Exhibit 10.56

AGREEMENT OF PURCHASE AND SALE

For

Nashville Flex Portfolio

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THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is made and entered into
as of this 25th day of October, 2007 (the “Contract Date”) by and between
FirstCal Industrial 2 Acquisition, LLC (“Seller”), and KBS Nashville Industrial
Portfolio I, LLC, a Delaware limited liability company (“Purchaser”).

1. SALE.

Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase
from Seller, for the purchase price set forth below and on the terms and
conditions set forth in this Agreement, all of the following:

(a) those certain tracts or parcels of land, together with all rights, easements
and interests appurtenant thereto including, but not limited to, any streets or
other public ways adjacent to said tracts or parcels and any water or mineral
rights owned by, or leased to, Seller, which is described on Exhibit A attached
hereto and made a part hereof (the “Land”);

(b) all of the buildings, structures, fixtures and other improvements located on
the Land, including, but not limited to, the building commonly known as 2515
Perimeter Place Drive, 500 Royal Parkway, 2525 Perimeter Place Drive, 431 Great
Circle Road, 501 Mainstream Drive, and 533 Mainstream Drive, Nashville,
Tennessee and all other on-site structures, systems, and utilities associated
with the building (all such improvements being referred to herein as the
“Improvements”), but excluding improvements, if any, owned by any tenants
located therein;

(c) Seller’s right, title and interest in those certain leases and other
agreements to occupy all or any portion of any or all of the Land and the
Improvements that are in effect on the Contract Date and are listed on Schedule
1(c) attached hereto or into which Seller enters prior to Closing (as
hereinafter defined) pursuant to the terms of this Agreement (collectively, the
“Leases”);

(d) all of Seller’s right, title and interest in and to all tangible personal
property upon the Land or within the Improvements, including, without
limitation, heating, ventilation and air conditioning systems and equipment,
appliances, furniture, tools and supplies, owned by Seller and used by Seller in
connection with the ownership and operation of the Land and the Improvements
(the “Personal Property”), but excluding any and all items of tangible personal
property owned by the tenants;

(e) all of Seller’s right, title and interest in and to only those contracts and
agreements to which Seller is party (other than Leases) relating to the upkeep,
repair, maintenance, leasing or operation of any or all of the Land,
Improvements and the Personal Property that are not terminable by their terms
without payment of a fee or penalty and which are listed on Schedule 1(e)
attached hereto (collectively, the “Contracts”). Notwithstanding the foregoing,
Seller shall terminate at Closing, and Purchaser shall not assume, any property
management or leasing agreement affecting the Property (as hereinafter defined);
and

(f) to the extent transferable, all of Seller’s right, title and interest (if
any) in and to all intangible assets of any nature relating to any or all of the
Land, the Improvements and the Personal Property, including, but not limited to,
(i) all guaranties and warranties issued with respect to the Personal Property
or the Improvements; (ii) all plans and specifications, drawings

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and prints describing the Improvements; (iii) trademarks or trade names
associated with the Improvements; and (iv) all licenses, permits, approvals,
certificates of occupancy, dedications, subdivision maps and entitlements now or
hereafter issued, approved or granted by any governmental authority in
connection with the Land or the Improvements (collectively, the “Intangibles”).

The Land, the Improvements, the Personal Property, the Contracts, the Leases and
the Intangibles are hereinafter referred to collectively as the “Property.”

2. PURCHASE PRICE. The total purchase price to be paid to Seller by Purchaser
for the Property shall be Fifty-Three Million Five Hundred Thousand and NO/100
Dollars ($53,500,000.00) (the “Purchase Price”), plus or minus prorations as
hereinafter provided.

3. CLOSING.

The purchase and sale contemplated herein shall be consummated at a closing
(“Closing”) to take place by mail or at the offices of the Title Company
(defined below). The Closing shall occur on November 15, 2007, or as otherwise
agreed by the parties (the “Closing Date”).

4. DEPOSIT.

Within one (1) business day of the execution and delivery of this Agreement by
Purchaser and Seller, Purchaser shall deposit, as its earnest money deposit, the
sum of Six Million and No/100 Dollars ($6,000,000.00) [the “Earnest Money”] in
an escrow with the Title Company (4100 Newport Place, Suite 120, Newport Beach,
California 92660, Attn: Joy Eaton; 949-724-3112) (the “Escrow”) pursuant to
escrow instructions in the form attached hereto as Exhibit B. The Earnest Money
and all interest earned thereon are herein collectively referred to as the
“Deposit.” Except as otherwise expressly set forth herein, the Deposit shall be
applied against the Purchase Price at Closing. The Deposit shall be
non-refundable to Purchaser except as otherwise expressly provided for herein.
Notwithstanding anything stated to the contrary in this Agreement, the only
circumstances under which Seller shall be entitled to receive the Deposit is if
Purchaser fails to purchase the Property when it is obligated to do so under
this Agreement.

5. SELLER’S DELIVERIES.

Seller covenants that prior to August 23, 2007 Seller, to Seller’s knowledge,
delivered or made available to Purchaser in the Nashville office of First
Industrial Realty Trust, Inc., a Maryland corporation and an affiliate of Seller
(“FR”), at the following address: 1420 Donelson Pike, Suite B-17, Nashville,
Tennessee 37217 (the “Nashville Office”), all of the documents and agreements
described on Exhibit C attached hereto and made a part hereof that are in
Seller’s possession (the “Documents”). From and after August 23, 2007, Seller
did not add any additional Documents to its files in the Nashville Office that
were not otherwise delivered to Seller prior to the Contract Date. From the date
hereof until the Closing Date, Seller shall continue to make available to
Purchaser or its agents for inspection in the Nashville office of FR, all, to
Seller’s knowledge, of the Documents in Seller’s possession. The Documents that
are furnished or made available to Purchaser pursuant to this Section 5 are
being furnished or made

 

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available to Purchaser for information purposes only and without any
representation or warranty by Seller with respect thereto, express or implied,
except as may otherwise be expressly set forth in this Section 5 or Section 8.1
below, in either case as limited by Sections 8.2 and 8.3 below.

Purchaser has informed Seller that Purchaser is required by law to complete with
respect to certain matters relating to the Property an audit commonly known as a
“3-14” Audit (“Purchaser’s 3-14 Audit”). In connection with the performance of
Purchaser’s 3-14 Audit, Seller shall during the Inspection Period (as
hereinafter defined) deliver to Purchaser, without representation or warranty,
concurrently with the delivery of the Documents, (i) the documents which are
described on Exhibit H attached hereto, to the extent in existence and in
Seller’s possession (collectively, “Purchaser’s 3-14 Audit Documents”) and
(ii) provide to Purchaser in written form, answers to such questions relating to
the Property which are set forth in Exhibit H, to the extent such information is
in existence and in Seller’s possession.

The Documents and the Purchaser’s 3-14 Audit Documents shall be collectively
referred to in this Agreement as the “Property Documents”.

The originals (and where originals are not available or in Seller’s possession
or control, copies) of all Property Documents shall become the property of
Purchaser upon Closing. Upon Closing, Seller may retain copies of any Property
Documents which Seller may make at Seller’s sole cost and expense.

6. INSPECTION PERIOD.

6.1. Basic Project Inspection. Purchaser acknowledges and agrees that it has
completed its due diligence inspection of the Property (“Basic Project
Inspection”) and hereby waives any right to terminate this Agreement on the
basis of the results of such Basic Project Inspection (provided, however, that
Purchaser does not waive any of its termination rights expressly provided for in
this Agreement).

