Exhibt 10.1
 
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
 
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (this
“Agreement”) is made and entered into as of the 7th day of August,  2012, by and
between GLL TERRY FRANCOIS BLVD., LLC, a Delaware limited liability company
(“Seller”), and HINES GLOBAL REIT 550 TERRY FRANCOIS LP, a Delaware limited
partnership (“Buyer”), with reference to the following facts:
 
R E C I T A L S:
 
A.           Seller is the owner of certain real property located at 550 Terry
Francois Boulevard in the City and County of San Francisco (“City”), State of
California and more particularly described on Exhibit A attached hereto (the
“Land”).  The Land is improved with an office building consisting of six stories
(the “Building”).
 
B.           The Property is located within the Mission Bay South Redevelopment
Project Area, which is part of the Mission Bay Development Area, and is subject
to the existing Development Entitlements.
 
C.           Seller desires to sell, and Buyer desires to purchase, all of
Seller’s right, title and interest in and to the following property
(collectively, the “Property”) upon the terms and subject to conditions
hereinafter set forth:
 
(i)           the Land, together with (a) all improvements located thereon,
including, without limitation, the Building (the “Improvements”), and (b) all
and singular the rights, benefits, privileges, easements, tenements,
hereditaments, and appurtenances thereon or in anywise appertaining thereto
(collectively, the “Real Property”);
 
(ii)           that certain Mission Bay Office Lease dated November 22, 2000, by
and between Seller (as successor to the original landlord) and The Gap, Inc., a
Delaware corporation (“Tenant”) as amended (the “Lease”);
 
(iii)           the equipment, machinery, furniture, furnishings, supplies and
other tangible personal property owned by Seller and now or hereafter located in
or used in connection with the operation, ownership or management of the Real
Property (collectively, the “Tangible Personal Property”); and
 
(iv)           to the extent assignable, all intangible personal property
related to the Real Property and the Improvements, including, without
limitation:  all trade names and trademarks associated with the Real Property
and the Improvements, including the name of the Real Property; the plans and
specifications and other architectural and engineering drawings for the
Improvements, if any; guaranties and warranties, if any; assignable contract
rights related to the construction, consulting, maintenance, repair, operation
or management of the Real Property, if any (collectively, the “Service
Contracts”), a list of which Service Contracts is attached hereto as Exhibit B;
Seller’s interest in the Development Entitlements and all governmental permits,
approvals and licenses, if any; and telephone exchange numbers (collectively,
the “Intangible Personal Property”);
 
PROVIDED, HOWEVER, that the Property shall not include any of the Excluded
Personalty.
 
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree that
the terms and conditions of this Agreement and the instructions to the Escrow
Holder with regard to the Escrow created pursuant hereto are as follows:
 
A G R E E M E N T:
 
1. Certain Basic Definitions.  For purposes of this Agreement, the following
terms shall have the following definitions:
 
1.1 “Affiliate”
 
 means (a) an entity that directly or indirectly controls, is controlled by, or
is under common control with the person or entity in question, or (b) an entity
at least a majority of whose economic interest is owned by the person or entity
in question; and the term “control” means the power to direct the management of
such entity through voting rights, ownership or contractual obligations.
 
1.2 “Agreement Regarding Successor Project Labor Agreement”
 
 means that certain Agreement Regarding Successor Project Labor Agreement dated
as of November 10, 2005 between Prior Owner and Catellus Operating Limited
Partnership, on the one hand, and Seller, on the other.
 
1.3 “Applicable Laws”
 
 means all laws, ordinances, rules, regulations and requirements of all
Governmental Authorities that are applicable to the Property, including without
limitation, the Federal Occupational Health and Safety Act, the Americans with
Disabilities Act of 1990, Title 24 of the California Code of Regulations and all
Environmental Laws, as amended from time to time.
 
1.4 “Assignment Agreement”
 
 means an Assignment, Assumption and Release Agreement in substantially the form
attached hereto as Exhibit C (subject to such modifications as may be reasonably
requested by the Redevelopment Agency, including, without limitation, that
Paragraphs 9.13 and 9.14 thereof be deleted).
 
1.5 “Assignment of Contracts”
 
 means an Assignment and Assumption of Contracts in the form attached hereto as
Exhibit D.
 
1.6 “Assignment of Lease”
 
 means an Assignment and Assumption of Lease in the form attached hereto as
Exhibit E.
 
1.7 “Assignment of Successor Project Labor Agreement”
 
 means an Assignment and Assumption of Agreement Regarding Successor Labor
Agreement in the form attached hereto as Exhibit F.
 
1.8 “Assignment of Tax Payment Agreement”
 
 means an Assignment and Assumption of Tax Payment Agreement in the form
attached hereto as Exhibit G.
 
1.9  “Bill of Sale”
 
 means a Bill of Sale in the form attached hereto as Exhibit H.
 
1.10 “Block 26/27 Owners”
 
 has the meaning set forth in Paragraph 26.6.
 
1.11 “Building”
 
 has the meaning set forth in Recital A.
 
1.12 “Business Day” means any day other than Saturday, Sunday or any other day
on which commercial banks in San Francisco, California are authorized or
required to close under the laws of the State of California or applicable
federal law.
 
1.13 “Buyer Exculpation Parties”
 
 has the meaning set forth in Paragraph 29.18.
 
1.14 “Buyer Parties”
 
 means Buyer and Buyer’s Affiliates (and each of their Affiliates) including,
but not limited to, Buyer’s or such companies’ officers, directors,
shareholders, members, partners, agents, employees, managers and attorneys.
 
1.15 “Buyer’s Address”
 
 means:
 
Hines Global REIT 550 Terry Francois Blvd. LP
c/o Hines Interests Limited Partnership
2800 Post Oak Boulevard, Suite 5000
Houston, Texas 777056
Attention:  Charles N. Hazen
Facsimile No.:  (713) 966-7851

with a copy to:

Hines Global REIT 550 Terry Francois Blvd. LP
c/o Hines Interests Limited Partnership
2800 Post Oak Boulevard, Suite 5000
Houston, Texas 777056
Attention:  Jason P. Maxwell
Facsimile No.:  (713) 966-2075

1.16 “Buyer’s Agents”
 
 means Buyer’s directors, officers, managers, employees, agents, investors,
counsel, consultants and contractors.
 
1.17 “Buyer’s Certificate”
 
 has the meaning set forth in Paragraph 8.2.2.
 
1.18 “Buyer’s Counsel’s Address”
 
 means:
 
Baker Botts L.L.P.
2001 Ross Avenue, Suite 600
Dallas, Texas 75201
Attention:  Jonathan W. Dunlay
Facsimile No.:     (214) 661-4711

1.19  “Buyer’s Due Diligence Notice”
 
 has the meaning set forth in Paragraph 6.5.
 
1.20 “California Affidavit”
 
 means a California Form 593-C.
 
1.21 “CFD Assessments”
 
 means the special taxes levied or to be levied on the Property and other
property in the Mission Bay Development Area in accordance with the terms and
conditions of the “Rate and Method of Apportionment of Special Tax” applicable
to the CFDs.
 
1.22 “CFDs”
 
 means, collectively, Redevelopment Agency of the City and County of San
Francisco Community Facilities District No.  5 (Mission Bay Maintenance
District) (the “Maintenance CFD”), Redevelopment Agency of the City and County
of San Francisco Community Facilities District No.  6 (Mission Bay South Public
Improvements) (the “Infrastructure CFD”), each established under the Mission Bay
South Financing Plan (which is annexed to the South OPA as Attachment E), and
San Francisco Community Facilities District 90-1 (Public School Facilities) (the
“Public School CFD”).
 
1.23 “City”
 
 has the meaning set forth in Recital A.
 
1.24 “Claims”
 
 means claims, demands, losses, liabilities, damages (excluding consequential
and punitive damages), liens, obligations, interest, injuries, penalties, fines,
actions, lawsuits or other proceedings (including informal proceedings),
judgments and awards and costs and expenses (including reasonable attorneys’
fees and costs, consultant and expert fees and costs and court costs) of
whatever kind or nature, known or unknown, contingent or otherwise, including,
without limitation, any action or proceeding brought by or on behalf of any
homeowners’ or similar association or member thereof, and including the
reasonable costs of carrying out the terms of any judgment, settlement, consent,
decree, stipulated judgment or other partial or complete termination of any such
action or proceeding.
 
1.25 “Close of Escrow”
 
 means the time of recording of the Grant Deed in the Official Records.
 
1.26 “Closing Date”
 
 means the date on which the Close of Escrow occurs.
 
1.27 “Confidential Information”
 
 means (i) any and all documents, materials, soil samples, ground water samples
and other information relating to the Property furnished or made available to
Buyer by Seller or its agents, including, without limitation, the files and
documents made available to Buyer pursuant to Paragraph 6.1, (ii) all written
summaries and abstracts thereof generated by Buyer in the course of conducting
its inspections, review of books and records, and other due diligence activities
relating to the Property (including, without limitation, matters relating to the
environmental condition of the Property except where otherwise already a
publicly available document); and (iii) the results of all inspections,
analyses, studies and similar reports relating to the Property prepared by or
for Buyer utilizing the information acquired through the exercise of Buyer’s
inspection rights, provided that the term “Confidential Information” does not
include such portions of materials, documents or other information which are or
become generally available to the public, provided that Buyer is not the party
making such documents or information available to the public.
 
1.28 “Cure Extension Notice”
 
 has the meaning set forth in Paragraph 14.
 
1.29 “Current Tax Period”
 
 means the fiscal year of the applicable taxing authority during which the Close
of Escrow occurs.
 
1.30 “Deposit”
 
 has the meaning set forth in Paragraph 3.1.1.
 
1.31 “Development Easements”
 
 has the meaning set forth in Paragraph 26.2.
 
1.32 “Development Entitlements”
 
 means those documents and materials governing development of the Property
listed on Exhibit I attached hereto.
 
1.33 “Diversity Program”
 
 has the meaning set forth in Paragraph 27.2.1.
 
1.34 “Effective Date”
 
 means the date of this Agreement.
 
1.35 “Environmental Covenant”
 
 means the Covenant and Environmental Restriction on Property in favor of the
RWQCB attached hereto as Exhibit J.
 
1.36 “Environmental Laws”
 
 means any and all federal, state, or local environmental health and/or safety
laws, regulations, standards, decisions of courts, ordinances, rules, codes,
orders, decrees, directives, guidelines, plans, risk management plans, recorded
property covenants, and/or restrictions, permits, or permit conditions currently
existing and as amended, enacted, issued or adopted in the future relating to
the environment or to any Hazardous Material (including, without limitation, the
Risk Management Plan, and the Environmental Covenant) which are or become
applicable to the Property.
 
1.37 “ERISA”
 
 has the meaning set forth in Paragraph 14.7.
 
1.38 “Escrow”
 
 means an escrow to be opened with the Escrow Holder to facilitate the
transaction contemplated in this Agreement.
 
1.39 “Escrow Holder”
 
 means First American Title Insurance Company.
 
1.40 “Escrow Holder’s Address”
 
 means:
 
First American Title Insurance Company
National Commercial Services
100 Spear Street, Suite 1600
San Francisco, California  94105
Attention:  Heather Kucala
Facsimile No.:  (415) 398-1750
Telephone No.:  (415) 837-2295
 
1.41 “Estoppel Certificate”
 
 has the meaning set forth in Paragraph 8.1.2(a).
 
1.42 “Excluded Materials”
 
 has the meaning set forth in Paragraph 6.1.1.
 
1.43 “Excluded Environmental Claims”
 
 has the meaning set forth in Paragraph 16.1.3.
 
1.44 “Excluded Personalty”
 
 means any and all fixtures, furniture, furnishings, equipment or other personal
property (including, without limitation, trade fixtures in, on, around or
affixed to the Building) owned or leased by Tenant or any managing agent,
leasing agent, contractor or employee at the Building; provided however, that
the Excluded Personalty shall not include, and Seller shall cause to be conveyed
to Buyer, any personal property located at the Property that is owned by any
managing agent to the extent that the cost of such personal property was paid
for or reimbursed by Seller or its predecessor in title.
 
1.45 “FIRPTA Certificate”
 
 means a certificate of non-foreign status in the form attached hereto as
Exhibit K.
 
1.46  “General Assignment”
 
 means a General Assignment in the form attached hereto as Exhibit L.
 
1.47  “Governmental Authority”
 
 means any local, state or federal governmental agency, court, board, bureau or
other authority having jurisdiction with respect to the Property, including,
without limitation, the California Regional Water Quality Control Board.
 
1.48 “Grant Deed”
 
 means a grant deed in substantially the form attached hereto as Exhibit M.
 
1.49 “Guarantor”
 
 means Hines Global REIT Properties, L.P.
 
1.50 “Hazardous Material”
 
 means any substance, material or waste that, because of its quantity,
concentration or physical or chemical characteristics poses a present or
potential hazard to human health and safety or to the environment, including,
but not limited to, petroleum, petroleum-based products, natural gas, or any
substance, material or waste (including, without limitation, biohazardous waste,
medical waste and sharps waste) that is, or shall be, listed, regulated or
defined by federal, state or local statute, regulation, rule, ordinance or other
governmental requirement to be hazardous, acutely hazardous, extremely
hazardous, toxic, radioactive, biohazardous, infectious, or otherwise dangerous.
 
1.51 “Immediately Available Funds”
 
 means cash, a bank cashier’s check or a confirmed wire transfer of funds.
 
1.52 “Improvements”
 
 has the meaning set forth in Recital C.
 
1.53 “Inspection Period”
 
 means the period commencing on the Effective Date and ending at 5:00 p.m.
(California time) on August 15, 2012.
 
1.54 “Inspection Work”
 
 has the meaning set forth in Paragraph 6.1.1.
 
1.55 “Intangible Personal Property”
 
 has the meaning set forth in Recital C.
 
1.56 “Land”
 
 has the meaning set forth in Recital A.
 
1.57 “Lease”
 
 has the meaning set forth in Recital C.
 
1.58 “Legal Costs”
 
 has the meaning set forth in Paragraph 22.
 
1.59  “Limitation Period”
 
 has the meaning set forth in Paragraph 14.
 
1.60  “Master Commercial Declaration”
 
 means the Master Declaration of Covenants, Conditions and Restrictions and
Reservation of Easements for Mission Bay Commercial recorded in the Official
Records on January 16, 2001 as Document No.  2001-G889923-00 at Reel H804, Image
0058, as the same has been or may hereafter be amended.
 
1.61 “Master Developer”
 
 means FOCIL-MB, LLC and its successors and assigns in its capacity as master
developer under the South OPA.
 
1.62 “Material Adverse Change”
 
  means the occurrence of any action, event or a change in circumstance which
(i) causes or renders a Seller Representation, that was true when made, to no
longer be true as of the Closing Date, (ii) does not result from the act or
omission of Buyer or any of Buyer’s Agents, and (iii) results in damages to
Buyer or a reduction in value of the Property in excess of Five Million and
No/100 Dollars ($5,000,000.00), excluding any action, event or change in
circumstance that was disclosed to Seller in writing prior to expiration of the
Inspection Period.
 
1.63 “MBCMC”
 
 has the meaning set forth in Paragraph 26.4.
 
1.64 “Mission Bay Development Area”
 
 means that certain real property located in the City and County of San
Francisco and generally bounded by Townsend Street, Third Street, relocated
Terry Francois Boulevard, Mariposa Street and Seventh Street.
 
1.65 “Mission Bay South Redevelopment Project Area”
 
 means the area located in the City and County of San Francisco that is the
subject of the South OPA.
 
1.66 “Notice”
 
 has the meaning set forth in Paragraph 20.
 
1.67 “OFAC”
 
 has the meaning set forth in Paragraph 14.6.
 
1.68 “Official Records”
 
 means the Official Records of the Recorder of the City and County of San
Francisco, California.
 
1.69 “Outside Closing Date”
 
 means August 31, 2012, subject to extension as expressly provided in Paragraph
8.3.3.
 
1.70 “Owner’s Affidavit”
 
 has the meaning set forth in Paragraph 9.12.
 
1.71 “Parking Estoppel”
 
 has the meaning set forth in Paragraph 8.1.2(b).
 
1.72 “Parking Structure Easement Agreement”
 
 has the meaning set forth in Paragraph 26.6.
 
1.73 “Permitted Encumbrances”
 
 has the meaning set forth in Paragraph 8.1.1.
 
1.74 “Person”
 
 has the meaning set forth in Paragraph 14.6.
 
1.75 “PILOT Agreement”
 
 has the meaning set forth in Paragraph 26.7.
 
1.76 “Pre-Existing Condition”
 
 has the meaning set forth in Paragraph 6.4.
 
1.77 “Prior Owner”
 
 means Mission Bay S26a/S28, LLC, a Delaware limited liability company.
 
1.78 “Proceeding”
 
 has the meaning set forth in Paragraph 14.
 
1.79 “Project Labor Agreement”
 
 means the Mission Bay Project Labor Agreement dated October 8, 1990, as the
same may have been amended.
 
1.80 “Property”
 
 has the meaning set forth in Recital C.
 
1.81 “Purchase Price”
 
 means One Hundred Eighty Million and No/100 Dollars ($180,000,000).
 
