Exhibit 10.1
AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS
     THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW
INSTRUCTIONS (“Agreement”) between GREIT — 525 AND 600 B STREET, LP, a Virginia
limited partnership (“Seller”), and LEGACY PARTNERS REALTY FUND II, LLC, a
Delaware limited liability company (“Buyer”), is made and entered into as of the
later of (i) the date this Agreement is executed by Seller and (ii) the date
this Agreement is executed by Buyer (the “Effective Date”):

1.   Purchase and Sale.       Subject to and in accordance with the terms and
provisions of this Agreement, Seller agrees to sell and Buyer agrees to purchase
from Seller, the Property, which term “Property” shall mean and include the
following:

  1.1   The parcels of land located in the City of San Diego, California located
at 600 B Street, San Diego, being more particularly described on Exhibit A
attached hereto (hereinafter referred to as the “Land”); and     1.2   All
rights, privileges, and easements appurtenant to the Land, including, without
limitation, all water rights, mineral rights, development rights, air rights,
reversions, or other appurtenances to said Land, and all right, title, and
interest of Seller, if any, in and to any land lying in the bed of any street,
road, alley, or right-of-way, open or proposed, adjacent to or abutting the
Land; and     1.3   Seller’s right, title and interest in all buildings,
structures, and improvements situated on the Land and the property underlying
the Ground Leases, including, without limitation, the office building containing
approximately 338,905 square feet of net rentable floor area, all parking areas
and other amenities located on the Land, and all apparatus, elevators, built-in
appliances, equipment, pumps, machinery, plumbing, heating, air conditioning,
and electrical and other fixtures located on the Land (all of which are together
hereinafter referred to as the “Improvements”); and     1.4   Seller’s right,
title and interest in the ground tenant’s interest in those five ground leases
underlying a portion of the Improvements located at 600 B Street all dated as of
June 28, 1963 and more particularly described on Exhibit B attached hereto
(hereinafter collectively referred to as the “Ground Leases”); and     1.5   All
leases and other occupancy agreements (collectively, the “Leases”), including
associated amendments, with all parties (collectively, “Tenants”) leasing the
Property or any part thereof or hereafter entered into in accordance with the
terms hereof prior to Closing, together with all security deposits, other
deposits held in connection with the Leases, and all of Seller’s right, title
and interest in and to all guarantees, letters of credit and other similar
credit enhancements providing

[FINAL EXECUTION COPY]

1

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

 

      additional security for such Leases (a schedule of all current Leases and
security being attached hereto as Exhibit G);     1.6   All tangible and
intangible personal property owned by Seller located on or used in connection
with the Property, including, without limitation, all sculptures, paintings and
other artwork, all equipment, furniture, tools and supplies, all plans and
specifications and other architectural and engineering drawings, if any, with
respect to the Land and the Improvements, and any other personal property and
all related intangibles as are owned by Seller and currently located in, on or
about or are used for the operation, maintenance, administration or repair of
the Property (a schedule of which is attached as Exhibit I, including Seller’s
interest, if any, in the common name of the Property (collectively, the
“Personal Property”);     1.7   All service contracts, agreements, warranties
and guaranties relating to the operation of the Property as of the Effective
Date (a schedule of which is attached hereto as Exhibit F), to the extent
assignable, and any other service and operating agreements pertaining to the
Property that are entered into by Seller after the date of this Agreement and
prior to the Closing in accordance with the terms of this Agreement, in each
case to the extent approved by Buyer in accordance with this Agreement
(collectively, the “Contracts”); provided, however, any Contracts not so
approved by Buyer shall be terminated by Seller on or before the Closing; and  
  1.8   To the extent transferable, all building permits, certificates of
occupancy and other certificates, permits, consents, authorizations, variances
or waivers, dedications, subdivision maps, licenses and approvals from any
governmental or quasi-governmental agency, department, board, commission, bureau
or other entity or instrumentality relating to the Property (the “Permits”).

2.   Purchase Price.       Subject to the charges, prorations and other
adjustments set forth in this Agreement, the total Purchase Price of the
Property shall be Ninety Six Million Dollars ($96,000,000) (“Purchase Price”)
payable as follows:

  2.1   Deposit/Further Payments/Down Payment.

  2.1.1   Within two (2) business days of the Effective Date, Buyer shall
deposit into Escrow the amount of Two Hundred Fifty Thousand Dollars $250,000
(the “Initial Deposit”), in the form of a wire transfer payable to Fidelity
National Title Company, 17911 Von Karman, Suite 275, Irvine, CA 92614, Attn:
Natalie Vona, telephone (949) 224-4723 (“Escrow Holder”). Escrow Holder shall
place the Initial Deposit into an interest bearing money market account at a
bank or other financial institution reasonably satisfactory to Buyer, and
interest thereon shall be credited to Buyer’s account.

[FINAL EXECUTION COPY]

2

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

 

  2.1.2   The Initial Deposit shall remain refundable until 5:00 p.m. on the
date that is five (5) business days following the Effective Date (the “Initial
Review Deadline”). If, based on its initial review, Buyer wishes to proceed with
the purchase of the Property in accordance with the terms of this Agreement,
Buyer shall deliver to Seller and Escrow Holder by the Initial Review Deadline a
written notice confirming that Buyer then wishes to proceed (“First Approval
Notice”). In such event, Buyer may then proceed with its review of the Property
pursuant to the terms hereof. If Buyer does not deliver a First Approval Notice
by the Initial Review Deadline, the Initial Deposit, together with any interest
accrued thereon, shall be immediately be refunded to Buyer, this Agreement shall
be deemed terminated, and neither party shall have any further obligation
hereunder except as specifically set forth herein.     2.1.3   Within one
(1) business day following the last day of the Inspection Period (as defined in
Section 6.1 below), and provided that Buyer has delivered a First Approval
Notice as set forth in Section 2.1.2 above and a Second Approval Notice (as
defined in Section 6.1 below), Buyer shall deposit into Escrow the amount of One
Million Five Hundred Thousand Dollars ($1,500,000) (the “Additional Deposit”),
in the form of a wire transfer payable to Escrow Holder. Escrow Holder shall
place the Additional Deposit into an interest bearing money market account at a
bank or other financial institution reasonably satisfactory to Buyer, and
interest thereon shall be credited to Buyer’s account. The Initial Deposit, and
to the extent it has been deposited, the Additional Deposit, shall collectively
be referred to herein as the “Deposit”.          2.2   On or before Closing,
Buyer shall deposit into Escrow the balance of the Purchase Price (subject to
adjustments and prorations as set forth herein), by wire transfer payable to
Escrow Holder.

3.   Title to Property.       During the Inspection Period (hereafter defined)
Buyer shall review and approve the Title Documents (hereinafter defined) and the
Survey (hereinafter defined). If the Title Documents or Survey reflect or
disclose any defect, exception or other matter affecting the Property (“Title
Defects”) that is unacceptable to Buyer, then prior to the expiration of the
Inspection Period, Buyer shall provide Seller with written notice (“Title
Notice”) of Buyer’s objections. Seller may, at its sole option, elect to cure or
remove the objections made by Buyer. Should Seller elect to attempt to cure or
remove the objection, it shall be a condition precedent to Buyer’s obligation to
acquire the Property that Seller cures such title objection prior to the
Closing. Unless Seller provides written notice to Buyer, within five (5) days
prior to the expiration of the Inspection Period, that Seller intends to cure
Buyer’s title objections, Seller shall be deemed to have elected not to cure or
remove Buyer’s title objections, and Buyer shall be entitled, as Buyer’s sole
and exclusive remedy to either (a) not deliver a Second Approval Notice as
referenced herein,

[FINAL EXECUTION COPY]

3

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

 

    in which case the Initial Deposit shall be released to Seller and the
Additional Deposit shall not be submitted by Buyer; or (b) elect to waive the
objections and close this transaction as otherwise contemplated herein. If Buyer
shall fail to terminate this Agreement pursuant to this Section 3, all matters
shown on the Survey and all matters described in the Title Report, except for
monetary liens which were not created by the Buyer and any matters the Seller
has agreed to cure in writing, shall be deemed “Permitted Exceptions.” If Buyer
is notified of any new Title Defect (which was not disclosed to Buyer prior to
the expiration of the Inspection Period) following the expiration of the
Inspection Period, Buyer shall have five (5) days from the date of such
notification to deliver a Title Notice with respect to any such new Title Defect
and Seller shall have five (5) business days to respond to Buyer’s Title Notice
with respect to such new Title Defects. If Buyer does not elect to cure such new
Title Defects, Buyer shall have the right to terminate this Agreement by
delivering written notice to Seller within ten (10) business days following
Buyer’s delivery of such new Title Notice.   4.   Due Diligence Items.

  4.1   Seller shall deliver to Buyer each of the following by no later than one
(1) business day following the Effective Date (together with the items described
in Section 4.2, collectively, the “Due Diligence Items”):

  4.1.1   The existing survey of the Property in Seller’s possession, dated
May 6, 2004 (the “Survey”);     4.1.2   A current preliminary title report or
title commitment (the “Title Report”) for the issuance of a standard coverage
owner’s policy of title insurance, with standard provisions and exceptions (the
“Title Policy”) to Buyer from the Escrow Holder, together with copies of all
documents constituting exceptions to the title as reflected in the Title Report
(collectively referred to hereinafter as the “Title Documents”);     4.1.3   A
list of all tenant leases, contracts, including service contracts, warranties,
management, maintenance, leasing commission or other agreements affecting the
Property, if any, together with copies of the same;     4.1.4   True and correct
copies of the real estate and personal property tax statements covering the
Property or any part thereof for each of the three (3) years prior to the
current year and, if available, for the current year;     4.1.5   A schedule of
all current or pending litigation with respect to the Property or any part,
thereof, if any;     4.1.6   Operating statements for the most recent two
(2) full calendar years and monthly operating statements for the calendar year
to date;

[FINAL EXECUTION COPY]

4

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

 

  4.1.7   An inventory of all personal property located on the Property, used in
the maintenance of the Property or stored for future use at the Property and an
inventory of all furniture and appliances used in the units, if any.

