Certificate”) dated December
15, 2004, executed by Prior Owner in favor of Former Lender;

     (9) the Leasing Agreement Subordination (the “Subordination”) dated December 15, 2004
executed by Prior Owner and Dunhill Partners, Inc.;

     (10) the Notice of Final Agreement (the “Notice”);

     (11) the Clearing Bank Instruction Letter (the “Instruction Letter”),

     (12)
the Earn-Out Letter Agreement (the “Earn-Out Letter”) dated December 15, 2004; and

     (13) the Post-Closing Agreement (the “Post-Closing Agreement”).

2

 

(The Prior UCC, Prior Environmental Agreement, Prior Carve Out Guaranty, Prior Cash Management
Agreement, Prior Manager’s Agreement, Escrow Agreement, Closing Certificate, Lease Form
Certificate, Subordination, Notice, Instruction Letter, Earn-Out Letter and Post-Closing Agreement
are hereinafter referred to collectively as the “Prior Owner’s Loan Documents.”)

     E. Upon the Effective Date, Borrower is executing and delivering, or is causing to be
delivered, to Lender the following documents:

     (1) those certain UCC Financing Statements (collectively, the “UCC”) naming Borrower as
Debtor therein, and naming Lender, as Secured Party therein, to be filed in the Public
Records and the records of the Secretary of State of Delaware;

     (2) that certain Hazardous Substance Indemnity Agreement (the “Environmental
Agreement”) dated as of the Effective Date, delivered by Borrower and New Guarantor for the
benefit of Lender;

     (3) that certain Carve Out Guaranty (the “Guaranty”) dated as of the Effective Date,
executed and delivered by New Guarantor, for the benefit of Lender;

     (4) that certain Cash Management Agreement (the “Cash Management Agreement”) dated as
of the Effective Date, between Borrower, Lender and AmREIT Realty Investment Corporation;

     (5) that certain Manager’s Subordination Agreement (the “Manager’s Agreement”) dated as
of the Effective Date, between AmREIT Realty Investment Corporation and Lender; and

     (6) this Agreement.

(The Note, the Mortgage, the Cross-Default Agreement, the UCC, the Environmental Agreement, the
Guaranty, the Cash Management Agreement, the Manager’s Agreement and this Agreement, together with
all other documents evidencing, serving or otherwise pertaining to the Loan (other than the Prior
Owner’s Loan Documents) are hereinafter referred to collectively as the “Loan Documents”, and
singularly as a “Loan Document”.)

     F. Lender is the holder of the Note and is the successor in interest to Former Lender in and
to the Loan Documents and the Prior Owner’s Loan Documents.

     G. The Property is being conveyed by Prior Owner to Borrower as of the Effective Date, and as
part of the consideration for such conveyance, Borrower and Guarantor agree to assume, subject to
this Agreement, all the obligations under the Loan Documents and comply with all covenants and
obligations contained in the Loan Documents.

3

 

     H. Prior Owner and Borrower have requested that Lender consent to the assumption
of the Loan and waive the due on sale restrictions of the Mortgage to permit the conveyance
of the Property to Borrower.

     I. Lender is willing to consent to the transfer of the Property by Prior Owner to
Borrower and the assumption of the Loan by Borrower, subject to the terms and conditions set
forth herein.

AGREEMENT

     NOW, THEREFORE, in consideration of the sum of Ten and No/100 Dollars ($10.00)
cash in hand paid by the parties hereto each to the other and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:

     1. Loan Information.

     (a) Lender certifies that the principal balance outstanding under the Note as of the
Effective Date is $22,022,876.50. Interest on the Loan has been paid
through November 30, 2006.
All escrow deposits held by Lender in connection with the Loan Documents shall, from and after
the Effective Date, be for the account of Borrower. To the actual knowledge of Lender as of the
Effective Date, no event of default, or event which with the passage of time or the giving of
notice, or both, would constitute an event of default, under the Loan Documents has occurred and
is continuing. Lender reserves the right to declare any existing default which subsequently comes to the attention of Lender.

     (b) Lender is holding the following escrow and/or reserve balances as of the Effective Date:

	 	 	 
	Real Estate Taxes
	 	$555,791.52
	Insurance
	 	$39,440.90
	Repair Escrow
	 	$0.00
	Replacement Reserve
	 	$175,939.18
	TI Leasing Reserve
	 	$214,456.36
	TI/LC General Reserve
	 	$0.00
	Other Escrow
	 	$252,451.94
	Holdback Reserve
	 	$103.68
	Holdback Reserve
	 	$0.00

     (c) The parties acknowledge and agree that Lender shall continue to hold the
escrow and reserve balances for the benefit of Borrower in accordance with the terms of the
Loan Documents. Prior Owner and Prior Guarantor covenant and agree that the Lender has no
further duty or obligation of any nature to Prior Owner or Prior Guarantor relating to such
escrow and/or reserve balances. The funds listed above constitute all of the reserve and
escrow funds currently held by Lender with respect to the Loan. All escrow deposits held by
Lender in connection with the Loan Documents shall, from and after the Effective Date, be
for the account of Borrower.

4

 

     2. Organization and Authority of Borrower.

     (a) Borrower represents and warrants to Lender as follows:

          (1) Borrower
is a limited partnership, duly formed and validly existing under the laws of the
State of Delaware, and duly qualified to transact business under the
laws of the state in which the
Property is located. The organizational ID number of the Borrower is 20-5839425. On or prior to the
date hereof, Borrower has delivered to Lender a fully executed IRS form W-9.