1.82 “Real Property”
 
 has the meaning set forth in Recital C.
 
1.83 “Redevelopment Agency”
 
 means the Redevelopment Agency of the City and County of San Francisco.
 
1.84 “Reimbursable Expenses”
 
 means the lesser of (a) the actual out of pocket expenses incurred by Buyer in
connection with this Agreement or Buyer’s proposed purchase of the Property,
including, but not limited to due diligence costs, survey costs and legal fees,
and (b) One Hundred Fifty Thousand and No/Dollars ($150,000).
 
1.85  “Risk Management Plan”
 
 and “RMP” mean the Risk Management Plan for the Mission Bay Development Area,
as more particularly described on Exhibit I attached hereto, as the same may
have been or hereafter be amended.
 
1.86 “RWQCB”
 
 means the Regional Water Quality Control Board, San Francisco Bay Region.
 
1.87 “Scheduled Closing Date”
 
 has the meaning set forth in Paragraph 4.2.
 
1.88 “Seller Knowledge Individuals”
 
 has the meaning set forth in Paragraph 14.
 
1.89 “Seller Parties”
 
 means Seller and Seller’s Affiliates (and each of their Affiliates), and
Seller’s or such companies’ officers, directors, shareholders, agents,
employees, managers and attorneys.
 
1.90 “Seller Representation Update”
 
 has the meaning set forth in Paragraph 28.
 
1.91 “Seller’s Address”
 
 means:
 
c/o GLL Real Estate Partners, Inc.
199 Fremont Street, Suite 1150
San Francisco, California  94105
Attn:  David Wall
Facsimile No.:   (415) 814-8101
Telephone No.:  (415) 814-8111
 
1.92 “Seller’s Broker”
 
 has the meaning set forth in Paragraph 21.
 
1.93 “Seller’s Counsel’s Address”
 
 means:
 
Bradley Arant Boult Cummings LLP
1600 Division Street, Suite 700
Nashville, Tennessee  37203
Attention:  John R. Haynes. Esq.
Telephone No.:  (615) 252-2343
Facsimile No.  (615) 252-6343
 
1.94 “Seller’s Surviving Covenants”
 
 has the meaning set forth in Paragraph 5 below.
 
1.95 “Seller’s Title Notice”
 
 has the meaning set forth in Paragraph 7.1.2.
 
1.96 “Service Contracts”
 
 has the meaning set forth in Recital C.
 
1.97 “South OPA”
 
 means the Mission Bay South Owner Participation Agreement listed on Exhibit I
attached hereto.
 
1.98 “Specially Designated Nationals and Blocked Persons”
 
 has the meaning set forth in Paragraph 14.6.
 
1.99  “Surviving Obligations”
 
 means obligations expressly stated in this Agreement to survive the termination
hereof.
 
1.100 “Tangible Personal Property”
 
 has the meaning set forth in Recital C.
 
1.101  “Tax Allocation Debt Promissory Note”
 
 means a Mission Bay South Tax Allocation Debt Promissory Note in the form
attached hereto as Exhibit N.
 
1.102 “Tax Payment Agreement”
 
 means that certain Tax Payment Agreement dated as of November 10, 2005 between
FOCIL-MB, LLC and Seller and recorded in the Official Records on November 14,
2005 as Instrument No.  2005I070743.
 
1.103 “Tenant”
 
 has the meaning set forth in Recital C.
 
1.104 “Tenant Notice”
 
 means a Notice to Tenant in the form attached hereto as Exhibit O.
 
1.105 “Tenant Receivables”
 
 has the meaning set forth in Paragraph 12.3.
 
1.106 “Title Company”
 
 means First American Title Insurance Company.
 
1.107 “Title Policy”
 
 has the meaning set forth in Paragraph 7.2.
 
1.108 “Title Report”
 
 has the meaning set forth in Paragraph 7.1.
 
1.109 “TMA”
 
 has the meaning set forth in Paragraph 26.4.
 
1.110 “Transfer”
 
 means to sell, assign, convey, lease, sublease, mortgage, hypothecate or
otherwise alienate.
 
1.111 “Transferee”
 
 means any natural person, corporation, firm, partnership, limited liability
company, association, joint venture, governmental or political subdivision or
agency or any similar entity to whom a Transfer is made.
 
1.112 “Unacceptable Encumbrances”
 
 has the meaning set forth in Paragraph 7.1.1.
 
1.113 “Unavoidable Delay”
 
 means a delay that is caused by strikes or other labor disputes, acts of God,
inability to obtain labor or materials despite commercially reasonable efforts
(financial condition excepted), lawsuits brought by plaintiffs who are not
Affiliates of the person claiming the benefit of the Unavoidable Delay (except
to the extent caused by the negligence of the person claiming the benefit of the
Unavoidable Delay), but only to the extent that an injunction or restraining
order has been issued by a court of competent jurisdiction preventing
performance, unforeseeable restrictions imposed or mandated by Governmental
Authorities in issuing requisite approvals or consents, enemy action, terrorism,
civil commotion, fire, flood, earthquake or any other unforeseeable event beyond
the reasonable control of the person claiming the benefit of the Unavoidable
Delay.
 
1.114 “Unbilled Tenant Receivables”
 
 has the meaning set forth in Paragraph 12.3.1.
 
1.115 “Uncollected Delinquent Tenant Receivables”
 
 has the meaning set forth in Paragraph 12.3.1.
 
1.116 “U.S.  Person”
 
 has the meaning set forth in Paragraph 14.6.
 
1.117 “Voluntary Monetary Liens”
 
 means (i) any deeds of trust or other monetary liens granted or consented to by
Seller against the Property during its period of ownership, including any such
matter assumed by Seller and (ii) any valid mechanic’s, materialman’s or similar
liens for work performed at the Property arising pursuant to work under
contracts entered into by Seller or Seller Parties, excluding, however, (a) the
Tax Payment Agreement (excluding any delinquencies thereunder) and (b)
non-delinquent liens described in the Parking Structure Easement Agreement.
 
2. Purchase and Sale
 
.  Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the
Property from Seller, for the Purchase Price and upon the terms and subject to
the conditions herein set forth; provided, however, that Buyer shall have no
obligation to assume any Service Contracts under which Seller is in default as
of the Close of Escrow.
 
3. Payment of Purchase Price
 
.
 
3.1 Purchase Price
 
.  The Purchase Price for the Property shall be paid by Buyer as follows:
 
3.1.1 Deposit.  Within five (5) Business Days after the Effective Date, Buyer
shall deposit with Escrow Holder the sum of Fifteen Million and No/100 Dollars
($15,000,000.00) (the “Deposit”) in Immediately Available Funds.  Escrow Holder
shall place the Deposit an interest-bearing commercial account at a bank which
participates in the FDIC transaction guarantee program affording FDIC insurance
to the full amount of the Deposit.  All interest earned on the Deposit shall be
added to and become part of the Deposit.
 
3.1.2 Delivery, Application and Disposition of Deposit
 
.
 
(a) Buyer’s failure to deliver the Deposit as required by Paragraph 3.1.1 shall
constitute a default by Buyer hereunder and shall entitle Seller, by written
notice to Buyer and to Escrow Holder, to terminate this Agreement as of the date
of Buyer’s receipt of such termination notice.
 
(b) The Deposit shall be applicable to the Purchase Price upon the Close of
Escrow.  If Buyer terminates this Agreement and the Escrow created hereunder in
accordance with the provisions of Paragraph 6.5, Paragraph 7.1.3 (other than for
Seller’s inability to either eliminate or ameliorate an Unacceptable Encumbrance
which Seller has committed to cure), Paragraph 7.1.3 (but only with respect to
Seller’s inability to either eliminate or ameliorate an Unacceptable Encumbrance
which Seller has committed to cure), Paragraph 7.1.4, Paragraph 8.3.1, Paragraph
18.1, Paragraph 19, or Paragraph 28 or if Seller terminates this Agreement
pursuant to Paragraph 8.3.2 (other than because of a failure of the closing
conditions in Paragraph 8.2.1 or Paragraph 8.2.2), then in each case the Deposit
shall be disbursed to Buyer. The Deposit shall be retained by Seller pursuant to
Paragraph 17.1 if the Close of Escrow does not occur for any reason other than
(i) Buyer’s termination of this Agreement in accordance with Paragraph 6.5,
Paragraph 7.1.3, Paragraph 7.1.4, Paragraph 8.3.1, Paragraph 18.1, Paragraph 19,
or Paragraph 28 or (ii) Seller’s failure to convey the Property to Buyer as
provided herein and where such failure constitutes a default by Seller
hereunder.  If this Agreement is terminated for any reason other than Seller’s
default before the Close of Escrow (whether the Deposit is retained by Seller or
returned to Buyer pursuant hereto), both Seller and Buyer shall be relieved of
all further obligations and liabilities under this Agreement, except for the
Surviving Obligations.
 
3.1.3 Closing Funds
 
.  In no event later than one (1) Business Day in advance of Close of Escrow,
Buyer shall deposit or cause to be deposited with Escrow Holder, in Immediately
Available Funds, the balance of the Purchase Price plus or minus Escrow Holder’s
estimate of Buyer’s share of closing costs, prorations and charges payable
pursuant to this Agreement.
 
3.2 Independent Consideration
 
.  At the same time as the delivery of the Deposit to the Escrow Holder, Buyer
shall deliver to Seller in cash the sum of $100.00 (the “Independent Contract
Consideration”) which amount has been bargained for and agreed to as
consideration for Buyer’s exclusive option to purchase the Property and the
right to inspect the Property during the Inspection Period provided herein, and
for Seller’s execution and delivery of this Agreement.  The Independent Contract
Consideration is in addition to and independent of all other consideration
provided in this Agreement, and is nonrefundable in all events.
 
4. Escrow
 
.
 
4.1 Opening of Escrow
 
.  Escrow shall be deemed opened on the date Escrow Holder shall have received a
fully executed original or originally executed counterparts of this Agreement
from both Buyer and Seller, together with the Deposit from Buyer.  Buyer and
Seller agree to execute, deliver and be bound by any reasonable or customary
supplemental escrow instructions of Escrow Holder or other instruments as may
reasonably be required by Escrow Holder in order to consummate the transaction
contemplated by this Agreement.  Any such supplemental instructions shall not
conflict with, amend or supersede any portions of this Agreement unless
expressly consented or agreed to in writing by Buyer and Seller.
 
4.2 Close of Escrow.  The closing of the transaction contemplated by this
Agreement and the Escrow shall occur on August 31, 2012 (such scheduled date, as
it may be extended as expressly provided elsewhere in this Agreement, being
referred to in this Agreement as the “Scheduled Closing Date”; and the actual
date of the closing, the “Closing Date”).  Buyer acknowledges that Seller’s
existing financing may only be prepaid on the date on which Seller’s monthly
installment payment is due, being August 31, 2012 or, if applicable, October 1,
2012 such that Close of Escrow must occur on August 31, 2012 unless the
Scheduled Closing Date and the Outside Closing Date are extended in accordance
with Paragraph 8.3.3 below.
 
5. Seller’s Covenants
 
.  Seller covenants with Buyer as follows:
 
5.1 No Conveyances
 
.  After the Effective Date, Seller shall not, without the prior written consent
of Buyer, voluntarily convey any interest in the Property; provided, however,
that nothing contained herein shall prohibit Seller from granting Development
Easements in accordance with Paragraph 26.2.
 
5.2 Leasing
 
.  Seller shall not enter into or consent to any modification of the Lease,
assignment of the Lease or sublease of the Property without the prior approval
of Buyer, which approval shall not be unreasonably withheld or delayed prior to
expiration of the Inspection Period, but which approval may be granted or
withheld in Buyer’s sole and absolute discretion after expiration of the
Inspection Period; provided, however, that Buyer acknowledges that any
assignment or sublease undertaken by Tenant as a matter of right without
Seller’s consent shall not constitute a breach of the foregoing covenant.
 
5.3 Operation and Maintenance
 
.  Subject to the terms and conditions of this Agreement and to Tenant’s rights
and obligations under the Lease, Seller shall operate and maintain the Property
in the ordinary and usual course of business and consistent with its past
practice throughout the entire period from the Effective Date hereof until the
Close of Escrow.
 
5.4 Significant Changes
 
.  Seller shall promptly notify Buyer of the occurrence after the Effective Date
of any event or circumstance actually known to Seller’s Knowledge Individuals
(without any duty to con­duct any investigation of any nature) that makes or
would make any of the Seller Representations materially and adversely false if
the same were remade as of the date that a Seller’s Knowledge Individual obtains
knowledge of such event or circumstance.
 
5.5 Books and Records
 
.  Upon Close of Escrow, Seller will provide to Buyer originals, or if originals
are unavailable, copies, of the books and records relating to the operation of
the Property maintained by Seller during Seller’s ownership thereof (excluding
the Excluded Materials), to the extent same are in Seller’s possession.
 
 The covenants set forth in Paragraphs 5.1, 5.2 and 5.5 above shall survive the
Close of Escrow for the Limitation Period and shall be referred to as "Seller's
Surviving Covenants".
 
6. Condition of Property
 
.
 
6.1 Inspection and Studies; Review of Seller’s Files
 
.
 
6.1.1 Commencing on the Effective Date, and continuing thereafter through the
Close of Escrow, Buyer shall have the right, at Buyer’s sole cost and expense,
but subject in all events to Buyer’s compliance with Applicable Laws and the
provisions of this Agreement, to conduct a physical inspection of the Property
and any engineering, geologic, use, development or other feasibility studies
that Buyer chooses to perform.  Additionally, to the extent in Seller’s
possession, Seller shall make available to Buyer, either at Seller’s offices in
San Francisco, California, by posting such materials to the diligence website or
by delivering copies thereof to Buyer or Buyer’s counsel: plans and
specifications; environmental and engineering reports relating to the Property;
copies of the Lease (including any and all amendments, riders, licenses, work
letters, inducement letters, side letters, etc.); copies of the Service
Contracts; copies of Seller’s books and records relating to the operation of the
Property; but excluding, however, Seller’s income tax records, Seller’s
corporate records, copies of Seller’s existing loan documents, any records
relating to Seller’s selling or financing negotiations, appraisals and financial
or valuation analyses generated by or made on behalf of Seller and those
documents which are protected by the attorney-client and/or attorney work
product privileges (all such excluded items, the “Excluded Materials”), none of
which are part of the Property.  Buyer shall have the right to review such files
and documents (excluding the Excluded Materials).  Such investigations and other
work, inspections and entries onto the Property are referred to herein as the
“Inspection Work.”  Buyer acknowledges that the right to review such files
and/or documents is a courtesy to Buyer, and that, without limiting the
provisions of this Paragraph 6 or Paragraphs 14 or 16 below, Seller does not
make any representation or warranty, express or implied, as to the accuracy or
completeness of any information contained in Seller’s files or in the documents
produced by Seller, including, without limitation, any environmental audit or
report (if any), and further that Seller and the Seller Parties shall have no
responsibility for the contents and accuracy of such disclosures.
 
6.1.2 Buyer agrees that the obligations of Seller in connection with Buyer’s
purchase of the Property shall be governed by this Agreement irrespective of the
contents of any such disclosures or the timing or delivery thereof, and that
Buyer shall rely upon its own independent review concerning matters contained in
such files and/or documents.  Further, Buyer acknowledges and agrees that it
shall not conduct interviews of any Seller employee, contractor, agent or other
Seller Party except as expressly agreed to in writing by Seller in advance and
upon such terms and conditions as Seller may establish.  Buyer may interview
Tenant at the Property; provided, however, that Buyer must notify Seller by
telephone or email at least forty-eight (48) hours in advance to inform Seller
of Buyer’s intended meeting and to allow a representative of Seller the
opportunity to attend such meeting.
 
6.1.3 If this Agreement is not terminated pursuant to the provisions of this
Paragraph 6, then whether or not a Phase I environmental assessment has been
undertaken with respect to the Property, Buyer shall be deemed to have agreed,
in accordance with the provisions of Paragraph 16.1 below, to accept title to
the Property subject to any Hazardous Material(s) discovered on the
Property.  Buyer agrees that, without limiting any other provision of this
Agreement, but subject to Paragraph 16.1 Seller shall be under no obligation to
Buyer to remediate or remove any Hazardous Material(s) discovered on the
Property as a result of the Inspection Work.
 
6.1.4 If the Close of Escrow shall not occur for any reason other than Seller’s
default, Buyer shall:  (a) if requested by Seller, promptly deliver to Seller
and without representation or warranty, the originals of all tests, reports and
inspections of the Property (provided the same do not restrict such delivery to
a third party) made and conducted by unrelated third parties for Buyer’s benefit
that are in the possession or control of Buyer or Buyer’s Representatives,
provided, that Seller reimburses Buyer for costs incurred by Buyer to obtain
such third party reports, and (b) promptly return to Seller copies of all due
diligence materials delivered by Seller to Buyer and shall destroy all copies
and abstracts thereof.  Notwithstanding anything to the contrary contained in
this Agreement, Buyer shall be entitled to retain one copy of such information
to the extent necessary in order to comply with any applicable laws or
regulations, and shall only be required to use commercially reasonable efforts
to return or destroy any materials stored electronically, and neither Buyer nor
any other Buyer Parties shall be required to return or destroy any electronic
copy of the materials created pursuant to Buyer’s standard electronic backup and
archival procedures.
 
