Exhibit 10.1
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
BY AND BETWEEN
SMII FAIRFAX LLC
(“Seller”)
AND
REPUBLIC PROPERTY LIMITED PARTNERSHIP
(“Buyer”)
[Willow Wood Plaza]

 

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TABLE OF CONTENTS

                                Page 1.   BASIC TERMS AND DEFINITIONS;
REFERENCES     1       1.1   Basic Terms and Definitions     1       1.2  
References     1       1.3   Extension of Closing Date     1   2.   PURCHASE AND
SALE     2   3.   PURCHASE PRICE AND DEPOSIT     2       3.1   Purchase Price  
  2       3.2   Payment of Purchase Price     2       3.3   Disposition of
Deposit Upon Failure to Close     3   4.   PROPERTY INFORMATION; TITLE REVIEW;
INSPECTIONS AND DUE DILIGENCE; TENANT ESTOPPEL CERTIFICATES; CONFIDENTIALITY    
3       4.1   Property Information     3  
 
      4.1.1   Documents to be Made Available     3  
 
      4.1.2   Due Diligence Deliveries     4       4.2   Title and Survey
Review; Title Policy     5  
 
      4.2.1   Delivery of Title Report     5  
 
      4.2.2   Title Review and Cure     5  
 
      4.2.3   Delivery of Title Policy at Closing     5       4.3   Inspections;
Due Diligence Period     6  
 
      4.3.1   Inspections in General     6  
 
      4.3.2   Environmental Inspections     6  
 
      4.3.3   Termination During Due Diligence Period     6       4.4   Tenant
Estoppel Certificates     7       4.5   Contracts     7       4.6  
Confidentiality     7   5.   OPERATIONS AND RISK OF LOSS     7       5.1  
Ongoing Operations     7       5.2   New Contracts     7       5.3   Leasing
Arrangements     8       5.4   Damage or Condemnation     8       5.5   Schedule
of Personal Property     9   6.   SELLER’S AND BUYER’S DELIVERIES     9      
6.1   Seller’s Deliveries into Escrow     9       6.2   Buyer’s Deliveries into
Escrow     9       6.3   Closing Statements/Escrow Fees; Tenant Notices     10  
    6.4   Post-Closing Deliveries     10  

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TABLE OF CONTENTS
(Continued)

                                Page 7.   CONDITIONS TO BUYER’S AND SELLER’S
OBLIGATIONS     10       7.1   Conditions to Buyer’s Obligations     10      
7.2   Conditions to Seller’s Obligations     11   8.   CLOSE OF ESCROW;
POSSESSION     11   9.   ESCROW     11       9.1   Closing     11       9.2  
Escrow and Title Charges     12       9.3   Procedures Upon Failure of Condition
    13   10.   PRORATIONS     13       10.1   Collected Rent     13       10.2  
Operating Costs and Additional Rent Reconciliation     13       10.3   Taxes and
Assessments     14       10.4   Leasing Commissions, Tenant Improvements and
Contracts     14       10.5   Tenant Deposits     15       10.6   Utilities and
Utility Deposits     15       10.7   Owner Deposits     15       10.8  
Percentage Rents     15       10.9   Final Adjustment After Closing     16   11.
  SELLER’S REPRESENTATIONS AND WARRANTIES; AS-IS     16       11.1   Seller’s
Representations and Warranties     16       11.2   As-Is     17   12.   BUYER’S
COVENANTS, REPRESENTATIONS AND WARRANTIES; RELEASE; ERISA; INDEMNIFICATION    
19       12.1   Representations and Warranties     19       12.2   Release    
20       12.3   ERISA     20   13.   DEFAULT AND DAMAGES     21       13.1  
DEFAULT BY BUYER     21       13.2   Default by Seller     21   14.   BROKER’S
COMMISSIONS     22   15.   MISCELLANEOUS PROVISIONS     22       15.1   Notices
    22       15.3   Work Product     23       15.4   Further Assurances     24  
    15.5   Attorneys’ Fees     24       15.6   Survival of Representations,
Warranties and Agreements     24       15.7   Entire Agreement     24  

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TABLE OF CONTENTS
(Continued)

                                Page     15.8   Governing Law     24       15.9
  Counterparts     24       15.10   Headings; Construction     25       15.11  
Time of Essence     25       15.12   Partial Validity; Severability     25      
15.13   No Third Party Beneficiaries     25       15.15   Joint Product of
Parties     25       15.16   Calculation of Time Periods     25       15.17  
Procedure for Indemnity     25       15.18   Waiver of Jury Trial     26      
15.19   No Personal Liability     26       15.20   Joint and Several Liability  
  26       15.21   Audited Income Statement     26  

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PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
     THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this “Agreement”)
is made and entered into as of March ___, 2006, between SMII FAIRFAX LLC, a
Delaware limited liability company (“Seller”), and REPUBLIC PROPERTY LIMITED
PARTNERSHIP, a Delaware limited partnership, or its permitted assignees
(“Buyer”), with reference to the following:
     A. Seller is the owner of the improved real property (the “Real Property”)
described on Exhibit A attached hereto together with certain personal property
located upon or used in connection with such improved real property and certain
other assets relating thereto, all as more particularly described in Section 2
hereof.
     B. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, the Real Property, together with certain personal property and related
assets on the terms and subject to the conditions contained in this Agreement.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1.   BASIC TERMS AND DEFINITIONS; REFERENCES

     1.1 Basic Terms and Definitions
          (a) Effective Date. The effective date of this Agreement shall be the
date set forth above (“Effective Date”).
          (b) Closing Date. Subject to extension pursuant to Section 1.3 of this
Agreement, the last day that Close of Escrow may occur shall be May 10, 2006, at
1:00 p.m. PST (the “Closing Date”).
          (c) Title Review Period. The “Title Review Period” shall end on
April 3, 2006, at 5:00 p.m. PST.
          (d) Due Diligence Period. The “Due Diligence Period” shall end on
April 10, 2006, at 5:00 p.m. PST.
          (e) Escrow Holder. The escrow holder shall be Chicago Title Company
(“Escrow Holder”), whose address is 16969 Von Karman, Irvine, California 92606,
Escrow Officer: Joy Eaton; Telephone: (949) 263-0123; Telecopier:
(949) 263-0356.
          (f) Title Company. The title company shall be Chicago Title Insurance
Company (“Title Company”) whose address is 16969 Von Karman, Irvine, California
92606, Title Coordinator: John Premac; Telephone: (949) 263-0123; Telecopier:
(949) 263-0356; the Title Company shall coordinate their title efforts with
their local offices located at 1129 20th Street, NW, Suite 300, Washington, DC
20036, Attention: Dianne E. Boyle, Assistant Vice President and Commercial
Counsel, Chicago Title Insurance Company, Telephone: (202) 263-4745, Fax:
(202) 955-5769, Email: boyled@ctt.com.
     1.2 References. All references to Exhibits refer to Exhibits attached to
this Agreement and all such Exhibits are incorporated herein by reference. The
words “herein,” “hereof,” “hereinafter” and words of similar import refer to
this Agreement as a whole and not to any particular Section hereof.
     1.3 Extension of Closing Date. Buyer may extend the Closing Date to no
later than May 25, 2006, provided that Buyer delivers to Seller notice of
Buyer’s intention to extend the Closing Date (the “Closing Date Extension
Notice”) no less than ten (10) days prior to the initial Closing Date.

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2.   PURCHASE AND SALE.

     Subject to the terms and conditions of this Agreement, Seller agrees to
sell, assign and transfer to Buyer and Buyer agrees to purchase from Seller, for
the purchase price set forth in Section 3 hereof, all of Seller’s right, title
and interest in and to the following (collectively, the “Property”):
     2.1 The Real Property, together with the buildings located thereon, and all
associated parking areas, and all other improvements located thereon (the
buildings and such other improvements are referred to herein collectively as the
(“Improvements”); all references hereinafter made to the Real Property shall be
deemed to include all rights, privileges, easements and appurtenances benefiting
the Real Property and/or the Improvements situated thereon, including, without
limitation, all mineral and water rights and all easements, rights-of-way and
other appurtenances used or connected with the beneficial use or enjoyment of
the Real Property;
     2.2 All personal property, equipment, supplies and fixtures (collectively,
the “Personal Property”) listed on Exhibit B attached hereto (as the same shall
be updated for replacement in the ordinary course of business) or otherwise left
on the Real Property at the Close of Escrow (as defined in Section 8.1 hereof)
to the extent owned by Seller and used in connection with the use and operation
of the Property;
     2.3 All of Seller’s interest in any intangible property (expressly
excluding the names “Koll,” “Bren”, “K/B”, “KBS”, “Schreiber”, “SM Brell” or any
derivative thereof, or any name that includes the word “Koll”, the word “Bren”,
the word “K/B”, the word “KBS”, the word “Schreiber”, the phrase “SM Brell” or
any derivative thereof) used or useful in connection with the foregoing,
including, without limitation, all contract rights, warranties, guaranties,
licenses, permits, entitlements, governmental approvals and certificates of
occupancy which benefit the Real Property and/or the Personal Property;
     2.4 Subject to the provisions of Section 5.3 hereof, all of Seller’s
interest in all leases affecting the Real Property as of the Close of Escrow
(the “Leases”); and
     2.5 All of Seller’s interests in the contracts listed on Exhibit C attached
hereto which are either terminable by the owner of the Property upon not more
than thirty (30) days’ notice or which Purchaser otherwise expressly agrees to
assume in accordance with the provisions of Section 5.2 hereof and all contracts
hereafter entered into by Seller to the extent permitted by the provisions of
this Agreement (the “Contracts”).
Notwithstanding anything to the contrary contained herein, the term “Property”
shall expressly exclude any Rents (as such term is defined in Section 10.1
hereof) or any other amounts payable by tenants under the Leases for periods
prior to the Close of Escrow, any Rent or other amounts payable by any former
tenants of the Property, and any judgments, stipulations, orders, or settlements
with any tenants under the Leases or former tenants of the Property (hereinafter
collectively referred to as the “Excluded Property”).

3.   PURCHASE PRICE AND DEPOSIT.

     3.1 Purchase Price. The purchase price for the Property shall be Sixty Six
Million Dollars ($66,000,000) (the “Purchase Price”).
     3.2 Payment of Purchase Price. The Purchase Price shall be payable as
follows:
          3.2.1 Within two (2) business days after the execution of this
Agreement by Buyer and Seller, and as a condition precedent to the effectiveness
hereof, Buyer shall deposit in escrow with Escrow Holder, in cash or current
funds, the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the
“Performance Deposit”). Immediately upon Escrow Holder’s receipt of the
Performance Deposit (the “Opening of Escrow”) the Performance Deposit shall
become nonrefundable, subject to the terms and conditions of this Agreement.

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     Upon expiration of the Due Diligence Period, if Buyer has not previously
terminated this Agreement by its terms, then Buyer shall deposit in escrow with
Escrow Holder, in cash or current funds, the sum of Two Million Dollars
($2,000,000) (the “Transaction Deposit”), which shall become nonrefundable
subject to the terms and conditions of this Agreement. Escrow Holder shall
invest the Transaction Deposit in a federally insured interest-bearing account
acceptable to Seller and Buyer, with all interest accruing thereon credited to
the Purchase Price. For purposes of this Agreement, any interest accruing on the
Performance Deposit and the Transaction Deposit from time to time shall be
deemed part of the Deposit. The Performance Deposit and the Transaction Deposit
are hereinafter collectively referred to as the “Deposit.” Concurrently with the
Close of Escrow, the Deposit (including the Performance Deposit) shall be
credited toward the Purchase Price.
     Buyer agrees that in consideration of Seller’s entering into this Agreement
with Buyer and providing Buyer with the opportunity to purchase the Property in
accordance with the terms and conditions set forth herein, the Performance
Deposit shall be deemed earned in full by Seller as of the execution and
delivery of this Agreement and, notwithstanding anything stated to the contrary
in this Agreement, if this Agreement is terminated by Buyer prior to the
expiration of Due Diligence Period for any reason other than the occurrence of
damage or destruction to any portion of the Property or condemnation to any
portion of the Property that permits Buyer to terminate this Agreement pursuant
to Section 5.4 herein, or the failure of the condition set forth in
Section 7.1(f), the Performance Deposit shall be delivered to Seller and the
Transaction Deposit shall be returned to Buyer. Buyer acknowledges and agrees
that Seller would not have entered into this Agreement with Buyer and provided
Buyer with the opportunity to acquire the Property in accordance with the terms
and conditions of this Agreement but for Buyer’s agreement to treat the
Performance Deposit in the manner provided in this Section 3.2.1.
          3.2.2 Provided all the conditions in Section 7.1 hereof have been
satisfied or waived by Buyer, Buyer shall deposit in cash or current funds with
Escrow Holder no later than 1:00 p.m. (California time) one (1) business day
prior to the Closing Date (as defined in Section 1.1(b) hereof) an amount equal
to the Purchase Price less the Deposit and all interest accrued thereon plus or
minus applicable prorations pursuant to Section 10 hereof.
     3.3 Disposition of Deposit Upon Failure to Close. If the Close of Escrow
fails to occur due to Buyer’s default under this Agreement (all of the
conditions to Buyer’s obligation to close having been satisfied or waived), then
the disposition of the Deposit and all interest accrued thereon shall be
governed by Section 13.1 hereof; if the Close of Escrow fails to occur due to
Seller’s default under this Agreement (all of the conditions to Seller’s
obligation to close having been satisfied or waived), then the Deposit
(including the Performance Deposit) and all interest accrued thereon shall
promptly be refunded to Buyer; and if the Close of Escrow fails to occur due to
the failure of any of the conditions set forth in Sections 7.1 or 7.2 hereof
other than as a result of Buyer’s or Seller’s default under this Agreement, then
the disposition of the Deposit and all interest accrued thereon shall be
governed by Section 9.3 hereof. Notwithstanding the foregoing, the provisions of
this Section 3.3 are expressly subject to the provisions of Section 3.2.1
herein.

4.   PROPERTY INFORMATION; TITLE REVIEW; INSPECTIONS AND DUE DILIGENCE; TENANT
ESTOPPEL CERTIFICATES; CONFIDENTIALITY.

     4.1 Property Information.
          4.1.1 Documents to be Made Available. Seller shall make available to
Buyer within two (2) business days after the date of this Agreement, to the
extent in Seller’s possession or the possession of its property manager, the
following, all of which shall be made available for review and copying (at
Buyer’s cost and expense) at the offices of Seller’s property manager in the
Washington, D.C. metropolitan area or at the Real Property:
          (a) the Leases, together with all applicable subleases, pending leases
and available Lease abstracts;
          (b) listing and other commission agreements;

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          (c) existing land title surveys, if any, for the Real Property,
including any existing as-built surveys (collectively, the “Existing Surveys”);
          (d) any Certificates of Occupancy;
          (e) correspondence files for all tenants under the Leases;
          (f) 2005 Reimbursement Reconciliation, tenant recovery billings and
detail of tenants’ operating and tax expense base year stops;
          (g) breakdown of non-rental revenue including overtime HVAC, tenant
bill backs, and/or storage income;
          (h) schedule of tenant electricity payment methods for relevant
tenants, including sub-meters, direct payments, and/or set rates;
          (i) utility bills for the last twelve (12) months;
          (j) current architectural/mechanical building plans; and
          (k) any environmental, soils, engineering and/or building inspection
reports prepared for Seller or Seller’s predecessors;
          (l) current operating budget;
          (m) operating statements for the past three (3) calendar years;
          (n) . historical occupancy/vacancy schedule for the last thirty-six
(36) months;
          (o) information on any open insurance claims and any closed insurance
claims from the last twelve (12) months; and
          (p) historical and projected capital improvements, including schedule
of outstanding tenant improvements and estimated time to completion.
          4.1.2 Due Diligence Deliveries. Except as otherwise provided below, as
of the date hereof, Buyer acknowledges receipt of the following documents:
          (a) the Argus Financial Analysis for the Property;
          (b) an aged receivables report through Februray 28, 2006;
          (c) schedule of existing subtenants and overage payments due;
          (d) copy of property tax bills/assessments for the last three
(3) years; and
          (e) copies of the Contracts.
The documents set forth in Sections 4.1.1 and 4.1.2 above shall be collectively
referred to as the “Property Information”.
Under no circumstances shall Buyer be entitled to review any appraisals relating
to the Property or any internal financial audits relating to the Property.