  4.2   Seller shall make the following available for inspection by Buyer during
ordinary business hours (or as otherwise agreed) at Seller’s management office:

  4.2.1   All site plans, leasing plans, as-built plans, drawings,
environmental, mechanical, electrical, structural, soils and similar reports
and/or audits and plans and specifications relative to the Property in the
possession of Seller, if any.     4.2.2   The tenant files, books and records
relating to the ownership and operation of the Property.     4.2.3   All other
items relating to the Property which are located at Seller’s management office
or otherwise within Seller’s possession or control, except internal financial
projections, appraisals, and other materials reasonably deemed by Seller to be
proprietary or confidential.

5.   Inspections.

  5.1   Buyer shall have a temporary non-exclusive license to enter and conduct
non-invasive feasibility, environmental, and physical studies collectively of
the Property that Buyer may deem necessary or advisable (the “Inspections”) at
any time during the Inspection Period, on the terms set forth in this Article 5.
Buyer shall not conduct invasive testing of any kind (including without
limitation, “Phase II” environmental testing without Seller’s consent. Buyer’s
right to conduct the Inspections shall be subject to rights of Tenants and shall
be subject to such conditions as may be reasonably imposed by the Seller in
order to avoid disruption at the Property.     5.2   Buyer must arrange all
Inspections of the Property with Seller at least one (l) business day in advance
of any Inspections. Buyer and its agents shall maintain equipment and other
materials in an orderly manner while they are located on the Property and to
maintain them in locations specified by Seller. Seller hereby confirms that it
has approved the scope and timing of the assessment work specifically described
in Exhibit J attached hereto and agrees to perform the work referenced therein
as work to be completed by Seller or Seller’s contractor. Buyer agrees to remove
all debris and trash resulting from the Inspections on a daily basis and to
remove all equipment and other materials used by Buyer or its agents as soon as
the activity for which such equipment and other materials are used is completed.
Buyer and its agents shall take all appropriate measures for the safety of
persons and property on the Property and shall comply with all applicable legal
requirements. Buyer shall restore any damage to the Property resulting from the
Inspections including but not limited to repair of surface openings resulting
from

[FINAL EXECUTION COPY]

5

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

 

      tests. Buyer shall promptly provide to Seller a copy of all final reports
and final test results prepared or furnished in connection with the Inspections.

  5.3   In the event that the Inspections show any fact, matter or condition to
exist with respect to the Property that is unacceptable to Buyer, in Buyer’s
sole subjective discretion, then Buyer shall be entitled, as its sole and
exclusive remedy, to (1) elect not to deliver a Second Approval Notice as set
forth herein, in which event the Initial Deposit will be automatically released
to Seller and Buyer will not submit the Additional Deposit, or (2) elect to
proceed to close the transaction as otherwise contemplated herein. Buyer agrees
to promptly discharge any liens that may be imposed against the Property as a
result of the Inspections and to defend, indemnify and hold Seller harmless from
all, claims, suits, losses, costs, expenses (including without limitation court
costs and attorneys’ fees), liabilities, judgments and damages incurred by
Seller as a result of any Inspections.     5.4   Buyer shall indemnify, save and
hold Seller and Seller’s officers, agents, employees, directors, trustees,
invitees, successors, and assigns (collectively “Indemnitees”) harmless against
all losses, costs, expenses, liabilities, claims, litigation, demands,
proceedings and damages (including but not limited to attorney’s fees) suffered
or incurred by Seller or any such Indemnitees arising out of and limited to the
Inspections, provided that Buyer shall not incur any liability due to its
discovery, without exacerbation of the condition of any Hazardous Materials or
other circumstances at the Property. Buyer waives any claims against Seller
arising out of the Inspections or this Agreement other than claims to the extent
caused by any negligent or willful misconduct of Seller or Seller’s agents.
Buyer hereby assume all responsibility for claims against Seller by the
contractors, subcontractors, employees, and agents of Buyer other than claims to
the extent caused by the negligence or willful misconduct of Seller or its
agents.     5.5   Buyer shall, during the term of this Agreement and at all
times during which access is available to it, require its subcontractors and
agents, to maintain insurance, in form and substance reasonably satisfactory to
Seller, with insurance companies acceptable to Seller, the following insurance:
Commercial General Liability Insurance, with limits of not less than One Million
Dollars ($1,000,000) combined single limit per occurrence and not less than Two
Million Dollars ($2,000,000) on a general aggregate basis, for bodily injury,
death and property damage (provided that agents and consultants shall not be
required to carry coverage in excess of $1,000,000). In addition, Buyer shall
maintain excess (umbrella) liability insurance with liability insurance with
limits of not less than Five Million Dollars ($5,000,000) per occurrence. Each
policy of insurance shall name Seller as an additional insured. Further, each
policy of insurance shall state that such policy is primary and noncontributing
with any insurance carried by Seller. Such policy shall contain a provision that
the naming of the additional insured shall not negate any right the additional
insured would have had as a claimant under the policy if not so named and shall
contain severability of interest and cross-liability clauses. A certificate,
together with any endorsements to the

[FINAL EXECUTION COPY]

6

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

 

      policy required to evidence the coverage which is to be obtained
hereunder, shall be delivered to Seller prior to entry on the Property. The
certificate shall expressly provide that no less than thirty (30) days prior
written notice shall be given Seller in the event of any material alteration to
or cancellation of the coverages evidenced by said certificate. Any policies
required by the provisions of this Section may be made a part of a blanket
policy of insurance with a “per project, per location endorsement” so long as
such blanket policy contains all of the provisions required herein and does not
reduce the coverage, impair the rights of the other party to this Agreement or
negate the requirements of this Agreement.     5.6   During the course of its
performance of the Inspections, Buyer will acquire knowledge concerning the
Property or Seller, or knowledge of other matters of a sensitive business nature
(collectively, “Privileged Information”). Except as described below, neither
Buyer nor its agents shall disclose to any third party, publicize or suffer or
permit any of their respective employees to so disclose or publicize any such
Privileged Information, other than to consultants, attorneys and agents as
necessary for the Buyer’s inspection and analysis of the Property. In the event
that Buyer believes in good faith that it is required by any legal requirement
to disclose any such Privileged Information, then Buyer shall immediately notify
Seller of such belief and the reasons for such belief. If Seller within ten
(10) days after receipt of such notice, advises the party that sent the notice
that Seller shall itself disclose the information, then Buyer shall not make
such disclosure (unless either such party reasonably believes that it must
disclose such information by law). If Buyer reasonably believes that such
disclosure is required to be made in less than the 10-day period, then the
notice to Seller shall so state and Seller’s time to respond will be reduced
accordingly.     5.7   The obligations of Buyer described in this Article shall
survive the Closing or any termination of this Agreement.

6.   Approval.

  6.1   Provided that Buyer delivers the First Approval Notice, Buyer shall have
until the date which is twenty (20) business days after the Effective Date
(“Inspection Period”) to approve or disapprove the Inspections. If Buyer wishes
to proceed with its acquisition of the Property at the expiration of the
Inspection Period, Buyer shall to deliver to Seller and Escrow Holder by 5:00
p.m. on the last day of the Inspection Period a written notice confirming that
Buyer wishes to proceed (“Second Approval Notice”). If Buyer shall fail to
deliver a Second Approval Notice to Seller and Escrow Holder prior to the
expiration of the Inspection Period, the condition of the Property shall be
deemed disapproved and this Agreement and the Escrow shall thereupon be
terminated. In such event, Buyer shall not be entitled to purchase the Property,
Seller shall not be obligated to sell the Property to Buyer, the Initial Deposit
and all interest thereon shall be released to Seller, Buyer shall not submit the
Additional Deposit, and the parties shall be

[FINAL EXECUTION COPY]

7

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

 

      relieved of any further obligation to each other with respect to the
Property, except as provided in Paragraph 5.     6.2   Notwithstanding anything
to the contrary contained herein, Buyer hereby agrees that, in the event this
Agreement is terminated for any reason, then Buyer shall promptly and at its
sole expense return to Seller all Due Diligence Items which have been delivered
by Seller to Buyer in connection with the Inspections, along with copies of all
final reports, drawings, plans, studies, summaries, surveys, maps and other data
prepared by third parties relating to the Property, subject to restrictions on
Buyer’s ability to make any such materials available to Seller that are imposed
in any agreement with a third party consultant preparing any such reports or
materials (“Buyer’s Reports”); provided, however, that delivery of such copies
and information by Buyer shall be without warranty or representation whatsoever,
express or implied, including without limitations, any warranty or
representation as to ownership, accuracy, adequacy or completeness thereof or
otherwise. Buyer shall cooperate with Seller at no expense to Buyer in order to
obtain a waiver of any such restrictions.     6.3   On or before the end of the
Inspection Period, Buyer will designate in a written notice to Seller which
Contracts Buyer will assume and which Contracts must be terminated by Seller at
Closing. Taking into account any credits or prorations to be made pursuant to
this Agreement for payments coming due after Closing but accruing prior to
Closing, Buyer will assume the obligations arising from and after the Closing
Date under those Contracts which Buyer has designated will not be terminated. At
Buyer’s expense (if any), Seller shall terminate at Closing all Contracts that
Buyer does not elect to assume as set forth herein.