6.2 Buyer’s Entry on the Property
 
.  Buyer’s physical inspection of the Property shall be conducted by employees
of Hines Interests Limited Partnership  and other Buyer’s Agents during normal
business hours and/or at times mutually acceptable to Buyer and Seller (Seller
hereby agreeing to authorize after hours inspections to the extent permitted by
Tenant and Seller is given at least two (2) Business Day's advance notice
thereof by telephone or email), and Seller shall have the right to be present
during any entry onto the Property by Buyer or Buyer’s Agents.  All
investigations made by Buyer will be at Buyer’s sole cost and expense and will
be performed without causing any damage to the Property (inadvertent damage will
be corrected by Buyer) or any interruption (other than minor interruptions
caused by a walk through of the Property) in the business operations of Tenant
at the Property and otherwise subject to Tenant’s rights under the Lease.  Buyer
shall take all reasonable precautions to minimize the impact on the Property and
Tenant, and if permission for testing is given by Seller, Buyer will restore the
Property in a timely manner at Buyer’s sole cost to the condition that existed
immediately prior to the Property investigations.  With respect to any invasive
testing or borings of the Property, Buyer must obtain Seller’s advance written
approval of the scope of such proposed activities, which approval may be
withheld or conditioned in its sole and absolute discretion.  Buyer agrees that
any such physical inspection of the Property shall be conducted and performed by
Buyer and its Agents in a good and workmanlike manner, and Buyer shall be solely
responsible for the prompt payment of all costs and expenses incurred in
connection therewith, including, without limitation, all laboratory,
installation, operating and capital costs, all insurance premiums, all
consultants’ fees, all disposal costs and reasonable attorneys’ and experts’
fees.   The provisions of the Access and Indemnity Agreement among Seller, Buyer
and Guarantor shall remain in full force and effect and is incorporated herein
by this reference to the extent not inconsistent or less restrictive than with
the terms of this Agreement.
 
6.3 Insurance
 
.  Prior to conducting any physical inspection or testing at the Property,
including, without limitation, boring, drilling and sampling of soil, Buyer
shall obtain, and during the period of such inspection or testing shall
maintain, at its expense, commercial general liability insurance (including
contractual liability coverage provided under standard ISO coverage) and
personal injury liability coverage, with Seller and its managing agent, if any,
as additional insureds, from an insurer reasonably acceptable to Seller, which
insurance policies must have limits for bodily injury and death of not less than
Three Million Dollars ($3,000,000) for any one occurrence and not less than
Three Million Dollars ($3,000,000) for property damage liability for any one
occurrence.  Prior to making any entry upon the Property, Buyer shall furnish to
Seller a certificate of insurance evidencing the foregoing coverage.
 
6.4 Indemnification
 
.  Buyer shall protect, indemnify, defend (with counsel reasonably acceptable to
Seller) and hold harmless Seller and the Seller Parties from and against, any
and all Claims suffered or incurred by Seller or any Seller Parties arising
directly or indirectly out of or as a consequence of any Inspection Work, or
other activities conducted on, under or about the Property by Buyer or Buyer’s
Agents.  The foregoing indemnification shall include, without limitation, the
following:  (a) personal injury claims, (b) payment of liens or encumbrances
(including, without limitation, mechanic’s or materialmen’s liens) filed or
recorded against the Property as a consequence of the Inspection Work, or any
other activities conducted on the Property by Buyer or Buyer’s Agents, (c) sums
paid in settlement of Claims, (d) reasonable attorney’s fees, consulting fees
and expert fees, (e) loss of use or damage to the Property as a result of any
Inspection Work, or other activities conducted on, under or about the Property
by Buyer or Buyer’s Agents, (f) loss of use or damage to the Property as a
result of any Inspection Work, or other activities conducted on, under or about
the Property by Buyer or Buyer’s Agents, (g) termination of or rental abatement
under the Lease; and/or (h) Claims arising from any breach by Buyer or Buyer’s
Agents of the terms, covenants or obligations to be performed or observed by
Buyer and/or Buyer’s Agents under this Agreement; provided, however, that the
foregoing indemnification shall not include any Claims to the extent resulting
from (i) the negligence or willful misconduct of Seller, or (ii) the mere
discovery of any pre-existing environmental condition (a “Pre-Existing
Condition”), except to the extent such Pre-Existing Condition is exacerbated
(other than by discovery) by any act or omission of Buyer or any of Buyer’s
Agents.  Buyer’s indemnification obligations set forth in this Paragraph 6.4
shall survive any termination of this Agreement and Close of Escrow.  In
addition, Buyer hereby forever and unconditionally waives, relinquishes,
discharges and releases Seller and Seller Parties from any and all Claims
incurred in the performance of the Inspection Work, or any other work undertaken
by or on behalf of Buyer pursuant to this Agreement, except as a result of the
negligence or willful misconduct of Seller and/or any Seller Parties.
 
6.5 Buyer’s Due Diligence Notice
 
.  Before the expiration of the Inspection Period, Buyer shall elect, in its
sole and absolute discretion, either (a) to approve all matters relating to the
Property, including, but not limited to, the physical condition of the Property
and its condition or suitability for Buyer’s intended use or development, or
(b) to terminate this Agreement.  Buyer shall make this election by giving
written notice thereof to Seller and Escrow Holder (“Buyer’s Due Diligence
Notice”) before the expiration of the Inspection Period.  If Buyer shall timely
elect to terminate this Agreement as provided herein, this Agreement shall be
terminated, the Deposit shall be paid to Buyer, each of Seller and Buyer shall
bear one-half of any Escrow cancellation and similar fees, and the parties shall
have no further rights or obligations under this Agreement, except for the
Surviving Obligations.  If Buyer does not give Seller Buyer’s Due Diligence
Notice before expiration of the Inspection Period, Buyer shall be deemed to have
elected to terminate this Agreement.
 
6.6 Limitation on Seller’s Liability
 
.  Without limiting any other disclaimer or release of Seller liability under
this Agreement, and except as provided otherwise in Paragraph 14, Buyer agrees
that Seller shall not have any liability, obligation or responsibility of any
kind with respect to any of the following:
 
6.6.1 the content or accuracy of any report, sample results study, opinion or
conclusion of any soils, toxic, environmental or other engineer or other person
or entity who has examined the Property or any aspect thereof;
 
6.6.2 the content or accuracy of any information disclosed to Buyer by any
engineer or consultant (including any of Seller’s engineers or consultants),
planner or other government employee in connection with Buyer’s review of the
Property;
 
6.6.3 the availability of building or other permits or approvals for the
Property by any state or local governmental bodies with jurisdiction over the
Property;
 
6.6.4 the availability or capacity of sewer, water or other utility connections
to the Property;
 
6.6.5 the content or accuracy of any materials and other information given to
Buyer by Seller or reviewed by Buyer with respect to the Property; or
 
6.6.6 the timing or nature of development of other property in the vicinity of
the Property.
 
7. Condition of Title
 
.
 
7.1 Buyer’s Title Review
 
.
 
7.1.1 Seller has delivered to Buyer a standard preliminary title report with
respect to the Property, together with the underlying documents relating to the
Schedule B exceptions set forth in such report (“Title Report”) and Seller’s
most current survey ("Survey").  Buyer shall have the right, at its cost, to
update the Survey.  Buyer shall have until the date that is five (5) Business
Days prior to the expiration of the Inspection Period (the “Title Notice Date”)
to give Seller written notice (“Buyer’s Title Notice”) of Buyer’s disapproval or
conditional approval of any matters shown in the Title Report or on the Survey
other than the Permitted Encumbrances described in 8.1.1(a)-(d) (the
“Unacceptable Encumbrances”).  The failure of Buyer to give Buyer’s Title Notice
on or before the Title Notice Date shall be conclusively deemed to constitute
Buyer’s approval of the condition of title to the Property.  Notwithstanding
anything contained herein to the contrary, Buyer shall not be required to object
to, and Seller shall cause to be removed as an exception from the Title Policy,
all Voluntary Monetary Liens.
 
7.1.2 If Buyer disapproves or conditionally approves in writing any matter of
title shown in the Title Report, then Seller may, but shall have no obligation
to, within three (3) Business Days following its receipt of Buyer’s Title
Notice, elect to eliminate or ameliorate to Buyer’s satisfaction the
Unacceptable Encumbrances by giving Buyer written notice (“Seller’s Title
Notice”) of those Unacceptable Encumbrances, if any, which Seller agrees to so
eliminate or ameliorate by the Closing Date; provided, however, that Seller
shall have no obligation to pay any consideration or incur any liability in
order to eliminate or ameliorate such Unacceptable Encumbrances other than
Voluntary Monetary Liens and provided Buyer shall have the right to approve,
which approval shall not be unreasonably withheld, all endorsements issued by
the applicable title insurer.
 
7.1.3 If Seller does not elect to eliminate or ameliorate all of the
Unacceptable Encumbrances, or if Buyer disapproves Seller’s Title Notice, or if
Seller fails to timely deliver Seller’s Title Notice, then Buyer shall have the
right, upon delivery of written notice to Seller and Escrow Holder on or before
the expiration of the Inspection Period, either to: (a) waive its prior
disapproval, in which event the Unacceptable Encumbrances shall be deemed
unconditionally approved without any credit or offset to the Purchase Price,
subject to any cure obligations expressly undertaken by Seller in the Seller’s
Title Notice; or (b) terminate this Agreement and the Escrow, in which event the
Deposit shall be disbursed to Buyer, Buyer and Seller shall each pay one-half
(1/2) of all Escrow cancellation and similar fees and the parties shall have no
further rights or obligations under this Agreement, except for the Surviving
Obligations.  Failure to take either one of the actions described in clauses (a)
and (b) above shall be deemed to be Buyer’s election to take the action
described in clause (a) above.  For avoidance of doubt, if this Agreement
remains in effect following the expiration of the Inspection Period, then the
Unacceptable Encumbrances shall thereafter consist of and mean only those
objections which Seller has cured or committed to endeavor to cure and any
Voluntary Monetary Liens, and all other matters shown on the Title Report
(including, without limitation, any matters as to which Buyer objected but
Seller elected not to cure) shall be deemed to be Permitted Encumbrances and any
prior objections by Buyer with respect thereto shall be deemed waived.  If, in
Seller’s Title Notice, Seller has agreed to either eliminate or ameliorate to
Buyer’s satisfaction by the Closing Date certain Unacceptable Encumbrances
described in Buyer’s Title Notice (other than Voluntary Monetary Loans, which
Seller shall be obligated to remove in all events), but Seller is unable to do
so, then Buyer shall have the right (which shall be Buyer’s sole and exclusive
right or remedy for such failure), upon delivery to Seller and Escrow Holder on
or before the Closing Date of a written notice to either:  (i) waive its prior
disapproval, in which event such Unacceptable Encumbrances shall be deemed
unconditionally approved without any credit or offset to the Purchase Price; or
(ii) terminate this Agreement and the Escrow, in which event (A) the Deposit
shall be disbursed returned to Buyer, (B) Seller shall bear all Escrow
cancellation and similar fees, and (C) the parties shall have no further rights
or obligations under this Agreement, except for the Surviving
Obligations.  Notwithstanding the previous sentence, if Seller’s Title Notice
provides that Seller will attempt to (as opposed to commit to) eliminate or
ameliorate the Unacceptable Encumbrances and Seller is thereafter unable to do
so, then the Deposit shall be disbursed Buyer and the parties shall each pay one
half (1/2) of all Escrow cancellation and similar fees.  Failure to take either
one of the actions described in clauses (i) and (ii) above shall be deemed to be
Buyer’s election to take the action described in clause (ii) above.
 
7.1.4 If the Title Report is amended or supplemented by the Title Company to
include exceptions that did not appear on the Title Report delivered to Buyer
and which are not expressly permitted under Paragraph 5.1 above, then Buyer
shall have until the later of the last day of the Inspection Period or five (5)
Business Days following Buyer’s receipt of any such amended or supplemented
Title Report to notify Seller of any disapproved item disclosed in the amended
or supplemented Title Report.  If Seller is unwilling to commit to remove any of
the exceptions objected to by Buyer prior to the Close of Escrow which
materially and adversely affect the Lease or the use of the Property, then Buyer
may terminate this Agreement by delivering notice thereof in writing to Seller
by the earlier to occur of (a) the Scheduled Closing Date, or (b) five (5)
Business Days after Seller’s written notice to Buyer of Seller’s unwillingness
to eliminate one or more of such title exceptions.  If Buyer terminates this
Agreement pursuant to its rights set forth in the preceding sentence, the
Deposit shall be disbursed to Buyer and neither party shall have any further
obligations under this Agreement except for the Surviving Obligations; provided,
however, that if the new title matter was executed by Seller in violation of
this Agreement, Seller shall pay to Buyer an amount equal to the Reimbursable
Expenses.
 
7.2 Title Policy
 
.  As provided in Paragraph 8.1.1, Buyer’s obligation to purchase the Property
on the Closing Date is subject to the willingness of the Title Company to issue
an ALTA extended coverage policy of title insurance in the current form of the
Title Company and in the amount of the Purchase Price (the “Title Policy”)
showing title to the Property vested in Buyer subject only to the Permitted
Encumbrances.  Buyer shall pay any endorsement fees and survey fees incurred in
connection with the issuance of the Title Policy.
 
8. Conditions to Close of Escrow
 
.
 
8.1 Conditions to Buyer’s Obligations
 
.  Buyer’s obligation to purchase the Property is subject to the satisfaction of
the following conditions for Buyer’s benefit (or Buyer’s waiver thereof, it
being agreed that Buyer may waive any or all of such conditions) on or before
the dates designated below for the satisfaction of such conditions:
 
8.1.1 Title Condition
 
.  The Title Company shall be prepared to issue at the Close of Escrow, upon
payment of the premium therefor, the Title Policy, containing such endorsements
as the Title Company shall agree to issue prior to expiration of the Inspection
Period (without any unsatisfied Schedule B-2 requirement relating to such
endorsements other than Seller’s delivery of the Owner’s Affidavit), subject
only to the printed exclusions in the policy jacket, the title matters approved
or deemed approved by Buyer pursuant to Paragraph 7.1 and the following
additional title exceptions (collectively, the “Permitted Encumbrances”):
 
(a) a lien to secure payment of general and special real property taxes and
assessments required pursuant to any Mello-Roos District, including the CFDs,
not delinquent, and the lien, if any, to secure payment of assessments, not
delinquent, under the Development Entitlements, in each case to the extent shown
on the Title Report;
 
(b) the lien of supplemental taxes assessed pursuant to Chapter 3.5 commencing
with Section 75 of the California Revenue and Taxation Code;
 
(c) matters affecting title to the Property created by or with the written
consent of Buyer, including, without limitation, any Development Easements; and
 
(d) all items which would be disclosed by an accurate, updated ALTA/ACSM Survey
of the Property or a physical inspection of the Property.
 
8.1.2 Estoppel Certificate
 
.
 
(a) On or prior to the Close of Escrow, Buyer shall have received an Estoppel
Certificate, executed by Tenant, substantially and materially in the form of the
estoppel certificate attached hereto as Exhibit P (the “Estoppel Certificate”),
which Estoppel Certificate shall be dated within forty-five (45) days of the
Close of Escrow; provided that, if, after receiving the form of the Estoppel
Certificate attached hereto, Tenant instead delivers a different or modified
estoppel that includes the items required to be covered in any estoppel
certificate delivered by Tenant pursuant to the Lease, such estoppel certificate
shall qualify as an “Estoppel Certificate” and shall satisfy the foregoing
condition as long as the Estoppel Certificate delivered by Tenant does not
disclose any material default under the Lease by Seller.
 
(b) On or prior to the Close of Escrow, Buyer shall have received an estoppel
certificate from the Garage Owner (as such term is defined in the Parking
Structure Easement Agreement) that is not Seller, substantially and materially
in the form of the estoppel certificate required under the Parking Structure
Easement Agreement (each, a “Parking Estoppel”), which Parking Estoppels shall
be dated within forty-five (45) days of the Close of Escrow and include clauses
(i) and (ii) below.  Notwithstanding anything to the contrary contained in this
Agreement, for any Parking Estoppel not obtained prior to the Close of Escrow,
Seller may cause this condition to be satisfied by delivering a representation
letter, executed by Seller, certifying that to Seller’s Actual Knowledge, (i)
there have been no amendments or modifications to the Parking Structure Easement
Agreement and (ii) there are no material defaults by Seller under the Parking
Structure Easement Agreement.  Seller’s liability under any such representation
letter shall be subject to the aggregate liability limit set forth in Paragraph
18.2 and shall expire and be of no further force or effect on the earlier of (i)
the expiration of the Limitation Period, and (ii) the date that Buyer receives
the missing Parking Estoppel, provided that such Parking Estoppel does not
contain adverse information inconsistent with Seller’s representation letter.
 
8.1.3 Seller’s Downdated Representations and Warranties
 
. The Seller Representations in Paragraphs 14.1, 14.2. 14.3.1, 14.3.2. 14.3.5.
14.6, 14.7, 14.9, 14.10 and 14.11 shall be true and correct in all material
respects as though remade effective as of the Scheduled Closing Date
 
8.1.4 No Material Adverse Change
 
.  There shall not have occurred any Material Adverse Change as of the Scheduled
Closing Date, subject to extension as provided in Paragraph 28 below.
 
