Document:

Exhibit
10.1

PURCHASE AND SALE AGREEMENT

BETWEEN

CFH REALTY II/LAS COLINAS COMMONS, L.P.

AS SELLER

AND

HARVARD PROPERTY TRUST, LLC

d/b/a BEHRINGER HARVARD FUNDS

AS PURCHASER

DATED DECEMBER 18, 2006

 

TABLE OF CONTENTS

	
  

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 1

  	
   

  
	
   

  	
  BASIC
  INFORMATION

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Certain Basic Terms

  	
  1

  
	
  1.2

  	
  Closing Costs

  	
  2

  
	
  1.3

  	
  Notice Addresses:

  	
  3

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 2

  	
   

  
	
   

  	
  PROPERTY

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Property

  	
  4

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 3

  	
   

  
	
   

  	
  EARNEST MONEY

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Deposit and Investment of Earnest Money

  	
  5

  
	
  3.2

  	
  Independent Consideration

  	
  5

  
	
  3.3

  	
  Form; Failure to Deposit

  	
  5

  
	
  3.4

  	
  Disposition of Earnest Money

  	
  5

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 4

  	
   

  
	
   

  	
  DUE DILIGENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Due Diligence Materials To Be Delivered

  	
  6

  
	
  4.2

  	
  Physical Due Diligence

  	
  6

  
	
  4.3

  	
  Financial Reporting

  	
  7

  
	
  4.4

  	
  Due Diligence/Termination Right

  	
  7

  
	
  4.5

  	
  Return of Documents and Reports

  	
  7

  
	
  4.6

  	
  Service Contracts

  	
  7

  
	
  4.7

  	
  Proprietary Information; Confidentiality

  	
  8

  
	
  4.8

  	
  No Representation or Warranty by Seller

  	
  8

  
	
  4.9

  	
  Purchaser’s Responsibilities

  	
  8

  
	
  4.10

  	
  Purchaser’s Agreement to Indemnify

  	
  9

  
	
  4.11

  	
  Environmental Studies; Seller’s Right to Terminate

  	
  9

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 5

  	
   

  
	
   

  	
  TITLE AND SURVEY

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Title Commitment

  	
  9

  
	
  5.2

  	
  Updated Survey

  	
  9

  
	
  5.3

  	
  Title Review

  	
  9

  
	
  5.4

  	
  Delivery of Title Policy at Closing

  	
  10

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 6

  	
   

  
	
   

  	
  OPERATIONS AND
  RISK OF LOSS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Ongoing Operations

  	
  10

  
	
  6.2

  	
  Damage

  	
  11

  
	
  6.3

  	
  Condemnation

  	
  12

  

 

 i
 

 

 

	
  

  	
  ARTICLE 7

  	
   

  
	
   

  	
  CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Closing

  	
  12

  
	
  7.2

  	
  Conditions to Parties’ Obligation to Close

  	
  12

  
	
  7.3

  	
  Seller’s Deliveries in Escrow

  	
  13

  
	
  7.4

  	
  Purchaser’s Deliveries in Escrow

  	
  14

  
	
  7.5

  	
  Closing Statements

  	
  15

  
	
  7.6

  	
  Purchase Price

  	
  15

  
	
  7.7

  	
  Possession

  	
  15

  
	
  7.8

  	
  Delivery of Books and Records

  	
  15

  
	
  7.9

  	
  Notice to Tenants

  	
  15

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 8

  	
   

  
	
   

  	
  PRORATIONS,
  DEPOSITS, COMMISSIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Prorations

  	
  15

  
	
  8.2

  	
  Leasing Costs

  	
  17

  
	
  8.3

  	
  Closing Costs

  	
  17

  
	
  8.4

  	
  Final Adjustment After Closing

  	
  17

  
	
  8.5

  	
  Tenant Deposits

  	
  17

  
	
  8.6

  	
  Commissions

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 9

  	
   

  
	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Seller’s Representations and Warranties

  	
  18

  
	
  9.2

  	
  Purchaser’s Representations and Warranties

  	
  19

  
	
  9.3

  	
  Survival of Representations and Warranties

  	
  19

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 10

  	
   

  
	
   

  	
  DEFAULT AND
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Seller’s Remedies

  	
  20

  
	
  10.2

  	
  Purchaser’s Remedies

  	
  20

  
	
  10.3

  	
  Attorneys’ Fees

  	
  21

  
	
  10.4

  	
  Other Expenses

  	
  21

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 11

  	
   

  
	
   

  	
  DISCLAIMERS,
  RELEASE AND INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Disclaimers By Seller

  	
  21

  
	
  11.2

  	
  Sale “As Is, Where Is”

  	
  22

  
	
  11.3

  	
  Seller Released from Liability

  	
  22

  
	
  11.4

  	
  “Hazardous Materials” Defined

  	
  23

  
	
  11.5

  	
  Indemnity

  	
  23

  
	
  11.6

  	
  Survival

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 12

  	
   

  
	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Parties Bound; Assignment

  	
  23

  
	
  12.2

  	
  Headings

  	
  24

  
	
  12.3

  	
  Invalidity and Waiver

  	
  24

  

 

 ii
 

 

 

	
  12.4

  	
  Governing Law

  	
  24

  
	
  12.5

  	
  Survival

  	
  24

  
	
  12.6

  	
  Entirety and Amendments

  	
  24

  
	
  12.7

  	
  Time

  	
  24

  
	
  12.8

  	
  Confidentiality

  	
  24

  
	
  12.9

  	
  No Electronic Transactions

  	
  25

  
	
  12.10

  	
  Notices

  	
  25

  
	
  12.11

  	
  Construction

  	
  25

  
	
  12.12

  	
  Calculation of Time Periods; Business Day

  	
  25

  
	
  12.13

  	
  Execution in Counterparts

  	
  25

  
	
  12.14

  	
  No Recordation

  	
  25

  
	
  12.15

  	
  Further Assurances

  	
  26

  
	
  12.16

  	
  Discharge of Obligations

  	
  26

  
	
  12.17

  	
  ERISA

  	
  26

  
	
  12.18

  	
  No Third Party Beneficiary

  	
  26

  
	
  12.19

  	
  Reporting Person

  	
  26

  
	
  12.20

  	
  Mandatory Arbitration

  	
  26

  
	
  12.21

  	
  Upfront Fees

  	
  26

  

 

 iii
 

 

 

LIST OF DEFINED TERMS

	
  

  	
  Page No.

  
	
   

  	
   

  
	
  AAA

  	
  I-1

  
	
  Affiliate

  	
  24

  
	
  Agreement

  	
  1

  
	
  Assignment

  	
  13

  
	
  Association Estoppel

  	
  14

  
	
  Broker

  	
  2

  
	
  Business Day

  	
  26

  
	
  Cash Bonus

  	
  27

  
	
  Casualty Notice

  	
  11

  
	
  CERCLA

  	
  23

  
	
  Closing

  	
  12

  
	
  Closing Date

  	
  2

  
	
  Code

  	
  19

  
	
  Confidentiality Obligations

  	
  25

  
	
  Confidentiality Regulation

  	
  25

  
	
  Due Diligence Termination Notice

  	
  7

  
	
  Earnest Money

  	
  1

  
	
  Effective Date

  	
  2

  
	
  ERISA

  	
  15

  
	
  Escrow Agent

  	
  2

  
	
  Estoppel Return Date

  	
  14

  
	
  Estoppels

  	
  14

  
	
  Exception Documents

  	
  10

  
	
  Hazardous Materials

  	
  23

  
	
  Improvements

  	
  4

  
	
  Independent Consideration

  	
  5

  
	
  Initiating Party

  	
  I-1

  
	
  Inspection Period

  	
  2

  
	
  Intangible Personal Property

  	
  5

  
	
  Land

  	
  4

  
	
  Leases

  	
  4

  
	
  Leasing Costs

  	
  17

  
	
  License Agreements

  	
  5

  
	
  Material Damage

  	
  12

  
	
  Materially Damaged

  	
  12

  
	
  Matheson

  	
  17

  
	
  OFAC

  	
  19

  
	
  Oil Lease

  	
  27

  
	
  Permitted Exceptions

  	
  10

  
	
  Permitted Outside Parties

  	
  8

  
	
  Plan

  	
  19

  
	
  Property

  	
  4

  
	
  Property Information

  	
  6

  
	
  Property Information Delivery Date

  	
  2

  
	
  Purchase Price

  	
  1

  
	
  Purchaser

  	
  1

  

 

 iv
 

 

 

	
  Real Property

  	
  4

  
	
  Report

  	
  7

  
	
  Reports

  	
  7

  
	
  Seller

  	
  1

  
	
  Seller’s Representatives

  	
  20

  
	
  Service Contracts

  	
  4

  
	
  Survey

  	
  10

  
	
  Survey Delivery Date

  	
  2

  
	
  Tangible Personal Property

  	
  4

  
	
  Taxes

  	
  16

  
	
  Tenant Estoppel

  	
  14

  
	
  Tenant Estoppel Condition

  	
  14

  
	
  Tenant Receivables

  	
  16

  
	
  Title and Survey Review Period

  	
  2

  
	
  Title Commitment

  	
  9

  
	
  Title Commitment Delivery Date

  	
  2

  
	
  Title Company

  	
  1

  
	
  Title Policy

  	
  10

  
	
  to Seller’s knowledge

  	
  20

  
	
  to the best of Seller’s knowledge

  	
  20

  
	
  Unbilled Tenant Receivables

  	
  16

  
	
  Uncollected Delinquent Tenant Receivables

  	
  17

  

 

 v

 

PURCHASE AND SALE AGREEMENT

Las Colinas
Commons, Irving, Texas

This Purchase and Sale Agreement (this “Agreement”) is made and entered
into by and between Purchaser and Seller.

RECITALS

A.            Defined
terms are indicated by initial capital letters. 
Defined terms shall have the meaning set forth herein, whether or not
such terms are used before or after the definitions are set forth.

B.            Purchaser
desires to purchase the Property and Seller desires to sell the Property, all
upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual terms,
provisions, covenants and agreements set forth herein, as well as the sums to
be paid by Purchaser to Seller, and for other good and valuable consideration,
the receipt and sufficiency of which are acknowledged, Purchaser and Seller
agree as follows:

ARTICLE 1

BASIC
INFORMATION

1.1           Certain Basic Terms.  The following defined terms shall have the
meanings set forth below:

	
  

  	
  1.1.1

  	
   

  	
  Seller:

  	
   

  	
  CFH REALTY II/LAS COLINAS COMMONS, L.P.,
  a Texas limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.2

  	
   

  	
  Purchaser:

  	
   

  	
  HARVARD PROPERTY TRUST, LLC, a
  Delaware limited liability company, d/b/a Behringer Harvard Funds

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.3

  	
   

  	
  Purchase Price:

  	
   

  	
  $15,922,900

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.4

  	
   

  	
  Earnest Money:

  	
   

  	
  $1,000,000 (the “Earnest Money”),
  including interest thereon, to be deposited in accordance with
  Section 3.1 below.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.5

  	
   

  	
  Title Company:

  	
   

  	
  LandAmerica/Commonwealth Title of Dallas

  2100 McKinney Avenue, Suite 1515

  Dallas, Texas 75201

  Attn.: Beverly Griese

  Telephone number: 214.855.8400

  Facsimile number: 214.754.9066

  E-mail: bgriese@landam.com

  	 

 

 1
 

 

 

	
  

  	
  1.1.6

  	
   

  	
  Escrow Agent:

  	
   

  	
  LandAmerica/Commonwealth Title of Dallas

  2100 McKinney Avenue, Suite 1515

  Dallas, Texas 75201

  Attn.: Beverly Griese

  Telephone number: 214.855.8400

  Facsimile number: 214.754.9066

  E-mail: bgriese@landam.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.7

  	
   

  	
  Broker:

  	
   

  	
  CB Richard Ellis, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.8

  	
   

  	
  Effective Date:

  	
   

  	
  The date on which this Agreement is executed by the
  latter to sign of Purchaser or Seller, as indicated on the signature page of
  this Agreement. If the execution date is left blank by either Purchaser or
  Seller, the Effective Date shall be the execution date inserted by the other
  party.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.9

  	
   

  	
  Property Information Delivery Date:

  	
   

  	
  The date which is two (2) Business Days after the
  Effective Date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.10

  	
   

  	
  Title Commitment Delivery Date:

  	
   

  	
  The date which is two (2) Business Days after the
  Effective Date.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  1.1.11

  	
   

  	
  Survey Delivery Date:

  	
   

  	
  The date which is fifteen (15) days after the
  Effective Date.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  1.1.12

  	
   

  	
  Title and Survey Review Period:

  	
   

  	
  The period ending ten (10) days after Purchaser’s
  receipt of the initial Title Commitment and the Exception Documents, but in
  any event beginning no earlier than the Effective Date and ending no later
  than the expiration of the Inspection Period.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  1.1.13

  	
   

  	
  Inspection Period:

  	
   

  	
  The period ending on December 1, 2006.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  1.1.14

  	
   

  	
  Closing Date:

  	
   

  	
  December 20, 2006.

  	 

									

 

1.2           Closing Costs.  Closing costs shall be allocated and paid as
follows:

	
  COST

  	
   

  	
  RESPONSIBLE

  PARTY

  
	
   

  	
   

  	
   

  
	
  Title Commitment required to be delivered pursuant
  to Section 5.1

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  
	
  Premium for standard form Title Policy required to
  be delivered pursuant to Section 5.4

  	
   

  	
  Seller

  

 

 2
 

 

 

	
   

  	
   

  	
   

  
	
  Premium for any upgrade of Title Policy for extended
  or additional coverage and any endorsements to the Title Policy desired by
  Purchaser, any inspection fee charged by the Title Company, tax certificates,
  municipal and utility lien certificates, and any other Title Company charges

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Costs of Survey

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  
	
  Costs of any revisions, modifications or
  recertifications to the Survey requested by Purchaser

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Costs for UCC Searches

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Recording fees for Deed

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  
	
  All other recording fees

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Any deed taxes, documentary stamps, transfer taxes,
  intangible taxes, mortgage taxes or other similar taxes, fees or assessments

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Any escrow fee charged by Escrow Agent for holding
  the Earnest Money or conducting the Closing

  	
   

  	
  Purchaser 1⁄2

  Seller 1⁄2

  
	
   

  	
   

  	
   

  
	
  Real Estate Sales Commission to Broker

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  
	
  All other closing costs, expenses, charges and fees

  	
   

  	
  By party
  incurring same

  

 

1.3           Notice
Addresses:

	
  

  	
  Purchaser:

  	
  Harvard Property Trust, LLC

  c/o Behringer Harvard Funds

  15601 Dallas Parkway, Suite 600

  Dallas, Texas 75001

  Attention: Joe Jernigan

  Telephone: 866.655.3600

  Facsimile: 866.655.3610

  E-mail: jjernigan@bhfunds.com

  	
   

  	
  Copy to:

  	
  Powell Coleman & Arnold LLP

  8080 N. Central Expressway

  Suite 1380

  Dallas, TX 75206-1846

  Attention: Patrick Arnold

  Telephone: 214.890.7108

  Facsimile: 214.373.8768

  E-mail: parnold@psclaw.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Seller:

  	
  CFH Realty II/Las Colinas Commons, L.P.

  c/o Crow Holdings

  2100 McKinney Avenue, Suite 700

  Dallas, Texas 75201

  Attention: Coe Juracek

  Telephone: 214.661.8116

  Facsimile: 214.661.8041

  E-mail: cjuracek@crowholdings.com

  	
   

  	
  Copy to:

  	
  Vinson & Elkins L.L.P.

  2001 Ross Avenue, Suite 3700

  Dallas, Texas 75201

  Attention: Paul A. Martin

  Telephone:214.220.7875

  Facsimile: 214.999.7875

  E-mail: pmartin@velaw.com

  

 

 3
 

 

ARTICLE 2

PROPERTY

2.1           Property.  Subject to the terms and conditions of this
Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase
from Seller, the following property (collectively, the “Property”):

2.1.1        Real Property.  The land located at 1525, 1555 and 1621 West
Walnut Hill, Irving, Texas, more commonly known as Las Colinas Commons as more
particularly described in Exhibit A hereto (the “Land”),
together with (a) all improvements located thereon, but expressly excluding
improvements and structures owned by any tenant or other third party (“Improvements”), (b) all right,
title and interest of Seller, if any, in and to the rights, benefits,
privileges, easements, tenements, hereditaments, and appurtenances thereon or
in anywise appertaining thereto, and (c) all right, title, and interest of
Seller, if any, in and to all strips and gores and any land lying in the bed of
any street, road or alley, open or proposed, adjoining the Land (collectively,
the “Real Property”).

2.1.2        Leases.  All of Seller’s right, title and interest in
all leases of the Real Property (other than License Agreements), including
leases which may be made by Seller after the Effective Date and prior to
Closing as permitted by this Agreement (the “Leases”).

2.1.3        Tangible Personal Property.  All of Seller’s right, title and interest in
the equipment, machinery, furniture, furnishings, supplies and other tangible
personal property, if any, owned by Seller and now or hereafter located in and
used in connection with the operation, ownership or management of the Real
Property, but specifically excluding any items of personal property owned or
leased by Seller’s property manager or tenants at or on the Real Property and
further excluding any items of personal property owned by third parties and
leased to Seller (collectively, the “Tangible Personal Property”).