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     4.2 Title and Survey Review; Title Policy.
          4.2.1 Delivery of Title Report. Seller shall promptly request the
Title Company to deliver to Buyer a preliminary report or title commitment
covering the Real Property (the “Title Report”), together with copies of all
documents (collectively, the “Title Documents”) referenced in the Title Report.
Buyer, at its option and expense, may (a) obtain a new survey for the Real
Property or (b) cause one or more of the Existing Surveys to be updated or
recertified. Buyer understands and acknowledges that if Buyer elects to obtain a
new survey or an updated or recertified survey for the Real Property the
completion and/or delivery of the surveys or updated or recertified surveys
shall not be a condition precedent to the Close of Escrow. Notwithstanding the
foregoing, Buyer further acknowledges that Seller makes no representations or
warranties, and Seller shall have no responsibility, with respect to the
completeness of the Title Documents made available to Buyer by the Title
Company.
          4.2.2 Title Review and Cure. Commencing from the date of this
Agreement and continuing through and including the Title Review Period, Buyer
shall have the right to approve or disapprove the condition of title to the Real
Property. On or before the expiration of the Title Review Period, Buyer shall
deliver to Seller and the Title Company written notice (“Buyer’s Title Notice”)
of Buyer’s approval or disapproval of the matters reflected in the Title Report
and any Existing Survey; Buyer’s Title Notice delivered by Buyer to Seller must
state that it is a “Buyer’s Title Notice being delivered in accordance with the
provisions of Section 4.2.2 of the Purchase Agreement.” The failure of Buyer to
deliver to Seller Buyer’s Title Notice on or before the expiration of the Title
Review Period shall be deemed to constitute Buyer’s approval of the condition of
title to the Real Property. If Buyer disapproves any matter of title shown in
the Title Report or Existing Survey for the Real Property, then Seller may, but
shall have no obligation to, within two (2) days after their receipt of the
Buyer’s Title Notice for the Real Property (“Seller’s Election Period”), elect
to eliminate or ameliorate to Buyer’s reasonable satisfaction the disapproved
title matters by giving Buyer written notice ( “Seller’s Title Notice”) of those
disapproved title matters, if any, which Seller agrees to so eliminate or
ameliorate by the Closing Date. Buyer acknowledges and agrees that any title
exception disapproved by Buyer shall be deemed ameliorated to Buyer’s reasonable
satisfaction to the extent that Seller either causes such exception to be
removed from the Title Policy (as such term is defined in Section 4.2.3 hereof)
or to be affirmatively insured over. If Seller does not elect to, or is unable
to, eliminate or ameliorate any disapproved title matters, Buyer reasonably
disapproves Seller’s Title Notice, or Seller fails to timely deliver Seller’s
Title Notice, then Buyer shall have the right, upon delivery to Seller and
Escrow Holder (on or before two (2) days following the expiration of Seller’s
Election Period) of a written notice, to either: (a) waive its prior
disapproval, in which event said disapproved matters shall be deemed approved;
or (b) terminate this Agreement and the Escrow (as such term is defined in
Section 9.1 hereof). Failure to take either one of the actions described in
(a) and (b) above shall be deemed to be Buyer’s election to take the action
described in clause (a) above. If Buyer elects to terminate this Agreement as
provided in clause (b) above, this Agreement shall automatically terminate, the
parties shall be released from all further obligations under this Agreement
(except pursuant to any provisions which by their terms survive a termination of
this Agreement), the Deposit shall be immediately returned to Buyer and Buyer
shall immediately return all Property Information to Seller. Buyer shall have
been deemed to have approved any title exception that Seller is not obligated to
remove and to which either Buyer did not object as provided above, or to which
Buyer did object, but with respect to which Buyer did not terminate this
Agreement.
          4.2.3 Delivery of Title Policy at Closing. As a condition precedent to
the Close of Escrow, the Title Company shall have issued and delivered to Buyer,
or shall have committed to issue and deliver to Buyer, with respect to the Real
Property, a Standard Coverage Owner’s Policy of Title Insurance (1992 Form) (the
“Title Policy”) issued by the Title Company as of the date and time of the
recording of the Deed (as such term is defined in Section 6.1 hereof) for the
Real Property, in the amount of the Purchase Price insuring Buyer as owner of
good, marketable and indefeasible fee simple title to the Real Property, subject
only to the Permitted Exceptions (as hereinafter defined). For purposes of this
Agreement, “Permitted Exceptions” shall mean and include (a) any lien to secure
payment of real estate taxes, including special assessments, not delinquent,
(b) all matters which could be revealed or disclosed by a physical inspection or
a survey of the Real Property and matters affecting the Real Property which are
created by or with the written consent of Buyer or which do not materially and
deleteriously affect

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Buyer’s contemplated use of the Real Property; (c) subject to the provisions of
Section 5.3 hereof, the rights of the tenants under the Leases affecting the
Real Property, (d) all exceptions disclosed by the Title Report relating to the
Real Property and which are approved or deemed approved by Buyer in accordance
with Section 4.2.2 hereof, and (e) all applicable laws, ordinances, rules and
governmental regulations (including, without limitation, those relating to
building, zoning and land use) affecting the development, use, occupancy or
enjoyment of the Real Property.
     4.3 Inspections; Due Diligence Period.
          4.3.1 Inspections in General. Commencing from the Effective Date and
continuing through and including the expiration of the Closing Date or earlier
termination of this Agreement, Buyer, its agents, and employees shall have a
limited license (the “License") to enter upon the Real Property for the purpose
of making non-invasive inspections at Buyer’s sole risk, cost and expense.
Before any such entry, Buyer shall provide Seller with a certificate of
insurance naming Seller as an additional insured and with an insurer and
insurance limits and coverage reasonably satisfactory to Seller. All of such
entries upon the Real Property shall be at reasonable times during normal
business hours and after at least 48 hours prior notice to Seller or Seller’s
agent, and Seller or Seller’s agent shall have the right to accompany Buyer
during any activities performed by Buyer on the Real Property. Notwithstanding
anything stated to the contrary herein, Buyer shall have no right to inspect any
of the occupied space in the Real Property, nor shall Buyer contact or speak to
any of the tenants under the Leases, unless Buyer provides Seller with no less
than forty-eight (48) hours prior written notice of such intention and Seller or
Seller’s representative is given the opportunity to be present during such
inspections and/or discussions with tenants; any discussions with tenants must
be limited to their existing tenancy and premises and may not involve any lease
renegotiations and such inspections shall not interfere with the rights of
tenants. At Seller’s request, Buyer shall provide Seller (at no cost to Seller)
with a copy of the results of any tests and inspections made by Buyer, excluding
only market and economic feasibility studies. If any inspection or test disturbs
the Real Property, Buyer will restore the Real Property to the same condition as
existed before the inspection or test. Buyer shall defend, indemnify Seller and
hold Seller, Seller’s trustees, officers, tenants, agents, contractors and
employees and the Real Property harmless from and against any and all losses,
costs, damages, claims, or liabilities, including but not limited to, mechanics’
and materialmen’s liens and Seller’s attorneys’ fees, arising out of or in
connection with Buyer’s, or its agents’, contractors’, employees’, or invitees’
entry upon or inspection of the Real Property. The License shall be deemed
revoked upon termination of this Agreement. The provisions of this Section 4.3.1
shall survive the Close of Escrow or the earlier termination of this Agreement.
          4.3.2 Environmental Inspections. The inspections under Section 4.3.1
may include non-invasive Phase I environmental inspections of the Real Property,
but no Phase II environmental inspections or other invasive inspections or
sampling of soil or materials, including without limitation construction
materials, either as part of the Phase I inspections or any other inspections,
shall be performed without the prior written consent of Seller, which may be
withheld in its sole and absolute discretion, and if consented to by Seller, the
proposed scope of work and the party who will perform the work shall be subject
to Seller’s review and approval. At Seller’s request, Buyer shall deliver to
Seller (at no cost to Seller) copies of any Phase II or other environmental
reports to which Seller consents as provided above.
          4.3.3 Termination During Due Diligence Period. If Buyer determines, in
its sole discretion, before the expiration of the Due Diligence Period, that the
Real Property is unacceptable for Buyer’s purposes, Buyer shall have the right
to terminate this Agreement by giving to Seller notice of termination
(“Termination Notice”) before the expiration of the Due Diligence Period, in
which event Escrow Holder shall remit the Performance Deposit to Seller, Buyer
shall immediately return all Property Information to Seller and, except for
those provisions of this Agreement which expressly survive the termination of
this Agreement, the parties hereto shall have no further obligations hereunder.
If Buyer fails to deliver a Termination Notice to Seller and Escrow Holder on or
before the expiration of the Due Diligence Period, then Buyer shall, subject to
the express provisions contained elsewhere in this Agreement, be deemed to be
satisfied with all aspects of all the Real Property, including, without
limitation, the condition and suitability of all the Real Property for Buyer’s
intended use, and Buyer shall be obligated to acquire the Real Property in
accordance with the provisions of this Agreement. Buyer’s

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delivery of a Termination Notice to Seller with respect to the Real Property
shall constitute Buyer’s election to terminate this Agreement with respect to
the Real Property as provided above in this Section 4.3.3.
     4.4 Tenant Estoppel Certificates. Seller shall use commercially reasonable
efforts to secure and deliver to Buyer by the Closing Date estoppel certificates
for all Leases consistent with the information in the Property Information and
substantially in the form attached hereto as Exhibit D or such form as may be
required under the applicable Leases. Buyer may terminate this Agreement upon
5 days written notice to Seller if, no less than five (5) business days prior to
the Closing Date, Seller fails to deliver to Buyer estoppel certificates
(“Tenant Estoppel Certificates”) in the form attached hereto as Exhibit D or
such form as may be required under any particular Lease, executed by tenants
under Leases covering at least seventy-five percent (75%) of the leased rental
floor area of the Real Property and meeting the foregoing requirements.
     4.5 Contracts. During the Due Diligence Period, Buyer shall provide to
Seller written notice of those Contracts, if any, which are not terminable
without cause by the owner of the Property upon thirty (30) days’ notice or less
which Buyer elects to assume from and after the Closing Date; provided, however,
that, notwithstanding anything stated to the contrary herein, Buyer shall in all
events not be obligated to assume any of Seller’s obligations under, and Seller
shall terminate at Close of Escrow, the management and leasing agreements listed
in Exhibit C attached hereto and made a part hereof and all other Contracts
which are not terminable without cause upon thirty (30) days’ notice or less
which Buyer does not elect to assume, except that, notwithstanding Seller’s
termination of the management and leasing agreement listed in Exhibit C attached
hereto, and in consideration of Seller’s terminating the same, Buyer shall be
responsible for, and Buyer shall assume pursuant to the terms and provisions of
the Assignment of Leases and Contracts and Bill of Sale, as hereinafter defined,
all leasing commissions due and payable (notwithstanding the termination of the
management and leasing agreement) under the management and leasing agreement
after the Close of Escrow arising out of the lease of space in the Property
after the Close of Escrow.
     4.6 Confidentiality. Prior to the Close of Escrow or in the event the Close
of Escrow never occurs, the Property Information and all other information,
other than matters of public record or matters generally known to the public,
furnished to, or obtained through inspection of the Real Property by, Buyer, its
affiliates, lenders, employees, attorneys, accountants and other professionals
or agents relating to the Real Property, will be treated by Buyer, its
affiliates, lenders, employees and agents as confidential, and will not, without
Seller’s approval (not to be unreasonably withheld), be disclosed to anyone
(except as reasonably required in connection with Buyer’s evaluation of the Real
Property) except to Buyer’s consultants who agree to maintain the
confidentiality of such information, and will be returned to Seller by Buyer if
the Close of Escrow does not occur. The terms of this Agreement will not be
disclosed to anyone prior to or after the Close of Escrow except to Buyer’s and
Seller’s consultants who agree to maintain the confidentiality of such
information and Seller and Buyer agree not to make any public announcements or
public disclosures or communicate with any media with respect to the subject
matter hereof without the prior written consent of the other party (in their
reasonable discretion). The confidentiality provisions of this Section 4.6 shall
not apply to any disclosures made by Buyer or Seller as required by the
Securities and Exchange Commission, the New York Stock Exchange, applicable law,
rule or regulation, by court order, or in connection with any subpoena served
upon Buyer or Seller; provided Buyer and Seller shall provide each other with
written notice before making any such disclosure.
5. OPERATIONS AND RISK OF LOSS
     5.1 Ongoing Operations. During the pendency of this Agreement, but subject
to the limitations set forth below, Seller shall carry on its businesses and
activities relating to the Real Property substantially in the same manner as it
did before the date of this Agreement. The new and pending lease transactions
(the “New and Pending Lease Transactions”) reflected on Schedule 1 attached
hereto shall be deemed approved by Buyer for purposes of this Agreement.
     5.2 New Contracts. Prior to the expiration of the Due Diligence Period,
Seller may without Buyer’s consent enter into contracts relating to the Real
Property which are terminable without cause on