8.1.5 Seller’s Obligations
 
.  As of the Close of Escrow, Seller shall have performed in all material
respects all of the obligations required to be performed by Seller under this
Agreement prior to the Scheduled Closing Date, subject to extension as provided
in Paragraph 28 below.
 
8.1.6 Assignment Agreement
 
.  Receipt by Escrow Holder of the Assignment Agreement, duly executed by the
Redevelopment Agency.
 
8.1.7 Tenant and Lease
 
.  The Lease shall be in full force and effect, and Tenant shall not be in
default due to its failure to pay base rent, tax, insurance and expense
reimbursements due under the Lease; provided, that Tenant’s challenge to taxes,
insurance and other expense pass through charged by Seller shall not constitute
a default by Tenant as long as Tenant has disputed such charged billed to Tenant
in accordance with the dispute procedures set forth in the Lease.
 
8.2 Conditions to Seller’s Obligations
 
.  Seller’s obligation to consummate the transaction contemplated by this
Agreement is subject to satisfaction of the following conditions for Seller’s
benefit (or Seller’s waiver thereof, it being agreed that Seller may waive any
or all of such conditions):
 
8.2.1 Buyer’s Obligations
 
.  Buyer shall have delivered the funds required hereunder and shall have
performed all other covenants, undertakings and obligations, and complied with
all conditions required by this Agreement to be performed or complied with by
Buyer at or before the Close of Escrow.
 
8.2.2 Certification of Representations
 
.  Buyer shall have certified to Seller (“Buyer’s Certificate”) that its
representations and warranties in Paragraph 15 are true and correct as of the
Close of Escrow as though originally made as of the date of the Buyer’s
Certificate.
 
8.2.3 Assignment Agreement
 
.  Receipt by Escrow Holder of the Assignment Agreement, duly executed by the
Redevelopment Agency.
 
8.3 Failure of Conditions
 
.
 
8.3.1 Failure of Buyer’s Conditions
 
.  If any one or more of the conditions to Buyer’s obligations, as set forth in
Paragraph 8.1 or elsewhere in this Agreement, is not either fully performed,
satisfied or waived in writing on or before the Scheduled Closing Date
(including any extension of the same as provided in Paragraph 8.3.3 below), then
Buyer may elect, by written notice to Seller and Escrow Holder, to terminate
this Agreement, in which event the Deposit shall be disbursed as provided in
Paragraph 3.1.2(b), each party shall bear one-half (1/2) of all Escrow
cancellation and similar fees (except to the extent expressly provided in this
Agreement to the contrary) and the parties shall have no further rights or
obligations under this Agreement, except for the Surviving Obligations.  Nothing
in this Paragraph shall be construed to limit any of Buyer’s rights or remedies
under Paragraph 18 in the event of a default by Seller hereunder, including any
failure of a condition due to Seller's default hereunder.
 
8.3.2 Failure of Seller’s Conditions
 
.  If any one or more of the conditions to Seller’s obligations, as set forth in
Paragraph 8.2 or elsewhere in this Agreement, is not either fully performed,
satisfied or waived in writing on or before the Scheduled Closing Date
(including any extension of the same as provided in Paragraph 8.3.3 below), then
Seller may elect, by written notice to Buyer and Escrow Holder, to terminate
this Agreement, in which event the Deposit shall be disbursed to Buyer, each
party shall bear one-half (1/2) of all Escrow cancellation and similar fees
(except to the extent expressly provided in this Agreement to the contrary) and
the parties shall have no further rights or obligations under this Agreement,
except for the Surviving Obligations.  Nothing in this Paragraph shall be
construed to limit any of Seller’s rights or remedies under Paragraph 17 in the
event of a default by Buyer or failing to purchase the Property.
 
8.3.3 Extension of Scheduled Closing Date
 
.  If the conditions set forth in Paragraph 8.1 or Paragraph  8.2 above are not
satisfied as of the Scheduled Closing Date, either Buyer or Seller, whichever
party is the party whose conditions were not satisfied, may, by written notice
to the other, extend the Scheduled Closing Date and the Outside Closing Date
until October 1, 2012 as to all conditions.
 
9. Deposits by Seller
 
.  At least one (1) Business Day before the Close of Escrow, Seller shall
deposit or cause to be deposited with Escrow Holder the following documents and
instruments:
 
9.1 Grant Deed
 
.  One (1) original counterpart of the Grant Deed, duly executed by Seller and
acknowledged.
 
9.2 Assignment Agreement
 
.  Four (4) original counterparts of the Assignment Agreement, duly executed by
Seller and acknowledged.
 
9.3 Assignment of Lease
 
.  Two (2) original counterparts of the Assignment of Lease, duly executed by
Seller.

9.4 Assignment of Contracts
 
.  Two (2) original counterparts of the Assignment of Contracts, duly executed
by Seller.
 
9.5 General Assignment
 
.  Two (2) original counterparts of the General Assignment, duly executed by
Seller.
 
9.6 Assignment of Successor Project Labor Agreement
 
.  Two (2) original counterparts of the Assignment of Successor Project Labor
Agreement, duly executed by Seller.
 
9.7 Assignment of Tax Payment Agreement
 
.  Three (3) original counterparts of the Assignment of Tax Payment Agreement,
duly executed by Seller and acknowledged.
 
9.8 Bill of Sale
 
.  A Bill of Sale, duly executed by Seller.
 
9.9 California Affidavit
 
.  A California Affidavit, duly executed by Seller.
 
9.10 FIRPTA Certificate
 
.  A FIRPTA Certificate, duly executed by Seller’s owner.
 
9.11 Tenant Notice
 
.  The Tenant Notice, duly executed by Seller.
 
9.12 Other Instruments
 
.  Such other instruments and documents as are required by the terms of this
Agreement, including any transfer tax affidavits and the Owner’s Affidavit in
the form of Exhibit Q (“Owner’s Affidavit”).
 
10. Deposits by Buyer
 
.  Buyer shall deposit or cause to be deposited with Escrow Holder the Deposit,
which is to be applied towards the payment of the Purchase Price, and the
balance of the Purchase Price, in Immediately Available Funds, in the amounts
and at the times set forth in Paragraph 3.  In addition, Buyer shall deposit
with Escrow Holder at least one (1) Business Day before the Close of Escrow such
other documents and instruments as are required pursuant to this Agreement,
including, without limitation, the following:
 
10.1 Grant Deed
 
.  One (1) original counterpart of the Grant Deed, duly executed by Buyer and
acknowledged.
 
10.2 Assignment Agreement
 
.  Four (4) original counterparts of the Assignment Agreement, duly executed by
Buyer and acknowledged.
 
10.3 Assignment of Lease
 
.  Two (2) original counterparts of the Assignment of Lease, duly executed by
Buyer.
 
10.4 Assignment of Contracts
 
.  Two (2) original counterparts of the Assignment of Contracts, duly executed
by Buyer.
 
10.5 General Assignment
 
.  Two (2) original counterparts of the General Assignment, duly executed by
Buyer.
 
10.6 Assignment of Successor Project Labor Agreement
 
.  Two (2) original counterparts of the Agreement Regarding Successor Project
Labor Agreement, duly executed by Buyer.
 
10.7 Assignment of Tax Payment Agreement
 
.  Three (3) original counterparts of the Assignment of Tax Payment Agreement,
duly executed by Buyer and acknowledged.
 
10.8 Tax Allocation Debt Promissory Note
 
.  Four (4) duplicate originals of the Tax Allocation Debt Promissory Note.
 
10.9 Buyer’s Certificate
 
.  The Buyer’s Certificate, duly executed by Buyer.
 
10.10 Other Instruments
 
.  Such other instruments and documents as are required by the terms of this
Agreement.
 
11. Costs and Expenses
 
.  The cost of the Title Policy shall be paid by Seller, and the cost of any
endorsements to the Title Policy shall be paid by Buyer.  The escrow fee of
Escrow Holder shall be divided equally between Seller and Buyer.  Seller shall
pay all documentary transfer taxes payable in connection with the recordation of
the Grant Deed.  Buyer shall pay all recording fees.  Each of Seller and Buyer
shall pay the fees of its own counsel, subject to Seller’s obligation to pay to
Buyer certain Reimbursable Expenses when specifically provided in this
Agreement.  Except as otherwise expressly provided in this Agreement, if, as a
result of no fault of Buyer or Seller, Escrow fails to close, Buyer and Seller
shall share equally all of Escrow Holder’s cancellation and similar fees as a
result of such termination.
 
12. Prorations
 
.  Upon the Close of Escrow, the following items shall be prorated as of the
Closing Date with all items of income and expense for the Property being borne
by Seller before the Closing Date and being borne by Buyer from and after (and
including) the Closing Date:  rent and other income and rents; pre-paid rent;
fees and assessments; prepaid expenses and obligations under Service Contracts
that are not terminated upon the Close of Escrow; accrued operating expenses;
real and personal ad valorem taxes and assessments and all other charges
included on any tax bill from the applicable tax assessor’s office; and any
assessments by private covenant for the then-current calendar year of the Close
of Escrow.  Specifically, but without limitation, the following shall apply to
such prorations:
 
12.1 Taxes and Assessments
 
.  Real and personal property taxes and taxes and assessments pursuant to any
Mello-Roos District affecting the Property (including the CFDs) shall be
prorated on the basis that Seller is responsible for (a) all such taxes for the
fiscal year of the applicable taxing authorities occurring before the Current
Tax Period, and (b) that portion of such taxes for the Current Tax Period
determined on the basis of the number of days that have elapsed from the first
day of the Current Tax Period to the Closing Date, inclusive, whether or not the
same shall be payable before the Close of Escrow.  If as of the Close of Escrow
the actual tax bills for the year or years in question are not available and the
amount of taxes to be prorated cannot be ascertained, then rates and assessed
valuation of the previous year, with known changes, shall be used, and when the
actual amount of taxes and assessments for the year or years in question shall
be determinable, then such taxes and assessments will be re-prorated between the
parties to reflect the actual amount of such taxes and
assessments.  Notwithstanding the foregoing, to the extent Tenant is responsible
for reimbursement or payment of such taxes and assessments pursuant to the
Lease, the amount payable by the Tenant in excess of base year taxes shall not
be prorated except to the extent that Seller has received estimated payments and
has not yet applied the same to the tax or assessment to which Tenant’s
reimbursement or payment is attributed.
 
12.2 Utilities
 
.  To the extent utilities are not maintained in Tenant’s name, Buyer shall take
all steps necessary to effectuate the transfer of all utilities to its name as
of the Closing Date, and where necessary post deposits with the utility
companies.  In such case, Seller shall endeavor to have all utility meters read
as of the Closing Date.  Seller shall be entitled to recover any and all
deposits held by any utility company as of the Closing Date or, at Seller’s
option, to the extent transferable and refundable to Buyer, take a credit for
same on the closing statement described in Paragraph 12.4.
 
12.3 Tenant Receivables
 
.  Rent received by Seller prior to the Closing Date, including any amounts
payable for operating expenses and taxes, that applies to the period of time
after the Closing Date shall be paid to Buyer at the Close of Escrow.  Rent due
from Tenant under the Lease and operating expenses, taxes and/or other amounts
payable by Tenant under the Lease but not yet received as of the Closing Date
(collectively, “Tenant Receivables”) shall not be prorated at the Close of
Escrow, but shall be apportioned on the basis of the period for which the same
is payable and if, as and when collected, as follows:
 
12.3.1 Buyer shall apply rent and other income and payments received from Tenant
under the Lease after the Close of Escrow in the following order of
priority:  (a) first, to the Buyer’s reasonable costs of collection; (b) second,
to payment of Tenant Receivables first coming due after the Close of Escrow and
applicable to the period of time after the Close of Escrow, which amount shall
be retained by Buyer; (c) third, to the payment of the current Tenant
Receivables then due for the month in which the Closing Date occurs, which
amount shall be apportioned between Buyer and Seller as of the Closing Date as
set forth in Paragraph 12 (with Seller’s portion thereof to be delivered to
Seller);; (d) fourth, to payment of Tenant Receivables first coming due after
the Close of Escrow but applicable to the period of time before the Close of
Escrow, including, without limitation, the Tenant Receivables described in
Paragraph 12.3.2 (“Unbilled Tenant Receivables”), which amount shall be
delivered to Seller; and (e) thereafter, to delinquent Tenant Receivables which
were due and payable as of the Close of Escrow but not collected by Seller as of
the Close of Escrow (collectively, “Uncollected Delinquent Tenant Receivables”),
which amount shall be delivered to Seller.  Notwithstanding the foregoing, at
any time from and after the date that is ninety (90) days after the Close of
Escrow, Seller shall have the right to pursue the collection of Uncollected
Delinquent Tenant Receivables without prejudice to Seller’s rights or Buyer’s
obligations hereunder; provided, however, Seller shall have no right to
terminate or cancel the Lease or to cause Tenant to be evicted or to exercise
any other “landlord” remedy (as set forth in the Lease) against Tenant other
than to sue for collection.  Any sums received by Buyer to which Seller is
entitled shall be held in trust for Seller on account of such past due rents
payable to Seller, and Buyer shall remit to Seller any such sums received by
Buyer to which Seller is entitled within ten (10) Business Days after receipt
thereof less reasonable, actual costs and expenses of collection, including
reasonable attorneys’ fees, court costs and disbursements, if any.  If Seller
receives any amounts after the Close of Escrow which are attributable, in whole
or in part, to any period after the Closing Date, then Seller shall remit to
Buyer that portion of the monies so received by Seller to which Buyer is
entitled within ten (10) Business Days after receipt thereof.  With respect to
Unbilled Tenant Receivables, Buyer covenants and agrees to (i) bill the same
when billable (based on information furnished by Seller), and (ii) cooperate
with Seller to determine the correct amount of operating expenses and/or taxes
due.
 
12.3.2 Without limiting the generality of Paragraph 12.3.1(b), if the final
reconciliation or determination of operating expenses and/or taxes due under the
Lease shows that a net amount is owed by Seller to Buyer (i.e., Seller collected
an amount greater than the amounts incurred through the Close of Escrow),
Buyer’s pro rata portion shall be paid by Seller to Buyer within ten (10)
Business Days of such final determination under the Lease.  If the final
determination of operating expenses and/or taxes due under the Lease shows that
a net amount is owed by Buyer to Seller (i.e., Seller collected an amount less
than the amounts incurred through the Close of Escrow), Buyer shall, within ten
(10) Business Days of such final determination, remit to Seller, Seller’s
portion of operating expenses and/or taxes for the period up to and including
the Closing Date, if, as and when received.  A preliminary adjustment will be
made at the Close of Escrow.  Buyer agrees to receive and hold any monies
received on account of such past due expenses and/or taxes in trust for Seller
and to pay same promptly to Seller as aforesaid.
 
12.4 Escrow Statement
 
.  At least two (2) Business Days before the Close of Escrow, the parties hereto
shall make a good faith effort to each agree upon all of the prorations to be
made and submit a statement to the Escrow Holder (or sign a statement prepared
by Escrow Holder) setting forth such prorations.  If any prorations,
apportionments or computations made under this Paragraph 12 shall require final
adjustment, then the parties hereto shall make the appropriate adjustments
promptly when accurate information becomes available and either party hereto
shall be entitled to an adjustment to correct the same.  Any corrected
adjustment or proration will be paid in cash to the party entitled thereto.
 
12.5 Survival
 
.  The provisions of this Paragraph 12 shall survive the Close of Escrow.
 
13. Disbursements and Other Actions by Escrow Holder
 
.  Upon the Close of Escrow, Escrow Holder shall promptly undertake all of the
following in the manner indicated:
 
13.1 Prorations
 
.  Prorate all matters referenced in Paragraph 12 based upon the statement
delivered into Escrow signed by each of the parties.
 
13.2 Recording
 
.  Cause the Grant Deed, the Assignment Agreement, the Assignment of Tax Payment
Agreement and any other documents that the parties hereto may mutually direct to
be recorded in the Official Records and conformed copies thereof, showing all
recording information, to be delivered to Buyer and Seller.
 
13.3 Funds
 
.  Disburse from funds deposited by Buyer with Escrow Holder as follows: (a)
first, deduct all items chargeable to the account of Seller pursuant to this
Agreement or as directed by Seller; (b) next, disburse the balance of the
Purchase Price and any additional amounts owed to Seller under this Agreement to
or as directed by Seller by wire transfer in accordance with instructions
received from Seller; and (c) next, disburse the remaining balance of the funds,
if any, to Buyer.
 
13.4 Title Policy
 
.  Direct the Title Company to issue the Title Policy to Buyer.
 
13.5 Documents to Seller
 
.  Deliver to Seller three (3) fully executed originals of the Assignment
Agreement, one (1) fully executed original Assignment of Lease, one (1) fully
executed original Assignment of Contracts, one (1) fully executed original
General Assignment, one (1) fully executed original Assignment of Successor
Project Labor Agreement, one (1) fully executed original Assignment of Tax
Payment Agreement, one (1) copy of the Bill of Sale, one (1) copy of the
California Affidavit, one (1) copy of the FIRPTA Certificate, one (1) copy of
the Tenant Notice, four (4) originals of the Tax Allocation Debt Promissory
Note, one (1) fully executed original of the Buyer’s Certificate and any other
documents to be delivered to Seller hereunder.
 
