Exhibit 10.1

PURCHASE AGREEMENT

between

TWO MAIN DEVELOPMENT LLC,

a Delaware limited liability company

and

AMERICAN ASSETS TRUST, L.P., a Maryland

limited partnership

March 1, 2011

First and Main

100 SW Main Street

Portland, Oregon 97204

 

- i -

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

AGREEMENT OF PURCHASE AND SALE

SUMMARY OF CERTAIN TERMS

 

Effective Date:

   March 1, 2011

Seller:

   Two Main Development LLC, a Delaware limited liability company

Seller’s Address:

  

Two Main Development LLC

c/o Shorenstein Properties LLC

235 Montgomery Street, 16th Floor

San Francisco, California 94104

Attention: Andrew Friedman

Telephone: (415) 772-7174

Facsimile: (415) 765-9080

Email: afriedman@shorenstein.com

 

with a copy to:

 

Shorenstein Properties LLC

235 Montgomery Street, 15th Floor

San Francisco, California 94104

Attention: Corporate Secretary

Telephone: (415) 772-7017

Facsimile: (415) 772-7080

 

with copy to:

 

Pillsbury Winthrop Shaw Pittman LLP

50 Fremont Street

San Francisco, California 94105

Attention: Stephen M. Wright, Esq.

Telephone: (415) 983-1188

Facsimile: (415) 983-1200

Email: stephen.wright@pillsburylaw.com

Buyer:

   American Assets Trust, L.P., a Maryland limited partnership

Buyer’s Address:

  

American Assets Trust, L.P.

c/o American Assets Trust, Inc.

11455 El Camino Real, Suite 200

San Diego, California 92130

Attention: Mr. John Chamberlain

Telephone: (858) 350-2600

Facsimile: (858) 350-2620

 

- ii -

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

With a copy to:   

American Assets Trust, L.P.

c/o American Assets Trust, Inc.

11455 El Camino Real, Suite 200

San Diego, California 92130

Attention: Adam Wyll, Esq.

Telephone: (858) 350-2600

Facsimile: (858) 350-2620

With a copy by email to:    gis@smclawoffices.com Real Property:    100 SW Main
Street, Portland, Oregon 97204 Purchase Price:    $129,434,224 Initial Deposit:
   $1,000,000 Additional Deposit:    $4,000,000 Approval Date:    March 4, 2011
Seller Representative:    Andrew Friedman Buyer Representative:    John
Chamberlain Title Company:    Chicago Title Insurance Company Closing Date:   
March 11, 2011

Closing Cost Allocations:

 

Costs    Buyer    Seller  

Title Insurance

   See Section 8.3   

Escrow Fees

   50%      50 % 

Recording Fees

   100%   

Survey Updates

   100%   

Transfer Tax

   See Section 8.3   

The information provided in this summary of certain terms is provided as a
convenience only. In the event of any conflict between any information contained
herein and the Agreement, the Agreement shall control.

 

- iii -

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

TABLE OF CONTENTS

 

          Page  

ARTICLE 1 Purchase and Sale

     6   

1.1

   The Property      6   

1.2

   Property Approval Period      7   

ARTICLE 2 Purchase Price

     11   

2.1

   Amount and Payment      11   

2.2

   Deposit      11   

2.3

   Liquidated Damages      11   

2.4

   Seller Default      12   

ARTICLE 3 Completion of Sale

     12   

3.1

   Place and Date      12   

ARTICLE 4 Title and Condition

     13   

4.1

   Title to the Property      13   

4.2

   Leases      13   

4.3

   Personal Property      13   

4.4

   Contracts      13   

4.5

   Permits      13   

4.6

   Acceptance of Title      13   

4.7

   “AS IS” Sale      14   

4.8

   Environmental Definitions      16   

ARTICLE 5 Representations and Warranties

     17   

5.1

   Seller      17   

5.2

   Buyer      19   

ARTICLE 6 Covenants

     19   

6.1

   Seller      19   

6.2

   Buyer      20   

6.3

   Casualty Damage      21   

6.4

   Eminent Domain      22   

ARTICLE 7 Conditions Precedent

     22   

7.1

   Seller      22   

7.2

   Buyer      23   

ARTICLE 8 Closing

     24   

8.1

   Procedure      24   

8.2

   Possession      25   

8.3

   Closing Costs      25   

8.4

   Prorations      25   

8.5

   Tenant Reconciliations and Post-Closing Adjustments      26   

8.6

   Post-Closing Access      27   

ARTICLE 9 General

     27   

9.1

   Notices      27   

9.2

   Attorneys’ Fees      29   

 

- iv -

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

9.3

   Governing Law      29   

9.4

   Construction      29   

9.5

   Terms Generally      29   

9.6

   Further Assurances      29   

9.7

   Partial Invalidity      29   

9.8

   Waivers      29   

9.9

   Miscellaneous      29   

9.10

   Time is of the Essence      30   

9.11

   Electronic Signatures      30   

9.12

   Exculpation      30   

9.13

   Or. Rev. Stat. § 93.040      31   

9.14

   Like Kind Exchange      31   

9.15

   Regulation 3-14 Cooperation      31   

EXHIBITS

 

Exhibit A

   Bargain and Sale Deed

Exhibit B

   Assignment of Leases

Exhibit C

   Bill of Sale

Exhibit D

   Assignment of Contracts

Exhibit E

   Assignment of Permits

Exhibit F-1

   Tenant Estoppel Certificate

Exhibit F-2

   Seller’s Estoppel Certificate

Exhibit G

   Seller’s Closing Certificate

Exhibit H

   Buyer’s Closing Certificate

Exhibit I

   Certificate of Nonforeign Status

SCHEDULES

 

Schedule 1

   Preliminary Report

Schedule 2

   Leases

Schedule 3

   Excluded Personal Property

Schedule 4

   Construction Contracts and Warranties

Schedule 5

   Service Contracts

Schedule 6

   List of Building, Engineering and Environmental Reports

Schedule 7

   Seller Disclosures

Schedule 8

   Security Deposits and Letter of Credit

Schedule 9

   Pending New Leases and Lease Amendments

Schedule 10

   Seller TI/LC Obligations

 

- v -

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

PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (this “Agreement”), is entered into as of March 1, 2011,
by and between TWO MAIN DEVELOPMENT LLC, a Delaware limited liability company
(“Seller”), and AMERICAN ASSETS TRUST, L.P., a Maryland limited partnership
(“Buyer”).

W I T N E S S E T H:

In consideration of the covenants in this Agreement, Seller and Buyer agree as
follows:

ARTICLE 1

Purchase and Sale

1.1 The Property. Seller agrees to sell to Buyer and Buyer agrees to purchase
from Seller, in accordance with this Agreement, the following property
(collectively, the “Property”):

(a) That certain real property commonly known as First and Main located at 100
SW Main Street, and all entitlements, rights-of-way, easements and similar
interest benefiting such real property (collectively, the “Real Property”), as
more particularly described in preliminary report No. 472511488291TO-CTORM dated
as of February 4, 2011 issued by Chicago Title Company and attached hereto as
Schedule 1 and incorporated herein by reference (the “Preliminary Report”).

(b) Seller’s interest in all leases, lease amendments, lease guaranties, work
letter agreements, improvement agreements, subleases, assignments, licenses,
concessions and other agreements (the “Leases”) with all persons (“Tenants”)
leasing, using or occupying the Property, including the Leases described on
Schedule 2 attached hereto.

(c) Except for those items described on Schedule 3 attached hereto, all tangible
and intangible personal property owned by Seller, located on or in the Real
Property and used in connection with the operation and maintenance of the
Property (the “Personal Property”).

(d) Seller’s interest in all construction contracts and agreements described in
Schedule 4 attached hereto and all warranties and guaranties relating the
Property (to the extent assignable)(the “Construction Contracts and
Warranties”).

(e) Seller’s interest in all service contracts and agreements described in
Schedule 5 attached hereto (the “Service Contracts”) that are approved pursuant
to section 1.2(h).

(f) All building permits, certificates of occupancy, and other certificates,
permits, licenses and approvals (the “Permits”) pertaining to the Real Property;
provided, however, that Buyer shall be responsible for any expense incurred in
connection with the transfer of such Permits.

 

- 6 -

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

1.2 Property Approval Period.

(a) During the period from the date of this Agreement to 5 p.m., Pacific
standard time, on March 4, 2011 (the “Property Approval Period”), Buyer shall in
accordance with this section 1.2, in good faith and with diligence, at Buyer’s
sole cost and expense, review and investigate the physical and environmental
condition of the Property, the character, quality and general utility of the
Property, the zoning, land use, environmental and building requirements and
restrictions applicable to the Property, the state of title to the Property, the
Leases, the Construction Contracts and Warranties, the Service Contracts and the
Permits. Buyer shall be responsible for preparing and paying the cost of any
amendment or update to the survey of the Property dated January 14, 2008
prepared by MacKay & Sposito, Inc. (such existing survey, the “Survey”) that may
be required by Buyer or its lender. Buyer shall determine whether or not the
Property is acceptable to Buyer within the Property Approval Period. If, during
the Property Approval Period, Buyer determines that the Property is not
acceptable, Buyer shall have the right, by giving written notice to Seller on or
before the last day of the Property Approval Period, to terminate this
Agreement. If Buyer exercises the right to terminate this Agreement in
accordance with this section 1.2, this Agreement shall terminate as of the date
such termination notice is given by Buyer, in which event the Initial Deposit
(defined below) shall be retained by Seller. If Buyer does not exercise the
right to terminate this Agreement in accordance with this section 1.2, this
Agreement shall continue in full force and effect, and Buyer shall have no
further right to terminate this Agreement pursuant to this section 1.2.

(b) During the Property Approval Period, Seller shall make available to Buyer at
the Property the following items (collectively, the “Diligence Documents”):

(i) all plans and specifications for the Property, logs and manuals for building
equipment, if any, and governmental reports that Seller has in Seller’s
possession or control, without request to or investigation of third parties, and
permit Buyer to examine the structural, mechanical, electrical, plumbing, roof,
foundation, soils and environmental condition of the Real Property. Buyer
acknowledges that Seller has made available to Buyer, prior to the date hereof,
the materials described in Schedule 6 attached hereto.

(ii) copies of all the Leases, all the Construction Contracts and Warranties,
all Service Contracts and all tenant and correspondence files relating to the
foregoing.

(iii) all of Seller’s books and records relating to the operation of the
Property including, without limitation, the following documents that Seller has
in its possession or control:

(A) copies of all certificates of occupancy, licenses, permits, authorizations,
and approvals issued by all governmental authorities having jurisdiction over
the Property and copies of all certificates issued by the local board of fire
underwriters (or other body exercising similar functions);

(B) copies of each bill for current real estate, personal property and
possessory interest taxes, water charges and other utilities; and

 

- 7 -

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

(C) All records and files relating to the physical condition, operation and
maintenance of the Property.

(c) Notwithstanding anything to the contrary herein, Seller shall not be
required to provide, copy or make available to Buyer (and the Diligence
Documents do not include) any internal memoranda, appraisals and valuation
reports and similar information or information covered by the attorney-client
privilege. Buyer acknowledges that the materials relating to the Property to be
furnished by Seller to Buyer contain confidential and proprietary information.
Buyer agrees to keep all such information confidential and not to disclose any
such information to any third party except to the extent necessary to carry out
the responsibilities of Buyer pursuant to this section 1.2 or to obtain
financing for the Property. Notwithstanding the foregoing, Buyer shall also have
the right to disclose or publically file such confidential information
(including this Agreement and its exhibits/schedules) as shall be required to
comply with any governmental or legal requirements applicable to Buyer or as
shall be necessary to Buyer’s prosecution of its rights and remedies under this
Agreement. If Buyer exercises the right to terminate this Agreement in
accordance with this section 1.2, Buyer shall, within five (5) days after the
termination date, return to Seller all copies of all materials relating to the
Property theretofore furnished by Seller. No representation or warranty in
respect of any documents, reports, studies, information or other materials
(including the accuracy or completeness thereof) are or shall be deemed to be
made or provided by Seller relating thereto or to the Property or otherwise, and
Buyer hereby acknowledges that no representations or warranties, either express
or implied, were made by Seller (other than as expressly set forth in this
Agreement or the documents and instruments executed by Seller in connection with
this Agreement) with respect to any of the foregoing. To the extent any person
or entity, other than Seller as expressly set forth herein, including any
surveyors, appraisers, title agents, tenants, escrow agent, attorneys,
engineering consultants or environmental consultants, made any representations
or warranties (other than as expressly set forth in section 5.1) or any other
statements (verbal or written) to Buyer, or provided any documents, reports,
studies, information or other materials, Buyer acknowledges it shall have no
claim or right of action against Seller arising therefrom, nor any right to
rescind or revoke this Agreement on account thereof.

(d) Buyer shall indemnify Seller and Seller Parties (defined below) for, defend
Seller and Seller Parties against, and hold Seller and Seller Parties harmless
from all claims, demands, liabilities, losses, damages, costs and expenses,
including reasonable attorneys’ fees and disbursements, arising from any entry
on the Property by Buyer or any of Buyer’s representatives. The foregoing
indemnification covenant shall survive any termination of this Agreement. If
this Agreement is terminated for any reason other than Seller’s default and
Seller, at Seller’s option, requests any reports relating to the Property
provided to Buyer by third parties (the “Buyer Reports”), Buyer shall deliver
the Buyer Reports to Seller; provided, however, such delivery shall be without
representation or warranty as to the accuracy or completeness of any such Buyer
Reports, and Seller acknowledges that Seller (and anyone to whom Seller provides
such Buyer Reports) shall have no claim or right of action against Buyer arising
therefrom. Notwithstanding anything to the contrary herein, Buyer shall not be
required to provide, copy or make available to Seller any internal memoranda,
appraisals and valuation reports and similar information or information covered
by the attorney-client privilege.

 

- 8 -

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

(e) Buyer shall maintain, and shall ensure that its contractors, agents and
third parties under its control maintain, public liability and property damage
insurance from a licensed insurance company insuring Buyer and its
representatives against any liability arising out of any entry or inspections of
the Property pursuant to the provisions hereof. Such insurance maintained by
Buyer (and Buyer’s agents) shall be in the amount of Three Million Dollars
($3,000,000) combined single limit for injury to or death of one or more persons
in an occurrence, and for damage to tangible property (including loss of use) in
an occurrence. Any policy maintained by Buyer (and Buyer’s agents) shall
(i) insure the contractual liability of Buyer covering Seller, (ii) name the
Seller (and its successors and assigns), Shorenstein Properties LLC, a Delaware
limited liability company, and Shorenstein Realty Services, L.P., a Delaware
limited partnership (“SRS”), as additional insureds, (iii) contain a
cross-liability provision, (iv) contain a provision that the insurance provided
by Buyer hereunder shall be primary and noncontributing with any other insurance
available to such Seller, and (v) be in form and substance adequate to insure
against all liability of Buyer and its agents arising out of any entry or
inspections of the Property pursuant to the provisions of this section 1.2.
Buyer shall provide Seller with evidence of such insurance coverage prior to any
entry or inspection of the Property.