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not more than 30-days’ notice or which will not be an obligation affecting the
Real Property after the Close of Escrow, provided that Seller provides Buyer
with written notice of the same. Following the expiration of the Due Diligence
Period, Seller will not enter into any contract that will be an obligation
affecting the Real Property subsequent to the Close of Escrow (except contracts
entered into in the ordinary course of business that are terminable without
cause on 30-days’ notice), without the prior consent of the Buyer, which shall
not be unreasonably withheld or delayed; provided, however, notwithstanding
anything stated to the contrary herein, Seller may, at any time without Buyer’s
consent, enter into (i) any contract required for Seller to comply with terms
and provisions contained in the Leases, or (ii) any contract necessary for
health and/or safety reasons relating to the Real Property, so long as Seller
provides Buyer with written notice of the same, together with a copy of any such
contract to be entered into by Seller. Notwithstanding the foregoing, Seller
shall use reasonable efforts (without cost or liability to Seller) to cause any
contract entered into by Seller pursuant to clauses (i) and (ii) above to be
terminable without cause on 30-days’ notice.
     5.3 Leasing Arrangements. Prior to the expiration of the Due Diligence
Period, Seller may without Buyer’s consent enter into new leases of space in the
Real Property and amendments, expansions and renewals of the Leases, provided
that Seller provides Buyer with prior written notice of the same and provided,
further, that no such leases are with the Seller or any affiliate of the Seller.
Following the expiration of the Due Diligence Period, except for the New and
Pending Lease Transactions, Seller shall obtain Buyer’s consent, which Buyer may
withhold in its sole discretion, before entering into any new lease of space in
the Real Property and before entering into a Lease amendment, expansion, or
renewal. Buyer shall be deemed to have consented to any new lease or any Lease
amendment, expansion, or renewal if it has not notified Seller specifying with
particularity the matters to which Buyer objects, within 5 business days after
its receipt of Seller’s written request for consent, together with a copy of the
Lease amendment, expansion, or renewal or the new lease. At the Close of Escrow,
Buyer shall reimburse Seller for commissions, legal fees, the cost of tenant
improvements, and all other leasing costs and expenses paid by Seller with
respect to all New and Pending Lease Transactions and with respect to all other
Lease amendments, expansions or renewals or new leases that were entered into
pursuant to this Section 5.3 provided that such commissions, fees, costs and/or
expenses were incurred, due and payable after the Effective Date, and at Close
of Escrow, shall assume in writing (pursuant to the Assignment of Leases and
Contracts and Bill of Sale) Seller’s obligations (whether arising before or
after the Closing Date) under such new leases and Lease amendments, expansions
or renewals. At the Close of Escrow, Buyer shall be entitled to a credit towards
the Purchase Price for all leasing costs set forth in Schedule 2 attached hereto
to the extent the same remain unpaid at the Close of Escrow, and, at Close of
Escrow, Buyer shall assume in writing (pursuant to the Assignment of Leases and
Contracts and Bill of Sale) Seller’s obligations (whether arising before or
after the Closing Date but in all events after the Effective Date) related to
such leasing costs.
     5.4 Damage or Condemnation. Risk of loss resulting from any condemnation or
eminent domain proceeding which is commenced or has been threatened against the
Real Property before the Close of Escrow, and risk of loss to the Real Property
due to fire, flood or any other cause before the Close of Escrow, shall remain
with Seller. If before the Close of Escrow the Real Property or any portion
thereof shall be materially damaged, or if the Real Property or any material
portion thereof shall be subjected to a bona fide threat of condemnation or
shall become the subject of any proceedings, judicial, administrative or
otherwise, with respect to the taking by eminent domain or condemnation, then
Buyer may elect not to acquire the Real Property by delivering written notice of
such election to Seller within five (5) days after Buyer learns of the damage or
taking, in which event Buyer shall no longer be obligated to purchase, and
Seller shall no longer be obligated to sell, the Real Property and the Deposit
(including the Performance Deposit) shall be returned to Buyer. If the Closing
Date is within the aforesaid 5-day period, then the Close of Escrow shall be
extended to the next business day following the end of said 5-day period. If no
such election is made, and in any event if the damage is not material, this
Agreement shall remain in full force and effect, the purchase contemplated
herein, less any interest taken by eminent domain or condemnation, shall be
effected with no further adjustment, and upon the Close of Escrow, Seller shall
assign, transfer and set over to Buyer all of the right, title and interest of
Seller in and to any awards that have been or that may thereafter be made for
such taking, and Seller shall assign, transfer and set over to Buyer any
insurance proceeds that may thereafter be made for such damage or destruction
giving Buyer a credit at the Close of Escrow for any deductible under such
policies. For

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purposes of this Section 5.4, the phrase(s) (i) “Material damage” or “Materially
damaged” means damage reasonably exceeding ten percent of the Purchase Price of
the Real Property, and (ii) “material portion” means any portion of the Real
Property that has a “fair market value” exceeding 10% of the Purchase Price of
the Real Property.
     5.5 Schedule of Personal Property. Prior to the expiration of the Due
Diligence Period, Seller shall deliver to Buyer a schedule of the Personal
Property, which, when delivered to Buyer, shall be deemed attached to this
Agreement as Exhibit B.

6.   SELLER’S AND BUYER’S DELIVERIES

     6.1 Seller’s Deliveries into Escrow. No less than one (1) business day
prior to the Closing Date, Seller shall deliver into Escrow (as such term is
defined in Section 9 hereof) to the Escrow Holder the following:
          (a) Deed. A deed (the “Deed”) in the form attached hereto as
Exhibit E, executed and acknowledged by Seller, conveying to Buyer Seller’s
title to the Real Property.
          (b) Assignment of Leases and Contracts and Bill of Sale. An Assignment
of Leases and Contracts and Bill of Sale (“Assignment of Leases and Contracts
and Bill of Sale”) in the form of Exhibit F attached hereto, executed by Seller.
          (c) State Law Disclosures. Such disclosures and reports as are
required by applicable state and local law in connection with the conveyance of
the Real Property.
          (d) FIRPTA. A Foreign Investment in Real Property Tax Act affidavit
executed by Seller substantially in the form of Exhibit G attached hereto.
          (e) Additional Documents. Any additional documents that Escrow Holder
or the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.
Seller acknowledges and agrees that, notwithstanding the foregoing, the Deed and
any documents required to record the Deed shall be delivered to the Title
Company’s office in Washington, DC, at the address set forth in Section 6.2
below.
     6.2 Buyer’s Deliveries into Escrow. No less than one (1) business day prior
to the Closing Date, Buyer shall deliver into Escrow to the Escrow Holder (or,
at Buyer’s election, as to everything set forth below other than the Purchase
Price, to the office of Chicago Title Insurance Company located at 1129 20th
Street, NW, Suite 300, Washington, DC 20036, Attention: Dianne E. Boyle,
Assistant Vice President and Commercial Counsel, Telephone: (202) 263-4745, Fax:
(202) 955-5769, Email: boyled@ctt.com) the following:
          (a) Purchase Price. The Purchase Price, less the Deposit that is
applied to the Purchase Price, plus or minus applicable prorations, deposited by
Buyer with the Escrow Holder in immediate, same-day federal funds wired for
credit into the Escrow Holder’s escrow account and deposited in Escrow Holder’s
escrow account no later than 1:00 p.m. PST one business day prior to the Closing
Date.
          (b) Assignment of Leases and Contracts and Bill of Sale. An Assignment
of Leases and Contracts and Bill of Sale executed by Buyer.
          (c) State Law Disclosures. Such disclosures and reports as are
required by applicable state and local law in connection with the conveyance of
the Real Property.

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          (d) Additional Documents. Any additional documents that Escrow Holder
or the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.
     6.3 Closing Statements/Escrow Fees; Tenant Notices. Concurrently with the
Close of Escrow, Seller and Buyer shall deposit with the Escrow Holder executed
closing statements consistent with this Agreement in the form required by the
Escrow Holder and, Seller and Buyer shall execute at the Close of Escrow, and
deliver to each tenant immediately after the Close of Escrow, tenant notices
regarding the sale of the Real Property in substantially the form of Exhibit H
attached hereto, or such other form as may be required by applicable state law.
     6.4 Post-Closing Deliveries. Immediately after the Close of Escrow, to the
extent in Seller’s possession, Seller shall deliver to the offices of Buyer’s
property manager: the original Leases; copies or originals of all contracts,
receipts for deposits, and unpaid bills; all keys, if any, used in the operation
of the Real Property; and, if in Seller’s possession or control, any “as-built”
plans and specifications of the Improvements.

7.   CONDITIONS TO BUYER’S AND SELLER’S OBLIGATIONS

     7.1 Conditions to Buyer’s Obligations. The Close of Escrow and Buyer’s
obligation to consummate the transaction contemplated by this Agreement are
subject to the satisfaction of the following conditions for Buyer’s benefit (or
Buyer’s waiver thereof in writing, it being agreed that Buyer may waive any or
all of such conditions) on or prior to the Closing Date or on the dates
designated below for the satisfaction of such conditions:
          (a) All of Seller’s representations and warranties contained herein
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date, subject to any qualifications hereafter
made to any of Seller’s representations as expressly provided for in
Section 11.1 hereof and subject to Buyer’s rights and remedies with respect to
any such qualifications as expressly provided in Section 11.1;
          (b) As of the Closing Date, Seller shall have performed its respective
obligations hereunder and all deliveries to be made at Close of Escrow by Seller
shall have been tendered;
          (c) There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened in
writing against Seller, the Property, or Seller’s interest therein that would
adversely affect Seller’s ability to perform its respective obligations under
this Agreement;
          (d) There shall exist no pending or threatened action, suit or
proceeding with respect to Seller before or by any court or administrative
agency which seeks to restrain or prohibit, or to obtain damages or a discovery
order with respect to, this Agreement or the consummation of the transaction
contemplated hereby;
          (e) No less than five (5) business days prior to the Closing Date,
Seller shall have delivered or caused to be delivered to Buyer, with respect to
the Real Property, Tenant Estoppel Certificates covering, in the aggregate, at
least seventy-five percent (75%) of the leased rental floor area of the Real
Property, which estoppel certificates shall be consistent with the information
set forth in the Property Information; and
          (f) Seller shall have received all third party consents and approvals
from all third parties from whom such consents and approvals are required, but
only to the extent Seller’s failure to obtain such consents and/or approvals
would prevent Seller from consummating the Close of Escrow.
If, notwithstanding the nonsatisfaction of any such condition, the Close of
Escrow occurs, there shall be no liability on the part of Seller for breaches of
representations and warranties of which Buyer had actual knowledge as of the
Close of Escrow.

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     7.2 Conditions to Seller’s Obligations.
          The Close of Escrow and Seller’s obligations to consummate the
transaction contemplated by this Agreement are subject to the satisfaction of
the following conditions for Seller’s benefit (or Seller’s waiver thereof in
writing, it being agreed that Seller may waive any or all of such conditions) on
or prior to the Closing Date or the dates designated below for the satisfaction
of such conditions:
          (a) All of Buyer’s representations and warranties contained herein
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date;
          (b) As of the Closing Date, Buyer has performed its obligations
hereunder and all deliveries to be made at Close of Escrow by Buyer shall have
been tendered including, without limitation, the deposit with Escrow Holder of
the amounts set forth in Section 6.2(a) hereof;
          (c) There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened in
writing against Buyer that would materially and adversely affect Buyer’s ability
to perform its obligations under this Agreement; and
          (d) There shall exist no pending or threatened action, suit or
proceeding with respect to Buyer before or by any court or administrative agency
which seeks to restrain or prohibit, or to obtain damages or a discovery order
with respect to, this Agreement or the consummation of the transaction
contemplated hereby;
          (e) Seller shall have received all third party consents and approvals
from (i) all governmental bodies from whom such consents and approvals are
necessary in order to consummate the Close of Escrow, and (ii) all parties from
whom such consents or approvals are necessary under all contracts, covenants and
other agreements relating to the Real Property and which have been recorded
against the Real Property or are contained in the Property Information made
available to Buyer, but only to the extent Seller’s failure to obtain such
consents and/or approvals would prevent Seller from consummating the Close of
Escrow; and
          (f) Seller shall have received a full general release signed by the
broker, if any, referred to in Section 14 hereof, which shall be in form and
substance reasonably acceptable to Seller, and shall release Seller from all
costs, obligations, liabilities, commissions, fees, and claims arising from the
transaction contemplated by this Agreement upon payment of the agreed upon
commission.

8.   CLOSE OF ESCROW; POSSESSION.

     8.1 “Close of Escrow” shall mean and refer to Seller’s receipt of the
Purchase Price and the other amounts due Seller in accordance with the
provisions of Section 9.1(b) below. The Escrow and Buyer’s right to purchase the
Real Property will terminate automatically if the Close of Escrow does not occur
on or before 1:00 p.m. PST on the Closing Date.
     8.2 Sole exclusive possession of the Real Property, subject only to the
Permitted Exceptions, shall be delivered to Buyer on the Closing Date.

9.   ESCROW.

     9.1 Closing. The escrow (the “Escrow”) for the consummation of this
transaction shall be established with Escrow Holder at the address indicated in
Section 15.1 hereof by the deposit of an original signed copy of this Agreement
with Escrow Holder contemporaneously with the execution hereof. This Agreement
shall constitute both an agreement among Buyer and Seller and escrow
instructions for Escrow Holder. If Escrow Holder requires separate or additional
escrow instructions which it deems necessary for its protection, Seller and
Buyer hereby agree promptly upon request by Escrow Holder to execute and deliver
to Escrow Holder such separate or additional escrow instructions (the
“Additional

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Instructions”). In the event of any conflict or inconsistency between this
Agreement and the Additional Instructions, this Agreement shall prevail and
govern, and the Additional Instructions shall so provide. The Additional
Instructions shall not modify or amend the provisions of this Agreement unless
otherwise agreed to in writing by Seller and Buyer.
     On the Closing Date, provided that the conditions set forth in Sections 7.1
and 7.2 hereof have been satisfied or waived, Escrow Holder shall take the
following actions in the order indicated below:
          (a) With respect to all closing documents delivered to Escrow Holder
hereunder, and to the extent necessary, Escrow Holder is authorized to insert
into all blanks requiring the insertion of dates the date of the recordation of
the Deed or such other date as Escrow Holder may be instructed in writing by
Seller and Buyer;
          (b) Deliver to Seller, in cash or current funds, the Purchase Price,
plus or minus, as the case may be, the amounts determined in accordance with the
provisions of Section 10 hereof, Buyer’s signed counterparts of the Assignment
of Leases and Contracts and Bill of Sale and conformed copies of the recorded
Deed;
          (c) Record the Deed in the official records of the County in which the
Real Property is located;
          (d) Deliver to Buyer those items referred to in Section 6.1 hereof and
a conformed copy of the recorded Deed;
          (e) Cause the Title Company to issue the Title Policy for the Real
Property in accordance with the provisions of Section 4.2.3 hereof; and
          (f) Deliver to Seller and Buyer a final closing statement which has
been certified by Escrow Holder to be true and correct.
The provisions of this Section 9.1 are subject to Buyer’s right to deliver all
documents required to be delivered by Buyer hereunder to the Title Company’s
office in Washington, DC at the address set forth in Section 6.1 hereof.
     9.2 Escrow and Title Charges.
          (a) Upon the Close of Escrow, escrow, title charges and other closing
costs shall be allocated between Seller and Buyer as follows:
               (i) Seller shall pay: the grantor recording tax payable in
connection with the recording of the Deed; and one-half (1/2) of any escrow fees
or similar charges of Escrow Holder and the Title Company.
               (ii) Buyer shall pay: the premiums for the title policy,
including, but not limited to, the premium for ALTA extended coverage, if
required by Buyer; one-half (1/2) of any escrow fees or similar charges of
Escrow Holder and the Title Company; and the state grantee tax and local grantee
tax payable in connection with the consummation of the transactions contemplated
by this Agreement.
               (iii) Buyer shall pay all costs incurred in connection with
Buyer’s updating or recertifying the Existing Surveys or obtaining any surveys
for the Real Property.
               (iv) Except to the extent otherwise specifically provided herein,
all other expenses incurred by Seller and Buyer with respect to the negotiation,
documentation and closing of this transaction, including, without limitation,
Buyer’s and Seller’s attorneys’ fees, shall be borne and paid by the party
incurring same.