6.2. Purchaser’s Undertaking. Purchaser shall not conduct (or cause to be
conducted) any physically intrusive investigation, examination or study of the
Land or the Improvements (any such investigation, examination or study, an
“Intrusive Investigation”) as part of its Basic Project Inspection or otherwise
without the prior written consent of Seller, which consent shall not be
unreasonably withheld. Purchaser and Purchaser’s employees, third party
consultants, lenders, engineers, accountants and attorneys (collectively,
“Purchaser’s Representatives”) shall, in performing its Basic Project
Inspection, comply with any and all applicable laws, ordinances, rules, and
regulations. Except to the extent required by any applicable statute, law,
regulation or governmental authority in its capacity as a contract purchaser
(i.e. not an owner), prior to the Closing, neither Purchaser nor Purchaser’s
Representatives shall report the results of the Basic Project Inspection or any
Intrusive Investigation to any governmental or quasi-governmental authority
under any circumstances without obtaining Seller’s express written consent,
which consent may be withheld in Seller’s sole discretion. If this transaction
fails to close for any reason other than due to Seller’s default, Purchaser
shall provide Seller with copies of any and all final, third party reports
prepared on behalf of Purchaser as part of the Basic Project Inspection without
any representation or warranty regarding the accuracy thereof. Purchaser and
Purchaser’s Representatives shall: (a) maintain comprehensive general liability
(occurrence) insurance in an

 

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amount of not less than $2,000,000 covering any accident arising in connection
with the presence of Purchaser and Purchaser’s Representatives at the Land and
the Improvements and the performance of any investigations, examinations or
studies thereon, and Purchaser shall deliver a certificate of insurance (in form
and substance reasonably satisfactory to Seller), naming Seller as an additional
insured thereunder, verifying the existence of such coverage to Seller prior to
entry upon the Land or the Improvements; and (b) promptly pay when due any third
party costs associated with its Basic Project Inspection. Purchaser shall, at
Purchaser’s sole cost, repair any damage to the Land or the Improvements
resulting from the Basic Project Inspection or any Intrusive Investigation, and,
to the extent Purchaser or Purchaser’s Representatives alter, modify, disturb or
change the condition of the Land or the Improvements as part of the Basic
Project Inspection, any Intrusive investigation or otherwise, Purchaser shall,
at Purchaser’s sole cost, restore the Land and the Improvements to the condition
in which the same were found before such alteration, modification, disturbance
or change. Purchaser hereby indemnifies, protects, defends and holds Seller,
Seller’s affiliates, their respective partners, shareholders, officers and
directors, and all of their respective successors and assigns (collectively, the
“Seller Indemnified Parties”) harmless from and against any and all losses,
damages, claims, causes of action, judgments, damages, costs and expenses
(including reasonable attorneys’ fees and court costs) (collectively, “Losses”)
that Seller or any Seller Indemnified Party suffers or incurs as a result of, or
in connection with Purchaser’s Basic Project Inspection, any Intrusive
Investigation or Purchaser’s or Purchaser’s Representatives entry upon the Land
or the Improvements hereunder. Purchaser’s undertakings pursuant to this
Section 6.2 shall indefinitely survive a termination of this Agreement or the
Closing and shall not be merged into any instrument of conveyance delivered at
Closing. Notwithstanding anything to the contrary in this Section 6.2,
Purchaser’s indemnification obligations under this Section 6.2 shall not apply
to (a) any loss arising from Seller’s own negligence or willful misconduct or
(b) Purchaser’s discovery of existing conditions on the Property, except to the
extent that Purchaser, or any party acting on behalf of Purchaser, exacerbates
or aggravates any such existing condition.

6.3. Confidentiality. Purchaser agrees to use reasonable efforts to maintain in
confidence the information and terms contained in the Evaluation Materials
(defined below) and this Agreement (collectively, the “Transaction
Information”). Purchaser shall not disclose all or any portion of the
Transaction Information to any person or entity and shall maintain the
Transaction Information in the strictest confidence; provided, however, that
Purchaser may disclose the Transaction Information: (a) to Purchaser’s
Representatives to the extent that Purchaser’s Representatives reasonably need
to know such Transaction Information in order to assist, and perform services on
behalf of, Purchaser; (b) on not less than two (2) business days prior written
notice, to the extent required by any applicable statute, law, regulation or
governmental authority; (c) in connection with any litigation that may arise
between the parties in connection with the transactions contemplated by this
Agreement; and (d) after the Closing. Purchaser shall advise Purchaser’s
Representatives of the provisions of this Section 6.3 and cause such parties to
maintain the Transaction Information as confidential information and otherwise
comply with the terms of this Section 6.3. For purposes of this Agreement, the
term “Evaluation Materials” shall mean the Property Documents and any other
materials or information delivered or made available by Seller or its agents to
Purchaser or Purchaser’s Representatives together with (i) all analyses,
compilations, studies or other documents prepared by (or on behalf of)
Purchaser, which contain or otherwise reflect such information or materials and
(ii) the results of any studies, analysis or investigation of the Property
undertaken by or on behalf of Purchaser. Purchaser agrees that the Evaluation
Materials shall be used solely for purposes of evaluating the acquisition and
potential ownership and

 

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operation of the Property. Notwithstanding anything contained herein to the
contrary, it is understood and agreed that money damages would not be a
sufficient remedy for any breach of this Section 6.3 by Purchaser or Purchaser’s
Representatives and that Seller shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such breach of this
Section 6.3 by Purchaser or Purchaser’s Representatives. Purchaser further
agrees to waive any requirement for the security or posting of any bond in
connection with such remedy. Such remedy shall not be deemed to be the exclusive
remedy for breach of this Section 6.3 but shall be in addition to all other
remedies available at law or in equity to Seller. In the event this Agreement is
terminated for any reason whatsoever, Purchaser shall promptly (and in any event
within three (3) business days after the effective date of termination) return
to Seller the Property Documents and any and all copies of the Property
Documents and destroy any and all other Evaluation Materials. The undertakings
of Purchaser pursuant to this Section 6.3 shall survive the termination of this
Agreement.

Notwithstanding the foregoing provisions of this Section 6.3 and anything to the
contrary set forth in Section 6.2 herein, nothing contained herein or therein
shall impair Purchaser’s (or its permitted assignee’s) right to disclose
information relating to this Agreement or the Property (a) to any due diligence
representatives and/or consultants that are engaged by, work for or are acting
on behalf of, any securities dealers and/or broker dealers evaluating Purchaser
or its permitted assignees, provided such parties agree to maintain such
information in confidence, (b) in connection with any filings (including any
amendment or supplement to any S-11 filing) with governmental agencies
(including the SEC) by any real estate investment trust (“REIT”) holding an
interest (direct or indirect) in any permitted assignee of Purchaser, and (c) to
any broker/dealers in the REIT’s broker/dealer network and any of the REIT’s
investors.

7. TITLE AND SURVEY MATTERS.

7.1. Conveyance of Title. At Closing, Seller agrees to deliver to Purchaser a
special warranty deed (“Deed”), in recordable form, conveying the Land and the
Improvements to Purchaser, free and clear of all liens, claims and encumbrances
except for the following items (the “Permitted Exceptions”): (1) taxes not yet
due and payable; (2) all exceptions reflected in the Pro Formas; (3) the rights
of tenants, as tenants only (with no right to purchase all or portions of the
Property), pursuant to the Leases; (4) matters arising out of any act of
Purchaser or Purchaser’s Representatives; and (5) local, state and federal laws,
ordinances, rules and regulations, including, but not limited to, zoning
ordinances (those liens, claims, encumbrances and matters referred to in items
(1) and (3)-(5) above, the “Existing Permitted Exceptions”).