(f) Buyer, by giving notice to Seller on or before the Property Approval Date
(the “Title Objection Date”), may object to any title exception in the
Preliminary Report or any matter shown on the Survey or any matter shown on any
update to the Survey or new survey. Buyer, by giving notice to Seller on or
before the date that is two (2) business days after the discovery thereof, may
object to any title exception in any update to the Preliminary Report. Buyer
shall be deemed to have approved title to the Property as shown in the
Preliminary Report, as updated and the Survey, or any updates or new surveys,
unless Buyer objects to any title exception or survey matter in accordance with
this section 1.2. If Buyer makes any such objection, Seller may, by giving
notice to Buyer on or before the date that is three (3) business days after
Buyer’s objection notice, elect either to remove such objections (or insure over
such objections if reasonably acceptable to Buyer) or not to remove such
objections. Seller shall be deemed to have elected not to remove any such
objection (or insure over such objection) unless Seller elects to remove or
insure over any such objection in accordance with this section 1.2. If Seller
elects to remove or insure over any such objection, Seller shall remove or
insure over the title exception or survey matter in question on or before the
Closing Date (defined below). If Seller elects (or is deemed to have elected)
not to remove or insure over any such objection, Buyer shall have the right, by
giving notice to Seller on or before the date that is five (5) business days
after Seller’s election not to cure (or deemed election not to cure), either to
terminate this Agreement (in which case the Initial Deposit (as defined below)
shall be retained by Seller) or to withdraw such objection and accept title to
the Property subject to the title exception or survey matter in question. If
Buyer does not exercise the right to terminate this Agreement in accordance with
this section 1.2, Buyer shall be deemed to have approved title to the Property
subject to the title exception or survey matter in question and to have
withdrawn such objection. If Seller requires additional time to remove or insure
over a title exception identified by Buyer, the Closing Date shall be postponed
for up to thirty (30) days as Seller may deem necessary to remove such title
exception.

 

- 9 -

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

(g) Seller hereby grants Buyer the right to enter onto/into the Real Property
for purposes relating to Buyer’s activities under this section 1.2; which right
shall be subject to the requirements of this section 1.2 and shall continue
until the Closing or earlier termination of this Agreement. Buyer acknowledges
and agrees that any and all inspections of the Property shall be conducted in a
manner not unreasonably disruptive to tenants or to the operation of the
Property. With respect to meetings with tenants and subtenants, Seller agrees to
permit Buyer to meet with tenants of the Property; provided, however, that Buyer
must provide Seller with written notice of such proposed meeting (which shall be
arranged by Seller) at least two (2) business days prior thereto, and also
provided that a representative of Seller, at Seller’s election, is available for
and is present at such meeting. Except as expressly set forth above, neither
Buyer nor any of the Buyer’s representatives shall contact tenants of the
Property or make any inquiries of tenants of the Property. Seller shall make
available to Buyer Seller’s employees, representatives, contractors, building
engineers, leasing agents and property managers (and their employees) at times
and frequencies reasonably sufficient to allow Buyer to conduct its due
diligence prior to the end of the Property Approval Period. Seller shall have
the right to have a representative present during any due diligence
investigations conducted by Buyer at the Property. In the event Buyer or any of
Buyer’s representatives desire to conduct any physically intrusive due
diligence, such as sampling of soils, inspection of building materials, roof
inspections, drilling wells or the like, Buyer shall identify in writing exactly
what procedures such party desires to perform and the identity of the contractor
or consultant which will perform such work and request Seller’s express prior
written consent thereto, which consent may be given or withheld in Seller’s sole
and absolute discretion. Upon receipt of Seller’s written consent, Buyer and/or
Buyer’s representatives, as applicable, shall perform any and all due diligence
strictly in compliance with the agreed upon procedures and with any and all
laws, ordinances, rules, regulations, permits and licenses applicable to the
Property.

(h) On or before the expiration of the Property Approval Period, Buyer shall
have the right to disapprove, by written notice to Seller, any of the Service
Contracts that are not terminable without penalty or fee upon no more than
thirty (30) days prior notice. If Buyer desires to have any Service Contract
terminated that is not expressly terminable upon no more than thirty (30) days
notice without penalty or fee (each a “Non-Terminable Service Contract”), then
Buyer shall notify Seller in writing of any such Non-Terminable Service Contract
that it desires to have terminated. If Buyer notifies Seller that desires to
terminate a Non-Terminable Service Contract and Seller responds in writing that
Seller will not terminate such Non-Terminable Service Contract, then Buyer’s
sole remedy will be to terminate this Agreement. All of the Service Contracts
which are either terminable on no more than thirty (30) days’ notice without
penalty or fee, or which are not disapproved by Buyer, or with respect to which
Buyer’s initial disapproval is waived or deemed to be waived hereunder by virtue
of Buyer’s failure to disapprove a Service Contract prior to the expiration of
the Property Approval Period, are referred to as the “Approved Service
Contracts.” Notwithstanding the foregoing, Buyer shall be required to assume
Seller’s obligations, if any, for leasing commissions due to outside brokers:
(1) for tenants already installed who exercise renewal or expansion options
under their leases after the date of this Agreement and (2) for leases under
negotiation prior to the Closing and disclosed to Buyer on Schedule 9 (including
any commissions due to SRS described on such schedule), or otherwise disclosed
in writing to Buyer pursuant to section 6.1, and which are executed within one
hundred twenty (120) days after the Closing.

 

- 10 -

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

ARTICLE 2

Purchase Price

2.1 Amount and Payment. The total purchase price for the Property (the “Purchase
Price”) shall be One Hundred Twenty Nine Million Four Hundred Thirty Four
Thousand Two Hundred Twenty Four Dollars ($129,434,224). At the Closing on the
Closing Date, Buyer shall pay the total purchase price for the Property to
Seller in cash in immediately available funds, subject to adjustments as
provided in section 8.4.

2.2 Deposit. Upon execution of this Agreement, Buyer shall deposit the sum of
One Million Dollars ($1,000,000) (the “Initial Deposit”) in cash in immediately
available funds in escrow with Chicago Title Insurance Company, 455 Market
Street, Suite 2100, San Francisco, California 94105, Attention: Terina Kung,
phone: (415) 291-5128, fax: (415) 896-9423 (the “Title Company”). The Initial
Deposit shall be nonrefundable to Buyer and shall be released to Seller in the
event Buyer elects to terminate this Agreement in accordance with section 1.2.
Buyer’s failure to deposit the Initial Deposit in escrow in a timely manner
shall constitute a material breach of this Agreement and Buyer shall be liable
for the amount of the Initial Deposit as liquidated damages for such breach. If
Buyer does not exercise the right to terminate this Agreement in accordance with
section 1.2 hereof, Buyer shall, on or before the last day of the Property
Approval Period, deposit the additional sum of Four Million Dollars ($4,000,000)
(the “Additional Deposit”) in cash in immediately available funds in escrow with
the Title Company. The Initial Deposit and the Additional Deposit together with
all interest earned thereon shall collectively be referred to as the “Deposit.”
The Deposit shall be held by the Title Company in an interest-bearing account
designated in writing by Buyer and approved in writing by Seller. If Seller and
Buyer complete the purchase and sale of the Property in accordance with this
Agreement, the Deposit and all interest thereon shall be applied to payment of
the total purchase price for the Property in accordance with section 2.1 hereof.
If Buyer exercises the right to terminate this Agreement in accordance with
section 1.2 hereof, or if the purchase and sale of the Property is not completed
and this Agreement terminates for any reason other than a material default by
Buyer under or a material breach by Buyer of this Agreement, then (i) the
Deposit and all interest thereon shall be returned to Buyer upon such
termination of this Agreement and (ii) if requested by Seller, Buyer shall
provide Seller with original and copies of all studies, tests, reports and other
documents or materials relating to the Property prepared, conducted or made by,
for or on behalf of Buyer in accordance with section 1.2.

2.3 Liquidated Damages. SELLER AND BUYER AGREE THAT, IF THE PURCHASE AND SALE OF
THE PROPERTY IS NOT COMPLETED IN ACCORDANCE WITH THIS AGREEMENT BECAUSE BUYER
DEFAULTS UNDER OR BREACHES THIS AGREEMENT AND FAILS TO CURE SUCH DEFAULT OR
BREACH WITHIN ONE BUSINESS DAY OF WRITTEN NOTICE, SELLER SHALL BE ENTITLED TO
TERMINATE THIS AGREEMENT AND UPON TERMINATION THE DEPOSIT SHALL BE PAID TO
SELLER AS LIQUIDATED DAMAGES AND AS SELLER’S SOLE AND EXCLUSIVE REMEDY IN THE
CASE OF SUCH A DEFAULT OR BREACH BY BUYER UNDER THIS AGREEMENT. BUYER AND SELLER
AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE
DAMAGE THAT SELLER MAY SUFFER IN THE EVENT OF SUCH DEFAULT BY BUYER. THEREFORE,

 

- 11 -

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

BUYER AND SELLER AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT
THAT SELLER WOULD SUFFER IF BUYER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF
THE PROPERTY IS AN AMOUNT EQUAL TO THE DEPOSIT. THE PAYMENT OF THIS AMOUNT AS
LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED
TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER. SELLER AND BUYER HAVE MADE THIS
PROVISION FOR LIQUIDATED DAMAGES BECAUSE IT WOULD BE DIFFICULT TO CALCULATE, ON
THE DATE HEREOF, THE AMOUNT OF ACTUAL DAMAGES FOR SUCH BREACH, AND THESE SUMS
REPRESENT REASONABLE COMPENSATION TO SELLER FOR SUCH BREACH.

SELLER’S INITIALS:              BUYER’S INITIALS:             

2.4 Seller Default. Seller and Buyer agree that, if the purchase and sale of the
Property is not completed in accordance with this Agreement because Seller
materially defaults under or materially breaches this Agreement, Buyer shall be
entitled, as Buyer’s sole remedy to either (i) terminate this Agreement and upon
termination the Deposit shall be returned to Buyer and Seller shall reimburse
Buyer for the actual, documented third-party costs incurred by Buyer in
connection with this transaction, but not in excess of Two Hundred Fifty
Thousand Dollars ($250,000) or (ii) demand and have specific performance of this
Agreement (provided, however, if the remedy of specific performance is
unavailable due solely to the fact that the Property has been sold by Seller to
a bona fide purchaser, then Buyer shall be entitled to bring an action against
Seller for damages). Buyer shall be deemed to have elected to terminate this
Agreement and receive back the Deposit if Buyer fails to file suit for specific
performance against Seller in a court of competent jurisdiction, on or before
the date which is thirty (30) days following the date upon which Closing was to
have occurred. Buyer waives any right to record a lis pendens on the Property.

ARTICLE 3

Completion of Sale

3.1 Place and Date. The purchase and sale of the Property shall be completed in
accordance with Article 8 hereof (the “Closing”). Subject to the terms of this
Agreement, the Closing shall occur through Escrow No. 160310130 with the Title
Company on March 11, 2011 (the “Closing Date”). Prior to the Closing Date,
Seller and Buyer each shall give appropriate written escrow instructions,
consistent with this Agreement, to the Title Company for the Closing in
accordance with this Agreement and upon giving such instructions such party need
not be physically present at the Closing. Seller shall have the right to extend
the Closing Date for an additional thirty (30) days in order to obtain Tenant
Estoppel Certificates executed by Tenants in order to satisfy the Minimum
Estoppel Requirement set forth in Section 7.2(d).

 

- 12 -

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

ARTICLE 4

Title and Condition

4.1 Title to the Property. Seller shall convey to Buyer fee title to the Real
Property, by a duly executed and acknowledged statutory special warranty deed
(the “Deed”) in the form of Exhibit A attached hereto, free and clear of all
monetary liens (including, without limitation, all deeds of trust and mechanics’
liens), encumbrances, leases, easements, restrictions, rights, covenants and
conditions, except the following (the “Permitted Exceptions”): (a) the matters
shown as exceptions in the Preliminary Report, or any updates thereto and
approved (or deemed to be approved) by Buyer pursuant to section 1.2 hereof;
(b) the Leases; (c) matters which would be shown by a correct survey of the
Property or a physical inspection of the Property to the extent not disapproved
by Buyer (and agreed to be cured or insured over by Seller) pursuant to section
1.2 hereof; (d) taxes and assessments which are not past due as of the Closing
Date; and (e) any other matters created, permitted or approved by Buyer.

4.2 Leases. Seller shall assign good title to Seller’s interest in the Leases to
Buyer and Buyer shall assume said Leases, by a duly executed Assignment and
Assumption of Leases (the “Assignment of Leases”) in the form of Exhibit B
attached hereto.

4.3 Personal Property. Seller shall transfer all of Seller’s title to the
Personal Property to Buyer, by a duly executed Bill of Sale (the “Bill of Sale”)
in the form of Exhibit C attached hereto without warranty or covenant.

4.4 Contracts. Seller shall assign all of Seller’s interest in the Construction
Contracts and Warranties and all of Seller’s interest in the Approved Service
Contracts (collectively, the “Contracts”) to Buyer and Buyer shall assume the
Contracts, by a duly executed Assignment and Assumption of Contracts (the
“Assignment of Contracts”) in the form of Exhibit D attached hereto.

4.5 Permits. Seller shall assign all of Seller’s interest in the Permits to
Buyer, by a duly executed Assignment of Permits (the “Assignment of Permits”) in
the form of Exhibit E attached hereto without warranty or covenant.

4.6 Acceptance of Title. Buyer’s acceptance of the Deed from Seller for the Real
Property at the Closing on the Closing Date and the issuance of the Title Policy
(defined below) or a marked-up commitment to Buyer by the Title Company on the
Closing Date shall conclusively establish that Seller conveyed the Property to
Buyer as required by this Agreement and shall discharge in full Seller’s
obligations under section 4.1 hereof with respect to title to the Real Property.

 

- 13 -

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

4.7 “AS IS” Sale

(a) Prior to the Closing:

(i) Buyer shall conduct all such inspections, investigations, tests, analyses,
appraisals and evaluations of the Property (including for Hazardous Materials,
as defined below) as Buyer considers necessary or appropriate (all of such
inspections, investigations and reports being herein collectively called the
“Investigations”).

(ii) Seller shall make available to Buyer, and otherwise allow Buyer access to,
the Diligence Documents pursuant to section 1.2 hereof.

(b) Buyer represents to Seller that it is experienced in the acquisition of real
property similar to the Real Property and that Buyer recognizes the risks of
acquiring and owning the Property and that an allocation of risk is intended by
this Agreement.

(c) Prior to Closing Buyer shall review, examine, evaluate and verify all
Diligence Documents and the results of the Investigations to the extent it deems
necessary or appropriate with the assistance of such experts as Buyer deemed
appropriate and:

(i) shall be familiar with the physical condition of the Property;

(ii) shall have completed its due diligence with respect to the Property and the
Diligence Documents to its satisfaction;

(iii) shall be acquiring the Property based exclusively upon its own
investigations and inspections of the Property and the Diligence Documents; and

(iv) shall be represented by advisors and consultants (including legal counsel)
of its choice in the transaction contemplated by this Agreement.

(d) EXCEPT FOR SELLER’S REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
AGREEMENT THAT EXPRESSLY SURVIVE THE CLOSING AND INSTRUMENTS EXECUTED BY SELLER
AT CLOSING (THE “SELLER’S WARRANTIES”), THE PROPERTY IS BEING SOLD, AND BUYER IS
ACCEPTING POSSESSION OF THE PROPERTY ON THE CLOSING DATE, “AS IS, WHERE IS, WITH
ALL FAULTS,” WITH NO RIGHT OF SETOFF OR REDUCTION IN THE PURCHASE PRICE. EXCEPT
FOR SELLER’S WARRANTIES, NEITHER SELLER, ITS COUNSEL OR BROKERS, NOR ANY
PARTNER, OFFICER, DIRECTOR, EMPLOYEE, AGENT OR ATTORNEY OF SELLER, ITS COUNSEL
OR BROKERS NOR ANY OTHER PARTY RELATED IN ANY WAY TO ANY OF THE FOREGOING (EACH
A “SELLER PARTY” AND COLLECTIVELY THE “SELLER PARTIES”) HAVE OR SHALL BE DEEMED
TO HAVE MADE ANY VERBAL OR WRITTEN REPRESENTATIONS, WARRANTIES, PROMISES OR
GUARANTEES (WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) TO BUYER WITH
RESPECT TO THE PROPERTY, ANY MATTER SET FORTH, CONTAINED OR ADDRESSED IN THE
DILIGENCE DOCUMENTS (INCLUDING, BUT NOT LIMITED TO, THE ACCURACY AND
COMPLETENESS THEREOF) OR THE RESULTS OF THE INVESTIGATIONS.