7.   Escrow.

  7.1   Opening.

  7.1.1   The purchase and sale of the Property shall be consummated through an
escrow (“Escrow”) to be opened with Escrow Holder within two (2) business days
after the Effective Date. Escrow shall be deemed to be opened as of the date
fully executed copies (or counterparts) of this Agreement are delivered to
Escrow Holder by Buyer and Seller (“Opening of Escrow”). This Agreement shall be
considered as the Escrow instructions between the parties, with such further
instructions as Escrow Holder shall require in order to clarify its duties and
responsibilities. If Escrow Holder shall require further Escrow instructions,
Escrow Holder may prepare such instructions on its usual form. Such further
instructions shall be promptly signed by Buyer and Seller and returned to Escrow
Holder within three (3) business days of receipt thereof. In the event of any
conflict between the terms and conditions of this Agreement and such further
instructions, the terms and conditions of this Agreement shall control.

[FINAL EXECUTION COPY]

8

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

 

  7.2   Closing.

  7.2.1   Subject to the provisions for extension of Closing expressly stated in
this Agreement, Escrow shall close (“Closing”) on the date which is twenty
(20) business days following the expiration of the Inspection Period.

  7.3   Buyer Required to Deliver.         Buyer shall deliver to Escrow the
following:

  7.3.1   Concurrently with the Opening of Escrow, the Initial Deposit and,
following the delivery of a First Approval Notice, the Additional Deposit;    
7.3.2   On or before Closing, the Purchase Price, subject to the closing
adjustments, credits and prorations contemplated hereby;     7.3.3   On or
before Closing, such other documents as Title Company may reasonably require
from Buyer in order to issue the Title Policy;     7.3.4   An original
counterpart executed by Buyer of an assignment and assumption agreement (the
“Assignment and Assumption Agreement”) in substantially the form attached hereto
as Exhibit C, whereby Seller assigns and conveys to Buyer all of Seller’s right,
title and interest in and Buyer assumes all of Seller’s obligations under, the
Leases and the Contracts and the Permits;     7.3.5   An original counterpart
executed by Buyer of an Assignment and Assumption of Ground Leases (the
“Assignment and Assumption of Ground Leases”) in substantially the form attached
hereto as Exhibit D;     7.3.6   A counterpart closing statement (the “Closing
Statement”) setting forth the Purchase Price and all amounts charged against
Buyer pursuant to Section 7.7 of this Agreement.

  7.4   Seller Required to Deliver.         On or before Closing, Seller shall
deliver to Escrow the following:

  7.4.1   A duly executed and acknowledged special warranty deed, conveying fee
title to the Property in favor of Buyer (the “Deed”), with a legal description
identical to the legal description attached hereto as Exhibit A;     7.4.2   An
executed certificate of non-foreign status;

[FINAL EXECUTION COPY]

9

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

 

  7.4.3   A bill of sale of the Personal Property, if any, without warranty, in
favor of Buyer and duly executed by Seller, in substantially the form attached
hereto as Exhibit E;     7.4.4   An original counterpart executed by Seller of
the Assignment and Assumption Agreement and the Assignment and Assumption of the
Ground Leases;     7.4.5   A counterpart Closing Statement setting forth the
Purchase Price and all amounts charged against Seller pursuant to Section 7.7 of
this Agreement;     7.4.6   Such other documents as Title Company may reasonably
require from Seller in order to issue the Title Policy;     7.4.7   A letter
from Seller addressed to each Tenant informing such Tenant of the change in
ownership and directing that future rent payments be made to Buyer;     Seller
shall deliver the following directly to Buyer after Closing has occurred:    
7.4.8   All keys to all buildings and other improvements located on the
Property, combinations to any safes thereon, and security devices therein in
Seller’s possession;     7.4.9   All records and files relating to the
management or operation of the Property, including, without limitation, all
insurance policies, all security contracts, all tenant files (including
correspondence), property tax bills, and all calculations used to prepare
statements of rental increases under the Leases and statements of common area
charges, insurance, property taxes and other charges which are paid by tenants
of the Project; and

  7.5   Buyer’s Costs.         Buyer shall pay the following:

  7.5.1   One-half of Escrow Holder’s fees, costs and expenses;     7.5.2   The
cost of recording any documents relating to Buyer’s financing;     7.5.3   All
costs of the title search and any title insurance premiums except the premium
for the basic CLTA title insurance policy; and     7.5.4   All other costs
customarily borne by Buyers of real property in the county in which the Property
is situated;

[FINAL EXECUTION COPY]

10

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

 

  7.6   Seller’s Costs.

Seller shall pay the following:

  7.6.1   One-half of Escrow Holder’s fees, costs and expenses;     7.6.2   All
transfer taxes, and costs of recording the Assignment and Assumption of Ground
Leases;     7.6.3   The premium for the basic CLTA title insurance policy; and  
  7.6.4   All other costs not itemized above which are customarily borne by
sellers of real property in the county in which the Property is situated.

  7.7   Prorations.

  7.7.1   Items to be Prorated. The following shall be prorated between Seller
and Buyer as of the Closing with the Buyer being deemed the owner of the
Property as of the Closing:         (a) Taxes and Assessments All non-delinquent
real property taxes, assessments and other governmental impositions of any kind
or nature, including, without limitation, any special assessments or similar
charges (collectively, “Taxes”), which relate to the tax year within which the
Closing occurs based upon the actual number of days in the tax year. Seller
shall be responsible for all Taxes assessed with respect to periods prior to
Closing, and Buyer shall be responsible for all Taxes assessed with respect to
periods from and after Closing. With respect to any portion of the Taxes which
are payable by any Tenant directly to the authorities, no proration or
adjustment shall be made. The proration for Taxes shall be based upon the most
recently issued tax bill for the Property, and shall be calculated based upon
the maximum early payment discount available. Upon the Closing, Buyer shall be
responsible for real estate taxes and assessments on the Property payable from
and after the Closing. In no event shall Seller be charged with or be
responsible for any increase in the taxes or assessments on the Property
resulting from the sale of the Property or from any improvements made or leases
entered into after the Closing. With respect to all periods for which Seller has
paid Taxes, Seller hereby reserves the right to institute or continue any
proceeding or proceedings for the reduction of the assessed valuation of the
Property, and, in its sole discretion, to settle the same. Seller shall have
sole authority to control the progress of, and to make all decisions with
respect to, such proceedings but shall provide Buyer with copies of all
communications with the taxing authorities. All net tax refunds and credits
attributable to any period prior to the Closing which Seller has paid or for
which Seller has given a credit to Buyer shall belong to and be the

[FINAL EXECUTION COPY]

11

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

 

      property of Seller, provided, however, that any such refunds and credits
that are the property of Tenants under Leases shall be promptly remitted by
Seller directly to such Tenants or to Buyer for the credit of such Tenants. All
net tax refunds and credits attributable to any period subsequent to the Closing
shall belong to and be the property of Buyer. Buyer agrees to reasonably
cooperate with Seller in connection with the prosecution of any such proceedings
and to take all steps, whether before or after the Closing, as may be necessary
to carry out the intention of this subparagraph, including the delivery to
Seller, upon demand, of any relevant books and records, including receipted tax
bills and cancelled checks used in payment of such taxes, the execution of any
and all consent or other documents, and the undertaking of any acts necessary
for the collection of such refund by Seller. 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. Tax records need not be kept longer
than seven years.         (b) Rents Buyer will receive a credit at the Closing
for all rents collected by Seller prior to the Closing and allocable to the
period from and after the Closing based upon the actual number of days in the
month. No credit shall be given the Seller for accrued and unpaid rent or any
other non-current sums due from Tenants until these sums are paid. Buyer shall
cooperate with Seller after the Closing to collect any rent under the Tenant
Leases which has accrued as of the Closing; provided, however, Buyer shall not
be obligated to sue any Tenants or exercise any legal remedies under the Tenant
Leases or to incur any expense over and above its own regular collection
expenses. All payments collected from Tenants after the Closing shall first be
applied to the month in which the Closing occurs, then to any rent due to Buyer
for the period after Closing and finally to any rent due to Seller for the
period prior to Closing. Seller shall not engage in collection efforts
post-closing.         (c) CAM Expenses To the extent that Tenants are
reimbursing the landlord for common area maintenance and other operating
expenses (collectively, “CAM Charges”), CAM Charges shall be prorated at Closing
and again subsequent to Closing, as of the date of Closing on a lease-by-lease
basis with each party being entitled to receive a portion of the CAM Charges
payable under each Lease for the CAM Lease Year in which Closing occurs, which
portion shall be equal to the actual CAM Charges incurred during the party’s
respective periods of ownership of the Property during the CAM Lease Year. As
used herein, the term “CAM Lease Year” means the twelve (12) month period as to
which annual CAM Charges are owed under each Lease. Five (5) days prior to
Closing the Seller shall submit to Buyer an itemization of its actual CAM
Charges operating expenses through such date and the amount of CAM Charges
received by the Seller as of such date, together with an estimate of CAM Charges
to be incurred to, but not including, the Closing. In the event that

[FINAL EXECUTION COPY]