2.1.4        Intangible Personal
Property.  All of Seller’s
right, title and interest, if any, without warranty, in all intangible personal
property related to the Real Property and the Improvements, including, without
limitation:  all trade names and trade
marks associated with the Real Property and the Improvements, including Seller’s
rights and interests, if any, in the name of the Real Property; the plans and
specifications and other architectural and engineering drawings for the
Improvements, if any (to the extent assignable without cost to Seller);
contract rights related to the operation, ownership or management of the Real
Property, including maintenance, service, construction, supply and equipment
rental contracts, if any, but not including Leases or License Agreements
(collectively, the “Service Contracts”)
(but only to the extent assignable without cost to Seller and Seller’s
obligations thereunder are expressly assumed by Purchaser pursuant to this
Agreement); warranties (to the extent assignable without cost to Seller);
governmental permits, approvals and licenses, if any (to the extent assignable
without cost to Seller); and telephone exchange numbers (to the extent
assignable without cost to Seller (all of the items described in this
Section 2.1.4 collectively referred to as the “Intangible
Personal Property”). 
Tangible Personal Property and Intangible Personal Property shall not
include (a) any appraisals or other economic evaluations of, or projections
with respect to, all or any portion of the Property, including, without
limitation, budgets prepared by or on behalf of Seller or any affiliate of
Seller, (b) any documents, materials or information which are subject to
attorney/client, work product or similar privilege, which constitute attorney
communications with respect to the Property and/or Seller, or which are subject
to a confidentiality agreement, and (c) any trade name, mark or other
identifying material that includes the name “Trammell Crow” or the name “Crow
Holdings” or any derivative thereof.

 4
 

 

2.1.5        License Agreements.  All of Seller’s right, title and interest in
and to all agreements (other than Leases), if any, for the leasing or licensing
of rooftop space or equipment, telecommunications equipment, cable access and
other space, equipment and facilities that are located on or within the Real
Property and generate income to Seller as the owner of the Real Property,
including agreements which may be made by Seller after the Effective Date and
prior to Closing as permitted by this Agreement (the “License
Agreements”).

ARTICLE 3

EARNEST
MONEY

3.1           Deposit and Investment of Earnest Money.
 Within three Business Days after the
Effective Date, Purchaser shall deposit the Earnest Money with Escrow
Agent.  Escrow Agent shall invest the
Earnest Money in government insured interest-bearing accounts satisfactory to
Seller and Purchaser, shall not commingle the Earnest Money with any funds of
Escrow Agent or others, and shall promptly provide Purchaser and Seller with
confirmation of the investments made. 
Such account shall have no penalty for early withdrawal, and Purchaser
accepts all risks with regard to such account.

3.2           Independent Consideration.  Upon the Effective Date hereof, Purchaser
shall deliver to Seller a check in the amount of $100 which amount the parties
acknowledge and agree has been bargained for and agreed to as independent consideration
for Seller’s execution and delivery of this Agreement (“Independent
Consideration”).  The
Independent Consideration is in addition to and independent of any other
consideration or payment provided in this Agreement and is nonrefundable in all
events.

3.3           Form; Failure to Deposit.  The Earnest Money shall be in the form of a
certified or cashier’s check or the wire transfer to Escrow Agent of
immediately available U.S. federal funds. 
If Purchaser fails to timely deposit any portion of the Earnest Money
within the time periods required, Seller may terminate this Agreement by
written notice to Purchaser, in which event any Earnest Money that has
previously been deposited by Purchaser with Escrow Agent shall be immediately
delivered to Seller and thereafter the parties hereto shall have no further
rights or obligations hereunder, except for rights and obligations which, by
their terms, survive the termination hereof.

3.4           Disposition of Earnest Money.  The Earnest Money shall be applied as a
credit to the Purchase Price at Closing. 
However, if Purchaser elects to terminate this Agreement prior to the
expiration of the Inspection Period pursuant to Section 4.3, Escrow Agent
shall pay the entire Earnest Money to Purchaser one Business Day following
Escrow Agent’s receipt of the Due Diligence Termination Notice from Purchaser
(as long as the current investment can be liquidated and disbursed in one
Business Day).  No notice to Escrow Agent
from Seller shall be required for the release of the Earnest Money to Purchaser
by Escrow Agent if Purchaser terminates this Agreement pursuant to
Section 4.3.  In the event of a
termination of this Agreement by either Seller or Purchaser for any reason
other than pursuant to Section 4.3, Escrow Agent is authorized to deliver
the Earnest Money to the party hereto entitled to same pursuant to the terms
hereof on or before the tenth Business Day following receipt by Escrow Agent
and the non-terminating party of written notice of such termination from the
terminating party, unless the other party hereto notifies Escrow Agent that it
disputes the right of the other party to receive the Earnest Money.  In such event, Escrow Agent may interplead
the Earnest Money into a court of competent jurisdiction in the county in which
the Earnest Money has been deposited. 
All attorneys’ fees and costs and Escrow Agent’s costs and expenses
incurred in connection with such interpleader shall be assessed against the
party that is not awarded the Earnest Money, or if the Earnest Money is
distributed in part to both parties, then in the inverse proportion of such
distribution.

 5
 

 

ARTICLE 4

DUE
DILIGENCE

4.1           Due Diligence Materials To Be Delivered.  Seller has provided Purchaser with certain
requested due diligence items (the “Property Information”).
 Following the expiration of the
Inspection Period, Purchaser shall have no right to terminate this Agreement
based on the Property Information (or the lack of the Property Information).  Notwithstanding the foregoing, in the event
that Purchaser requires additional Property Information, Seller agrees to
cooperate with Purchaser in obtaining such information whether in the
possession of Seller or Seller’s property management company or under Seller’s
control.  Purchaser agrees to reimburse
Seller for reasonable expenses incurred in obtaining any requested additional
Property Information.

4.2           Physical Due Diligence.  Commencing on the Effective Date and
continuing until the Closing, Purchaser shall have reasonable access to the
Property at all reasonable times during normal business hours, upon appropriate
notice to tenants as permitted or required under the Leases, for the purpose of
conducting reasonably necessary tests, including surveys and architectural,
engineering, geotechnical and environmental inspections and tests, provided
that (a) Purchaser must give Seller two full Business Days’ prior telephone or
written notice of any such inspection or test, and with respect to any
intrusive inspection or test (i.e., core sampling) must obtain Seller’s prior
written consent (which consent may be given, withheld or conditioned in Seller’s
sole discretion), (b) prior to performing any inspection or test, Purchaser
must deliver a certificate of insurance to Seller evidencing that Purchaser has
in place and Purchaser shall cause its contractors, agents and representatives
to deliver certificates of insurance evidencing that they have in place (and
Purchaser and its contractors, agents and representatives shall maintain during
the pendency of this Agreement) (1) commercial general liability insurance with
limits of at least Two Million Dollars ($2,000,000) for bodily or personal
injury or death, (2) property damage insurance in the amount of at least Two
Million Dollars ($2,000,000), (3) contractual liability insurance with respect
to Purchaser’s obligations hereunder, and (4) workers’ compensation insurance
in accordance with applicable law, all covering any accident arising in
connection with the presence of Purchaser, its contractors, agents and
representatives on the Property, which insurance shall (A) name as additional
insureds thereunder, except with respect to Workers’ Compensation Insurance,
Seller and such other parties holding insurable interests as Seller may
designate and (B) be written by a reputable insurance company having a rating
of at least “A+:VII” by Best’s Rating Guide (or a comparable rating by a
successor rating service), and (C) otherwise be subject to Seller’s prior
approval, and (c) all such tests shall be conducted by Purchaser in compliance
with Purchaser’s responsibilities set forth in Section 4.9 below.  Purchaser shall bear the cost of all such
inspections or tests and shall be responsible for and act as the generator with
respect to any wastes generated by those tests, which obligation shall survive
the termination of this Agreement. 
Subject to the provisions of Section 4.7 hereof, Purchaser or
Purchaser’s representatives may communicate with any tenant; provided, however,
Purchaser must contact Seller at least five full Business Days in advance by
telephone to inform Seller of Purchaser’s intended communication with any
tenant and to allow Seller the opportunity to participate in such communication
if Seller desires.  Subject to the
provisions of Section 4.7 hereof, Purchaser or Purchaser’s representatives
may communicate with any governmental authority for the sole purpose of
gathering information in connection with the transaction contemplated by this
Agreement; provided, however, Purchaser must contact Seller at least five full
Business Days in advance by telephone to inform Seller of Purchaser’s intended
communication with any governmental authority and to allow Seller the
opportunity to participate in such communication if Seller desires.  As used in this Section, “communicate” and “communication”
shall mean the initiation of, response to, or sharing or exchange of
information, knowledge or messages, whether by oral, written or electronic
methods or media, or by any other means for the purpose of knowingly subverting
the provisions of this Section regarding Purchaser’s obligations to
provide Seller with prior notice of such communication and Seller’s ability to
participate in such communication.

 6
 

 

4.3           Financial Reporting.  Purchaser has advised Seller that Purchaser
must cause to be prepared up to three (3) years of audited financial statements
in respect of the Property in compliance with the policies of Purchaser and
certain laws and regulations, including, without limitation, Securities and
Exchange Commission Regulation S-X. Seller agrees to use reasonable
efforts to cooperate with Purchaser’s auditors in the preparation by Purchaser
of such audited financial statements (it being understood and agreed that the
foregoing covenant shall survive the Closing). Without limiting the generality
of the preceding sentence (a) Seller shall, during normal business hours,
allow Purchaser’s auditors reasonable access to such books and records
maintained by Seller (and Seller’s manager of the Property) in respect of the
Property as necessary to prepare such audited financial statements;
(b) Seller shall use reasonable efforts to provide to Purchaser such
financial information and supporting documentation as are in the possession of
Seller or Seller’s property management company and are necessary for Purchaser’s
auditors to prepare audited financial statements; (c) Seller will make
available for interview by Purchaser and Purchaser’s auditors the manager of
the Property or other agents or representatives of Seller responsible for the
day-to-day operation of the Property and the keeping of the books and records
in respect of the operation of the Property; and (d) if Seller has audited
financial statements with respect to the Property, Seller shall promptly
provide Purchaser’s auditors with a copy of such audited financial
statements.  If after the Closing Date
Seller obtains an audited financial statement in respect of the Property for a
fiscal period prior to the Closing Date that was not completed as of the
Closing Date, then Seller shall promptly provide Purchaser with a copy of such
audited financial statement, and the foregoing covenant shall survive
Closing.  Purchaser shall reimburse
Seller all reasonable costs incurred by Seller in connection with this Section 4.3.

4.4           Due Diligence/Termination Right.  Purchaser shall have through the last day of
the Inspection Period in which (a) to examine, inspect, and investigate
the Property Information and the Property and, in Purchaser’s sole and absolute
judgment and discretion, determine whether the Property is acceptable to
Purchaser, and (b) obtain all necessary internal approval.  Notwithstanding anything to the contrary in
this Agreement, Purchaser may terminate this Agreement for any reason or no
reason by giving written notice of termination to Seller and Escrow Agent (the “Due Diligence Termination Notice”)
on or before the last day of the Inspection Period and Purchaser shall receive
the return of the Earnest Money pursuant to Section 3.4 hereof.  If Purchaser does not give a Due Diligence
Termination Notice, this Agreement shall continue in full force and effect,
Purchaser shall be deemed to have waived its right to terminate this Agreement
pursuant to this Section 4.3.

4.5           Return of Documents and Reports.  If the transaction contemplated herein does
not close, Purchaser shall provide to Seller, within three Business Days
following a written request from Seller therefor, copies of all third party
reports, investigations and studies, other than economic analyses
(collectively, the “Reports”
and, individually, a “Report”)
prepared for Purchaser in connection with its due diligence review of the
Property, including, without limitation, any and all Reports involving
structural or geological conditions, environmental, hazardous waste or
hazardous substances contamination of the Property, if any.  The Reports shall be delivered to Seller
without any representation or warranty as to the completeness or accuracy of
the Reports or any other matter relating thereto.  Purchaser’s obligation to deliver the
Property Information and the Reports to Seller pursuant to the terms of this
Section 4.5 shall survive the termination of this Agreement.

4.6           Service Contracts.  On or prior to the last day of the Inspection
Period, Purchaser will advise Seller in writing of which Service Contracts it
will assume and for which Service Contracts Purchaser requests that Seller
deliver written termination at or prior to Closing, provided Seller shall have
no obligation to terminate, and Purchaser shall be obligated to assume, any
Service Contracts which by their terms cannot be terminated without penalty or
payment of a fee, including, without limitation, the electrical contract for
the Property.  Seller shall deliver at
Closing notices of termination of all Service Contracts that are not so
assumed.  Purchaser must assume the
obligations arising from and after the

 7
 

 

Closing Date under those Service Contracts (a) that Purchaser has
agreed to assume, or that Purchaser is obligated to assume pursuant to this
Section 4.6, and (b) for which a termination notice is delivered as of or
prior to Closing but for which termination is not effective until after
Closing.

4.7           Proprietary Information; Confidentiality.  Purchaser acknowledges that the Property
Information is proprietary and confidential and has been and will be delivered to Purchaser solely to assist Purchaser
in determining the feasibility of purchasing the Property.  Purchaser shall not use the Property
Information for any purpose other than as set forth in the preceding
sentence.  Purchaser shall not disclose
the contents to any person other than to those persons who are responsible for
determining the feasibility of Purchaser’s acquisition of the Property,
including but not limited to Purchaser’s consultants, professionals, lenders,
accountants, attorneys, partners, officers and employees, and who have agreed
to preserve the confidentiality of such information as required hereby
(collectively, “Permitted Outside Parties”).  Purchaser shall not divulge the contents of
the Property Information and other information except in strict accordance with
the confidentiality standards set forth in this Section 4.7.  In permitting Purchaser to review the
Property Information or any other information, Seller has not waived any
privilege or claim of confidentiality with respect thereto, and no third party
benefits or relationships of any kind, either express or implied, have been
offered, intended or created.  Purchaser’s
obligations under this Section 4.7 shall survive the termination of this
Agreement, provided, however any duty of confidentiality set forth in this
Agreement shall terminate if Purchaser acquires the Property.  Notwithstanding the foregoing, Purchaser
shall be permitted to disclose such information that is published by Seller as
public knowledge or otherwise available in the public domain and as may be
recommended by Purchaser’s legal counsel in order to comply with all financial
reporting, securities laws and other legal requirements applicable to
Purchaser, including any required disclosures to the Securities and Exchange
Commission.

4.8           No Representation or Warranty by Seller.  Purchaser acknowledges that, except as
expressly set forth in this Agreement, Seller has not made and does not make
any warranty or representation regarding the truth, accuracy or completeness of
the Property Information or the source(s) thereof.  Purchaser further acknowledges that some if
not all of the Property Information was prepared by third parties other than
Seller.  Seller expressly disclaims any
and all liability for representations or warranties, express or implied,
statements of fact and other matters contained in such information, or for
omissions from the Property Information, or in any other written or oral
communications transmitted or made available to Purchaser unless otherwise set
forth in this Agreement.  Purchaser shall
rely solely upon its own investigation with respect to the Property, including,
without limitation, the Property’s physical, environmental or economic
condition, compliance or lack of compliance with any ordinance, order, permit
or regulation or any other attribute or matter relating thereto.  Seller has not undertaken any independent
investigation as to the truth, accuracy or completeness of the Property
Information and are providing the Property Information solely as an
accommodation to Purchaser.

4.9           Purchaser’s Responsibilities.  In conducting any inspections, investigations
or tests of the Property and/or Property Information, Purchaser and its agents
and representatives shall:  (a) not
disturb the tenants or interfere with their use of the Property pursuant to
their respective Leases; (b) not interfere with the operation and maintenance
of the Property; (c) not damage any part of the Property or any personal
property owned or held by any tenant or any third party; (d) not injure or
otherwise cause bodily harm to Seller or its agents, guests, invitees,
contractors and employees or any tenants or their guests or invitees; (e)
comply with all applicable laws; (f) promptly pay when due the costs of all
tests, investigations, and examinations done with regard to the Property; (g)
not permit any liens to attach to the Real Property by reason of the exercise
of its rights hereunder; (h) repair any damage to the Real Property resulting directly
or indirectly from any such inspection or tests; and (i) not reveal or disclose
prior to Closing any information obtained during the Inspection Period
concerning the Property and the Property Information to anyone other than the
Permitted Outside Parties, in accordance with the confidentiality

 8
 

 

standards set forth in Section 4.7 above, or except as may be
otherwise required by law.  Purchaser’s
obligations under this Section 4.9 shall survive the termination of this
Agreement.

4.10         Purchaser’s Agreement to Indemnify.  Purchaser hereby agrees to indemnify, defend
and hold Seller harmless from and against any and all liens, claims, causes of
action, damages, liabilities and expenses (including reasonable attorneys’
fees) arising out of Purchaser’s inspections or tests permitted under this
Agreement or any violation of the provisions of Sections 4.2, 4.7 and 4.9;
provided, however, the indemnity shall not extend to protect Seller from any
pre-existing liabilities for matters merely discovered by Purchaser (i.e.,
latent environmental contamination) so long as Purchaser’s actions do not
aggravate any pre-existing liability of Seller. 
Purchaser’s obligations under this Section 4.10 shall survive the
termination of this Agreement and shall survive the Closing.

4.11         Environmental Studies; Seller’s Right to Terminate.  If the transaction contemplated herein does
not close, Purchaser shall provide to Seller, within three Business Days
following a written request from Seller therefor, copies of any and all
reports, tests or studies involving contamination of or other environmental
concerns relating to the Property; provided, however, Purchaser shall have no
obligation to cause any such tests or studies to be performed on the Property.  Seller acknowledges that Purchaser has not
made and does not make any warranty or representation regarding the truth or
accuracy of any such studies or reports. 
Notwithstanding Section 4.10 above, Purchaser shall have no
liability or culpability of any nature as a result of having provided such
information to Seller or as a result of Seller’s reliance thereon or arising
out of the fact that Purchaser merely conducted such tests or studies, so long
as Purchaser’s actions do not aggravate any pre-existing liability of
Seller.  In the event that such reports,
tests or studies indicate the existence or reasonable potential existence of
any contamination of any portion of the Property that is not disclosed in the
Property Information and that is material (meaning that the reasonably estimated
cost of remediation and/or other liability associated therewith, as determined
by Seller’s environmental consultants, exceeds $150,000.00), then Seller may
terminate this Agreement by giving written notice to Purchaser within ten
Business Days after Purchaser has provided Seller with copies of such reports,
tests or studies, whereupon the Earnest Money shall be returned to Purchaser,
the parties shall have no further obligations hereunder except for obligations
that expressly survive the termination hereof.