(e) AT CLOSING BUYER SHALL HAVE HAD THE OPPORTUNITY TO CONDUCT TESTING AND
INSPECTIONS TO CONFIRM INDEPENDENTLY ALL INFORMATION THAT BUYER CONSIDERS
MATERIAL TO ITS PURCHASE OF THE PROPERTY OR THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT. EXCEPT FOR SELLER’S WARRANTIES, BUYER IS NOT RELYING ON (AND SELLER

 

- 14 -

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

AND EACH OF THE SELLER PARTIES DOES HEREBY DISCLAIM AND RENOUNCE) ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE WHATSOEVER, WHETHER ORAL OR
WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER OR THE SELLER
PARTIES, AS TO: (i) THE OPERATION OF THE PROPERTY OR THE INCOME POTENTIAL, USES,
OR MERCHANTABILITY OR FITNESS OF ANY PORTION OF THE PROPERTY FOR A PARTICULAR
PURPOSE; (ii) THE PHYSICAL CONDITION WHETHER VISIBLE OR NOT, OF THE PROPERTY OR
THE CONDITION OR SAFETY OF THE PROPERTY OR ANY IMPROVEMENTS THEREON, INCLUDING,
BUT NOT LIMITED TO, PLUMBING, SEWER, HEATING, VENTILATING AND AIR CONDITIONING,
LIFE SAFETY, BUILDING MANAGEMENT, VERTICAL TRANSPORTATION, AND ELECTRICAL
SYSTEMS, ROOFING, FOUNDATIONS, SOILS AND GEOLOGY, INCLUDING HAZARDOUS MATERIALS,
LOT SIZE, OR SUITABILITY OF THE PROPERTY OR ANY IMPROVEMENTS THEREON FOR A
PARTICULAR PURPOSE; (iii) THE PRESENCE OR ABSENCE, LOCATION OR SCOPE OF ANY
HAZARDOUS MATERIALS IN, AT, OR UNDER THE PROPERTY; (iv) WHETHER THE APPLIANCES,
IF ANY, PLUMBING OR UTILITIES ARE IN WORKING ORDER; (v) THE HABITABILITY OR
SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION;
(vi) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY SOUND, IN GOOD CONDITION, OR IN
COMPLIANCE WITH APPLICABLE MUNICIPAL, COUNTY, STATE OR FEDERAL STATUTES, CODES
OR ORDINANCES; (vii) THE ACCURACY OF ANY STATEMENTS, CALCULATIONS OR CONDITIONS
STATED OR SET FORTH IN SELLER’S BOOKS AND RECORDS CONCERNING THE PROPERTY OR SET
FORTH IN THE DILIGENCE DOCUMENTS OR ANY OF SELLER’S OFFERING MATERIALS WITH
RESPECT TO THE PROPERTY; (viii) THE DIMENSIONS OF THE PROPERTY OR THE ACCURACY
OF ANY FLOOR PLANS, SQUARE FOOTAGE, LEASE ABSTRACTS, SKETCHES, REVENUE OR
EXPENSE PROJECTIONS RELATED TO THE PROPERTY; (ix) THE OPERATING PERFORMANCE, THE
INCOME AND EXPENSES OF THE PROPERTY OR THE ECONOMIC STATUS OF THE PROPERTY;
(x) THE ABILITY OF BUYER TO OBTAIN ANY AND ALL NECESSARY GOVERNMENTAL APPROVALS
OR PERMITS FOR BUYER’S INTENDED USE AND DEVELOPMENT OF THE PROPERTY; (xi) THE
LEASING STATUS OF THE PROPERTY OR THE INTENTIONS OF ANY PARTIES WITH RESPECT TO
THE NEGOTIATION AND/OR EXECUTION OF ANY LEASE FOR ANY PORTION OF THE PROPERTY;
AND (xii) SELLER’S OWNERSHIP OF ANY PORTION OF THE PROPERTY.

(f) EXCEPT TO THE EXTENT SET FORTH IN THE SELLER’S WARRANTIES, NEITHER SELLER
NOR ANY SELLER PARTY IS UNDER ANY DUTY (AND BUYER HEREBY RENOUNCES ANY DUTY OF
SELLER OR ANY SELLER PARTY) TO MAKE ANY AFFIRMATIVE DISCLOSURES OR INQUIRY
REGARDING ANY MATTER RELATING TO THE PROPERTY THAT MAY OR MAY NOT BE KNOWN TO
SELLER OR ANY SELLER PARTY.

(g) BUYER, FOR BUYER AND BUYER’S SUCCESSORS AND ASSIGNS, HEREBY RELEASES SELLER
AND SELLER PARTIES, AND THEIR SUCCESSORS AND ASSIGNS FROM, AND WAIVES ALL CLAIMS
AND LIABILITY, INCLUDING ENVIRONMENTAL LIABILITY (DEFINED BELOW), AGAINST SELLER
AND SELLER PARTIES, AND THEIR SUCCESSORS AND ASSIGNS FOR OR ATTRIBUTABLE TO THE
FOLLOWING:

(i) ANY AND ALL STATEMENTS OR OPINIONS HERETOFORE OR HEREAFTER MADE, OR
INFORMATION FURNISHED, BY THEM TO BUYER OR ITS AGENTS OR REPRESENTATIVES
RELATING TO THE PROPERTY, EXCEPT FOR SELLER’S WARRANTIES; AND

 

- 15 -

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

(ii) ANY STRUCTURAL, PHYSICAL OR ENVIRONMENTAL CONDITION AT THE PROPERTY,
INCLUDING, CLAIMS OR LIABILITIES RELATING TO THE PRESENCE, DISCOVERY OR REMOVAL
OF ANY HAZARDOUS MATERIALS IN, AT, ABOUT OR UNDER THE PROPERTY, OR FOR,
CONNECTED WITH OR ARISING OUT OF ANY AND ALL CLAIMS OR CAUSES OF ACTION BASED
UPON ENVIRONMENTAL LAW (DEFINED BELOW).

(h) AFTER CLOSING, AS BETWEEN BUYER AND SELLER, THE RISK OF LIABILITY OR EXPENSE
ASSOCIATED WITH THE PROPERTY (INCLUDING ENVIRONMENTAL LIABILITIES), EVEN IF
ARISING FROM EVENTS BEFORE CLOSING, WILL BE THE SOLE RESPONSIBILITY OF BUYER,
REGARDLESS OF WHETHER THE LIABILITIES WERE KNOWN OR UNKNOWN AT CLOSING. ONCE
CLOSING HAS OCCURRED, BUYER INDEMNIFIES SELLER FOR, HOLDS SELLER HARMLESS FROM,
AND RELEASES SELLER FROM LIABILITY FOR ANY LATENT DEFECTS AND FROM ANY LIABILITY
ASSOCIATED WITH THE PROPERTY, INCLUDING LIABILITY UNDER THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT, THE RESOURCE
CONSERVATION AND RECOVERY ACT, AND ANY OTHER ENVIRONMENTAL LAWS. BUYER
INDEMNIFIES SELLER FOR, HOLDS SELLER HARMLESS FROM, AND RELEASES SELLER FROM ANY
LIABILITY ASSOCIATED WITH THE PROPERTY ARISING AS THE RESULT OF SELLER’S OWN
NEGLIGENCE OR THE NEGLIGENCE OF SELLER’S REPRESENTATIVES. BUYER INDEMNIFIES
SELLER FOR, HOLDS SELLER HARMLESS FROM, AND RELEASES SELLER FROM ANY LIABILITY
FOR ENVIRONMENTAL LIABILITIES AFFECTING THE PROPERTY ARISING AS THE RESULT OF
THEORIES OF PRODUCTS LIABILITY AND STRICT LIABILITY, OR UNDER NEW LAWS OR
CHANGES TO EXISTING LAWS ENACTED AFTER THE DATE OF THIS AGREEMENT THAT WOULD
OTHERWISE IMPOSE ON SELLERS IN THIS TYPE OF TRANSACTION NEW LIABILITIES FOR
ENVIRONMENTAL LIABILITIES AFFECTING THE PROPERTY.

(i) This section 4.7 shall survive the Closing.

4.8 Environmental Definitions. As used herein “Environmental Law” means any
international, federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, order, consent decree or judgment, in each case in
existence as of the Closing Date, relating to or regulating human health or
safety, or industrial hygiene or environmental conditions or protection of the
environment, or pollution or contamination of the air, soil, surface water or
groundwater, and includes the Comprehensive Environmental Response Compensation
and

 

- 16 -

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

Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, the
Toxic Substances Control Act, the Federal Water Pollution Control Act, the Safe
Drinking Water Act, the Hazardous Materials Transportation Act, the Oil
Pollution Act of 1990 and any state laws implementing the foregoing federal
laws. As used herein “Environmental Liability” means any claim, demand, order,
suit, obligation, liability, cost (including, the cost of any investigation,
testing, compliance or remedial action), consequential damages, loss or expense
(including attorneys’ and consultants’ fees and expenses) arising out of,
relating to or resulting from any Environmental Law or environmental, health or
safety matter or condition, including natural resources, and related in any way
to the Property or to this Agreement or its subject matter, in each case,
whether arising or incurred before, on or after the Closing Date. As used herein
“Hazardous Materials” means (i) any petroleum, petroleum products, by-products
or breakdown products, radioactive materials, asbestos-containing materials or
polychlorinated biphenyls, (ii) any chemical, material or substance defined or
regulated as toxic or hazardous or as a pollutant, contaminant or waste under
any Environmental Law or any Mold or Mold Condition. As used herein “Release”
means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the environment,
including continuing migration, of Hazardous Materials into or through soil,
surface water or groundwater. As used herein “Mold” means mold, mildew, fungus
or other potentially dangerous organisms. As used herein “Mold Condition” means
the presence of Mold or any condition(s) that reasonably can be expected to
indicate the presence of Mold, including observed discoloration of walls,
ceilings or floors, complaints received within the last six (6) months of
respiratory ailment or eye irritation by tenants, employees or any other
occupants or invitees in the Property or any notice from a governmental agency
of complaints regarding the indoor air quality at the Property.

ARTICLE 5

Representations and Warranties

5.1 Seller. The representations and warranties of Seller in this section 5.1 and
in Seller’s Closing Certificate (defined below) are a material inducement for
Buyer to enter into this Agreement. Such representations and warranties shall
survive the Closing for only nine (9) months after the Closing Date (including,
without limitation, all covenants and indemnities included in the exhibits
attached hereto)(the “Survival Period”), at which time such representations and
warranties shall terminate. Except as disclosed on Schedule 7 attached hereto,
Seller represents and warrants to Buyer as of the date of this Agreement as set
forth below in this section 5.1.

(a) Seller is a limited liability company duly formed, validly existing and in
good standing under the laws of the State of Delaware. Seller is duly qualified
to do business and is in good standing in the State of Oregon. Seller has full
power and authority to enter into this Agreement and to perform this Agreement.
The execution, delivery and performance of this Agreement by Seller have been
duly and validly authorized by all necessary action on the part of Seller, and
all required consents or approvals have been duly obtained, and neither the
execution and delivery of this Agreement, nor the incurrence of the obligations
set forth in this Agreement, nor the consummation of the transactions
contemplated by this Agreement, nor compliance with the provisions of this
Agreement will conflict with or result in a breach of any of the provisions

 

- 17 -

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

of, or constitute a default under, any bond, note or other evidence of
indebtedness, contract, indenture, mortgage, deed of trust, loan, agreement,
lease, or other agreement or instrument to which Seller is a party or by which
the Real Property may be bound. This Agreement is a legal, valid and binding
obligation of Seller, enforceable against Seller 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.

(b) The Leases in effect as of the date of this Agreement are accurately
described on Schedule 2 attached hereto and at the Closing there will be no
other leases, rental agreements, or similar agreements granting rights of
occupancy to any portion of the Real Property other than (i) the Leases
described on such Schedule 2, and (ii) any leases entered into in accordance
with the provisions of section 6.1 of this Agreement. The Leases have not been
amended or modified by Seller except as shown on Schedule 2, the copies of the
Leases provided to, or made available to, Buyer are true, complete, and correct
copies of such Leases (including all amendments, addenda, and other agreements
relating thereto) currently in the possession of Seller and, to the best of
Seller’s knowledge, no party is in default under any of the Leases. The security
deposits held by Seller under the Leases are correctly set forth in Schedule 8
attached hereto.

(c) To Seller’s knowledge and except for office and janitorial supplies
typically used in Class A office buildings, there are no Hazardous Materials are
present in, on or under the Real Property, and there is no present Release of
any Hazardous Material in, on or under the Real Property except as disclosed on
Schedule 6.

(d) To Seller’s knowledge, Seller has received no written notice that there is
any litigation, arbitration or other legal or administrative suit, action or
proceeding pending against Seller relating to the Real Property or any part
thereof that would materially affect the value of the Real Property.

(e) Seller is not a “foreign person” as defined in section 1445 of the Internal
Revenue Code of 1986, as amended, and the Income Tax Regulations thereunder.

(f) Except for Eastdil Secured (“Broker”), Seller has not dealt with any real
estate broker or finder in connection with the sale of the Property to Buyer or
this Agreement.

(g) Seller has not previously assigned, transferred, or conveyed, or purported
to assign, transfer, or convey, any right, title, or interest in the Property or
any portion thereof (other than conveyances for security purposes which have
previously, or will be as of Closing, be terminated).

As used herein, “to Seller’s knowledge,” “to the knowledge of Seller” and
similar phrases shall mean to the current actual knowledge of Gregg Meyer (as
Asset Manager) only, without any duty of independent investigation or inquiry.
Actual knowledge shall not be deemed to exist merely be assertion by Buyer of a
claim that any of the foregoing persons should have known of such facts or
circumstances, if such person did not have actual knowledge such facts and
circumstances.

 

- 18 -

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

5.2 Buyer. The representations and warranties of Buyer in this section 5.2 and
in Buyer’s Closing Certificate (defined below) are a material inducement for
Seller to enter into this Agreement. Seller would not sell the Property to Buyer
without such representations and warranties of Buyer. Such representations and
warranties shall survive the Closing for the Survival Period, at which time such
representations and warranties shall terminate. Buyer represents and warrants to
Seller as of the date of this Agreement as set forth below in this section 5.2.

(a) Buyer is a limited partnership duly organized and validly existing and in
good standing under the laws of the State of Maryland. Buyer is (or shall be
prior to the Closing) duly qualified to do business and is in good standing in
the State of Oregon. Buyer has full power and authority to enter into this
Agreement and to perform this Agreement. The execution, delivery and performance
of this Agreement by Buyer have been duly and validly authorized by all
necessary action on the part of Buyer and all required consents or approvals
have been duly obtained or will be obtained. 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.

(b) Except for Eastdil Secured, Buyer has not dealt with any real estate broker
or finder in connection with the purchase of the Property from Seller or this
Agreement.