12

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

 

      the Seller has received CAM Charges payments in excess of its actual CAM
Charges operating expenses, the Buyer shall be entitled to receive a credit
against the Purchase Price for the excess. In the event that the Seller has
received CAM Charges payments less than its actual CAM Charges operating
expenses, to the extent that the Leases provide for a “true up” at the end of
the CAM Lease Year, the Seller shall be entitled to receive any deficit but only
after the Buyer has received any true up payment from the Tenant. Upon receipt
by either party of any CAM Charge true up payment from a Tenant, the party
receiving the same shall provide to the other party its allocable share of the
“true up” payment within thirty (30) days of the receipt thereof.         (d)
Operating Expenses All operating expenses (including all charges under the
service contracts and agreements assumed by Buyer) shall be prorated, and as to
each service provider, operating expenses payable or paid to such service
provider in respect to the billing period of such service provider in which the
Closing occurs (the “Current Billing Period”), shall be prorated on a per diem
basis based upon the number of days in the Current Billing Period prior to the
Closing and the number of days in the Current Billing Period from and after the
Closing, and assuming that all charges are incurred uniformly during the Current
Billing Period. If actual bills for the Current Billing Period are unavailable
as of the Closing, then such proration shall be made on an estimated basis based
upon the most recently issued bills, subject to readjustment upon receipt of
actual bills.         (e) Security Deposits; Prepaid Rents. Prepaid rentals and
other tenant charges and security deposits (including any portion thereof which
may be designated as prepaid rent) under Tenant Leases, if and to the extent
that such deposits are in Seller’s actual possession or control and have not
been otherwise applied by Seller to any obligations of any Tenants under the
Tenant Leases, shall be credited against the Purchase Price, and upon the
Closing, Buyer shall assume full responsibility for all security deposits to be
refunded to the Tenants under the Tenant Leases (to the extent the same are
required to be refunded by the terms of such Tenant Leases or applicable). In
the event that any security deposits are in the form of letters of credit or
other financial instruments (the “Non-Cash Security Deposits”), Seller will
cooperate with Buyer to have Buyer named as beneficiary under the Non-Cash
Security Deposits; provided that such cooperation shall be at no cost or expense
to Seller. Buyer will not receive a credit against the Purchase Price for such
security deposits. Seller will cause each original letter of credit and all
necessary original transfer documentation to be placed into Escrow so that Buyer
is named as Beneficiary thereunder effective as of Closing, and the original
letter of credit in Buyer’s name is delivered to Buyer immediately following
Closing, or if for any reason such timing is not possible, Seller will

[FINAL EXECUTION COPY]

13

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

 

      cooperate with Buyer and place into Escrow such documentation as may be
necessary to cause any such letter of credit to be issued in Buyer’s name
immediately following Closing.         (f) Leasing Costs. Seller shall receive a
credit at the Closing for all leasing costs, including tenant improvement costs
and allowances, and its pro-rata leasing commissions, previously paid by Seller
in connection with any Lease or modification to an existing Lease which was
entered into after the Effective Date and which is approved or deemed approved
by Buyer pursuant to this Agreement, which approval included approval of the
tenant improvement costs. The Seller’s pro-rata share shall be equal to a
fraction which has as its numerator the number of months left in the base term
of the Lease after the Closing and which has as its denominator the number of
months in the base term of the Lease. Seller shall pay for all tenant
improvement allowances and leasing commissions and other leasing costs with
respect to the premises leased as of the Effective Date by the Tenants pursuant
to the Tenant Leases in effect as of the Effective Date, and will grant to Buyer
a credit toward the Purchase Price at Closing for any such improvement
allowances, free rent, leasing commissions or other leasing costs which are
unpaid as of the Closing or apply to periods after the Closing, but only if and
to the extent such leasing costs were not shown in the property revenue proforma
as delivered to Buyer prior to the Effective Date.         (g) Percentage Rent
Any percentage rents due or paid under any of the Leases (“Percentage Rent”)
shall be prorated between Buyer and Seller outside of Closing as of the Closing
on a Lease-by-Lease basis, as follows; (a) Seller shall be entitled to receive
the portion of the Percentage Rent under each Lease for the Lease Year in which
Closing occurs, which portion shall be the ratio of the number of days of said
Lease Year in which Seller was Landlord under the Lease to the total number of
days in the Lease Year, and (b) Buyer shall receive the balance of Percentage
Rent paid under each Lease for the Lease Year. As used herein, the term “Lease
Year” means the twelve (12) month period as to which annual Percentage Rent is
owed under each Lease. Upon receipt by either Buyer or Seller of any gross sales
reports (“Gross Sales Reports”) and any full or partial payment of Percentage
Rent from any tenant of the Property, the party receiving the same shall provide
to the other party a copy of the Gross Sales Report and a check for the other
party’s prorata share of the Percentage Rent within thirty (30) days of the
receipt thereof. In the event that the Tenant only remits a partial payment,
then the amount to be remitted to the other party shall be its prorata share of
the partial payment. Nothing contained herein shall be deemed or construed to
require either Buyer to Seller to pay to the other party its prorata share of
the Percentage Rent prior to receiving the Percentage Rent from the Tenant, and
the acceptance or negotiation of any check for Percentage Rent by either party

[FINAL EXECUTION COPY]

14

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

 

      shall not be deemed a waiver of that party’s right to contest the accuracy
or amount of the Percentage Rent paid by the Tenant.

  7.7.2   Calculation; Reproration. Prior to Closing the parties shall jointly
prepare an estimated closing statement which shall set forth the costs payable
under Sections 7.5 and 7.6 and the prorations and credits provided for in
Section 7.7.1 and elsewhere in this Agreement. Any item which cannot be finally
prorated because of the unavailability of information shall be tentatively
prorated on the basis of the best data then available and adjusted when the
information is available in accordance with this subparagraph; provided,
however, that there shall be no reproration for taxes and assessments. The
estimated closing statement as adjusted as aforesaid and approved in writing by
the parties shall be referred to herein as the “Closing Statement”. If the
prorations and credits made under the Closing Statement shall prove to be
incorrect or incomplete for any reason, then either party shall be entitled to
an adjustment to correct the same; provided, however, that there shall be no
reproration for taxes and assessments; and further provided that any adjustment
shall be made, if at all, within sixty (60) days after the Closing (except with
respect to CAM Charges, in which case such adjustment shall be made within
thirty (30) days after the information necessary to perform such adjustment is
available and in no event later than April 2007), and if a party fails to
request an adjustment to the Closing Statement by a written notice delivered to
the other party within the applicable period set forth above (such notice to
specify in reasonable detail the items within the Closing Statement that such
party desires to adjust and the reasons for such adjustment), then the
prorations and credits set forth in the Closing Statement shall be binding and
conclusive against such party.     7.7.3   Items Not Prorated. Seller and Buyer
agree that (a) on the Closing, the Property will not be subject to any financing
arranged by Seller; (b) none of the insurance policies relating to the Property
will be assigned to Buyer and Buyer shall responsible for arranging for its own
insurance as of the Closing; and (c) utilities, including telephone,
electricity, water and gas, shall be read on the Closing and Buyer shall be
responsible for all the necessary actions needed to arrange for utilities to be
transferred to the name of Buyer on the Closing, including the posting of any
required deposits and Seller shall be entitled to recover and retain from the
providers of such utilities any refunds or overpayments to the extent applicable
to the period prior to the Closing, and any utility deposits which it or its
predecessors may have posted. Accordingly, there will be no prorations for debt
service, insurance or utilities. In the event a meter reading is unavailable for
any particular utility, such utility shall be prorated in the manner provided in
subparagraph (1)(e) above.

[FINAL EXECUTION COPY]

15

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

 

  7.7.4   Indemnification. Buyer and Seller shall each indemnify, protect,
defend and hold the other harmless from and against any claim in any way arising
from the matters for which the other receives a credit or otherwise assumes
responsibility pursuant to this Section.     7.7.5   Survival. This Section 7.7
shall survive the Closing, provided that all prorations shall be settled by
April 2007.

  7.8   Determination of Dates of Performance.         Promptly after delivery
to Buyer of the Title Report, Escrow Holder shall prepare and deliver to Buyer
and Seller a schedule which shall state each of the following dates:

  7.8.1   The date of Opening of Escrow pursuant to Paragraph 6.1;     7.8.2  
The date of receipt of the Title Report by Buyer;     7.8.3   The date by which
title must be approved by Buyer pursuant to Paragraph 3.2;     7.8.4   The date
by which the Inspections must be approved by Buyer pursuant to Paragraph 5.1.1;
    7.8.5   The date by which the amounts described in Paragraph 2 must be
deposited by Buyer, for which determination Escrow Holder shall assume
satisfaction of the condition expressed in Paragraph 2 on the last date stated
for its satisfaction; and     7.8.6   The date of Closing pursuant to
Paragraph 6.2.

      If any events which determine any of the aforesaid dates occur on a date
other than the date specified or assumed for its occurrence in this Agreement,
Escrow Holder shall promptly redetermine as appropriate each of the dates of
performance in the aforesaid schedule and notify Buyer and Seller of the dates
of performance, as redetermined.