7.2. Title Commitment. Seller acknowledges that Purchaser has delivered to
Seller a commitment or commitments (collectively, the “Title Commitment”) issued
by Chicago Title Insurance Company (the “Title Company”), for an ALTA extended
coverage owner’s title insurance policy with respect to the Land (the “Title
Policy”), in the full amount of the Purchase Price, together with copies of all
recorded documents evidencing title exceptions raised in “Schedule B” of such
Title Commitment. The date on which Purchaser has received the Title Commitment
is referred to as the “Commitment Delivery Date.”

7.3. Survey. Seller has delivered or made available to Purchaser copies of any
existing surveys of the Land and the Improvements (the “Surveys”) together with
the Property Documents. Purchaser may obtain, at Purchaser’s cost, obtain
updates of the Surveys (an “Updated Surveys”) certified to Purchaser and its
lenders.

 

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7.4. Defects and Cure.

7.4.1. Purchaser’s Defect Notices. Purchaser shall accept title to the Land and
the Improvements subject to all of the Existing Permitted Exceptions.
Furthermore, Purchaser hereby accepts those exceptions listed in those certain
four (4) Proforma Owner’s Policies numbered 520932, 520933, 520938 and 520939
(collectively, the “Pro Formas”), copies of which Purchaser’s counsel e-mailed
to Seller’s counsel on October 10, 2007. For purposes of this Agreement, the
term Title Policy shall mean an ALTA Owner’s Policy of Title Insurance, issued
by the Title Company as of the date and time of the recording of the Deed, in
the amount of the Purchase Price, insuring Purchaser as owner of good,
marketable and indefeasible fee simple title to the Land, subject only to the
Permitted Exceptions for the Land. Any exceptions to title (other than the
Existing Permitted Exceptions) that arise between the effective date of the
Title Commitment or the Updated Surveys, as the case may be, and the Closing are
referred to herein as “New Defects.” Purchaser shall have two (2) business days
after its receipt of written notice or updated title evidence reflecting any New
Defects within which to notify Seller in writing (a “Defect Notice”) of any such
New Defects to which Purchaser reasonably objects. Those New Defects to which
Purchaser does not object in a Defect Notice given within the applicable two
(2) business day period shall be deemed Permitted Exceptions.

7.4.2. Seller’s Response Notices. Seller shall be obligated to cure and remove
the liens of any mortgage or deed of trust evidencing an indebtedness owed by
Seller. Moreover, Seller shall be obligated to cure and remove all of the
following classes of New Defects (“Mandatory Cure Items”), if any: (i) tax liens
for delinquent ad valorem real estate taxes; (ii) mechanics liens pursuant to a
written agreement either between (x) the claimant (the “Contract Claimant”) and
Seller or its employees, officers or managing agents (the “Seller Parties”) or
(y) the Contract Claimant and any other contractor, materialman or supplier with
which Seller or the Seller Parties have a written agreement; and (iii) broker’s
liens pursuant to a written agreement between the broker and Seller or any
Seller Parties. Seller shall be permitted to cure Mandatory Cure Items that in
the aggregate are for a liquidated amount of $50,000 or less by procuring title
insurance on terms reasonably acceptable to Purchaser. Seller may elect, in its
sole discretion, to cure and remove any Disclosed Exception identified by
Purchaser in a Defect Notice by delivering written notice to Purchaser (a
“Seller’s Response Notice”) indicating that Seller has elected to cure and
remove any such matters (any such matters that Seller elects to cure and remove,
“Seller Cure Items”) not later than the sooner to occur of (i) three
(3) business days after Seller’s receipt of the applicable Defect Notice; or
(ii) Closing. Seller shall have until Closing to cure and remove any Seller Cure
Items. If Seller fails to provide a Seller’s Response Notice, Seller shall be
deemed to have delivered a Seller’s Response Notice electing not to cure and
remove any New Defects identified by Purchaser in the applicable Defect Notice.
Notwithstanding anything to the contrary set forth herein, Seller shall be
permitted to cure any encroachments by procuring title insurance on terms
reasonably acceptable to Purchaser. If Seller elects (or is deemed to elect) not
to cure and remove any New Defects, Purchaser may elect, in its sole discretion
and as its sole remedy hereunder, at law or in equity, by delivery of written
notice to Seller not later than the first to occur of (i) the date that is three
(3) business days after Purchaser’s receipt (or deemed receipt) of a Seller’s
Response Notice; or (ii) Closing, to either (a) proceed to Closing and accept
title to

 

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the Land and the Improvements, subject to those New Defects, as the case may be,
that Seller has refused (or is deemed to have refused) to cure or remove,
without deduction or offset against the Purchase Price and with such New Defects
in that case being deemed to be Permitted Exceptions or (b) terminate this
Agreement, in which event the Deposit shall be delivered to Purchaser and
neither party shall have any further liabilities or obligations pursuant to this
Agreement except those liabilities or obligations that expressly survive
termination of this Agreement. If Purchaser fails to timely notify Seller of its
election pursuant to the preceding sentence, Purchaser shall be deemed to have
elected alternative (a).

7.5. Title Cure Provisions. If, on or prior to Closing, Seller fails to cure and
remove each New Defect (other than Mandatory Cure Items), as the case may be,
that Seller agreed to cure (pursuant to a Seller’s Response Notice), Purchaser
may, at its option and as its sole remedy hereunder, at law or in equity, either
(i) terminate this Agreement by written notice to Seller delivered on or prior
to Closing, in which event (a) the Deposit shall be returned to Purchaser, and
(b) this Agreement, without further action of the parties, shall become null and
void and neither party shall have any further liabilities or obligations under
this Agreement except for those liabilities or obligations which expressly
survive termination of this Agreement; or (ii) elect to consummate the Closing
and accept title to the Land and Improvements subject to all those New Defects
that Seller has failed to cure or remove (in which event, all such exceptions to
title shall be deemed Permitted Exceptions), without deduction or offset against
the Purchase Price. If Purchaser fails to make either such election, Purchaser
shall be deemed to have elected option (ii). If Seller fails to cure and remove
any Mandatory Cure Items on or prior to Closing, Purchaser may, at its option
and by delivery of written notice to Seller on or prior to Closing, terminate
this Agreement, in which event the Deposit shall be returned to Purchaser and
this Agreement, without further action of the parties, shall become null and
void and neither party shall have any further liabilities or obligations under
this Agreement except for those liabilities and obligations which expressly
survive a termination of this Agreement.

7.6. Additional Title Matters.

7.6.1. Mercantile Lease. Reference is hereby made to (i) that certain Lease
Agreement dated May 25, 1989 by and between Joseph V. Russell & Associates
(“Russell”) and Mercantile Properties, Inc. (“Mercantile”), as amended by that
certain Lease Amendment No. 1, dated April 23, 1990 by and between Russell and
Mercantile (collectively, the “Mercantile Lease”) and (ii) that certain Short
Form Lease dated May 25, 1989 by and between Russell and Mercantile (the
“Mercantile Short Form Lease”). Seller covenants to use reasonable efforts to
procure that certain Lease Amendment No. 2 (which amends the Mercantile Lease)
and that certain First Amendment to Short Form Lease Agreement (which amends the
Mercantile Short Form Lease), both of which are attached hereto in Schedule
7.6.1 (collectively, the “Mercantile Lease Amendments”). In no event shall
Purchaser be entitled to terminate this Agreement on the basis of Seller’s
failure to receive, on or prior to Closing, either or both of the Mercantile
Lease Amendments. In the event Seller fails to obtain, as of the Closing, either
or both of the Mercantile Lease Amendments, then, at Closing, Seller shall
execute and deliver to the Title Company that certain Affidavit Regarding
Mercantile Lease attached hereto in Schedule 7.6.1.