13.6 Documents to Buyer
 
.  Deliver to Buyer one (1) fully executed original of the Assignment Agreement,
one (1) fully executed original Assignment of Lease, one (1) fully executed
original Assignment of Contracts, one (1) fully executed original General
Assignment, one (1) fully executed original Assignment of Successor Project
Labor Agreement, one (1) fully executed Assignment of Tax Payment Agreement, the
original Bill of Sale, one (1) copy of the California Affidavit, one (1) copy of
the FIRPTA Certificate, the original Tenant Notice, one (1) copy of the Tax
Allocation Debt Promissory Note, and one (1) copy of the Buyer’s Certificate and
any other documents to be delivered to Buyer hereunder.
 
14. Seller’s Representations and Warranties
 
.  Seller hereby represents and warrants to Buyer as of the date hereof (each a
“Seller Representation” and collectively the “Seller Representations”):
 
14.1 Formation
 
.  Seller is a limited liability company, duly organized, validly existing and
in good standing under the laws of the State of Delaware.
 
14.2 Authority
 
.  Seller has full power and authority to enter into and perform this Agreement
in accordance with its terms.  This Agreement and all documents executed by
Seller which are to be delivered to Buyer at the Close of Escrow are, and at the
time of the Close of Escrow will be, duly authorized, executed and delivered by
Seller, and at the time of the Close of Escrow will be the legal, valid and
binding obligations of Seller enforceable against Seller in accordance with
their respective terms, do not and, at the time of the Close of Escrow will not,
violate any provision of any agreement or judicial order to which Seller or the
Property is subject.
 
14.3 Lease
 
.
 
14.3.1 Seller has delivered to Buyer, or made available to Buyer for review, a
true and complete copy of the Lease (and all amendments thereto) as maintained
by Seller in its files and used by Seller in connection with its ownership,
management and operation of the Property, and, to Seller’s Actual Knowledge, the
same represents a true and complete copy of the Lease.
 
14.3.2 Seller has not received any written notices from Tenant asserting that
Seller is in default in any material respects under the Lease (other than
defaults that have been cured).
 
14.3.3 Seller has not given any written notices to Tenant asserting that Tenant
is in default in any material respect under the Lease (other than defaults that
have been cured).
 
14.3.4 To Seller’s Actual Knowledge, Tenant is not in material default under the
Lease.
 
14.3.5 Seller has not entered into an agreement that will be binding on Buyer
that provides for the payment of any commissions, finder’s fees or other
compensation to any broker or any other person or entity with respect to the
Lease.
 
14.4 Service Contracts
 
.  Exhibit B is a true, correct and complete list of the Service Contracts in
effect as of the date hereof which are not intended to be terminated as of the
Close of Escrow and Seller has delivered to Buyer, or made available to Buyer
for review, true and complete copies of all Service Contracts, set forth on
Schedule B.  To Seller’s Actual Knowledge, Seller is in compliance with all of
the Service Contracts in all material respects.
 
14.5 Actions
 
.  There is no action, suit, litigation, hearing or administrative proceeding
pending against Seller or, to Seller’s Actual Knowledge, threatened with respect
to all or any portion of the Property in each case which is not or would not be
covered by insurance.
 
14.6 OFAC
 
.  Seller is not an individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee, estate, limited liability
company, unincorporated organization, real estate investment trust, government
or any agency or political subdivision thereof, or any other form of entity
(collectively, a “Person”) with whom a United States citizen, entity organized
under the laws of the United States or its territories or entity having its
principal place of business within the United States or any of its territories
(collectively, a “U.S.  Person”) is prohibited from transacting business of the
type contemplated by this Agreement, whether such prohibition arises under
United States law, regulation, executive orders and lists published by the
Office of Foreign Assets Control, Department of the Treasury (“OFAC”) (including
those executive orders and lists published by OFAC with respect to Persons that
have been designated by executive order or by the sanction regulations of OFAC
as Persons with whom U.S.  Persons may not transact business or must limit their
interactions to types approved by OFAC [“Specially Designated Nationals and
Blocked Persons”]) or otherwise.
 
14.7 ERISA
 
.  Neither Seller nor the Property constitutes either (a) an “employee benefit
plan” as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), which is subject to Title I of ERISA, or (b) a
“plan” as defined in Section 4975(a) of Internal Revenue Code (“Code”) (the
plans described in subparagraphs (a) and (b) being collectively referred to as a
“Plan”).
 
14.8 No Violations
 
.  To Seller’s Actual Knowledge, except for any violations cured on or before
the Effective Date, Seller has not received written notice of the violation of
any law, ordinance, rule, regulation or order applicable to the Property
relating to safety, health, building, fire, zoning, or Hazardous Materials
during Seller’s period of ownership.

14.9 Contracts
 
.  To Seller’s Actual Knowledge, there are no service, maintenance or management
contracts or similar agreements to which Seller is a party and that would be
binding on Buyer or the Property after the Close of Escrow, except for the
agreements to be assumed by Buyer at the Close of Escrow pursuant to this
Agreement and described on Schedule B.
 
14.10 Bankruptcy
 
.  Seller has not (a) made a general assignment for the benefit of creditors,
(b) filed any voluntary petition in bankruptcy or suffered the filing of any
involuntary petition by Seller’s creditors, (c) suffered the appointment of a
receiver to take possession of all, or substantially all, of Seller’s assets,
(d) suffered the attachment or other judicial seizure of all, or substantially
all, of Seller’s assets, (e) admitted in writing its inability to pay its debts
as they come due, or (f) made an offer of settlement, extension or composition
to its creditors generally.
 
14.11 Employees
 
.  There are no employees of Seller engaged in the operation, management or
maintenance of the Property.  Seller is not a party to any collective bargaining
agreement or employment agreement with respect to the Property.
 
Any and all uses of the phrase “to Seller’s Actual Knowledge” or other
references to Seller’s knowledge in this Agreement shall mean the actual,
present, conscious knowledge of David Wall and Doug Baker (collectively, the
“Seller Knowledge Individuals”) as to a fact at the time given (including at the
time of any updates made after the Effective Date) without any investigation or
inquiry.  Without limiting the foregoing, Buyer acknowledges that the Seller
Knowledge Individuals have not performed and are not obligated to perform any
investigation or review of any files or other information in the possession of
Seller, or to make any inquiry of any persons, or to take any other actions in
connection with the representations and warranties of Seller set forth in this
Agreement.  Neither the actual, present, conscious knowledge of any other
individual or entity, nor the constructive knowledge of the Seller Knowledge
Individuals or of any other individual or entity, shall be imputed to the Seller
Knowledge Individuals.
 
The Seller Representations and Seller’s Surviving Covenants shall survive the
Close of Escrow for nine (9) months (the “Limitation Period”).  Additionally,
Excluded Environmental Claims are subject to, and must be brought within, the
Limitation Period, and Buyer shall not have, and hereby waives, the right to
bring any such claims after the expiration of the Limitation Period.  Each such
Seller Representation and Seller’s Surviving Covenants shall automatically be
null and void and of no further force and effect on the nine (9) month
anniversary of the Closing Date unless, prior to such nine (9) month
anniversary, Buyer shall have provided Seller with a notice alleging that Seller
is in breach of such Seller Representation or Seller’s Surviving Covenants and
specifying in reasonable detail the nature of such breach.  Buyer shall allow
Seller thirty (30) days after its notice within which to cure such breach or if
such breach cannot be cured within such thirty (30) day period, and Seller
notifies Buyer it wishes to extend its cure period (the “Cure Extension
Notice”), such additional reasonable period of time as is required to cure the
same (not to exceed ninety (90) days in the aggregate) (the “Outside Cure Date”)
so long as such cure has been commenced within such thirty (30) day period and
is being diligently pursued to completion.  If Seller fails to cure such breach
(including payment of all actual Damages (defined below) suffered by Buyer)
after written notice thereof, Buyer’s sole remedy (subject to Paragraph 18.2)
shall be to commence a legal proceeding against Seller alleging that Seller
shall be in breach of such representation or warranty or in breach of Seller’s
Surviving Covenants and that Buyer shall have suffered actual damages as a
result thereof (a “Proceeding”), which Proceeding must be commenced, if at all,
within sixty (60) days after the expiration of the Limitation Period; provided,
however, that if Buyer gives Seller written notice of such a breach within the
Limitation Period, and Seller subsequently sends a Cure Extension Notice, then
Buyer shall have until the date which is thirty (30) days after the Outside Cure
Date to commence such Proceeding.  If Buyer shall have timely commenced a
Proceeding and a court of competent jurisdiction shall, pursuant to a final,
non-appealable order in connection with such Proceeding, determine that (1)
Seller breached the applicable Seller Representation or the applicable Seller’s
Surviving Covenants, (2) Buyer suffered actual damages (the “Damages”) by reason
of such breach, and (3) Buyer did not have actual knowledge of such breach on or
prior to the Close of Escrow, then Buyer shall be entitled to receive an amount
equal to the Damages subject to the limitations contained in this
Agreement.  Any such Damages, subject to the limitations contained in this
Agreement, shall be paid within thirty (30) days following the entry of such
final, non-appealable order and delivery of a copy thereof to Seller.  After
Close of Escrow and prior to December 31, 2012, Seller shall maintain a liquid
net worth of $5,000,000.  On or after December 31, 2012, Seller may distribute
any remaining net sales proceeds or other assets of Seller to its investors, as
long as Seller maintains, for the remainder of the Limitation Period, a liquid
net worth equal to the lesser of (i) $5,000,000, or (ii) an amount determined by
Seller, in good faith, sufficient to satisfy any written claim of breach
delivered by Buyer to Seller pursuant to Article 14 above.  In no event shall
Damages include, or Buyer be entitled to recover, consequential or punitive
damages under any circumstances.
 
The Seller Representations are subject to the following limitations:  (i)
subject to Paragraph 8.1.7, Seller does not represent or warrant that the Lease
or any particular Service Contract will be in force or effect as of the Close of
Escrow or that Tenant or the contractors thereunder, as applicable, will not be
in default thereunder, and (ii) to the extent that Seller has delivered to Buyer
any leases, contracts or other information with respect to the Property at any
time prior to Buyer’s delivery of a Buyer’s Due Diligence Notice, and such
leases, contracts or other information contain provisions inconsistent with any
of such representations and warranties, then such representations and warranties
shall be deemed modified to conform to such provisions, and (iii) Seller shall
not be deemed in breach of its representations and warranties contained in
Paragraph 14.4 if Buyer does not assume responsibility for the Service
Contract(s) which violate(s) such representations and warranties and neither
Buyer nor the Property would otherwise be bound thereby.
 
15. Buyer’s Representations and Warranties
 
.  Buyer hereby represents and warrants to Seller as of the date hereof and as
of the Close of Escrow as follows:
 
15.1 Formation
 
.  Buyer is a limited partnership, duly organized and existing in good standing
under the laws of the State of Delaware.
 
15.2 Authority
 
.  Buyer has full power and authority to enter into and perform this Agreement
in accordance with its terms.  This Agreement and all documents executed by
Buyer which are to be delivered to Seller at the Close of Escrow are, and at the
time of the Close of Escrow will be, duly authorized, executed and delivered by
Buyer and are, and at the time of the Close of Escrow will be the legal, valid
and binding obligations of Buyer, enforceable against Buyer in accordance with
their respective terms.
 
15.3 Not Tax-Exempt
 
.  Buyer is not a tax-exempt entity.
 
15.4 OFAC
 
.  Buyer is not a Person with whom a U.S.  Person is prohibited from transacting
business of the type contemplated by this Agreement, whether such prohibition
arises under OFAC (including those executive orders and lists published by OFAC
with respect to Specially Designated Nationals and Blocked Persons) or
otherwise.
 
15.5 ERISA
 
.  Buyer is not acquiring the Property with the assets of an employee benefit
plan (as defined in Section 3(3) of ERISA), or, if plan assets will be used to
acquire the Property, Buyer will deliver to Seller at the Close of Escrow a
certificate containing such factual representations as shall permit Seller and
its counsel to conclude that no prohibited transaction would result from the
consummation of the transactions contemplated by this Agreement.  Buyer is not a
“party in interest” within the meaning of Section 3(3) of ERISA with respect to
any beneficial owner of Seller.
 
16. Buyer Acknowledgements
 
.
 
16.1 Condition of Property
 
.
 
16.1.1 Buyer acknowledges and agrees that it is purchasing the Property based
upon Buyer’s inspection and investigation of the Property, all physical, legal,
entitlement and economic aspects of the Property, and all documents related
thereto, or its opportunity to do so, including, without limitation, review of
the financial information, the Lease (and the rights of Tenant thereunder),
building permits, certificates of occupancy, environmental audits and
assessments, toxic reports, surveys, investigation of land use and development
rights, development restrictions and conditions that are or may be imposed by
any Governmental Authority, agreements with associations affecting or concerning
the Property, the condition of title, soils and geological reports, engineering
and structural tests, insurance contracts, contracts for work in progress,
marketing studies, cost-to-complete studies, governmental agreements and
approvals, architectural plans and site plans, and, AS A MATERIAL INDUCEMENT TO
THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY SELLER, BUYER IS PURCHASING THE
PROPERTY IN AN “AS IS, WHERE IS” PHYSICAL CONDITION AND IN AN “AS IS” STATE OF
REPAIR, WITH ALL FAULTS, without relying upon any representations or warranties,
express, implied or statutory, of any kind, except as expressly set forth in
Paragraph 14 and in the documents executed and delivered at the Close of Escrow
("Closing Documents").  Without limiting the above, Buyer acknowledges that
neither Seller, except as expressly set forth in Paragraph 14 or in the Closing
Documents, nor any other party has made any representations or warranties,
statements or promises, express or implied, to Buyer or anyone acting on behalf
of Buyer on which Buyer is relying as to any matters, directly or indirectly,
concerning the Property or the condition, use or development thereof, including,
but not limited to, the Land, the Improvements, the Lease, infrastructure, if
any, development rights and exactions, expenses associated with the Property,
taxes, assessments, bonds, permissible uses, title exceptions, water or water
rights, topography, utilities, zoning of the Property, soil, subsoil,
architectural plans, site plans, the purposes for which the Property is to be
used, drainage, environmental or building laws, rules or regulations, Hazardous
Material or any other matters affecting or relating to the Property.  The
closing of the purchase of the Property by Buyer hereunder shall be conclusive
evidence that (a) Buyer has fully and completely inspected (or has caused to be
fully and completely inspected) the Property, and (b) Buyer accepts the Property
as being in good and satisfactory condition and suitable for Buyer’s purposes.
 
16.1.2 Buyer shall perform and rely upon its own investigation concerning its
intended use of the Property, the Property’s fitness therefor, and the
availability of such intended use under Applicable Laws.  Buyer further
acknowledges and agrees that Seller’s cooperation with Buyer in connection with
Buyer’s due diligence review of the Property, whether by providing the Title
Report, environmental and other reports, the Development Entitlements and other
documents, or permitting inspection of the Property, shall not be construed as
any warranty or representation, express or implied, of any kind with respect to
the Property, or with respect to the accuracy, completeness, or relevancy of any
such documents except as specifically provided in Paragraph 14 above or in the
Closing Documents.
 
16.1.3 Without limiting the generality of the foregoing, except with respect to
Claims arising out of a breach of Seller’s Warranties or Seller’s Surviving
Covenants or the Closing Documents, Buyer, for itself and, to the maximum extent
permitted by Applicable Laws, on behalf of its Transferees with respect to all
or a part of the Property, hereby expressly waives, releases and relinquishes
any and all Claims that Buyer or such Transferees may now or hereafter have
against any Seller Party, and their respective successors and assigns, whether
known or unknown, arising from or related to the condition or use of the
Property or under the Lease (including, without limitation, any construction
defects, errors or omissions on or in the Property, the presence of Hazardous
Materials or other toxic substances or any other conditions (whether patent,
latent or otherwise) affecting the Property, or any other law or regulation
applicable thereto, or the valuation, salability, utility or suitability of the
Property), with respect to any past, present or future presence or existence of
Hazardous Material at, on, about, under or within any part of the Property, or
with respect to any past, present or future violations of any Applicable Laws,
now or hereafter enacted, regulating or governing the use, handling, storage,
release or disposal of Hazardous Material at, on, about, under or within any
part of the Property, including, without limitation, (a) any and all rights
Buyer or such Transferees may now or hereafter have to seek contribution from
Seller under Section 113(f)(i) of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (“CERCLA”), as amended by the Superfund
Amendments and Reauthorization Act of 1986 (42 U.S.C.A.  §9613), as the same may
be further amended or replaced by any similar law, rule or regulation, (b) any
and all rights Buyer or such Transferees may now or hereafter have against
Seller under the Carpenter-Presley-Tanner Hazardous Substances Account Act
(California Health and Safety Code, Section 25300 et seq.), as the same may be
further amended or replaced by any similar law, rule or regulation, (c) any and
all Claims, whether known or unknown, now or hereafter existing, with respect to
the Property under Section 107 of CERCLA (42 U.S.C.A.  §9607), and (d) any and
all Claims, whether known or unknown, based on nuisance, trespass or any other
common law or statutory provisions.  Buyer further acknowledges and agrees that
this release shall be given full force and effect according to each of its
expressed terms and provisions, including, but not limited to, those relating to
unknown and suspected claims, damages and causes of action.
 