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          (b) If the Close of Escrow does not occur by reason of Buyer’s or
Seller’s default under this Agreement, then all escrow and title charges
(including cancellation fees) shall be borne by the party in default.
     9.3 Procedures Upon Failure of Condition. Except as otherwise expressly
provided herein, if, following the expiration of the Due Diligence Period, any
condition set forth in Sections 7.1 or 7.2 hereof is not timely satisfied or
waived for a reason other than the default of Buyer or Seller in the performance
of its respective obligations under this Agreement:
          (a) This Agreement, the Escrow and the respective rights and
obligations of Seller and Buyer hereunder shall terminate (other than the
indemnity and insurance obligations of Buyer set forth in Sections 4.3.1 and 14
hereof and the confidentiality provisions of Section 4.6 hereof which shall
survive such termination) at the written election of the party for whose benefit
such condition was imposed, which written election must be made (i) within three
(3) business days after the date such condition was to be satisfied, or (ii) on
the date the Close of Escrow occurs, whichever occurs first;
          (b) Escrow Holder shall promptly return the Transaction Deposit and
the Performance Deposit to Buyer, and Escrow Holder shall promptly return to
Seller and Buyer all documents deposited by them respectively, which are then
held by Escrow Holder;
          (c) Buyer shall return to Seller the Property Information and Buyer
shall deliver to Seller all Work Product (as such term is defined in
Section 15.3 hereof); and
          (d) Any escrow cancellation and title charges shall be borne equally
by Seller and Buyer.
10. PRORATIONS. If the Purchase Price is received by Seller’s depository bank in
time to credit to Seller’s account on the Closing Date, the day the Close of
Escrow occurs shall belong to Buyer and all prorations hereinafter provided to
be made as of the Close of Escrow shall each be made as of the end of the day
before the Closing Date. If the cash portion of the Purchase Price is not so
received by Seller’s depository bank on the Closing Date, then the day the Close
of Escrow occurs shall belong to Seller and such proration shall be made as of
the end of the day that is the Closing Date. In each such proration set forth
below, the portion thereof applicable to periods beginning as of Close of Escrow
shall be credited to Buyer or charged to Buyer as applicable and the portion
thereof applicable to periods ending as of Close of Escrow shall be credited to
Seller or charged to Seller as applicable.
     10.1 Collected Rent. All rent (including, without limitation, all base
rents, additional rents and retroactive rents, and expressly excluding tenant
reimbursements for Operating Costs, as hereinafter defined) and all other income
(and any applicable state or local tax on rent) (hereinafter collectively
referred to as “Rents”) collected under Leases in effect on the Closing Date
shall be prorated as of the Close of Escrow. Uncollected Rent (“Uncollected
Rent”) shall not be prorated and, to the extent due and payable for the period
prior to the Close of Escrow, shall remain the property of Seller. After the
Close of Escrow, Buyer shall deliver to Seller any and all Uncollected Rent
accrued as of the Closing Date to the extent subsequently collected by Buyer
unless directed by the tenant to the contrary; provided, however, that Buyer
shall apply Rents received after the Closing Date, first, to payment of the
current Rents then due to Buyer and, thereafter, to Uncollected Rent
attributable to the period prior to the Closing Date unless directed by the
tenant to the contrary. Any prepaid Rents or other rents received by Seller for
the period following the Closing Date shall be paid over by Seller to Buyer.
Buyer will make reasonable efforts, without incurring enforcement costs and
without suit, to collect any Rents applicable to the period before the Close of
Escrow including, without limitation, sending to tenants bills for the payment
of past due Rents during the first twelve (12) month period following the
Closing Date. Seller may pursue collection of any Rents that were past due as of
the Closing Date, provided that Seller shall have no right to terminate any
Lease or any tenant’s occupancy under any Lease in connection therewith.
     10.2 Operating Costs and Additional Rent Reconciliation. Seller, as
landlord under the Leases, is currently collecting from tenants under the Leases
additional rent to cover taxes, insurance, utilities (to the extent not paid
directly by tenants), common area maintenance and other operating costs and
expenses (collectively, “Operating Costs”) in connection with the ownership,
operation,

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maintenance and management of the Real Property. To the extent that any
additional rent (including, without limitation, estimated payments for Operating
Costs) is paid by tenants to the landlord under the Leases based on an estimated
payment basis (monthly, quarterly, or otherwise) for which a future
reconciliation of actual Operating Costs to estimated payments is required to be
performed at the end of a reconciliation period, Buyer and Seller shall make an
adjustment at the Close of Escrow for the applicable reconciliation period (or
periods, if the Leases do not have a common reconciliation period) based on a
comparison of the actual Operating Costs to the estimated payments at the Close
of Escrow. If, as of the Close of Escrow, Seller has received additional rent
payments in excess of the amount that tenants will be required to pay, based on
the actual Operating Costs as of the Close of Escrow, Buyer shall receive a
credit in the amount of such excess. If, as of the Close of Escrow, Seller has
received additional rent payments that are less than the amount that tenants
would be required to pay based on the actual Operating Costs as of the Close of
Escrow, Seller shall receive a credit in the amount of such deficiency;
provided, however, Seller shall not be entitled to the portion, if any, of such
deficiency for which Seller received a credit at the Close of Escrow under
clause (b) of Section 10.3 hereof. Operating Costs that are not payable by
tenants either directly or reimbursable under the Leases shall be prorated
between Seller and Buyer and shall be reasonably estimated by the parties if
final bills are not available.
     10.3 Taxes and Assessments. Real estate taxes and assessments imposed by
any governmental authority (“Taxes”) with respect to the Real Property for the
relevant tax year in which the Real Property is being sold and that are not yet
due and payable or that have not yet been paid and that are not (and will not
be) reimbursable by tenants under the Leases (or under leases entered into after
the Close of Escrow for vacant space existing at the Close of Escrow) as
Operating Costs shall be prorated as of the Close of Escrow based upon the most
recent ascertainable assessed values and tax rates and based upon the number of
days Buyer and Seller will have owned the Real Property during such relevant tax
year. Seller shall receive a credit for any Taxes paid by Seller and applicable
to (a) any period after the Close of Escrow, and (b) any period before the Close
of Escrow to the extent reimbursable as Operating Costs by (i) existing tenants
under the Leases and not yet received from such tenants, or (ii) future tenants
that may execute leases covering space in the Real Property that is vacant as of
the Close of Escrow. If, as of the Closing Date, Seller is protesting or has
notified Buyer, in writing, that it has elected to protest any Taxes for the
Real Property, then Buyer agrees that Seller shall have the right (but not the
obligation), after the Closing Date, to continue such protest. In such case, any
Taxes paid by Buyer after the Closing Date with respect to the Real Property
shall be paid under protest and Buyer shall promptly notify Seller of any
payments of Taxes made by Buyer with respect to the Real Property. Buyer further
agrees to cooperate with Seller and execute any documents requested by Seller in
connection with such protest. As to the Real Property, any tax savings received
(“Tax Refunds”) for the relevant tax year under any protest, whether filed by
Seller or Buyer, shall be prorated between the parties based upon the number of
days, if any, Seller and Buyer respectively owned the Real Property during such
relevant tax year; if such protest was filed by a Seller, any payment of Tax
Refunds to Buyer shall be net of any fees and expenses payable to any third
party for processing such protest, including attorneys’ fees. Seller shall have
the obligation to refund to any tenants in good standing as of the date of such
Tax Refund, any portion of such Tax Refund paid to Seller which may be owing to
such tenants, which payment shall be paid to Buyer within fifteen (15) business
days of delivery to Seller by Buyer of written confirmation of such tenants’
entitlement to such Tax Refunds. Buyer shall have the obligation to refund to
tenants in good standing as of the date of such Tax Refund, any portion of such
Tax Refund paid to it which may be owing to such tenants. Seller and Buyer agree
to notify the other in writing of any receipt of a Tax Refund within fifteen
(15) business days of receipt of such Tax Refund. To the extent either party
obtains a Tax Refund, a portion of which is owed to the other party, the
receiving party shall deliver the Tax Refund to the other party within fifteen
(15) business days of its receipt. If Buyer or Seller fail to pay such amount(s)
to the other as and when due, such amount(s) shall bear interest from the date
any such amount is due to Seller or Buyer, as applicable, until paid at the
lesser of (a) twelve percent (12%) per annum and (b) the maximum amount
permitted by law. The obligations set forth herein shall survive the Close of
Escrow and Buyer agrees that, as a condition to the transfer of the Property by
Buyer, Buyer will cause any transferee to assume the obligations set forth
herein.
     10.4 Leasing Commissions, Tenant Improvements and Contracts. At Close of
Escrow, Buyer shall assume (pursuant to the Assignment of Leases and Contracts
and Bill of Sale) the obligation to pay all (a) leasing costs that are due and
payable or become due and payable after the Effective Date

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and prior to the Closing Date to the extent that the same (i) arise from a new
lease or any Lease amendment, extension or expansion hereafter entered into by
Seller in accordance with the terms and conditions of this Agreement, or
(ii) arise out of any New and Pending Lease Transactions (including, without
limitation, the commissions and/or tenant improvements referenced in Section 5.3
hereof), and (b) leasing costs that are due after the Closing Date. Buyer will
assume the obligations arising from and after the Closing Date under the
Contracts that Buyer has elected or is otherwise obligated to assume pursuant to
the provisions of Section 4.5 hereof. At Close of Escrow, Seller shall provide
Buyer an accounting of all such leasing costs that have been incurred and an
accounting of such leasing costs that have been paid.
     10.5 Tenant Deposits. All tenant security deposits listed in Schedule 3
attached hereto, together with all tenant security deposits received by Seller
after the Effective Date, shall, to the extent not hereafter applied to tenant
obligations under the Leases, be transferred or credited to Buyer at the Close
of Escrow or placed in escrow if required by law. Seller agrees, from and after
the Effective Date and prior to the Closing Date, not to apply any tenant
security deposits to tenant obligations under the Leases unless any tenant is 60
or more days in arrears in payments under the applicable Lease. As of the Close
of Escrow, Buyer shall assume Seller’s obligations related to tenant security
deposits. Buyer will indemnify, defend, and hold Seller harmless from and
against all demands and claims made by tenants arising out of the transfer or
disposition of any security deposits and will reimburse Seller for all
attorneys’ fees incurred or that may be incurred as a result of any such claims
or demands as well as for all loss, expenses, verdicts, judgments, settlements,
interest, costs and other expenses incurred or that may be incurred by Seller as
a result of any such claims or demands by tenants.
     10.6 Utilities and Utility Deposits. Utilities for the Real Property
(excluding utilities for which payment is made directly by tenants), including
water, sewer, electric, and gas, based upon the last reading of meters prior to
the Close of Escrow, shall be prorated. Seller shall be entitled to a credit for
all security deposits held by any of the utility companies providing service to
the Real Property. Seller shall endeavor to obtain meter readings on the day
before the Closing Date, and if such readings are obtained, there shall be no
proration of such items and Seller shall pay at Close of Escrow the bills
therefor for the period to the day preceding the Close of Escrow, and Buyer
shall pay the bills therefor for the period subsequent thereto. If the utility
company will not issue separate bills, Buyer will receive a credit against the
Purchase Price for Seller’s portion and will pay the entire bill prior to
delinquency after Close of Escrow. If Seller has paid utilities no more than
30 days in advance in the ordinary course of business, then Buyer shall be
charged its portion of such payment at Close of Escrow. Buyer shall be
responsible for making any security deposits required by utility companies
providing service to the Real Property.
     10.7 Owner Deposits. Seller shall receive a credit at the Close of Escrow
for all bonds, deposits, letters of credit, set aside letters or other similar
items, if any, that are outstanding with respect to the Real Property that have
been provided by Seller or any of its affiliates to any governmental agency,
public utility, or similar entity (collectively, “Owner Deposits”) to the extent
assignable to Buyer and to the extent disclosed in Schedule 5 attached hereto.
To the extent any Owner Deposits are not assignable to Buyer, Buyer shall
replace such Owner Deposits and obtain the release of Seller (or its affiliates)
from any obligations under such Owner Deposits. To the extent that any funds are
released as a result of the termination of any Owner Deposits for which Seller
did not get a credit, such funds shall be delivered to Seller immediately upon
their receipt.
     10.8 Percentage Rents. Percentage rents (“Percentage Rents”) actually
collected for the month in which the Close of Escrow occurs shall be prorated as
of the Closing Date. Percentage Rents due after the Close of Escrow shall not be
prorated; provided, however, after Buyer has completed any reconciliation of
actual Percentage Rents payable and estimated Percentage Rents paid by the
subject tenants, and all reconciled amounts have been paid, a reconciliation
shall be made between Seller and Buyer with regard to such Percentage Rents.
Pursuant to such reconciliation, Seller and Buyer shall be entitled to their
proportionate share of all Percentage Rents paid for the subject fiscal Lease
year used to calculate each tenant’s Percentage Rents (less any out-of-pocket
costs incurred in collecting said amounts, which shall belong to Buyer) based on
the number of days of such fiscal year Seller and Buyer owned the Property (and
adjusted for any amount of Percentage Rent prorated at Closing or received by
Seller or Buyer). As used in this paragraph, the term “Percentage Rents” shall
not include and shall have

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deducted from such Percentage Rent amount any “base” or “minimum” rent component
which is payable each month (regardless of actual sales), which “base” or
“minimum” rent component shall be prorated or otherwise handled in the manner
provided in this Agreement. Buyer will make reasonable efforts, without suit, to
collect all Percentage Rents payable after the Close of Escrow and relating to
the period prior to the Close of Escrow, and all Percentage Rents which are
delinquent as of the Close of Escrow, including, without limitation, sending to
tenants bills for the payment of the same. Seller may pursue collection of all
Percentage Rents payable after the Close of Escrow and relating to the period
prior to the Close of Escrow and all Percentage Rents which are delinquent as of
the Close of Escrow, provided that Seller shall have no right to terminate any
Lease or any tenant’s occupancy under any Lease in connection therewith.
     10.9 Final Adjustment After Closing. If final prorations cannot be made at
the Close of Escrow for any item being prorated under this Section 10, then,
provided Buyer or Seller identify any such proration (“Post Closing Proration”)
in writing before the Close of Escrow, Buyer and Seller agree to allocate such
items on a fair and equitable basis as soon as invoices or bills are available
and applicable reconciliation with tenants have been completed, with final
adjustment to be made as soon as reasonably possible after the Close of Escrow
(but in no event later than ninety (90) days after the Close of Escrow, except
that adjustments arising from any tax protest under Section 10.3 or from
Percentage Rents under Section 10.8 hereof shall not be subject to such 90 day
limitation, but shall be made as soon as reasonably possible), to the effect
that income and expenses are received and paid by the parties on an accrual
basis with respect to their period of ownership. Payments in connection with the
final adjustment shall be due no later than ninety (90) days after the Close of
Escrow, except that adjustments arising from any tax protest under Section 10.3
or relating to Percentage Rents under Section 10.8 hereof shall not be subject
to such 90 day limitation, but shall be made as soon as reasonably possible.
Seller shall have reasonable access to, and the right to inspect and audit,
Buyer’s books to confirm the final prorations for a period of one (1) year after
the Close of Escrow. Notwithstanding anything to the contrary stated in this
Section 10, except for any reconciliation arising out of a tax protest under
Section 10.3 hereof, or arising out of Percentage Rents under Section 10.8
hereof, and except for any Post Closing Prorations (which must be determined and
paid within ninety (90) days after the Close of Escrow), all prorations made
under this Section 10 shall be final as of the Close of Escrow and shall not be
subject to further adjustment (whether due to an error or for any other reason)
after the Close of Escrow.