7.6.2. Southeastern Telecom Memorandum of Lease. Reference is hereby made to
that certain Memorandum of Lease dated June 4, 1996 recorded June 6, 1996 in

 

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the records of Davidson County, Tennessee as Book 10078, Pages 444-46. Seller
covenants to use reasonable efforts to procure that certain Termination of
Memorandum of Lease (the “Memorandum Termination”) which is attached hereto in
Schedule 7.6.2. In no event shall Purchaser be entitled to terminate this
Agreement on the basis of Seller’s failure to receive, on or prior to the
Closing, the Memorandum Termination. In the event Seller fails to obtain, as of
the Closing, the Memorandum Termination, then, at Closing, Seller shall execute
and deliver to the Title Company that certain Affidavit Regarding Memorandum of
Lease attached hereto in Schedule 7.6.2.

7.7. Conditions Precedent.

7.7.1. Conditions Precedent to Purchaser’s Performance. Purchaser’s obligation
to purchase the Property is subject to the satisfaction or written waiver of all
the conditions described below:

(a) Issuance of Title Policy. At the Closing, the Title Company shall have
irrevocably committed to issue the Title Policy, subject only to the Permitted
Exceptions, upon Closing. The condition described in this Section 7.7.1(a),
however, shall be rendered null and void if the Title Company does not commit to
issue the Title Policy, subject only to the Permitted Exceptions, as a result of
the failure of Purchaser to satisfy its obligations hereunder regarding the
issuance of the Title Policy.

(b) Validity of Representations and Warranties. All representations and
warranties by Seller in this Agreement shall be true and correct in all material
respects as of Closing.

(c) Performance of Covenants. Seller shall have duly performed all material
covenants and material agreements to be performed under this Agreement,
including, without limitation, the timely delivery of all documents and
instruments to the Title Company as required by Section 12 hereof.

(d) Estoppel Certificates. No less than three (3) business days prior to the
Closing Date, Seller shall have delivered or caused to be delivered to
Purchaser, with respect to the Improvements, estoppel certificates satisfying
the requirements set forth in Section 10.6 hereof.

7.7.2. Conditions Precedent to Seller’s Performance. Seller’s obligation to sell
the Property is subject to the satisfaction or written waiver of all conditions
set forth below:

(a) Performance of Covenants. Purchaser shall have duly performed all covenants
and agreements to be performed by Purchaser under this Agreement, including,
without limitation, the timely delivery of all documents and instruments to the
Title Company as required by Section 13 hereof.

(b) Validity of Representations and Warranties. All representations and
warranties by Purchaser in this Agreement shall be true and correct in all
material respects as of Closing.

 

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8. SELLER’S COVENANTS AND REPRESENTATIONS.

8.1. Seller’s Representations. Seller represents and warrants to Purchaser that
the following matters are true as of the Contract Date, in all material
respects, except as may otherwise be provided in the Documents.

8.1.1. Litigation. There is no pending or, to Seller’s knowledge, threatened
litigation or governmental proceedings against the Property or Seller in
connection with the Property that would adversely affect the Property.

8.1.2. United States Person. Seller is a “United States Person” within the
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended,
and shall execute and deliver an “Entity Transferor” certification at Closing.

8.1.3. Condemnation. To Seller’s knowledge, there is no pending or contemplated
condemnation or other governmental taking proceedings affecting all or any part
of the Land and the Improvements.

8.1.4. Environmental Matters. To Seller’s knowledge, Seller has received no
written notification from any governmental authority that (x) all or some
portion of the Land and the Improvements violates any Environmental Laws (as
hereinafter defined); or (y) any Hazardous Substances have been stored or
generated at, released or discharged from or are present upon the Land and the
Improvements, except in the ordinary course of business and in accordance with
all Environmental Laws. As used herein, “Hazardous Substances” means all
hazardous or toxic materials, substances, pollutants, contaminants, or wastes
currently identified as a hazardous substance or waste in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (commonly known
as “CERCLA”), as amended, the Superfund Amendments and Reauthorization Act
(commonly known as “SARA”), the Resource Conservation and Recovery Act (commonly
known as “RCRA”), or any other federal, state or local legislation or ordinances
applicable to the Land or the Improvements. As used herein, the term
“Environmental Laws” shall mean all federal, state and local environmental laws,
rules, statutes, directives, binding written interpretations, binding written
policies, ordinances and regulations issued by any governmental authority and in
effect as of the date of this Agreement with respect to or which otherwise
pertain to or affect the Land or the Improvements, or any portion thereof, the
use, ownership, occupancy or operation of the Land or the Improvements, or any
portion thereof, or any owner of the Land, and as same have been amended,
modified or supplemented from time to time prior to the date of this Agreement,
including but not limited to CERCLA, the Hazardous Substances Transportation Act
(49 U.S.C. § 1802 et seq.), RCRA, the Water Pollution Control Act (33 U.S.C.
§ 1251 et seq.), the Safe Drinking Water Act (42 U.S.C. § 300f et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.), the Solid Waste Disposal Act
(42 U.S.C. § 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601
et seq.), the Emergency Planning and Community Right-to-Know Act of 1986
(42 U.S.C. § 11001 et seq.), the Radon and Indoor Air Quality Research Act
(42 U.S.C. § 7401 note, et seq.), SARA, comparable state and local laws, and any
and all rules and regulations which have become effective prior to the date of
this Agreement under any and all of the aforementioned laws.

 

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8.1.5. Due Authorization; Conflict. Seller is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and is qualified to do business in and is in good standing under the
laws of the State of Tennessee. Seller has full power to execute, deliver and
carry out the terms and provisions of this Agreement and each of the other
agreements, instruments and documents herein required to be made or delivered by
Seller pursuant hereto, and has taken, or will take prior to Closing, all
necessary action to authorize the execution, delivery and performance of this
Agreement and such other agreements, instruments and documents. The individuals
executing this Agreement and all other agreements, instruments and documents
herein required to be made or delivered by Seller pursuant hereto on behalf of
Seller are and shall be duly authorized to sign the same on Seller’s behalf and
to bind Seller thereto. The execution and delivery of, and consummation of the
transactions contemplated by, this Agreement are not prohibited by, and will not
conflict with, constitute grounds for termination of, or result in the breach
of, any of the agreements or instruments to which Seller is now party or by
which it is bound, or any order, rule or regulation of any court or other
governmental agency or official.

8.1.6. Enforceability. This Agreement has been, and each and all of the other
agreements, instruments and documents herein required to be made by Seller
pursuant hereto have been, or on the Closing Date will have been, executed by or
on behalf of Seller, and when so executed, are and shall be legal, valid and
binding obligations of Seller enforceable against Seller in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and, as to enforceability, the general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

8.1.7. Leases; Tenant Improvements. Copies of all Leases in effect as of the
Contract Date (the “Existing Leases”), and all amendments thereto and guaranties
thereof, if any, have been furnished by Seller to Purchaser and the copies so
provided are true and complete. The Existing Leases have not been amended,
modified or terminated (except for any amendments delivered to Purchaser
pursuant to the preceding sentence). To Seller’s knowledge, the Existing Leases
are presently in full force and effect.