          (2) No proceeding is pending for the dissolution or annulment of Borrower, and all license and
franchise taxes due and payable by Borrower have been paid in full.

          (3) Borrower has the full power and authority to enter into and perform this Agreement and to
assume the Loan. The execution, delivery and performance of this Agreement and the other documents
contemplated herein by Borrower (A) have been duly and validly authorized by all necessary action
on the part of Borrower, (B) does not conflict with or result in a violation of Borrower’s
organizational documents or any judgment, order or decree of any court or arbiter in any proceeding
to which Borrower is a party, (C) does not conflict with, or constitute a material breach of, or
constitute a material default under, any contract, agreement or other instrument by which Borrower
is bound or to which Borrower is a party, and (D) constitutes the valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their terms.

     (b) New Guarantor represents and warrants to Lender as follows:

          (1) New Guarantor is a limited partnership, duly formed and validly existing under the laws of
the State of Texas, and to the extent required by applicable law, duly qualified to transact
business under the laws of the state in which the Property is located.

          (2) No proceeding is pending for the dissolution or annulment of New Guarantor, and all
license and franchise taxes due and payable by New Guarantor have been paid in full.

          (3) New Guarantor has the full power and authority to enter into and perform this Agreement
and perform its obligations under the Guaranty. The execution, delivery and performance of this
Agreement and the other documents contemplated herein by New Guarantor (A) have been duly and validly authorized by all necessary action on the part of New Guarantor,
(B) does not conflict with or result in a violation of New Guarantor’s organizational documents or
any judgment, order or decree of any court or arbiter in any proceeding to which New Guarantor is a
party, (C) does not conflict with, or constitute a material
breach of, or constitute a material
default under, any contract, agreement or other instrument by which New Guarantor is bound or to
which New Guarantor is a party, and (D) constitutes the valid and binding obligations of New
Guarantor, enforceable against New Guarantor in accordance with their terms.

5

 

     3. Representations
and Warranties.

     (a) As of the effective date, Prior Owner hereby represents and warrants to Lender
as follows:

               (1) There is no Event of Default (as defined in the Mortgage) or event which with the passage
of time or the giving of notice, or both, would constitute an Event of Default under the Loan
Documents executed or assumed by Prior Owner or the Prior Owner’s Loan Documents;

               (2) There are no subordinate liens of any kind covering or relating to the Property, nor are
there any mechanics’ liens (except as shown on the title commitment dated effective July 18, 2006,
issued October 3, 2006, by Republic Title Company, G.F. No. 06R29866SJ6, and being bonded around in
accordance with the Loan Documents and applicable law) or liens for delinquent taxes or assessments
encumbering the Property, nor has notice of a lien or notice of intent to file a lien been received
by Prior Owner;

               (3) The Loan Documents executed by Prior Owner and Prior Owner’s Loan Documents are in full
force and effect;

               (4) Prior Owner has thoroughly read and reviewed the terms and provisions of this Agreement,
the Loan Documents executed by Prior Owner and the Prior Owner’s Loan Documents, and is familiar
with same, and Prior Owner has entered into this Agreement voluntarily, without duress or undue
influence of any kind, and with the advice and representation of legal counsel, if any, selected
by Prior Owner; and

     (b) As of the Effective Date, Prior Guarantor hereby represents and warrants to Lender
as follows:

               (1) There is no Event of Default or event which with the passage of time or the giving of
notice, or both, would constitute an Event of Default under the Loan Documents executed by Prior
Guarantor or Prior Owner’s Loan Documents executed by Prior Guarantor;

               (2) The Loan Documents and Prior Owner’s Loan Documents executed by Prior Guarantor are in
full force and effect;

               (3) Prior Guarantor has thoroughly read and reviewed the terms and provisions of this
Agreement, the Loan Documents executed by Prior Guarantor and Prior Owner’s Loan Documents executed
by Prior Guarantor, and is familiar with same, and Prior Guarantor has entered into this Agreement
voluntarily, without duress or undue influence of any kind, and with the advice and representation
of legal counsel, if any, selected by Prior Guarantor; and

6

 

     (c) Borrower hereby represents and warrants to Lender as follows:

               (1) To Borrower’s knowledge as of the Effective Date, there is no Event of Default or
event which with the passage of time or the giving of notice, or both, would constitute an Event of
Default under the Loan Documents;

               (2) Borrower has thoroughly read and reviewed the terms and provisions of this Agreement and
the other Loan Documents and is familiar with same, and Borrower has entered into this Agreement
voluntarily, without duress or undue influence of any kind, and with the advice and representation
of legal counsel, if any, selected by Borrower; and

               (3) With the exception of the information relating to the proposed ownership structure of
Borrower, which has been subsequently updated by information delivered to Lender in writing, all
written information and materials, including financial information, regarding Borrower and its
affiliates provided to Lender in connection with the assumption of the Loan were true and correct
in all material respects as of the date provided to Lender and remain true and correct in all
material respects as of the date of this Agreement.

     (d) New Guarantor represents and warrants to Lender as follows:

               (1) New Guarantor has received and reviewed the Loan Documents;

               (2) All information and materials provided to Lender, including financial information,
regarding New Guarantor provided to Lender in connection with the assumption of the Loan was true
and correct in all material respects as of the date provided to Lender and remains materially true
and correct as of the date of this Agreement; and

               (3) There is no bankruptcy, receivership or insolvency proceeding pending or threatened
against New Guarantor.

Prior Owner, Prior Guarantor, Borrower and New Guarantor acknowledge that Lender is relying upon
the foregoing representations and warranties as a material inducement to Lender’s execution of
this Agreement.