ARTICLE 6

Covenants

6.1 Seller. Seller covenants and agrees with Buyer as follows:

(a) Prior to the expiration of the Property Approval Period, Seller shall
provide Buyer with updated lists of Leases and Contracts. After the execution of
this Agreement, Seller shall not execute any additional lease or any contract
affecting the Real Property or amend, modify, renew, extend or terminate any of
the Leases, the Contracts or the Permits in any material respect without the
prior approval of Buyer, which approval shall not be unreasonably withheld,
provided that Seller will not be obligated to obtain Buyer’s written approval
(i) if Seller is contractually obligated to take such action under the terms of
any such Lease, Contract or Permit or (ii) to enter into any new Lease or
amendment to Lease currently under negotiation as described on Schedule 9
attached hereto provided that such new Lease or amendment to Lease is entered
into on substantially the terms described on Schedule 9. Between the date of
this Agreement and the Closing Date, Seller shall manage, operate, maintain and
repair the Real Property and the Personal Property in the ordinary course of
business in accordance with sound property management practice, keep the Real
Property and the Personal Property in good repair and working order and sound
condition, promptly give Buyer copies of written notices received by Seller
asserting any material breach or default under the Leases or the Contracts or
any material violation of the Permits or any covenants, conditions,
restrictions, laws, statutes, rules, regulations or ordinances applicable to the
Real Property or the Personal Property, and perform when due Seller’s
obligations under the Leases, the Contracts and the Permits in accordance with
the Leases, the Contracts and the Permits and all applicable laws. Between the
date of this Agreement and the Closing Date, Seller shall keep or cause to be
kept in force property insurance covering all buildings, structures,
improvements, machinery, fixtures and equipment included in the Real Property
insuring against risks of physical loss or damage, subject to standard
exclusions, with such policy limits as Seller determines is prudent in the
exercise of sound property management practices.

 

- 19 -

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

(b) Seller shall indemnify Buyer for, and defend Buyer against, and hold Buyer
harmless from all actions, claims, demands, liabilities, losses, damages, costs
and expenses, including reasonable attorneys’ fees and disbursements, that may
be suffered or incurred by Buyer if any representation or warranty made by
Seller in section 5.1 hereof or in Seller’s Closing Certificate was untrue or
incorrect in any material respect when made or that may be caused by any breach
by Seller of any such representation or warranty. Notwithstanding the foregoing,
Buyer shall not have the right to enforce any claim, nor shall Seller be liable
in any way to Buyer, for a breach of a representation or warranty of Seller if
the breach in question results from or is based on a condition, state of facts
or other matter of which Buyer had actual knowledge prior to the Closing (which
for purposes hereof will mean the actual knowledge of John W. Chamberlain).
Furthermore, Seller shall have no liability to Buyer for a breach of any
representation or warranty made by Seller under section 5.1 hereof or in
Seller’s Closing Certificate unless written notice containing a description of
the specific nature of such breach has been given by Buyer to Seller and Buyer
shall have commenced an action against Seller with respect to such breach prior
to the date that is thirty (30) days after the expiration of the Survival
Period. Furthermore, no claim for breach of any representation or warranty of
Seller shall be actionable or payable unless the valid claims for all such
breaches collectively aggregate more than Four Hundred Thousand Dollars
($400,000), in which event the full amount of such claims shall be actionable.
In no event shall the aggregate liability of Seller to Buyer by reason of a
breach of one or more of Seller’s representations exceed the sum of Three
Million Dollars ($3,000,000).

(c) Seller shall use commercially reasonable efforts (but shall not be obligated
to compensate any tenants in connection therewith) to obtain an estoppel
certificate (the “Tenant Estoppel Certificate”) executed by each tenant under
each of the Leases that is either: (i) substantially in the form of Exhibit F-1
attached hereto, (ii) substantially in the form required by the Lease for such
tenant, or (iii) for governmental entities, is in the form provided by such
governmental entity and to deliver each Tenant Estoppel Certificate to Buyer
before the Closing Date. For the avoidance of doubt, if the tenant in question
marks up or amends the form or substance of the estoppel certificate provided by
the landlord such that (i) it is inconsistent with the applicable Lease or
(ii) it discloses a material default under the Lease or identifies a potential
claim against the landlord, such document shall not qualify as a Tenant Estoppel
Certificate for purposes of satisfying the provisions of Section 7.2(d).

(d) If the purchase and sale of the Property is completed in accordance with
this Agreement, Seller shall pay the commission due Broker in accordance with
the separate written agreement between Seller and Broker.

6.2 Buyer. Buyer covenants and agrees with Seller as follows:

(a) Buyer shall indemnify Seller for, and defend Seller against, and hold Seller
harmless from all actions, claims, demands, liabilities, losses, damages, costs
and expenses, including reasonable attorneys’ fees and disbursements, that may
be suffered or incurred by Seller if any representation or warranty made by
Buyer in section 5.2 hereof or in Buyer’s Closing Certificate was untrue or
incorrect in any respect when made or that may be caused by any breach by Buyer
of any such representation or warranty.

 

- 20 -

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

(b) Except for liabilities retained or incurred by Seller hereunder, from and
after the Closing, Buyer shall indemnify Seller and its affiliates and their
respective officers, directors, employees and agents (collectively, “Seller’s
Affiliates”), defend Seller and Seller’s Affiliates against, and hold Seller and
Seller’s Affiliates harmless from and against all claims, demands, liabilities,
losses, damages, costs and expenses, including, without limitation, reasonable
attorneys’ fees and disbursements based upon, arising out of, in connection with
or relating to the Property, including, without limitation, any such liabilities
that are caused by any failure by Buyer to perform the obligations of the
landlord under the Leases first accruing on or after the date of this Agreement
or of the Property owner under the Contracts first accruing on or after the date
of this Agreement.

6.3 Casualty Damage. If, before the Closing Date, the improvements on the
Property are damaged by any insured casualty and the cost to restore such
improvements, as reasonably agreed by Seller and Buyer, is more than Five
Million Dollars ($5,000,000), Buyer shall have the right, by giving notice to
Seller within thirty (30) days after Seller gives notice of the occurrence of
such casualty to Buyer, to terminate this Agreement, in which event this
Agreement shall terminate. If, before the Closing Date, the improvements on the
Property are damaged by any casualty not covered by insurance and the cost to
restore such improvements, as reasonably determined by Seller and Buyer, is more
than Two Million Dollars ($2,000,000) (such an event being referred to as a
“Major Uninsured Casualty”), Seller and Buyer each shall have the right, by
giving notice to the other within thirty (30) days after Seller gives notice of
the occurrence of such casualty to Buyer, to terminate this Agreement, in which
event this Agreement shall terminate. If, in the event of a Major Uninsured
Casualty, Seller elects to terminate this Agreement (as provided above), then
Buyer may override such election by agreeing, in writing, to assume the
responsibility for such damage with no right to any claim against Seller on
account thereof, in which event the subject transaction shall proceed as if such
damage had not occurred. If this Agreement terminates as result of an election
by Buyer or Seller following a Major Uninsured Casualty the Deposit shall be
immediately returned to Buyer. If, before the Closing Date, the improvements on
the Property are damaged by any insured casualty and the cost to restore such
improvements, as reasonably determined by Buyer, is Five Million Dollars
($5,000,000) or less, or the improvements on the Property are damaged by any
casualty not covered by insurance and the cost to restore such improvements, as
reasonably determined by Seller and Buyer, is Two Million Dollars ($2,000,000)
or less, or either Seller or Buyer has the right to terminate this Agreement
pursuant to either of the preceding sentences but neither Seller nor Buyer
exercises such right, then this Agreement shall remain in full force and effect
and, on the Closing Date, any insurance proceeds (or, if not theretofore
received, the right to receive such proceeds) payable to Seller on account of
the damage shall be transferred to Buyer and the amount of any deductible under
Seller’s insurance policy to the extent of the restoration cost as reasonably
determined by Seller and Buyer shall be a credit to Buyer against the total
purchase price for the Property. Seller shall give notice to Buyer reasonably
promptly after the occurrence of any damage to the improvements on the Property
by any casualty. If necessary, the Closing Date shall be postponed until Seller
has given any notice to Buyer required by this section 6.3 and the period of
thirty (30) days described in this section 6.3 has expired, and the restoration
cost has been determined by Seller and Buyer.

 

- 21 -

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

6.4 Eminent Domain. If, before the Closing Date, 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 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. If, before the Closing Date, 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, on the Closing Date, the condemnation award (or, if not theretofore
received, the right to receive such award) payable to Seller on account of the
taking shall be transferred to Buyer. Seller shall give notice to Buyer
reasonably promptly 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. If necessary, the Closing Date shall be postponed
until Seller has given any notice to Buyer required by this section 6.4 and the
period of thirty (30) days described in this section 6.4 has expired. For
purposes of this section 6.4, a “material part of the Property” shall mean a
part of the Property that would result in a decrease of the value of the
Property by ten percent (10%) of the Purchase Price or more.

ARTICLE 7

Conditions Precedent

7.1 Seller. The obligations of Seller under this Agreement are subject to
satisfaction of all of the conditions set forth in this section 7.1. Seller may
waive any or all of such conditions in whole or in part but any such waiver
shall be effective only if made in writing. After the Closing, any such
condition that has not been satisfied shall be treated as having been waived in
writing. No such waiver shall constitute a waiver by Seller of any of its rights
or remedies if Buyer defaults in the performance of any covenant or agreement to
be performed by Buyer under this Agreement or if Buyer breaches any
representation or warranty made by Buyer in section 5.2 hereof or in Buyer’s
Closing Certificate. If any condition set forth in this section 7.1 is not fully
satisfied or waived in writing by Seller, this Agreement shall terminate, but
without releasing Buyer from liability if Buyer defaults in the performance of
any such covenant or agreement to be performed by Buyer or if Buyer breaches any
such representation or warranty made by Buyer before such termination.

(a) On the Closing Date, Buyer shall not be materially in default in the
performance of any material covenant to be performed by Buyer under this
Agreement; provided, however, prior to any termination pursuant to this
paragraph, Seller shall provide Buyer with written notice of such default and
Buyer shall have one (1) business day to cure such default.

 

- 22 -

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

(b) On the Closing Date, all representations and warranties made by Buyer in
section 5.2 hereof shall be true and correct in all material respects as if made
on and as of the Closing Date and Seller shall have received a Buyer’s Closing
Certificate (“Buyer’s Closing Certificate”) in the form of Exhibit G attached
hereto, certifying to Seller that all of Buyer’s representations and warranties
are materially true and correct on and as of the Closing Date, with only such
exceptions (other than material adverse exceptions) as are necessary to reflect
facts or circumstances arising between the date of this Agreement and the
Closing Date that would make any such representation or warranty untrue or
incorrect on and as of the Closing Date.

(c) On the Closing Date, no judicial or administrative suit, action,
investigation, inquiry or other proceeding by any person shall have been
instituted against Seller that challenges the validity or legality of any of the
transactions contemplated by this Agreement.

7.2 Buyer. The obligations of Buyer under this Agreement are subject to
satisfaction of all of the conditions set forth in this section 7.2. Buyer may
waive any or all of such conditions in whole or in part but any such waiver
shall be effective only if made in writing. After the Closing, any such
condition that has not been satisfied shall be treated as having been waived in
writing. No such waiver shall constitute a waiver by Buyer of any of its rights
or remedies if Seller defaults in the performance of any covenant or agreement
to be performed by Seller under this Agreement or if Seller breaches any
representation or warranty made by Seller in section 5.1 hereof or in Seller’s
Closing Certificate. If any condition set forth in this section 7.2 is not fully
satisfied or waived in writing by Buyer, this Agreement shall terminate, but
without releasing Seller from liability if Seller defaults in the performance of
any such covenant or agreement to be performed by Seller or if Seller breaches
any such representation or warranty made by Seller before such termination and
Buyer shall be entitled to the immediate return of the Deposit.

(a) On the Closing Date, Seller shall not be materially in default in the
performance of any material covenant to be performed by Seller: provided,
however, prior to any termination pursuant to this paragraph, Buyer shall
provide Seller with written notice of such default and Seller shall have one
(1) business day to cure such default.

(b) On the Closing Date, all representations and warranties made by Seller in
section 5.1 hereof shall be true and correct in all material respects as if made
on and as of the Closing Date and Buyer shall have received a Seller’s closing
certificate (“Seller’s Closing Certificate”) in the form of Exhibit H attached
hereto, certifying to Buyer that all of Seller’s representations and warranties
are materially true and correct on and as of the Closing Date, with only such
exceptions (other than material adverse exceptions) as are necessary to reflect
facts or circumstances arising between the date of this Agreement and the
Closing Date that would make any such representation or warranty untrue or
incorrect on and as of the Closing Date; provided that if Seller’s Closing
Certificate includes any material adverse exceptions, Seller shall have the
right, but not the obligation, upon written notice to Buyer, to postpone the
Closing Date for up to seven (7) days and to take any action available to Seller
that Seller deems appropriate to allow Seller to deliver Seller’s Closing
Certificate at the Closing (as so postponed) without material adverse exception.
If requested, Buyer shall cooperate in good faith with Seller in connection
therewith. For purposes of this section 7.2(b), “material” shall mean any matter
that would result in damages of, or decrease the value of the Property by, two
percent (2%) of the Purchase Price or more.

 

- 23 -

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

(c) On the Closing Date, the Title Company shall be irrevocably committed and
prepared to issue to Buyer a standard owner’s policy of title insurance, with
liability equal to the total purchase price for the Property, insuring Buyer
that fee title to the Property is vested in Buyer subject only to the Permitted
Exceptions and the usual preprinted exceptions (the “Title Policy”).

(d) On the Closing Date, Buyer shall have received Tenant Estoppel Certificates
executed by tenants which in the aggregate lease at least seventy percent
(70%) of the total leased rentable square footage of office space on the
Property (collectively, the “Minimum Estoppel Requirement”). In the event Seller
cannot for any reason obtain a Tenant Estoppel Certificate from tenants under
the Leases sufficient to reach the Minimum Estoppel Requirement, Seller, at its
option, may deliver to Buyer a Seller’s estoppel certificate substantially in
the form of Exhibit F-2 attached hereto with respect to any tenants such that
when combined with the Tenant Estoppel Certificates that were obtained, will
satisfy the Minimum Estoppel Requirement. If Seller obtains a Tenant Estoppel
Certificate from any such tenant after delivery of such Seller’s estoppel
certificate with respect to such tenant, such Seller’s estoppel certificate
shall, after delivery thereof to Buyer and as of the date of such Tenant
Estoppel Certificate, be void ab initio and shall have no further force or
effect.

(e) On the Closing Date, no judicial or administrative suit, action,
investigation, inquiry or other proceeding by any person shall have been
instituted against Buyer that challenges the validity or legality of any of the
transactions contemplated by this Agreement.

ARTICLE 8

Closing

8.1 Procedure. Seller and Buyer shall cause the following to occur at the
Closing on the Closing Date:

(a) The Title Company shall be unconditionally prepared to record the Deed for
the Real Property, duly executed and acknowledged by Seller, in the Office of
the Multnomah County Recorder in the State of Oregon.

(b) Seller shall date as of the Closing Date, execute and deliver to Buyer
(i) the Assignment of Leases, (ii) the Bill of Sale, (iii) the Assignment of
Contracts, (iv) the Assignment of Permits, (v) a Certificate of Non-Foreign
Status in the form of Exhibit I attached hereto, (vi) Seller’s Closing
Certificate, (vii) a letter to all Tenants under the Leases notifying them that
the Property has been sold to Buyer and directing them to pay future rent and
other charges to Buyer at the address to be furnished by Buyer, and (viii) such
other documents as are reasonably necessary to effectuate the sale of the
Property to Buyer (including any state, county or city transfer tax
declarations).

(c) Buyer shall date as of the Closing Date, execute and deliver to Seller
(i) the Assignment of Leases, (ii) the Assignment of Contracts, (iii) Buyer’s
Closing Certificate, and (iv) such other documents as are reasonably necessary
to effectuate the sale of the Property to Buyer (including any state, county or
city transfer tax declarations).