8.1.8. Contracts; Other Agreements. Seller is not party to any service
contracts, management contracts or other comparable agreements that will be
binding upon the Land and the Improvements after Closing other than the
Contracts.

8.1.9. Bankruptcy Matters. Seller has not made a general assignment for the
benefit of creditors, filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by its creditors, suffered the appointment of
a receiver to take possession of substantially all of its assets, suffered the
attachment or other judicial seizure of substantially all of its assets,
admitted its inability to pay its debts as they come due, or made an offer of
settlement, extension or composition to its creditors generally.

8.1.10. No Brokers. To Seller’s knowledge, Seller has delivered or made
available as Documents true and complete copies of any and all listing
agreements, brokerage agreements, Leases or other comparable agreements
(collectively, “Brokerage Agreements”) into which Seller has entered in
connection with the Property, and pursuant to which a leasing commission or
finder’s fee may be payable subsequent to Closing.

 

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8.1.11. Employees. Seller has no employees at the Property.

8.1.12. 1031 Exchange. Seller recognizes and understands that this transaction
may be part of a contemplated “like kind” exchange for Purchaser under §1031 of
the Internal Revenue Code (“Purchaser’s Exchange”). As such, Seller agrees to
reasonably cooperate with Purchaser in effectuating Purchaser’s Exchange, which
cooperation may include the execution of documents and the taking of other
reasonable action, as is necessary in the opinion of Purchaser, to accomplish
Purchaser’s Exchange; provided, however, that Seller shall not be required to
assume any additional expense or liability in connection with, or as part of its
cooperation with, Purchaser’s Exchange or to agree to any extension of the
Closing Date beyond the date specified in Section 3. The covenant contained in
this Section 8.1.12 shall survive the Closing and shall not be merged into any
instrument of conveyance delivered at Closing.

8.1.13. Violation of Law. Seller has not received any written notice of any
violation of any laws, ordinances, rules or administrative or judicial orders
affecting or regarding the Property.

8.1.14. Patriot Act Compliance. Seller is not acting, directly or indirectly
for, or on behalf of, any person, group, entity or nation named by any Executive
Order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism) or the United States Treasury Department as a terrorist, “Specially
Designated National and Blocked Person,” or other banned or blocked person,
entity, or nation pursuant to any Law that is enforced or administered by the
Office of Foreign Assets Control, and is not engaging in this transaction,
directly or indirectly, on behalf of, or instigating or facilitating this
transaction, directly or indirectly, on behalf of, any such person, group,
entity or nation. The representation set forth in this Section 8.1.14 shall not
apply to the shareholders of First Industrial Realty Trust, Inc., a Maryland
corporation and an affiliate of Seller.

8.2. Seller’s Knowledge. All references in this Agreement to “Seller’s
knowledge,” “Seller’s actual knowledge” or words of similar import shall refer
only to the actual (as opposed to deemed, imputed or constructive) knowledge of
Michael Schack and Steven Preston without inquiry and, notwithstanding any fact
or circumstance to the contrary, shall not be construed to refer to the
knowledge of any other person or entity.

8.3. Limitations. The representations and warranties of Seller to Purchaser
contained in Section 8.1 hereof, as modified by the Closing Date Certificate (as
hereinafter defined) (the “Seller Representations” as of the Closing), shall
survive the Closing Date and the delivery of the Deed for a period of twelve
(12) months. No claim for a breach of any Seller Representation, or the failure
or default of a covenant or agreement of Seller that survives Closing, shall be
actionable or payable unless (a) the breach in question results from, or is
based on, a condition, state of facts or other matter which was not actually
disclosed to, or actually known by, Purchaser prior to Closing, (b) the valid
claims for all such breaches collectively aggregate more than Twenty-Five
Thousand and No/100 Dollars ($25,000.00), in which event the full amount of such
claims shall be actionable,

 

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and (c) written notice containing a description of the specific nature of such
breach shall have been delivered by Purchaser to Seller prior to the expiration
of said twelve (12) month survival period, and an action with respect to such
breach(es) shall have been commenced by Purchaser against Seller within eighteen
(18) months after Closing. Notwithstanding anything contained herein to the
contrary, the maximum amount that Purchaser shall be entitled to collect from
Seller in connection with all suits, litigation or administrative proceedings
resulting from all breaches by Seller of any Seller Representations or any
covenants of Seller shall in no event exceed $1,000,000.00 in the aggregate (the
“CAP”); provided, however, that the Cap shall not apply with respect to Sections
14 and 22 of this Agreement. Notwithstanding anything to the contrary contained
herein, if Purchaser is notified in any Document, or in writing by Seller, or
otherwise obtains actual (as opposed to deemed, imputed or constructive)
knowledge, that any Seller Representation made by Seller is not true or correct
as of the Contract Date, or that such Seller Representation is not true or
correct on or before the Closing, or is notified in any Document, or in writing
by Seller, or otherwise obtains actual (as opposed to deemed, imputed or
constructive) knowledge that Seller has failed to perform any covenant and
agreement herein contained, and Purchaser shall nevertheless acquire the
Property notwithstanding such fact, Purchaser shall not be entitled to commence
any action after Closing to recover damages from Seller due to such Seller
Representation(s) failing to be true or correct (and Purchaser shall not be
entitled to rely on such Seller Representation) or such covenant(s) and
agreement(s) having failed to be performed by Seller.

8.4. Representation Condition. It shall be a condition precedent to Purchaser’s
obligation to proceed to Closing that all of the Seller Representations are true
and correct in all material respects as of the Closing Date (the “Representation
Condition”). Notwithstanding anything contained herein to the contrary, if any
Seller Representation is untrue or inaccurate in any material respect and
Purchaser becomes aware of such untruth or inaccuracy prior to Closing,
Purchaser may elect, in its sole discretion and as its sole remedy hereunder, at
law or in equity, either to (i) terminate this Agreement by delivery of written
notice to Seller on or prior to Closing, whereupon the Deposit shall be promptly
returned to Purchaser and neither party shall have any further liability
hereunder, except for those liabilities that expressly survive a termination of
this Agreement; or (ii) proceed to Closing and accept the untruth or inaccuracy
of such Seller Representation with no further right to terminate the Agreement
(or pursue any other right or remedy) on the basis of the untruth or inaccuracy
thereof.

9. PURCHASER’S COVENANTS AND REPRESENTATIONS.

Effective as of the execution of this Agreement, Purchaser hereby covenants with
Seller, and represents and warrants to Seller, as follows:

9.1. 1031 Exchange. Purchaser recognizes and understands that this transaction
may be part of a contemplated “like kind” exchange for Seller under §1031 of the
Internal Revenue Code (“Seller’s Exchange”). As such, Purchaser agrees to
cooperate with Seller in effectuating Seller’s Exchange, which cooperation may
include the execution of documents and the taking of other reasonable action, as
is necessary in the opinion of Seller, to accomplish Seller’s Exchange;
provided, however, that Purchaser shall not be required to execute any documents
other than a simple consent, assume any additional expense or liability in
connection with, or as part of its cooperation with, Seller’s Exchange or to
agree to any extension of the Closing Date beyond the date specified in
Section 3. The covenant contained in this Section 9.1 shall survive the Closing
and shall not be merged into any instrument of conveyance delivered at Closing.