     4. Consent of Lender. Lender hereby consents to the sale of the Property by Prior
Owner to Borrower and agrees that such sale shall not constitute a default under the Prior Owner’s
Loan Documents or the Loan Documents. Notwithstanding the foregoing, this consent to the transfer
of the Property shall not be deemed to be a waiver of the right of the Lender under the Mortgage
or the Loan Documents to prohibit any future transfers of the Property or any interest therein, or
of the right of the Lender to deny consent to any such transaction in the future in accordance
with the provisions of the Mortgage. From and after the Effective Date, references in the Loan
Documents to “Maker,” “Mortgagor,” “Debtor,” “Borrower,” or other similar references that prior to
the Effective Date referred to Prior Owner shall refer to Borrower, and references in the Loan
Documents to “Guarantor” or other similar references that prior to the Effective Date referred to
Prior Guarantor shall refer to New Guarantors).

7

 

     5. Assumption and Ratification. Subject to Section 26 below, Borrower hereby assumes
and agrees to comply with all covenants and obligations of Prior Owner contained in the Loan
Documents and henceforth shall be bound by all the terms thereof. Without limiting the foregoing,
Borrower hereby assumes and agrees to pay in full as and when due all payments, the obligations and
other indebtedness evidenced by the Note. Borrower hereby authorizes the Lender to file any and all
UCC financing statements as Lender may deem necessary including, without limitation, financing
statements containing the description “all assets of
Borrower” or “all personal property of
Borrower” or similar language. As assumed hereby, the Loan Documents executed by Prior Owner shall
remain in full force and effect. Subject to Section 26 below, the Borrower hereby adopts, ratifies
and confirms as of the Effective Date all of there presentations, warranties and covenants of Prior
Owner contained in the Loan Documents as modified by this Agreement.

     6. Release of Claims. Prior Owner, Prior Guarantor, Borrower and New
Guarantor (individually, a “Borrower Party” and collectively, the “Borrower Parties”), hereby
jointly and severally, unconditionally and irrevocably, finally and completely RELEASE AND
FOREVER DISCHARGE Former Lender and Lender, and their respective successors, assigns, affiliates,
subsidiaries, parents, officers, shareholders, directors, employees, attorneys and agents, past,
present and future (collectively and individually, “Lender Parties”), of and from any and all
claims, controversies, disputes, liabilities, obligations, demands, damages, debts, liens, actions
and causes of action of any and every nature whatsoever, known or unknown, whether at law, by
statute or in equity, in contract or in tort, under state or federal jurisdiction, and whether or
not the economic effects of such alleged matters arise or are discovered in the future, which
Borrower Parties have as of the Effective Date or may claim to have against Lender Parties arising
out of or with respect to any and all transactions relating to the Loan, the Prior Owner’s Loan
Documents or the Loan Documents occurring on or before the Effective Date, including any loss, cost
or damage of any kind or character arising out of or in any way connected with or in any way
resulting from the acts, actions or omissions of Lender Parties occurring on or before the
Effective Date. The foregoing release is intended to be, and is, a full, complete and general
release in favor of Lender Parties with respect to all claims, demands, actions, causes of action
and other matters described therein, including specifically, without limitation, any claims,
demands or causes of action based upon allegations of breach of fiduciary duty, breach of any
alleged duty of fair dealing in good faith, economic coercion, usury, or any other theory, cause of
action, occurrence, matter or thing which might result in liability upon Lender Parties arising or
occurring on or before the Effective Date. Borrower Parties understand and agree that the foregoing
general release is in consideration for the agreements of Lender contained herein and that they
will receive no further consideration for such release. Each Borrower Party for itself represents
and warrants to Lender that such Borrower Party has not previously assigned or transferred to any
person or entity any matter released hereunder, and such Borrower Party agrees to indemnify,
protect and hold the Lender Parties harmless from and against any and all claims based on or
arising out of any breach of the foregoing representation and warranty by such Borrower Party.

     7. Default. Any default by Borrower in the performance of its obligations herein
contained, or any material inaccuracy in the representations and warranties made by Borrower

8

 

herein, shall constitute a default under the Loan Documents and shall entitle Lender to
exercise all of its rights and remedies set forth in the Loan Documents.

     8. Lift of Bankruptcy Stay. Notwithstanding any provision in the Loan Documents to
the contrary, in the event Borrower shall make application for or seek relief or protection under
any of the sections or chapters of the United States Bankruptcy Code (the “Code”), or in the
event that any involuntary petition is filed against Borrower under any section of the Code,
Borrower will not oppose Lender’s application for immediate relief from any automatic stay
imposed by Sec. 362 of the Code, or otherwise, or on or against the exercise of the rights and
remedies otherwise available to Lender pursuant to the Loan Documents and as otherwise provided
by law.

     9. Fees. Borrower, Prior Owner and Lender have agreed that, simultaneously with the
execution hereof, all fees, costs, and charges arising in connection with the execution of this
Agreement, including without limitation, all reasonable attorneys’ fees, title company fees,
title insurance premiums, recording costs, and other closing costs incurred by Lender in
connection with this Agreement, will be paid by Prior Owner as of the Effective Date (excluding
any application fees which will be paid by Borrower), and that Lender shall have no obligation
whatsoever for payment thereof.