 

- 24 -

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

(d) Buyer shall pay to Seller the Purchase Price for the Property in cash in
immediately available funds in accordance with section 2.1 hereof.

8.2 Possession. Subject to the Leases, Seller shall transfer possession of the
Property to Buyer on the Closing Date including delivery of all keys, codes, and
other security devices for the Property. Seller shall, on the Closing Date,
deliver to Buyer the Leases, Contracts, Permits and any other plans and
specifications, certificates, licenses and approvals relating to the Property in
the possession of Seller, which shall become the property of Buyer on the
Closing Date, and copies of all of Seller’s books and records relating to the
operation of the Real Property.

8.3 Closing Costs. Seller shall pay for the standard portion of the Title Policy
and the cost of any endorsements or additional coverage obtained at the request
of Seller in order to eliminate or insure over a title matter to which Buyer
objected under, and in accordance with procedure described in, section 1.2
hereof. Except as provided above, Buyer shall pay the cost of any upgrades,
endorsements, co-insurance and reinsurance to the Title Policy, including the
cost of extended coverage over general exceptions. Buyer shall be responsible
for any applicable city, county and/or state transfer tax. Buyer shall pay
recording charges for the Deed. Escrow fees and any other expenses of the escrow
for the sale shall be split equally between Buyer and Seller. Any other costs
shall be paid in accordance with local custom.

8.4 Prorations. Prior to the Closing, Seller shall provide to Buyer a draft
proration schedule and information and verification reasonably necessary to
support such prorations schedule. Buyer and Seller shall use their reasonable
best efforts to finalize as many items on such proration schedule as possible
before the Closing. The items in subparagraphs (a) through (d) of this section
8.4 shall be prorated between Seller and Buyer based on the actual number of
days in the applicable period, as of the end of day immediately preceding the
Closing Date, with Seller being entitled to income and obligated for expenses
attributable to the period prior to the Closing Date, and Buyer being entitled
to the income and obligated for expenses attributable to the Closing Date and
thereafter.

(a) Real Estate Taxes and Assessments. Seller or Buyer, as the case may be,
shall be allocated real estate taxes and assessment installment payments
(including, any assessments imposed by private covenant) applicable to Buyer’s
period of ownership or applicable to Seller’s period of ownership, respectively,
even if such taxes and assessment installment payments are not yet due and
payable.

(b) Rent. Buyer shall receive a credit for any rent and other income (and any
applicable state or local tax on rent) under the Leases collected by Seller
before the Closing that applies to any period after the Closing. Uncollected
rent and other uncollected income shall not be prorated at the Closing. After
the Closing, Buyer shall apply all rent and income collected by Buyer from the
tenants, unless such tenant properly identifies the payment as being for a
specific item, first to tenant’s monthly rental for the then current month,
second to the tenant’s monthly rental for the month in which the Closing
occurred and then to arrearages in the reverse order in which they were due,
remitting to Seller, after deducting any actual out-of-pocket collection costs,
any rent properly allocable to Seller’s period of ownership. Buyer shall bill
and attempt to collect such rent arrearages in the ordinary course of business,
but shall not be obligated to

 

- 25 -

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

engage a collection agency or take legal action to collect any rent arrearages.
Any rent or other income received by Buyer after the Closing that is owed to
Seller shall be held in trust and remitted to Seller promptly after receipt.
Buyer’s obligations under this section 8.4(b) shall terminate as of the date set
forth in section 8.5, and Buyer shall retain any past due rents received after
such date. All tenant security deposits (and interest thereon if required by law
or contract to be earned thereon) shall be transferred or credited to Buyer at
the Closing. Any letters of credit or other non-cash tenant security deposits
held by Seller shall be transferred and re-issued to Buyer. As of the Closing,
Buyer shall assume Seller’s obligations related to tenant security deposits, but
only to the extent they are properly credited and transferred to Buyer.

(c) Contracts and Operating Expenses. Seller or Buyer, as the case may be, shall
receive a credit for regular charges under the Service Contracts and for
operating expenses, paid and applicable to Buyer’s period of ownership or
payable and applicable to Seller’s period of ownership, respectively. Amounts
due under the Construction Contracts shall be paid in accordance with sections
8.4(e) and (f).

(d) Utilities. Without duplication of the apportionment for operating expense
pass-throughs, unreimbursed charges for assessments for sewer and water and
other utilities, including charges for consumption of electricity, steam and gas
and any other receipts or charges, as applicable, shall be apportioned by Buyer
and Seller within four (4) weeks after the Closing. Seller shall use reasonable
efforts to have all meters read as close to, but before, the Closing as is
feasible, and shall be responsible for amounts shown due by reason of such
readings.

(e) Seller TI/LC Obligations. Buyer shall receive a credit against the Purchase
Price for the improvement, moving, relocation or other payments, credits,
allowances or obligations to tenants and leasing commissions accrued by Seller
that are described on Schedule 10 attached hereto (the “Seller TI/LC
Obligations”) to the extent they are not paid by Seller on or before the
Closing. Buyer shall assume the obligation to pay such costs as and when they
become due and payable.

(f) Buyer TI/LC Obligations. Buyer shall be responsible for all improvement,
moving, relocation or other payments, credits, allowances or obligations to
tenants (including any parking subsidy obligations) and leasing commissions for
all Leases other than the Seller TI/LC Obligations (the “Buyer TI/LC
Obligations”). Buyer shall reimburse Seller through escrow for any of the Buyer
TI/LC Obligations paid by Seller prior to the Closing.

(g) BETC Credit. Seller shall have no further interest in the Building Energy
Tax Credit (the “BETC”) available from the Oregon Department of Energy in
connection with the Property. Seller shall cooperate with Buyer in connection
with the transfer of the BETC to Buyer following the Closing.

8.5 Tenant Reconciliations and Post-Closing Adjustments. On or before the date
that is one (1) year after the Closing (the “Reconciliation Date”), Buyer shall
prepare and present to Seller a calculation of the proration of operating
expense pass-throughs and other items based upon the actual amount of such items
charged to or received by the parties for their period of ownership in 2011. The
parties shall make the appropriate adjusting payment between them within thirty
(30) days after presentment to Seller of Buyer’s calculation. Seller may inspect

 

- 26 -

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

Buyer’s books and records related to the Property to confirm the calculation.
Such adjusting payment shall be considered final and no additional post-Closing
adjustment for any incorrect proration or adjustment shall be made. To the
extent that there is insufficient information on the Reconciliation Date to
accurately complete the proration of income and expense, Buyer shall prepare and
present to Seller a calculation of operating expense and real property taxes
pass-throughs under the Leases and other items based upon the actual amount of
such items charged to or received by the parties for their period of ownership
on or before the Reconciliation Date.

8.6 Post-Closing Access. For a period of at least one (1) year after the
Closing, upon reasonable prior notice and during normal business hours, Buyer
shall provide Seller and Seller’s designated accountants and auditors with
access to the books and records of the Property and all similar information
relating to the period prior to the Closing Date.

ARTICLE 9

General

9.1 Notices. All notices and other communications under this Agreement shall be
properly given only if made in writing and (i) mailed by certified mail, return
receipt requested, postage prepaid, or (ii) delivered by hand (including
messenger or recognized delivery, courier or air express service), or (iii) by
facsimile or email (accompanied by telephonic notice) provided however, that if
such communication is given via facsimile transmission or email, an original
counterpart of such communication shall concurrently be sent in the manner
specified in item (ii) above, to the party at the address set forth in this
section 9.1 or such other address as such party may designate by notice to the
other party pursuant to this section 9.1. Such notices and other communications
shall be effective on the date of receipt (evidenced by the certified mail
receipt) if mailed, on the date of such hand delivery if hand delivered, on the
date of facsimile confirmation (provided that the foregoing requirements in
connection with such facsimile are satisfied) or on the date the email is sent,
provided that the sender does not receive any failure of delivery notice
(provided that the foregoing requirements in connection with such email are
satisfied). If any such notice or other communication is not received or cannot
be delivered due to a change in the address of the receiving party of which
notice was not previously given to the sending party or due to a refusal to
accept by the receiving party, such notice or other communication shall be
effective on the date delivery is attempted. Any notice or other communication
under this Agreement may be given on behalf of a party by the attorney for such
party.

 

  (a) The address of Seller:

Two Main Development LLC

c/o Shorenstein Properties LLC

235 Montgomery Street, 16th Floor

San Francisco, CA 94104

Attention: Andrew Friedman

Telephone: (415) 772-7174

Facsimile: (415) 765-9080

 

- 27 -

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

Email: afriedman@shorenstein.com

with a copy to:

Shorenstein Properties LLC

235 Montgomery Street, 15th Floor

San Francisco, CA 94104

Attention: Corporate Secretary

Telephone: (415) 772-7017

Facsimile: (415) 772-7080

with a copy to:

Pillsbury Winthrop Shaw Pittman LLP

50 Fremont Street

San Francisco, California 94105

Attention: Stephen M. Wright, Esq.

Telephone:(415) 983-1188

Facsimile: (415) 983-1200

Email: stephen.wright@pillsburylaw.com

 

  (b) The address of Buyer is:

American Assets Trust, L.P.

c/o American Assets Trust, Inc.

11455 El Camino Real, Suite 200

San Diego, California 92130

Attention: Mr. John Chamberlain

Telephone: (858) 350-2600

Facsimile: (858) 350-2620

with a copy to:

American Assets Trust, L.P.

c/o American Assets Trust, Inc.

11455 El Camino Real, Suite 200

San Diego, California 92130

Attention: Adam Wyll, Esq.

Telephone: (858) 350-2600

Facsimile: (858) 350-2620

With a copy by e-mail to:

gis@smclawoffices.com

 

- 28 -

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

9.2 Attorneys’ Fees. If there is any legal action or proceeding between Seller
and Buyer arising from or based on this Agreement, the unsuccessful party to
such action or proceeding shall pay to the prevailing party all costs and
expenses, including reasonable attorneys’ fees and expenses, incurred by such
prevailing party in such action or proceeding and in any appeal in connection
therewith. If such prevailing party recovers a judgment in any such action,
proceeding or appeal, such costs, expenses and attorneys’ fees and expenses
shall be included in and as a part of such judgment.

9.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon without regard to principles of
conflicts of laws.

9.4 Construction. Seller and Buyer acknowledge that each party and its counsel
have reviewed and revised this Agreement and that the rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any document executed
and delivered by either party in connection with the transactions contemplated
by this Agreement. The captions in this Agreement are for convenience of
reference only and shall not be used to interpret this Agreement.

9.5 Terms Generally. The defined terms in this Agreement shall apply equally to
both the singular and the plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The term “person” includes individuals, corporations,
partnerships, limited liability companies, trusts, other legal entities,
organizations and associations, and any government or governmental agency or
authority. The words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.” The words “approval,” “consent” and
“notice” shall be deemed to be preceded by the word “written.”

9.6 Further Assurances. From and after the date of this Agreement, Seller and
Buyer agree to do such things, perform such acts, and make, execute, acknowledge
and deliver such documents as may be reasonably necessary or proper and usual to
complete the transactions contemplated by this Agreement and to carry out the
purpose of this Agreement in accordance with this Agreement.

9.7 Partial Invalidity. If any provision of this Agreement is determined by a
proper court to be invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect the other provisions of this
Agreement and this Agreement shall remain in full force and effect without such
invalid, illegal or unenforceable provision.

9.8 Waivers. No waiver of any provision of this Agreement or any breach of this
Agreement shall be effective unless such waiver is in writing and signed by the
waiving party and any such waiver shall not be deemed a waiver of any other
provision of this Agreement or any other or subsequent breach of this Agreement.

9.9 Miscellaneous. The Exhibits and Schedules attached to this Agreement are by
this reference incorporated herein and made a part of this Agreement. Except as
provided in paragraph (c) of section 1.2, neither Seller nor Buyer shall make
any public announcement of this Agreement or the transactions contemplated by
this Agreement without the prior consent of the other, unless any such
announcement is reasonably necessary to comply with applicable law.

 

- 29 -

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

Buyer shall not assign or transfer this Agreement, or any interest in or part of
this Agreement, without the prior consent of Seller. Notwithstanding the
foregoing, Buyer shall have the right to assign this Agreement without the prior
consent of Seller to any affiliate of Buyer or to an exchange accommodator in
connection with any IRC Section 1031 tax deferred exchange, and in such case,
Section 5.2(a) hereof shall automatically be amended to reflect the proper state
of formation and type of entity of such assignee Buyer. No such assignment or
transfer shall release Buyer from any obligation or liability under this
Agreement. Subject to the foregoing, this Agreement shall benefit and bind
Seller and Buyer and their respective personal representatives, heirs,
successors and assigns. This Agreement may be executed in counterparts, each of
which shall be an original, but all of which shall constitute one and the same
Agreement. This Agreement may not be amended or modified except by a written
agreement signed by Seller and Buyer. This Agreement constitutes the entire and
integrated agreement between Seller and Buyer relating to the purchase and sale
of the Property and supersedes all prior agreements, understandings, offers and
negotiations, oral or written, with respect to the sale of the Property.

9.10 Time is of the Essence. Time is of the essence of this Agreement. In the
computation of any period of time provided for in this Assignment or by law, the
day of the act or event from which the period of time runs shall be excluded,
and the last day of such period shall be included, unless it is not a business
day, in which case the period shall be deemed to run until the end of the next
day which is a business day.

9.11 Electronic Signatures. Each party (i) has agreed to permit the use, from
time to time, of telecopied signatures in order to expedite the transaction
contemplated by this Agreement, (ii) intends to be bound by its telecopied
signature, (iii) is aware that the other will rely on the telecopied signature,
and (iv) acknowledges such reliance and waives any defenses (other than fraud)
to the enforcement of any document based on the fact that a signature was sent
by telecopy. As used herein, the term “telecopied signature” shall include any
signature sent via facsimile or via email in portable document format (“.pdf”).

9.12 Exculpation. No constituent shareholder, member or partner in or agent of
Seller or Buyer nor any advisor, trustee, director, officer, employee,
beneficiary, shareholder, member, manager, partner, participant, representative
or agent of any partnership, limited liability company, corporation, trust or
other entity that has or acquires a direct or indirect interest in Seller or
Buyer, shall have any personal liability, directly or indirectly, under or in
connection with this Agreement or any agreement made or entered into under or
pursuant to the provisions of this Agreement, or any amendment or amendments to
any of the foregoing made at any time or times. Buyer and its successors and
assigns and, without limitation, all other persons and entities, shall look
solely to Seller’s assets for the payment of any claim or for any performance,
and Buyer, on behalf of itself and its successors and assigns, hereby waives any
and all such personal liability. Seller and its successors and assigns and,
without limitation, all other persons and entities, shall look solely to Buyer’s
assets for the payment of any claim or for any performance, and Seller, on
behalf of itself and its successors and assigns, hereby waives any and all such
personal liability.

9.13 Or. Rev. Stat. § 93.040. THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT
BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS
SUBJECT TO LAND USE LAWS AND

 

- 30 -

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

REGULATIONS THAT, IN FARM OR FORESTRY ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR
SITTING OF A RESIDENCE AND THAT LIMIT LAWSUITS AGAINST FARMING OR FOREST
PRACTICES AS DEFINED IN ORS 30.930 IN ALL ZONES. BEFORE SIGNING OR ACCEPTING
THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE
PERSON’S RIGHTS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND
SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, AND SECTIONS 2 TO 9 AND 17,
CHAPTER 855, OREGON LAWS 2009. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE
PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE
CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING
TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR
215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO VERIFY THE
EXISTENCE OF FIRE PROTECTION FOR STRUCTURES AND TO INQUIRE ABOUT THE RIGHTS OF
NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO
195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, AND SECTIONS 2 TO 9
AND 17, CHAPTER 855, OREGON LAWS 2009.

