PURCHASE AND SALE AGREEMENT

 

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                                                                   Exhibit 10.31

 

                                                                        Post Oak

                                                                  Houston, Texas

 

                            PURCHASE AND SALE AGREEMENT

 

      THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), made to be effective

as of November 10, 2004 (the "Effective Date"), between CRESCENT REAL ESTATE

FUNDING X, L.P., a Delaware limited partnership, having an office at 777 Main

Street, Suite 2100, Fort Worth, Texas 76102-5325 ("Seller"), and CRESCENT POC

INVESTORS, L.P., a Delaware limited partnership, having an office c/o J.P.

Morgan Investment Management Inc., 522 Fifth Avenue, New York, New York 10036

("Purchaser"); each a "Party" and, collectively, the "Parties." In addition,

Crescent Real Estate Equities Limited Partnership, a Delaware limited

partnership ("Crescent") has executed this Agreement solely for the purposes of

Article 6, Article 7, Article 13, Article 16 and Article 17 hereof.

 

      WHEREAS, Seller owns fee simple title in and to all of that certain tract

or parcel of land situated in Houston, Harris County, Texas, being more

particularly described on Exhibit A attached hereto and made a part hereof for

all purposes (the "Land"), together with all improvements, structures (including

the parking garages) and fixtures located on the Land (collectively, the

"Improvements"); and

 

      WHEREAS, subject to the terms and conditions set forth herein, Seller

desires to sell and Purchaser desires to purchase (a) all of the Land and the

Improvements, and (b) all other rights and interests pertaining thereto as more

particularly described in Section 2.1 hereinafter.

 

      NOW, THEREFORE, in consideration of the mutual promises and covenants set

forth herein, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the Parties hereby agree to the

following:

 

                                   ARTICLE 1.

                              CERTAIN DEFINITIONS.

 

      For purposes of this Agreement, the following terms shall have the

respective meanings set forth below:

 

      "Actions" mean any claims, actions, suits, demands, proceedings or

investigations, whether at law or in equity or before any court, arbitrator,

arbitration panel or Governmental Body.

 

      "Additional Rent" has the meaning ascribed to such term in Section 11.2 of

this Agreement.

 

      "Affiliate" of a party means any Person that, directly or indirectly,

controls, is controlled by or is under common control with, such party. For

purposes of this Agreement the term "control" means the possession, directly or

indirectly, of the power to decide, affirmatively (by

 

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direction) or negatively (by veto), the management and policies of a Person,

whether through ownership and voting securities, by contract or otherwise.

 

      "Agreement" has the meaning ascribed to such term in the Introductory

Paragraph.

 

      "Ancillary Agreement" means each Purchaser Ancillary Agreement and Seller

Ancillary Agreement.

 

      "Base Rents" has the meaning ascribed to such term in Section 11.2 of this

Agreement.

 

      "Adjoining Land" means any land owned by Seller, or in which the Seller

otherwise has an interest, lying in the bed of any street, road, avenue, open or

proposed, public or private, in front of or adjoining the Land or any portion

thereof, and any award to be made in lieu thereof and in and to any unpaid award

for damage to the Land or the Improvements by reasons of change of grade of any

street occurring after the Effective Date.

 

      "Agreement Estoppel" means that certain Agreement Estoppel Certificate

(Brochsteins & Ambassador Owners) in the form of Exhibit O.

 

      "Closing" means the closing of the transactions contemplated hereby, which

shall take place at the offices of the Escrow Agent or through escrow pursuant

to an escrow agreement mutually agreeable to the Parties on the Closing Date at

10:00 A.M., or at such other time or place as the parties may agree upon in

writing.

 

      "Closing Date" means November 10, 2004. The Parties acknowledge and agree

that the Closing Date and the Effective Date are the same date; it is the

Parties' intention that the transactions contemplated herein are to be

consummated on a "sign and close" basis on such date. In this Agreement,

reference is generally made to such date as the "Closing Date" in the context of

provisions that address the Closing.

 

      "Code" means the Internal Revenue Code of 1986, as amended and the rules

and regulations promulgated thereunder.

 

      "Commitment" has the meaning ascribed to such term in Section 4.1.1 of

this Agreement.

 

      "Crescent" has the meaning ascribed to such term in the Introductory

Paragraph of this Agreement.

 

      "Damages" mean all actual losses, liabilities, costs, damages, claims and

expenses (including reasonable attorneys' fees and disbursements through

appeal).

 

      "Default" means (i) a breach of or default under any contract, agreement,

covenant, document or other instrument, or (ii) the occurrence of an event which

with the passage of time or the giving of notice, or both, would constitute a

breach of or default under any such contract, agreement, covenant, document or

other instrument, or (iii) the occurrence of an event that with or without the

passage of time or the giving of notice, or both, would give rise to a right of

termination or acceleration under any such contract, agreement, covenant,

document or other instrument.

 

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      "Easement and Right-of-Way Agreement Estoppel" means that certain Easement

and Right-of-Way Agreement Certificate (For Tract II) in the form of Exhibit M.

 

      "Environmental Laws" mean all federal, state, local and foreign

environmental, health and safety Laws including, without limitation Laws

relating to emissions, discharge, releases or threatened releases of pollutants,

contaminants, chemicals, or industrial, toxic or hazardous substances into the

environment (including, without limitation, air, surface water, ground water,

land surface or subsurface strata) or otherwise relating to the manufacture,

processing, distribution, use, treatment, storage, disposal, transport or

handling of pollutants, contaminants, chemicals, or industrial, solid, toxic or

hazardous substances. As used in this Agreement, the term "Hazardous Substances"

includes, without limitation, (i) all substances which are designated pursuant

to Section 311(b)(2)(A) of the Federal Water Pollution Control Act ("FWPCA"), 33

U.S.C. Section 1251 et seq.; (ii) any element, compound, mixture, solution, or

substance which is designated pursuant to Section 102 of the Comprehensive

Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.