     10. No Offsets or Defenses. Borrower hereby acknowledges, confirms and warrants to
Lender that as of the Effective Date, Borrower neither has nor claims any offset, defense, claim,
right of set-off or counterclaim against Lender under, arising out of or in connection with this
Agreement, the Note, the Mortgage or any other Loan Document. Borrower covenants and agrees with Lender that if any offset, defense, claim, right of set-off or counterclaim
exists as of the Effective Date, Borrower does hereby irrevocably and expressly waive the right to
assert such matter. Borrower understands and agrees that the foregoing release is in consideration
for the agreements of Lender contained herein, and Borrower will receive no further consideration
for such release.

     11. Confirmation. Except as specifically set forth herein, all other terms and
conditions of the Loan Documents shall remain unmodified and in full force and effect, the same
being confirmed and republished hereby; and except as otherwise specifically set forth herein, the
undersigned Borrower hereby assumes, affirms, reaffirms and republishes all of the warranties,
covenants and agreements as set forth in the Loan Documents as modified by this Agreement.

     12. Usury Savings Clause. Notwithstanding anything to the contrary contained elsewhere
in this Agreement, Borrower and Lender hereby agree that all agreements between them with respect
to the Loan, including but not limited to the Loan Documents, whether now existing or hereafter
arising are expressly limited so that in no contingency or event whatsoever shall the amount paid,
or agreed to be paid, to Lender for the use, forbearance, or detention of the money loaned to
Borrower, or for the performance or payment of any covenant or obligation contained herein or
therein, exceed the maximum rate of interest under applicable law (the” Maximum Rate”). If from any
circumstance whatsoever, fulfillment of any provisions of this Agreement or the Loan Documents at
the time performance of such provisions shall be due

9

 

would involve transcending the limit of validity prescribed by law, then, automatically,
the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any
circumstance Lender should ever receive anything of value deemed interest by applicable law which
would exceed the Maximum Rate, such excessive interest shall be applied to the reduction of the
principal amount owing with respect to the Loan or on account of the other indebtedness secured
by the Loan Documents or Borrower’s Loan Documents and not to the payment of interest, or if such
excessive interest exceeds the unpaid principal balance of the Loan and such other indebtedness,
such excess shall be refunded to Borrower. All sums paid or agreed to be paid to Lender for the
use, forbearance or detention of the Loan and other indebtedness of Borrower to Lender shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout
the full term of such indebtedness until payment in full so that the actual rate of interest on
account of all such indebtedness is uniform throughout the actual term of the Loan and does not
exceed the Maximum Rate throughout the entire term of the Loan, as appropriate. The terms and
provisions of this Section 12 shall control every other provision of this Agreement and all other
agreements between Borrower and Lender.

     13. Modifications, Waiver. No waiver, modification, amendment, discharge, or change of
any of the Loan Documents shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification, waiver, amendment, discharge, or change is
sought.

     14. No
Novation .THE PARTIES DO NOT INTEND THIS AGREEMENT NOR THE TRANSACTIONS
CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE
CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION
WITH THE LOAN DOCUMENTS. FURTHER, THE PARTIES DO NOT INTEND THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY TO AFFECT THE PRIORITY OF ANY OF THE
LENDER’S LIENS IN ANY OF THE
COLLATERAL SECURING THE EXISTING NOTE IN ANY WAY, INCLUDING, BUT NOT LIMITED TO, THE LIENS, SECURITY
INTERESTS AND ENCUMBRANCES CREATED BY THE MORTGAGE.

     15. Recitals True. Prior Owner, Prior Guarantor and Lender each hereby approve the
recitations set forth in the preamble of this Agreement and agree that said recitations are true
and correct in all respects as of the Effective Date. Borrower and New Guarantor each hereby
approve the recitations set forth in Paragraphs E, G, H and I and agree that such recitations are
true and correct in all respects as of the Effective Date.

     16. Notices. Lender and Borrower agree that all notice provisions contained in the
Loan Documents are hereby modified to amend the notice address for Borrower and Lender, and that
from and after the Effective Date the notice address for Lender and Borrower are as follows:

          If to Lender:

c/o Capmark Finance Inc.

3 Ravinia Drive, N.E.

10

 

Suite 200

Atlanta, Georgia 30346

Attention: Servicing Department for Loan No. 99-1072809

          If to Borrower:

AmREIT SSPF Preston Towne Crossing, LP

8 Greenway Plaza, Suite 1000
Houston, Texas 77046
Attention: Tenel Tayer

     Each party to this Agreement may designate a further change of address by notice given as
required in the Mortgage.

     17. Severability. If all or any portion of any provision of this Agreement shall
be held to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or
unenforceability shall not affect any other provision hereof or thereof, and such provision shall
be limited and construed in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion thereof were not contained herein or therein.

     18. Counterpart. This Agreement may be executed in any number of counterparts with the
same effect as if all parties hereto had signed the same document. All such counterparts shall be
construed together and shall constitute one instrument, but in making proof hereof it shall only be
necessary to produce one such counterpart.

     19. Governing Law .The terms and conditions of this Agreement shall be governed by the
applicable laws of the state in which the Property is located.

     20. Interpretation. Within this Agreement, words of any gender shall be held and
construed to include any other gender, and words in the singular number shall be held and construed
to include the plural, unless the context otherwise requires. The section headings used herein are
intended for reference purposes only and shall not be considered in the interpretation of the terms
and conditions hereof. The parties acknowledge that the parties and their counsel have reviewed and
revised this Agreement and that the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.

     21. Amendment. The terms and conditions hereof may not be modified, altered
or otherwise amended except by an instrument in writing executed by Borrower and Lender.