11.   SELLER’S REPRESENTATIONS AND WARRANTIES; AS-IS.

     11.1 Seller’s Representations and Warranties. In consideration of Buyer’s
entering into this Agreement and as an inducement to Buyer to purchase the Real
Property from Seller, Seller makes the following representations and warranties
to Buyer:
          (a) Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, and is
duly qualified to transact business in the Commonwealth of Virginia. Seller has
the legal right, power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby, and the execution, delivery and
performance of this Agreement have been duly authorized and no other action by
Seller is requisite to the valid and binding execution, delivery and performance
of this Agreement, except as otherwise expressly set forth herein.
          (b) There is no agreement to which Seller is a party or to Seller’s
Actual Knowledge binding on Seller which would prevent Seller from consummating
the transaction contemplated by this Agreement.
          (c) To Seller’s Actual Knowledge, except as disclosed in Schedule 4
attached hereto and made a part hereof, Seller has received no written notice of
any pending actions, suits, proceedings, or claims threatened in any court or by
or before any federal, state, county, or municipal department, commission,
board, bureau, agency, or other governmental instrumentality which would prevent
consummation by Seller of the sale of the Property or adversely affect the
performance of any of Seller’s other obligations hereunder to be performed prior
to, at, or after Closing.

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          (d) To Seller’s Actual Knowledge, except as disclosed in Schedule 4
attached hereto and made a part hereof, Seller has not received any written
notice from any governmental agency of any violation of any laws, ordinances,
rules or administrative or judicial orders affecting or regarding the Property,
including with regard to any environmental matters affecting the Property.
          (e) To Seller’s Actual Knowledge, neither Seller nor any of its
respective affiliates or constituents, nor any of their respective brokers or
other agents acting in any capacity in connection with the transactions
contemplated by this Agreement is or will be (a) conducting any business or
engaging in any transaction or dealing with any person appearing on the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”) list of
restrictions and prohibited persons (“Prohibited Persons”) (which lists can be
accessed at the following web address: http://www.ustreas.gov/offices/
enforcement/ofac/), including the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Prohibited Person; (b)
dealing in, or otherwise engaging in any transaction relating to, any property
or interests in property blocked pursuant to Executive Order No. 13224 dated
September 24, 2001, relating to “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism”; or
(c) engaging in or conspiring to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempting to violate, any
of the prohibitions set forth in any U.S. anti-money laundering law.
For purposes of this Section 11.1, the phrase “To Seller’s Actual Knowledge”
shall mean the actual (and not implied, imputed, or constructive) knowledge of
Peter Potrykus (whom the Seller represents is the asset manager for the Real
Property), without any inquiry or investigation of any other parties, including,
without limitation, the tenants and the property manager of the Real Property.
The representations and warranties made by Seller in this Agreement shall
survive the recordation of the Deed for a period of six (6) months and any
action for a breach of Seller’s representations or warranties must be made and
filed within said six (6) month period. If, after the Effective Date, but before
the Close of Escrow, Seller becomes aware of any facts or changes in
circumstances that would cause any of its representations and warranties in this
Agreement to be untrue at Close of Escrow, Seller may notify Buyer in writing of
such fact. In such case, or in the event Buyer obtains information which would
cause any of Seller’s representations and warranties to be untrue at Close of
Escrow, Buyer, as its sole and exclusive remedy, shall have the right to either
(i) terminate this Agreement, in which case the Transaction Deposit shall be
immediately returned to Buyer, the Performance Deposit shall be returned to
Buyer if, and only if, such termination occurs after the expiration of the Due
Diligence Period, and neither party shall have any rights or obligations under
this Agreement (except for Sections 4.3.1, 15.3 and 15.5 which survive
termination of this Agreement); or (ii) accept a qualification to Seller’s
representations and warranties as of the Close of Escrow and complete the
purchase and sale of the Property without any rights to recovery for breach of
the unqualified representation and warranty. Other than as set forth in the
immediately preceding sentence, if Buyer proceeds with the Close of Escrow,
Buyer shall be deemed to have expressly waived any and all remedies for the
breach of any representation or warranty discovered by Buyer prior to the Close
of Escrow.
     11.2 As-Is. As of the expiration of the Due Diligence Period, Buyer will
have:
          (a) examined and inspected the Property and will know and be satisfied
with the physical condition, quality, quantity and state of repair of the
Property in all respects (including, without limitation, the compliance of the
Real Property with the Americans With Disabilities Act of 1990 Pub.L. 101-336,
104 Stat. 327 (1990), and any comparable local or state laws (collectively, the
“ADA”) and by proceeding with this transaction following the expiration of the
Due Diligence Period shall be deemed to have determined that the same is
satisfactory to Buyer;
          (b) reviewed the Property Information and all instruments, records and
documents which Buyer deems appropriate or advisable to review in connection
with this transaction, including, but not by way of limitation, any and all
architectural drawings, plans, specifications, surveys, building and occupancy
permits, and any licenses, leases, contracts, warranties and guarantees relating
to the Real Property or the business conducted thereon, and Buyer, by proceeding
with this transaction following the

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expiration of the Due Diligence Period, shall be deemed to have determined that
the same and the information and data contained therein and evidenced thereby
are satisfactory to Buyer;
          (c) reviewed all applicable laws, ordinances, rules and governmental
regulations (including, but not limited to, those relating to building, zoning
and land use) affecting the development, use, occupancy or enjoyment of the Real
Property, and Buyer, by proceeding with this transaction following the
expiration of the Due Diligence Period, shall be deemed to have determined that
the same are satisfactory to Buyer; and
          (d) at its own cost and expense, made its own independent
investigation respecting the Property and all other aspects of this transaction,
and shall have relied thereon and on the advice of its consultants in entering
into this Agreement, and Buyer, by proceeding with this transaction following
the expiration of the Due Diligence Period, shall be deemed to have determined
that the same are satisfactory to Buyer.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT FOR SELLER’S
REPRESENTATIONS AND WARRANTIES IN SECTION 11.1 OF THIS AGREEMENT AND ANY
WARRANTIES OF TITLE CONTAINED IN THE DEED DELIVERED AT THE CLOSE OF ESCROW
(“SELLER’S WARRANTIES”), THIS SALE IS MADE AND WILL BE MADE WITHOUT
REPRESENTATION, COVENANT, OR WARRANTY OF ANY KIND (WHETHER EXPRESS, IMPLIED, OR,
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, STATUTORY) BY SELLER. AS A
MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, BUYER AGREES TO ACCEPT
THE PROPERTY ON AN “AS IS” AND “WHERE IS” BASIS, WITH ALL FAULTS, AND WITHOUT
ANY REPRESENTATION OR WARRANTY, ALL OF WHICH SELLER HEREBY DISCLAIMS, EXCEPT FOR
SELLER’S WARRANTIES. EXCEPT FOR SELLER’S WARRANTIES, NO WARRANTY OR
REPRESENTATION IS MADE BY SELLER AS TO FITNESS FOR ANY PARTICULAR PURPOSE,
MERCHANTABILITY, DESIGN, QUALITY, CONDITION, OPERATION OR INCOME, COMPLIANCE
WITH DRAWINGS OR SPECIFICATIONS, ABSENCE OF DEFECTS, ABSENCE OF HAZARDOUS OR
TOXIC SUBSTANCES, ABSENCE OF FAULTS, FLOODING, OR COMPLIANCE WITH LAWS AND
REGULATIONS INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND
THE ENVIRONMENT (INCLUDING, WITHOUT LIMITATION, THE ADA). BUYER ACKNOWLEDGES
THAT BUYER HAS ENTERED INTO THIS AGREEMENT WITH THE INTENTION OF MAKING AND
RELYING UPON ITS OWN INVESTIGATION OF THE PHYSICAL, ENVIRONMENTAL, ECONOMIC USE,
COMPLIANCE, AND LEGAL CONDITION OF THE PROPERTY AND THAT BUYER IS NOT NOW
RELYING, AND WILL NOT LATER RELY, UPON ANY REPRESENTATIONS AND WARRANTIES MADE
BY SELLER OR ANYONE ACTING OR CLAIMING TO ACT, BY, THROUGH OR UNDER OR ON
SELLER’S BEHALF CONCERNING THE PROPERTY. ADDITIONALLY, BUYER AND SELLER HEREBY
AGREE THAT (A) EXCEPT FOR SELLER’S WARRANTIES, BUYER IS TAKING THE PROPERTY “AS
IS” WITH ALL LATENT AND PATENT DEFECTS AND THAT EXCEPT FOR SELLER’S WARRANTIES,
THERE IS NO WARRANTY BY SELLER THAT THE PROPERTY IS FIT FOR A PARTICULAR
PURPOSE, (B) EXCEPT FOR SELLER’S WARRANTIES, BUYER IS SOLELY RELYING UPON ITS
EXAMINATION OF THE PROPERTY, AND (C) BUYER TAKES THE PROPERTY UNDER THIS
AGREEMENT UNDER THE EXPRESS UNDERSTANDING THAT THERE ARE NO EXPRESS OR IMPLIED
WARRANTIES (EXCEPT FOR THE LIMITED WARRANTIES OF TITLE SET FORTH IN THE DEED AND
SELLER’S WARRANTIES).
WITH RESPECT TO THE FOLLOWING, BUYER FURTHER ACKNOWLEDGES AND AGREES THAT SELLER
SHALL NOT HAVE ANY LIABILITY, OBLIGATION OR RESPONSIBILITY OF ANY KIND AND THAT
SELLER HAS MADE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND:

1.   THE CONTENT OR ACCURACY OF ANY REPORT, STUDY, OPINION OR CONCLUSION OF ANY
SOILS, TOXIC, ENVIRONMENTAL OR OTHER ENGINEER OR OTHER PERSON OR ENTITY WHO HAS
EXAMINED THE PROPERTY OR ANY ASPECT THEREOF;

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2.   THE CONTENT OR ACCURACY OF ANY OF THE ITEMS (INCLUDING, WITHOUT LIMITATION,
THE PROPERTY INFORMATION) DELIVERED TO BUYER PURSUANT TO BUYER’S REVIEW OF THE
CONDITION OF THE PROPERTY; OR

3.   THE CONTENT OR ACCURACY OF ANY PROJECTION, FINANCIAL OR MARKETING ANALYSIS
OR OTHER INFORMATION GIVEN TO BUYER BY SELLER OR REVIEWED BY BUYER WITH RESPECT
TO THE PROPERTY.

BUYER ALSO ACKNOWLEDGES THAT THE REAL PROPERTY MAY OR MAY NOT CONTAIN ASBESTOS
AND, IF THE REAL PROPERTY CONTAINS ASBESTOS, THAT BUYER MAY OR MAY NOT BE
REQUIRED TO REMEDIATE ANY ASBESTOS CONDITION IN ACCORDANCE WITH APPLICABLE LAW.
BUYER IS A SOPHISTICATED REAL ESTATE INVESTOR AND IS, OR WILL BE AS OF THE CLOSE
OF ESCROW, FAMILIAR WITH THE REAL PROPERTY AND ITS SUITABILITY FOR BUYER’S
INTENDED USE. THE PROVISIONS OF THIS SECTION 11.2 SHALL SURVIVE INDEFINITELY ANY
CLOSING OR TERMINATION OF THIS AGREEMENT AND SHALL NOT BE MERGED INTO THE
DOCUMENTS EXECUTED AT CLOSE OF ESCROW.

     
 
  /s/ GRS      
 
  BUYER’S INITIALS

12.   BUYER’S COVENANTS, REPRESENTATIONS AND WARRANTIES; RELEASE; ERISA;
INDEMNIFICATION.

     In consideration of Seller entering into this Agreement and as an
inducement to Seller to sell the Real Property to Buyer, Buyer makes the
following covenants, representations and warranties:
     12.1 Representations and Warranties.
          (a) Authority. Buyer is a limited partnership organized and in good
standing under the laws of the State of Delaware. Buyer has the legal right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby, and the execution, delivery and performance of
this Agreement have been duly authorized and no other action by Buyer is
requisite to the valid and binding execution, delivery and performance of this
Agreement, except as otherwise expressly set forth herein. There is no agreement
to which Buyer is a party or to Buyer’s knowledge binding on Buyer which is in
conflict with this Agreement.
          (b) Executive Order 13224. To Buyer’s actual knowledge, neither Buyer
nor any of its respective affiliates or constituents, nor any of their
respective brokers or other agents acting in any capacity in connection with the
transactions contemplated by this Agreement is or will be (a) conducting any
business or engaging in any transaction or dealing with any person appearing on
the OFAC list of restrictions and Prohibited Persons (which lists can be
accessed at the following web address:
http://www.ustreas.gov/offices/enforcement/ofac/), including the making or
receiving of any contribution of funds, goods or services to or for the benefit
of any Prohibited Person; (b) dealing in, or otherwise engaging in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224 dated September 24, 2001, relating to “Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism”; or (c) engaging in or conspiring to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempting to violate, any of the prohibitions set forth in any U.S. anti-money
laundering law.

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     12.2 Release. By proceeding with this transaction following the expiration
of the Due Diligence Period, Buyer shall be deemed to have made its own
independent investigation of the Property, the Property Information and the
presence of Hazardous Materials on the Real Property as Buyer deems appropriate.
Accordingly, subject to the representations and warranties of Seller expressly
set forth in Section 11.1 hereof, Buyer, on behalf of itself and all of its
officers, directors, shareholders, employees, representatives and affiliated
entities (collectively, the “Releasors”) hereby expressly waives and
relinquishes any and all rights and remedies Releasors may now or hereafter have
against Seller, its successors and assigns, partners, shareholders, officers
and/or directors (the “Seller Parties”), whether known or unknown, which may
arise from or be related to (a) the physical condition, quality, quantity and
state of repair of the Real Property and the prior management and operation of
the Real Property, (b) the Property Information, (c) the Real Property’s
compliance or lack of compliance with any federal, state or local laws or
regulations, and (d) any past, present or future presence or existence of
Hazardous Materials on, under or about the Real Property or with respect to any
past, present or future violation of any rules, regulations or laws, now or
hereafter enacted, regulating or governing the use, handling, storage or
disposal of Hazardous Materials, including, without limitation, (i) any and all
rights and remedies Releasors may now or hereafter have under the Comprehensive
Environmental Response Compensation and Liability Act of 1980 (“CERCLA”), the
Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation
and Recovery Act, and the Toxic Substance Control Act, all as amended, and any
similar state, local or federal environmental law, rule or regulation, and
(ii) any and all claims, whether known or unknown, now or hereafter existing,
with respect to the Real Property under Section 107 of CERCLA (42 U.S.C.A.
§9607). As used herein, the term “Hazardous Material(s)” includes, without
limitation, any hazardous or toxic materials, substances or wastes, such as
(1) any materials, substances or wastes which are toxic, ignitable, corrosive or
reactive and which are regulated by any local governmental authority, or any
agency of the United States government, (2) any other material, substance, or
waste which is defined or regulated as a hazardous material, extremely hazardous
material, hazardous waste or toxic substance pursuant to any laws, rules,
regulations or orders of the United States government, or any local governmental
body, (3) asbestos, (4) petroleum and petroleum based products, (5)
formaldehyde, (6) polychlorinated biphenyls (PCBs), and (7) freon and other
chlorofluorocarbons.
Buyer’s Initials: /s/ GRS                                    
     WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER, ON BEHALF OF
ITSELF AND THE OTHER RELEASORS, HEREBY ASSUMES ALL RISK AND LIABILITY RESULTING
OR ARISING FROM, OR RELATING TO THE OWNERSHIP, USE, CONDITION, LOCATION,
MAINTENANCE, REPAIR, OR OPERATION OF, THE PROPERTY.
     THE FOREGOING WAIVERS, RELEASES AND AGREEMENTS BY BUYER, ON BEHALF OF
ITSELF AND THE RELEASORS, SHALL SURVIVE THE CLOSE OF ESCROW AND THE RECORDATION
OF THE DEED AND SHALL NOT BE DEEMED MERGED INTO THE DEED UPON ITS RECORDATION.
     12.3 ERISA. Buyer is not purchasing any of the Property with “plan assets”
of an Employee Benefit Plan subject to Title I of the Employee Retirement Income
Security Act of 1974 (as amended from time to time, the “Act,” and together with
any regulation, rule or judicial or administrative case, order, or pronouncement
arising under or connected with the Act, “ERISA”) or of a plan subject to
Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”).
Buyer shall take all actions reasonably requested by Seller for the purpose of
ensuring, to Seller’s satisfaction, that the transactions contemplated herein
will comply with ERISA and not result in an imposition of an excise tax under

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Section 4975 of the Code; such actions shall include, without limitation, the
making of such further representations and warranties as Seller’s counsel
reasonably deems necessary to ensure that neither this Agreement nor any of the
transactions contemplated herein will violate ERISA or result in an imposition
of an excise tax under Section 4975 of the Code. In the event that this
Agreement, or any transaction or other action by Seller in connection herewith,
shall be deemed to violate ERISA or result in an imposition of an excise tax
under Section 4975 of the Code, Seller may immediately terminate this Agreement
(without any liability to Seller) in accordance with, and subject to the terms
and conditions of, Section 9.3 hereof as if such termination arose from a failed
condition under Section 9.3 hereof.