 

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9.2. Due Authorization. As of the Contract Date, Purchaser is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware. Purchaser has full power to execute, deliver
and carry out the terms and provisions of this Agreement and each of the other
agreements, instruments and documents herein required to be made or delivered by
Purchaser pursuant hereto, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and such other agreements,
instruments and documents. The individuals executing this Agreement and all
other agreements, instruments and documents herein required to be made or
delivered by Purchaser pursuant hereto on behalf of Purchaser are and shall be
duly authorized to sign the same on Purchaser’s behalf and to bind Purchaser
thereto.

9.3. Enforceability. This Agreement has been, and each and all of the other
agreements, instruments and documents herein required to be made by Purchaser
pursuant hereto have been, or on the Closing Date will have been, executed by
Purchaser or on behalf of Purchaser, and when so executed, are and shall be
legal, valid, and binding obligations of Purchaser enforceable against Purchaser
in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting the
rights of creditors generally and, as to enforceability, the general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law).

9.4. No Conflict. The execution and delivery of, and consummation of the
transactions contemplated by this Agreement is not prohibited by, and will not
conflict with, constitute grounds for termination of, or result in the breach of
any of the agreements or instruments to which Purchaser is now party or by which
it is bound, or any order, rule or regulation of any court or other governmental
agency or official.

9.5. Bankruptcy Matters. Purchaser has not made a general assignment for the
benefit of creditors, filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by its creditors, suffered the appointment of
a receiver to take possession of substantially all of its assets, suffered the
attachment or other judicial seizure of substantially all of its assets,
admitted its inability to pay its debts as they come due, or made an offer of
settlement, extension or composition to its creditors generally.

9.6. Patriot Act Compliance. Purchaser is not acting, directly or indirectly
for, or on behalf of, any person, group, entity or nation named by any Executive
Order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism) or the United States Treasury Department as a terrorist, “Specially
Designated National and Blocked Person,” or other banned or blocked person,
entity, or nation pursuant to any Law that is enforced or administered by the
Office of Foreign Assets Control, and is not engaging in this transaction,
directly or indirectly, on behalf of, or instigating or facilitating this
transaction, directly or indirectly, on behalf of, any such person, group,
entity or nation. The representation contained in this Section 9.6 shall not
apply with respect to the shareholders of any REIT that owns an interest in any
permitted assignee of Purchaser.

 

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10. ACTIONS AFTER THE CONTRACT DATE. The parties covenant to do the following
through the Closing Date:

10.1. Title. From and after the Contract Date, Seller shall not make any change
to the condition of title to either or both of the Land and the Improvements
that would change the condition of title approved or deemed approved by
Purchaser pursuant to Section 7.4, except as required by law or by Section 7.4,
or with Purchaser’s advance written consent, which consent may be withheld in
Purchaser’s sole discretion. From and after the Contract Date, and except with
respect to normal leasing activities at the Land and the Improvements [in
accordance with Section 10.3 below], Seller shall not sell, or assign or create
any right, title or interest in, any or all of the Land, the Improvements and
any part of either of them, or create any lien, encumbrance or charge thereon,
without the prior written consent of Purchaser, which consent may be withheld in
Purchaser’s sole discretion.

10.2. Maintenance and Operation of Property. From and after the Contract Date,
Seller shall maintain the Land and the Improvements in substantially its current
condition (normal wear and tear and damage by casualty excepted); shall maintain
existing insurance coverage in full force and effect; and shall operate and
maintain the Land and the Improvements in the ordinary course of Seller’s
business; provided, however, that if Seller believes that a capital replacement
or improvement to the Improvements is necessary, then Seller shall notify
Purchaser, in writing, of the nature of such capital replacement or improvement.
If Purchaser approves such capital replacement or improvement, then Seller shall
cause such capital replacement or improvement to be performed and the cost
incurred by Seller in connection therewith shall be credited to Seller by
Purchaser at Closing. From and after the Contract Date, and except with respect
to normal leasing activities at the Land and the Improvements (in accordance
with Section 10.3 below), Seller shall not enter into any new contract or
agreement with respect to the ownership and operation of the Land and the
Improvements that would be binding on Purchaser or the Property after Closing,
without Purchaser’s prior written approval (which approval may be withheld in
Purchaser’s reasonable discretion).

10.3. Leasing Activities. Seller shall not execute and enter into any new lease,
license or occupancy agreement for all or some portion of the Land and the
Improvements, including, without limitation, any amendment, renewal, expansion
or modification to, or termination of, any Existing Lease (all of the foregoing,
a “New Lease”) unless Seller obtains Purchaser’s advance written consent to such
New Lease, which consent may be withheld in Purchaser’s sole discretion. New
Leases shall not include, and Seller shall be free to execute and enter into at
any time, any non-discretionary amendments, modifications, renewals or
expansions of any Existing Lease pursuant to the requirements of such Existing
Lease which shall be promptly (and in any event within three (3) business days
after signing) delivered to Purchaser.

10.4. Leasing Expenses. “Lease Expenses” shall mean, collectively, any and all
commissions and fees or costs and expenses arising out of or in connection with
the leasing of the Property, including, but not limited to, (i) any extension,
renewal or expansion of any Existing Lease exercised between the Contract Date
and the Closing Date and (ii) any New Lease. Lease Expenses shall include,
without limitation, (a) brokerage commissions and fees to effect any such
leasing transaction, (b) expenses incurred for repairs and tenant improvements,
(c) allowances for tenant improvements and moving, and (d) reasonable legal fees
for services in connection with the

 

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preparation of documents and other services rendered in connection with the
effectuation of the leasing transaction. Except for the Schedule 10.4 Lease
Expenses (as hereinafter defined) Lease Expenses for any Existing Leases
relating to the base lease term or any renewal term that is elected or with
respect to which an option is exercised, as the case may be, prior to the
Contract Date shall be paid in full at or prior to Closing by Seller, without
contribution or proration from Purchaser (“Seller’s Lease Expenses”).
Notwithstanding the foregoing, to the extent that any such Seller’s Lease
Expenses have not been paid in full by Seller prior to Closing, Purchaser may
elect to assume responsibility for such unpaid Seller’s Lease Expenses, and,
upon such election, shall receive a credit against the Purchase Price in the
amount of such assumed unpaid Seller’s Lease Expenses. Lease Expenses for
(x) any renewals (other than renewals elected or with respect to which an option
is exercised prior to the Contract Date) or expansions of any Existing Lease,
and (y) any New Leases shall be the sole responsibility of Purchaser, without
contribution or proration from Seller (“Purchaser’s Lease Expenses”), to the
extent such Lease Expenses are disclosed to Purchaser at the time Purchaser
approves the applicable Lease renewals and/or expenses or the applicable New
Leases. In the event Seller has paid any Purchaser’s Lease Expenses on or prior
to Closing, Purchaser shall credit Seller for such amounts at Closing. Seller
hereby indemnifies, protects, defends and holds Purchaser, and its successors
and assigns (the “Purchaser’s Indemnified Parties”), harmless from and against
any and all Losses that any or all of Purchaser and any Purchaser’s Indemnified
Parties actually suffer and incur as a result of the failure by Seller to timely
pay or discharge any of the Seller’s Lease Expenses. Purchaser hereby
indemnifies, protects, defends and holds Seller and the Seller Indemnified
Parties harmless from and against all Losses that any or all of Seller and the
Seller Indemnified Parties actually suffer or incur as a result of the failure
by Purchaser to timely pay or discharge any of the Purchaser’s Lease Expenses or
any New Lease Expenses or any Schedule 10.4 Lease Expenses. Notwithstanding
anything to the contrary set forth herein, Purchaser acknowledges and agrees
that upon the consummation of the Closing, those Lease Expenses described on
Schedule 10.4 attached hereto (the “Schedule 10.4 Lease Expenses”) shall
automatically become the sole responsibility of Purchaser, without any
contribution from Seller. At Closing, Purchaser shall (i) reimburse Seller for
any Schedule 10.4 Lease Expenses previously paid by Seller and (ii) assume the
obligation to pay any unpaid Schedule 10.4 Lease Expenses. The terms of this
Section 10.4 shall survive the Closing and the delivery of any conveyance
documentation.