ARTICLE 5

TITLE
AND SURVEY

5.1           Title Commitment.  Seller shall cause to be prepared and
delivered to Purchaser on or before the Title Commitment Delivery Date:  (a) a current commitment for title insurance
or preliminary title report (the “Title Commitment”)
issued by the Title Company, in the amount of the Purchase Price, with
Purchaser as the proposed insured, and (b) copies of all documents of record
referred to in the Title Commitment as exceptions to title to the Property (the
“Exception Documents”).

5.2           Updated Survey.  Seller has previously delivered to Purchaser
an updated survey (the “Survey”).  Purchaser may request such additional
modifications or revisions, at Purchaser’s cost, to otherwise satisfy Purchaser’s
objectives.

5.3           Title Review.  During the Title and Survey Review Period,
Purchaser shall review title to the Property as disclosed by the Title
Commitment and the Survey.  Seller shall
have no obligation to cure title objections except financing liens of an
ascertainable amount created by, under or through Seller, which liens Seller
shall cause to be released at or prior to Closing (with Seller having the right
to apply the Purchase Price or a portion thereof for such purpose), and Seller
shall deliver the Property free and clear of any such financing liens.  Seller further agrees to remove any
exceptions or encumbrances to title which are voluntarily created by, under or
through Seller after the Effective Date without Purchaser’s

 9
 

 

consent (if requested, such consent shall not be unreasonably withheld
or delayed).  The term “Permitted Exceptions” shall
mean:  the specific exceptions (excluding
exceptions that are part of the promulgated title insurance form) in the Title
Commitment that the Title Company has not agreed to remove from the Title
Commitment as of the end of the Title and Survey Review Period and that Seller
is not required to remove as provided above; matters created by, through or
under Purchaser; items shown on the Survey which have not been removed as of
the end of the Inspection Period; real estate taxes not yet due and payable;
rights of tenants under the Leases; rights of tenants or licensees under
License Agreements; and any licensees under any Service Contracts not
terminated as of Closing.

5.4           Delivery of Title Policy at Closing.  In the event that the Title Company does not
issue at Closing, or unconditionally commit at Closing to issue, to Purchaser,
an owner’s title policy in accordance with the Title Commitment, insuring
Purchaser’s fee simple title to the Real Property in the amount of the Purchase
Price, subject only to the standard exceptions, modified as follows:
(a) the exception for restrictive covenants shall either be deleted or
shall list specific restrictions by recorded document; (b) the exception
for ad valorem taxes shall reflect only taxes for the current year and
subsequent years, and subsequent assessments for prior years due to changes in
land usage or ownership, and shall be endorsed “not yet due and payable”;
(c) there shall be no exception for “visible and apparent easements,” for “public
or private roads” or the like; (d) there shall be no exception for “rights
of parties in possession,” although there may be an exception for Leases or
Licenses specifically described in the Title Policy; and (e) any reference
to submitting claims under the Title Policy to arbitration shall be deleted,
and exclusions from coverage contained in such policy and the Permitted
Exceptions (the “Title Policy”),
Purchaser shall have the right to terminate this Agreement, in which case the
Earnest Money shall be immediately returned to Purchaser and the parties hereto
shall have no further rights or obligations, other than those that by their
terms survive the termination of this Agreement.

ARTICLE 6

OPERATIONS
AND RISK OF LOSS

6.1           Ongoing
Operations.  From the
Effective Date through Closing:

6.1.1        Leases, Service Contracts
and License Agreements. 
Seller will perform its material obligations under the Leases, Service
Contracts and License Agreements.

6.1.2        New Contracts.  Except as provided in Section 6.1.4,
Seller will not enter into any contract that will be an obligation affecting
the Property subsequent to the Closing, except contracts entered into in the
ordinary course of business that are terminable without cause and without the
payment of any termination penalty on not more than 30 days’ prior notice.

6.1.3        Maintenance of
Improvements; Removal of Personal Property.  Subject to Sections 6.2 and 6.3, Seller shall
maintain or cause the tenants under the Leases to maintain all Improvements
substantially in their present condition (ordinary wear and tear and casualty
excepted) and in a manner consistent with Seller’s maintenance of the
Improvements during Seller’s period of ownership.  Seller will not remove any Tangible Personal
Property except as may be required for necessary repair or replacement, and
replacement shall be of approximately equal quality and quantity as the removed
item of Tangible Personal Property.

6.1.4        Leasing; License
Agreements.  Seller will
not amend or terminate any existing Lease or License Agreement or enter into
any new Lease or new License Agreement without providing Purchaser (a) all
relevant supporting documentation, as reasonably determined by Seller,
including, without limitation, tenant financial information to the extent in
Seller’s possession, and (b) as to any such amendment or termination of a Lease
or License Agreement or new Lease or new License Agreement

 10
 

 

which is to be executed after the expiration of the Inspection Period,
Seller’s request for Purchaser’s approval. 
If Purchaser’s consent is requested by Seller as to any amendment or
termination of a Lease or License Agreement, or as to a new Lease or new
License Agreement, Purchaser agrees to give Seller written notice of approval
or disapproval of a proposed amendment or termination of a Lease or License
Agreement or new Lease or new License Agreement within three Business Days
after Purchaser’s receipt of the items in Sections 6.1.4(a) and
6.1.4(b).  If Purchaser does not respond
to Seller’s request within such time period, then Purchaser will be deemed to
have approved such amendment, termination or new Lease or new License
Agreement.  Purchaser’s approval rights
and obligations will vary depending on whether the request for approval from
Seller is delivered to Purchaser before or after the expiration of the
Inspection Period, as follows:

(1)           With respect to a
request for approval delivered by Seller to Purchaser before the expiration of
the Inspection Period, Purchaser’s consent shall not be required.  Moreover, whether or not Purchaser consents
to an amendment or termination of a Lease or License Agreement or the entering
into of a new Lease or License Agreement, Seller may amend or terminate a Lease
or License Agreement or enter into a new Lease or License Agreement at anytime
prior to the expiration of the Inspection Period; however, if Purchaser does
not consent to same or is not deemed to have approved same, and if Seller
elects to amend or terminate a Lease or License Agreement or enter into a new
Lease or License Agreement notwithstanding Purchaser’s failure to approve same,
then Purchaser may, at the time Seller notifies Purchaser of the execution of
said amendment, termination or new Lease or License Agreement, elect to
terminate this Agreement and receive a return of the Earnest Money; provided
that if Purchaser does not elect to terminate within five days after said
notification from Seller, then Purchaser shall have waived its right to
terminate pursuant to this Section 6.1.4.

(2)           With respect to a
request for approval delivered by Seller to Purchaser after the expiration of
the Inspection Period, Purchaser may withhold its consent in its reasonable
discretion, and Seller may not amend or terminate a Lease or License Agreement
or enter into a new Lease or new License Agreement without Purchaser’s written
consent.

6.2           Damage.  If prior to Closing the Property is damaged
by fire or other casualty,  Seller shall
estimate the cost to repair and the time required to complete repairs and will
provide Purchaser written notice of Seller’s estimation (the “Casualty Notice”) as soon as
reasonably possible after the occurrence of the casualty.

6.2.1        Material.  In the event of any Material Damage to or
destruction of the Property or any portion thereof prior to Closing, Purchaser
may, at its option, terminate this Agreement by delivering written notice to
the other on or before the expiration of 30 days after the date Seller delivers
the Casualty Notice to Purchaser (and if necessary, the Closing Date shall be
extended to give the parties the full thirty-day period to make such election
and to obtain insurance settlement agreements with Seller’s insurers).  Upon any such termination, the Earnest Money
shall be returned to Purchaser and the parties hereto shall have no further
rights or obligations hereunder, other than those that by their terms survive
the termination of this Agreement.  If
Purchaser does not terminate this Agreement within said 30-day period, then
Purchaser shall be deemed to have waived its right to terminate under this
Section 6.2.1 and the parties shall proceed under this Agreement and close
on schedule (subject to extension of Closing as provided above), and as of
Closing Seller shall assign to Purchaser, without representation or warranty by
or recourse against Seller, all of Seller’s rights in and to any resulting
insurance proceeds (including any rent loss insurance applicable to any period
on and after the Closing Date) due Seller as a result of such damage or
destruction and Purchaser shall assume full responsibility

 11
 

 

for all needed repairs, and Purchaser shall receive a credit at Closing
for any deductible amount under such insurance policies (but the amount of the
deductible plus insurance proceeds shall not exceed the lesser of (a) the cost
of repair or (b) the Purchase Price and a pro rata share of the rental or
business loss proceeds, if any).  For the
purposes of this Agreement, “Material Damage”
and “Materially Damaged” means damage
which, in Seller’s reasonable estimation, exceeds $1,000,000 to repair.

6.2.2        Not Material.  If the Property is not Materially Damaged,
then Purchaser shall not have the right to terminate this Agreement, and Seller
shall, at its option, either (a)  repair
the damage before the Closing in a manner reasonably satisfactory to Purchaser
(and if necessary, Seller may extend the Closing Date up to 30 days to complete
such repairs), or (b) credit Purchaser at Closing for the reasonable cost to
complete the repair (in which case Seller shall retain all insurance proceeds
and Purchaser shall assume full responsibility for all needed repairs).

6.3           Condemnation.  If proceedings in eminent domain are
instituted with respect to the Property or any portion thereof, Purchaser may,
at its option, by written notice to Seller given within ten days after Seller
notifies Purchaser of such proceedings (and if necessary the Closing Date shall
be automatically extended to give Purchaser the full ten-day period to make
such election), either:  (a) terminate
this Agreement, in which case the Earnest Money shall be immediately returned
to Purchaser and the parties hereto shall have no further rights or
obligations, other than those that by their terms survive the termination of
this Agreement, or (b) proceed under this Agreement, in which event Seller
shall, at the Closing, assign to Purchaser its entire right, title and interest
in and to any condemnation award, and Purchaser shall have the sole right after
the Closing to negotiate and otherwise deal with the condemning authority in
respect of such matter.  If Purchaser
does not give Seller written notice of its election within the time required
above, then Purchaser shall be deemed to have elected option (b) above.

ARTICLE 7

CLOSING

7.1           Closing.  The consummation of the transaction
contemplated herein (“Closing”)
shall occur on the Closing Date at the offices of Escrow Agent (or such other
location as may be mutually agreed upon by Seller and Purchaser).  Funds shall be deposited into and held by
Escrow Agent in a closing escrow account with a bank satisfactory to Purchaser
and Seller.  Upon satisfaction or
completion of all closing conditions and deliveries, the parties shall direct
Escrow Agent to immediately record and deliver the closing documents to the
appropriate parties and make disbursements according to the closing statements
executed by Seller and Purchaser.

7.2           Conditions to Parties’ Obligation to Close.  In addition to all other conditions set forth
herein, the obligation of Seller, on the one hand, and Purchaser, on the other
hand, to consummate the transactions contemplated hereunder are conditioned
upon the following:

7.2.1        Representations and
Warranties.  The other
party’s representations and warranties contained herein shall be true and
correct in all material respects as of the Effective Date and the Closing Date,
except for (a) representations and warranties made as of, or limited by, a
specific date, which will be true and correct in all material respects as of
the specified date or as limited by the specified date, and (b) Seller’s
representations and warranties under Section 9.1.2, which will be true and
correct in all material respects as of the Effective Date;

7.2.2        Deliveries.  As of the Closing Date, the other party shall
have tendered all deliveries to be made at Closing; and

 12
 

 

7.2.3        Actions, Suits, etc.  There shall exist no pending or threatened
actions, suits, arbitrations, claims, attachments, proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, against the other party that would materially and adversely affect
that party’s ability to perform its obligations under this Agreement.

So long as a party is not in default hereunder, if any
condition to such party’s obligation to proceed with the Closing hereunder has
not been satisfied as of the Closing Date (or such earlier date as is provided
herein), subject to any applicable notice and cure periods provided in Sections
10.1 and 10.2, such party may, in its sole discretion, terminate this Agreement
by delivering written notice to the other party on or before the Closing Date
(or such earlier date as is provided herein), or elect to close (or to permit
any such earlier termination deadline to pass) notwithstanding the
non-satisfaction of such condition, in which event such party shall be deemed
to have waived any such condition.  In
the event such party elects to close (or to permit any such earlier termination
deadline to pass), notwithstanding the non-satisfaction of such condition, said
party shall be deemed to have waived said condition, and there shall be no
liability on the part of any other party hereto for breaches of representations
and warranties of which the party electing to close had knowledge at the
Closing.

7.3           Seller’s Deliveries in Escrow.  As of or prior to the Closing Date, Seller
shall deliver in escrow to Escrow Agent the following:

7.3.1        Deed.  A special warranty deed in the form of Exhibit
B hereto in form acceptable for recordation under the law of the state
where the Property is located and restating the provisions of Article 11 hereof
and including a list of Permitted Exceptions to which the conveyance shall be
subject, executed and acknowledged by Seller, conveying to Purchaser Seller’s
interest in the Real Property (the “Deed”);

7.3.2        Bill of Sale, Assignment
and Assumption.  A Bill of
Sale, Assignment and Assumption of Leases and Contracts in the form of Exhibit
C hereto (the “Assignment”),
executed and acknowledged by Seller, vesting in Purchaser Seller’s right, title
and interest in and to the property described therein free of any claims,
except for the Permitted Exceptions to the extent applicable;

7.3.3        Conveyancing or Transfer
Tax Forms or Returns. 
Such conveyancing or transfer tax forms or returns, if any, as are
required to be delivered or signed by Seller by applicable state and local law
in connection with the conveyance of the Real Property;

7.3.4        FIRPTA.  A Foreign Investment in Real Property Tax Act
affidavit in the form of Exhibit D hereto executed by Seller;

7.3.5        Authority.  Evidence of the existence, organization and
authority of Seller and of the authority of the persons executing documents on
behalf of Seller reasonably satisfactory to the underwriter for the Title
Policy;

7.3.6        Additional Documents.  Any additional documents that Escrow Agent or
the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement (provided, however, no such
additional document shall expand any obligation, covenant, representation or
warranty of Seller or result in any new or additional obligation, covenant,
representation or warranty of Seller under this Agreement beyond those
expressly set forth in this Agreement); and

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7.3.7        Estoppel
Certificates.

(i)            Seller shall make
commercially reasonable efforts to obtain and deliver to Purchaser, no later
than three (3) Business Days after the Effective Date (the “Estoppel Return Date”), a tenant
estoppel certificate in substantially the form of Exhibit G attached
hereto executed by each tenant at the Property; provided, however, the form of
tenant estoppel certificate shall reflect appropriate changes thereto for any
tenant that has specific requirements in its Lease regarding the form of the
tenant estoppel certificate. An executed tenant estoppel certificate in the
form of Exhibit G (as such form may be changed for any tenant that has
specific requirements in its Lease regarding the form of the tenant estoppel
certificate) is herein referred to as a “Tenant Estoppel”.
Seller shall deliver each Tenant Estoppel to Purchaser (regardless of whether
it complies with this Agreement) promptly following Seller’s receipt thereof.
Notwithstanding anything contained herein to the contrary, it shall be a
condition precedent to the obligation of Purchaser to consummate the
transaction that is the subject of this Agreement that Seller deliver to
Purchaser, on or before the Estoppel Return Date, Tenant Estoppels executed by
(A) tenants occupying, in the aggregate, at least eighty-five percent
(85%) of the leased square footage at the Property, and (B) each tenant
that leases more than ten thousand (10,000) square feet at the Property (such
condition being herein referred to as the “Tenant Estoppel Condition”).  In the event that Seller is unable to satisfy
the Tenant Estoppel Condition by the Estoppel Return Date, Seller shall not be
in default under this Agreement. However, if the Tenant Estoppel Condition is
not fulfilled as of the Estoppel Return Date, then, for three (3) Business Days
thereafter, Purchaser shall have the option either to (C) waive the Tenant
Estoppel Condition, (D) extend the Closing Date for up to seven (7) days
to allow Seller more time to obtain additional estoppel certificates; or
(E) terminate this Agreement, in which event all of the Earnest Money
shall be returned to Purchaser.  If
Purchaser elects to extend the Closing Date pursuant to clause (D) of the
preceding sentence and the Tenant Estoppel Condition is still not fulfilled on
or before the expiration of the seven (7) day extension period, then Purchaser,
as its sole and exclusive remedy, may elect one of the options set forth in
clauses (C) and (E) of the preceding sentence.  Notwithstanding the foregoing, Seller has provided
and Purchaser has approved tenant estoppel certificates for each of First
Horizon, YMCA, ATX Technologies and Matheson (defined below).

(ii)           Seller has delivered
and Purchaser has approved the estoppel certificate from The Las Colinas
Association (the “Association Estoppel,”
which, together with the Tenant Estoppel, shall be known as the “Estoppels”).  The Association Estoppel identified some
deficiencies in the landscaping and exterior appearance at the Property, and
the Purchase Price reflects a credit to Purchaser sufficient to remedy such deficiencies.