SUBJECT TO THE LIMITATIONS SET FORTH IN PARAGRAPHS 14 AND 18.2, THE FOREGOING
WAIVER AND RELEASE SHALL NOT APPLY TO AND BUYER FULLY RESERVES ALL RIGHTS AND
REMEDIES IT MAY HAVE AGAINST SELLER (AND SELLER AGREES THAT BUYER CAN NAME
SELLER IN AN ACTION OR CROSS CLAIM, COUNTERCLAIM OR COMMENCE OTHER APPROPRIATE
LEGAL PROCEEDINGS AGAINST IT) WITH RESPECT TO STATUTORY CLAIMS FOR CONTRIBUTION
RESULTING FROM:  (A) CLAIMS BY ANY THIRD PARTY BASED ON SELLER’S STORAGE, USE OR
DISPOSAL OF HAZARDOUS MATERIALS ON THE PROPERTY DURING ITS PERIOD OF OWNERSHIP;
AND/OR (B) ANY DEMAND OR ORDER OF A GOVERNMENTAL AGENCY REQUIRING THE
INVESTIGATION, MONITORING AND/OR REMEDIATION OF HAZARDOUS MATERIALS ORIGINALLY
RELEASED ON OR FROM THE PROPERTY BY SELLER DURING ITS PERIOD OF OWNERSHIP (THE
“EXCLUDED ENVIRONMENTAL CLAIMS”).
 
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BUYER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE PROVISIONS
OF CALIFORNIA CIVIL CODE SECTION 1542 (“SECTION 1542”), WHICH IS SET FORTH
BELOW:
 
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”
 
BY INITIALING BELOW, BUYER HEREBY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY
IN CONNECTION WITH THE MATTERS WHICH ARE THE SUBJECT OF THE WAIVERS AND RELEASES
CONTAINED IN THIS PARAGRAPH 17.1.3:
 
RTS
Buyer’s Initials
 
The waivers and releases by Buyer herein contained shall survive the Close of
Escrow and the recordation of the Grant Deed and will not be deemed merged into
the Grant Deed upon its recordation.
 
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16.2 Subsequent Owners or Occupants
 
.  Buyer acknowledges that the Property is subject to the Environmental
Covenant, and Buyer hereby covenants to comply with the Environmental
Covenant.  Without limiting the generality of the foregoing, the Environmental
Covenant requires all Owners and Occupants (as therein defined) to include the
following statement in all purchase agreements or leases (or other grant of
right or possession) relating to the Property:
 
“a.           The land described herein may contain hazardous materials in soils
and in the ground water under the property, and is subject to a deed restriction
(Covenant and Restriction) dated as of February 23, 2000, and recorded on March
21, 2000, in the Official Records of San Francisco County, California, as
Document No.  2000G748552, which Covenant and Restriction imposes certain
covenants, conditions, and restrictions on usage of the property described
herein.  This statement is not a declaration that a hazard exists.
 
“b.           In all future leases, licenses, permits, or other agreements
between, on the one hand, an Owner or Occupant, and, on the other hand, another
entity, which authorizes such entity to undertake or to engage in activities
that are subject to one or more requirements set forth in the Risk Management
Plan (RMP), the contracting Owner or Occupant will provide a copy of the RMP or
its relevant provisions prior to execution of such agreements and ensure that
such agreements contain covenants that (a) such entity will comply with the RMP
(to the extent the RMP applies to the entity’s activities); (b) such entity will
obligate other entities with which it contracts for construction, property
maintenance or other activities which may disturb soil or groundwater to comply
with the applicable provisions of the RMP; and (c) such entity (and the entities
with which it so contracts) will refrain from interfering with Owner’s or
Occupant’s compliance with the RMP.
 
“c.           In all agreements between an Owner and another entity providing
for access to the Property for the purpose of environmental mitigation,
monitoring or remediation (“Environmental Responses”) by such entity, the Owner
will provide that entity with a copy of the RMP prior to execution of such
agreement and ensure that such agreements contain covenants by the entity that
the entity will (a) comply with the RMP (to the extent the RMP applies to the
entity’s activities); and (b) obligate any person or company with which it
contracts for Environmental Response that may disturb soil or groundwater to
comply with the applicable provisions of the RMP.”
 
16.3 RMP
 
.  Buyer hereby acknowledges receipt of the RMP.
 
16.4 San Francisco Soils Analysis Disclosure
 
.  Buyer acknowledges and understands that the Property is located in an area of
the City and County of San Francisco subject to the requirements of Article 20
of the San Francisco Public Works Code and Article 22A of the San Francisco
Health Code, and in accordance with the requirements of Section 1233 of the San
Francisco Health Code, Buyer hereby acknowledges receipt of a summary of such
Articles, a copy of which is attached to the RMP as Exhibit F.
 
16.5 Natural Hazards Disclosures
 
.  Buyer acknowledges that Seller has complied with the disclosure obligations
relating to seismic, geologic and other natural hazards imposed on Seller by
California law by delivering to Buyer a Natural Hazards Disclosure Report.
 
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17. Buyer’s Default
 
.
 
17.1 LIQUIDATED DAMAGES
 
.   IF, AND ONLY IF, BUYER SHALL DEFAULT BY FAILING TO CLOSE THIS TRANSACTION
WITHOUT LEGAL EXCUSE, SELLER’S SOLE AND EXCLUSIVE REMEDY BY REASON THEREOF SHALL
BE TO TERMINATE THIS AGREEMENT AND, UPON SUCH TERMINATION, SELLER SHALL BE
ENTITLED TO RECEIVE AND RETAIN THE DEPOSIT (AND ANY INTEREST EARNED THEREON) AS
LIQUIDATED DAMAGES FOR BUYER’S DEFAULT HEREUNDER, IT BEING AGREED THAT THE
DAMAGES BY REASON OF BUYER’S DEFAULT ARE DIFFICULT, IF NOT IMPOSSIBLE, TO
ASCERTAIN, AND THAT THE AMOUNT OF THE DEPOSIT (AND ANY INTEREST THEREON)
REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES AND THEREAFTER BUYER
AND SELLER SHALL HAVE NO FURTHER RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT
EXCEPT FOR THOSE THAT ARE EXPRESSLY PROVIDED IN THIS AGREEMENT TO SURVIVE THE
TERMINATION HEREOF.  THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO
SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677.  IF
SELLER PROPERLY TERMINATES THIS AGREEMENT PURSUANT TO A RIGHT GIVEN TO IT
HEREUNDER AND BUYER TAKES ANY ACTION WHICH INTERFERES WITH SELLER’S ABILITY TO
SELL, EXCHANGE, TRANSFER, LEASE, DISPOSE OF OR FINANCE THE PROPERTY OR TAKE ANY
OTHER ACTIONS WITH RESPECT THERETO (INCLUDING, WITHOUT LIMITATION, THE FILING OF
ANY LIS PENDENS OR OTHER FORM OF ATTACHMENT AGAINST THE PROPERTY), THEN THE
NAMED BUYER (AND ANY PERMITTED ASSIGNEE OF BUYER’S INTEREST HEREUNDER) SHALL BE
LIABLE FOR ALL LOSS, COST, DAMAGE, LIABILITY OR EXPENSE (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS’ FEES, COURT COSTS AND DISBURSEMENTS AND
CONSEQUENTIAL DAMAGES) INCURRED BY SELLER BY REASON OF SUCH ACTION TO CONTEST BY
BUYER; PROVIDED, THAT THE FOREGOING SHALL NOT BE DEEMED TO PROHIBIT BUYER FROM
FILING AN ACTION FOR SPECIFIC PERFORMANCE AS PROVIDED IN PARAGRAPH 18 OR FROM
CHALLENGING SELLER’S RIGHT TO TERMINATE THIS AGREEMENT WITH THE UNDERSTANDING
AND LIMITATION THAT BUYER MAY NOT UNDER ANY CIRCUMSTANCES BE PERMITTED TO FILE
ANY LIEN LIS PENDENS OR OTHER FORM OF ATTACHMENT AGAINST THE PROPERTY IN
CONNECTION WITH SUCH ACTION FOR SPECIFIC PERFORMANCE OR CHALLENGE.
 
SELLER’S INITIALS:  JS
JC                                                                BUYER’S
INITIALS:  ____
 
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17.2 Other Seller Remedies
 
.
 
17.2.1 Nothing contained in this Paragraph 17 shall serve to waive or otherwise
limit (a) Seller’s remedies or damages for claims of Seller against Buyer with
respect to any obligations of Buyer that, by the terms of this Agreement,
survive the Close of Escrow or any termination of this Agreement before the
Close of Escrow, including, without limitation, Buyer’s indemnification
obligations under Paragraph 6.4 or (b) Seller's rights to obtain from Buyer all
costs and expenses of enforcing the liquidated damage provision contained in
Paragraph 17.1, including Legal Costs.
 
17.2.2 The parties agree that Seller would suffer material injury or damage not
compensable by the payment of money if Buyer were to breach or violate its
confidentiality obligations under Paragraph 24.  Accordingly, notwithstanding
the provisions of Paragraph 17.1, in addition to all other remedies that Seller
may have, Seller may bring an action in equity or otherwise for specific
performance to enforce compliance with Paragraph 24 of this Agreement, or an
injunction to enjoin the continuance of any such breach or violation
thereof.  Buyer agrees to waive any requirement for a bond in connection with
any such injunctive or other equitable relief.
 
18. Seller’s Default
 
.
 
18.1 Buyer’s Remedies
 
.  If (a) Seller shall default in any of its obligations to be performed on the
Scheduled Closing Date or (b) Seller shall default in the performance of any of
its material obligations to be performed prior to the Scheduled Closing Date
and, with respect to any default under this clause (b) only, such default shall
continue for five (5) business days after notice to Seller,  Buyer as its sole
remedy by reason thereof (in lieu of prosecuting an action for damages or
proceeding with any other legal or equitable course of conduct, the right to
bring such actions or proceedings being expressly and voluntarily waived by
Buyer, to the extent legally permissible, following and upon advice of its
counsel) shall have the right, subject to the other provisions of this
Paragraph 18.1, (i) to seek to obtain specific performance of Seller’s
obligations hereunder, provided that any action for specific performance shall
be commenced within ninety (90) days after Buyer obtains actual knowledge of
such default, and if Buyer prevails thereunder, Seller shall reimburse Buyer for
all reasonable legal fees, court costs and all other reasonable costs of such
action or (ii) to terminate this Agreement and receive a return of the Deposit;
provided, that if and only if Seller’s affirmative and intentional conduct in
violation of this Agreement causes the remedy of specific performance to not be
available to Buyer, Seller shall also pay Buyer within ten (10) days after
Buyer’s demand therefor (which shall be accompanied by reasonable back-up
documentation) an amount equal to the Reimbursable Expenses, it being understood
that if Buyer fails to commence an action for specific performance within ninety
(90) days after such default, Buyer’s sole remedy shall be to terminate this
Agreement and receive a return of the Deposit and reimbursement of the
Reimbursable Expenses, if applicable.  If Buyer elects to seek specific
performance of this Agreement, then as a condition precedent to any suit for
specific performance, Buyer shall on or before the Scheduled Closing Date, time
being of the essence, fully perform all of its obligations hereunder which are
capable of being performed (other than the payment of the Purchase Price, which
shall be paid as and when required by the court in the suit for specific
performance).  Upon such return and delivery, this Agreement shall terminate and
neither party hereto shall have any further obligations hereunder  except for
those that are expressly provided in this Agreement to survive the termination
hereof.
 
18.2 Liability Limitations
 
.  Notwithstanding anything to the contrary set forth in this Agreement,
Seller’s liability for any and all claims arising out of any covenant,
representation or warranty of Seller contained in this Agreement and in any
document executed by Seller pursuant to this Agreement, including, without
limitation, any instruments delivered at the Close of Escrow, and any Excluded
Environmental Claims shall, subject to the limitations of survival set forth in
Paragraph 14, be limited to claims in excess of One Hundred Thousand Dollars
($100,000) in the aggregate (provided that for such claims, Buyer shall be
entitled to recover from the first dollar of any loss incurred, subject to the
following aggregate liability limit), and Seller’s aggregate liability for any
and all such claims shall not exceed Five Million Dollars ($5,000,000); provided
that the foregoing limitation shall not apply to (i) Seller's obligations under
Paragraph 12, (ii) Seller's obligations under Paragraph 21, or (iii) any action
by Buyer for specific performance of Seller's obligations hereunder.
 
19. Damage or Condemnation Before Close of Escrow
 
.  Seller shall promptly notify Buyer of any casualty to the Property (or the
parking facilities required pursuant to the Lease) or any pending or threatened
condemnation proceeding affecting the Property or such parking facilities before
the Close of Escrow following Seller’s obtaining Actual Knowledge or Seller’s
receipt of written notice of such casualty or condemnation proceeding.  If any
such damage or actual or overtly threatened proceeding relates to or may result
in the loss of any material portion of the Property (as set forth below), Buyer
shall have the right, within ten (10) days after receiving written notice of
such damage, destruction or proceeding from Seller (but in any event prior to
the Close of Escrow), either to: (a) terminate this Agreement, in which event
the Deposit and all funds deposited into Escrow by Buyer shall be disbursed to
Buyer  and neither party shall have any further rights or obligations hereunder
except for the Surviving Obligations, or (b) continue this Agreement in effect,
in which event upon the Close of Escrow, Buyer shall be entitled to any
compensation, awards, or other payments or relief resulting from such casualty
or condemnation proceeding relating to the Property and there shall be no
adjustment to the Purchase Price, provided, however, Buyer shall receive a
credit against the cash due at Closing for the amount of the deductible on such
casualty insurance policy less any amounts reasonably and actually expended by
Seller to remedy any unsafe conditions at the Property, in no event to exceed
the amount of the loss, and provided further, that in the event such amount
spent by Seller to remedy unsafe conditions shall exceed the amount of the
deductible on such casualty insurance policy, then to the extent such excess is
reimbursed by the insurance carrier after Close of Escrow, Buyer shall deliver
such excess amount to Seller, within five (5) business days of its receipt of
any casualty insurance proceeds received on account of such casualty).  A
failure by Buyer to notify Seller in writing within such ten (10) day period
will be deemed an election to proceed under clause (b) above.  If Buyer elects
(or is deemed to elect) to proceed under clause (b) above, Seller shall not
compromise, settle or adjust any claims to such proceeds without Buyer’s prior
written consent.  For the purpose of this Paragraph 19, damage to the Property
or a condemnation action affecting a portion thereof shall be deemed to involve
a material portion of the Property if the reasonably estimated cost of
restoration or repair of such damage or the amount of the condemnation award
with respect to such taking shall exceed fifteen percent (15%) of the Purchase
Price or permit Tenant to terminate the Lease (unless said right has been waived
by Tenant) or to abate rent.  If Buyer shall not have the right to terminate
this Agreement as a result of such damage or condemnation proceeding, Buyer
shall accept the Property in its then condition (without any abatement or
reduction in the Purchase Price, provided, however, Buyer shall receive a credit
against the cash due at Closing for the amount of the deductible on such
casualty insurance policy less any amounts reasonably and actually expended by
Seller to remedy any unsafe conditions at the Property, in no event to exceed
the amount of the loss, and provided further, that in the event such amount
spent by Seller to remedy unsafe conditions shall exceed the amount of the
deductible on such casualty insurance policy and is reimbursed by the insurance
carrier, then Buyer shall deliver such excess amount to Seller, within five (5)
business days of its receipt of any casualty insurance proceeds received on
account of such casualty) in which case Buyer shall proceed with the Close of
Escrow and Buyer will be entitled to an assignment of all of Seller’s rights to
any insurance proceeds or any award in connection with such taking, as the case
may be.  If any such non-material damage or taking occurs, Seller shall not
compromise, settle or adjust any claims to such insurance proceeds or such
award, as the case may be, without Buyer’s prior written
consent.  Notwithstanding anything to the contrary, if there is a casualty that
entitles Tenant to rental abatement under the Lease, then Buyer’s obligation to
close is additionally conditioned upon (i) the agreement by Seller’s property
manager to manage the Property for Buyer on Seller’s property manager’s standard
terms, and (ii) Seller’s property manager’s existing rental interruption
insurance continuing to cover the lost rent during the duration of Tenant’s rent
abatement period.  Notwithstanding the foregoing, in the event of a casualty
where Buyer does not have the right to terminate this Agreement, if the
estimated cost to repair and/or restore any such damage exceeds the sum of the
insurance proceeds assigned to Buyer plus the deductible, then Buyer shall have
the right to terminate this Agreement unless Seller elects to credit against the
Purchase price at Closing the amount of such excess.  The provisions of
Paragraph 19 shall survive the Close of Escrow.
 