Section 9601 et seq.; (iii) any hazardous waste having the characteristics which

are identified under or listed pursuant to Section 3001 of the Resource

Conservation and Recovery Act ("RCRA"), Section 6901 et seq.; (iv) any toxic

pollutant listed under Section 307(a) of the FWPCA; (v) any hazardous air

pollutant which is listed under Section 112 of the Clean Air Act, 42 U.S.C.

Section 7401 et seq.; (vi) any imminently hazardous chemical substance or

mixture with respect to which action has been taken pursuant to Section 7 of the

Toxic Substance Control Act, 15 U.S.C. Section 2601 et seq.; and (vii)

petroleum, petroleum products, petroleum by-products, petroleum decomposition

by-products, and waste oil; (viii) "hazardous materials" within the meaning of

the Hazardous Materials Transportation Act, 49 U.S.C. Section 1802 et seq.; (ix)

any hazardous substance or material identified or regulated by or under any

applicable provisions of the laws of the state in which any portion of the

Property is located; (x) asbestos or any asbestos containing materials; (xi) any

radioactive material or substance; (xii) all toxic wastes, hazardous wastes and

hazardous substances as defined by, used in, controlled by or subject to all

implementing regulations adopted and publications promulgated pursuant to the

foregoing statutes; and (xiii) any other hazardous or toxic substance or

pollutant identified in or regulated under any other applicable federal, state

or local Laws.

 

      "Exxon Pipeline Estoppel" means that certain Exxon Pipeline Estoppel

Certificate in the form of Exhibit L.

 

      "Governmental Body" means any agency, instrumentality, department,

commission, court, tribunal or board of any government, whether foreign or

domestic and whether national, federal, state, provincial or local.

 

      "Grant of Easement Estoppel" means that certain Grant of Easement Estoppel

Certificate (For Tract III) in the form of Exhibit N.

 

      "Guarantees" means all guarantees, agreements and undertakings of any

Guarantor in connection with the Tenant Leases (individually, a "Guaranty").

 

      "Guarantor" means any guarantor under any existing Guaranty of any Tenant

Lease.

 

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      "Hazardous Discharge" has the meaning ascribed to such term in Section

5.1.2(n) of this Agreement.

 

      "Houston Center Contract" means that certain Purchase and Sale Agreement

of even date herewith between Crescent, as the seller thereunder, and Crescent

HC Investors, L.P., an Affiliate of Purchaser, as the purchaser thereunder,

relating to the land and improvements commonly known as Houston Center in

Houston, Harris County, Texas.

 

      "Intangible Personal Property" shall mean all right, title and interest of

Seller in and to all telephone numbers listed after the name of the Property,

and all other items of intangible personal property owned by Seller and utilized

principally in connection with the operation of the Property (except for items

of intangible personal property that are otherwise the subject of other defined

terms set forth in this Agreement).

 

      "Law" or "Laws" mean laws, statutes, rules, regulations, codes, orders,

ordinances, judgments, injunctions, or decrees.

 

      "Lehman" means Lehman Brothers Holdings, Inc.

 

      "License Agreements" means all agreements (written or oral) in the nature

of licenses to which Seller is a party or is bound affecting any portion of the

Property all which are set forth in Schedule 5.1.2(d) annexed hereto and made a

part hereof.

 

      "Lien" means any security interest, lien, mortgage, claim, charge, pledge,

restriction, equitable interest, restrictive covenant or encumbrance of any

nature.

 

      "Major Lease" means any Tenant Lease with respect to which the Tenant

thereunder is a Major Tenant.

 

       "Major Tenant" means those Tenants identified as such on Schedule 5.1.2(d)

attached hereto.

 

      "Overage Rent" has the meaning ascribed to such term in Section 11.1 of

this Agreement.

 

      "Permits" has the meaning ascribed to such term in Section 2.1.6 of this

Agreement.

 

      "Person" means any natural person, corporation, business trust, joint

venture, association, company, limited liability entity, firm, partnership, or

other entity or Governmental Body.

 

      "Purchaser Ancillary Agreement" means each agreement or other instrument

executed or to be executed in connection with this Agreement by Purchaser or an

Affiliate of Purchaser, including The Crescent Contract, the Houston Center

Contract and all Closing documentation executed by Purchaser or an Affiliate of

Purchaser in connection therewith.

 

      "Rents" has the meaning ascribed to such term in Section 11.1 of this

Agreement.

 

      "Reports" means the environmental reports and other written materials

listed in Exhibit H attached hereto and made a part hereof.

 

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      "Security Deposits" means all security deposits and other deposits (in the

form of cash, letters of credit or otherwise) required to be deposited with

Seller pursuant to the Tenant Leases.

 

      "Seller Ancillary Agreement" means each agreement or other instrument

executed or to be executed in connection with this Agreement by Seller or an

Affiliate of Seller, including The Crescent Contract, the Houston Center

Contract and all Closing documentation executed by Seller or an Affiliate of

Seller in connection therewith.

 

      "SPF" means JPMorgan Chase Bank, as Trustee under Amended and Restated

Declaration of Trust, dated November 13, 2001, as amended, for its Commingled

Pension Trust Fund (Strategic Property).

 

      "Subleases" means all leases executed by the Tenants or their

predecessors-in-interest to a third party for all or a portion of the space

demised under such Tenants' Lease, all of which are set forth in Schedule

5.1.2(d) attached hereto and made a part hereof.