7.4           Purchaser’s Deliveries in Escrow.  As of or prior to the Closing Date, Purchaser
shall deliver in escrow to Escrow Agent the following:

7.4.1        Bill of Sale, Assignment
and Assumption.  The
Assignment, executed and acknowledged by Purchaser;

7.4.2        ERISA Letter.  A letter to Seller in the form of Exhibit
E hereto duly executed by Purchaser, confirming that Purchaser is not
acquiring the Property with the “plan assets” as defined in Section 3(42)
of the Employee Retirement Income Security Act of 1974 (“ERISA”)
and, in the event Purchaser is unable or unwilling to make such a
representation, Purchaser shall be deemed to be in default hereunder, and
Seller shall have the right to terminate this Agreement and to receive and
retain the Earnest Money;

 14
 

 

7.4.3        Conveyancing or Transfer
Tax Forms or Returns. 
Such conveyancing or transfer tax forms or returns, if any, as are
required to be delivered or signed by Purchaser by applicable state and local
law in connection with the conveyance of the Real Property;

7.4.4        Authority.  Evidence of the existence, organization and
authority of Purchaser and of the authority of the persons executing documents
on behalf of Purchaser reasonably satisfactory to the underwriter for the Title
Policy; and

7.4.5        Additional Documents.  Any additional documents that Seller, Escrow
Agent or the Title Company may reasonably require for the proper consummation
of the transaction contemplated by this Agreement (provided, however, no such
additional document shall expand any obligation, covenant, representation or
warranty of Purchaser or result in any new or additional obligation, covenant,
representation or warranty of Purchaser under this Agreement beyond those
expressly set forth in this Agreement).

7.5           Closing Statements.  As of or prior to the Closing Date, Seller
and Purchaser shall deposit with Escrow Agent executed closing statements
consistent with this Agreement in the form required by Escrow Agent.

7.6           Purchase Price.  At or before 1:00 p.m., Dallas, Texas time on
the Closing Date, Purchaser shall deliver to Escrow Agent the Purchase Price,
less the Earnest Money that is applied to the Purchase Price, plus or minus
applicable prorations, in immediate, same-day U.S. federal funds wired for
credit into Escrow Agent’s escrow account, which funds must be delivered in a
manner to permit Escrow Agent to deliver good funds to Seller or its designee
on the Closing Date (and, if requested by Seller, by wire transfer); in the
event that Escrow Agent is unable to deliver good funds to Seller or its
designee on the Closing Date, then the closing statements and related
prorations will be revised as necessary.

7.7           Possession.  Seller shall deliver possession of the
Property to Purchaser at the Closing subject only to the Permitted Exceptions.

7.8           Delivery of Books and Records.  After the Closing, Seller shall deliver to
the offices of Purchaser’s property manager or to the Real Property to the
extent in Seller’s or its property manager’s possession or control:  Lease Files; License Agreements; maintenance
records and warranties; plans and specifications; licenses, permits and
certificates of occupancy; copies or originals of all books and records of
account, contracts, and copies of correspondence with tenants and suppliers;
all advertising materials; booklets; and keys.

7.9           Notice to Tenants.  Seller and Purchaser shall each execute, and
Purchaser shall deliver to each tenant immediately after the Closing, a notice
regarding the sale in substantially the form of Exhibit F hereto, or
such other form as may be required by applicable state law.  This obligation on the part of Purchaser
shall survive the Closing.

ARTICLE 8

PRORATIONS,
DEPOSITS, COMMISSIONS

8.1           Prorations.  At Closing, the following items shall be
prorated as of the Closing Date with all items of income and expense for the
Property being borne by Purchaser from and after (and including) the Closing
Date:  Tenant Receivables (defined below)
and other income and rents that have been collected by Seller as of Closing;
fees and assessments; prepaid expenses and obligations under Service Contracts;
accrued operating expenses; real and personal ad valorem taxes (“Taxes”); and any

 15
 

 

assessments by private covenant for the then-current calendar year of
Closing.  Specifically, the following shall
apply to such prorations and to post-Closing collections of Tenant Receivables:

8.1.1        Taxes.  If Taxes for the year of Closing are not
known or cannot be reasonably estimated, Taxes shall be prorated based on Taxes
for the year prior to Closing.  Any
additional Taxes relating to the year of Closing or prior years arising out of
a change in the use of the Real Property or a change in ownership shall be
assumed by Purchaser effective as of Closing and paid by Purchaser when due and
payable, and Purchaser shall indemnify Seller from and against any and all such
Taxes, which indemnification obligation shall survive the Closing.  If Taxes for the year of Closing are due and
owing at the time of Closing, Seller’s and Purchaser’s prorated portions of
Taxes shall be paid by Escrow Agent to the local taxing authorities as of the
Closing Date.

8.1.2        Utilities.  Purchaser shall take all steps necessary to
effectuate the transfer of all utilities to its name as of the Closing Date,
and where necessary, post deposits with the utility companies.  Seller shall ensure that all utility meters
are read as of the Closing Date.  Seller
shall be entitled to recover any and all deposits held by any utility company
as of the Closing Date.

8.1.3        Tenant Receivables.  Rents due from tenants under Leases and from
tenants or licensees under License Agreements and operating expenses and/or
taxes payable by tenants under Leases (collectively, “Tenant
Receivables”) and not collected by Seller as of Closing shall
not be prorated between Seller and Purchaser at Closing but shall be
apportioned on the basis of the period for which the same is payable and if, as
and when collected, as follows:

(a)           Tenant Receivables and
other income received from tenants under Leases and/or tenants or licensees
under License Agreements after Closing shall be applied in the following order
of priority:  (1) first, to payment of
the current Tenant Receivables then due for the month in which the Closing Date
occurs, which amount shall be apportioned between Purchaser and Seller as of
the Closing Date as set forth in Section 8.1 hereof (with Seller’s portion
thereof to be delivered to Seller); (2) second, to Tenant Receivables first
coming due after Closing and applicable to the period of time after Closing,
which amount shall be retained by Purchaser; (3) third, to payment of
Tenant Receivables first coming due after Closing but applicable to the period
of time before Closing, including, without limitation, the Tenant Receivables
described in Section 8.1.3(b) below (collectively, “Unbilled
Tenant Receivables”), which amount shall be delivered to Seller;
and (4) thereafter, to delinquent Tenant Receivables which were due and payable
as of Closing but not collected by Seller as of Closing (collectively, “Uncollected Delinquent Tenant Receivables”),
which amount shall be delivered to Seller. 
Notwithstanding the foregoing, Seller shall have the right to pursue the
collection of Uncollected Delinquent Tenant Receivables for a period of one
year after Closing without prejudice to Seller’s rights or Purchaser’s
obligations hereunder, provided, however, Seller shall have no right to cause
any such tenant or licensee to be evicted or to exercise any other “landlord”
remedy (as set forth in such tenant’s Lease or licensee’s License Agreement)
against such tenant other than to sue for collection.  Any sums received by Purchaser to which
Seller is entitled shall be held in trust for Seller on account of such past
due rents payable to Seller, and Purchaser shall remit to Seller any such sums
received by Purchaser to which Seller is entitled within ten Business Days
after receipt thereof less reasonable, actual costs and expenses of collection,
including reasonable attorneys’ fees, court costs and disbursements, if
any.  Seller expressly agrees that if
Seller receives any amounts after the Closing Date which are attributable, in
whole or in part, to any period after the Closing Date, Seller shall remit to
Purchaser that portion of the monies so received by Seller to which Purchaser
is entitled within ten Business Days after receipt thereof.  With respect to Unbilled Tenant Receivables,
Purchaser covenants and agrees to (A) bill the same when billable

 16
 

 

and (B) cooperate with Seller to determine the correct
amount of operating expenses and/or taxes due. 
The provisions of this Section 8.1.3(a) shall survive the Closing.

(b)           If the final
reconciliation or determination of operating expenses and/or taxes due under
the Leases shows that a net amount is owed by Seller to Purchaser, said amount
shall be paid by Seller to Purchaser within ten Business Days of such final
determination under the Leases.  If the
final determination of operating expenses and/or taxes due under the Leases
shows that a net amount is owed by Purchaser to Seller, Purchaser shall, within
ten Business Days of such final determination, remit said amount to
Seller.  Purchaser agrees to receive and
hold any monies received on account of such past due expenses and/or taxes in
trust for Seller and to pay same promptly to Seller as aforesaid.  The provisions of this Section 8.1.3(b)
shall survive the Closing.

8.2           Leasing Costs.  Seller agrees to pay or discharge at or prior
to Closing all leasing commissions, costs for tenant improvements, lease buyout
costs, moving allowances, design allowances, legal fees and other costs,
expenses and allowances incurred in order to induce a tenant to enter into a
Lease or Lease renewal or extension or to induce a licensee to enter into a
License Agreement (collectively, “Leasing Costs”)
that are due and payable prior to Closing with respect to Leases and License
Agreements in force as of or prior to the Effective Date; provided, however,
that Seller shall have no obligation to pay, and as of Closing Purchaser shall
assume the obligation to pay, all Leasing Costs payable with respect to any
option to renew or option to expand that has not been exercised prior to the
Effective Date, which obligation shall survive the Closing.  Additionally, as of Closing, Purchaser shall
assume Seller’s obligations for (a) Leasing Costs that are due and payable
after Closing with respect to Leases and License Agreements in force as of or
prior to the Effective Date, and (b) Leasing Costs incurred with respect to
Leases and Lease renewals and extensions and License Agreements and License
Agreement renewals and extensions executed subsequent to the Effective
Date.  Notwithstanding this
Section 8.2, (1) Purchaser shall pay all costs with respect to the
pending lease amendment for Matheson Tri-Gas, Inc. (“Matheson”),
and (2) if any abated Basic Rent remains pursuant to the terms of Exhibit J
to the Lease Agreement dated as of May 17, 2006, between Seller, as
landlord, and Matheson, as tenant, then Seller shall credit Purchaser at
Closing for the amount of the remaining abated Basic Rent.

8.3           Closing Costs.  Closing costs shall be allocated between
Seller and Purchaser in accordance with Section 1.2.

8.4           Final Adjustment After Closing.  If final bills are not available or cannot be
issued prior to Closing for any item being prorated under Section 8.1,
then Purchaser and Seller agree to allocate such items on a fair and equitable
basis as soon as such bills are available, final adjustment to be made as soon
as reasonably possible after the Closing. 
Payments in connection with the final adjustment shall be due within 30
days of written notice.  All such rights
and obligations shall survive the Closing.

8.5           Tenant Deposits.  All tenant and licensee security deposits
collected and not applied by Seller (and interest thereon if required by law or
contract) shall be transferred or credited to Purchaser at Closing.  As of the Closing, Purchaser shall assume
Seller’s obligations related to tenant and licensee security deposits, but only
to the extent they are credited or transferred to Purchaser.

8.6           Commissions.  Seller shall be responsible to Broker for a
real estate sales commission at Closing (but only in the event of a Closing in
strict accordance with this Agreement) in accordance with a separate agreement
between Seller and Broker.  Broker may
share its commission with any other licensed broker involved in this
transaction, but the payment of the commission by Seller to Broker shall fully
satisfy any obligations of Seller to pay a commission hereunder.  Under no circumstances shall Seller owe a
commission or other compensation directly to any other broker, agent or
person.  Any cooperating

 17
 

 

broker shall not be an affiliate, subsidiary or related in any way to
Purchaser.  Other than as stated above in
this Section 8.6, Seller and Purchaser each represent and warrant to the
other that no real estate brokerage commission is payable to any person or
entity in connection with the transaction contemplated hereby, and each agrees
to and does hereby indemnify and hold the other harmless against the payment of
any commission to any other person or entity claiming by, through or under
Seller or Purchaser, as applicable.  This
indemnification shall extend to any and all claims, liabilities, costs and
expenses (including reasonable attorneys’ fees and litigation costs) arising as
a result of such claims and shall survive the Closing.

ARTICLE 9

REPRESENTATIONS
AND WARRANTIES

9.1           Seller’s
Representations and Warranties. 
Seller represents and warrants to Purchaser that:

9.1.1        Organization and Authority.  Seller has been duly organized, is validly
existing, and is in good standing in the state in which it was formed.  Seller has the full right and authority and
has obtained any and all consents required to enter into this Agreement and to
consummate or cause to be consummated the transactions contemplated
hereby.  This Agreement has been, and all
of the documents to be delivered by Seller at the Closing will be, authorized
and executed and constitute, or will constitute, as appropriate, the valid and
binding obligation of Seller, enforceable in accordance with their terms.

9.1.2        Conflicts and Pending
Actions.  There is no
agreement to which Seller is a party or, to Seller’s knowledge, that is binding
on Seller which is in conflict with this Agreement.  To Seller’s knowledge, there is no action or
proceeding pending or threatened against Seller or relating to the Property,
which challenges or impairs Seller’s ability to execute or perform its
obligations under this Agreement.

9.1.3        Tenant Leases.  As of the Effective Date, Exhibit H
lists all tenants of the Property and the Lease Files include leases and
amendments.

9.1.4        Service Contracts and
License Agreements.  Exhibit
J lists all of the Service Contracts and Licenses for the Property.

9.1.5        No Condemnation.  Seller has received no written notification
of any pending condemnation, expropriation, eminent domain, litigation,
administrative action or other legal proceeding affecting all or any portion of
the Property, and Seller has no knowledge that any such proceeding is
contemplated.

9.1.6        Prohibited Persons and
Transactions.  Seller
represents and warrants to Purchaser that, to Seller’s knowledge, Seller is
currently in compliance with and shall at all times during the term of this
Agreement (including any extension thereof) remain in compliance with the
regulations of the Office of Foreign Asset Control (“OFAC”)
of the Department of the Treasury (including those named on OFAC’s Specially
Designated and Blocked Persons List) and any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or
Support Terrorism), or other governmental action relating thereto.

9.1.7        Notices from Governmental
Authorities.  Other than
the Association Estoppel, to Seller’s knowledge, Seller has not received from
any governmental authority written notice of any material violation of any laws
applicable (or alleged to be applicable) to the Real Property, or any part

 18
 

 

thereof, that has not been corrected, except as may be reflected in the
Property Information or otherwise disclosed in writing to Purchaser.

9.1.8        Leasing Commissions.  All commissions due and payable for the
current lease terms of existing leases under those certain leasing commission
agreements listed on Exhibit F to Exhibit C of this
Agreement (the Bill of Sale, Assignment and Assumption of Leases and Contracts)
have been paid or will be paid at closing.

9.2           Purchaser’s
Representations and Warranties. 
Purchaser represents and warrants to Seller that:

9.2.1        Organization and Authority.  Purchaser has been duly organized and is
validly existing as a limited liability company in good standing in the State
of Delaware and is qualified to do business in the state in which the Real
Property is located.  Purchaser has the
full right and authority and has obtained any and all consents required to
enter into this Agreement and to consummate or cause to be consummated the transactions
contemplated hereby.  This Agreement has
been, and all of the documents to be delivered by Purchaser at the Closing will
be, authorized and properly executed and constitute, or will constitute, as
appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.

9.2.2        Conflicts and Pending
Action.  There is no
agreement to which Purchaser is a party or to Purchaser’s knowledge binding on
Purchaser which is in conflict with this Agreement.  There is no action or proceeding pending or,
to Purchaser’s knowledge, threatened against Purchaser which challenges or
impairs Purchaser’s ability to execute or perform its obligations under this
Agreement.

9.2.3        ERISA.  Purchaser is not an employee benefit plan (a “Plan”) subject to ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”): assets being used to
acquire the Property are not “plan assets” within the meaning of
Section 3(42) of ERISA; to Purchaser’s knowledge, Purchaser is not a “party
in interest” (as that term is defined in Section 3(14) of ERISA) with
respect to any Plan that is an investor in Seller, and Purchaser’s acquisition
of the Property will not constitute or result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code.

9.2.4        Prohibited Persons and
Transactions.  Purchaser
represents and warrants to Seller that, to Purchaser’s knowledge, Purchaser is
currently in compliance with and shall at all times during the term of this
Agreement (including any extension thereof) remain in compliance with the
regulations of the OFAC (including those named on OFAC’s Specially Designated
and Blocked Persons List) and any statute, executive order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action relating thereto.

9.3           Survival of Representations and Warranties.  The representations and warranties set forth
in this Article 9 are made as of the Effective Date and, except in the case of
Sections 9.1.2 and 9.1.7 or as provided in Section 7.2.1(a), are remade as
of the Closing Date and shall not be deemed to be merged into or waived by the
instruments of Closing, but shall survive the Closing for a period of one year
(the “Survival Period”); provided,
however, that such representations and warranties shall automatically terminate
if prior to the Closing, Purchaser assigns this Agreement in violation of
Section 12.1.  Terms such as “to Seller’s knowledge,” “to the best of Seller’s knowledge”
or like phrases mean the actual present and conscious awareness or knowledge of
J. Coe Juracek (“Seller’s Representatives”),
without any duty of inquiry or investigation; provided that so qualifying
Seller’s knowledge shall in no event give rise to any personal liability on the
part of Seller’s Representatives, or any of them, or any other officer or
employee of Seller, on account of any breach of any representation or

 19
 

 

warranty made by Seller herein. 
Seller hereby represents to Purchaser that the person named in the
preceding sentence is the person within Seller’s organization most likely to
have knowledge of the matters set forth in this Article 9.  Said terms do not include constructive
knowledge, imputed knowledge, or knowledge Seller or such persons do not have
but could have obtained through further investigation or inquiry.  No broker, agent, or party other than Seller
is authorized to make any representation or warranty for or on behalf of
Seller.  Each party shall have the right
to bring an action against the other on the breach of a representation or
warranty or covenant hereunder or in the documents delivered by Seller at the
Closing, but only on the following conditions: 
(1) the party bringing the action for breach first learns of the breach
after Closing and gives written notice of such breach to the other party before
the end of the Survival Period and files such action on or before the first day
following the second anniversary of the Closing Date, and (2) neither party shall
have the right to bring a cause of action for a breach of a representation or
warranty or covenant unless the damage to such party on account of such breach
(individually or when combined with damages from other breaches) equals or
exceeds $25,000, and then only to the extent of such excess.  Neither party shall have any liability after
Closing for the breach of a representation or warranty or covenant hereunder of
which the other party hereto had knowledge as of Closing.  Notwithstanding any other provision of this
Agreement, any agreement contemplated by this Agreement, or any rights which
Purchaser might otherwise have at law, equity, or by statute, whether based on
contract or some other claim, Purchaser agrees that any liability of Seller to
Purchaser will be limited to $250,000. 
The provisions of this Section 9.3 shall survive the Closing.  Any breach of a representation or warranty or
covenant that occurs prior to Closing shall be governed by Article 10.