     22. Entire Agreement. This Agreement contains the entire agreement between the parties
hereto with respect to the modification of the Loan and fully supersedes all prior agreements and
understanding between the parties pertaining to such subject matter.

11

 

     23. Successors and Assigns. The terms and conditions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their successors and permitted
assigns.

     24. TRIAL
BY JURY WAIVER BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, AND
LENDER BY ITS ACCEPTANCE OF THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM
ARISING IN CONNECTION WITH, OUT OF
OR OTHERWISE RELATING TO THE LOAN, THIS AGREEMENT OR THE LOAN DOCUMENTS.

     25. Release. Lender hereby forever releases and discharges Prior Owner and Prior
Guarantor from any and all liability and obligation for repaying the Loan and any and
all liability, obligation or duty under the Loan Documents and the Prior Owner’s Loan Documents
arising from and after the Effective Date; provided, however, that Prior Owner and Prior
Guarantor are not released or discharged from any liability, obligation or duty under the Loan
Documents executed by Prior Owner or Prior Guarantor or Prior
Owner’s Loan Documents (i) arising
prior to or simultaneously with the assumption of the Loan by Borrower, excluding any liability
for repaying the Loan in accordance with the terms of the Loan Documents arising after the
assumption of the Loan by Borrower, including the payment of the
outstanding principal balance of the Loan on the Maturity Date; (ii) for any losses or damages suffered, or expenses incurred
by Lender as a result of any representation or warranty of Prior Owner or Prior Guarantor in this
Agreement that proves to have been false or misleading in any material respect when made or
delivered, (iii) in the event the assumption of the Loan by Borrower is deemed void for any reason whatsoever, or (iv) any losses or damages suffered, or expenses incurred by
Lender as a result of any fraudulent or tortious conduct by Prior Owner or Prior Guarantor.
In all cases, Prior Owner and Prior Guarantor, as applicable, shall bear the burden of proof
on the issue of the time at which an act or event first occurred or an obligation first
arose, which is the subject of claimed liability under any of the Loan Documents or Prior
Owner’s Loan Documents.

     26. Modifications to Loan Documents.

     (a) Section 1.1(a) of the Mortgage is hereby deleted in its entirety and replaced with the
following language;

     “Borrower is duly organized and validly existing as a limited partnership and their current
status is active under laws of Delaware and is qualified to do business in all other
jurisdictions in which Borrower is transacting business.”

     (b) Section
1.1(b) of the Mortgage is hereby modified by deleting the words and figure
“execute, deliver” in the first line of Section 1.1(b), and inserting in lieu thereof the words
and figures “execute and deliver that certain Loan Assumption
Agreement, dated as of December 7,
2006,”.

     (c) Section
1.1(e) of the Mortgage is hereby deleted in its entirety and replaced with the
following language:

12

 

     “Notwithstanding anything contained herein to the contrary, (i) transfers among AmREIT
MIG III PTC/BSQ, LLC (“MIG III”) and PTC/BSQ Acquisition Company, LLC of direct or indirect
interests in Borrower shall be permitted, provided, (A) MIG III shall, at all times retain an
economic interest in Borrower, and (B) if such transfers of direct or indirect interests in
Borrower shall result in an entity which did not previously own more than 49% of the direct or
indirect interest in Borrower, owning more than 49% of the direct or indirect interest in Borrower,
(1) Borrower shall provide Lender thirty (30) days’ prior written notice of such transfer and (2)
Borrower shall cause to be delivered to Lender a substantive non-consolidation opinion reasonably
acceptable to Lender; (ii) transfers by PTC/BSQ Acquisition Company, LLC of direct or indirect
interests in Borrower to any JPMorgan Entity or any affiliate of any JPMorgan Entity shall be
permitted, provided, however, if such transfers of direct or indirect interests in Borrower shall
result in an entity which did not previously own more than 49% of the direct or indirect interest
in Borrower, owning more than 49% of the direct or indirect interest in Borrower, (1) Borrower
shall provide Lender thirty (30) days’ prior written notice of such transfer and (2) Borrower shall
cause to be delivered to Lender a substantive non-consolidation opinion reasonably acceptable to
Lender; and (iii) any other transfer of direct or indirect interests in Borrower shall be permitted
so long as (A) MIG III and/or a JPMorgan Entity shall collectively own, at all times, not less than
50% of the direct and indirect interest in Borrower and (B) MIG III and/or an Advisor Controls
Borrower. In no event shall (w) transfers of securities of an entity who is the owner of a direct
or indirect interest in Borrower, and whose common stock is traded on a national securities
exchange or in the over-the-counter securities market, (x) transfers of units of participation in
Commingled Pension Trust Fund (Special Situation Property) of JPMorgan Chase Bank, N.A., (y)
transfers of limited partnership interests in New Guarantor so long as New Guarantor continues to
be controlled, either directly or indirectly, by AmREIT, a Texas real estate investment trust, or
(z) transfers of shares in AmREIT, be considered transfers of direct or indirect interests in
Borrower. “JPMorgan Entity” shall mean any pension fund or collective investment fund containing
pension funds, separate accounts or other investors for which J.P. Morgan Investment Management
Inc. or JPMorgan Chase Bank, N.A. (or one of its parents, affiliates, or subsidiaries) acts as
trustee, agent or investment advisor. “Advisor” shall mean J.P. Morgan Investment Management Inc.
or JPMorgan Chase Bank, N.A. (or one of its parents, affiliates, or subsidiaries) in their capacity
as agent or investment advisor “Control” shall mean the power to direct the management and policies
of the Borrower, directly or indirectly, whether through the ownership of voting securities or
other beneficial interests by contract or otherwise.”