8.   Representations, Warranties, and Covenants.

  8.1   Representations of Seller. Seller hereby represents and warrants to
Buyer as of the date hereof and as of the Closing as follows:

  8.1.1   Seller is a limited partnership duly formed and validly existing under
the laws of the Commonwealth of Virginia. Seller has full power and authority to
enter into this Agreement, to perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement is a legal, valid and binding
obligation of Seller, enforceable against Seller in

[FINAL EXECUTION COPY]

16

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

 

      accordance with its terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
affecting the rights of creditors generally.     8.1.2   Seller is not a
“foreign person” within the meaning of Section 1445(f) of the Internal Revenue
Code of 1986, as amended (the “Code”).     8.1.3   To Seller’s knowledge, no
actions, suits, or proceedings are pending, or have been threatened by any
organization, person, individual, or governmental agency that concerns or
affects the Property or Seller’s right to perform its obligations hereunder.    
8.1.4   To Seller’s knowledge, Seller has received no notice of any violations
of law, municipal or county ordinances, or other legal requirements with respect
to the Property, including any legal requirements with respect to the use,
occupancy or construction of the Improvements.     8.1.5   To Seller’s
knowledge, attached hereto as Exhibit F is a complete and accurate list of all
Contracts, and neither Seller nor any provider under any of the Contracts has
asserted any breach or default thereunder.     8.1.6   To Seller’s knowledge,
attached hereto as Exhibit G is a complete and accurate list of all Leases and
except as provided in Exhibit G, no material breach or default exists under the
Leases and all security for the Leases remains in place as shown as Exhibit G.
Further, to Seller’s knowledge and except as provided in Exhibit G, no leasing
costs (leasing commissions, tenant improvement costs or allowances, free rent or
other concessions) remain outstanding with respect to the current term of any of
the existing Leases which will not be satisfied as of Closing.

      As used in this Agreement, the phrase “Seller’s knowledge” or similar
phrase shall mean the actual knowledge, without the duty of investigation, of
Robert Munson, asset manager of the Property and Deborah Valdivia, property
manager for the Property. It shall be a condition precedent to Buyer’s
obligation to close that no representation or warranty shall have changed prior
to Closing in such a way that constitutes a Material Adverse Change (hereafter
defined). For purposes of this Agreement, a “Material Adverse Change” is a
modification to a Seller representation which causes the value of the Property,
as determined by a mutually acceptable third party appraiser, to decrease by at
least One Million Dollars ($1,000,000). If a Material Adverse Change occurs,
Buyer shall be entitled, as its sole remedy, to either (a) proceed with the
acquisition without modification of the Purchase Price, or (b) terminate this
Agreement and recover the Deposit. Notwithstanding the foregoing, it is
understood and agreed that this provision relates to a change outside of
Seller’s control. If it is determined that Seller breached a representation or
warranty when made, such breach shall entitle

[FINAL EXECUTION COPY]

17

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

 

      Buyer to pursue remedies for such breach, including terminating this
Agreement and recovering the entire Deposit.     8.2   Approval of Property;
Limitations on Seller Representations and Warranties.

  8.2.1   Except as may be specifically provided in Section 8.4 of this
Agreement, Seller makes no representations or warranties as to the truth,
accuracy, completeness, methodology of preparation or otherwise concerning any
engineering or environmental reports, audits, the materials prepared by the
Seller, or any other materials, data or other information whatsoever supplied to
Buyer in connection with Buyer’s inspection of the Property. It is the parties’
express understanding and agreement that such materials are provided only for
Buyer’s convenience in making its own examination and determination prior to the
expiration of the Inspection Period as to whether it wishes to purchase the
Property, and, in doing so, Buyer shall rely exclusively on its own independent
investigation and evaluation of every aspect of the Property and not on any
materials supplied by Seller. Except as may be specifically provided elsewhere
in this Agreement, Buyer expressly disclaims any intent to rely on any such
materials provided to it by Seller in connection with its inspection and agrees
that it shall rely solely on its own independently developed or verified
information. Except with respect to all obligations in this Agreement
(including, without limitation, Seller’s express representations and warranties)
that are expressly stated to survive Closing, the indemnity provisions contained
in the documents delivered in connection with the closing of the transactions
contemplated by this Agreement (collectively, the “Surviving Obligations”),
Buyer hereby releases Seller and its agents, representatives, and employees from
any and all claims, demands, and causes of action, past, present, and future
that Buyer may have relating to (a) the condition of the Property at any time,
before or after the Closing, including without limitation, the presence of any
hazardous materials, or (b) any other matter pertaining to the Property,
provided, however, in no event shall the foregoing release extend to (a) any
breach of Seller’s representations or warranties set forth herein, (b) any
breach by Seller of its obligations under this Agreement, or (c) any third party
claims arising out of or resulting from events occurring prior to Closing to the
extent covered by Seller’s insurance. This release shall survive the Closing or
the termination of this Agreement.     8.2.2   In the event of any breach by
Seller of any of the preceding representations or warranties, Buyer’s sole
remedy (in the event Buyer becomes aware of any such breach) shall be to elect
in writing to terminate this Agreement (in which event Buyer shall be entitled
to the Deposit and recovery of costs as set forth in Section 14.1), or waive
such breach and proceed with the Closing. In the event of any material breach by
Seller of any of such representations or warranties or any other material breach
by Seller of any

[FINAL EXECUTION COPY]

18

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

 

      other provision of this Agreement or any agreement delivered in connection
herewith discovered after Closing, Seller shall be liable only for direct and
actual damages suffered by Buyer on account of Seller’s breach, up to the
applicable limits described hereunder, and shall in no event be liable for
consequential or punitive damages. Any liability of Seller hereunder for breach
of any such representations or warranties shall be limited to (a) claims in
excess of an aggregate of Twenty-Five Thousand Dollars ($25,000.00), and (b) a
maximum aggregate cap of One Million Dollars ($1,000,000.00). Notice of such
claim must be delivered to Seller in writing within ten (10) months of the
Closing Date. In no event shall Seller or Buyer be liable for any indirect or
consequential damages on account of Seller’s or Buyer’s breach of any
representation or warranty contained in this Agreement. Additionally,
notwithstanding the foregoing, if Buyer actually and unequivocally becomes aware
prior to the Closing that any representation or warranty hereunder is untrue, or
any covenant or condition to Closing has not been fulfilled or satisfied (if not
otherwise waived by Buyer), and Buyer nonetheless proceeds to close on the
purchase of the Property, then Buyer shall be deemed to have irrevocably and
absolutely waived, relinquished and released all rights and claims against
Seller for any damage or other loss arising out of or resulting from such untrue
representation or warranty or such unfulfilled or unsatisfied covenant or
condition. Seller’s representations and warranties set forth in Section 8.4
shall survive the Closing for a period of nine (9) months.     8.2.3   Approval
of Property. The consummation of the purchase and sale of the Property pursuant
to this Agreement shall be deemed Buyer’s acknowledgement that it has had an
adequate opportunity to make such legal, factual and other inspections,
inquiries and investigations as it deems necessary, desirable or appropriate
with respect to the Property. Such inspections, inquiries and investigations of
Buyer shall be deemed to include, but shall not be limited to, any leases and
contracts pertaining to the Property, the physical components of all portions of
the Property, the physical condition of the Property, such state of facts as an
accurate survey, environmental report and inspection would show, the present and
future zoning ordinance, ordinances, resolutions. Except with respect to
Seller’s representations and warranties set forth herein, Buyer shall not be
entitled to and shall not rely upon, Seller or Seller’s agents with regard to,
and Seller will not make any representation or warranty with respect to: (i) the
quality, nature, adequacy or physical condition of the Property including, but
not limited to, the structural elements, foundation, roof, appurtenances,
access, landscaping, parking facilities, or the electrical, mechanical, HVAC,
plumbing, sewage or utility systems, facilities, or appliances at the Property,
if any; (ii) the quality, nature, adequacy or physical condition of soils or the
existence of ground water at the Property; (iii) the existence, quality, nature,
adequacy or physical

[FINAL EXECUTION COPY]

19

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

 

      condition of any utilities serving the Property; (iv) the development
potential of the Property, its habitability, merchantability, or the fitness,
suitability, or adequacy of the Property for any particular purpose; (v) the
zoning or other legal status of the Property; (vi) the Property or its
operations’ compliance with any applicable codes, laws, regulations, statutes,
ordinances, covenants, conditions or restrictions of any governmental or
quasi-governmental entity or of any other person or entity; (vii) the quality of
any labor or materials relating in any way to the Property; or (viii) the
condition of title to the Property or the nature, status and extent of any
right-of-way, lease, right of redemption, possession, lien, encumbrance,
license, reservation, covenant, condition, restriction, or any other matter
affecting the Property except as expressly set forth in this Agreement. EXCEPT
AS EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER HAS NOT, DOES NOT, AND WILL NOT
MAKE ANY WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE PROPERTY AND SELLER
SPECIFICALLY DISCLAIMS ANY OTHER IMPLIED WARRANTIES OR WARRANTIES ARISING BY
OPERATION OF LAW, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF
CONDITION, MERCHANTABILITY, HABITABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OR
USE. FURTHERMORE, SELLER HAS NOT, DOES NOT, AND WILL NOT MAKE ANY REPRESENTATION
OR WARRANTY WITH REGARD TO COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION,
POLLUTION, OR LAND USE LAWS, RULES, REGULATIONS, ORDERS, OR REQUIREMENTS
INCLUDING, BUT NOT LIMITED TO, THOSE PERTAINING TO THE HANDLING, GENERATING,
TREATING, STORING OR DISPOSING OF ANY HAZARDOUS WASTE OR SUBSTANCE INCLUDING,
WITHOUT LIMITATION, ASBESTOS, PCB AND RADON. BUYER ACKNOWLEDGES THAT BUYER IS A
SOPHISTICATED BUYER FAMILIAR WITH THIS TYPE OF PROPERTY AND THAT, SUBJECT ONLY
TO THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT AND CLOSING DOCUMENTS,
BUYER WILL BE ACQUIRING THE PROPERTY “AS IS AND WHERE IS, WITH ALL FAULTS,” IN
ITS PRESENT STATE AND CONDITION, SUBJECT ONLY TO NORMAL WEAR AND TEAR AND BUYER
SHALL ASSUME THE RISK THAT ADVERSE MATTERS AND CONDITIONS MAY NOT HAVE BEEN
REVEALED BY BUYER’S INSPECTIONS AND INVESTIGATIONS. BUYER SHALL ALSO ACKNOWLEDGE
AND AGREE THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS,
COLLATERAL TO OR AFFECTING THE PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY
THIRD PARTY. THE TERMS AND