 

      "Tenants" (or singularly, a "Tenant") means the tenants under the Tenant

Leases.

 

      "Tenant Leases" means all agreements (written or oral) in the nature of

space leases, lettings, concessions or occupancy agreements, and all amendments,

modifications, supplements, additions, extensions, renewals and side letters

thereof or thereto, affecting the Land or the Improvements.

 

      "The Crescent Contract" means that certain Contribution Agreement of even

date herewith between Crescent Real Estate Funding I, L.P., an Affiliate of

Seller, and Crescent TC Investors, L.P., an Affiliate of Purchaser, relating in

part to the land and improvements commonly known as The Crescent in Dallas,

Dallas County, Texas.

 

      "Title Estoppels" means collectively the Exxon Pipeline Estoppel, Easement

and Right-of-Way Agreement Estoppel, Grant of Easement Estoppel and Agreement

Estoppel.

 

      "UCC Releases" means release of each of the liens found per the UCC

Searches, as defined in Section 4.1.3 hereinafter, as set forth in Exhibit P.

 

                                   ARTICLE 2.

                              SALE OF THE PROPERTY.

 

      Section 2.1. Property. For the consideration and upon and subject to the

terms, provisions and conditions of this Agreement, Seller agrees to sell to

Purchaser, and Purchaser agrees to purchase from Seller, all of Seller's right,

title and interest in and to all of the following described property

(collectively, the "Property"):

 

             2.1.1 Seller's fee simple title in and to all of the Land (and, if

applicable, any Adjoining Land), together with all of the Improvements located

thereon, and all rights, titles and interests of Seller appurtenant to the Land

and Improvements, including, without limitation, (i) all minerals, oil, gas and

other hydrocarbon substances thereon or thereunder, (ii) all easements,

privileges and hereditaments, whether or not of record, (iii) all gaps, gores,

adjacent strips, adjacent roads, streets, highways, alleys and rights-of-way

(both public or private, open or

 

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proposed), (iv) any awards for damage to the Property by reason of a change of

grade of any road, street, highway, alley, or right-of-way, (v) any condemnation

awards made or to be made in lieu thereof, and (vi) all access, air, water,

riparian, development, utility (including sanitary and storm sewer capacity or

reservations or rights under utility agreements) and solar rights and all income

therefrom;

 

            2.1.2 All fixtures, furnishings, furniture, equipment, machinery,

inventory, appliances and other personal property owned by Seller, located at or

used in connection with the Land and Improvements, including, without

limitation, (1) all mechanical systems, fixtures and equipment comprising a part

of or attached to or located upon the Land and Improvements, (2) all maintenance

equipment and tools owned by Seller and used in connection with the Land and

Improvements, (3) all site plans, surveys, plans and specifications, marketing

materials and floor plans in Seller's possession which relate solely to the

Improvements and no other premises, (4) all pylons and other signs, and (5) all

other personal property of every kind and character owned by Seller and located

in or on or used in connection with the Land and Improvements or the operations

thereon, (collectively, the "Personalty"), which items are listed on Schedule

5.1.2(aa) attached hereto. Notwithstanding anything to the contrary contained

herein, it is expressly agreed by the Parties that any fixtures, furniture,

furnishings, equipment or other personal property owned or leased (from a party

other than Seller) by any tenant, managing agent, leasing agent, contractor, or

employee, shall not be included in the Property to be sold to Purchaser

hereunder;

 

            2.1.3 The Tenant Leases and Security Deposits, the License

Agreements and the Guaranties,

 

            2.1.4 All of Seller's rights, titles and interests as lessee under

any leases;

 

            2.1.5 All service, management and maintenance contracts and other

contracts, reciprocal easement agreements, development agreements, concession

agreements and operating agreements all as listed on Schedule 5.1.2(q) relating

to the ownership and operation of the Property (collectively, the "Operating

Agreements"), and warranties, guaranties and bonds in effect at Closing and

listed on Schedule 5.1.2(v) attached hereto and by this reference made a part

hereof (the "Warranties") relating to the Land, the Improvements or the

Personalty, to the extent the same are assignable;

 

            2.1.6 All permits, licenses, certificates of occupancy and

governmental approvals, if any, which relate to the Land, Improvements,

Personalty, Operating Agreements or Tenant Leases (the "Permits");

 

            2.1.7 The Intellectual Property (hereinafter defined) used solely in

connection with the operation of the Property; excluding any Intellectual

Property to which Seller is restricted from granting such a license or for which

consent is required and not obtained (provided, that Seller agrees to use

commercially reasonable efforts to obtain any such required consent). For the

purposes hereof, "Intellectual Property" means any of the following which are

used by Seller in connection with the Property: (i) trademarks, service marks,

trade dress, logo name, trade names, domain name, registrations, designations

(including without limitation the name "Post Oak Central" and any variations

thereof) but excluding any Crescent or Crescent-derivative

 

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trademark, service mark, trade dress or logo, (ii) copyrights, (iii) trade

secrets and confidential business information (including ideas, research and

development, know-how, formulas, compositions, manufacturing and production

processes and techniques, methods, schematics, technology, technical data,

designs, drawings, flowcharts, block diagrams, specifications, customer and

supplier lists, pricing and cost information and business and marketing plans

and proposals), (iv) computer software (including data and related

documentation), (v) patents, and (vi) licenses, sublicenses, agreements, or

permissions related to any of the foregoing;

 

            2.1.8 The Intangible Personal Property; and

 

            2.1.9 To the extent transferable, all other rights owned by Seller

and necessary to or used exclusively in connection with the ownership,

maintenance or operation of the items set forth in subsections 2.1.1 through

2.1.8 above.