ARTICLE 10

DEFAULT
AND REMEDIES

10.1         Seller’s Remedies.  If Purchaser fails to consummate the purchase
of the Property pursuant to this Agreement or otherwise defaults on its
obligations hereunder at or prior to Closing for any reason except failure by
Seller to perform hereunder, or if prior to Closing any one or more of
Purchaser’s representations or warranties are breached in any material respect,
and such default or breach is not cured by the earlier of the third (3rd)
Business Day after written notice thereof from Seller or the Closing Date (except
no notice or cure period shall apply if Purchaser fails to consummate the
purchase of the Property hereunder), Seller shall be entitled, as its sole
remedy (except as provided in Sections 4.10, 8.6, 10.3 and 10.4 hereof), to
terminate this Agreement and recover the Earnest Money as liquidated damages
and not as penalty, in full satisfaction of claims against Purchaser
hereunder.  Seller and Purchaser agree
that Seller’s damages resulting from Purchaser’s default are difficult, if not
impossible, to determine and the Earnest Money is a fair estimate of those
damages which has been agreed to in an effort to cause the amount of such
damages to be certain.  Notwithstanding
anything in this Section 10.1 or in Exhibit I to the contrary, in
the event of Purchaser’s default or a termination of this Agreement, Seller
shall have all remedies available at law or in equity in the event Purchaser or
any party related to or affiliated with Purchaser is asserting any claims or
right to the Property that would otherwise delay or prevent Seller from having
clear, indefeasible and marketable title to the Property, and in said event
Seller shall not be required to submit such matter to arbitration as
contemplated by Exhibit I.  In all
other events Seller’s remedies shall be limited to those described in this
Section 10.1 and Sections 4.10, 8.6, 10.3 and 10.4 hereof.  If Closing is consummated, Seller shall have
all remedies available at law or in equity in the event Purchaser fails to
perform any obligation of Purchaser under this Agreement.

10.2         Purchaser’s Remedies.  If Seller fails to consummate the sale of the
Property pursuant to this Agreement or otherwise defaults on its obligations
hereunder at or prior to Closing for any reason except failure by Purchaser to
perform hereunder, or if prior to Closing any one or more of Seller’s
representations or warranties are breached in any material respect, and such
default or breach is not cured by the earlier of the third (3rd) Business Day
after written notice thereof from Purchaser or the Closing Date (Purchaser
hereby agreeing to give such written notice to Seller within one Business Day
after

 20
 

 

Purchaser first learns of any such default or breach by Seller, except
no notice or cure period shall apply if Seller fails to consummate the sale of
the Property hereunder), Purchaser shall elect, as its sole remedy, either to
(a) terminate this Agreement by giving Seller timely written notice of such
election prior to or at Closing and recover the Earnest Money, (b) enforce
specific performance to consummate the sale of the Property hereunder, or (c)
waive said failure or breach and proceed to Closing without any reduction in
the Purchase Price.  Notwithstanding
anything herein to the contrary, Purchaser shall be deemed to have elected to
terminate this Agreement if Purchaser fails to deliver to Seller written notice
of its intent to file a claim or assert a cause of action for specific
performance against Seller on or before ten Business Days following the
scheduled Closing Date or, having given such notice, fails to file a lawsuit
asserting such claim or cause of action in the county in which the Property is
located within two months following the scheduled Closing Date.  Purchaser’s remedies shall be limited to
those described in this Section 10.2 and Sections 10.3 and 10.4
hereof.  IN NO EVENT SHALL SELLER’S
DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR AFFILIATES, ANY OFFICER,
DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING
PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER
LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER
BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.

10.3         Attorneys’ Fees.  In the event either party hereto employs an
attorney in connection with claims by one party against the other arising from
the operation of this Agreement, the non-prevailing party shall pay the
prevailing party all reasonable fees and expenses, including attorneys’ fees,
incurred in connection with such claims.

10.4         Other Expenses.  If this Agreement is terminated due to the
default of a party, then the defaulting party shall pay any fees or charges due
to Escrow Agent for holding the Earnest Money as well as any escrow
cancellation fees or charges and any fees or charges due to the Title Company
for preparation and/or cancellation of the Title Commitment.

ARTICLE 11

DISCLAIMERS,
RELEASE AND INDEMNITY

11.1         Disclaimers By Seller.  Except as expressly set forth in this
Agreement, it is understood and agreed that Seller and Seller’s agents or
employees have not at any time made and are not now making, and they
specifically disclaim, any warranties, representations or guaranties of any
kind or character, express or implied, with respect to the Property, including,
but not limited to, warranties, representations or guaranties as to (a) matters
of title (other than Seller’s special warranty of title to be contained in the
Deed), (b) environmental matters relating to the Property or any portion
thereof, including, without limitation, the presence of Hazardous Materials in,
on, under or in the vicinity of the Property, (c) geological conditions,
including, without limitation, subsidence, subsurface conditions, water table,
underground water reservoirs, limitations regarding the withdrawal of water,
and geologic faults and the resulting damage of past and/or future faulting,
(d) whether, and to the extent to which the Property or any portion thereof is
affected by any stream (surface or underground), body of water, wetlands, flood
prone area, flood plain, floodway or special flood hazard, (e) drainage, (f)
soil conditions, including the existence of instability, past soil repairs,
soil additions or conditions of soil fill, or susceptibility to landslides, or
the sufficiency of any undershoring, (g) the presence of endangered species or
any environmentally sensitive or protected areas, (h) zoning or building
entitlements to which the Property or any portion thereof may be subject, (i)
the availability of any utilities to the Property or any portion thereof
including, without limitation, water, sewage, gas and electric, (j) usages of
adjoining property, (k) access to the Property or any portion thereof, (l) the
value, compliance with the plans and specifications, size, location, age, use,
design, quality, description, suitability, structural integrity, operation,
title to, or physical or financial condition of the Property or any portion
thereof, or any income,

 21
 

 

expenses, charges, liens, encumbrances, rights or claims on or
affecting or pertaining to the Property or any part thereof, (m) the condition
or use of the Property or compliance of the Property with any or all past,
present or future federal, state or local ordinances, rules, regulations or
laws, building, fire or zoning ordinances, codes or other similar laws, (n) the
existence or non-existence of underground storage tanks, surface impoundments,
or landfills, (o) any other matter affecting the stability and integrity of the
Property, (p) the potential for further development of the Property, (q) the
merchantability of the Property or fitness of the Property for any particular
purpose, (r) the truth, accuracy or completeness of the Property Information,
(s) tax consequences, or (t) any other matter or thing with respect to the
Property.

11.2         Sale “As Is, Where Is”.  Purchaser acknowledges and agrees that upon
Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept
the Property “AS IS, WHERE IS, WITH ALL FAULTS,”
except to the extent expressly provided otherwise in this Agreement and any
document executed by Seller and delivered to Purchaser at Closing.  Except as expressly set forth in this
Agreement, Purchaser has not relied and will not rely on, and Seller has not
made and is not liable for or bound by, any express or implied warranties,
guarantees, statements, representations or information pertaining to the
Property or relating thereto (including specifically, without limitation,
Property information packages distributed with respect to the Property) made or
furnished by Seller, or any property manager, real estate broker, agent or
third party representing or purporting to represent Seller, to whomever made or
given, directly or indirectly, orally or in writing.  Purchaser represents that it is a
knowledgeable, experienced and sophisticated purchaser of real estate and that,
except as expressly set forth in this Agreement, it is relying solely on its
own expertise and that of Purchaser’s consultants in purchasing the Property
and shall make an independent verification of the accuracy of any documents and
information provided by Seller. 
Purchaser will conduct such inspections and investigations of the
Property as Purchaser deems necessary, including, but not limited to, the
physical and environmental conditions thereof, and shall rely upon same.  By failing to terminate this Agreement prior
to the expiration of the Inspection Period, Purchaser acknowledges that Seller
has afforded Purchaser a full opportunity to conduct such investigations of the
Property as Purchaser deemed necessary to satisfy itself as to the condition of
the Property and the existence or non-existence or curative action to be taken
with respect to any Hazardous Materials on or discharged from the Property, and
will rely solely upon same and not upon any information provided by or on
behalf of Seller or its agents or employees with respect thereto, other than
such representations, warranties and covenants of Seller as are expressly set
forth in this Agreement.  Upon Closing, Purchaser
shall assume the risk that adverse matters, including, but not limited to,
adverse physical or construction defects or adverse environmental, health or
safety conditions, may not have been revealed by Purchaser’s inspections and
investigations except as set forth in this Agreement.  Purchaser hereby represents and warrants to
Seller that:  (a) Purchaser is
represented by legal counsel in connection with the transaction contemplated by
this Agreement; and (b) Purchaser is purchasing the Property for business,
commercial, investment or other similar purpose and not for use as Purchaser’s
residence.  Purchaser waives any and all
rights or remedies it may have or be entitled to, deriving from disparity in
size or from any significant disparate bargaining position in relation to
Seller.

11.3         Seller Released from Liability.  Purchaser acknowledges that it will have the
opportunity to inspect the Property during the Inspection Period, and during
such period, observe its physical characteristics and existing conditions and
the opportunity to conduct such investigation and study on and of the Property
and adjacent areas as Purchaser deems necessary, Purchaser hereby FOREVER
RELEASES AND DISCHARGES Seller from all responsibility and liability, including
without limitation, liabilities and responsibilities for the lessor’s
obligations under the Leases relating to the physical, environmental or legal
compliance status of the Property, whether arising before or after the
Effective Date, and liabilities under the Comprehensive Environmental Response,
Compensation and Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.), as
amended (“CERCLA”), regarding the
condition, valuation, salability or utility of the Property, or its suitability
for any purpose whatsoever (including, but not limited to, with respect to the
presence in the soil, air, structures and surface and

 22
 

 

subsurface waters, of Hazardous Materials or other materials or
substances that have been or may in the future be determined to be toxic,
hazardous, undesirable or subject to regulation and that may need to be
specially treated, handled and/or removed from the Property under current or
future federal, state and local laws, regulations or guidelines, and any
structural and geologic conditions, subsurface soil and water conditions and
solid and hazardous waste and Hazardous Materials on, under, adjacent to or
otherwise affecting the Property). 
Purchaser further hereby WAIVES (and by Closing this transaction will be
deemed to have WAIVED) any and all objections and complaints (including, but
not limited to, federal, state and local statutory and common law based
actions, and any private right of action under any federal, state or local
laws, regulations or guidelines to which the Property is or may be subject,
including, but not limited to, CERCLA) concerning the physical characteristics
and any existing conditions of the Property, including, without limitation, the
lessor’s obligations under the Leases relating to the physical, environmental
or legal compliance status of the Property, whether arising before or after the
Effective Date.  Purchaser further hereby
assumes the risk of changes in applicable laws and regulations relating to
past, present and future environmental conditions on the Property and the risk
that adverse physical characteristics and conditions, including, without
limitation, the presence of Hazardous Materials or other contaminants, may not
have been revealed by its investigation.

11.4         “Hazardous Materials” Defined.  For purposes hereof, “Hazardous
Materials” means “Hazardous Material,” “Hazardous Substance,” “Pollutant
or Contaminant,” and “Petroleum” and “Natural Gas Liquids,” as those terms are
defined or used in Section 101 of CERCLA, and any other substances
regulated because of their effect or potential effect on public health and the
environment, including, without limitation, PCBs, lead paint, asbestos, urea
formaldehyde, radioactive materials, putrescible materials, and infectious
materials.

11.5         Indemnity.  Purchaser agrees to indemnify, defend and
hold Seller harmless of and from any and all liabilities, claims, demands, and
expenses of any kind or nature that relate to an act, event or condition that
first occurred on or after Closing as the result of an act or omission.  Seller agrees to indemnify, defend and hold
Purchaser harmless for and from any and all liabilities, claims, demands and
expenses of any kind or nature asserted by third parties that relate to an act,
event or condition that first occurred prior to Closing as the result of an act
or omission by Seller, subject to the provisions of this Agreement and the
documents executed in connection with the Closing, including, without
limitation, Article 9 and Article 11 hereof.

11.6         Survival.  The terms and conditions of this Article 11
shall expressly survive the Closing, not merge with the provisions of any
closing documents and shall be incorporated into the Deed.

Purchaser acknowledges and agrees that the disclaimers
and other agreements set forth herein are an integral part of this Agreement
and that Seller would not have agreed to sell the Property to Purchaser for the
Purchase Price without the disclaimers and other agreements set forth above.

ARTICLE 12

MISCELLANEOUS

12.1         Parties Bound; Assignment.  This Agreement, and the terms, covenants, and
conditions herein contained, shall inure to the benefit of and be binding upon
the heirs, personal representatives, successors, and assigns of each of the
parties hereto.  Purchaser may assign its
rights under this Agreement, without the consent of Seller, upon the following
conditions:  (a) the assignee of
Purchaser must be an Affiliate of Purchaser (the term “Affiliate”
shall mean (1) an entity that controls, is controlled by, or is under
common control with Purchaser; (2) any partnership in which Purchaser or
Purchaser’s controlling member is the general partner; or (3) any fund or
entity sponsored by Purchaser, (b) all of the Earnest Money must have been
delivered in accordance herewith, (c) the Inspection Period shall be

 23
 

 

deemed to have ended, (d) the assignee of Purchaser shall assume all
obligations of Purchaser hereunder, but Purchaser shall remain primarily liable
for the performance of Purchaser’s obligations, (e) a copy of the fully
executed written assignment and assumption agreement shall be delivered to
Seller prior to Closing, and (f)  the requirements in Section 12.17
are satisfied.

12.2         Headings.  The article, section, subsection, paragraph
and/or other headings of this Agreement are for convenience only and in no way
limit or enlarge the scope or meaning of the language hereof.

12.3         Invalidity and Waiver.  If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and, to the greatest
extent legally possible, effect shall be given to the intent manifested by the
portion held invalid or inoperative.  The
failure by either party to enforce against the other any term or provision of
this Agreement shall not be deemed to be a waiver of such party’s right to
enforce against the other party the same or any other such term or provision in
the future.

12.4         Governing Law.  This Agreement shall, in all respects, be
governed, construed, applied, and enforced in accordance with the law of the
state in which the Real Property is located.

12.5         Survival.  The provisions of this Agreement that
contemplate performance after the Closing and the obligations of the parties
not fully performed at the Closing (other than any unfulfilled closing
conditions which have been waived or deemed waived by the other party) shall
survive the Closing and shall not be deemed to be merged into or waived by the
instruments of Closing.

12.6         Entirety and Amendments.  This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
relating to the Property.  This Agreement
may be amended or supplemented only by an instrument in writing executed by the
party against whom enforcement is sought. 
All Exhibits hereto are incorporated herein by this reference for all
purposes.

12.7         Time.  Time is of the essence in the performance of
this Agreement.

12.8         Confidentiality.  Purchaser shall make no public announcement
or disclosure of any information related to this Agreement to outside brokers
or third parties, before the Closing, without the prior written specific
consent of Seller; provided, however, that Purchaser may, subject to the
provisions of Section 4.7, make disclosure of this Agreement to its
Permitted Outside Parties as necessary to perform its obligations hereunder and
as may be required under laws or regulations applicable to Purchaser.  Notwithstanding anything to the contrary set
forth herein or in any other agreement to which the parties hereto are parties
or by which they are bound, any and all obligations of confidentiality
contained herein and therein (the “Confidentiality
Obligations”), as they relate to the transactions and events
contemplated by this Agreement (collectively, the “Transaction”), shall not
apply to the “structure or tax aspects” (as that phrase is used in
Section 1.6011-4(b)(3) [or any successor provision] of the Treasury
Regulations [the “Confidentiality Regulation”]
promulgated under Section 6011 of the Internal Revenue Code of 1986, as
amended) of the Transaction; provided, however, that the Confidentiality
Obligations nevertheless shall apply at a given time to any and all items of
information not required to be freely disclosable at such time in order for the
Transaction not to be treated as “offered under conditions of confidentiality”
within the meaning of the Confidentiality Regulation.  In no event shall Purchaser disclose the
Purchase Price or other economic terms of this Agreement to any party other
than its Permitted Outside Parties before or following the Closing, except to
the extent required by applicable law or to Purchaser’s investors, potential
investors or their representatives.

 24
 

 

12.9         No Electronic Transactions.  The parties hereby acknowledge and agree this
Agreement shall not be executed, entered into, altered, amended or modified by
electronic means.  Without limiting the
generality of the foregoing, the parties hereby agree the transactions
contemplated by this Agreement shall not be conducted by electronic means,
except as specifically set forth in the “Notices” Section of this
Agreement.

12.10       Notices.  All notices required or permitted hereunder
shall be in writing and shall be served on the parties at the addresses set
forth in Section 1.3.  Any such
notices shall, unless otherwise provided herein, be given or served (a) by
depositing the same in the United States mail, postage paid, certified and
addressed to the party to be notified, with return receipt requested, (b) by
overnight delivery using a nationally recognized overnight courier, (c) by
personal delivery, (d) by facsimile transmission during normal business hours
with a confirmation copy delivered by another method permitted under this
Section 12.10, or (e) by electronic mail addressed to the electronic mail
address set forth in Section 1.3 for the party to be notified with a
confirmation copy delivered by another method permitted under this
Section 12.10.  Notice given in
accordance herewith for all permitted forms of notice other than by electronic
mail, shall be effective upon the earlier to occur of actual delivery to the
address of the addressee or refusal of receipt by the addressee (even if such
addressee refuses delivery thereof). 
Notice given by electronic mail in accordance herewith shall be
effective upon the entrance of such electronic mail into the information
processing system designated by the recipient’s electronic mail address.  Except for facsimile and electronic mail
notices as described above, no notice hereunder shall be effective if sent or
delivered by electronic means.  In no
event shall this Agreement be altered, amended or modified by electronic mail
or electronic record.  A party’s address
may be changed by written notice to the other party; provided, however, that no
notice of a change of address shall be effective until actual receipt of such
notice.  Copies of notices are for
informational purposes only, and a failure to give or receive copies of any
notice shall not be deemed a failure to give notice.  Notices given by counsel to the Purchaser
shall be deemed given by Purchaser and notices given by counsel to the Seller
shall be deemed given by Seller.