[FINAL EXECUTION COPY]

20

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

 

CONDITIONS OF THIS PARAGRAPH SHALL SURVIVE THE CLOSING, AND NOT MERGE WITH THE
PROVISIONS OF ANY CLOSING DOCUMENTS. SELLER SHALL NOT BE LIABLE OR BOUND IN ANY
MANNER BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION
PERTAINING TO THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,
SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED
TO IN THIS AGREEMENT. EXCEPT WITH REGARD TO THE OBLIGATIONS EXPRESSLY SET FORTH
IN THIS AGREEMENT AND THE REPRESENTATIONS AND WARRANTIES IN SECTION 8.4, BUYER
HEREBY RELEASES SELLER AND ITS AGENTS, REPRESENTATIVES AND EMPLOYEES FROM ANY
AND ALL LIABILITY RELATING TO THE CONDITION OF THE PROPERTY BEFORE OR AFTER THE
CLOSING AND ANY OTHER MATTER RELATING TO THE PROPERTY, WHETHER KNOWN OR UNKNOWN
AT THE TIME OF THE CLOSING. PROVIDED, HOWEVER, IN NO EVENT SHALL THE FOREGOING
RELEASE EXTEND TO (A) ANY BREACH OF SELLER’S REPRESENTATIONS OR WARRANTIES SET
FORTH HEREIN, (B) ANY BREACH BY SELLER OF ITS OBLIGATIONS UNDER THIS AGREEMENT,
OR (C) ANY THIRD PARTY CLAIMS ARISING OUT OF OR RESULTING FROM EVENTS OCCURRING
PRIOR TO CLOSING TO THE EXTENT COVERED BY SELLER’S INSURANCE.

  8.2.4   Release. Except as expressly set forth in this Agreement to the
contrary and except for any claims arising under the express representations,
warranties or covenants of Seller under this Agreement or under the indemnity
provisions of any document delivered in connection with the closing of the
transactions contemplated by this Agreement, Buyer for itself and its agents,
affiliates, successors and assigns, hereby releases and forever discharges
Seller, and any party related to or affiliated with Seller and their respective
successors and assigns (the “Seller Related Parties”) from and against any and
all claims at law or equity which Buyer or any party related to or affiliated
with Buyer and their respective successors and assigns (each a “Buyer Related
Party”) whether known or unknown at the time of this agreement, which Buyer or a
Buyer Related Party has or may have in the future, arising from or related to
any matter or thing relating to or in connection with the Property, including
but not limited to, the documents and information referred to in this Agreement,
the leases and the tenants, the Loan, any construction defects, errors or
omissions in the design or construction and arising out of the physical,
environmental, economic or legal condition of the Property, including, without
limitation, any claim for indemnification or contribution arising under the

[FINAL EXECUTION COPY] 21  

 

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

 

      Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9601, et. seq.) or any similar federal, state or local statute,
rule or ordinance relating to liability of property owners or operators for
environmental matters but excluding third-party claims for events occurring
prior to Closing which are covered by insurance carried by Seller. For the
foregoing purposes, Buyer hereby specifically waives the provisions of
Section 1542 of the California Civil Code and any similar law of any other
state, territory or jurisdiction. Section 1542 provides:         A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.         BUYER
HEREBY SPECIFICALLY ACKNOWLEDGES THAT BUYER HAS CAREFULLY REVIEWED THIS
SUBSECTION AND DISCUSSED ITS IMPORT WITH LEGAL COUNSEL AND THAT THE PROVISIONS
OF THIS SUBSECTION ARE A MATERIAL PART OF THIS AGREE         BUYER:
R.P.                    

  8.3   Covenants of Seller. Seller hereby covenants as follows:

  8.3.1   At all times from the date hereof through the date of Closing, Seller
shall cause to be in force fire and extended coverage insurance upon the
Property, and public liability insurance with respect to damage or injury to
persons or property occurring on the Property in at least such amounts as are
maintained by Seller on the Effective Date;     8.3.2   From the end of the
Inspection Period through the date of Closing, Seller will not enter into any
new lease with respect to the Property, without Buyer’s prior written consent,
which may be granted or withheld in Buyer’s sole discretion. Exercise of a
renewal option shall not be considered a new lease. Any brokerage commission
payable with respect to a new lease entered into after the Effective Date shall
be paid by Buyer. Further, Seller will not modify any existing Lease covering
space in the Property without first obtaining the written consent of Buyer which
may be granted or withheld in Buyer’s sole discretion. Buyer shall have five
(5) business days following written notice of the proposed deal in which to
approve or disapprove of any new lease or modification for which it has a right
to consent. Failure to respond in writing within said time period shall be
deemed to be consent;

[FINAL EXECUTION COPY] 22  

 

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

 

  8.3.3   From the Effective Date through the date of Closing, Seller shall not
sell, assign, or convey any right, title or interest whatsoever in or to the
Property, or create or permit to attach any lien, security interest, easement,
encumbrance, charge, or condition affecting the Property (other than the
Permitted Exceptions) without promptly discharging the same prior to Closing;  
  8.3.4   Seller shall not, without Buyer’s written approval, (a) amend or waive
any right under any Contract, or (b) enter into any agreement of any type
affecting the Property that is not terminable on 30 days notice;     8.3.5   If
Buyer provides seller with subordination, nondisturbance and attornment
agreements (“SNDAs”) prepared and completed by the Buyer, Seller shall deliver
such SNDAs to each tenant.     8.3.6   Seller shall use commercially reasonable
efforts to secure the Ground Lease Estoppels and the Ground Lease Consents as
set forth herein. In addition, with respect to the existing Tenant Lease with
the City of San Diego, within two (2) business days after the Opening of Escrow,
Seller shall personally serve via a process server registered by the State of
California a written “Sale Notice” upon the person(s) and/or public official(s)
identified in the existing lease with the City of San Diego. The Sale Notice
shall be in the form required by the lease with the City of San Diego. Seller
shall provide by with a copy of the “Sale Notice” together with written proof of
service of the Sale Notice, executed by the process server under penalty of
perjury, to Buyer as soon as reasonably practicable during the Inspection
Period. Seller shall thereafter use commercially reasonable efforts to obtain
written confirmation from the City of San Diego that the City of San Diego
waives its “right to negotiate” with respect to the sale to Buyer.     8.3.7  
Seller shall also use commercially reasonable efforts to obtain tenant estoppels
from all tenants of the Property. At least two (2) business days prior to
delivering the estoppels to tenants, Seller shall provide draft estoppels to
Buyer for Buyer’s review and comment.     8.3.8   Seller shall retain Indoor Air
Professionals, Inc. (“IAP”) to complete, at Seller’s cost, the work outlined in
IAP’s bid dated March 23, 2006 for “Supply Outlet Ductwork Cleaning & Coating”
in compliance with all applicable laws, rules and regulations and shall provide
to Buyer a final report from IAP confirming completion of such work.

[FINAL EXECUTION COPY] 23  

 

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

 

9.      Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:

  9.1   Buyer is a limited liability company duly organized and validly existing
under the laws of the State of Delaware. Buyer has full power and authority to
enter into this Agreement, to perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement is a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
subject to the effect of applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting the rights of creditors
generally.

10.      Conditions Precedent to Closing.

  10.1   The obligations of Buyer pursuant to this Agreement shall, at the
option of Buyer, be subject to the following conditions precedent:

  10.1.1   All of the representations, warranties and agreements of Seller set
forth in this Agreement shall be true and correct in all material respects as of
the Effective Date. Further, no Material Adverse Change shall have occurred
prior to Closing with regard to the Seller’s representations. Seller shall not
have on or prior to Closing, failed to meet, comply with or perform in any
material respect any conditions or agreements on Seller’s part as required by
the terms of this Agreement.     10.1.2   There shall be no material adverse
change in the matters reflected in the Title Report, there shall not exist any
material adverse encumbrance or title defect affecting the Property except for
the Permitted Exceptions or matters to be satisfied at Closing, and Title
Company shall be unconditionally committed to issue at Closing a Title Policy
insuring fee simple and leasehold title vested in Buyer, with coverage in the
full amount of the Purchase Price and showing only those exceptions to title
which are approved or deemed approved by Buyer as specifically set forth herein,
it being acknowledged that due to the amount of coverage required hereunder,
Buyer may elect by written notice delivered to Seller and Title Company prior to
Closing, to require co-insurance with up to two (2) additional title companies
having comparable financial strength to Title Company provided that any such
co-insurance arrangement shall not delay Closing or result in any additional
cost to Seller.     10.1.3   Seller shall have obtained and delivered to Buyer
estoppel certificates, in accordance with their respective Leases, from tenants
representing seventy-five percent (75%) of the square feet which are leased and
occupied by tenants as of the Effective Date, which shall include, at a minimum,
estoppels from the following “Major Tenants”: Comerica, City of San Diego, TNS
Market Development, Embassy CES, Akonix Systems and Laughlin Falbo
(collectively, the “Estoppel Delivery

[FINAL EXECUTION COPY] 24  

 

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

 