 

      Section 2.2. The Parties acknowledge and agree that the value of the

Personalty is de minimis and that no part of the Purchase Price (hereinafter

defined) is allocable thereto. Although it is not anticipated that any sales tax

shall be due and payable, Purchaser agrees that Purchaser shall pay to the

applicable Governmental Body any and all sales and/or compensating use taxes

imposed upon or due solely by reason of the transactions contemplated hereunder

under any applicable Law. Purchaser shall file all necessary tax returns with

respect to all such taxes and, to the extent required by applicable Law, Seller

will join in the execution of any such tax returns. The provisions of this

Section 2.2 shall survive the Closing.

 

                                    ARTICLE 3.

                           PAYMENT OF PURCHASE PRICE.

 

      Section 3.1. The Purchase Price (herein so called) to be paid by Purchaser

to Seller for the Property shall be $147,500,000. The Purchase Price, plus or

minus prorations and adjustments as provided in this Agreement, shall be paid by

Purchaser to Seller at Closing by wire transfer of Current Funds (hereinafter

defined) to an account or accounts designated in writing by Crescent not less

than two (2) business days prior to the Closing Date. As used in this Agreement,

"Current Funds" means wire transfers of immediately available funds, certified

funds or a cashier's check in a form acceptable to the Escrow Agent (hereinafter

defined) which would permit the Title Company to promptly disburse such funds.

 

                                   ARTICLE 4.

                           TITLE; DUE DILIGENCE REVIEW

 

      Section 4.1. The Parties acknowledge and agree that prior to the Effective

Date, Purchaser has received, and has had an opportunity to review, the

following:

 

            4.1.1 (i) from Fidelity National Title Insurance Company, Attention:

Pat Noska, 717 N. Harwood Street, Suite 800, Dallas, Texas 75201, Telephone:

(214) 220-1829, Fax: (214) 969-5348 (the "Escrow Agent"), as authorized agent

for Fidelity National Title Insurance Company ("Fidelity"), G.F. No. 04-01-5205

bearing an issue date of October 29, 2004 (Revision #8); (ii) from Stewart Title

Guaranty Company, Attention: Jim Putnam, 1980 Post Oak Boulevard, Suite 110,

Houston, Texas 77056, Telephone: (713) 625-8700, Fax: (713) 629-2255, as

authorized agent for Stewart Title Guaranty Company ("Stewart"), File No.

04117541;

 

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(iii) from Chicago Title Insurance Company, Attention: Kay Starkey, 2001 Bryan

Street, Suite 1700, Dallas, Texas 75201, Telephone: (214) 965-1686, Fax: (214)

965-1622, as authorized agent for Chicago Title Insurance Company ("Chicago"),

G.F. No. 2104-01209-FKS, Commitment No. 44-903-80-653195C; and (iv) from

Republic Title of Texas, Inc., Attention: C. Richard White, 2626 Howell Street,

10th Floor, Dallas, Texas 75204, Telephone: (214) 855-8868, Fax: (214) 855-8848,

as authorized agent for First American Title Insurance Company ("First

American"), G.F. No. 04R16452A SJ3 (the foregoing, collectively, the "Title

Company"), four (4) title insurance commitments (collectively, the "Commitment")

pertaining to the Land, and binding Fidelity to issue to Purchaser at Closing on

a co-insurance basis an Owner's Policy of Title Insurance (the "Fidelity Owner

Title Policy") in the amount of $73,750,000 (the "Fidelity Owner Title Policy

Amount"); binding Stewart to issue to Purchaser at Closing on a co-insurance

basis an Owner's Policy of Title Insurance (the "Stewart Owner Title Policy") in

the amount of $29,500,000 (the "Stewart Owner Title Policy Amount"); binding

First American to issue to Purchaser at Closing on a co-insurance basis an

Owner's Policy of Title Insurance (the "First American Owner Title Policy") in

the amount of $29,500,000 (the "First American Owner Title Policy Amount"); and

binding Chicago to issue to Purchaser at Closing on a co-insurance basis an

Owner's Policy of Title Insurance (the "Chicago Owner Title Policy" and,

together with the Fidelity Owner Title Policy, the Stewart Owner Title Policy

and the First American Owner Title Policy, collectively, the "Owner Title

Policy") in the amount of $14,750,000 (the "Chicago Owner Title Policy Amount"

and, together with the Fidelity Owner Title Policy Amount, the Stewart Owner

Title Policy Amount and the First American Owner Title Policy Amount,

collectively, the "Owner Title Policy Amount"); together with copies of

instruments or documents (the "Exception Documents") creating or evidencing

conditions or exceptions to title affecting the portion of the Land that is the

subject thereof, as described in the Commitment;

 

            4.1.2 A copy of the most current on the ground survey for the Land

in Seller's possession, dated November 3, 2004, last revised November 5, 2004,

Project No.0048-9701-S, prepared by Ernest Roth, R.P.L.S. No. 2044, of Terra

Surveying Co., Inc., a surveyor licensed by the State of Texas (the "Survey");

 

            4.1.3 Searches of the Uniform Commercial Code Records of Harris

County, Texas, as well as a search of the Secretary of State of the State of

Texas, with respect to Seller (and the Secretary of State of the State of

Delaware with respect to the formation of Seller) under the name of Seller (the

"UCC Searches") dated within 60 days of the Effective Date hereof;

 

            4.1.4 Litigation searches of Seller from county courts in Harris

County, Texas, the state district courts of Harris County, Texas and federal

courts in the Southern District of Texas, Houston Division (the "Litigation

Searches"); and

 

            4.1.5 Searches of the Real Property Records of Harris County, Texas

under the name of Seller with respect to federal and state tax liens and

judgment liens (the "Lien Searches").