13.   DEFAULT AND DAMAGES.

     13.1 DEFAULT BY BUYER. BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT,
IN THE EVENT THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO A BUYER DEFAULT (ALL OF
THE CONDITIONS TO BUYER’S OBLIGATIONS TO CLOSE HAVING BEEN SATISFIED OR WAIVED),
SELLER WILL SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL NATURE OF
THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE SPECIAL NATURE OF THE
NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT, BE IMPRACTICAL OR EXTREMELY
DIFFICULT TO ASCERTAIN. IN ADDITION, BUYER WISHES TO HAVE A LIMITATION PLACED
UPON THE POTENTIAL LIABILITY OF BUYER TO SELLER IN THE EVENT THE CLOSE OF ESCROW
FAILS TO OCCUR DUE TO A BUYER DEFAULT, AND WISHES TO INDUCE SELLER TO WAIVE
OTHER REMEDIES WHICH SELLER MAY HAVE IN THE EVENT OF A BUYER DEFAULT. BUYER AND
SELLER, AFTER DUE NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT THE AMOUNT OF
THE DEPOSIT REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER WILL
SUSTAIN IN THE EVENT OF SUCH BUYER DEFAULT. BUYER AND SELLER HEREBY AGREE THAT
SELLER MAY, IN THE EVENT THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO A BUYER
DEFAULT, TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO BUYER AND ESCROW HOLDER,
CANCEL THE ESCROW AND RECEIVE OR RETAIN (AS TO THE PERFORMANCE DEPOSIT) THE
DEPOSIT AS LIQUIDATED DAMAGES AND ESCROW HOLDER SHALL IMMEDIATELY DELIVER
(UNLESS IT HAS ALREADY DONE SO) THE DEPOSIT TO SELLER. SUCH RETENTION OF THE
DEPOSIT BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER AND
SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY.
     NOTHING IN THIS SECTION 13.1 SHALL (A) PREVENT OR PRECLUDE ANY RECOVERY OF
ATTORNEYS’ FEES OR OTHER COSTS INCURRED BY SELLER PURSUANT TO SECTION 15.5 OR
(B) IMPAIR OR LIMIT THE EFFECTIVENESS OR ENFORCEABILITY OF THE INDEMNIFICATION
OBLIGATIONS OF BUYER CONTAINED IN SECTIONS 4.3.1 AND 14 HEREOF. SELLER AND BUYER
ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS SECTION
13.1 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.

         
 
  Seller’s Initials:        /s/ CSJ          
 
  Buyer’s Initials:        /s/ GRS          

     13.2 Default by Seller. If Seller defaults in its obligations to sell and
convey the Property to Buyer pursuant to this Agreement, Buyer’s sole and
exclusive remedy shall be to elect one of the following: (a) to terminate this
Agreement, in which event Buyer shall be entitled to the return by the Escrow
Holder of the Transaction Deposit and the return from Seller of the Performance
Deposit, or (b) to bring a suit for specific performance provided that any suit
for specific performance must be brought as to the Property within 45 days of
Seller’s default, Buyer’s waiving the right to bring suit at any later date to
the extent permitted by law. This Agreement confers no present right, title or
interest in the Property to Buyer and Buyer agrees not to file a lis pendens or
other similar notice against the Real Property except in connection with, and
after, the proper filing of a suit for specific performance.

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14.   BROKER’S COMMISSIONS.

     Except for Larsen Commercial Real Estate, Buyer’s broker (whose commission
shall be paid by Buyer pursuant to a separate agreement with Buyer), neither
party hereto has had any contact or dealing regarding the Real Property, or any
communication in connection with the subject matter of this transaction, through
any licensed real estate broker or other person who can claim a right to a
commission or finder’s fee as a procuring cause of the sale contemplated herein.
In the event that any other broker or finder perfects a claim for a commission
or finder’s fee, the party responsible for the contact or communication on which
the broker or finder perfected such claim shall indemnify, save harmless and
defend the other party from said claim and all costs and expenses (including
reasonable attorneys’ fees) incurred by the other party in defending against the
same.

15.   MISCELLANEOUS PROVISIONS.

     15.1 Notices. All written notices or demands of any kind which either party
hereto may be required or may desire to serve on the other in connection with
this Agreement shall be served by personal service, by registered or certified
mail, recognized overnight courier service or facsimile transmission. Any such
notice or demand so to be served by registered or certified mail, recognized
overnight courier service or facsimile transmission shall be delivered with all
applicable delivery charges thereon fully prepaid and, if the party so to be
served be Buyer, addressed to Buyer as follows:

     
 
  Republic Property Trust
 
  1280 Maryland Avenue, S.W., Suite 280
 
  Washington, D.C. 20024
 
  Attention: Andrew Pulliam, Vice President
 
  Telephone No: (202) 863-0300 X140
 
  Fax No.: (202) 863-4049
 
   
with a copy thereof to:
   
 
   
 
  Republic Property Trust
 
  1280 Maryland Avenue, S.W., Suite 280
 
  Washington, D.C. 20024
 
  Attention: Gary R. Siegel, General Counsel
 
  Telephone No.: (202) 863-033 ext. 247
 
  Fax No.: (202) 204-1359
 
    and, if the party so to be served be Seller, addressed to Seller as follows:
 
   
 
  c/o Koll Bren Schreiber Realty Advisors, Inc.
 
  1133 21st Street NW, Suite 400
 
  Washington, D.C. 20036
 
  Attention: Peter Potrykus
 
  Telephone No.: (202) 822-1230 x103
 
  Fax No.: (202) 822-1340
 
   
with copies thereof to:
   
 
   
 
  c/o Koll Bren Schreiber Realty Advisors, Inc.
 
  125 Summer Street, Suite 1640
 
  Boston, MA 02110
 
  Attention: Charles B. Lindwall
 
  Telephone No.: (617) 532-6501
 
  Fax No.: (617) 345-9200
 
   
 
            and

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  James Chiboucas, Esq.
 
  620 Newport Center Drive, Suite 1300
 
  Newport Beach, CA 92660
 
  Telephone No.: (949) 417-6555
 
  Fax No.: (949) 417-6523
 
   
 
            and
 
   
 
  Morgan, Lewis & Bockius LLP
 
  5 Park Plaza, Suite 1750
 
  Irvine, California 91614
 
  Attention: L. Bruce Fischer, Esq.
 
  Telephone No.: (949) 399-7145
 
  Fax No.: (949) 399-7001
 
    and, if the party to be served be Escrow Holder, addressed to Escrow Holder
as follows:
 
   
 
  Chicago Title Company
 
  16969 Von Karman, Suite 200
 
  Irvine, California 92606
 
  Attention: Ms. Joy Eaton
 
  Telephone No.: (949) 263-0123
 
  Fax No.: (949) 263-0356

Service of any such notice or demand so made by personal delivery, registered or
certified mail, recognized overnight courier or facsimile transmission shall be
deemed complete on the date of actual delivery (or refusal to accept delivery)
as shown by the addressee’s registry or certification receipt or, as to
facsimile transmissions, by “answer back confirmation” (provided that a copy of
such notice or demand is delivered by any of the other methods provided above
within one (1) business day following receipt of such facsimile transmission),
as applicable. Either party hereto may from time to time, by notice in writing
served upon the other as aforesaid, designate a different mailing address to
which or a different person to whose attention all such notices or demands are
thereafter to be addressed.
     15.2 Assignment; Binding on Successors and Assigns. Buyer shall not assign,
transfer or convey its rights or obligations under this Agreement or with
respect to the Property without the prior written consent of Seller, which
consent Seller may withhold in its sole, absolute and subjective discretion;
provided, however, Buyer may assign its rights under this Agreement without
Seller’s consent to any affiliate of, or any entity under common control with,
Buyer, so long as (i) no less than ten (10) days prior to the Close of Escrow,
Buyer provides Seller with written notice of its intentions to assign its rights
under this Agreement to the Affiliate, which notice must be accompanied by the
name of such assignee and such assignee’s signature block, (ii) the Affiliate
assumes, jointly and severally, in writing Buyer’s obligations hereunder and the
Affiliate agrees in writing to be subject to all of the terms and conditions set
forth in this Agreement pursuant to an assignment and assumption agreement
substantially in the form attached hereto as Exhibit I and made a part hereof
(the “Assignment and Assumption Agreement”), and (iii) Buyer shall not be
released from its obligations hereunder. Any attempted assignment without the
prior written consent of Seller shall be void and Buyer shall be deemed in
default hereunder. Any permitted assignments shall not relieve the assigning
party from its liability under this Agreement. Subject to the foregoing, and
except as provided to the contrary herein, the terms, covenants, conditions and
warranties contained herein and the powers granted hereby shall inure to the
benefit of and bind all parties hereto and their respective heirs, executors,
administrators, successors and assigns, and all subsequent owners of the
Property.
     15.3 Work Product. Effective upon and in the event of a termination of this
Agreement for any reason, Buyer shall assign and deliver to Seller (at no cost
to Seller), and does hereby assign without the need for any further act or
instrument (at no cost to Seller), all reports, plans, studies, documents,
written information and the like which has been generated by Buyer’s third party
consultants, whether prior to the Opening of Escrow or during the period of
Escrow in connection with Buyer’s proposed

23

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acquisition, development, use or sale of the Real Property (collectively, the
“Work Product”). In such event, Buyer shall deliver the Work Product which has
been assigned to Seller not later than five (5) days after the date of the
termination of this Agreement. The Work Product shall be fully paid for and
shall not be subject to any lien, encumbrance or claim of any kind. Buyer shall
also return all materials and information (including, without limitation, the
Property Information) given to it by Seller or its consultants during Escrow, in
the same condition as delivered to Buyer.
     15.4 Further Assurances. In addition to the acts and deeds recited herein
and contemplated to be performed, executed or delivered by Seller or Buyer,
Seller and Buyer hereby agree to perform, execute and deliver, or cause to be
performed, executed and delivered, on the Closing Date or thereafter any and all
such further acts, deeds and assurances as Buyer or Seller, as the case may be,
may reasonably require in order to consummate fully the transactions
contemplated hereunder.
     15.5 Attorneys’ Fees. If any legal action or any arbitration or other
proceeding is brought or if an attorney is retained for the enforcement of this
Agreement or any portion thereof, or because of any alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of this
Agreement, the prevailing party shall be entitled to recover from the other
reimbursement for the reasonable fees of attorneys and other costs (including
court costs and witness fees) incurred by it, in addition to any other relief to
which it may be entitled. The term “prevailing party” means the party obtaining
substantially the relief sought, whether by compromise, settlement or judgment.
     15.6 Survival of Representations, Warranties and Agreements. Unless
otherwise expressly stated in this Agreement (a) each of the covenants,
obligations, representations, and agreements contained in this Agreement shall
survive the Close of Escrow and the execution and delivery of the Deed only for
a period of 6 months immediately following the Closing Date, and (b) any claim
based upon a misrepresentation or a breach of a warranty contained in this
Agreement shall be actionable or enforceable if and only if notice of such claim
is given to the party which allegedly made such misrepresentation or breached
such covenant, obligation, warranty or agreement within 6 months after the
Closing Date; provided, however, in no event shall Seller’s liability, if any,
with respect to any breach of Seller’s representations or warranties hereunder
exceed $500,000 in the aggregate. Notwithstanding anything stated to the
contrary in this Agreement, the indemnification provisions of Sections 4.3.1,
10.5 and 14 hereof and the provisions of Sections 4.6, 10.1, 10.3, 10.4, 10.8,
11.2, 12.1, 12.2, 12.3, 13.2, 15.3, 15.5, 15.17, 15.19 and 15.20 hereof shall
survive the termination of this Agreement or the Close of Escrow without
limitation, and shall not be merged with the recording of the Deed.
     15.7 Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties in respect to the subject matter hereof, and the
parties intend for the literal words of this Agreement to govern and for all
prior negotiations, drafts, and other extrinsic communications, whether oral or
written, to have no significance or evidentiary effect. The parties further
intend that neither this Agreement nor any of its provisions may be changed,
amended, discharged, waived or otherwise modified orally except only by an
instrument in writing duly executed by the party to be bound thereby. The
parties hereto fully understand and acknowledge the importance of the foregoing
sentence and are aware that the law may permit subsequent oral modification of a
contract notwithstanding contract language which requires that any such
modification be in writing; but Buyer and Seller fully and expressly intend that
the foregoing requirements as to a writing be strictly adhered to and strictly
interpreted and enforced by any court which may be asked to decide the question.
Each party hereto acknowledges that this Agreement accurately reflects the
agreements and understandings of the parties hereto with respect to the subject
matter hereof and hereby waive any claim against the other party which such
party may now have or may hereafter acquire to the effect that the actual
agreements and understandings of the parties hereto with respect to the subject
matter hereof may not be accurately set forth in this Agreement.
     15.8 Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Virginia.
     15.9 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

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     15.10 Headings; Construction. The various headings of this Agreement are
included for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provision hereof. When the context and construction so
require, all words used in the singular herein shall be deemed to have been used
in the plural and the masculine shall include the feminine and the neuter and
vice versa. The use in this Agreement of the term “including” and related terms
such as “include” shall in all cases mean “without limitation.” All references
to “days” in this Agreement shall be construed to mean calendar days unless
otherwise expressly provided and all references to “business days” shall be
construed to mean days on which national banks are open for business.
     15.11 Time of Essence. Seller and Buyer hereby acknowledge and agree that
time is strictly of the essence with respect to each and every term, condition,
obligation and provision hereof and failure to perform timely any of the terms,
conditions, obligations or provisions hereof by either party shall constitute a
material breach of, and non-curable (but waivable) default under this Agreement
by the parties so failing to perform.
     15.12 Partial Validity; Severability. If any term or provision of this
Agreement or the application thereof to any person or circumstance shall, to any
extent, be held invalid or unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each such term and provision of this Agreement shall be valid and
be enforced to the fullest extent permitted by law.
     15.13 No Third Party Beneficiaries. This Agreement is for the sole and
exclusive benefit of the parties hereto and their respective permitted
successors and assigns, and no third party is intended to, or shall have, any
rights hereunder.
     15.14 Intentionally omitted.
     15.15 Joint Product of Parties. This Agreement is the result of arms-length
negotiations between Seller and Buyer and their respective attorneys.
Accordingly, neither party shall be deemed to be the author of this Agreement
and this Agreement shall not be construed against either party.
     15.16 Calculation of Time Periods. 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 at, unless such last day is a
Saturday, Sunday or legal holiday for national banks in California, in which
event the period shall run until the end of the next day which is neither a
Saturday, Sunday, or legal holiday. Unless otherwise expressly provided herein,
the last day of any period of time described herein shall be deemed to end at
5:00 p.m., California time.
     15.17 Procedure for Indemnity. The following provisions govern actions for
indemnity under this Agreement. Promptly after receipt by an indemnitee of
notice of any claim, such indemnitee will, if a claim in respect thereof is to
be made against the indemnitor, deliver to the indemnitor written notice thereof
and the indemnitor shall have the right to participate in and, if the indemnitor
agrees in writing that it will be responsible for any costs, expenses,
judgments, damages, and losses incurred by the indemnitee with respect to such
claim, to assume the defense thereof, with counsel mutually satisfactory to the
parties; provided, however, that an indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the indemnitor, if the
indemnitee reasonably believes that representation of such indemnitee by the
counsel retained by the indemnitor would be inappropriate due to actual or
potential differing interests between such indemnitee and any other party
represented by such counsel in such proceeding. The failure of indemnitee to
deliver written notice to the indemnitor within a reasonable time after
indemnitee receives notice of any such claim shall relieve such indemnitor of
any liability to the indemnitee under this indemnity only if and to the extent
that such failure is prejudicial to its ability to defend such action, and the
omission so to deliver written notice to the indemnitor will not relieve it of
any liability that it may have to any indemnitee other than under this
indemnity. If an indemnitee settles a claim without the prior written consent of
the indemnitor, then the indemnitor shall be released from liability with
respect to such claim unless the indemnitor has unreasonably withheld such
consent.