9.14 Like Kind Exchange. Buyer shall cooperate with Seller in effecting a
tax-deferred exchange of the Property under Section 1031 of the Internal Revenue
Code so long as no unreimbursed additional costs (other than Buyer’s internal
costs and attorneys’ fees) or liabilities are incurred by Buyer. Likewise,
Seller shall cooperate with Buyer in effecting a tax-deferred exchange of the
Property under Section 1031 of the Internal Revenue Code so long as no
unreimbursed additional costs (other than Seller’s internal costs and attorneys’
fees) or liabilities are incurred by Seller. Nothing contained in this section
9.14 shall result in any delay of the Closing Date.

9.15 Regulation 3-14 Cooperation. Seller acknowledges that it has been advised
that Buyer is an affiliate of American Assets Trust, Inc. (“AAT”), a real estate
investment trust, and that, as such, Buyer will require cooperation from Seller
in meeting certain regulatory requirements applicable to Buyer. Upon Buyer’s
written request, during the period commencing on the date of this Agreement and
ending two (2) years following the Closing, Seller shall make Seller’s books and
records (to the extent not delivered to Buyer in accordance with the
requirements of section 8.2) available to Buyer for inspection, copying, and
audit by Buyer’s designated accountants, at Buyer’s expense, to enable or assist
AAT to make any necessary or appropriate filings (as specified on attached
Exhibit J), if, as, and when such filing may be required by the Securities and
Exchange Commission (the “Commission”) or otherwise by applicable law.
Furthermore, and without limiting the foregoing, for a period of two (2) years
following the Closing, Seller, or, in the event Seller is dissolved, an
affiliate of Seller reasonably acceptable to Buyer shall execute, from time to
time upon reasonable advanced notice, the form of audit letter contained in
attached Exhibit K, as the same may be modified from time to time to reflect
only the Seller’s period of ownership. The covenants and agreements set forth in
this section 9.15 shall survive the Closing for a period of two (2) years.

[SIGNATURE PAGE TO FOLLOW]

 

- 31 -

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

IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the date
first hereinabove written.

 

SELLER:

TWO MAIN DEVELOPMENT LLC,

a Delaware limited liability company

By:   /S/    ANDREW FRIEDMAN         Name:   Andrew Friedman Title:   Vice
President

 

BUYER:

AMERICAN ASSETS TRUST, L.P.,

a Maryland limited partnership

By:  

AMERICAN ASSETS TRUST, INC.,

a Maryland corporation, its General Partner

  By:   /S/    JOHN W. CHAMBERLAIN             John W. Chamberlain     President
and CEO

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

Title Company acknowledges receipt of the Deposit in the amount of One Million
Dollars ($1,000,000) and a copy of this Agreement executed by both Buyer and
Seller.

 

Dated: March 2, 2011     CHICAGO TITLE INSURANCE COMPANY       By   /s/ Terina
Kung       Its   Escrow officer

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

EXHIBIT A

FORM OF DEED

After Recording Return to:

Until a change is requested, all tax

Statements shall be sent to:

STATUTORY SPECIAL WARRANTY DEED

             , a              (“Grantor”) conveys and specially warrants to
            , a              (“Grantee”) the real property located in Multnomah
County, Oregon, described on the attached Exhibit A, free of encumbrances
created or suffered by Grantor except for those described on the attached
Exhibit B.

The true consideration for this conveyance is                     .

BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE
SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, UNDER ORS 195.300, 195.301 AND
195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, AND
SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009. THIS INSTRUMENT DOES NOT
ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF
APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS
INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE
APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND
BEING TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS
92.010 OR 215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO
DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED
IN ORS 30.930, AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS,
IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11,
CHAPTER 424, OREGON LAWS 2007, AND SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON
LAWS 2009.

Dated this              day of             , 2011.

 

 

Exhibit A

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

EXHIBIT B

ASSIGNMENT OF LEASES

THIS ASSIGNMENT OF LEASES, made as of             ,             , by and between
            , a              (“Seller”), and             , a             
(“Buyer”),

W I T N E S S E T H:

For valuable consideration, receipt of which is acknowledged, Seller and Buyer
agree as follows:

1. Assignment and Assumption.

(a) Seller hereby assigns and transfers to Buyer all right, title and interest
of Seller in, to and under the leases, lease amendments, lease guaranties, work
letter agreements, improvement agreements, subleases, assignments, licenses,
concessions and other agreements described in Exhibit 1 attached hereto and made
a part hereof (the “Leases”).

(b) Buyer hereby accepts the foregoing assignment, and assumes and agrees to
perform all of the covenants and agreements in the Leases to be performed by the
landlord thereunder that arise or accrue from and after the date of this
Assignment.

2. Indemnification.

(a) Seller shall indemnify and defend Buyer against and hold Buyer harmless from
all claims, demands, liabilities, losses, damages, costs and expenses,
including, without limitation, reasonable attorneys’ fees and disbursements,
that are caused by any failure by Seller to perform any of the obligations of
the landlord under the Leases before the date of this Assignment. Seller’s
indemnity obligations under this Assignment shall terminate nine (9) months from
the date of this Assignment and in no event shall the aggregate liability of
Seller under this Assignment, that certain Assignment of Contracts between
Seller and Buyer dated as of March __, 2011 and section 6.1(b) of that certain
Purchase Agreement between Seller and Buyer dated as of March __, 2011 exceed
Three Million Dollars ($3,000,000).

(b) Buyer shall indemnify and defend Seller against and hold Seller harmless
from all claims, demands, liabilities, losses, damages, costs and expenses,
including, without limitation, reasonable attorneys’ fees and disbursements,
that are caused by any failure by Buyer to perform any of the obligations of the
landlord under the Leases first accruing on or after the date of this
Assignment.

3. Further Assurances. Seller and Buyer agree to execute such other documents
and perform such other acts as may be reasonably necessary or proper and usual
to effect this Assignment.

4. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Oregon.

 

Exhibit B

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

5. Successors and Assigns. This Assignment shall be binding upon and shall inure
to the benefit of Seller and Buyer and their respective personal
representatives, heirs, successors and assigns.

IN WITNESS WHEREOF, Seller and Buyer have executed this Assignment as of the
date first hereinabove written.

 

SELLER: BUYER:

 

Exhibit B

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

EXHIBIT C

BILL OF SALE

For valuable consideration, receipt of which is acknowledged,             , a
             (“Seller”), hereby sells, assigns, transfers and delivers to
            , a              (“Buyer”), all of the personal property, tangible
or intangible, owned by Seller and used exclusively in connection with the
operation of the real property described on Exhibit 1 attached hereto but
excluding those items described in Exhibit 2 attached hereto (the “Personal
Property”).

SELLER HAS MADE NO AFFIRMATION OF FACT OR PROMISE RELATING TO THE PERSONAL
PROPERTY THAT HAS BECOME ANY BASIS OF THIS BARGAIN OTHER THAN THAT SELLER HAS
NOT PREVIOUSLY ASSIGNED, TRANSFERRED OR CONVEYED ANY SUCH PERSONAL PROPERTY, AND
FURTHER, SELLER HAS MADE NO AFFIRMATION OF FACT OR PROMISE RELATING TO THE
PERSONAL PROPERTY THAT WOULD CONFORM TO ANY SUCH AFFIRMATION OR PROMISE. SELLER
DISCLAIMS ANY WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE WHATEVER WITH
RESPECT TO THE PERSONAL PROPERTY. THE PERSONAL PROPERTY IS SOLD ON AN “AS IS”
BASIS.

Dated:             .

 

SELLER:

 

Exhibit C

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

EXHIBIT D

ASSIGNMENT OF CONTRACTS

THIS ASSIGNMENT, made as of             ,             , by and between
            , a              (“Seller”), and             , a             
(“Buyer”),

W I T N E S S E T H:

For valuable consideration, receipt of which is acknowledged, Seller and Buyer
agree as follows:

1. Assignment and Assumption.

(a) Seller hereby assigns and transfers to Buyer all right, title and interest
of Seller in, to and under the contracts (the “Contracts”) described in
Exhibit 1 attached hereto and made a part hereof and all warranties and
guarantees associated with the property described in Exhibit 2.

(b) Buyer hereby accepts the foregoing assignment, and assumes and agrees to
perform all of the covenants and agreements in the Contracts to be performed by
Seller thereunder that arise or accrue from and after the date of this
Assignment.

2. Indemnification.

(a) Seller shall indemnify and defend Buyer against and hold Buyer harmless from
all claims, demands, liabilities, losses, damages, costs and expenses,
including, without limitation, reasonable attorneys’ fees and disbursements,
that are caused by any failure by Seller to perform the obligations of Seller
under the Contracts before the date of this Assignment. Seller’s indemnity
obligations under this Assignment shall terminate nine (9) months from the date
of this Assignment and in no event shall the aggregate liability of Seller under
this Assignment, that certain Assignment of Leases between Seller and Buyer
dated as of March __, 2011 and section 6.1(b) of that certain Purchase Agreement
between Seller and Buyer dated as of March __, 2011 exceed Three Million Dollars
($3,000,000).

(b) Buyer shall indemnify and defend Seller against and hold Seller harmless
from all claims, demands, liabilities, losses, damages, costs and expenses,
including, without limitation, reasonable attorneys’ fees and disbursements,
that are caused by any failure by Buyer to perform the obligations of Buyer
under the Contracts first accruing on or after the date of this Assignment.

3. Further Assurances. Seller and Buyer agree to execute such other documents
and perform such other acts as may be reasonably necessary or proper and usual
to effect this Assignment.

4. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of Oregon.

 

 

Exhibit D

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

5. Successors and Assigns. This Assignment shall be binding upon and shall inure
to the benefit of Seller and Buyer and their respective personal
representatives, heirs, successors and assigns.

IN WITNESS WHEREOF, Seller and Buyer have executed this Assignment as of the
date first hereinabove written.

 

SELLER: BUYER:

 

Exhibit D

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

EXHIBIT E

ASSIGNMENT OF PERMITS

For valuable consideration, receipt of which is acknowledged,             , a
            (“Seller”), hereby assigns and transfers to             , a
            (“Buyer”), all of Seller’s right, title and interest in, to and
under all building permits, certificates of occupancy and other certificates,
permits, licenses and approvals (the “Permits”) pertaining solely to the real
property described on Exhibit 1 attached hereto or to Seller’s interest in all
buildings, structures, improvements, machinery, fixtures and equipment affixed
or attached to such real property and all easements and rights appurtenant to
such real property

Dated:                     .

 

SELLER:

 

Exhibit E

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

EXHIBIT F-1

TENANT ESTOPPEL CERTIFICATE

The undersigned (“Tenant”) hereby certifies to              (“Buyer”), as
follows:

 

1. Attached to this Estoppel Certificate as Exhibit 1 is an accurate and
complete list of the lease and all amendments and modifications thereto and
guaranties thereof (the “Lease”) by which Tenant leases the space described
therein (the “Premises”), which space is located in the building located at 100
SW Main Street, Portland, Oregon (the “Building”), currently owned by Two Main
Development LLC (“Landlord”). The Building, the land on which the Building is
located and any other improvements located on such land are herein collectively
referred to as the “Property”.

 

2. The term of the Lease has commenced and the full rent is: [check one]

 

  ¨ now accruing under the Lease in the amount of $             per month for
base rent plus operating expenses and taxes, subject to adjustment as set forth
in the Lease.

 

  ¨ will begin to accrue on             .

 

3. No monthly rent (excluding security deposits) has been paid more than thirty
days in advance except as follows              (if none, please state “none”).

 

4. Landlord holds a security deposit of $             (if none, please state
“none”) and a letter of credit in the amount of $             (if none, please
state “none”) under the Lease.

 

5. The Lease is in full force and effect, has not been amended or modified
(except for the amendments or modifications, if any, identified in Exhibit 1
attached to this Tenant Estoppel Certificate), and constitutes the entire
agreement and only lease between Landlord and Tenant relating to the Premises.

 

6. Except as expressly set forth in the Lease, Tenant has not been granted any
options to terminate the term of the Lease earlier than the date specified in
Paragraph 2 above, nor any options and/or rights of first refusal to extend the
term of the Lease or to lease any other space in the Property. Tenant does not
have any outstanding options to purchase, or rights of first refusal or first
offer to purchase, the Premises or any part of the Property. Tenant has no
parking rights related to the Premises except as set forth in the Lease.

 

7. To Tenant’s current actual knowledge, as of the date of this Estoppel
Certificate, there is no breach or default by Landlord under the Lease and
Tenant has no knowledge of any event which with the giving of notice, the
passage of time or both would constitute a default by Landlord under the Lease.
To Tenant’s current actual knowledge, as of the date of this Estoppel
Certificate, Tenant has no defense, claim or demand against the landlord, under
the Lease or otherwise, which can be offset against rents or other charges due
or to become due under the Lease.

 

Exhibit F-1

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

8. Tenant has not assigned the Lease or subleased all or any part of the
premises thereunder other than by a document identified in Exhibit 1 attached
hereto.

 

9. Tenant is not a debtor in any bankruptcy case or other insolvency proceeding
relating to Tenant. To Tenant’s current actual knowledge, any guarantor of the
Lease (“Guarantor”), as of the date of this Estoppel Certificate is not a debtor
in any bankruptcy case or other insolvency proceeding relating to Guarantor.

 

10. All improvements required to be completed by Landlord have been completed
and there are no contributions, credits, free rent, rent abatements, deductions
or other sums due to Tenant from Landlord except             .

Notwithstanding anything contained in this Estoppel Certificate, nothing
contained in this Estoppel Certificate shall constitute or be deemed to
constitute an amendment, modification or waiver of any term or condition of the
Lease or any right or remedy of Tenant thereunder. In the event of a conflict
between the Lease and this Estoppel Certificate, the Lease shall control.

The foregoing information is accurate and complete. Tenant acknowledges that
Buyer will rely on this Tenant Estoppel Certificate in purchasing such building
from the current owner and Tenant agrees that Buyer shall have the right to rely
on this Estoppel Certificate in connection therewith.

Dated:             .

 

TENANT: By:     Name:     Title:    

 

Exhibit F-1

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

EXHIBIT F-2

SELLER ESTOPPEL CERTIFICATE

The undersigned (“Landlord”) hereby certifies to              (“Buyer”),
            , as follows:

 

1. Attached to this Estoppel Certificate as Exhibit 1 is an accurate and
complete list of the lease and all amendments and modifications thereto and
guaranties thereof (the “Lease”) by which              (“Tenant”) leases the
space described therein (the “Premises”), which space is located in the building
located at             , Portland, Oregon (the “Building”), currently owned by
             LLC (“Landlord”). The Building, the land on which the Building is
located and any other improvements located on such land are herein collectively
referred to as the “Property”.

 

2. The term of the Lease has commenced and the full rent is: [check one]

 

  ¨ now accruing under the Lease in the amount of $             per month for
base rent plus operating expenses and taxes, subject to adjustment as set forth
in the Lease.

 

  ¨ will begin to accrue on             .

 

3. No monthly rent (excluding security deposits) has been paid more than thirty
days in advance except as follows              (if none, please state “none”).

 

4. Landlord holds a security deposit of $             (if none, please state
“none”) and a letter of credit in the amount of $             (if none, please
state “none”) under the Lease.

 

5. The Lease is in full force and effect, has not been amended or modified
(except for the amendments or modifications, if any, identified in Exhibit 1
attached to this Tenant Estoppel Certificate), and constitutes the entire
agreement and only lease between Landlord and Tenant relating to the Premises.