20. Notices
 
.  All notices, requests, approvals, demands, directions or other communications
required or permitted hereunder (generally, a “Notice”) shall be in writing and
shall be personally delivered, sent by a reputable overnight courier service,
sent by registered or certified mail, postage prepaid, return receipt requested,
or sent by telecopy or facsimile and shall be deemed received upon the earlier
of (a) if personally delivered or sent by overnight courier, the date of
delivery to the address of the party to receive such Notice, (b) if mailed, the
date of delivery as shown on the sender’s registry or certification receipt, or
(c) if sent by telecopy or facsimile, the date and time transmission is
confirmed if such time is prior to 5:00 PM, and the next Business Day if such
time is after 5:00 PM (using the time in effect at the address of the party to
receive such Notice).  A copy of any Notice sent by telecopy or facsimile also
must be personally delivered or sent by reputable overnight courier service (in
accordance with this Paragraph) within forty-eight (48) hours of the
transmission of such Notice by telecopy or facsimile, provided that failure to
deliver such copy within forty-eight (48) hours will not invalidate any Notice
sent by telecopy or facsimile.  All Notices to Seller shall be sent to Seller’s
Address with a copy to Seller’s Counsel’s Address.  All Notices to Buyer shall
be sent to Buyer’s Address with a copy to Buyer’s Counsel’s Address.  All
Notices to Escrow Holder shall be sent to Escrow Holder’s Address.  Notice of
change of address shall be given by written notice in the manner detailed in
this Paragraph.  Rejection or other refusal to accept or the inability to
deliver because of a changed address of which no Notice was given shall be
deemed to constitute receipt of the Notice sent.
 
21. Brokers
 
.  Each party represents to the other that it has not dealt with any broker,
finder or intermediary with respect to this transaction other than Eastdil
Secured (“Seller’s Broker”).  Buyer agrees to indemnify and hold harmless Seller
from any Claims in connection with an assertion by any person for a real estate
broker’s commission, finder’s fee or other compensation based upon any
statement, representation or agreement of Buyer, and Seller agrees to indemnify
and hold Buyer harmless from any such Claims (including by Seller’s Broker)
based upon any statement, representation or agreement of Seller.  Each party’s
obligations set forth in this Paragraph 21 shall survive the termination of this
Agreement and Escrow before the Close of Escrow and shall survive the Close of
Escrow.
 
22. Legal Fees
 
.  Should either party hereto institute any action or proceeding in court or any
other dispute resolution mechanism against the other party, by reason of or
alleging the failure of the other party to comply with any or all of its
obligations hereunder, whether for declaratory or other relief, then the party
that prevails in such action, proceeding or dispute resolution shall be
entitled, in addition to any other recovery or relief, to its reasonable
attorneys’ fees and expenses and consultant and expert fees and expenses related
thereto (whether at the administrative, trial or appellate levels) (“Legal
Costs”).  Any judgment, order, or award entered in such action, proceeding, or
dispute resolution shall contain a specific provision providing for the recovery
of attorneys’ fees and costs and consultant and expert fees and expenses
incurred in enforcing, perfecting and executing such judgment.  A party shall be
deemed to have prevailed in any such action or proceeding (without limiting the
generality of the foregoing) if such action is dismissed upon the payment by the
other party of the sums allegedly due or the performance of obligations
allegedly not complied with, or if such party obtains substantially the relief
sought by it in the action, irrespective of whether such action is prosecuted to
judgment.  As used in this Agreement, the term “Legal Costs” shall include,
without limitation, reasonable attorneys’ and experts’ fees, costs and expenses
incurred in the following: (a) post judgment motions and appeals; (b) contempt
proceedings; (c) garnishment, levy, and debtor and third party examinations; (d)
discovery; and (e) bankruptcy litigation.  This Paragraph 22 shall survive any
termination of this Agreement before the Close of Escrow and shall also survive
the recordation of the Grant Deed and the Close of Escrow and shall not be
deemed merged into the Grant Deed upon its recordation.
 
23. Transfers
 
.  Buyer shall not Transfer its rights and/or obligations under this Agreement
without the written consent of Seller, which consent Seller may withhold in its
sole and absolute discretion; provided, that, Buyer may assign this Agreement to
an Affiliate of Buyer without Seller’s Consent.  If Seller consents to any
Transfer of Buyer’s rights and/or obligations under this Agreement, Buyer shall
deliver to Seller, at least five (5) days before the closing date of the
proposed Transfer, an originally executed assumption agreement from the
Transferee under which the Transferee assumes all of the duties and obligations
of Buyer under this Agreement and any other agreement or instrument contemplated
by this Agreement.  Except as specifically set forth above, any attempt by Buyer
to Transfer its rights and/or obligations under this Agreement without the
written consent of Seller shall be voidable at Seller’s option.  Any permitted
Transfer shall not relieve, alter or release the assigning party from its
primary liability under this Agreement.
 
24. Confidentiality
 
.
 
24.1 Buyer’s Obligations
 
.  Buyer shall keep all Confidential Information in the strictest confidence,
and shall not disclose any Confidential Information to any third parties except
as expressly permitted herein, and will take all measures necessary to safeguard
such information in order to preserve its confidentiality.  Under no
circumstances shall Buyer use any of the Confidential Information for any
purpose other than the investigation of the Property in connection with its
purchase as contemplated under this Agreement.  Without limiting the generality
of the foregoing, Buyer may not disclose Confidential Information to any third
parties, other than to Buyer’s Agents or Buyer Parties, prospective lenders,
partners, and investors, but then only to the extent Buyer’s Agents or Buyer
Parties, prospective lenders, partners, and investors, need to review the
Confidential Information for purposes of analyzing Buyer’s proposed purchase of
the Property and only provided that Buyer instructs such Buyer’s Agents to keep
the Confidential Information strictly confidential as required by this
Agreement.  Buyer agrees to use diligent efforts to prevent Buyer’s Agents and
Buyer Parties from making any unauthorized disclosure of the Confidential
Information and, in all events, shall be responsible for the acts of Buyer’s
Agents or Buyer Parties with respect to the Confidential
Information.  Notwithstanding the foregoing or any other Section of this
Agreement to the contrary, Seller recognizes that Hines Global REIT, Inc. may
disclose  to the U.S. Securities and Exchange Commission (“SEC”) and other
applicable governmental authorities, financial statements and/or other
communications of such information regarding the transactions contemplated
hereby and any such information relating to the Property, but only to the extent
necessary under federal or state securities laws, rules, or regulations
(including SEC rules and regulations), generally accepted accounting principles,
or other accounting rules and procedures.  Without limiting the foregoing, after
Closing Hines Global REIT, Inc. may file this Agreement (excluding Exhibits)
with the SEC and may file a form “8K” and/or prospectus to which this Agreement
(excluding Exhibits) is attached.
 
24.2 Required Disclosure
 
.  If Buyer becomes legally compelled to disclose all or any part of the
Confidential Information or the existence of this Agreement or the transaction
contemplated hereby, Buyer shall, unless prohibited by applicable law from doing
so, provide Seller with prompt written notice so that Seller may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Paragraph 24.  If such protective order or other remedy is
not obtained, Seller will waive compliance with provisions of this Paragraph to
allow Buyer to comply with such legal obligation.
 
24.3 Disclosure of Transaction
 
.  Prior to the Closing Date, Buyer and Seller shall confer and agree on a press
release to be issued jointly by Buyer and Seller disclosing the transaction and
the appropriate time for making such release.  Neither Buyer nor Seller shall
issue any press releases (or other public statements) with respect to the
transaction contemplated in this Agreement without approval of the other party,
which approval may not be unreasonably withheld; provided, however, that Seller
or Buyer may make such reports and other disclosures as are required by
applicable law or as otherwise deemed necessary, desirable or required by Seller
or Buyer or their parent entities in the course of their
operations.  Notwithstanding the foregoing, Buyer may, without Seller’s consent,
issue a simple press release or simple advertisement disclosing the sale of the
Property to Buyer as long as such press release or advertisement does not
disclose the purchase price or other terms of the Agreement or the identity of
Seller or its Affiliates.
 
24.4 Survival
 
.  The terms, covenants and conditions contained in Paragraph 24 shall survive
any termination of this Agreement and Escrow before the Close of Escrow, but
shall not survive the Close of Escrow.
 
25. Community Facilities Districts
 
.  Buyer acknowledges that, pursuant to the CFDs, a lien of Special Tax has been
established with respect to the Property.  Nothing herein shall be deemed to
require Seller to reimburse Buyer for any CFD Assessments, other taxes or public
or private assessments that may now or hereafter be owing with respect to the
Property, all of which shall be the sole responsibility of Buyer, subject,
however, to proration of the foregoing to the extent the same relate to the
period prior to Close of Escrow.  If requested, by Seller, Buyer shall execute
additional instruments whereby Buyer acknowledges the existence of the CFDs and
that Buyer is aware of the terms and conditions thereof.
 
26. Additional Covenants and Easements
 
.
 
26.1 Entitlement Covenants, Changes
 
.  Buyer shall not seek to effect any change or amendment to the existing
subdivision map or record any further parcel or final map of the Property or any
portion thereof or facilities thereon.  Buyer shall not change or attempt to
change any zoning or obtain or apply for any zoning variance or exception or
seek to modify the Development Entitlements without Seller’s prior written
consent, which consent shall not be unreasonably withheld.  The terms of this
Paragraph 26.1 shall survive the Close of Escrow until the date that is one (1)
year after the Close of Escrow.
 
26.2 Development Easements - Before Close of Escrow
 
.  Before the Close of Escrow, Seller shall have the right, subject to the
limitations set forth below, to record covenants, conditions and restrictions
against the Property, and to grant, convey or dedicate easements, rights and
rights-of-way on and over the Property to utility companies, local water and
sewer districts, the City and other Governmental Authorities, property owners’
associations and other entities that service the Property or properties located
nearby or adjacent thereto, and to adjacent property owners, for the purpose of
facilitating the development, or regulating the operation and maintenance, of
the Property or other property in Mission Bay, including, without limitation,
public access, landscape maintenance, adjacent sidewalk maintenance, and sewer,
water and storm drain easements (the types of covenants, easements, rights and
rights-of-way described in the foregoing are, collectively, referred to herein
as “Development Easements”); provided, however, that before Seller records,
grants, conveys or dedicates any Development Easements hereunder, Seller shall
furnish Buyer with a copy of the proposed Development Easements for Buyer’s
review and approval, which approval shall not be unreasonably withheld or
conditioned.  Buyer shall approve or disapprove any proposed Development
Easements within ten (10) Business Days following its receipt thereof; Buyer’s
failure to approve or disapprove any proposed Development Easements within such
ten (10) Business Day period shall constitute Buyer’s approval
thereof.  Notwithstanding the foregoing to the contrary, Seller shall not be
required to obtain Buyer’s approval of proposed Development Easements if such
Development Easements (a) will not materially and adversely affect the
development of the Property, and (b) are materially consistent with the
Development Entitlements.
 
26.3 Development Easements – Following Close of Escrow
 
.  Upon and following the Close of Escrow, Buyer shall, at the written request
of Master Developer or Prior Owner, grant, consent to, convey or dedicate
Development Easements, provided that such Development Easements (a) are
required, in the sole determination of Master Developer or Prior Owner, as
applicable, for the development of other property in Mission Bay or to establish
reasonable conditions, covenants and restrictions regulating the operation and
maintenance of the Property or other property in Mission Bay; (b) will not
materially and adversely affect the development of the Property; and (c) are
materially consistent with the material terms of the Development
Entitlements.  Buyer’s obligations set forth in this Paragraph 26.3 shall
survive the Close of Escrow and shall not be merged with the Grant Deed.
 
26.4 Master Association and Transportation Management Association
 
.  Buyer acknowledges that the owner of the Property is or will be a member of
the Mission Bay Commercial Maintenance Corporation (“MBCMC”) and Buyer is
obligated to participate in a Transportation Management Association (the “TMA”)
that was formed to implement and administer the Transportation System Management
Plan for the Mission Bay Development Area.  Buyer further acknowledges that the
Property is subject to the covenants, conditions and restrictions contained in
the Master Commercial Declaration and to participation in the Master Association
and TMA, and that Buyer will be responsible for all assessments that may be
owing with respect to the Property following the Close of Escrow with respect to
the Master Association and TMA.  This Paragraph 26.4 shall survive the Close of
Escrow and not be merged with the Grant Deed.
 
26.5 Project Labor Agreement
 
.  Buyer acknowledges that Seller is a party to the Agreement Regarding
Successor Project Labor Agreement.  In connection with the Close of Escrow,
Buyer shall execute and deliver the Assignment of Successor Project Labor
Agreement.  After the Close of Escrow, Buyer shall, if requested by the other
parties to the Agreement Regarding Successor Project Labor Agreement or the
Council (as defined in the Agreement Regarding Successor Project Labor
Agreement), enter into an agreement in substantially the form of the Agreement
Regarding Successor Project Labor Agreement.  This Paragraph 26.5 shall survive
the Close of Escrow and not be merged with the Grant Deed.
 
26.6 Parking Structure
 
.  A parking structure (the “Parking Structure”) constructed on Block 27
provides parking for Block 26a, Block 28, Block 27 and Block 26 (the owners of
said Blocks are collectively referred to as the “Block 26/27 Owners”).  The
respective rights and obligations of each of the Block 26/27 Owners with respect
to the use, operation and maintenance of the Parking Structure are set forth in
that certain Easement Agreement dated as of December 14, 2007 and recorded in
the Official Records on December 14, 2007 as Instrument No.  2007I502747 (the
“Parking Structure Easement Agreement”).
 
26.7 Agency Approval of Transfers to Exempt Entities
 
.  Buyer, on behalf of itself and its successors, agrees that during the Term
(as defined in the South OPA) of the South OPA Buyer will not Transfer the
Property, or any portion thereof, to any entity for any use that is or could be
exempt from property taxation without first obtaining (a) from such tax exempt
entity a binding contractual commitment, in form and substance reasonably
satisfactory to the Redevelopment Agency, the City, Prior Owner and Master
Developer, obligating such entity to make a payment in lieu of taxes (“PILOT
Agreement”) equal to the full amount of the property taxes that would have been
assessed against the Property notwithstanding the ownership or use by a tax
exempt entity, or (b) Buyer entering into a PILOT Agreement, in form and
substance reasonably satisfactory to the Redevelopment Agency, the City and
Master Developer, for the benefit of the Redevelopment Agency and the City,
requiring the full payment of property taxes (or a payment in lieu thereof in an
amount equal to the property taxes) that would have been assessed against the
Property notwithstanding such occupancy by such tax exempt entity, or (c) the
written consent of the Redevelopment Agency, the City and Prior Owner, in their
respective sole discretion.  Buyer agrees not to request an adjustment to the
Base Year Value for the South Plan Area (as defined in the South OPA) as a
result of any permitted Transfer to an entity exempt from property
taxation.  For purposes hereof, “Base Year Value” means the aggregate assessed
value of property within the South Plan Area on the assessment roll last
equalized prior to the effective date of the ordinance adopting the Mission Bay
South Redevelopment Plan (as defined in the South OPA) and the term “last
equalized” has the meaning set forth in Section 2052 of the California Revenue
and Taxation Code.  Buyer shall include in all agreements for the Transfer of
the Property, or any portion thereof, a contractually binding provision
requiring that unless the Redevelopment Agency, the City and Prior Owner in
their respective sole discretion agree otherwise, any such Transferee (or
subsequent Transferee of such Transferee) that is a tax-exempt entity enter into
a PILOT reasonably satisfactory to the Redevelopment Agency, the City, Prior
Owner and Master Developer consistent with this Paragraph 26.7.  Buyer’s
obligations under this Paragraph 26.7 shall survive the Close of Escrow and
shall not be merged with the Grant Deed.
 
26.8 Future Dedication
 
.  Buyer shall cooperate reasonably with the Master Developer and its affiliated
companies, successors and assigns in connection with the future dedication of
South Street and any other property abutting the Property intended to be
dedicated to the appropriate Governmental Authority.  This Paragraph 26.8 shall
survive the Close of Escrow and not be merged with the Grant Deed.
 
26.9 Transfer Notice
 
.  After the Close of Escrow, Seller shall send the notice required by Section
3.4 of the Environmental Covenant.  This Paragraph 26.9 shall survive the Close
of Escrow and not be merged with the Grant Deed.
 
27. Compliance with Development Entitlements
 
.
 
27.1 Generally
 
.  Before the expiration of the Inspection Period, Buyer shall have reviewed the
Development Entitlements, including, without limitation, the RMP and
Environmental Covenant and related documents listed on Exhibit J attached
hereto.  Buyer covenants to perform all obligations or other actions to be
performed by Buyer under this Agreement in accordance with the Development
Entitlements and all Applicable Laws, and agrees that it shall be solely
responsible for all fees and costs related to any development of the Property
occurring after the Close of Escrow.
 
27.2 Diversity Program
 
.
 