12.11       Construction.  The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and agree 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.

12.12       Calculation of Time
Periods; Business Day. 
Unless otherwise specified, in computing any period of time described
herein, the day of the act or event after which the designated period of time
begins to run is not to be included and the last day of the period so computed
is to be included, unless such last day is not a Business Day, in which event
the period shall run until the end of the next day which is a Business
Day.  The last day of any period of time
described herein shall be deemed to end at 5:00 p.m. local time in the state in
which the Real Property is located.  As
used herein, the term “Business Day”
means any day that is not a Saturday, Sunday or legal holiday for national
banks in the city in which the Real Property is located.

12.13       Execution in Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
such counterparts shall constitute one Agreement.  To facilitate execution of this Agreement,
the parties may execute and exchange by telephone facsimile counterparts of the
signature pages, provided that executed originals thereof are forwarded to the
other party on the same day by any of the delivery methods set forth in
Section 12.9 other than facsimile.

12.14       No Recordation.  Without the prior written consent of Seller,
there shall be no recordation of either this Agreement or any memorandum
hereof, or any affidavit pertaining hereto, and any such recordation of this
Agreement or memorandum or affidavit by Purchaser without the prior

 25
 

 

written consent of Seller shall constitute a default hereunder by
Purchaser, whereupon Seller shall have the remedies set forth in
Section 10.1 hereof.  In addition to
any such remedies, Purchaser shall be obligated to execute an instrument in
recordable form releasing this Agreement or memorandum or affidavit, and
Purchaser’s obligations pursuant to this Section 12.14 shall survive any
termination of this Agreement as a surviving obligation.

12.15       Further Assurances.  In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, but
without any obligation to incur any additional liability or expense, on or
after the Closing any further deliveries and assurances as may be reasonably
necessary to consummate the transactions contemplated hereby or to further
perfect the conveyance, transfer and assignment of the Property to Purchaser.

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

12.17       ERISA.  Under no circumstances shall Purchaser have
the right to assign this Agreement to any person or entity owned or controlled
by an employee benefit plan if Seller’s sale of the Property to such person or
entity would, in the reasonable opinion of Seller’s ERISA advisors or
consultants, create or otherwise cause a “prohibited transaction” under
ERISA.  In the event Purchaser assigns
this Agreement or transfers any ownership interest in Purchaser, and such
assignment or transfer would make the consummation of the transaction hereunder
a “prohibited transaction” under ERISA and necessitate the termination of this
Agreement then, notwithstanding any contrary provision which may be contained
herein, Seller shall have the right to terminate this Agreement.

12.18       No Third Party Beneficiary.  The provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered
at Closing, except that a tenant of the Property may enforce Purchaser’s
indemnity obligation under Section 4.10 hereof.

12.19       Reporting Person.  Purchaser and Seller hereby designate the
Title Company as the “reporting person” pursuant to the provisions of
Section 6045(e) of the Internal Revenue Code of 1986, as amended.

12.20       Mandatory Arbitration.  The parties have agreed to submit disputes to
mandatory arbitration in accordance with the provisions of Exhibit I
hereto and made a part hereof for all purposes. 
Each of Seller and Purchaser waives the right to commence an action in
connection with this Agreement in any court and expressly agrees to be bound by
the decision of the arbitrator determined in Exhibit I.  The waiver of this Section 12.20 will
not prevent Seller or Purchaser from commencing an action in any court for the
sole purposes of enforcing the obligation of the other party to submit to
binding arbitration or the enforcement of an award granted by arbitration
herein or as expressly permitted by Section 10.1 hereof.  The terms of this Section 12.20 shall
survive (a) the termination of this Agreement, and (b) the Closing.

12.21       Upfront Fees.  Purchaser acknowledges that Seller is
currently in negotiations for an oil and gas lease with Cimmaron Field
Services, Inc. to encumber the Land (the “Oil Lease”).  Seller shall be entitled to 100% of the
$68,962.46 cash bonus referenced in Section 1 of the Oil Lease (the “Cash Bonus”), notwithstanding
Section 8.1.3 hereof.  Purchaser
shall be entitled to all other payments, fees and

 26
 

 

royalties under the Oil Lease. 
If the Oil Lease is not signed until after the Closing Date and
Purchaser receives the Cash Bonus, Purchaser shall deliver the Cash Bonus to
Seller within five Business Days following Purchaser’s receipt thereof.  Notwithstanding anything in this Agreement to the contrary, Purchaser
shall have the right to approve the Oil Lease as to form and content prior to
its execution, which approval shall not be unreasonably withheld, conditioned
or delayed.

[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]

 27

 

SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

CFH REALTY II/LAS COLINAS COMMONS, L.P.

AND

HARVARD PROPERTY TRUST, LLC

d/b/a BEHRINGER HARVARD FUNDS

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year written below.

	
  

  	
   

  	
  SELLER:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  CFH REALTY II/LAS COLINAS COMMONS, L.P.,

  a Texas limited partnership

  	 

	
  

  Date executed by Seller

  	
   

  	
  By:

  	
  CFH Realty II/Las Colinas Commons GP, L.L.C.,

  a Texas limited liability company, its general

  partner

  	 

	
                                   ,
  2006

  	
   

  	
   

  	
  By:

  	
  Crow Holdings Managers, L.L.C., a Texas

  limited liability company, its manager

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  PURCHASER:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  HARVARD PROPERTY TRUST, LLC, a
  Delaware

  limited liability company, d/b/a Behringer Harvard

  Funds

  	 

	
  Date executed by
  Purchaser

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
                                   ,
  2006

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
													

 

 

JOINDER BY ESCROW AGENT

Escrow Agent has executed this Agreement in order to
confirm that Escrow Agent has received and shall hold the Earnest Money
required to be deposited under this Agreement and the interest earned thereto,
in escrow, and shall disburse the Earnest Money, and the interest earned
thereon, pursuant to the provisions of this Agreement.

	
  

  	
   

  	
  LANDAMERICA/COMMONWEALTH TITLE OF

  DALLAS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date executed by Escrow Agent

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
                                ,
  2006

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

LIST OF EXHIBITS

	
  Exhibit A

  	
   

  	
  -

  	
   

  	
  Legal Description of Land

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  -

  	
   

  	
  Special Warranty Deed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  -

  	
   

  	
  Bill of Sale, Assignment and Assumption of Leases
  and Contracts

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  -

  	
   

  	
  FIRPTA Certificate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  -

  	
   

  	
  ERISA Letter

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  -

  	
   

  	
  Notice to Tenants

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  -

  	
   

  	
  Tenant Estoppel Certificate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  -

  	
   

  	
  List of Tenants

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  -

  	
   

  	
  Mandatory Arbitration

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit J

  	
   

  	
  -

  	
   

  	
  Service Contracts and Licenses

  

 

 

Exhibit A

LEGAL
DESCRIPTION OF LAND

Lot 2R, Block 1, NEC Addition, City of Irving, Dallas
County, Texas, as reflected in a plat recorded in Volume 87100, Page 5908, of
the Real Estate Records of Dallas County, Texas.

 A-1

 

Exhibit B

SPECIAL
WARRANTY DEED

	
  THE STATE OF TEXAS

  	
   

  	
  §

  	
   

  	
   

  
	
   

  	
   

  	
  §

  	
   

  	
  KNOW ALL MEN BY THESE
  PRESENTS:

  
	
  COUNTY OF DALLAS

  	
   

  	
  §

  	
   

  	
   

  

 

CFH REALTY II/LAS COLINAS
COMMONS, L.P., a Texas limited partnership (“Grantor”), for and in consideration
of the sum of $10.00 and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, has GRANTED, BARGAINED, SOLD, and
CONVEYED and by these presents does GRANT, BARGAIN, SELL, and CONVEY unto HARVARD PROPERTY TRUST, LLC, a Delaware limited liability
company, d/b/a Behringer Harvard Funds (“Grantee”),
the tract or parcel of land in Dallas County, Texas, described in Exhibit A,
together with all improvements located on such land and all rights, titles, and
interests appurtenant thereto including, without limitation, Grantor’s
interest, if any, in any and all adjacent streets, alleys, rights of way and
any adjacent strips and gores (such land, improvements and interests are
hereinafter collectively referred to as the “Property”).

This Special Warranty Deed and the conveyance
hereinabove set forth is executed by Grantor and accepted by Grantee subject to
all easements, restrictions, reservations and covenants now of record and
further subject to all matters that a current, accurate survey of the Property
would show, together with the matters described in Exhibit B hereto and
incorporated herein by this reference, to the extent the same are validly
existing and applicable to the Property (hereinafter referred to collectively
as the “Permitted Exceptions”).

Grantee acknowledges that Grantee has independently
and personally inspected the Property. 
The Property is hereby conveyed to and accepted by Grantee in its
present condition, “AS IS, WITH ALL FAULTS,
AND WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, except as
otherwise set forth herein or in that certain Purchase and Sale Agreement dated
as of                             ,
by and between Grantor and Harvard Property Trust, LLC (the “Sale Agreement”).”  Notwithstanding anything contained herein to
the contrary, except as set forth herein or in the Sale Agreement, it is
understood and agreed that Grantor and Grantor’s agents or employees have never
made and are not now making, and they specifically disclaim, any warranties,
representations or guaranties of any kind or character, express or implied,
oral or written, with respect to the Property, including, but not limited to,
warranties, representations or guaranties as to (a) matters of title (other
than Grantor’s warranty of title set forth herein), (b) environmental matters
relating to the Property or any portion thereof, including, without limitation,
the presence of Hazardous Materials (as defined in the Sale Agreement) in, on,
under or in the vicinity of the Property, (c) geological conditions, including,
without limitation, subsidence, subsurface conditions, water table, underground
water reservoirs, limitations regarding the withdrawal of water, and geologic
faults and the resulting damage of past and/or future faulting, (d) whether,
and to the extent to which the Property or any portion thereof is affected by
any stream (surface or underground), body of water, wetlands, flood prone area,
flood plain, floodway or special flood hazard, (e) drainage, (f) soil
conditions, including the existence of instability, past soil repairs, soil
additions or conditions of soil fill, or susceptibility to landslides, or the
sufficiency of any undershoring, (g) the presence of endangered species or any
environmentally sensitive or protected areas, (h) zoning or building
entitlements to which the Property or any portion thereof may be subject, (i)
the availability of any utilities to the Property or any portion thereof
including, without limitation, water, sewage, gas and electric, (j) usages of
adjoining property, (k) access to the Property or any portion

 B-1
 

 

thereof, (l) the value, compliance with the plans and specifications,
size, location, age, use, design, quality, description, suitability, structural
integrity, operation, title to, or physical or financial condition of the
Property or any portion thereof, or any income, expenses, charges, liens,
encumbrances, rights or claims on or affecting or pertaining to the Property or
any part thereof, (m) the condition or use of the Property or compliance of the
Property with any or all Regulation federal, state or local ordinances, rules,
regulations or laws, building, fire or zoning ordinances, codes or other
similar laws, (n) the existence or non-existence of underground storage tanks,
surface impoundments, or landfills, (o) any other matter affecting the
stability and integrity of the Property, (p) the potential for further
development of the Property, (q) the merchantability of the Property or fitness
of the Property for any particular purpose, (r) the truth, accuracy or
completeness of the Property Information, (s) tax consequences, or (t) any
other matter or thing with respect to the Property.  EXCEPT AS EXPRESSLY SET
FORTH HEREIN OR IN THE SALE AGREEMENT, GRANTOR MAKES NO REPRESENTATIONS OR WARRANTIES
OF ANY KIND TO GRANTEE, INCLUDING, WITHOUT LIMITATION, THE PHYSICAL CONDITION
OF THE PROPERTY, OR THEIR SUITABILITY FOR ANY PARTICULAR PURPOSE OR OF
MERCHANTABILITY.  GRANTEE IS RELYING ON
ITS INVESTIGATIONS OF THE PROPERTY IN DETERMINING WHETHER TO ACQUIRE IT.  THE PROVISIONS OF THIS PARAGRAPH ARE A
MATERIAL PART OF THE CONSIDERATION FOR GRANTOR EXECUTING THIS SPECIAL WARRANTY
DEED, AND SHALL SURVIVE CLOSING.

TO HAVE AND TO HOLD the Property, together with all
and singular the rights and appurtenances thereunto in anywise belonging, unto
Grantee, its successors and assigns forever, and Grantor does hereby bind
itself, its successors and assigns, to WARRANT AND FOREVER DEFEND all and
singular the title to the Property unto the said Grantee, its successors and
assigns against every person whomsoever lawfully claiming or to claim the same
or any part thereof by, through, or under Grantor but not otherwise, subject to
the Permitted Exceptions.

Grantee’s address is: 
                                               

EXECUTED as of                                  ,
2006.

	
  

  	
   

  	
  CFH REALTY II/LAS COLINAS COMMONS, L.P.,

  a Texas limited partnership

  
	
   

  	
   

  	
  By:

  	
  CFH Realty II/Las Colinas Commons GP, L.L.C.,

  a Texas limited liability company, its general

  partner

  
	
   

  	
   

  	
   

  	
  By:

  	
  Crow Holdings Managers, L.L.C., a Texas

  limited liability company, its manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
									

 

	
  THE STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF DALLAS

  	
   

  	
  §

  

 

This instrument was
acknowledged before me on                               ,
2006, by                                                            ,
                                           
of Crow Holdings Managers, L.L.C., a

 B-2
 

 

Texas limited
liability company, manager of CFH Realty II/Las Colinas Commons GP,
L.L.C., a Texas limited liability company, general partner of CFH
Realty II/Las Colinas Commons, L.P., a Texas limited partnership, on
behalf of said limited liability companies and limited partnership.

	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  
	
   

  	
  Notary Public, State of Texas

  

 

 B-3
 

 

EXHIBIT
A

Lot 2R, Block 1, NEC Addition, City of Irving, Dallas
County, Texas, as reflected in a plat recorded in Volume 87100, Page 5908, of
the Real Estate Records of Dallas County, Texas.

 B-4
 

 

EXHIBIT
B

[Permitted
Exceptions]

 B-5

 

Exhibit C

BILL OF
SALE, ASSIGNMENT AND ASSUMPTION

OF LEASES AND CONTRACTS

Las Colinas Commons

THIS BILL OF SALE, ASSIGNMENT AND ASSUMPTION OF LEASES
AND CONTRACTS (this “Bill of Sale”)
is made as of the           day of
                       ,
2006, by and between CFH REALTY II/LAS
COLINAS COMMONS, L.P., a Texas limited partnership (“Assignor”), and HARVARD PROPERTY TRUST, LLC, a Delaware limited liability
company, d/b/a Behringer Harvard Funds (“Assignee”).

W
I T N E S S E T H:

For good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby
agree as follows:

1.             Assignor
hereby sells, transfers, assigns and conveys to Assignee the following:

(a)           All
right, title and interest of Assignor in and to all tangible personal property
(“Personalty”) set forth in the
inventory on Exhibit A hereto and made a part hereof, and located on,
and used in connection with the management, maintenance or operation of that
certain land and improvements located in the County of Dallas, State of Texas,
as more particularly described in Exhibit B hereto and made a part
hereof (“Real Property”), but excluding
tangible personal property owned or leased by Assignor’s property manager or
the tenants of the Real Property under the Tenant Leases (as defined below).

(b)           All
right title and interest of Assignor in and to: 
(i) all warranties and guaranties (express or implied) issued to
Assignor in connection with the Real Property or the Personalty; (ii) all
licenses, permits, certificates of occupancy and other consents or approvals
from governmental authorities or private parties which relate to the Real
Property, or the Personalty; (iii) all other intangible property
associated with the use or operation of the Real Property or the Personalty,
including specifically, without limitation, any and all other trade names or
logos used by Assignor in the operation of the Real Property or the Personalty;
and (iv) all plans, specifications, drawings, reports, studies, books,
records and other documents pertaining to the Real Property or the Personalty (“Intangibles”).

(c)           All
right, title and interest of Assignor in and to those certain leases described
on Exhibit C hereto and made a part hereof (the “Tenant
Leases”), relating to the leasing of space in the Real Property
and all of the rights, interests, benefits and privileges of the lessor
thereunder, and to the extent Assignee has not received a credit therefor under
the Purchase Agreement (as defined below), all prepaid rents and security and
other deposits held by Assignor under the Tenant Leases and not credited or
returned to tenants, but subject to all terms, conditions, reservations and
limitations set forth in the Tenant Leases.

(d)           To
the extent assignable, all right, title and interest of Assignor in and to
those certain contracts set forth on Exhibit D hereto and made a part
hereof, and all warranties, guaranties, indemnities and claims (including,
without limitation, for workmanship, materials and performance) and which exist
or may hereafter exist against any contractor, subcontractor, manufacturer or
supplier or laborer or other services relating thereto (collectively, the “Contracts”).

 C-1
 

 

(e)           All
right, title and interest of Assignor in and to those agreements set forth on Exhibit
E hereto and made a part hereof (the “License Agreements”).

2.             This
Bill of Sale is given pursuant to that certain Purchase and Sale Agreement (as
amended, the “Purchase Agreement”) dated as
of December 18, 2006, between Assignor and Assignee, providing for, among other
things, the conveyance of the Personalty, the Intangibles, the Tenant Leases,
the License Agreements and the Contracts.