      Condition”). Estoppel certificates shall be deemed to satisfy this
condition precedent unless they disclose material adverse matters. Buyer shall
notify Seller within three (3) business days of receipt of a copy of the
executed estoppel certificate of its approval or disapproval and the basis of
such disapproval, if disapproved and Seller shall use commercially reasonable
efforts to satisfy the Estoppel Delivery Condition by the date which is three
(3) business days prior to Closing.. If Buyer disapproves of an estoppel
certificate because of a material, adverse matter disclosed therein, and Seller
is unable to obtain a reasonably acceptable estoppel certificate prior to the
Closing, then, at Buyer’s election, this Agreement shall terminate, Buyer shall
be entitled to a refund of the Deposit, and neither party shall have any further
obligation to the other except Buyer’s indemnification obligations under
Paragraph 5. If Buyer has not received the required amount of estoppels to
satisfy the Estoppel Delivery Condition by the date which is three (3) business
days prior to Closing, then Seller or Buyer shall be permitted to extend the
Closing Date until five (5) days after the receipt of all such estoppels, to
permit Seller to secure such estoppels to meet the Estoppel Delivery Condition,
but in no event shall Seller extend Closing by more than thirty (30) days.    
10.1.4   With regard to the “option to negotiate” contained in Section 29 of the
lease with the City of San Diego (“City”), either (a) Seller shall have sent the
“Sale Notice” (as defined in the lease with the City and as referenced in
Section 8.3.6) and the City shall have failed to respond within the required
thirty (30) days, thereby waiving its “right to negotiate” pursuant to the terms
of its lease; or (b) Seller shall have delivered to Buyer written confirmation
from the City that the City waives its “right to negotiate” with respect to the
sale to Buyer. Seller agrees to use commercially reasonable efforts to obtain
the City’s written confirmation of its waiver of the “right to negotiate” as
soon as possible following the Effective Date and Seller shall notify Buyer
within one (1) business day following the issuance of the City’s determination,
and Seller agrees that this condition precedent must be satisfied, if at all, by
the date which is three (3) business days prior to Closing. Notwithstanding
anything to the contrary herein, if this Agreement is terminated due to the
City’s exercise of its “right to negotiate”, Seller shall promptly reimburse
Buyer for all costs incurred by Buyer in connection with its attempted
acquisition of the Property, including, without limitation, costs associated
with Buyer’s review and inspection of the Property and documents relating
thereto, and negotiation of this Agreement, up to the following reimbursement
caps: (i) if this Agreement is terminated due to the City’s determination within
five (5) business days following the Effective Date — $125,000; (ii) if this
Agreement is terminated due to the City’s determination within ten (10) business
days following the Effective Date — $175,000; and (iii) if this

[FINAL EXECUTION COPY] 25  

 

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

 

      Agreement is terminated due to the City’s determination fifteen (15) or
more business days following the Effective Date — $225,000.

  10.2   The obligations of Seller pursuant to this Agreement shall, at the
option of Seller, be subject to the condition precedent that the Board of GREIT,
Inc. (the “Board”) approve the sale of the Property pursuant to this Agreement.
This condition precedent shall be subject to the following terms and conditions:

(a)      Seller shall use commercially reasonable efforts to obtain the
necessary Board approval for Buyer’s acquisition of the Property pursuant
hereto, and shall keep Buyer informed regarding the timing of requesting the
necessary Board approval.
(b)      If Board approval is not granted, Seller shall notify Buyer
immediately, and by no later that one (1) business day following the
determination of the Board.
(c)      If Board approval is not obtained and this Agreement is deemed
terminated as a result of this determination by the Board, Seller shall promptly
reimburse Buyer for all costs incurred by Buyer in connection with its attempted
acquisition of the Property, including, without limitation, costs associated
with Buyer’s review and inspection of the Property and documents relating
thereto, and negotiation of this Agreement, up to the following reimbursement
caps: (i) if this Agreement is terminated due to disapproval by the Board within
five (5) business days following the Effective Date — $125,000; (ii) if this
Agreement is terminated due to disapproval by the Board within ten (10) business
days following the Effective Date — $175,000; and (iii) if this Agreement is
terminated due to disapproval by the Board fifteen (15) or more business days
following the Effective Date — $225,000

  10.3   Ground Lease Estoppels and Consents.

  10.3.1   The obligations of Seller to consummate the purchase and sale of the
Property are subject to the following conditions precedent. The lessors holding
an undivided interest in at least one hundred percent (100%) of the real
property under the Ground Leases shall have executed and delivered to Seller and
Buyer no less than three (3) business days prior to Closing a consent,
assignment and release agreement consenting to the assignment of the Ground
Leases to Buyer and releasing Seller from all obligations under the Ground
Leases on or after the effective date of the consent, which consent shall be
substantially in the form of Exhibit D attached hereto (“Ground Lease Consent”).
Seller’s failure to obtain such Ground Lease Consent shall not be considered a
default hereunder.

[FINAL EXECUTION COPY] 26  

 

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

 

  10.3.2   The lessors holding an undivided interest in at least one hundred
(100%) percent of the real property under the Ground Leases shall have executed
and delivered to Buyer no less than three (3) business days prior to Closing an
estoppel certificate under the Ground Leases confirming that Seller is not in
default under the Ground Leases, which estoppel shall be substantially in the
form of Exhibit H attached hereto (“Ground Lease Estoppel”). Seller’s failure to
obtain such Ground Lease Estoppel shall not be considered a default hereunder,
unless Seller cannot obtain the Ground Lease Estoppel because Seller is in
default under one or more of the Ground Leases.

  10.4   The mold remediation work referenced in Section 8.3.8 above shall have
been completed.

Seller agrees to use commercial reasonable efforts to obtain the required Ground
Lease Consent and Ground Lease Estoppel by no later than three (3) days prior to
Closing. Seller and Buyer shall be permitted to extend the Closing Date until
five (5) days after the receipt of such Ground Lease Consent and Ground Lease
Estoppel, to permit Seller to secure them; provided, however, that in no event
may Seller or Buyer extend the Closing Date by more than thirty (30) days
without the written consent of the other party hereto. Buyer shall provide all
documents reasonably requested by the lessors under the Ground Leases to approve
the release of Seller thereunder and shall execute all documentation reasonably
requested by the lessors related to Buyer’s assumption of the obligations under
the Ground Leases.
If any such condition is not fully satisfied by closing, the party in whose
favor the condition runs shall notify the other party and may terminate this
Agreement by written notice to the other party whereupon this Agreement may be
canceled, upon return of the Due Diligence Items the Deposit shall be paid to
Buyer and, thereafter, neither Seller nor Buyer shall have any continuing
obligations hereunder, provided, however, if this Agreement is terminated due to
a failure of either of the conditions precedent set forth in Section 10.3.1 or
10.3.2, Seller shall promptly reimburse Buyer for all costs incurred by Buyer in
connection with its attempted acquisition of the Property, including, without
limitation, costs associated with Buyer’s review and inspection of the Property
and documents relating thereto, and negotiation of this Agreement, up to a
maximum reimbursement cap of Fifty Thousand Dollars ($50,000), provided that if
such conditions cannot be satisfied due to a default by Seller under the Ground
Leases, the reimbursement cap shall be Two Hundred Twenty-Five Thousand Dollars
($225,000).
11.      Damage or Destruction Prior to Closing.
In the event that the Property should be damaged by any casualty prior to the
Closing, then:

  11.1   If the cost of repairing damage to the Premises, as reasonably
estimated by Seller, is less than One Million Dollars ($1,000,000) and no Major
Tenant is able to

[FINAL EXECUTION COPY] 27  

 

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

 

      terminate its Tenant Lease as a result of such casualty, and no tenant
under a Tenant Lease is able to abate its rent following Closing unless covered
by Seller’s rental interruption proceeds assigned to Buyer, the Closing shall
proceed as scheduled and any insurance proceeds shall be distributed to Buyer to
the extent not expended by Seller for restoration, and Buyer shall receive a
credit for any applicable deductible; or     11.2   If the cost of repairing
damage to the Premises, as reasonably estimated by Seller, is greater than One
Million Dollars ($1,000,000), or if such casualty entitles any Major Tenant to
terminate its lease and any abated rent granted to a tenant under a Tenant Lease
is not covered by rental interruption proceeds which can be assigned to Buyer,
then Buyer may elect to terminate this Agreement, in which case upon return of
the Due Diligence Items the Deposit shall be returned to Buyer and neither party
shall have any further obligation to the other except for Buyer’s
indemnification obligations under Paragraph 5.

12.      Eminent Domain.

  12.1   If, before the Closing, proceedings are commenced for the taking by
exercise of the power of eminent domain of all or a material part of the
Property which, as reasonably determined by Buyer, would render the Property
unacceptable to Buyer or unsuitable for Buyer’s intended use, Buyer shall have
the right, by giving notice to Seller within thirty (30) days after Seller gives
notice of the commencement of such proceedings to Buyer, to terminate this
Agreement, in which event this Agreement shall terminate, the Deposit shall be
returned to Buyer and neither party shall have any further obligation to the
other except for Buyer’s indemnification under Paragraph 5. If, before the
Closing, proceedings are commenced for the taking by exercise of the power of
eminent domain of less than such a material part of the Property, or if Buyer
has the right to terminate this Agreement pursuant to the preceding sentence but
Buyer does not exercise such right, then this Agreement shall remain in full
force and effect and, at the Closing, the condemnation award (or, if not
therefore received, the right to receive such portion of the award) payable on
account of the taking shall be transferred in the same manner as title to the
Property is conveyed. Seller shall give notice to Buyer within three
(3) business days after Seller’s receiving notice of the commencement of any
proceedings for the taking by exercise of the power of eminent domain of all or
any part of the Property.