10.5. Lease Enforcement. Seller shall obtain Purchaser’s prior written consent,
which consent may be withheld in Purchaser’s sole discretion, to such
enforcement or application of security deposits.

10.6. Estoppel Certificates. Seller shall use reasonable and diligent efforts to
obtain and deliver to Purchaser estoppel certificates from each of the tenants
of the Land and the Improvements, which estoppel certificates shall be without
material and adverse modification to the form of estoppel certificate attached
as Exhibit D hereto or such form as may be required by the applicable tenant’s
Lease (each estoppel certificate satisfying such criteria, a “Conforming
Estoppel”) on or prior to the Closing Date. An estoppel certificate shall be
deemed to contain a material and adverse modification if (i) the estoppel
certificate contains modification(s) that relate to matter(s) of an
ascertainable and liquidated amount in excess of $10,000 and (ii) Seller fails
to provide Purchaser with a credit at Closing in an amount necessary to cure
such modification(s). Moreover, the condition precedent described in this
Section 10.6 shall be deemed to have failed if there are estoppel certificates
which, in the aggregate, contain modifications that relate to matters of

 

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an ascertainable and liquidated amount in excess of $100,000 and Seller fails to
provide Purchaser with a credit at Closing in an amount necessary to cure such
modifications so that they are $100,000 or less (it being understood agreed by
Purchaser that so long as Seller provides a credit in an amount sufficient to
reduce such modifications such that they are $100,000 or less in the aggregate,
then Purchaser shall not be permitted to terminate this Agreement pursuant to
this sentence). With respect to the delivery and receipt of estoppel
certificates as provided above, Seller covenants and agrees that (i) Seller
shall prepare, or cause to be prepared, and deliver to Purchaser for review and
approval, the estoppel certificates based on the form attached hereto as Exhibit
D, and (ii) Seller shall remit, or cause to be remitted, the estoppel
certificates to tenants for signature as soon as possible following Purchaser’s
written notice to Seller that Purchaser has approved the estoppel certificates
prepared by Seller (which written notice shall set forth any required
corrections). If Purchaser fails to notify Seller, in writing, of its approval
of, or any changes to, the estoppel certificates it receives from Seller for
approval within two (2) business days following Purchaser’s receipt of the same,
Seller may forward such estoppel certificates to the tenants without Purchaser’s
prior approval. It shall be a condition precedent to Purchaser’s obligation to
proceed to close hereunder that, no less than three (3) business days prior to
the Closing Date, Seller delivers to Purchaser a Conforming Estoppel from all of
the following tenants: (i) Metro Government (all spaces), Caremark, Inc., Quest
Diagnostics, Southeastern Telecom, GSA (all spaces), Mercantile Properties,
Inc., and Caterpillar Financial Services (collectively, the “Critical Tenants”)
and (ii) tenants (inclusive of the Critical Tenants) who lease, in the
aggregate, at least seventy-five percent (75%) of the leased space in the
Improvements (the “Required Estoppel Amount”). If, no less than three
(3) business days prior to the Closing Date, Purchaser does not receive a
sufficient number of Conforming Estoppels to satisfy the Required Estoppel
Amount, Purchaser may elect, as its sole and exclusive remedy hereunder, by
delivery of written notice to Seller on or prior to Closing, either to
(i) proceed to Closing and waive the condition precedent related to the Required
Estoppel Amount and the delivery of Conforming Estoppels; or (ii) terminate this
Agreement, whereupon the Deposit shall be returned to Purchaser and neither
party shall have any further liability or obligation hereunder, except as
otherwise expressly provided herein.

10.7. Future Notices. Seller shall promptly deliver to Purchaser any notices it
may hereafter receive from time to time that, if not delivered to Purchaser,
would cause the representations and warranties set forth in Section 8 herein to
be untrue if made after Seller’s receipt of any such notices.

10.8. No Marketing. From and after the Contract Date, Seller shall not market,
solicit, negotiate, or enter into any agreement with any party other than
Purchaser for the sale or transfer of any interest in the Property.

10.9. No Further Encumbrance. From and after the Contract Date, Seller shall not
alienate, lien, encumber or otherwise transfer all or any interest in the
Property (other than to Purchaser at the Closing).

11. PROPERTY SOLD “AS IS”.

11.1. Except as is otherwise expressly provided in this Agreement and the
conveyance documentation delivered at Closing, Seller hereby specifically
disclaims any warranty (oral or written) concerning: (i) the nature and
condition of the Property and the suitability thereof

 

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for any and all activities and uses that Purchaser elects to conduct thereon;
(ii) the manner, construction, condition and state of repair or lack of repair
of the Improvements; (iii) the compliance of the Land and the Improvements or
their operation with any laws, rules, ordinances or regulations of any
government or other body; and (iv) any other matter whatsoever except as
expressly set forth in this Agreement. EXCEPT AS IS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON A
STRICTLY “AS IS” “WHERE IS” BASIS AS OF THE CLOSING DATE, AND SELLER MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW,
INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF QUANTITY, QUALITY,
CONDITION, HABITABILITY, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY, ANY IMPROVEMENTS LOCATED THEREON OR ANY SOIL
CONDITIONS RELATED THERETO.

11.2. PURCHASER SPECIFICALLY ACKNOWLEDGES THAT PURCHASER IS NOT RELYING ON (AND
SELLER HEREBY DISCLAIMS AND RENOUNCES) ANY REPRESENTATIONS OR WARRANTIES MADE BY
OR ON BEHALF OF SELLER OF ANY KIND OR NATURE WHATSOEVER, EXCEPT FOR THOSE
PARTICULAR REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED IN THIS AGREEMENT
AND THE DOCUMENTS EXECUTED IN CONNECTION WITH CLOSING. FURTHER, PURCHASER, FOR
PURCHASER AND PURCHASER’S SUCCESSORS AND ASSIGNS, HEREBY RELEASES SELLER FROM,
AND WAIVES, ANY AND ALL CLAIMS AND LIABILITIES AGAINST SELLER FOR, RELATED TO,
OR IN CONNECTION WITH, ANY ENVIRONMENTAL OR PHYSICAL CONDITION AT THE PROPERTY
(OR THE PRESENCE OF ANY MATTER OR SUBSTANCE RELATING TO THE ENVIRONMENTAL
CONDITION OF THE PROPERTY), INCLUDING, BUT NOT LIMITED TO, CLAIMS AND/OR
LIABILITIES RELATING TO (IN ANY MANNER WHATSOEVER) ANY HAZARDOUS, TOXIC OR
DANGEROUS MATERIALS OR SUBSTANCES LOCATED IN, AT, ABOUT OR UNDER THE PROPERTY,
OR FOR ANY AND ALL CLAIMS OR CAUSES OF ACTION (ACTUAL OR THREATENED) BASED UPON,
IN CONNECTION WITH, OR ARISING OUT OF, CERCLA, AS AMENDED BY SARA, AND AS MAY BE
FURTHER AMENDED FROM TIME TO TIME, RCRA, OR ANY OTHER CLAIM OR CAUSE OF ACTION
(INCLUDING ANY FEDERAL OR STATE BASED STATUTORY, REGULATORY OR COMMON LAW CAUSE
OF ACTION) RELATED TO ENVIRONMENTAL MATTERS OR LIABILITY WITH RESPECT TO, OR
AFFECTING, THE PROPERTY. PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS
CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE
PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE
CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OF, OR CURATIVE
ACTION TO BE TAKEN WITH RESPECT TO, ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR
DISCHARGED FROM THE LAND OR THE IMPROVEMENTS, AND WILL RELY SOLELY UPON SAME AND
NOT UPON ANY INFORMATION PROVIDED BY, OR ON BEHALF OF, SELLER, ITS AGENTS AND
EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS AND WARRANTIES
OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE DOCUMENTS
EXECUTED IN CONNECTION WITH CLOSING. UPON CLOSING,