 

6. Except as expressly set forth in the Lease, Tenant has not been granted any
options to terminate the term of the Lease earlier than the date specified in
Paragraph 2 above, nor any options and/or rights of first refusal to extend the
term of the Lease or to lease any other space in the Property. Tenant does not
have any outstanding options to purchase, or rights of first refusal or first
offer to purchase, the Premises or any part of the Property. Tenant has no
parking rights related to the Premises except as set forth in the Lease.

 

7. To Landlord’s current actual knowledge, as of the date of this Estoppel
Certificate, there is no breach or default by Landlord under the Lease and
Landlord has no knowledge of any event which with the giving of notice, the
passage of time or both would constitute a default by Landlord under the Lease.
To Landlord’s current actual knowledge, as of the date of this Estoppel
Certificate, Tenant has no defense, claim or demand against the landlord, under
the Lease or otherwise, which can be offset against rents or other charges due
or to become due under the Lease.

 

Exhibit F-2

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

8. To Landlord’s current actual knowledge, Tenant has not assigned the Lease or
subleased all or any part of the premises thereunder other than by a document
identified in Exhibit 1 attached hereto.

 

9. To Landlord’s current actual knowledge, Tenant is not a debtor in any
bankruptcy case or other insolvency proceeding relating to Tenant. To Landlord’s
current actual knowledge, any guarantor of the Lease (“Guarantor”), as of the
date of this Estoppel Certificate is not a debtor in any bankruptcy case or
other insolvency proceeding relating to Guarantor.

 

10. All improvements required to be completed by Landlord have been completed
and there are no contributions, credits, free rent, rent abatements, deductions
or other sums due to Tenant from Landlord except             .

The foregoing information is accurate and complete. Landlord acknowledges that
Buyer will rely on this Tenant Estoppel Certificate in purchasing such building
from the current owner and Tenant agrees that Buyer shall have the right to rely
on this Estoppel Certificate in connection therewith.

Dated:             .

[Signature]

 

Exhibit F-2

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

EXHIBIT G

SELLER’S CLOSING CERTIFICATE

For valuable consideration, receipt of which is acknowledged,              , a
             (“Seller”), hereby certifies to              , a             
(“Buyer”), that all representations and warranties made by Seller in section 5.1
of the Purchase Agreement dated              ,              , between Seller and
Buyer (the “Purchase Agreement”) are materially true and correct on and as of
the date of this Certificate except for any changes in the list of Leases
attached to the Assignment of Leases from Schedule 2 attached to the Purchase
Agreement (and all such changes are permitted under the terms of the Purchase
Agreement) or in the list of Contracts attached to the Assignment of Contracts
from Schedule 4 and Schedule 5 attached to the Purchase Agreement. This
Certificate is executed by Seller and delivered to Buyer pursuant to the
Purchase Agreement.

Dated:              .

 

SELLER:

 

Exhibit G

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

EXHIBIT H

BUYER’S CLOSING CERTIFICATE

For valuable consideration, receipt of which is acknowledged,              , a
             (“Buyer”), hereby certifies to             , a             
(“Seller”), that all representations and warranties made by Buyer in section 5.2
of the Purchase Agreement dated             ,             , between Seller and
Buyer (the “Purchase Agreement”) are materially true and correct on and as of
the date of this Certificate. This Certificate is executed by Buyer and
delivered to Seller pursuant to the Purchase Agreement.

Dated:             .

 

BUYER:

 

Exhibit H

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

EXHIBIT I

CERTIFICATE OF NONFOREIGN STATUS

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign person.
For U.S. tax purposes (including section 1445), the owner of a disregarded
entity (which has legal title to a U.S. real property interest under local law)
will be the transferor of the property and not the disregarded entity. To inform
the transferee that withholding of tax is not required upon the disposition of a
U.S. real property interest by Shorenstein Realty Investors Eight, L.P., a
Delaware limited partnership (“Seller”), the undersigned hereby certifies the
following on behalf of Seller:

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

2. Seller is not a disregarded entity as defined in Income Tax Regulations
section 1.1445-2(b)(2)(iii).

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

4. Seller’s office address is             .

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

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

Dated:             .

 

SELLER:

 

Exhibit I

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

EXHIBIT J

SEC REQUIREMENTS

For the period of time commencing on the date of the Agreement to which this
Exhibit is attached, and continuing through the second (2nd) anniversary of the
Closing Date, Seller shall, from time to time, upon reasonable advance notice
from Buyer, provide Buyer and its representatives, agents and employees with
access to review and copy, in Seller’s offices, all financial and other
information in Seller’s possession relating to the Property and pertaining to
the period of Seller’s ownership and operation of the Property, which
information is relevant and reasonably necessary, in the reasonable opinion of
the outside, third party accountants (the “Accountants”) of AAT, to enable AAT
and its Accountants to prepare financial statements in compliance with any or
all of (a) Rule 3-14 of Regulation S-X of the Commission; (b) any other rule
issued by the Commission and applicable to AAT; and (c) any other applicable
requirements of any registration statement, report or disclosure statement filed
with the Commission by, or on behalf of, AAT. Seller acknowledges and agrees
that the following is a representative description of the information and
documentation that AAT and the Accountants may require in order to comply with
(a), (b) and (c) above:

Rent rolls for the calendar month in which the Closing occurs and the eleven
(11) calendar months immediately preceding the calendar month in which the
Closing occurs;

Seller’s written analysis of both (a) scheduled increases in base rent required
under the Leases in effect on the Closing Date; and (b) rent concessions imposed
pursuant to those Leases, of (a) and (b), provided Seller is not obligated to
prepare any such analysis and need only provide any such analysis as may exist
and be in Seller’s possession;

Seller’s internally-prepared Operating Statements;

Leases;

 

Exhibit J

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

Tax bills;

Seller’s cash receipt journal(s) and bank statements;

Seller’s general ledger;

Seller’s schedule of expense reimbursements required under Leases in effect on
the Closing Date;

Schedule of those items of repairs and maintenance performed by, or at the
direction of Seller, during Seller’s final fiscal year in which Seller owns and
operates the Property (the “Final Fiscal Year”);

Schedule of those capital improvements and fixed asset additions made by, or at
the direction of, Seller during the Final Fiscal Year;

Seller’s invoices with respect to expenditures made during the Final Fiscal
Year;

Access (during normal and customary business hours) to responsible personnel to
answer accounting questions; and

A representation letter in such form as is reasonably required by Buyer, signed
by the individual(s) responsible for Seller’s financial reporting, which
representation letter may be required to assist the Accountants in rendering an
opinion on such financial statements (provided it is understood that Seller’s
financial statements may be prepared on a Federal Income Tax accrual basis of
accounting).

 

Exhibit J

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

EXHIBIT K

FORM AUDIT LETTER

(Letterhead of Seller)

Ladies and Gentlemen:

We are providing this letter in connection with your audit of the balance sheet
of Two Main Development LLC (the “Property”) as of December 31, 2010, and the
related statements of operations, member’s capital and cash flows for the year
then ended, for the purpose of expressing an opinion as to whether the financial
statements present fairly, in all material respects, the financial position,
results of operations and cash flows of the Property in conformity with
accounting principles generally accepted in the United States of America
(“GAAP”). Certain representations in this letter are described as being limited
to matters that are material. Items are considered material, regardless of size,
if they involve an omission or misstatement of accounting information that, in
the light of surrounding circumstances, makes it probable that the judgment of a
reasonable person relying on the information would be changed or influenced by
the omission or misstatement. Materiality limitations do not apply to
representations not directly related to amounts included in the financial
statements.

We confirm, to our actual knowledge, the following representations made to you
during your audit:

1. The financial statements referred to above are fairly presented in conformity
with GAAP.

2. There have been no:

(a) Circumstances that have resulted in communications from the Property’s
external legal counsel reporting evidence of a material violation of securities
law or breach of fiduciary duty, or similar violation by the Property or any
agent thereof.

(b) Communications from regulatory agencies concerning noncompliance with, or
deficiencies in, financial reporting practices.

3. There are no:

(a) Violations or possible violations of laws or regulations, whose effects
should be considered for disclosure in the financial statements or as a basis
for recording a loss contingency.

(b) Unasserted claims or assessments that our lawyers have advised us are
probable of assertion and must be disclosed in accordance with Financial
Accounting Standards Board (“FASB”) Accounting Standards Certification (“ASC”)
Section 450- Contingencies.

 

Exhibit K

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

(c) Other liabilities or gain or loss contingencies that are required to be
accrued or disclosed by GAAP.

(d) Material transactions that have not been properly recorded in the accounting
records underlying the financial statements.

(e) Events that have occurred subsequent to the balance sheet date and through
the date of this letter that would require adjustment to or disclosure in the
financial statement.

4. We acknowledge our responsibility for the design and implementation of
programs and controls to prevent, deter and detect fraud. We understand that the
term “fraud” includes misstatements arising from fraudulent financial reporting
and misstatements arising from misappropriation of assets.

Misstatements arising from fraudulent financial reporting are intentional
misstatements, or omissions of amounts or disclosures in financial statements to
deceive financial statement users. Misstatements arising from misappropriation
of assets involve the theft of an entity’s assets where the effect of the theft
causes the financial statement not to be presented in conformity with GAAP.

5. We have no knowledge of any fraud or suspected fraud affecting the Property
involving:

(a) Management,

(b) Employees who have significant roles in internal control over financial
reporting, or

(c) Others where the fraud could have a material effect on the financial
statements.

6. We have no knowledge of any allegations of fraud or suspected fraud affecting
the entity received in communications from employees, former employees,
analysts, regulators, short sellers, or others.

7. The Property has no plans or intentions that may materially affect the
carrying value or classification of assets and liabilities.

8. We have no knowledge of any officer or director of the Property, or any other
person acting under the direction thereof, having taken any action to
fraudulently influence, coerce, manipulate or mislead you during your audit.

9. The following have been properly recorded or disclosed in the financial
statement:

(a) Related party transactions including sales, purchases, loans, transfers,
leasing arrangements, guarantees, ongoing contractual commitments and amounts
receivable from or payable to related parties.

 

Exhibit K

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

We understand that the term “related party” refers to affiliates of the
enterprise; entities for which investments are accounted for by the equity
method by the enterprise; trusts for the benefit of employees, such as pension
and profit sharing trusts that are managed by or under the trusteeship of
management; principal owners of the enterprise; its management; members of the
immediate families of principal owners of the enterprise and its management; and
other parties with which the enterprise may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests. Another party also is a related party if it
can significantly influence the management or operating policies of the
transacting parties or if it has an ownership interest in one of the transacting
parties and can significantly influence the other to an extent that one or more
of the transacting parties might be prevented from fully pursuing its own
separate interests.

(b) Guarantees, whether written or oral, under which the Property is
contingently liable, including guarantee contracts and indemnification
agreements.

(c) Significant estimates and material concentrations known to management that
are required to be disclosed in accordance with the AICPA’s Statement of
Position (SOP) 94-6, Disclosure of Certain Significant Risks and Uncertainties.
Significant estimates are estimates at the balance sheet date, which could
change materially within the next year. Concentrations refer to volumes of
business, revenues, available sources of supply, or markets or geographic areas
for which it is reasonably possible that events could occur which would
significantly disrupt normal finances within the next year. Concentrations
include material sources of financing, including off· balance sheet arrangements
and transactions with unconsolidated, limited purpose entities, and
contingencies inherent in the arrangements, that are reasonably likely to affect
the continued availability of liquidity and financing.

10. The Property has satisfactory title to all owned assets, and there are no
liens or encumbrances on such assets, nor has any asset been pledged as
collateral, except as disclosed in the financial statements.

11. The Property has complied with all aspects of contractual agreements that
would have a material effect on the financial statement in the event of
noncompliance.

Further, we confirm that we are responsible for the fair presentation in the
financial statements of financial position, results of operations and cash flows
in conformity with GAAP.

 

Very truly yours,

 

Exhibit K

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

Schedule 2 – List of Leases

USA GSA Armed Forces Recruiting (LOR07177)

 

  1. Special Requirements Package, dated 1/21/10

 

  2. Attachment 2 to SFO No. 9OR2095

 

  3. Solicitation for Offers, dated 3/4/10

 

  4. Proposal to Lease Space (for SFO 9OR2095), dated 3/31/10

 

  5. General Clauses

 

  6. Lease Agreement, dated 4/21/10

 

  7. Supplemental Lease Agreement No. 1, dated 7/26/10

 

  8. Representations and Certifications, dated 8/25/10

 

  9. Supplemental Lease Agreement No. 2, dated 9/13/10

 

  10. Supplemental Lease Agreement No. 3, dated 12/16/10

USA GSA Drug Enforcement Administration (LOR07127)

 

  1. Special Requirements Package, dated 9/16/09

 

  2. Solicitation for Offers, dated 10/13/09

 

  3. Amendment 1 to Solicitation for Offers 9OR2096, dated 11/24/09

 

  4. Amendment 2 to Solicitation for Offers 9OR2096, dated 12/3/09

 

  5. Amendment 3 to Solicitation for Offers 9OR2096, dated 12/22/09

 

  6. Proposal to Lease Space (for SFO 9OR2096), dated 1/21/10

 

  7. General Clauses

 

  8. Lease Agreement, dated 1/27/10

 

  9. Supplemental Lease Agreement No. 1, dated 5/21/10

 

  10. Supplemental Lease Agreement No. 2, dated 7/14/10

 

  11. Representations and Certifications, dated 8/25/10

 

  12. Supplemental Lease Agreement No. 3, dated 10/5/10

 

  13. Supplemental Lease Agreement No. 4, dated 12/16/10

USA GSA Internal Revenue Service (LOR07128)

 

  1. Special Requirements Package, dated 9/17/09

 

  2. Solicitation for Offers, dated 12/7/09

 

  3. Amendment 1 to Solicitation for Offers 9OR2122, dated 12/22/09

 

  4. Amendment 2 to Solicitation for Offers 9OR2122

 

  5. Proposal to Lease Space (for SFO 9OR2122), dated 1/21/10

 

  6. General Clauses

 

  7. Lease Agreement, dated 1/27/10

 

  8. Supplemental Lease Agreement No. 1, dated 6/9/10

 

  9. Supplemental Lease Agreement No. 3, dated 8/24/10

 

  10. Representations and Certifications, dated 8/25/10

 

  11. Supplemental Lease Agreement No. 4, dated 9/13/10

 

  12. Supplemental Lease Agreement No. 5, dated 11/10/10

 

  13. Supplemental Lease Agreement No. 6, dated 12/16/10

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

USA GSA Internal Revenue Service (LOR07130)

 

  1. Special Requirements Package, dated 10/13/09

 

  2. Solicitation for Offers, dated 11/17/09

 

  3. Amendment 1 to Solicitation for Offers 9OR2121, dated 12/17/09

 

  4. Amendment 2 to Solicitation for Offers 9OR2121, dated 12/22/09

 

  5. Proposal to Lease Space (for SFO 9OR2121), dated 1/21/10

 

  6. General Clauses

 

  7. Lease Agreement, dated 1/27/10

 

  8. Supplemental Lease Agreement No. 1, dated 6/9/10

 

  9. Supplemental Lease Agreement No. 2, dated 8/24/10

 

  10. Representations and Certifications, dated 8/25/10

 

  11. Supplemental Lease Agreement No. 3, dated 9/23/10

 

  12. Supplemental Lease Agreement No. 4, dated 11/22/10

 

  13. Supplemental Lease Agreement No. 5, dated 1/28/11

USA GSA US Department of Agriculture (LOR07146)

 

  1. Special Requirements Package, dated 10/15/09

 

  2. Solicitation for Offers, dated 1/6/10

 

  3. Proposal to Lease Space (for SFO 9OR2109), dated 1/20/10

 

  4. General Clauses

 

  5. Lease Agreement, dated 3/11/10

 

  6. Supplemental Lease Agreement No. 1, dated 6/9/10

 

  7. Supplemental Lease Agreement No. 2, dated 8/9/10

 

  8. Representations and Certifications, dated 8/25/10

 

  9. Supplemental Lease Agreement No. 3, dated 9/13/10

 

  10. Supplemental Lease Agreement No. 4, dated 12/16/10

USA GSA Veterans Benefits Administration (LOR07129)

 

  1. Special Requirements Package, dated 9/30/09

 

  2. Solicitation for Offers, dated 10/28/09

 

  3. Amendment 1 to Solicitation for Offers 9OR2105, dated 12/9/09

 

  4. Amendment 2 to Solicitation for Offers 9OR2105, dated 12/22/09

 

  5. Proposal to Lease Space (for SFO 9OR2105), dated 1/8/10

 

  6. General Clauses

 

  7. Lease Agreement, dated 1/27/10

 

  8. Supplemental Lease Agreement No. 1, dated 5/21/10

 

  9. Supplemental Lease Agreement No. 2, dated 7/26/10

 

  10. Supplemental Lease Agreement No. 4, dated 8/9/10

 

  11. Memo, dated 8/16/10

 

  12. Representations and Certifications, dated 8/25/10

 

  13. Supplemental Lease Agreement No. 5, dated 9/13/10

 

  14. Supplemental Lease Agreement No. 6, dated 11/22/10

 

  15. Supplemental Lease Agreement No. 7, dated 12/16/10

 

  16. Supplemental Lease Agreement No. 8, dated 1/28/11

Portland Energy Conservation, Inc.