[SIGNATURES BEGIN ON NEXT PAGE]

 

     
IN WITNESS WHEREOF, the parties hereby have all executed this Agreement under seal as of
the day and year first hereinabove written.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	AMREIT SSPF BERKELEY, LP,
	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	AmREIT SSPF BERKELEY
GP, LLC,
	 	 	 	 	a Delaware limited liability company,
	 	 	 	 	its sole general partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	PTC/BSQ Holding Company LLC,
	 	 	 	 	 	 	a Delaware limited liability company, its managing

member
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	AmREIT MIG III PTC/BSQ, LLC,
	 	 	 	 	 	 	 	 	a Texas limited liability company,
	 	 	 	 	 	 	 	 	its managing member
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Chad C. Braun	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	 

Chad C. Braun
	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	GUARANTOR:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	AMREIT MONTHLY INCOME & GROWTH FUND III,
	 	 	LTD., a Texas limited partnership
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	AmREIT Monthly Income & Growth Fund III Corporation,
	 	 	 	 	a Texas corporation, its sole general partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Chad C. Braun
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Chad C. Braun
	 	 	 	 	Title:	 	Vice President

14

 

ACKNOWLEDGMENT

STATE OF TEXAS

COUNTY OF HARRIS

This
instrument was acknowledged before me on December 5, 2006 by
Chad C. Braun, the Vice President of
AmREIT MIG III PTC/BSQ, LLC, a Texas limited liability company and the managing member of PTC/BSQ
Holding Company LLC, a Delaware limited liability company and the managing member of AmREIT SSPF
Berkeley GP, LLC, a Delaware limited liability company and the sole general partner of AmREIT SSPF
Berkeley, LP, a Delaware limited partnership, on behalf of said limited partnership.

	 	 	 
	 

	 	/s/ Deborah Korkmas
	 

	 	 
Notary
Public in and for the
	 

	 	State of Texas
	 
	 	 
	
	 	 
	 
	 	 
	 

	 	Name: DEBORAH KORKMAS
	 

	 	 
My
commission expires: 6-21-2009

STATE OF Texas

COUNTY OF Harris

This instrument was acknowledged before me on December 5, 2006 by
Chad C. Braun, the Vice President of AmREIT Monthly Income & Growth Fund III Corporation, a
Texas corporation and the sole general partner of AmREIT Monthly Income & Growth Fund III, Ltd., a
Texas limited partnership, on behalf of said limited partnership.

	 	 	 	 	 
	 

	 	/s/ Deborah Korkmas	 	 
	 

	 	 

Notary Public in and for the
	 	 
	 

	 	State of Texas	 	 
	 
	 	 	 	 
	
	 	 	 	 
	 
	 	 	 	 
	 

	 	Name: DEBORAH KORKMAS	 	 
	 

	 	 
My
commission expires: 5-21-2009	 	 

15

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRIOR OWNER:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	BERKELEY CENTER, LTD.,	 	 
	 	 	a Texas limited partnership	 	 
	 	 	 	 	By:	 	Berkeley Center GP LLC, a Delaware
	 	 	 	 	 	 	limited liability company, its general
	 	 	 	 	 	 	partner
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ William L. Hutchinson
	 

	 	 	 	 	 	 	 	 

	 	 
	 	 	 	 	 	 	 	 	William L. Hutchinson, President

ACKNOWLEDGMENT

	 	 	 
	STATE OF TEXAS

	 	§
	 

	 	§
	COUNTY OF DALLAS

	 	§

     This
instrument was acknowledged on the 29th day of November, 2006, by William L.
Hutchinson, President of Berkeley Center, GP LLC, a Delaware limited liability company, on
behalf of said limited liability company, in its capacity as general partner of Berkeley
Center, Ltd., a Texas limited partnership, on behalf of said limited partnership.

	 	 	 	 	 
	 

	 	/s/ Betty Duncan Davis	 	 
	 

	 	 

Notary Public in and for the State of Texas
	 	 
	 
	 	 	 	 
	
	 	 	 	 

 

 

	 	 	 	 	 
	 

	 	PRIOR GUARANTOR:	 	 
	 
	 	 	 	 
	 

	 	/s/ William L. Hutchinson 	 	 
	 

	 	 

WILLIAM L. HUTCHINSON (SEAL)
	 	 

ACKNOWLEDGEMENT

	 	 	 
	STATE OF TEXAS

	 	§
	 

	 	§
	COUNTY OF DALLAS

	 	§

     This
instrument was acknowledged on the 29th day of November,
2006, by William L.
Hutchinson, an individual.

	 	 	 	 	 
	 

	 	/s/ Betty Duncan Davis	 	 
	 

	 	 
Notary Public in and for the State of Texas
	 	 
	 
	 	 	 	 
	
	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 	 	 	 	 
	 	 	LaSalle Bank
National Association as
	 	 	Trustee for the
registered holders of J.P.
	 	 	Morgan Chase
Commercial Mortgage
	 	 	Securities Corp.,
Commercial Mortgage
	 	 	 Pass-Through
Certificates, Series 2005-CIBC12
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Capmark Finance Inc., a California
	 	 	 	 	corporation, its authorized agent
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Lori Sandford	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Lori Sandford
	 	 	 	 	Title:	 	 Vice President

18

 

STATE OF TEXAS

COUNTY OF COLLIN

This instrument was acknowledged before me on December 5,
 2006 by Lori Sandford, the
Vice President of Capmark Finance, Inc., a California corporation, the authorized agent for
LaSalle Bank National Association as Trustee for the registered holders of J.P. Morgan Chase
Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series
2005-CIBC12, on behalf of said corporation.