27.2.1 Without limiting the generality of Paragraph 27.1, Buyer expressly
acknowledges that it has received and reviewed the Program in Diversity/Economic
Development Program, attached as Attachment H to the South OPA (the “Diversity
Program”).  Buyer agrees to comply with all of the provisions of the Diversity
Program applicable to the Property or Buyer’s construction, use or development
of the Property.  Buyer acknowledges that Schedule 4, Section I.C of the
Diversity Program references the City-wide “First Source Hiring Program” (FSHP)
adopted by the City and County of San Francisco August 3, 1998 and codified at
San Francisco Administrative Code Sections 83.1-83.1(8).  The FSHP is designed
to identify entry-level positions associated with employees engaged in
construction work for certain commercial development projects and to provide
first interview opportunity to graduates of city-sponsored training
programs.  Buyer acknowledges that its activities with respect to the Property
are or may be subject to the FSHP, and that the FSHP and the Diversity Program
may impose obligations on Buyer, including good faith efforts to meet
requirements and goals regarding interviewing, recruiting, hiring and retention
of individuals.  Buyer agrees to comply with any applicable requirements
contained in the FSHP or the Diversity Program.
 
27.2.2 Buyer expressly acknowledges that the Diversity Program provides for the
arbitration of certain disputes under the circumstances therein set
forth.  Consequently, with respect thereto and as to the subject matter thereof,
Buyer agrees to be bound by the applicable arbitration provisions.
 
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NOTICE:  BY INITIALING IN THE SPACE BELOW, BUYER IS AGREEING TO HAVE ANY DISPUTE
CONCERNING THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION SET
FORTH IN THE DIVERSITY PROGRAM DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW, AND BUYER IS GIVING UP ANY RIGHTS IT MIGHT POSSESS TO HAVE A
DISPUTE LITIGATED IN COURT OR A JURY TRIAL.  BY INITIALING IN THE SPACE BELOW,
BUYER IS GIVING UP ITS JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE
RIGHTS ARE SPECIFICALLY INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION
REFERENCED ABOVE.  IF BUYER REFUSES TO SUBMIT TO ARBITRATION AFTER AGREEING TO
THIS PROVISION, BUYER MAY BE COMPELLED TO ARBITRATE UNDER THE CALIFORNIA CODE OF
CIVIL PROCEDURE.  BUYER’S AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
 
BUYER HAS READ AND UNDERSTANDS THE FOREGOING AND AGREES TO SUBMIT DISPUTES
CONCERNING THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION SET
FORTH IN THE DIVERSITY PROGRAM TO A NEUTRAL ARBITRATOR.
 
RTS
Buyer’s Initials
 
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27.3 Non-Discrimination
 
.  Without limiting the generality of Paragraph 27.1, Buyer acknowledges that
the South OPA expressly provides that there shall be no discrimination against
or segregation of persons or groups of persons or any employee or applicant for
employment on account of race, color, creed, religion, national origin,
ancestry, sex, marital or domestic partner status, familial status, lawful
source of income (as defined in Section 3304 of the San Francisco Police Code),
gender identity, sexual orientation, age or disability (including, without
limitation, HIV/AIDS status) in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Property.  All deeds, leases or contracts
for the sale, lease, sublease or other transfer of all or any portion of the
Property are required to contain the foregoing nondiscrimination and
non-segregation provision.
 
27.4 Mitigation Measures
 
.  Without limiting the generality of Paragraph 27.1, Buyer expressly
acknowledges that the South OPA contains mitigation measures relating to the
Property.  Buyer acknowledges that it will comply with and do all things
necessary to perform the obligations of Owner (as defined in the South OPA) now
or hereafter pertaining to the Property.
 
27.5 Survival
 
.  This Paragraph 27 shall survive the Close of Escrow and not be merged with
the Grant Deed.
 
28. Seller Representation Update
 
.  At the Close of Escrow, Seller shall deliver an instrument (the “Seller
Representation Update”) advising Buyer in what respects the Seller
Representations are inaccurate as of the Closing Date as if remade on the
Closing Date.  If the Seller Representation Update shall give rise to Buyer’s
right under Paragraph 8.1 not to effect the Close of Escrow hereunder, Buyer
shall advise Seller of the reasons therefor and Seller shall have up to an
additional thirty (30) days to attempt to satisfy the conditions precedent set
forth in Paragraph 8.1, including, if Seller so elects by written notice to
Buyer, by extending the Scheduled Closing Date, if necessary.
 
29. Miscellaneous
 
.
 
29.1 Survival of Covenants
 
.  In addition to the provisions otherwise expressly set forth herein, (a) the
representations and warranties of Buyer and Seller set forth in this Agreement,
and (b) all covenants made by Buyer and Seller in this Agreement pursuant to
which Buyer and Seller will, by the terms of such covenants, have continuing
rights or obligations under this Agreement following the Close of Escrow shall
survive the recordation of the Grant Deed and the Close of Escrow and shall not
be deemed merged into the Grant Deed upon its recordation; provided, however,
that the survival of the Seller Representations and Seller’s Surviving Covenants
is subject to the Limitation Period set forth in Paragraph 14.
 
29.2 Required Actions of Buyer and Seller
 
.  Buyer and Seller agree to execute such instruments and documents and to
diligently undertake such actions as may be required in order to consummate the
purchase and sale of the Property and shall use good faith efforts to accomplish
the Close of Escrow in accordance with the provisions hereof; provided, however,
that Seller shall not be required to execute any instrument to induce the Title
Company to issue the Title Policy other than (i) certificates regarding
authorizing resolutions, consents or other evidence of Seller’s authority, (ii)
the Owner’s Affidavit, and (iii) any document that Seller agrees to deliver
pursuant to the Seller’s Title Notice.
 
29.3 Time of Essence
 
.  Time is of the essence of each and every term, condition, obligation and
provision hereof.  All references herein to a particular time of day shall be
deemed to refer to San Francisco, California time.
 
29.4 Counterparts
 
.  This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute a
single agreement with the same effect as if both parties had signed the same
signature page.  Any signature page from any counterpart of this Agreement,
signed only by one party, may be detached from such counterpart and re-attached
to any other counterpart of this Agreement that has a signature page signed only
by the other party.
 
29.5 Captions
 
.  Any captions to, or headings of, the Paragraphs or subparagraphs of this
Agreement are solely for the convenience of the parties hereto, are not a part
of this Agreement, and shall not be used for the interpretation or determination
of the validity of this Agreement or any provision hereof.
 
29.6 No Obligations to Third Parties
 
.  Except as otherwise expressly provided herein, the execution and delivery of
this Agreement shall not be deemed to confer any rights upon, nor obligate any
of the parties hereto, to any person or entity other than the parties hereto.
 
29.7 Exhibits
 
.  The Exhibits attached hereto are hereby incorporated herein by this reference
for all purposes.
 
29.8 Amendment to this Agreement
 
.  The terms of this Agreement may not be modified or amended except by an
instrument in writing executed by each of the parties hereto.
 
29.9 Waiver
 
.  The waiver or failure to enforce any provision of this Agreement shall not
operate as a waiver of any future breach of any such provision or any other
provision hereof.
 
29.10 Applicable Law
 
.  This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of California.
 
29.11 Fees and Other Expenses
 
.  Except as otherwise provided herein, each of the parties shall pay its own
fees and expenses in connection with this Agreement.
 
29.12 Entire Agreement
 
.  This Agreement supersedes any prior agreements, negotiations and
communications, oral or written, including any letter of intent or letter of
understanding previously executed by such parties, if any, and, contains the
entire agreement between Buyer and Seller as to the subject matter hereof.  No
subsequent agreement, representation, or promise made by either party hereto, or
by or to an employee, officer, agent or representative of either party shall be
of any effect unless it is in writing and executed by the party to be bound
thereby.
 
29.13 Partial Invalidity
 
.  If any portion of this Agreement as applied to either party or to any
circumstances shall be adjudged by a court to be void or unenforceable, such
portion shall be deemed severed from this Agreement and shall in no way effect
the validity or enforceability of the remaining portions of this Agreement.
 
29.14 Successors and Assigns
 
.  Subject to the provisions of Paragraph 23, this Agreement shall be binding
upon and shall inure to the benefit of the successors and assigns of the parties
hereto.
 
29.15 Independent Counsel
 
.  Buyer and Seller each acknowledge that: (a) they have been represented by
independent counsel in connection with this Agreement; (b) they have executed
this Agreement with the advice of such counsel; and (c) this Agreement is the
result of negotiations between the parties hereto and the advice and assistance
of their respective counsel.  The fact that this Agreement was prepared by
Seller’s counsel as a matter of convenience shall have no import or
significance.  Any uncertainty or ambiguity in this Agreement shall not be
construed against Seller because Seller’s counsel prepared this Agreement in its
final form.
 
29.16 No Recorded Memorandum
 
.  Neither party shall record this Agreement or any short form memorandum of
this Agreement.
 
29.17 Deadlines
 
.  If the last day of any period to give notice, reply to a notice or undertake
any action under this Agreement occurs on a Saturday, Sunday or bank, City or
Redevelopment Agency holiday, then the last day for such undertaking, action,
giving or replying to notice shall be the next succeeding Redevelopment Agency
business day.
 
29.18 Exculpation
 
.
 
29.18.1 Buyer agrees that it does not have and will not have any claims or
causes of action against any disclosed or undisclosed officer, director,
employee, trustee, shareholder, partner, member, principal, parent, subsidiary
or other affiliate of Seller, or any officer, director, employee, trustee,
shareholder, partner or principal of any such parent, subsidiary or other
affiliate (collectively, the “Seller Exculpation Parties”), arising out of or in
connection with this Agreement or the transactions contemplated hereby.  Buyer
agrees to look solely to Seller and its assets (including the Purchase Price)
for the satisfaction of any liability or obligation arising under this Agreement
or the transactions contemplated hereby, or for the performance of any of the
covenants, warranties or other agreements contained herein or in documents
executed pursuant hereto, and further agrees not to sue or otherwise seek to
enforce any personal obligation against any of the Seller Exculpation Parties
with respect to any matters arising out of or in connection with this Agreement
(or any documents executed pursuant hereto) or the transactions contemplated
hereby.  Without limiting the generality of the foregoing provisions of this
Paragraph 29.18.1, Buyer hereby unconditionally and irrevocably waives any and
all claims and causes of action of any nature whatsoever it may now or hereafter
have against the Seller Exculpation Parties, and hereby unconditionally and
irrevocably releases and discharges the Seller Exculpation Parties from any and
all liability whatsoever which may now or hereafter accrue in favor of Buyer
against the Seller Exculpation Parties in connection with or arising out of this
Agreement (or any documents executed pursuant hereto) or the transactions
contemplated hereby.  Notwithstanding the foregoing, the foregoing limitation
shall not apply in the event of an improper distribution by Seller to its
Members in breach of the last sentence of the second to last paragraph of
Paragraph 14 but only to the extent of such improper distribution.
 
29.18.2 Seller agrees that it does not have and will not have any claims or
causes of action against any disclosed or undisclosed officer, director,
employee, trustee, shareholder, partner, principal, parent, subsidiary or other
affiliate of Buyer, including, or any officer, director, employee, trustee,
shareholder, partner, member, or principal of any such parent, subsidiary or
other affiliate of Buyer (collectively, the “Buyer Exculpation Parties”),
arising out of or in connection with this Agreement or the transactions
contemplated hereby.  Subject to and without modification of the liquidated
damage provisions set forth in Paragraph 17.1 above, Seller agrees to look
solely to Buyer and its assets for the satisfaction of any liability or
obligation arising under this Agreement or the transactions contemplated hereby,
or for the performance of any of the covenants, warranties or other agreements
contained herein or in documents executed pursuant hereto, and further agrees
not to sue or otherwise seek to enforce any personal obligation against any of
the Buyer Exculpation Parties with respect to any matters arising out of or in
connection with this Agreement (or any documents executed pursuant hereto) or
the transactions contemplated hereby.  Without limiting the generality of the
foregoing provisions of this Paragraph 29.18.2, Seller hereby unconditionally
and irrevocably waives any and all claims and causes of action of any nature
whatsoever it may now or hereafter have against the Buyer Exculpation Parties,
and hereby unconditionally and irrevocably releases and discharges the Buyer
Exculpation Parties from any and all liability whatsoever which may now or
hereafter accrue in favor of Seller against the Buyer Exculpation Parties in
connection with or arising out of this Agreement (or any documents executed
pursuant hereto) or the transactions contemplated hereby.
 
29.18.3 The provisions of this Paragraph 29.18 shall survive the termination of
this Agreement and the Close of Escrow and not be merged with the Grant Deed.
 
29.19 Cooperation With Buyer’s Auditors and SEC Filings
 
.  Seller shall reasonably cooperate with Buyer to provide Buyer (at Buyer’s
sole cost and expense) copies of, or reasonable access to, such information as
may be reasonably requested by Buyer, to the extent in the possession of Seller,
to enable Buyer’s auditor (Deloitte & Touche LLP or any successor auditor
selected by Buyer) to conduct an audit of the expenses of the operation of the
Property for the year to date of the year in which Closing occurs and the year
immediately preceding the year in which Closing occurs.  Seller shall cooperate
with Buyer’s auditor on, and subject to, the same terms as set forth above in
this Section in the conduct of such audit.  In addition, Seller agrees to
provide to Buyer’s auditor, if requested by such auditor, historical expense
statements for the operation of the Property, whether required before or after
Closing, but only to the extent such expense statements are in the possession of
Seller.  Without limiting the foregoing, Seller shall furnish to Buyer such
Property expenses information as may be reasonably required by Buyer or any
affiliate of Buyer to make any filings required by law with the SEC or other
governmental authority; provided the foregoing obligations of Seller shall be
limited to providing such information or documentation as may be in the
possession of Seller.  This Section will survive the Close of Escrow.
 
29.20 Guaranty
 
.  Guarantor joins in this Agreement solely for the purpose of irrevocably,
absolutely and unconditionally guaranteeing the payment and performance by Buyer
of its obligations pursuant to Paragraph 6.4 of this Agreement.  Guarantor
understands and agrees that Seller may look first to Guarantor as primary
obligor for the payment and the performance of Buyer’s obligations guaranteed by
Guarantor, including, but not limited to, for the payment of damages arising
from Buyer’s breach of such obligations, together with costs of enforcement of
such guaranty.  Guarantor waives and relinquishes all rights and defenses of a
guarantor or surety, now existing or hereafter arising, known or unknown, and
Guarantor agrees that the validity of this section and Guarantor’s obligations
hereunder shall not be affected, delayed, limited or impaired by any event
whatsoever, including, but not limited to, (i) the merger, consolidation,
dissolution, cessation of business or liquidation of Buyer, (ii) the financial
decline or bankruptcy of Buyer, (iii) any stay, extension or discharge that may
be granted to Buyer by any court in proceedings under the Bankruptcy Code, or
any amendments thereof, or under any other law, (iv) Seller’s compromise or
settlement, with or without release, of any other party, (v) Seller’s failure to
file suit against Buyer, regardless of whether Buyer is becoming insolvent, is
believed to be about to leave the state or any other circumstance, (vi) Seller’s
failure to give the Guarantor notice of Buyer’s breach, (vii) the
unenforceability of any liability, obligation or covenant against Buyer for any
reason, (viii) the execution, modification or amendment of this Agreement, (ix)
Buyer’s failure to exercise diligence in collection or enforcement, (x) the
termination of any relationship between the Guarantor and Buyer, or (xi) Buyer’s
change of name or the use of any other name.  Guarantor shall not be entitled to
require that Seller or Buyer marshal assets, and the benefit of any rule of law
or equity to the contrary is hereby expressly waived by the
Guarantor.  Guarantor waives all suretyship defenses to the maximum extent
permitted under applicable law.
 

 

 

 

 

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IN WITNESS WHEREOF, Buyer, Guarantor and Seller have executed this Agreement as
of the day and year first written above.
 
“Buyer”
HINES GLOBAL REIT 550 TERRY FRANCOIS LP, a
Delaware limited partnership
 
 
By:  HINES GLOBAL REIT 550 TERRY FRANCOIS
        GP LLC, a Delaware limited liability company, its
        general partner
      By:   /s/ Ryan T. Sims     Name:   Ryan T. Sims     Title:   Manager      

 
THE UNDERSIGNED GUARANTOR EXECUTED THIS AGREEMENT SOLELY FOR PURPOSES OF
AGREEING TO SECTION 29.20 ABOVE.
 
 
“Guarantor”
HINES GLOBAL REIT PROPERTIES, L.P.
 
 
By:  Hines Global REIT, Inc.
        General Partner
      By:   /s/ Ryan T. Sims     Title:  Chief Financial Officer and Secretary  
   

 
 
 
 

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“Seller”
GLL TERRY FRANCOIS BLVD., LLC,
a Delaware limited liability company
     
By: GLL USA Management LLC
       Its Manager
      By:          /s/ Jochecn Schnier       Name:   Jochen Schnier     Title: 
 Chief Operating Officer         By:  /s/ James H. Cunningham, Jr.      Name: 
James H. Cunningham, Jr.      Title:  Chief Financial Officer           

 

 

 
 
 

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Acceptance by Escrow Holder:
 
First American Title Insurance Company hereby acknowledges that it has received
originally executed counterparts or a fully executed original of the foregoing
Agreement of Purchase and Sale and Joint Escrow Instructions and agrees to act
as Escrow Holder thereunder and to be bound by and perform the terms thereof as
such terms apply to Escrow Holder.
 
Dated:  August 7, 2012
First American Title Insurance Company
          By:
/s/ Ted V. Bigornia
 
      Name:  Ted V. Birgornia
 
             Its:  Authorized Agent

 

 
 
 

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