 

      The costs associated with the Survey, the UCC Searches, the Litigation

Searches and the Lien Searches shall be paid by Seller. Subject to the terms and

conditions set forth in this Agreement, Purchaser hereby approves the Commitment

(including the Exception Documents

 

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pertaining thereto), the Survey, the UCC Searches, the Litigation Searches and

the Lien Searches.

 

      Section 4.2. At Closing, the Title Company shall issue to Purchaser the

Owner Title Policy for the Land as specified in the Commitment, with such

endorsements as the Parties may direct, dated no earlier than the date of the

filing of the Deed described in Section 9.1.1 hereof, insuring Purchaser's title

to the Land in the amount of the Owner Title Policy Amount, subject to the

Permitted Exceptions (hereinafter defined). For the purposes hereof, the term

"Permitted Exceptions" shall mean and refer to (i) the title encumbrances,

exceptions or other matters set forth in Exhibit G attached hereto, which are

reflected in the Commitment (but excluding those matters which are expressly

identified below as Non-Permitted Exceptions to Title); (ii) the rights of the

Tenants under Tenant Leases listed in Exhibit G as Tenants only without any

option or right of first offer or refusal to purchase; and (iii) taxes and

assessments for the year in which Closing occurs and subsequent years.

Notwithstanding anything to the contrary herein, Seller agrees that there shall

be no Liens affecting the Land or Improvements at the time of Closing, and

Seller shall satisfy any and all such Liens prior to or concurrently with the

Closing (the "Non-Permitted Exceptions to Title"). With respect to the costs

associated with the Commitment, the Owner Title Policy to be issued in

connection therewith, and any mortgagee title insurance policy (a "Mortgagee

Policy") relating to a New Loan (hereinafter defined), including in each

instance, without limitation, the cost of reinsurance and endorsements, the

Parties agree that the payment of such costs, together with the title insurance

costs under The Crescent Contract and the Houston Center Contract shall be

allocated among Purchaser and its Affiliates and Seller and its Affiliates as

follows: Seller, 41.9%; Purchaser, 58.1%.

 

      Section 4.3.

 

            4.3.1 The parties acknowledge and agree that, during the period

between July 22, 2004 and the Effective Date (the "Due Diligence Period"),

Purchaser had an opportunity to perform its due diligence review of the

Property. Purchaser acknowledges that certain written information has been made

available by Seller to Purchaser in the disclosure schedules attached hereto or

posted on the "Client Connect" website maintained by Haynes and Boone, LLP under

the heading "Post Oak Central - Due Diligence," on behalf of Seller and its

Affiliates, at least three (3) business days prior to the Closing Date

(collectively, the "Due Diligence Information"). Subject to the terms and

conditions set forth in this Agreement, Purchaser has determined that the

Property is satisfactory and feasible for its intended use.

 

            4.3.2 The Parties acknowledge that the Due Diligence Information

which Seller has made available to Purchaser includes certain documents and

other information pertaining to the Property prepared by third parties other

than Seller or an Affiliate of Seller (the "Third Party Property Information").

Except as otherwise expressly provided herein, Seller expressly disclaims any

and all liability for representations or warranties, express or implied,

statements of fact and other matters contained in the Third Party Property

Information, or in any other written or oral communications transmitted or made

available to Purchaser, which has been prepared by third parties other than

Seller or an Affiliate of Seller. With respect to the Property, Purchaser shall

rely solely upon (a) Purchaser's due diligence review of the Property, and (b)

the express warranties and representations of Seller set forth in this Agreement

pertaining to the Property, including, without limitation, the Property's

physical, environmental or economic condition,

 

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compliance or lack of compliance with any Law or Permit or any other attribute

or matter relating thereto.

 

                                   ARTICLE 5.

                         REPRESENTATIONS AND WARRANTIES.

 

      Section 5.1. As of the Effective Date hereof, Seller represents and

warrants to Purchaser the following:

 

            5.1.1 Seller Representations.

 

            (a) Seller is a limited partnership duly organized and validly

      existing and in good standing under the laws of the State of Delaware, and

      is qualified to do business in the State of Texas. Seller has the full

      power and authority to own, lease and operate its assets and properties

      and to conduct its business as now conducted. Neither Seller, nor any

      entity controlling, or controlled by, Seller owns a five percent (5%) or

      greater interest (within the meaning of Prohibited Transaction Class

      Exemption 84-14) in JP Morgan Chase Bank.

 

            (b) This Agreement constitutes the legal, valid and binding

      obligation of Seller, enforceable against Seller in accordance with its

      terms. Seller has taken all necessary action to authorize and approve the

      execution and delivery of this Agreement and the Seller Ancillary

      Agreements and its performance hereof and thereof.

 

            (c) The execution and delivery of this Agreement and the Seller

      Ancillary Agreements and the performance by Seller of its obligations

      hereunder and thereunder do not and will not conflict with or violate any

      current Laws of any Governmental Body with jurisdiction over Seller or the

      Property, including, without limitation, the United States of America, the

      State of Delaware, the State of Texas, or any political subdivision of any

      of the foregoing, or any decision or ruling of any arbitrator to which

      Seller is a party or by which Seller or the Property is bound or affected.