/s/ Brenda
Hilbig

                                                                                                                        

NOTARY

                                                                                                                        

Title

My commission expires: 6/19/2006

 

 

EXHIBIT
A 

Legal Description

LOT 3R, BLOCK I

BEING a tract or parcel of land situated in The T.J. Cotton Survey, Abstract No, 202, COLLIN
County, Texas and being all of Lot 3R, Block 1, in the Replat of Berkeley Square Addition, an
addition to the City of Plano, as recorded in Cabinet H, Page 417 of the Plat Records of COLLIN
County, Texas and being more particularly described as follows:

BEGINNING at a 5/8 inch iron pin found for corner a the intersection of the North right-of-way
of West Park Boulevard/FM 544, (120 foot ROW) and the West right of way of Ohio Drive (85 foot
ROW);

THENCE North 89 degrees 25 minutes 00 seconds West, along the said North right-of-way of West Park
Boulevard, a distance of 170.13 feet to a 1/2 inch iron rod pin found
for corner, said corner being
the common Southwest corner of Lot 3R, Block 1 and the Southeast corner of Lot 2R, Block 1, of the
said • Replat of Berkeley Square Addition;

THENCE North 00 degrees 32 minutes 01 second East, along the said common line of Lots 3R and
Lot 2R, Block 1 of said addition, passing at 210.00 feet a 1/2 inch iron rod found for the
Southwest corner of Lot 2R, Block 1 of said addition and a total
distance of 230.00 feet to a
1/2 inch iron rod found for corner, said point being the Northwest
corner of Lot 3R, Block 1 of
said addition;

THENCE North 57 degrees 00 minutes 00 seconds East, along the North line of said Lot 3R, Block 1
of said addition, a distance of 113.05 feet to a 1/2 inch iron rod
found for corner, in the
Westerly ROW line of said Ohio Drive, said point also being at the beginning of a non-tangent
curve to the right having a central angle of 29 degrees 04 minutes 15 seconds, a radius of
601.93;

THENCE
along said Westerly ROW line of Ohio Drive, an are distance of 305.41
feet to a 1/2 inch
iron rod found for corner;

THENCE South 00 degrees 31 minutes 18 seconds West, along said Westerly ROW line of Ohio Drive,
a distance of 0.14 feet to the POINT OF BEGINNING and CONTAINING 0.909 acre of land, more or
less. (39,620 S.F.)

LOT 2R, BLOCK 1

BEING a tract or parcel of land situated in the TJ. Cotton Survey, Abstract No. 202, COLLIN
County, Texas and being all of Lot 2R, Block 1, in the Replat of Berkeley Square Addition, an
addition to the City of Plano, as recorded in Cabinet H, Page 417 of
the Plat Records of COLLIN
County, Texas and being more particularly described as follows:

COMMENCING
a 5/8 inch iron pin found for corner at the intersection of the North right-of-way of
West Park Boulevard/FM 544, (120 foot ROW) and the West right-of-way of Ohio Drive (85 foot
ROW);

THENCE North 89 degrees 25 minutes 00 seconds West along the said North right-of-way of West
Park Boulevard, a distance of 170.13 feet to the POINT OF BEGINNING and a 1/2 inch iron pin
found for corner, said point also being the common Southwest corner of Lot 3R, Block 1 and the
Southeast corner of Lot 2R, Block 1, of the Replat of Berkeley Square Addition;

A-1

 

THENCE North 89 degrees 25 minutes 00 seconds West, along the said North right-of-way
of West Park Boulevard, a distance of 105.00 feet to a 1/2 inch iron pin found for corner, at the
Southwest corner of Lot 2R, Block 1 of said addition;

THENCE North 00 degrees 32 minutes 01 second East, along the West line of Lot 2R, Block 1 of said
addition, a distance of 210.00 feet to a 1/2 inch of said addition;

THENCE South 89 degrees 25 minutes 00 seconds East, along the North line of said Lot 2R, Block 1
of said addition, a distance of 105.00 feet to a 1/2 inch iron rod found for corner, at the
Northeast corner of said Lot 2R, Block 1 of said addition and in the West line of Lot 3R, Block 1
of said addition;

THENCE South 00 degrees 32 minutes 01 second West along said West line of Lot 3R, Block 1 of said
addition, a distance of 210.00 feet to the POINT OF BEGINNING and CONTAINING 0.506 acre tract of
land; more or less, (22,050 S.F.)

A PART OF LOT 1R, BLOCK 1

BEING a tract or parcel of land situated in the T J. Cotton Survey, Abstract No. 202, COLLIN
County, Texas and being all of Lot 2R, Block 1, in the Replat of Berkeley Square Addition, an
addition to the City of Plano, as recorded in Cabinet H, Page 417 of the Plat Records of COLLIN
County, Texas and being more particularly described as follows:

COMMENCING
a 5/8 inch iron pin found for corner at the intersection of the North right-of-way of
West Park Boulevard/FM 544, (120 foot ROW) and the West right-of-way of Ohio Drive (85 foot ROW);

THENCE North 89 degrees 25 minutes 00 seconds West along the said North right-of-way of West Park
Boulevard, a distance of 275.13 feet to the POINT OF BEGINNING and a 1/2 inch iron pin found for
corner, said point also being the common Southwest corner of Lot 2R, Block 1, of the said Replat of
Berkeley Square Addition;