13.      Notices.

  13.1   All notices, demands, or other communications of any type given by any
party hereunder, whether required by this Agreement or in any way related to the
transaction contracted for herein, shall be void and of no effect unless given
in accordance with the provisions of this Paragraph. All notices shall be in
writing and delivered to the person to whom the notice is directed, either in
person, by United States Mail, as a registered or certified item, return receipt
requested by

[FINAL EXECUTION COPY] 28  

 

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

 

      telecopy or by Federal Express. Notices delivered by mail shall be deemed
given when received. Notices by telecopy or Federal Express shall be deemed
received on the business day following transmission. Notices shall be given to
the following addresses:

         
Seller:
  Theresa Hutton
 
 
  Triple Net Properties, LLC
 
 
  1551 N. Tustin Ave. #200
 
 
  Santa Ana, CA 92705
 
 
  (714) 667-8252
 
 
  (714) 667-6860 fax  
 
     
With Required Copy to:
  Scott Peters
 
 
  GREIT, Inc.
 
 
  1551 N. Tustin Avenue, #200
 
 
  Santa Ana, CA 92705
 
 
  (714) 667-8252
 
 
  (714) 667-6860 fax  
 
     
And to:
  Joseph J. McQuade, Esq.
 
 
  Hirschler Fleischer
 
 
  The Federal Reserve Bank Building, 16th Floor
 
 
  701 East Byrd Street
 
 
  Richmond, VA 23219
 
 
  (804) 771-9502
 
 
  (804) 644-0957 fax  
 
     
Buyer:
  Ted Tapfer
 
 
  Legacy Partners
 
 
  4 Park Plaza, Suite 620
 
 
  Irvine, CA 92614
 
 
  (949) 863-0386
 
 
  Fax: (949) 261-1182  
 
     
With Required Copy to:
  Robert F. Phipps
 
 
  Legacy Partners
 
 
  4000 E Third Avenue, Suite 600
 
 
  Foster City, CA 94404
 
 
  (650) 571-2200
 
 
  Fax: (650) 235-2589

[FINAL EXECUTION COPY] 29  

 

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

 

     
And to:
  Pamela L. Westhoff, Esq.
 
  DLA Piper Rudnick Gray Cary US LLP
 
  550 South Hope Street
 
  Suite 2300
 
  Los Angeles, CA 90071
 
  213.330.7747
 
  Fax: 213.330.7547

14.      Remedies.

  14.1   Defaults by Seller. If there is any default by Seller under this
Agreement, following notice to Seller and the expiration of a 7-day cure period
during which period Seller may cure the default, Buyer may, as it sole option
elect to either (a) declare this Agreement terminated, in which case the Deposit
shall be returned to Buyer and Buyer may seek damages only for its actual
reasonable, documented out of pocket expenses incurred in connection with this
transaction, not to exceed One Hundred Twenty-Five Thousand Dollars ($125,000);
or (b) treat this Agreement as being in full force and effect and bring an
action against Seller for specific performance.     14.2   Defaults by Buyer. If
there is any default by Buyer under this Agreement, following notice to Buyer
and the expiration of a 7-day cure period, during which period Buyer may cure
the default, then Seller may, as its sole remedy, declare this Agreement
terminated, in which case the Deposit shall be paid to Seller as liquidated
damages and each party shall thereupon be relieved of all further obligations
and liabilities, except any which survive termination. Notwithstanding the
foregoing, the Buyer’s right to cure shall not be applicable to a failure to
close and the Closing shall in no event be extended pursuant to this Section. In
the event this Agreement is terminated due to the default of Buyer hereunder,
Buyer shall deliver to Seller, at no cost to Seller, the Due Diligence Items and
final copies of Buyer’s Reports.

15.      Assignment.
Buyer may assign its rights under this Agreement to an entity in which Buyer
participates in the equity and management, provided, however, that Buyer shall
have no such right unless a written assignment is delivered to Seller no later
than seven (7) business days before Closing; and further provided that no such
assignment shall relieve Buyer of its obligations hereunder.
16.      Interpretation and Applicable Law.
This Agreement shall be construed and interpreted in accordance with the laws of
the state in which the Property is located (the “State”). Where required for
proper interpretation, words in the singular shall include the plural; the
masculine gender shall include the neuter and the feminine, and vice versa. The
terms “successors and assigns”

[FINAL EXECUTION COPY] 30  

 

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

 

    shall include the heirs, administrators, executors, successors, and assigns,
as applicable, of any party hereto.   17.   Amendment.       This Agreement may
not be modified or amended, except by an agreement in writing signed by the
parties. The parties may waive any of the conditions contained herein or any of
the obligations of the other party hereunder, but any such waiver shall be
effective only if in writing and signed by the party waiving such conditions and
obligations.   18.   Attorney’s Fees.       In the event it becomes necessary
for either party to file a suit or arbitration to enforce this Agreement or any
provisions contained herein, the prevailing party shall be entitled to recover,
in addition to all other remedies or damages, reasonable attorneys’ fees and
costs of court incurred in such suit or arbitration.   19.   Entire Agreement;
Survival.       This Agreement (and the items to be furnished in accordance
herewith) constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings of the parties in connection therewith. No representation,
warranty, covenant, agreement, or condition not expressed in this Agreement
shall be binding upon the parties hereto nor affect or be effective to
interpret, change, or restrict the provisions of this Agreement. All of the
obligations of the parties hereunder and all other provisions of this Agreement
shall be deemed to have merged into the Assignment and Assumption of Ground
Leases and shall be extinguished at Closing or the earlier termination of this
Agreement, except as expressly provided herein.   20.   Multiple Originals Only;
Counterparts.       Numerous agreements may be executed by the parties hereto.
Each such executed copy shall have the full force and effect of an original
executed instrument. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute the entire
agreement of the parties.   21.   Acceptance.       Time is of the essence of
this Agreement. The date of execution of this Agreement by Seller shall be the
date of execution of this Agreement. If the final date of any period falls upon
a Saturday, Sunday, or legal holiday under Federal law, the laws of the State or
the laws of the State of California, then in such event the expiration date of
such period shall be extended to the next day which is not a Saturday, Sunday,
or legal holiday under Federal law, the laws of the State or the State of
California.   [FINAL EXECUTION COPY]

31

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

 

22.   Real Estate Commission.       Seller and Buyer each represent and warrant
to the other that neither Seller nor Buyer has contracted or entered into any
agreement with any real estate broker, agent, finder or any other party in
connection with this transaction, and that neither party has taken any action
which would result in any real estate broker’s, finder’s or other fees or
commissions being due and payable to any party with respect to the transaction
contemplated hereby, except that Seller has contracted with Triple Net
Properties Realty, Inc., as its broker and will pay any commission due to said
brokers. Each party hereby indemnifies and agrees to hold the other party
harmless from any loss, liability, damage, cost, or expense (including
reasonable attorneys’ fees) resulting to the other party by reason of a breach
of the representation and warranty made by such party in this paragraph.   23.  
Exchange.       Either party may structure the purchase and sale of the Property
as a like kind exchange pursuant to Section 1031 of the Internal Revenue Code of
1986, as amended, and in connection therewith, shall have the right to assign
its interest in this Agreement to a qualified exchange intermediary of its
choosing to effect such exchange. The other party shall cooperate with and shall
execute such documents as may be necessary to effect such a like kind exchange,
including a customary assignment and/or notice of assignment, however, such
assignment and cooperation shall be at no cost or expense to the non-requesting
party and shall not otherwise affect the term of this Agreement.   24.  
Confidentiality.       Buyer agrees that, prior to the closing, all Property
information received by Buyer shall be kept confidential as provided in this
paragraph. Without the prior written consent of Seller, prior to the closing,
the Property information shall not be disclosed by Buyer or its representatives,
in any manner whatsoever, in whole or in part, except (l) to Buyer’s
representatives who need to know the Property information for the purpose of
evaluating the Property and who are informed by the Buyer of the confidential
nature of the Property information; (2) as may be necessary for Buyer or Buyer’s
representatives to comply with applicable laws, including, without limitation,
governmental, regulatory, disclosure, tax and reporting requirements; to comply
with other requirements and requests of regulatory and supervisory authorities
and self-regulatory organizations having jurisdiction over Buyer or Buyer’s
representatives; to comply with regulatory or judicial processes; or to satisfy
reporting procedures and inquiries of credit rating agencies in accordance with
customary practices of Buyer or its affiliates; and (3) to prospective tenants
of the Property.

THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK
[FINAL EXECUTION COPY]

32

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

 

SIGNATURE PAGE FOR
600 B Street, San Diego, California
EXECUTED on this the 11th day of May, 2006
SELLER:

              GREIT - 525 and 600 B Street, LP,
a Virginia limited partnership
 
       
 
  By:   GREIT - 525 and 600 B Street GP, LLC,
 
      a Virginia limited liability company
 
  Its:   General Partner

         
 
  By:   G REIT, L.P.,
 
      a Maryland limited partnership,
 
  Its:   sole member

         
 
  By:   G REIT, Inc.,
 
      a Virginia corporation,
 
  Its:   General Partner

         
 
  By:   /s/ Scott D. Peters
 
       
 
  Name:   Scott D. Peters
 
       
 
  Title:   President & CEO
 
       

EXECUTED on this the 11th day of May, 2006.
BUYER:
Legacy Partners Realty Fund II, LLC,
a Delaware limited liability company

     
By:
  Legacy Partners Investment Management Services, LLC
 
  a Delaware limited liability company
Its:
  Managing Member

             
 
  By:   /s/ Robert F. Phipps    
 
           
 
  Name:   Robert F. Phipps    
 
  Title:   VP    

[FINAL EXECUTION COPY]

33