 

  1. Lease Agreement, dated 8/26/10

 

  2. Commencement Letter, dated 2/1/11

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

Storage Agreements

 

  1. Storage Lease Agreement, dated 1/4/11

USAgencies Credit Union

 

  1. Lease Agreement, dated 10/12/10

 

  2. Commencement Letter, dated 11/16/10

tw telecom of oregon llc

 

  1. Communications License Agreement, dated 3/31/09

 

  2. First Amendment to Communications License Agreement, dated 5/29/09

 

  3. Confirmation of Relevant Dates, dated 12/20/10

Integra Telecom of Oregon, Inc.

 

  1. Communications License Agreement, dated 6/18/09

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

Schedule 3 – Excluded Personal Property

 

Description of Property

  

Quantity

  

Location

Signage      

Type 21 - Entrance Closed - Silver

   1    Storage Behind Mailroom

Type 21 - Please Pardon Inconvenience - Silver

   1    Storage Behind Mailroom

Type 22 - Caution Please Watch Step

   1    Storage Behind Mailroom

Type 22 - Caution - Wet Floor at Revolving Door

   2    Storage Behind Mailroom

Type 25 - Restroom Closed Door Hanger

   5    Storage Behind Mailroom

Type 28 - Caution Wet Floor

   5    Storage Behind Mailroom

Type 69 - Please Pardon Inconvenience - Silver

   4    Storage Behind Mailroom

Safety Cone Signs-Icy Conditions/Men Working

     

Above

   12    Storage Behind Mailroom

Safety Cones & Accessories

   10    Storage Behind Mailroom

Loading Dock Signs

   3    Loading Dock

No Smoking Building Signs

   6    Building Exterior

No Parking - Compactor

   1    Loading Dock

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

Schedule 4 – Construction Contracts & Warranties

Construction Contracts:

Core & Shell – Hoffman Construction

AIA Document A111 – 1997

 

  •  

Standard Form of Agreement between Owner (Two Main LLC) and Contractor (Hoffman
Construction Company of Oregon), dated 11/12/2007

AIA Document A201 – 1997

 

  •  

General Conditions of the Contract for Construction (including Exhibits A to I)
Contract Correction Letter, dated 11/12/2007

Core & Shell – Architect

AIA Document B141 – 1997

 

  •  

Standard Form of Agreement between Owner (Two Main Development, LLC) and
Architect (GBD Architects, Incorporated), dated 2/14/2008

GBD Sub-Consultant PL Insurance Requirements Letter, dated

2/28/2008 GSA Tenant Improvement Construction Contracts

Implementation Letter (DEA)

 

  •  

Between Owner (Two Main Development, LLC) and Contractor (Lease Crutcher Lewis,
LLC), dated 4/5/2010

Implementation Letter (IRS – Permanent)

 

  •  

Between Owner (Two Main Development, LLC) and Contractor (Lease Crutcher Lewis,
LLC), effective date 4/5/2010 and agreement date 6/14/2010

Implementation Letter (IRS – Temporary)

 

  •  

Between Owner (Two Main Development, LLC) and Contractor (Lease Crutcher Lewis,
LLC), effective date 4/5/2010 and agreement date 6/14/2010

Implementation Letter (USDA OIG)

 

  •  

Between Owner (Two Main Development, LLC) and Contractor (Lease Crutcher Lewis,
LLC), effective date 4/5/2010 and agreement date 6/11/2010

Implementation Letter (VBA)

 

  •  

Between Owner (Two Main Development, LLC) and Contractor (Lease Crutcher Lewis,
LLC), effective date 4/5/2010 and agreement date 6/11/2010

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

Bike Hub Amenity Contract

Implementation Letter (Bike Hub), dated 1/26/2011

 

  •  

Agreement Between Owner (Shorenstein Realty Services, LP, a California Limited
Partnership) and Contractor (Lease Crutcher Lewis, LLC) made pursuant to the
On-Call Agreement between SRS and Contractor dated 10/31/2008

PECI Construction Contract

Implementation Letter (Portland Energy Conservation, Inc.), dated 10/3/2010

 

  •  

Agreement Between Owner (Shorenstein Realty Services, LP, a California Limited
Partnership) and Contractor (Lease Crutcher Lewis, LLC) made pursuant to the
On-Call Agreement between SRS and Contractor dated 10/31/2008

Schedule 1 Modification Notice

AIA Document B141 – 1997 between Shorenstein Realty Services, LP, a California
Limited Partnership, (“Owners Agent”), and GBD Architects Incorporated,
(“Architect”), dated 2/17/2011

AIA Document A111 – 1997 between Shorenstein Realty Services, LP, a California
Limited Partnership, (“Owners Agent”), and Lease Crutcher Lewis, LLC,
(“Contractor”), dated 3/12/2010

Construction Warranties

Letter of Warranty for Project: Shorenstein Realty Services: GSA First and Main
– VBA Suite; Job #PC10585, dated 8/31/2010

Letter of Warranty for Project: Shorenstein Realty Services: GSA First and Main
– DEA Suite; Job #PC10584, dated 8/31/2010

Letter of Warranty for Project: Shorenstein Realty Services: GSA First and Main
– AFR Suite; Job #PC10591, dated 8/31/2010

Letter of Warranty for Project: Shorenstein Realty Services: GSA First and Main
– OIG Suite; Job #PC10590, dated 8/31/2010

Letter of Warranty for Project: Shorenstein Realty Services: GSA First and Main
– IRS-P Suite; Job #PC10586, dated 8/31/2010

Letter of Warranty for Project: Shorenstein Realty Services: GSA First and Main
– IRS-T Suite; Job #PC10587, dated 8/31/2010

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

Schedule 5 – Service Contracts

Alarm Monitoring

Agreement for Alarm Monitoring Services, between Shorenstein Realty Services,
L.P. and Convergint Technologies, LLC, dated June 1, 2010 (includes 6 other
downtown properties).

Architects

Agreement between SRS and GBD Architects Incorporated, dated May 1, 2009.
Modification notice dated February 17, 2011 reflecting Schedule 1 changes.

Carpet Cleaning

Agreement between SRS and Millennium Building Services, dated February 11, 2011.

Compactor Maintenance

Agreement for Project Services, between Shorenstein Realty Services, L.P. and
Wessco, dated August 5, 2010.

Communications License

Communications License Agreement between Two Main Development LLC and Comcast of
Tualatin Valley, Inc., dated April 26, 2010.

Fire System Testing

Agreement for Fire System Testing & Inspection & Preventative Maintenance,
between Shorenstein Realty Services, L.P. and Convergint Technologies, dated
January 18, 2011.

General Contractors

Agreement between Shorenstein Realty Services, L.P. and Lease Crutcher Lewis,
October 31, 2008. Extension letter dated October 29, 2010 (extends contract to
May 31, 2011). Modification Notice dated March 12, 2010 reflecting Schedule 1
changes.

Janitorial Services

Janitorial Services Agreement, between Shorenstein Realty Services, L.P. and GCA
Services Group, dated August 1, 2010.

Landscaping

Service Contract between Teufel Nursery, Inc. and Two Main Development, LLC,
dated February 25, 2011.

Life Safety System Maintenance & Testing

Agreement for Alarm Monitoring Services, between Shorenstein Realty Services,
L.P., and Convergint Technologies, LLC, dated June 1, 2010.

Life Safety System Confidence Testing (Sprinkler System)

Fire Sprinkler Confidence Testing, Agreement for Project Services, between
Shorenstein Realty Services, L.P. and Pacific Fire Systems, LLC, dated
February 1, 2011

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

Parking Garage

Parking Management and Services Agreement between Shorenstein Realty Services,
L.P. and City Center Parking, dated October 11, 2010.

Security Services

Security Services Agreement, between Shorenstein Realty Services, L.P. and ABM
Security Services, dated January 14, 2011.

Waste Removal

Agreement for Project Services, Waste & Recycling Removal Services, between
Shorenstein Realty Services, L.P., and Allied Waste Services, dated April 1,
2010.

Window Washing

Agreement for Project Services, between Shorenstein Realty Services, L.P. and
Premier Cleaning Services, LLC, dated January 12, 2011.

National Contracts

Carpet & Floor Cleaning

Agreement for Project Services, between Shorenstein Realty Services, L.P. and
Northwest Commercial Carpet & Floor Cleaning, dated January 1, 2008.

Construction

AIA Document A111 – 1997, Standard Form of Agreement between Shorenstein Realty
Services, L.P., and Howard S. Wright Constructors, dated October 31, 2008.
Schedule 1 Modification Notice, dated March 12, 2010. Contract Extension Letter,
dated October 29, 2010.

AIA Document A111 – 1997, Standard Form of Agreement between Shorenstein Realty
Services, L.P., and Russell Construction, Inc., dated October 31, 2008.

AIA Document A111 – 1997, Standard Form of Agreement between Shorenstein Realty
Services, L.P., and Walsh Construction Co./Oregon, dated October 31, 2008.
Schedule 1 Modification Notice, dated March 12, 2010.

Elevator / Escalator Maintenance

Elevator / Escalator Maintenance Agreement, between Shorenstein Realty Services,
L.P. and Kone, Inc., dated October 1, 2007.

Engineering Services

Engineering Services Agreement, between Shorenstein Realty Services, L.P. and
Able Engineering Services, Inc., dated December 1, 2010.

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

Environmental Consulting Services

Agreement for Environmental Consulting Services, between MACTEC Engineering and
Consulting, Inc. and Shorenstein Realty Services, L.P., dated October 30, 2007.
First Amendment to Agreement for Project Services, dated July 1, 2009.

Lease Administration

Agreement for Project Services, between Shorenstein Realty Services, L.P. and
Realogic Analytics, Inc., dated May 11, 2009.

Vendor and Tenant Insurance Certificate Tracking

Agreement for Project Services between Shorenstein Realty Services, L.P. and
Business Credentialing Services, dated October 1, 2009.

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

Schedule 6 – List of Building, Engineering and Environmental Reports

Building Reports:

Window Test Report #1 (B2728.00 – First & Main), dated 5/1/2009

 

  •  

Submitted by RDH Building Sciences Inc. for Window L9 Benson Curtainwall 1

Window Test Report #2 (B2728.00 – First & Main), dated 5/1/2009

 

  •  

Submitted by RDH Building Sciences Inc. for Window L9 Benson Curtainwall 2

Window Test Report #3 (B2728.00 – First & Main), dated 6/18/2009

 

  •  

Submitted by RDH Building Sciences Inc. for Window L4 Benson Curtainwall South

Window Test Report #4 (B2728.00 – First & Main), dated 9/2009

 

  •  

Submitted by RDH Building Sciences Inc. for Window L16 Benson Curtainwall South

Window Test Report #5 (B2728.00 – First & Main), dated 3/10/2010

 

  •  

Submitted by RDH Building Sciences Inc. for Window L1 Benson Curtainwall South

Window Test Report #6 (B2728.00 – First & Main), dated 3/10/2010

 

  •  

Submitted by RDH Building Sciences Inc. for Window L1 Fin Wall Location 1

Window Test Report #7 (B2728.00 – First & Main), dated 3/10/2010

 

  •  

Submitted by RDH Building Sciences Inc. for Window L1 Fin Wall Location 2

Environmental Reports:

Phase I Environmental Site Assessment Report, dated 6/20/2000

 

  •  

City Center Parking Lot, 1124 SW 2nd Street, Portland, OR

 

  •  

Submitted by SECOR International Incorporated for Urban Growth Property Trust

State of Oregon Department of Environmental Quality Memorandum

 

  •  

Conditional No Further Action Recommendation, First & Main site, ECSI# 4085,
dated 6/11/2009

State of Oregon Department of Environmental Quality

 

  •  

Conditional No Further Action Determination, First and Main Office Building,
City block of in Multnomah County, Tax Lot number 600, Tax Map 1S/1E-03BD, ESCI
Site ID No. 4085, dated 10/13/2009

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

Closure Report, Proposed First and Main Office Building, dated 3/3/2009

 

  •  

By GeoDesign, Inc. for Oregon Department of Environmental Quality, Northwest
Region and Shorenstein Realty Services, LP

Memorandum RE: First and Main Office Building (ESCI No. 4085), Additional Soil
Excavation and Oversight

 

  •  

GeoDesign, Inc., dated 12/1/2009

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

Schedule 7 – Seller Disclosures

NONE

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

Schedule 8 – Security Deposits and Letter of Credit

NONE

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

Schedule 9 – Pending New Leases and Lease Amendments

Starbucks Corporation

Commercial Lease Agreement by and between Two Main Development, LLC and
Starbucks Corporation for 1,782 USF for a lease term of ten (10) years and base
rent of $21.00 psf/year for lease years 1 through 5 and $23.10 psf/year for
lease years 6 through 10.

USA GSA Internal Revenue Service (LOR07128)

Supplemental Lease Agreement No. 7 (for overtime HVAC from 1/29/11 through
4/15/11 at a rate of $55.00 per hour)

Non-Binding Letter of Intent – RTJ Enterprises, LLC

Received by Seller 3/1/11, dated 2/9/11 from RTJ Enterprises, LLC dba Freshii
for retail space of approximately 2,200 SF; terms not mutually agreed upon.

Non-Binding Letter of Intent – Scottrade, Inc.

Received by Seller 3/1/11, dated 2/24/11 from Scottrade, Inc. for retail space
of approximately 1,600 SF to 1,800 SF; terms not mutually agreed upon.

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

Schedule 10 – Seller TI, LC and Base Building Obligations

 

Description

   Amount  

Starbucks Corporation

  

Tenant Improvements

   $ 265,000.00   

Leasing Commissions

   $ 17,401.00   

Portland Energy Conservation, Inc.

  

Tenant Improvements

   $ 949,370.00   

Leasing Commissions (to be paid by Seller 3/1/11)

   $ 360,977.97   

Bike Hub Amenity

   $ 39,500