 

            (d) Annexed hereto as Schedule 5.1.1(d) and made a part hereof are

      the financial statements prepared by Seller relating to the Property for

      the three years ended December 31, 2001, 2002 and 2003 (collectively, the

      "Financial Statements"). The Financial Statements in each case are true

      and complete with respect to all material items contained therein and

      fairly present in all material respects the financial position and results

      of operations of Seller with respect to the Property as at, or for the

      periods ended on, such dates. Also annexed as part of such Schedule are

      certain operating statements prepared by Seller relating to the Property

      covering periods subsequent to December 31, 2003, as shown therein. Such

      statements and budgets were prepared in the ordinary course of managing

      the Property.

 

            5.1.2 Property Representations.

 

            (a) To Seller's knowledge, no Governmental Body plans to change the

       highway or road system in the vicinity of the Land in a manner which would

      adversely

 

                                       10

<PAGE>

 

      affect the Land and/or the business operations conducted thereon or would

      restrict or change access from any such highway or road to the Land.

 

            (b) There are no pending or, to Seller's knowledge, threatened

      condemnation or eminent domain proceedings relating to or affecting the

      Land and/or the Improvements.

 

            (c) No Person has any (i) conditional or unconditional right and/or

      option to purchase the Property or any portion thereof, and/or (ii) right

      of first refusal or offer to purchase the Property or any portion thereof.

 

            (d) Schedule 5.1.2(d) attached hereto, which includes a rent roll

      and other information pertaining to the Tenant Leases, is true, correct

      and complete, and lists all Tenant Leases with respect to the Land or any

      portion thereof or interest therein that Seller leases, subleases or

      licenses as the ground lessor, lessor, sublessor or licensor. Seller has

      made available to Purchaser true and materially complete and correct

      copies of the Tenant Leases and currently outstanding letters of intent

       relating to occupancy of space within the Property. Except as otherwise

      shown in Schedule 5.1.2(d), no Person other than Seller has the right to

      possess or occupy the Land (or any portion thereof). All of the Tenant

      Leases are in full force and effect and have not been modified except as

      set forth in Schedule 5.1.2(d). To Seller's knowledge, there are no

      parties in possession of the Land (or any portion thereof) except the

      Tenants and any subtenants under subleases that are disclosed in Schedule

      5.1.2(d); except as set forth in Schedule 5.1.2(d), there are no

      unsatisfied "Take-Over" space obligations or "Take-Back" space obligations

      (for the purposes hereof, "Take-Over" space obligations means rent

       obligations of the Tenant in other buildings assumed by the landlord and

      "Take-Back" space obligations means obligations imposed upon the landlord

      to sublet or otherwise be responsible for the obligations of a Tenant

      under a Tenant Lease). Except as set forth in Schedule 5.1.2(d), there are

      no disputes with Tenants as to the amount of their rent or other charges

      (including, without limitation, charges for common area maintenance) under

      any Tenant Lease; except as set forth in the Tenant Leases, no Tenant has

      any option to cancel its Tenant Lease; except as set forth in Schedule

      5.1.2(d), there is no Default beyond applicable notice and cure periods by

      the landlord under any Tenant Leases. Seller has not received from any

      Tenant any written notice claiming any Default by the landlord under its

      Tenant Lease; except as set forth in Schedule 5.1.2(d), Seller has not

      delivered to any Tenant any written notice claiming a Default by Tenant

       under its Tenant Lease which Default has not been cured; except as set

      forth in Schedule 5.1.2(d), to Seller's knowledge, there are no

      circumstances which, after notice and the expiration of any applicable

      grace period, would constitute a Default by either landlord or any Tenant

      under any of the Tenant Leases; except as set forth in Schedule 5.1.2(d),

      Seller has not received written notice from any Tenant of any defense to,

      or offsets or claims against rental payable or obligations under any

      Tenant Lease; and to Seller's knowledge, no Tenant has asserted, or has

      any defense to, offsets or claims against rental payable or obligations

      under any Tenant Lease.

 

      Except for any Subleases specified in Schedule 5.1.2(d), to Seller's

knowledge, (i) Seller has not consented to any Subleases, (ii) there are no

Subleases encumbering or affecting the

 

                                       11

<PAGE>

 

Land or Improvements (or any portion thereof), and (iii) true, correct and

complete copies of any such Subleases have been delivered to Purchaser and/or

its consultants, accountants, auditors, attorneys, agents and/or other

representatives ("Purchaser's Representatives").

 

      Except for the License Agreements specified in Schedule 5.1.2(d), there

are no License Agreements encumbering or affecting the Land or Improvements (or

any portion thereof). True, correct and complete copies of any such License

Agreements have been delivered to Purchaser and/or Purchaser's Representatives.

All of such License Agreements are in full force and effect and have not been

modified except as set forth in Schedule 5.1.2(d). Except as set forth in

Schedule 5.1.2(d), there are no disputes with any licensee as to the amount of

its rent or other charges (including, without limitation, charges for common

area maintenance) under any License Agreement; except as set forth in such

License Agreements, no licensee has any option to cancel its License Agreement;

except as set forth in Schedule 5.1.2(d), there is no Default beyond applicable

notice and cure periods by any licensee under such License Agreements. Seller

has not received from any licensee any written notice claiming any Default by

Seller as licensor under its License Agreement; except as set forth in Schedule

5.1.2(d), Seller has not delivered to any licensee written notice claiming a

Default by such licensee under its License Agreement which Default has not been

cured; except as set forth in Schedule 5.1.2(d), to Seller's knowledge there are

no circumstances which, after notice and the expiration of any applicable grace

period, would constitute a Default by either any licensee or Seller, as licensor

under any of the License Agreements; except as set forth in Schedule 5.1.2(d),

Seller has not received written notice from any licensee of any defense to, or

offsets or claims against rental payable or obligations under any License

Agreement; and to Seller's knowledge, no licensee has asserted, or has any

defense to, offsets or claims against rental payable or obligations under any

License Agreement.