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     15.18 Waiver of Jury Trial. To the extent permitted by applicable law, the
parties hereby waive any right to trial by jury in any legal proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.
     15.19 No Personal Liability. Notwithstanding anything stated to the
contrary herein, Seller’s liability under this Agreement shall be limited to
Seller’s interest in the Property and neither Seller, Seller’s constituent
partners, Seller’s asset manager, nor Seller’s directors, employees or agents
shall have any personal liability hereunder.
     15.20 Joint and Several Liability. If Buyer is composed of more than one
individual or entity, all obligations and liabilities of Buyer under this
Agreement shall be joint and several as to each of the individuals or entities
who compose Buyer.
     15.21 Audited Income Statement. For a period of one (1) year after Closing,
Seller shall, at no cost or expense to Seller, reasonably cooperate with Buyer
in the preparation by Buyer of an audited income statement for the Property
(“Audited Income Statement”), provided that Buyer notifies Seller in writing of
its intent to have the Audited Income Statement prepared. In connection with the
preparation of the Audited Income Statement, Seller shall provide Buyer and
Buyer’s accountants with reasonable access to Seller’s financial records related
to the Property and shall respond (and cause its accountants to respond), at
Buyer’s sole cost and expense, to questions that Buyer may reasonably have
concerning (and which are required in connection with) the audit of such books
and records provided that such responses shall not cause a significant burden on
Seller or Seller’s accountants, and, provided further that under no
circumstances shall Buyer or Buyer’s accountants be entitled to review any
appraisals relating to the Property, any internal financial audits relating to
the Property, or any other information relating to the Property that is subject
to the attorney-client privilege.
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
[Signatures on following pages]

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“SELLER”
SMII FAIRFAX LLC,
a Delaware limited liability company

By:   SM BRELL II, L.P.,
a California limited partnership,
its sole member

  By: KBS INVESTORS, II,
a California general partnership,
its general partner

  By:   SCHREIBER REAL ESTATE INVESTMENTS, L.P.,
a Delaware limited partnership,
general partner

  By:   SCHREIBER INVESTMENTS, LLC,
a California limited liability company,
its general partner

  By:   /s/ Charles J. Schreiber, Jr.
Charles J. Schreiber, Jr.,
Manager

S-1

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“BUYER”
REPUBLIC PROPERTY LIMITED PARTNERSHIP,
a Delaware limited partnership

                      By:   Republic Property Trust,             a Maryland real
estate investment trust,             General Partner    
 
               
 
      By:   /s/ Mark R. Keller    
 
               
 
      Name:   Mark R. Keller    
 
               
 
      Its:   Chief Executive Officer    
 
               

S-2

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AGREED TO THIS 22nd
DAY OF MARCH, 2006,
AS TO PROVISIONS RELATING
TO ESCROW HOLDER:
CHICAGO TITLE INSURANCE COMPANY

              By:   Chicago Title Company,         its authorized agent    
 
           
 
  By:   /s/ Joy Eaton    
 
           
 
  Name:   Joy Eaton    
 
           
 
  Its:   AVP            
 
   

S-3

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LIST OF EXHIBITS AND SCHEDULES

         
EXHIBIT A
  —   Description of Real Property  
EXHIBIT B
  —   Description of Personal Property  
EXHIBIT C
  —   List of Contracts  
EXHIBIT D
  —   Form of Tenant Estoppel Certificate  
EXHIBIT E
  —   Form of Deed  
EXHIBIT F
  —   Form of Assignment of Leases, Contracts and Bill of Sale  
EXHIBIT G
  —   Form of FIRPTA Affidavit  
EXHIBIT H
  —   Form of Tenant Notice  
EXHIBIT I
  —   Form of Assignment and Assumption Agreement  
SCHEDULE 1
  —   Description of New and Pending Lease Transactions  
SCHEDULE 2
  —   Seller’s Leasing Obligations  
SCHEDULE 3
  —   Schedule of Tenant Security Deposits  
SCHEDULE 4
  —   Disclosures  
SCHEDULE 5
      Schedule of Owner’s Deposits

 

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EXHIBIT A
Description of Real Property
(Attached)

 

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Willow Wood Plaza — 1 of 3
All of that certain lot or parcel of land situated, lying and being in Fairfax
County, Virginia and being particularly described as follows:
DESCRIPTION OF LOT 1
COMMONWEALTH CORPORATE CENTER
Beginning at a point on a curve on the northerly side of Lee Highway, Routes 29,
211, and 50 said point being a common corner between the land of Nancy
Culbertson et al, Trustees, and Lot 1 of Commonwealth Corporate Center, herein
described, and shown on a plat of the aforementioned subdivision recorded in
Deed Book 6301 Page. 704 of the land records of Falrfax County, Virginia;
Thence running with the northerly line of Lee Highway and following the arc of a
curve to the left having a radius, chord bearing and chord of 6569.90 feet, S 67
degrees 40' 55" W., and 324.15 feet respectively, for an arc distance of 324.19
feet to a point of reversed curvature; thence following the arc of a curve to
the right having a radius, chord bearing and chord of 25.00 feet, N 70 degrees
33' 58" W. and 34.21 feet respectively, for an arc distance of 37.68 feet to
another point of reversed curvature on the northerly side of Eaton Place; thence
running along same and following the arc of a curve to the left having a radius,
chord bearing and chord of 202.00 feet, N 56 degrees 47' 58" W. and 198.43 feet
respectively, for an arc distance of 207.42 feet to a point of tangency; thence
continuing with said Eaton Place N 86 degrees 12' 59" W. 320.93 feet to a point,
said point being a southeasterly corner of Lot 4 of the aforementioned
subdivision;
Thence departing Eaton Place and running along the common boundary between Lot 4
and Lot 1, N 03 degrees 47' 01" E, 81.12 feet to a point; thence continuing
along said boundary N 48 degrees 47' 01" E, 51.10 feet to a point of curvature;
thence following the arc of a curve to the left having a radius, chord bearing
and chord of 61.00 feet, N 26 degrees 17' 01" E, and 46.69 feet respectively,
for an arc distance of 47.91 feet to a point of tangency; thence continuing
along said common boundary in a northerly direction and thence in an easterly
direction the following courses and distances:
N 03 degrees 47' 01"E, 115.79 feet to a point; thence
S 86 degrees 12'59" E, 226.17 feet to a point; thence
N 03 degrees 47'01" E, 6.82 feet to a point; thence
S 86 degrees 12'59" E, 61.96 feet to a point; thence
N 03 degrees 47'01" E, 32.85 feet to a point; thence
N 40 degrees 45'32" W, 61.29 feet to a point; thence
N 54 degrees 08' 58" E, 33.80 feet to a point on the southwesterly boundary of
Parcel B of Commonwealth

 

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Willow Wood Plaza — 2 of 3
Corporate Center; thence running along same S 40 degrees 45' 32" E, 198.83 feet
to a point; thence continuing along boundary S 59 degrees 10' 17" E, 402.68 feet
to a point on the westerly line of Culbertson et a1, Trustees; thence running
along said westerly line S 11 degrees 14' 13" N, 23.07 feet to the point of
beginning.
DESCRIPTION OF LOT 2
COMMONWEALTH CORPORATE CENTER
Beginning at a on the northerly side of Eaton Place, said point being a common
corner between Lot 3 and Lot 2 of Commonwealth Corporate Center, the latter
being herein described and shown on a plat of the aforementioned subdivision
recorded in Deed Book 6301 Page 704 of the land records of Fairfax County,
Virginia;
Thence running with the northerly line of Eaton Place N 86 degrees 12' 59" W,
585.78 feet to a point; thence continuing along said line N 89 degrees 40' 51"
W, 1.94 feet to a point on the easterly boundary of the land of Roland B.
Atkins, et a1, Trustees; thence departing Eaton Place and running along the
easterly line of said land N 21 degrees 45' 36" E, 535.74 feet: to a common
westerly corner between said Lot 2 and Lot thence turning and running along the
common boundary between said lots the following courses and distances:
S 68 degrees 14'24"E, 52.51 feet to a point; thence
S 86 degrees 12'59"E, 76.44 feet to a point; thence
S 03 degrees 47'01"W, 44.26 feet to a point; thence
S 86 degrees 12'59"E, 105.00 feet to a point; and
S 03 degrees 47' 01" W, 157.20 feet to a point of curvature; thence following
the arc of a curve to the right having a radius, chord bearing, and chord of
60.00 feet, S 11 degrees 19' 56" W, and 15.76 feet respectively, for an arc a
curve and continuing along said common boundary S 86 degrees 12' 59" E, 139.06
feet to a point: thence continuing along said boundary S 03 degrees 47' 01" W,
115.79 feet to a point of curvature; thence following the arc of a curve to the
left having a radius, chord bearing, and chord of 61.00 feet, S 18 degrees 42'
59" E, and 46.69 feet respectively, for an arc distance of 47.91 feet to a point
of tangency: thence continuing along said common boundary S 41 degrees 12' 59"
E, 51.10 feet to a point; thence continuing along said common boundary S 03
degrees 47' 01" W, 81.12 feet to the point of beginning.
DESCRIPTION OF PARCEL “A”

 

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Willow Wood Plaza — 3 of 3
COMMONWEALTH CORPORATE CENTER
Beginning at a point on the southerly side of Eaton Place, said point being a
common corner between the land of P&H Investments Incorporated and Parcel “A” of
Commonwealth Corporate Center, as herein described and shown on a plat of
subdivision recorded in Deed Book 6301 Page 704 of the land records of the
County of Fairfax, Virginia;
Thence running with said Eaton Place S 86 degrees 12' 59" E, 46.34 feet to a
point of curvature; thence continuing with Eaton Place and following the arc of
a curve to the right having a radius of 142.00 feet, and a chord bearing and
chord of S 58 degrees 17' 41" E and 132.99 feet respectively, for an arc
distance of 138.40 feet to a point of compound curvature; thence following the
arc of a curve to the right having radius of 25.00 feet and a chord bearing and
chord of S degrees 28' 06" W and 37.06 feet respectively, for an arc distance of
41.75 feet to a point of reversed curvature on the northerly side of Lee Highway
(Routes 50, 29, and 211); thence following the arc of a curve to the left having
a radius of 6569.90 feet and a chord bearing and chord of S 64 degrees 38' 27" W
and 153.50 feet respectively, for an arc distance of 153.51 feet to a point,
said point being a common corner to the land of P&H Investments Incorporated;
thence running with the common boundary between said land and Parcel A, N 03
degrees 08' 18" W, 174.31 feet to the point of beginning.
TOGETHER WITH those certain non-exclusive easements for operation, maintenance,
use, repair and replacement of the Cooling Towers Building and Refaining Walls
as set forth in that certain Easement Agreement recorded in Deed Book 7144 at
page 392.
ANB BEING part of the property conveyed to SMII Fairfax, LLC, a Delaware limited
liability company, by Deed from The Equitable Life Assurance Society of the
United States, a New York corporation, dated March 30, 2000 and recorded March
30, 2000 in Deed Book 11296 at page 1840.

 

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EXHIBIT B
Description of Personal Property
[TO BE PROVIDED PRIOR TO THE EXPIRATION OF THE DUE DILIGENCE PERIOD]

 

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EXHIBIT C
List of Contracts

 

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EXHIBIT D
Form of Tenant Estoppel Certificate
(Attached)

 

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TENANT ESTOPPEL CERTIFICATE
     The undersigned (“Tenant”) hereby certifies to ___, a ___ (“Landlord”), and
___, a ___, and its successors and assigns (collectively, “Buyer”), as of the
date of this Certificate:
     A. Tenant is the Lessee under that certain Lease dated ___ relating to ___
(the “Premises”), together with any amendments thereto (collectively, the
“Lease”).
     B. The dates of all amendments to the Lease are as follows:
____________________________________
 
     C. There are no other agreements, oral or in writing, between Landlord and
Tenant with respect to the Premises excepted as identified above.
     D. The Lease is in full force and effect.
     E. To Tenant’s actual knowledge no default exists under the Lease by
Landlord.
     F. To Tenant’s actual knowledge, Tenant has no claim or demand against the
Landlord.
     G. Monthly base rent is equal to $___ and has been paid through ___,
200___.
     H. Common area maintenances, taxes, insurance and other charges owed by
Tenant on a monthly basis is equal to $___ and has been paid through ___.
     I. Tenant’s security deposit held by Landlord is $___.
     J. All tenant improvements and other items of an executory nature relating
thereto have been performed by Landlord, except ___; and Landlord has paid in
full any required contributions towards work performed by Tenant, except ___.
     K. There have been no prepayments of rent more than one (1) month in
advance which have not been applied to rent obligations previously due and
payable.
     L. There has been no assignment or subletting of the Lease or the Premises,
except ___.
     M. Tenant has no right or option to purchase any portion of the Real
Property upon which the Premises are situated.
 Tenant acknowledges that (i) this Estoppel Certificate is being given in order
to induce Buyer to purchase the property of which the Premises are a part, and
to take on the obligations of Landlord, (ii) Buyer’s lender (“Lender”) intends
to make a loan to Buyer secured by the property of which the Premises are a
part, and (iii) that each of Buyer and Lender is entitled to rely upon this
Estoppel Certificate.
Dated:__________________, 200_

 

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              “TENANT”        
 
           
By:
                     
 
                     
 
  (Print Name)   (Title)    

 

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EXHIBIT E
Form of Deed
(Attached)

 

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RECORDING REQUESTED BY:
  Tax Map Nos.:    
WHEN RECORDED MAIL TO:
         
[...................................................]
  Consideration:    
 
       
 
       
MAIL TAX STATEMENTS TO:
         
[...................................................]
       