3.             As
set forth in Article 11 of the Purchase Agreement, which is hereby
incorporated by reference as if herein set out in full and except as set forth
herein, the property conveyed hereunder is conveyed by Assignor and accepted by
Assignee AS IS, WHERE IS, AND WITHOUT ANY WARRANTIES OF
WHATSOEVER NATURE, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN THE
PURCHASE AGREEMENT, IT BEING THE INTENTION OF ASSIGNOR AND ASSIGNEE EXPRESSLY
TO NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE,
WARRANTIES CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION
OF THE PROPERTY CONVEYED HEREUNDER, OR BY ANY SAMPLE OR MODEL THEREOF, AND ALL
OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE TEXAS UNIFORM
COMMERCIAL CODE.

4.             Assignee
hereby accepts the assignment of the Personalty, the Intangibles, the Tenant
Leases, the Contracts and the License Agreements and agrees to assume and
discharge, in accordance with the terms thereof, (a) all of the obligations
thereunder from and after the date hereof, including, without limitation, the
obligations and duties of Assignor relating to any tenant deposits for which
Assignee received a credit from Assignor pursuant to the Purchase Agreement,
and (b) all of the lessor’s obligations under the Tenant Leases relating to the
physical, environmental or legal compliance status of the Real Property,
whether arising before or after the date hereof.  Additionally, but without limiting the
generality of the foregoing, Assignee agrees to assume and discharge all
leasing commissions, costs for tenant improvements, legal fees and other costs
and expenses incurred with respect to Tenant Leases and Tenant Lease renewals
and extensions and License Agreements and License Agreement renewals and
extensions executed subsequent to the Effective Date of the Agreement and those
set forth on Exhibit F hereto. 
Assignee agrees to indemnify and hold harmless Assignor from any cost,
liability, damage or expense (including attorneys’ fees) arising out of or
relating to Assignee’s failure to perform any of the foregoing obligations.

5.             Assignor
agrees to indemnify and hold harmless Assignee from any cost, liability, damage
or expense (including attorneys’ fees) arising out of or relating to Assignor’s
failure to perform any of the obligations of Assignor under the Tenant Leases,
Contracts or License Agreements, to the extent accruing prior to the date
hereof, excluding all of the lessor’s obligations under the Tenant Leases
relating to the physical, environmental or legal compliance status of the Real
Property (whether accruing before or after the date hereof).

6.             This
Bill of Sale may be executed in any number of counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument.

 C-2
 

 

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

	
  

  	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CFH REALTY II/LAS COLINAS COMMONS, L.P.,

  
	
   

  	
   

  	
  a Texas limited partnership

  
	
   

  	
   

  	
  By:

  	
  CFH Realty II/Las Colinas Commons GP, L.L.C.,

  a Texas limited liability company, its general

  partner

  
	
   

  	
   

  	
   

  	
  By:

  	
  Crow Holdings Managers, L.L.C., a

  Texas limited liability company, its

  manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
									

 

	
  THE STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF DALLAS

  	
   

  	
  §

  

 

This instrument was
acknowledged before me on                  ,
2006, by                                                         ,
                                  
of Crow Holdings Managers, L.L.C., a Texas limited liability company, manager
of CFH Realty II/Las Colinas Commons GP, L.L.C., a Texas limited liability
company, general partner of CFH Realty II/Las Colinas Commons, L.P., a
Texas limited partnership, on behalf of said limited liability companies and
limited partnership.

	
   

  	
   

  
	
   

  	
  

  
	
   

  	
  Notary Public,
  State of Texas

  

 

 C-3
 

 

 

	
  

  	
   

  	
  ASSIGNEE:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  HARVARD PROPERTY TRUST, LLC, a
  Delaware

  limited liability company, d/b/a Behringer Harvard

  Funds

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  

  	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	 

								

 

	
  THE STATE OF                       

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF                       

  	
   

  	
  §

  

 

This
instrument was acknowledged before me on                       ,
2006, by                                                                ,
                                        
of Harvard Property Trust, LLC, a Delaware limited liability company, on behalf
of said limited liability company.

	
  

  	
   

  
	
   

  	
  Notary Public,
  State of                            

  

 

	
  Exhibit A

  	
   

  	
  Personalty

  
	
  Exhibit B

  	
   

  	
  Real Property

  
	
  Exhibit C

  	
   

  	
  Tenant Leases

  
	
  Exhibit D

  	
   

  	
  Contracts

  
	
  Exhibit E

  	
   

  	
  License Agreements

  
	
  Exhibit F

  	
   

  	
  Lease Costs and Expenses

  

 

Exhibit F shall include the
following commission agreements:

1.             Commission
Agreement dated October 20, 2004 between Seller, as owner, and CB Richard
Ellis, Inc., as broker, regarding ATX Group, Inc.

2.             Commission
Agreement dated April 4, 2001 between Seller, as owner, and Solendar/Hall,
Inc., as broker, regarding YMCA of Metropolitan Dallas.

3.             Commission
Agreement dated July 2, 2003 between Seller, as owner, and Trammell Crow
Brokerage Services, Ltd., as broker, regarding First Horizon Home Loan
Corporation.

4.             Commission
Agreement dated May 26, 2006 between Seller, as owner, and The Staubach
Company-Southwest, Inc., as broker, regarding Matheson Tri-Gas, Inc.

 C-4

 

Exhibit D

FIRPTA
CERTIFICATE

Section 1445 of the Internal Revenue Code
provides that a transferee of a U.S. real property interest must withhold tax
if the transferor is a foreign person. 
For U.S. tax purposes (including Section 1445), the owner of a disregarded
entity (which has legal title to a U.S. real property interest under local law)
will be the transferor of the property and not the disregarded entity.  To inform HARVARD
PROPERTY TRUST, LLC, a Delaware limited liability company, d/b/a
Behringer Harvard Funds (“Transferee”)
that withholding of tax is not required upon the disposition of a U.S. real
property interest by Crow Holdings Realty Partners II, L.P., a Delaware limited
partnership (“Transferor”), the beneficial
owner of CFH REALTY II/LAS COLINAS COMMONS, L.P.,
a Texas limited partnership (U.S. employer identification number                                       ),
the undersigned, in his capacity as Vice President of Crow Holdings Managers,
L.L.C., but not individually, hereby certifies to Transferee the following on
behalf of Transferor:

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

2.             Transferor
is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii);

3.             Transferor’s
U.S. employer identification number is                       ;
and

4.             Transferor’s
office address is c/o Crow Holdings, 2100 McKinney Avenue, Suite 700, Dallas,
Texas  75201.

Transferor understands that this certification may be
disclosed to the Internal Revenue Service by Transferee and that any false
statement contained herein could be punished by fine, imprisonment, or both.

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

	
  Dated as of
                         ,
  2006.

  
	
   

  	
   

  
	
   

  	
   

  	
  CROW HOLDINGS REALTY PARTNERS II, L.P., a

  Delaware limited partnership

  
	
   

  	
   

  	
  By:

  	
  Crow Holdings Realty Advisors II, L.P., a Delaware

  limited partnership, its general partner

  
	
   

  	
   

  	
   

  	
  By:

  	
  Crow Holdings Realty Management II, L.P., a

  Texas limited partnership,
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Crow Holdings Managers, L.L.C., a

  Texas limited liability company, its

  general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dan Feeney, Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
									

 

 D-1
 

 

 

	
  THE STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF DALLAS

  	
   

  	
  §

  

 

This instrument
was acknowledged before me on                         
        , 2006, by Dan Feeney, Vice
President of Crow Holdings Managers, L.L.C., a Texas limited liability company
and general partner of Crow Holdings Realty Management II, L.P., a Texas
limited partnership and general partner of Crow Holdings Realty Advisors II,
L.P., a Delaware limited partnership and general partner of Crow Holdings
Realty Partners II, L.P., a Delaware limited partnership liability on behalf of
said limited partnerships and said limited liability company.

SWORN TO AND SUBSCRIBED
BEFORE ME by                                                                    
on                                ,
2006.

	
  

  	
   

  
	
   

  	
  Notary Public, State of Texas

  

 

 D-2

 

Exhibit E

ERISA LETTER

                                  ,
2006

CFH Realty II/Las Colinas Commons, L.P.

c/o Crow Holdings

2100 McKinney Avenue, Suite 700

Dallas, Texas  75201

Attn: Coe Juracek

Re:                               Acquisition
of Las Colinas Commons in Irving, Texas

Ladies and Gentlemen:

The undersigned represents to you that HARVARD PROPERTY TRUST, LLC, a Delaware limited liability
company, d/b/a Behringer Harvard Funds, or any affiliates thereof, or any firm,
person or entity providing financing for the purchase of the entire interest of
CFH REALTY II/LAS COLINAS COMMONS, L.P.,
a Texas limited partnership, in the above-described property (the “Property”) are not using the “plan
assets” as defined in Section 3(42) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), in
the performance or discharge of its obligations under that certain Purchase and
Sale Agreement dated December 18, 2006, with respect to the Property by and
between CFH REALTY II/LAS COLINAS COMMONS, L.P.,
a Texas limited partnership, as Seller, and the undersigned, as Purchaser,
including the acquisition of the Property.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  HARVARD PROPERTY TRUST, LLC, a
  Delaware

  limited liability company, d/b/a Behringer Harvard

  Funds

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 E-1

 

Exhibit F

NOTICE TO TENANTS

                                     ,
            

 

 

Dear Tenant:

You are hereby notified that CFH
REALTY II/LAS COLINAS COMMONS, L.P., a Texas limited
partnership (“Seller”), the current owner of
Las Colinas Commons in Irving, Texas (the “Property”)
and the current owner of the landlord’s interest in your lease in the Property,
has sold the Property to HARVARD PROPERTY TRUST,
LLC, a Delaware limited liability company, d/b/a Behringer Harvard
Funds (“New Owner”), as of the above
date.  In connection with such sale,
Seller has assigned and transferred its interest in your lease and your
security deposit thereunder in the amount of $                     
(the “Security Deposit”) to New Owner,
and New Owner has assumed and agreed to perform all of the landlord’s
obligations under your lease (including any obligations set forth in your lease
or under applicable law to repay or account for the Security Deposit) from and
after such date.  New Owner acknowledges
that New Owner has received and is responsible for the Security Deposit.

Accordingly, (a) all your obligations under the lease
from and after the date hereof, including your obligation to pay rent, shall be
performable to and for the benefit of New Owner, its successors and assigns,
and (b) all the obligations of the landlord under the lease, including any
obligations thereunder or under applicable law to repay or account for the
Security Deposit, shall be the binding obligation of New Owner and its
successors and assigns.  Unless and until
you are otherwise notified in writing by New Owner, the address of New Owner
for all purposes under your lease is:

 F-1
 

 

 

 

 

 

	
  

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  CFH REALTY II/LAS COLINAS COMMONS, L.P.,

  a Texas limited partnership

  
	
   

  	
  By:

  	
  CFH Realty II/Las Colinas Commons GP, L.L.C.,

  a Texas limited liability company, its general

  partner

  
	
   

  	
   

  	
  By:

  	
  Crow Holdings Managers, L.L.C., a

  Texas limited liability company, its

  manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEW OWNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HARVARD PROPERTY TRUST, LLC, a
  Delaware

  limited liability company, d/b/a Behringer Harvard

  Funds

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
											

 

 F-2

 

Exhibit G

TENANT ESTOPPEL CERTIFICATE

[Address of Buyer]

 

 

RE:                                 [Name
and Address of Property]

Gentlemen:

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

1.             Attached
hereto as Schedule 1 is a list of all amendments to the Lease and any other
agreements setting forth the terms and conditions under which Tenant occupies
or uses the Premises or other facilities in or relating to the Building.

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

3.             The
undersigned is the Tenant under the Lease for space at the Premises covering                       
rentable square feet. The term of the Lease commenced on                                          ,
and expires on                             ,
subject to any rights of Tenant to extend the term as provided therein.  The base rent presently being charged is $                          .  All rentals, charges, additional rent and
other obligations on the part of the undersigned have been paid to and
including                      ,
200  .  No rental, other than
for the current month, has been paid in advance.  In addition to the fixed minimum Basic Rent,
the Tenant pays its Proportionate Share of Taxes with a Base Tax Year of                            
and Additional Rent with an Expense Stop of Operating Costs for the calendar
year                  .

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

5.             (1) Landlord
is not in any respect in default in the performance of the terms and provisions
of the Lease, nor, to Tenant’s knowledge, does any state of facts or condition
exist which, with the giving of notice or the passage of time, or both, would
result in such a default; and (2) all conditions under the Lease to be
performed by Landlord have been satisfied. 
Without limiting the generality of the foregoing, all improvements to be
constructed in the Premises by Landlord have been completed to the satisfaction
of Tenant and accepted by Tenant and any tenant construction allowances have
been paid in full, and all duties of an inducement nature required of Landlord
in the Lease have been fulfilled to

 G-1
 

 

Tenant’s satisfaction. Tenant has no claim against Landlord by reason
of any restriction, encumbrance or defect in title of the Premises of which
Tenant has actual knowledge.

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

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

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

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

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

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

The above certifications
are made to the Benefited Parties knowing that the Benefited Parties will rely
thereon in making an investment in the Premises. For purposes hereof, the term “Benefited
Parties” means the addressees of this letter and all of the following: (a)
Harvard Property Trust, LLC, a Delaware limited liability company and its
successors, assigns, and designees (including, without limitation, any tenant
in common purchasers); and (b) any lender to which any party described in the
foregoing clause (a) grants a deed of trust, mortgage or other lien upon the
Premises.

	
  

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
                                               ,
  a                                                 

  
	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 G-2
 

 

JOINDER
OF GUARANTOR

The undersigned joins in the execution of this Estoppel
Certificate for the purpose of confirming to and for the benefit of the
Benefited Parties (a) that the guaranty of Tenant’s obligations under the Lease
executed by the undersigned remain in full force and effect, and (b) that the
undersigned has no defenses or offsets to its obligations under the guaranty of
the Lease executed by the undersigned. The undersigned understands that the
Benefited Parties will rely upon the foregoing confirmations.

	
  

  	
                                               ,
  a                                                 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 G-3
 

 

Schedule 1

List of Amendments to Lease and Related Agreements

 G-4

 

Exhibit H

LIST OF TENANTS

1.             First
Horizon

2.             Matheson
Tri-Gas

3.             YMCA

4.             ATX
Technologies

 H-1

 

Exhibit I

MANDATORY ARBITRATION

The parties have agreed to submit disputes to
mandatory arbitration in accordance with the following provisions:

1.             Arbitration.

(a)           General.  Any dispute among Seller and Purchaser as to
the interpretation of any provision of this Agreement or the rights and
obligations of any party hereunder shall be resolved through binding
arbitration as hereinafter provided in Dallas, Texas.

(b)           Selection of Arbitrator.  If arbitration is required to resolve a
dispute among Seller and Purchaser, either Seller or Purchaser may select one
person to act as the arbitrator for resolution of the dispute (the first party
to give written notice of its proposed arbitrator to the other party hereto
shall be the “Initiating Party”).  The person so selected by the Initiating
Party (i) shall not be an affiliate of any party to the dispute in question,
and (ii) shall have his name on a list of arbitrators approved by the American
Arbitration Association (“AAA”),
Judicial Arbitration and Mediation Services, Inc. or another entity then active
in arbitration.  The Initiating Party
shall give written notice to the other party hereto specifying the person
selected by the Initiating Party to act as the arbitrator for resolution of
that dispute.  The other party hereto
shall have the right to object to the qualifications or independence of the
person so selected by the Initiating Party to act as the arbitrator for
resolution of that dispute.  If, within
ten Business Days after the Initiating Party gives written notice specifying
the person selected by the Initiating Party to act as arbitrator, the
Initiating Party has not received a writing from the other party hereto
objecting to the qualifications or independence of the person so selected by
the Initiating Party, the person selected by the Initiating Party shall act as
the arbitrator for resolution of the dispute in question.  If, within ten Business Days after the
Initiating Party gives written notice specifying the person selected by the
Initiating Party to act as arbitrator, the Initiating Party receives a writing
from the other party hereto objecting to the qualifications or independence of
the person so selected by the Initiating Party, the person so selected by the
Initiating Party shall not serve as the arbitrator for resolution of the
dispute, and if the parties have not mutually otherwise agreed on an arbitrator
within five Business Days after written notice of the objection, either party
hereto may request the Dallas office of the AAA to select one person to act as
the arbitrator for resolution of the dispute.

(c)           Rules of Arbitration.  The arbitrator selected pursuant to
Section 1(b) above will establish the rules for proceeding with the
arbitration of the dispute, which will be binding upon all parties to the
arbitration proceeding.  The arbitrator
may use the rules of AAA for commercial arbitration but is encouraged to adopt
the rules the arbitrator deems appropriate to accomplish the arbitration in the
quickest and least expensive manner possible. 
Accordingly, the arbitrator may (i) dispense with any formal rules of
evidence and allow hearsay testimony so as to limit the number of witnesses
required, (ii) accept evidence of property values without formal appraisals and
upon such information provided by Seller and Purchaser or other persons and
otherwise minimize discovery procedures as the arbitrator deems appropriate,
(iii) act upon his understanding or interpretation of the law on any issue
without the obligation to research the issue or accept or act upon briefs of
the issue prepared by any party, (iv) limit the time for presentation of any
party’s case as well as the amount of information or number of witnesses to be
presented in connection with any hearing, and (v) impose any other rules which
the arbitrator believes appropriate to effect a resolution of the dispute as
quickly and inexpensively as possible. 
In any event, the arbitrator (A) shall permit each side no more than two
depositions (including any deposition of experts), which depositions may not
exceed four hours each, one set of ten interrogatories (inclusive of

 I-1
 

 

sub-parts) and one set of five document requests (inclusive of
sub-parts), (B) shall not permit any requests for admissions, (C) shall limit
the hearing, if any, to two days, and (D) shall render his or her decision
within 60 days of the filing of the arbitration.