THENCE North 00 degrees 19 minutes 00 seconds East, departing said North right-of-way line along
the common boundary between said Preston Towne Crossing and Berkeley Square Addition, a distance
of 514.26 feet to a 1/2 inch iron pin set for corner,

THENCE North 90 degrees 00 minutes 00 seconds East, a distance of 331.81 to a 1/2 inch iron pin
set for corner, in the 60 foot radius of the Early Morn Drive, at the beginning of a non-tangent
curve to the left, having a central angle of 90 degrees 00 minutes 00 seconds, a radius of 60.00
feet;

THENCE
along said radius of Early Morn Drive, an arc distance of 92.24 feet to a 1/2 inch iron rod
found for corner;

THENCE South 89 degrees 25 minutes 00 seconds East, a distance of 363.12 feet to a 5/8 inch iron
pin found for corner, said point being the point of curvature of a curve to the left having a
radius of 229.95 feet;

THENCE
along said curve to the left, a distance of 192.44 feet through a central angle of 47
degrees 57 minutes 00 seconds to a 5/8 inch iron pin found, said point being the intersection of
the South right-of-way line of Early Morn Drive and the said West right-of-way line of Ohio Drive;

THENCE South 47 degrees 22 minutes 00 seconds East, departing the said right-of-way line of Early
Morn Drive, along the said South right-of-way line of Ohio Drive, a distance of 125.00 feet to a
5/8 inch

A-2

 

Iron pin found for corner, said point being the point of curvature of a curve to the right
having a radius of 601.93 feet;

THENCE along said curve to the right, a distance of 197.66 feet through a central angle of
18 degrees 48 minutes 53 seconds to a point of tangency and a 5/8 inch iron pin found for corner,
at the Northeast corner of Lot 3R, Block 1, of said addition; THENCE South 57 degrees 00 minutes
00 seconds West, along the North line of Lot 3R, Block 1, a distance of 113.05 feet to a 1/2 inch
iron rod found for corner,

THENCE South 00 degrees 32 minutes 0] second West, along the West line of Lot 3R, Block 1, a
distance of 20.00 feet to a 1/2 inch iron rod found for corner, at the Northeast corner of Lot 2R,
Block 1 of said addition;

THENCE North 89 degrees 25 minutes 00 seconds West, along the North line of said Lot 2R, Block 1,
a distance of 105.00 feet to a 1/2 inch iron rod found for corner, a the Northwest corner of said
Lot 2R, Block 1;

THENCE South 00 degrees 32 minutes 01 seconds West, along the West line, of said Lot 2R,
Block 1, a distance of 210.00 feet to the POINT OF BEGINNING and CONTAINING 11.240 acres of land,
more or less. (489,616 S.F.)

A PART OF LOT 1R, BLOCK 1

BEING a tract or parcel of land situated in the T.J. Cotton Survey, Abstract No. 202, COLLIN
County, Texas and being all of Lot 2R, Block 1, in the Replat of Berkeley Square Addition, an
addition to the City of Plano, as recorded in Cabinet H, Page 417 of the Plat Records of COLLIN
County, Texas and being more particularly described as follows:

COMMENCING
a 5/8 inch iron pin found for corner at the intersection of the North right-of-way of
West Park Boulevard/FM 544, (120 foot R0W) and the West right-of-way of Ohio Drive (85 foot ROW);

THENCE North 89 degrees 25 minutes 00 seconds West along the said North right-of-way of West Park
Boulevard, a distance of 1214.88 feet;

THENCE North 00 degrees 19 minutes 00 seconds East, departing said North right-of-way line along
the common boundary between said Preston Towne Crossing and Berkeley Square Addition, a distance
of 514.26 feet to the POINT OF BEGINNING, a 1/2 inch iron pin set for corner;

THENCE North 00 degrees 19 minutes 00 seconds East, departing said North right-of-way line along
the common boundary between said Preston Towne Crossing and Berkeley Square Addition, a distance
of 353.81 feet to a 1/2 inch iron pin set for corner, said point being in the South line of a
9.725 acre tract as conveyed to Highwood Apartments, as recorded in Volume C, Page 480,
Plat Records, COLLIN County, Texas;

THENCE South 89 degrees 25 minutes 00 seconds East, departing said common line along the boundary
between said Berkeley Square Addition and Highwood Apartments, a distance of 451.81 feet to a 5/8
inch iron pin found for corner, said point being in the West line of a 0.406 acres Stiles Tract as
recorded in Volume 1747, Page 581, Deed Records, COLLIN County, Texas;

THENCE South 00 degrees 19 minutes 00 seconds West, departing said common line along the common
boundary between said Berkeley Square Addition and 0.406 acre Stiles Tract, a distance of 353.81
feet to a 1/2 inch iron pin found for corner, in the 60 foot radius of the Early Morn Drive, at
the beginning of a

A-3

 

nontangent curve to the left, having a central angle of 180 degrees 00 minutes 00 seconds, a
radius of 60.00 feet;

THENCE
along said radius of Early Morn Drive, and curve to the left, an arc distance of 188.50 feet to
a 1/2 inch iron rod found for corner;

THENCE South 90 degrees 00 minutes 00 seconds West, a distance of 331.81 feet to the POINT OF
BEGINNING and CONTAINING 3.5399 acres of land, more or less. (154,199 S.F.)

Filed and Recorded

Official Public Records

Brenda Taylor, County Clerk

Collin County, TEXAS

12/08/2006 02:36:23 PM 
$108.00 DLAIRD

20061208001734840

                                                

A-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]