 

      Schedule 5.1.2(d) specifies any Guarantees relating to the Tenant Leases.

All of such Guarantees are in full force and effect and have not been modified

except as set forth in Schedule 5.1.2(d). Except as set forth in Schedule

5.1.2(d), no Guarantor of any Tenant Lease has been released or discharged,

voluntarily (or to Seller's knowledge, involuntarily, or by operation of law)

from any obligation related to such Tenant Lease and covered by its Guaranty.

 

      With respect to the rent roll that is a part of Schedule 5.1.2(d) attached

hereto: (i) such rent roll reflects all Tenant Leases dated as of November 5,

2004, prepared by or for Seller; the information in the rent roll was used to

invoice Tenants for their monthly payments for November, 2004; (ii) except as

set forth in Schedule 5.1.2(d), the rent roll sets forth all of the Security

Deposits being held by Seller and required to be delivered by the Tenants under

their Tenant Leases; there are no other Security Deposits; and all Security

Deposits are held by or on behalf of Seller; and (iii) the information shown on

the rent roll is true, correct and complete in all material respects.

 

            (e) Schedule 5.1.2(e) specifies all unpaid leasing costs and

      expenses arising out of Tenant Leases entered into prior to the Effective

      Date (including, without limitation, all tenant improvement costs, all

      outstanding tenant improvement allowances and all outstanding leasing

       commissions). Except for those unpaid leasing costs and expenses

      (including, without limitation, tenant improvement costs, outstanding

      tenant improvement allowances and outstanding leasing commissions) listed

      in Schedule 5.1.2(e), there are no other such costs or expenses due now,

      or that will

 

                                       12

<PAGE>

hereafter become due or owing with respect to the Land or Improvements, other

than in connection with leases that may be entered into by Purchaser after the

Effective Date. Except as otherwise shown in Schedule 5.1.2(e), there are no

unpaid leasing costs or expenses (including, without limitation, tenant

improvement costs, outstanding tenant improvement allowances or outstanding

leasing commissions) due or payable to Seller or any of its Affiliates in

connection with the Tenant Leases entered into as of the Effective Date.

 

      (f) Except as set forth in Schedule 5.1.2(f), all tenant improvements

required under the Tenant Leases to be completed by the Effective Date hereof by

the landlord thereunder have been completed and all tenant allowances and other

tenant inducement costs required under the Tenant Leases to be paid prior to the

Effective Date have been paid in full.

 

      (g) Except as set forth in Schedule 5.1.2(g), to Seller's knowledge after

due and diligent inquiry, the Land and Improvements and the current use,

occupation and condition thereof are in compliance with and do not violate any

applicable deed restrictions or other covenants, restrictions or agreements

(including, without limitation, any of the Permitted Exceptions) in any material

respect. Except as set forth in Schedule 5.1.2(g), to Seller's knowledge, the

Land and Improvements and the current use, occupation and condition thereof are

in compliance with and do not violate any applicable site plan approvals, zoning

or subdivision regulations or urban redevelopment plans applicable to the Land

and Improvements in any material manner. Except as set forth in Schedule

5.1.2(g), neither Seller nor, to Seller's knowledge, any Affiliate of Seller,

has received any written notice of noncompliance with or violation of any

applicable deed restriction or other covenants, restrictions, or agreements

(including, without limitation, any of the Permitted Exceptions), site plan,

approvals, zoning or subdivision regulations or urban redevelopment plans

applicable to the Land and Improvements. Seller is not in material Default under

any Permitted Exception. Except as set forth in Schedule 5.1.2(g), to Seller's

knowledge, Seller is in compliance with the covenants, conditions, obligations,

restrictions and requirements set forth in the Permitted Exceptions. To Seller's

knowledge, all work, development, construction and improvements performed or

required pursuant thereto, whether by Seller or any predecessor in interest,

have been completed and paid for in conformity therewith. Except as set forth in

Schedule 5.1.2(g), all current assessments, dues, charges and other payments

required under any of the Permitted Exceptions have been paid in full and Seller

is not in arrears with respect to any such payments.

 

      (h) Except as set forth in the current tax bills, copies of which are

annexed hereto and made a part hereof as Schedule 5.1.2(h), which copies are

true and complete copies of such tax bills, there are no special assessments or

charges which have been levied against, and remain an obligation of, the Land

and/or the Improvements. There are no pending or, to Seller's knowledge,

threatened, special assessments affecting the Land and/or the Improvements or

any contemplated improvements affecting the Land and/or the Improvements that

may result in any such special assessments.

 

                                       13

<PAGE>

 

      (i) Except for the Leasing and Management Agreement (herein so called) to

be executed on the Closing Date, there is no contract or agreement with any

third party for the management of the Property or any portion thereof, which

will be binding on the Land and Improvements or on Seller as of the Closing

Date.

 

      (j) Except as set forth in the Reports and in Schedule 5.1.2(j), Seller

and the Property have complied in all material respects with all Environmental

Laws. Seller has obtained all material Permits which are required with respect

to the operation of the Land and Improvements under any Environmental Laws.

 

      (k) Seller and the Land and Improvements are in possession of (and in

compliance in all material respects with the requirements of), all Permits

required by any Environmental Laws, and are also in compliance in all material

respects with all other limitations, restrictions, conditions, standards,

prohibitions, requirements, obligations, schedules and timetables contained in

any Environmental Laws or contained in any plan, order, decree, judgment,

injunction, notice or demand letter issued, entered, promulgated or approved

thereunder applicable to Seller or the Land or Improvements. Seller has

delivered or made readily available to Purchaser or the Purchaser

Representatives true and complete copies of all final environmental studies

prepared by outside consultants relating to the Land and Improvements that were

prepared for or requested by Seller or Crescent.