(d)           Costs of Arbitration.  The arbitrator will have the exclusive
authority to determine and award costs of arbitration and the costs incurred by
any party for its attorneys, advisors and consultants.

(e)           Award of Arbitrator.  Any award made by the arbitrator shall be
binding on Seller, Purchaser and all parties to the arbitration and shall be
enforceable to the fullest extent of the law.

(f)            Governing Law; Actual Damages; Etc.  In reaching any determination or award, the
arbitrator will apply the laws of the state in which the Property is
located.  Except as permitted under
Section 1(d) above, the arbitrator’s award will be limited to actual
damages and will not include punitive or exemplary damages.  Nothing contained in this Agreement will be
deemed to give the arbitrator any authority, power or right to alter, change,
amend, modify, add to or subtract from any of the provisions of this
Agreement.  All privileges under state
and federal law, including, without limitation, attorney-client, work product
and party communication privileges, shall be preserved and protected.  All experts engaged by a party must be
disclosed to the other party within 14 days after the date of notice and demand
for arbitration is given.

 I-2

 

Exhibit J

SERVICE CONTRACTS AND LICENSES

	
  1.

  	
   

  	
  Air Performance Services, Inc.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  All Star Power Sweet, Ltd.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Caremast

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Myers Pest Control

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Thyssen Knepp

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Standard Waste

  
	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Four Leaf Landscape

  
	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Reliant Energy Retail Services, LLC

  

 

 J-1Exhibit 10.1

FOURTH AMENDMENT TO LOAN AGREEMENT

THIS FOURTH AMENDMENT TO
LOAN AGREEMENT (this “Amendment”) is made and entered into and effective
as of December 22, 2006 (the “Amendment Closing Date”), by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association (the “Bank”), FOSSIL PARTNERS, L.P. (the “Borrower”), FOSSIL, INC. (the “Company”), FOSSIL INTERMEDIATE, INC. (“Fossil
Intermediate”), FOSSIL TRUST (“Fossil
Trust”), FOSSIL STORES I, INC.
(“Fossil I”), ARROW MERCHANDISING, INC.
(“Arrow Merchandising”) and FOSSIL
HOLDINGS, LLC (“Fossil Holdings”) (the Company, Fossil
Intermediate, Fossil Trust, Fossil I, Arrow Merchandising and Fossil Holdings
are sometimes referred to herein individually as a “Guarantor” and
collectively as the “Guarantors”).

RECITALS

WHEREAS, the Bank, the
Borrower and the Guarantors are parties to that certain Loan Agreement, dated
as of September 23, 2004 (as amended, modified or supplemented, from time
to time, the “Agreement”); and

WHEREAS, the Bank, the
Borrower and the Guarantors desire to amend the Agreement and the other Loan
Documents as herein set forth.

NOW, THEREFORE, in
consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, agree as follows:

ARTICLE I.

Definitions

Section 1.01.  Capitalized terms
used in this Amendment are defined in the Agreement, as amended hereby, unless
otherwise stated.

ARTICLE II.

Amendments

Section 2.01.  Amendment to
Section 12(a).  Effective as of the
Amendment Closing Date, Section 12(a) of the Agreement is hereby amended
and restated in its entirety to read as follows:

“(a)                            Annual
Financial Statements.  Furnish the
Bank, within one hundred (100) days after the end of each fiscal year of the
Company, (i) either (A) a copy of the Company’s audited consolidated financial
statements, consisting of at least a balance sheet and related statement of
income, retained earnings and changes in financial condition of the Company
prepared in conformity with generally accepted accounting principles, applied
on a basis consistent with that of the preceding year, and certified by an
independent certified public accountant selected by the

 

Company and reasonably
satisfactory to the Bank or (B) upon payment to the Bank of a non-refundable
$10,000 fee in immediately available funds (the “Non-GAAP Annual Financial
Statements Fee”), a copy of its unaudited consolidated financial statements
for such fiscal year, consisting of at least a balance sheet and related
statement of income, retained earnings and changes in financial condition of
the Company applied on a basis consistent with that of the preceding year and
not prepared in conformity with GAAP (“Non-GAAP Annual Financial Statements”)
but certified by an authorized officer of the Company that such Non-GAAP Annual
Financial Statements are true and correct in all material respects and complete
to the best of the Company’s knowledge, provided that for each fiscal
year in which the Company furnishes Non-GAAP Annual Financial Statements, the
Company shall pay the Non-GAAP Annual Financial Statements Fee upon delivery
thereof, and (ii) a copy of the consolidating financial statements of the
Company prepared by the Company.

Section 2.02.  Amendment to
Section 12(b).  Effective as of the
Amendment Closing Date, Section 12(b) of the Agreement is hereby amended
and restated in its entirety to read as follows:

“(b)                           Quarterly
Financial Statements.  Furnish the
Bank, within fifty (50) days after the end of any fiscal quarter of the Company
during the term hereof (other than the fiscal quarter ending on the last day of
the fiscal year of Company), (i) a copy of its unaudited consolidated financial
statements for such fiscal quarter, consisting of at least a balance sheet and
related statement of income, materially prepared in conformity with generally
accepted accounting principles (“GAAP”) and certified by an authorized
officer of the Company, or (ii) upon payment to the Bank of a non-refundable
$10,000 fee in immediately available funds (the “Non-GAAP Quarterly
Financial Statements Fee”), a copy of its unaudited consolidated financial
statements for such fiscal quarter, consisting of at least a balance sheet and
related statement of income, not prepared in conformity with GAAP (“Non-GAAP
Quarterly Financial Statements”) but certified by an authorized officer of
the Company that such Non-GAAP Quarterly Financial Statements are true and
correct in all material respects and complete to the best of the Company’s
knowledge, provided that for each fiscal quarter in which the Company
furnishes Non-GAAP Quarterly Financial Statements, the Company shall pay the
Non-GAAP Quarterly Financial Statements Fee upon delivery thereof.”

Section 2.03.  Amendment to
Section 12(c).  Effective as of the
Amendment Closing Date, Section 12(c) of the Agreement is hereby amended
and restated in its entirety to read as follows:

 2
 

 

“(c)                            Compliance
Certificate.  Furnish the Bank,
concurrently with the delivery of the financial statements required to be
delivered pursuant to clauses (a) and (b) above, a Compliance Certificate in a
form similar to the Compliance Certificate attached hereto as Exhibit C,
but including all representations and warranties to the satisfaction of the
Bank, signed by an authorized officer of the Borrower and the Company.  For any quarter that the Company furnishes to
the Bank Non-GAAP Quarterly Financial Statements as permitted by Section
12(b)(i)(y) hereof, for purposes of determining compliance with the
financial covenants set forth in Section 14 hereof, such determination
shall be made by the Bank by reference to the Non-GAAP Quarterly Financial
Statements so long as Company paid to the Bank the Non-GAAP Quarterly Financial
Statements Fee for such period.”

Section 2.04.  Amendment to
Section 13.  Effective as of the
Amendment Closing Date, Section 13 of the Agreement is hereby amended by
inserting immediately below Section 13(f) the following text as new Section
13(g):

“(g)                           Equity Purchases.  Make any payment to any equity holder
(whether in cash or in property) with respect to the repurchase of any of their
respective equity interests.”

Section 2.05.  Amendment to
Section 14.  Effective as of the
Amendment Closing Date, Section 14 of the Agreement is hereby amended by
adding Section 14(d) thereto to read as follows:

“(e)                            Minimum Cash
on Hand.  Maintain at all
times unrestricted and unencumbered cash on hand of the Company on a
consolidated basis of at least $50,000,000.”

ARTICLE
III.

Conditions Precedent

Section 3.01.  Conditions to
Effectiveness.  The effectiveness of
this Amendment is subject to the satisfaction of the following conditions
precedent, unless specifically waived in writing by the Bank:

(a)                                  The
Bank shall have received this Amendment, duly executed by the Borrower and each
Guarantor;

(b)                                 There
shall have been no material adverse change in the business or financial
condition of the Borrower, Company and the Guarantors, taken as a whole;

(c)                                  There
shall be no material adverse litigation, either pending or threatened, against
the Borrower or any Guarantor that could reasonably be expected to have a
material adverse effect on the business or financial condition of the Borrower,
Company and the Guarantors, taken as a whole;

 3
 

 

(d)                                 The
representations and warranties contained herein and in the Agreement and the
other Loan Documents, as each is amended hereby, shall be true and correct in
all material respects as of the date hereof, as if made on the date hereof,
except to the extent such representations were made as of a specific date;

(e)                                  No
default or Event of Default under the Agreement, as amended hereby, shall have
occurred and be continuing, unless such default or Event of Default has been
specifically waived in writing by the Bank;

(f)                                    All
requisite corporate, partnership or trust proceedings, as appropriate, shall
have been taken the Borrower and each Guarantor to authorize the execution,
delivery and performance of this Amendment, and such proceedings and other
legal matters incident thereto shall be satisfactory to the Bank and its legal
counsel; and

(g)                                 The
Bank shall have received from the Borrower, in immediately available funds, an
amendment fee in the amount of $10,000 (which fee shall be fully earned and
non-refundable upon execution hereof).

ARTICLE
IV.

No Waiver

Section 4.01.  Nothing contained
herein shall be construed as a waiver by the Bank of any covenant or provision
of the Agreement, the other Loan Documents, this Amendment, or of any other
contract or instrument between the Borrower and/or the Guarantors and the Bank,
and the failure of the Bank at any time or times hereafter to require strict
performance by the Borrower and/or any Guarantor of any provision thereof shall
not waive, affect or diminish any right of the Bank to thereafter demand strict
compliance therewith.  The Bank hereby
reserves all rights granted under the Agreement, the other Loan Documents, this
Amendment and any other contract or instrument between the Borrower and/or the
Guarantors and the Bank.

ARTICLE
V.

Ratifications, Representations and Warranties, Covenants

Section 5.01.  General
Ratifications.  The terms and
provisions set forth in this Amendment shall modify and supersede all
inconsistent terms and provisions set forth in the Agreement and the other Loan
Documents, and, except as expressly modified and superseded by this Amendment,
the terms and provisions of the Agreement and the other Loan Documents are
ratified and confirmed and shall continue in full force and effect.  The parties hereto agree that the Agreement
and the other Loan Documents, as amended hereby, shall continue to be legal,
valid, binding and enforceable in accordance with their respective terms.

Section 5.02.  Ratification of
Guaranties.  Each of the Guarantors
hereby acknowledges and consents to all of the terms and conditions of this
Amendment and hereby ratifies and confirms the Guaranty Agreement to which it
is a party to or for the benefit of the Bank. 
Each of the Guarantors hereby represents and acknowledges that it has no
claims, counterclaims, offsets, credits or defenses to the Loan Documents or
the performance of its obligations thereunder.

 4
 

 

Furthermore,
each Guarantor agrees that nothing contained in this Amendment shall adversely
affect any right or remedy of the Bank under the Guaranty Agreement to which
such Guarantor is a party.  Each
Guarantor hereby agrees that with respect to the Guaranty Agreement to which it
is a party, all references in such Guaranty Agreement to the “Guaranteed
Obligations” shall include, without limitation, the obligations of the Borrower
to the Bank under the Agreement, as amended hereby.  Finally, each of the Guarantors hereby
represents and acknowledges that the execution and delivery of this Amendment
and the other Loan Documents executed in connection herewith shall in no way
change or modify its obligations as a guarantor, debtor, pledgor, assignor,
obligor and/or grantor under its respective Guaranty Agreement (except as
specifically provided in this Section 5.02) and shall not constitute a
waiver by the Bank of any of the Bank’s rights against such Guarantor.

Section 5.03.  Ratification of
Security Interests.  The Company
hereby agrees that the Stock Pledge Agreement is hereby expressly amended such
that the definition of “Secured Obligations” contained therein includes,
without limitation, all indebtedness and other obligations of the Borrower now
or hereafter existing hereunder the Agreement, as amended hereby.  Furthermore, the Company hereby ratifies and
reaffirms its obligations under the Stock Pledge Agreement, as the same is
amended hereby, and represents and acknowledges that the Stock Pledge Agreement
is not subject to any claims, counterclaims, defenses or offsets.  Finally, the Company hereby represents and
acknowledges that the execution and delivery of this Amendment and the other
Loan Documents executed in connection herewith shall in no way change or modify
its obligations as a debtor, pledgor, assignor, obligor and/or grantor under
the Stock Pledge Agreement (except as specifically provided in this Section
5.03) and shall not constitute a waiver by the Bank of any of the Bank’s
rights against the Company.

Section 5.04.  Representations
and Warranties.  The Borrower and
each of the Guarantors hereby jointly and severally represent and warrant to
the Bank that (a) the execution, delivery and performance of this Amendment and
any and all other Loan Documents executed and/or delivered in connection
herewith have been duly authorized by all requisite corporate, partnership or
trust proceedings, as appropriate, and will not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
Agreement of Limited Partnership, Articles of Incorporation, By-Laws or Trust
Agreement, as applicable, of the Borrower or any Guarantor, or of any mortgage,
indenture, material contract, material agreement or other material instrument,
or any judgment, order or decree, binding upon the Borrower or any Guarantor;
(b) the officer(s) of the Borrower and each Guarantor executing and delivering
this Amendment and any and all other Loan Documents executed and/or delivered
in connection herewith are duly elected and are authorized, by resolution of
the board of directors, board of managers or trustees (or other applicable
governing body) of the Borrower and each such Guarantor, to execute on behalf
of each such entity this Amendment and any and all other Loan Documents
executed and/or delivered in connection herewith; (c) the representations and
warranties contained in the Agreement and the other Loan Documents, as amended
hereby, are true and correct in all material respects on and as of the date
hereof and on and as of the date of execution hereof as though made on and as
of each such date, except to the extent such representations were made as of a
specific date; (d) no default or Event of Default under the Agreement, as
amended hereby, has occurred and is continuing, unless such default or Event of
Default has been specifically waived in writing by the Bank; and (e) the
Borrower and the Guarantors are in full compliance

 5
 

 

with all
covenants and agreements contained in the Agreement and the other Loan
Documents, as amended hereby.

ARTICLE
VI.

Miscellaneous Provisions

Section 6.01.  Survival of
Representations and Warranties.  All
representations and warranties made in the Agreement or any other Loan
Documents, including, without limitation, any document furnished in connection
with this Amendment, shall survive the execution and delivery of this Amendment
and the other Loan Documents to be executed in connection herewith, and no
investigation by the Bank or any closing shall affect the representations and
warranties or the right of the Bank to rely upon them.

Section 6.02.  Reference to
Agreement.  Each of the Agreement and
the other Loan Documents, and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement, as amended hereby, are hereby
amended so that any reference in the Agreement and such other Loan Documents to
the Agreement, shall mean a reference to the Agreement, as amended hereby.

Section 6.03.  Expenses of the
Bank.  As provided in the Agreement,
the Borrower agrees to pay on demand all reasonable costs and expenses incurred
by the Bank in connection with the preparation, negotiation, and execution of
this Amendment and the other Loan Documents executed pursuant hereto and any
and all amendments, modifications, and supplements hereto or thereto, including,
without limitation, the costs and fees of the Bank’s legal counsel, and all
costs and expenses incurred by the Bank in connection with the enforcement or
preservation of any rights under the Agreement or any other Loan Document, in
each case as amended hereby, including, without, limitation, the costs and fees
of the Bank’s legal counsel.

Section 6.04.  Severability.  Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

Section 6.05.  Successors and
Assigns.  This Amendment is binding
upon and shall inure to the benefit of the Borrower, the Guarantors and the
Bank and their respective successors and assigns.

Section 6.06.  Counterparts.  This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

Section 6.07.  Effect of
Waiver.  No consent or waiver,
express or implied, by the Bank to or for any breach of or deviation from any
covenant or condition by the Borrower or any Guarantor shall be deemed a
consent to or waiver of any other breach of the same or any other covenant,
condition or duty.

 6
 

 

Section 6.08.  Headings.  The headings, captions and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.

Section 6.09.  Applicable Law.  THIS AMENDMENT AND ALL OTHER AGREEMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.

Section 6.10.  Final Agreement.  THE AGREEMENT AND THE OTHER LOAN DOCUMENTS,
EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED.  THE AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.  NO MODIFICATION,
RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT
SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY THE BORROWER, THE
GUARANTORS AND THE BANK.

Section 6.11.  Agreement for
Binding Arbitration.  The parties agree to be
bound by the terms and provisions of the Bank’s current Arbitration Program
which is incorporated herein by reference and is acknowledged as received by
the parties pursuant to which any and all disputes shall be resolved by
mandatory binding arbitration upon the request of any party.

[Remainder of page
intentionally left blank.]

 7

 

IN WITNESS WHEREOF, this
Amendment has been executed and is effective as of the date first above-written.

	
  

  	
  “BANK”

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK,

  
	
   

  	
  NATIONAL ASSSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan K. Nugent

  
	
   

  	
   

  	
  Susan K. Nugent,

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  “BORROWER”

  
	
   

  	
   

  
	
   

  	
  FOSSIL PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Fossil, Inc., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randy S. Kercho

  
	
   

  	
   

  	
  Randy S. Kercho,

  
	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “GUARANTORS”

  
	
   

  	
   

  
	
   

  	
  FOSSIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Randy S. Kercho

  
	
   

  	
   

  	
  Randy S. Kercho,

  
	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FOSSIL INTERMEDIATE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  

 

 

 

	
  

  	
  FOSSIL TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FOSSIL STORES I, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARROW MERCHANDISING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  FOSSIL HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Mike L. Kovar

  
	
   

  	
   

  	
  Mike L. Kovar, Treasurer

  
						

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