 
(Space Above Line For Recorder’s Use Only)
SPECIAL WARRANTY DEED
     THIS SPECIAL WARRANTY DEED is made as of the ___ day of ___, 200_, by ___,
a ___ (the “Grantor”), whose address is ___, in favor of ___, a ___ (the
“Grantee”), whose address is ___.
WITNESSETH:
THAT, for and in consideration of the sum of Ten Dollars ($10.00), cash in hand
paid, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Grantor does hereby grant, bargain, sell and
convey, with Special Warranty of Title, unto the Grantee, all that certain
parcel of land situate in Fairfax County, Virginia, together with all
improvements situated thereon (the “Property”), and being more particularly
described on Exhibit A attached hereto and incorporated herein by reference.
TO HAVE AND TO HOLD the Property with all rights, privileges, appurtenances, and
immunities thereto belonging or in any way appertaining unto the said Grantee
and unto Grantee’s heirs, successors, and assigns forever.
     BY ACCEPTING THIS DEED (AS EVIDENCED BY THE RECORDING OF THIS DEED IN THE
OFFICIAL RECORDS OF ___ COUNTY, ___), GRANTEE ACKNOWLEDGES AND AGREES THAT
GRANTEE IS TAKING THE PROPERTY “AS IS” WITH ALL LATENT AND PATENT DEFECTS AND
WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES (EXCEPT FOR THE LIMITED WARRANTIES OF
TITLE SET FORTH IN THIS SPECIAL WARRANTY DEED AND GRANTOR’S EXPRESS
REPRESENTATIONS AND WARRANTIES SET FORTH IN THE PURCHASE AGREEMENT ENTERED INTO
BY AND BETWEEN GRANTOR AND GRANTEE DATED AS OF ___, 200_, WHICH LIMITED
WARRANTIES SHALL SURVIVE FOR SIX (6) MONTHS FROM THE DATE HEREOF).
IN WITNESS WHEREOF, the Grantor has caused this Special Warranty Deed to be
executed as of the date first above written.
[SIGNATURE FOLLOWS]

 

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  Grantor:
 
   
 
   
 
   
 
   
 
   
 
   

     
Address of Grantee:
   
 
         
 
         
 
         

 

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                    STATE OF CALIFORNIA )      
 
          )     SS.
COUNTY OF
      )      
 
                 

          On ___, 200_, before me, ___, a Notary Public, personally appeared
___, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
          WITNESS my hand and official seal.
                                                                      

 

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EXHIBIT A
LEGAL DESCRIPTION
[ATTACHED]

 

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EXHIBIT F
Form of Assignment of Leases,
Contracts and
Bill of Sale
(Attached)

 

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ASSIGNMENT OF LEASES AND CONTRACTS AND BILL OF SALE
     This Assignment of Leases and Contracts and Bill of Sale (this
“Assignment”) is executed and delivered as of the ___ day of ___, 200___ (the
“Closing Date”) pursuant to that certain Purchase and Sale Agreement and Escrow
Instructions (“Agreement”) dated ___, 200_, by and between ___, a ___
(“Seller”), and ___, a ___ (“Purchaser”), covering the real property described
in Exhibit A attached hereto (“Property”).
     1. Sale of Personalty. For good and valuable consideration, Seller hereby
sells, transfers, sets over and conveys to Purchaser the following (the
“Personal Property”):
     (a) Tangible Personalty. All of Seller’s right, title and interest, if any,
in and to all the furniture, fixtures, equipment, and other tangible personal
property listed on Exhibit B attached hereto or otherwise located in or on the
Property to the extent owned by Seller and used in connection with the ownership
and operation of the Property; and
     (b) Intangible Personalty. All the right, title and interest of Seller, if
any, in and to assignable licenses and permits relating to the operation of the
Property, assignable guaranties and warranties from any contractor, manufacturer
or other person in connection with the construction or operation of the
Property, and the right to use the name of the Property (if any), but
specifically excluding any right, title or interest of Seller in any trademarks,
service marks and trade names of Seller (including, without limitation, the
names “Koll,” “Bren”, “K/B”, “KBS”, “Schreiber”, “SM Brell” or any derivative
thereof, or any name that includes the word “Koll”, the word “Bren”, the word
“K/B”, the word “KBS”, the word “Schreiber”, the phrase “SM Brell” or any
derivative thereof) and with reservation by Seller to use such name in
connection with other property owned by Seller in the vicinity of the Property.
     2. Assignment of Leases and Contracts. For good and valuable consideration,
Seller hereby assigns, transfers, sets over and conveys to Purchaser, and
Purchaser hereby accepts the following:
     (a) Leases. All of the Seller’s right, title and interest in and to all
tenant leases relating to the Property listed in Exhibit C-1 and Exhibit C-2
attached hereto (“Leases”);
     (b) Contracts and Commission Agreements. Seller’s right, title and interest
in and to the contracts and commission agreements described in Exhibit D-1 and
Exhibit D-2 attached hereto (the “Contracts”).
     3. Assumption. Purchaser hereby assumes the obligations of Seller under
(a) the Leases listed on Exhibit C-1 attached hereto arising from and after the
Closing Date, (b) the Leases listed on Exhibit C-2 attached hereto whether
arising before or after the Closing Date, (c) the Contracts listed on
Exhibit D-1 attached hereto arising from and after the Closing Date, (d) the
Contracts listed on Exhibit D-2 attached hereto arising before or after the
Closing Date, and (e) that certain leasing agreement dated ___, entered into by
and between Seller and ___, but only to the extent of any leasing commissions
hereafter due and payable thereunder arising out of the lease of space in the
Property by Purchaser after the date of this Assignment, and shall defend,
indemnify and hold harmless Seller from and against any claims, liability,
damages, causes of action, expenses, and attorneys’ fees incurred by Seller by
reason of the failure of Purchaser to fulfill, perform, discharge, and observe
its obligations with respect to the Leases or the Contracts.
     4. Agreement Applies. Except as may otherwise be provided in the Agreement,
the Contracts and Leases are being assigned and transferred, and the Personal
Property is being transferred, to Purchaser on an “as is,” and “where is” basis,
with all faults, and without any representation or warranty, all of which Seller
hereby disclaims, all as more particularly set forth in Section 11.2 of the
Agreement, which Section shall be, and hereby is, incorporated herein by
reference.

 

--------------------------------------------------------------------------------

 

     5. Counterparts. This Assignment may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, with the same effect as
if all parties had signed the same signature page.
     6. Attorneys’ Fees. In any action between the parties to enforce any of the
terms or provisions of this Assignment, the prevailing party in the action shall
be entitled to recover from the non-prevailing party, in addition to damages,
injunctive relief or other relief, and its reasonable costs and expenses,
including, without limitation, costs and reasonable attorneys’ fees (including
on appeal).
     7. Merger. This Assignment and the Agreement contain the entire
understanding between the parties relating to their subject matter. All prior
and contemporaneous agreements and understandings, whether oral or written, are
superseded by this Assignment and the Agreement. This Assignment may only be
modified in writing executed by both Purchaser and Seller. Nothing contained in
this Assignment is intended to terminate or affect the validity of any of the
representations or warranties contained in the Agreement.
     8. Joint and Several Liability. All obligations and liabilities of
Purchaser under this Assignment shall be joint and several as to each of the
individuals or entities who compose Purchaser.
     9. Miscellaneous. This Assignment shall be binding upon and shall inure to
the benefit of the parties hereto, their heirs, executors, administrators,
successor-in-interest and assigns. If any term or provision of this Assignment
shall be held invalid or unenforceable, the remainder of this Assignment shall
not be affected. This Assignment shall be construed in accordance with and
governed by the laws of the Commonwealth of Virginia. Nothing in this Assignment
shall impair, limit or lessen any of the rights of the parties with respect to
the provisions of the Agreement which were intended to survive the Closing Date.
Nothing in this Assignment, express or implied, is intended to confer upon any
person or entity, other than the parties hereto and their respective successors
and assigns, any rights or remedies.
     IN WITNESS WHEREOF, the undersigned have caused this instrument to be
executed as of the date written above.

 

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              SELLER:
 
             
 
  a    
 
       
 
       
 
             
 
            PURCHASER:
 
             
 
  a    
 
       
 
       
 
             

 

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EXHIBIT A
DESCRIPTION OF PROPERTY
[ATTACHED]

 

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EXHIBIT B
DESCRIPTION OF TANGIBLE PROPERTY
[ATTACHED]

 

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EXHIBIT C-1
LIST OF LEASES UNDER WHICH PURCHASER ASSUMES
OBLIGATIONS AFTER THE CLOSING DATE
[ATTACHED]

 

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EXHIBIT C-2
LIST OF LEASES UNDER WHICH PURCHASER ASSUMES
OBLIGATIONS BEFORE AND AFTER THE CLOSING DATE
[ATTACHED]

 

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EXHIBIT D-1
LIST OF CONTRACTS UNDER WHICH PURCHASER ASSUMES
OBLIGATIONS AFTER THE CLOSING DATE
[ATTACHED]

 

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EXHIBIT D-2
LIST OF CONTRACTS UNDER WHICH PURCHASER ASSUMES
OBLIGATIONS BEFORE AND AFTER THE CLOSING DATE
[ATTACHED]

 

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EXHIBIT G
Form of FIRPTA Affidavit
(Attached)

 

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FIRPTA CERTIFICATE
     ___ (“Member”) is the sole owner of ___ (“Seller”). Seller, a disregarded
entity for U.S. tax purposes, is the transferor of certain real property more
particularly described on Exhibit A attached hereto (the “Property”).
     Section 1445 of the Internal Revenue Code of 1986 (the “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 of
the Code), 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 the transferee that withholding of tax
will not be required in connection with the disposition of the Property pursuant
to that certain Purchase and Sale Agreement and Escrow Instructions dated as of
___, 200___, by and between ___, a ___ (“Purchaser”) and Seller, the undersigned
certifies the following on behalf of Member:
     1. Member is not a foreign corporation, foreign Company, foreign trust or
foreign estate, as those terms are defined in the Code and the regulations
promulgated thereunder;
     2. Member is not a disregarded entity as defined in §1.1445-2(b)(2)(iii),
     3. Member’s U.S. employer identification number is ___, and
     4. Member’s address is: 620 Newport Center Drive, Suite 1300, Newport
Beach, CA 92660.
     It is understood that this certificate may be disclosed to the Internal
Revenue Service 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 the foregoing
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 Member.
Date: ________________, 200__
                                                            

 

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Exhibit A
Legal Description
(Attached)

 

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EXHIBIT H
Form of Tenant Notice
(Attached)

 

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NOTICE TO TENANTS
[Date]
[Project Name]
[Address]
[City/State/ZIP]
Dear Tenant:
     Notice is hereby given to the tenants of ___ (the “Property”) that ___, a
___ (“Seller”), the current owner of the Property, has sold the Property to ___,
a ___ (“Purchaser”) effective [date of takeover]. Purchaser has assumed all of
the obligations of landlord under your lease, including any obligations with
respect to your security deposit, if any, which has been transferred to
Purchaser.

              Sincerely,
 
            “Seller”
 
             
 
  a    
 
       
 
                  “Purchaser”
 
             
 
  a    
 
       
 
             

 

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EXHIBIT I
Form of Assignment and Assumption Agreement
(Attached)

 

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ASSIGNMENT AND ASSUMPTION
AGREEMENT
     THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment and Assumption”)
dated as of ___, 200_, is entered into by and between ___, a ___ (“Assignor” and
“Buyer”), and ___, a ___ (“Assignee”):
RECITALS
     A. Reference is hereby made to that certain Purchase and Sale Agreement and
Escrow Instructions dated as of ___, 200_, by and between Buyer and ___, a ___
(“Seller”) (the “Purchase Agreement”). All initially-capitalized terms not
otherwise defined herein shall have the meanings set forth in the Purchase
Agreement unless the context clearly indicates otherwise.
     B. Assignor desires to assign to Assignee, all of Assignor’s right, title
and interest as buyer in, to and under the Purchase Agreement, and Assignee
desires to accept the assignment thereof and assume Assignor’s obligations
thereunder.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
AGREEMENT
     1. Assignment and Assumption and Assumption.
          1.1 Assignment. Assignor hereby transfers, assigns and conveys,
without recourse, representation or warranty, express or implied, all of
Assignor’s rights, interests, liabilities and obligations in and to the
Property, and all of Assignor’s rights, interests, liabilities and obligations
under the Purchase Agreement (and related documents) to acquire same to
Assignee. Assignee hereby assumes all such rights, interests, liabilities and
obligations, and joins in all representations, warranties, releases, and
indemnities, of Assignor under the Purchase Agreement (and related documents)
relating to such Property and the Purchase Agreement (and related documents)
assigned to it above. Assignor agrees it shall not be released from its
obligations under the Purchase Agreement as a result of this Assignment and
Assumption, and Assignee agrees that its acquisition of the Property pursuant to
the Purchase Agreement shall be subject to all terms and conditions thereof,
including without limitation all release and as-is provisions of the Purchase
Agreement. Notwithstanding the foregoing, commencing as of the date hereof,
(i) Seller shall have the right to deal exclusively with Assignee with respect
to all matters concerning the Purchase Agreement, including, without limitation,
any modifications and amendments to the Purchase Agreement, without obtaining
Assignor’s prior consent, and (ii) Assignee shall have the full authority to
bind the Assignee and Buyer.
          1.2 Assumption. Assignee hereby assumes all of the terms and
provisions under the Purchase Agreement, and all of Assignor’s obligations under
the Purchase Agreement arising after the date hereof and agrees fully and
faithfully to pay, perform and discharge, as and when payment, performance and
discharge are due, all of Buyer’s obligations under the Purchase Agreement
arising after the date hereof, including, without limitation, all of the
“as-is,” release and indemnity provisions set forth under the Purchase
Agreement.
          1.3. This Assignment and Assumption shall be binding on and inure to
the benefit of Assignor and Assignee and their respective heirs, executors,
administrators, successors in interest and permitted assigns.
     2. Attorneys’ Fees. In the event any party institutes any action or
proceeding against the other party with regard to this Assignment and
Assumption, the prevailing party of such action shall be

 

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entitled to recover from the non-prevailing party (in addition to all other
remedies provided by law) its attorneys’ fees and costs incurred in such action
or proceeding.
     3. Counterparts. This Assignment and Assumption may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which when taken together shall constitute one and the same instrument. Each
counterpart may be delivered by facsimile transmission. The signature page of
any counterpart may be detached therefrom without impairing the legal effect of
the signature(s) thereon provided such signature page is attached to any other
counterpart identical thereto.
(Signatures on Next Page)

 

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IN WITNESS WHEREOF, Buyer/Assignor and Assignee have executed this Assignment
and Assumption as of the day and year first above written.

                          “BUYER” and “ASSIGNOR”       “ASSIGNEE”    
 
                                             
a
              a                                  
By:
            By:      
Name:
            Name:        
Its:
            Its:        

i