 

      (l) Except as set forth in the Reports, there is no pending, or, to

Seller's knowledge, threatened Action, demand, claim, hearing, notice of

violation, notice or demand letter that affects or applies to Seller or the Land

or Improvements implicating Environmental Laws or any order, decree, judgment,

injunction, notice or demand letter issued, entered, promulgated or approved

thereunder.

 

      (m) Except as set forth in the Reports and in Schedule 5.1.2(m), there are

no past or present events, conditions, circumstances, activities, practices,

incidents, actions or plans known to Seller which may reasonably be expected to

interfere with or prevent the compliance or continued compliance by Seller with

any Environmental Laws or with any regulation, code, plan, order, decree,

judgment, injunction, notice or demand letter issued, entered, promulgated or

approved thereunder, or which is reasonably likely to give rise to any common

law or legal liability, or otherwise form the basis of any Action, hearing,

notice of violation or study, based on or related to the manufacture,

processing, distribution, use, treatment, storage, disposal, transport or

handling, or the emission, discharge, release or threatened release into the

environment, by Seller or the Land or Improvements of any pollutant,

contaminant, chemical, or industrial, toxic or Hazardous Substances.

 

      (n) Except as set forth in the Reports and in Schedule 5.1.2(n), to

Seller's knowledge there has been no material emission, spill, release or

discharge from the Land or Improvements or by Seller at any other location or

disposal site, into or upon (i) the air, (ii) soils or improvements, (iii)

surface water or ground water, or (iv) the sewer, septic system or waste

treatment, storage or disposal system servicing the Land and/or the Improvements

of any toxic or Hazardous Substances regulated by the Environmental

 

                                       14

<PAGE>

 

Laws and used, stored, generated, treated or disposed at or from the Land and/or

the Improvements (any of which events is hereinafter referred to as "Hazardous

Discharge"). To Seller's knowledge, the Land and Improvements are free of

material amounts of all Hazardous Substances except for paints, cleaning

materials, fertilizer, pesticides, fuels and lubricants or similar materials in

amounts customarily used by prudent owners and tenants in the construction,

ownership, management and maintenance of their properties, which are, to

Seller's knowledge, being used, stored, handled, transported, generated and

disposed of in compliance with applicable Environmental Laws.

 

      (o) Except as set forth in the Reports and in Schedule 5.1.2(o), Seller

has not received any written notice of and has no knowledge of any complaints,

orders, directives, claims, citations or notices with respect to (i) air

emissions, (ii) spills, releases or discharges to soils or any improvements

located thereon, surface water, ground water or the sewer, septic system or

waste treatment, storage or disposal systems servicing the Land and/or the

Improvements, (iii) noise emissions, (iv) solid or liquid waste disposal, (v)

the use, generation, storage, transportation or disposal of toxic or Hazardous

Substances or (vi) other environmental, health or safety matters affecting

Seller or the Property.

 

      (p) Neither the Land nor any portion thereof is now or has ever been a

"Super-Fund Site". Except as set forth in the Reports and in Schedule 5.1.2(p),

to Seller's knowledge there are no underground storage tanks located on the

Land.

 

      (q) There are no Operating Agreements affecting the Property, oral or

written, other than those listed in Schedule 5.1.2(q) attached hereto. Each of

the Operating Agreements is in full force and effect. Seller has performed all

material obligations required to be performed by it, and is not in material

Default, under any Operating Agreement to which it is a party, by assumption or

otherwise. To Seller's knowledge, no other party is in material Default under

any such Operating Agreement. Seller has delivered to Purchaser or to

Purchaser's Representatives true, correct and complete copies of the Operating

Agreements. Seller is not a party to any material lease, contract, agreement or

other obligation other than the Tenant Leases and the Operating Agreements.

Except as set forth in Schedule 5.1.2(q), none of the Operating Agreements

(other than the Leasing and Management Agreement) are between Seller and any

Affiliate of Seller.

 

      (r) (i) Except as set forth in Schedule 5.1.2(r), Seller has not received

any written notice of any violation of any Law (including, without limitation,

building code, health and safety or zoning violations) issued by any

Governmental Body affecting the Land or Improvements that remains uncured as of

the Effective Date (collectively, "Violations") and (ii) except as set forth in

Schedule 5.1.2(r), Seller has not received any written notice that an

investigation has been commenced respecting any such possible Violations.

 

      (s) Schedule 5.1.2(s) attached hereto sets forth the material Permits held

by Seller with respect to the Property. To Seller's knowledge, all Permits

necessary to be maintained in connection with ownership, use, operation, leasing

and maintenance of the

 

                                       15

<PAGE>

 

Property have been obtained and are in full force and effect. Seller has not

received written notice, nor does Seller have knowledge, (i) of any pending or

threatened modification or cancellation of any of the Permits, (ii) that Seller

lacks any Permit required in connection with the ownership, operation,

management or leasing of the Property (even though a physical copy thereof may

not be in the possession of Seller), or (iii) of any violation of any of the

Permits.

 

      (t) Schedule 5.1.2(t) attached hereto sets forth a true and complete list

and description of all insurance policies relating to the Property. Except as

set forth in Schedule 5.1.2(t), there are no pending claims made against the

Property. Schedule 5.1.2(t), the insurance, from January 1, 2004 to the date

hereof, has (i) been maintained in full for