 

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PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED
TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY
NOT HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATIONS, AND PURCHASER, UPON
CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER FROM
AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF
ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING
ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR
UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER, AT ANY
TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR
PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT
LIMITATION, ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS,
EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY.

11.3. PURCHASER ACKNOWLEDGES AND AGREES THAT THE WAIVERS, RELEASES AND OTHER
PROVISIONS CONTAINED IN THIS SECTION 11 WERE A MATERIAL FACTOR IN SELLER’S
ACCEPTANCE OF THE PURCHASE PRICE AND THAT SELLER IS UNWILLING TO SELL THE
PROPERTY TO PURCHASER UNLESS SELLER IS RELEASED AS EXPRESSLY SET FORTH ABOVE.
PURCHASER, WITH PURCHASER’S COUNSEL, HAS FULLY REVIEWED THE DISCLAIMERS AND
WAIVERS SET FORTH IN THIS AGREEMENT, AND UNDERSTANDS THE SIGNIFICANCE AND EFFECT
THEREOF. THE TERMS AND CONDITIONS OF THIS SECTION 11 WILL EXPRESSLY SURVIVE THE
CLOSING, WILL NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS, AND WILL
BE INCORPORATED INTO THE DEED.

NOTWITHSTANDING ANY PROVISION HEREOF TO THE CONTRARY, THE PROVISIONS OF THIS
SECTION 11.3 SHALL NOT APPLY TO, AND PURCHASER DOES NOT RELEASE SELLER FROM,
(A) ANY DAMAGES, CLAIMS, LIABILITIES OR OBLIGATIONS ARISING OUT OF OR IN
CONNECTION WITH A BREACH OF ANY COVENANT, AGREEMENT, REPRESENTATION OR WARRANTY
OF SELLER SET FORTH IN THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN
CONNECTION WITH THIS AGREEMENT, OR (B) SELLER’S FRAUD.

12. SELLER’S CLOSING DELIVERIES.

At Closing (or such other times as may be specified below), Seller shall deliver
or cause to be delivered to Purchaser the following:

12.1. Deed. A Deed executed by Seller, and in recordable form, conveying the
Land and Improvements to Purchaser, subject to the Permitted Exceptions.

12.2. Assignment of Leases. Two (2) duly executed counterparts of an Assignment
and Assumption of Leases (the “Assignment of Leases”) in the form attached
hereto as Exhibit E.

 

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12.3. Assignment of Contracts. Two (2) duly executed counterparts of an
Assignment and Assumption of Contracts and Intangibles (an “Assignment of
Contracts”) in the form attached hereto as Exhibit F.

12.4. Bill of Sale. Two (2) duly executed originals of a Bill of Sale (the “Bill
of Sale”) in the form attached hereto as Exhibit G.

12.5. Keys. Keys to all locks located in the Improvements.

12.6. Affidavit of Title. An affidavit of title (or comparable “no lien”
statement), in form and substance reasonably acceptable to the Title Company as
may be required to enable Title Company to issue the Title Policy.

12.7. Closing Statement. Two (2) duly executed counterparts of a closing
statement (the “Closing Statement”) conforming to the proration and other
relevant provisions of this Agreement, which Closing Statement shall be in a
form mutually and reasonably agreed upon by Seller and Purchaser.

12.8. Entity Transfer Certificate. Entity Transfer Certification confirming that
Seller is a “United States Person” within the meaning of Section 1445 of the
Internal Revenue Code of 1986, as amended.

12.9. Letter of Credit. If applicable, with respect to any security deposits
that are letters of credit, Seller shall (a) deliver to Purchaser at the Closing
such letters of credit, (b) execute and deliver such other instruments as the
issuers of such letters of credit shall reasonably require, and (c) cooperate
with Purchaser to change the named beneficiary under such letters of credit to
Purchaser, so long as Seller does not incur any additional liability or expense
in connection therewith.

12.10. Notices to Tenants. Notices to each of the tenants under the Leases,
notifying them of the sale of the Land and Improvements and directing them to
pay all future rent as Purchaser may direct, which forms shall be prepared by
Purchaser and reasonably acceptable to Seller.

12.11. Estoppel Certificates. The Conforming Estoppels received by Seller
pursuant to Section 10.6 above.

12.12. Leases. Originals or certified copies of the Leases, which certification
shall be made subject to all of the terms, conditions and limitations of
Sections 8.2 and 8.3.

12.13. Closing Date Certificate. For purposes of determining whether the
Representation Condition has been satisfied, Seller shall deliver to Purchaser
at Closing a certificate (the “Closing Date Certificate”) certifying that all of
the Seller Representations are true and correct, as of the Closing Date and in
all material respects, except for changes and qualifications specified in such
Closing Date Certificate, such that the Closing Date Certificate is true and
accurate in all material respects. The representations, warranties and
certifications contained in the Closing Date Certificate shall be made by Seller
to the standard of knowledge, if any, contained herein for the applicable
representations, warranties or certifications and subject to all of the terms,
conditions

 

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and limitations contained in Sections 8.2 and 8.3 of this Agreement.
Notwithstanding anything contained herein to the contrary, if, as of the
Closing, the Representation Condition is not fulfilled for any reason or any
Seller Representations are not true and correct, in any material respect,
Purchaser may, in its sole discretion and as its sole remedy, hereunder, at law
or in equity, elect either to (aa) terminate this Agreement by delivery of
written notice to Seller not later than the Closing Date, whereupon the Deposit
shall be delivered to Seller (except to the extent such termination also
constitutes a Seller default pursuant to Section 13.1 of this Agreement, in
which event the Deposit shall be returned to Purchaser) and neither party shall
have any further liability hereunder except for those liabilities that expressly
survive a termination of this Agreement; or (bb) proceed to Closing and waive
the failure of the Representation Condition.

12.14. Organizational Documents. Seller shall deliver to the Title Company such
organizational and authority documents of Seller as are reasonably required by
the Title Company for the Title Company to issue the Title Policy to Purchaser.

13. PURCHASER’S CLOSING DELIVERIES.

At Closing (or at such other times as may be specified below), Purchaser shall
deliver or cause to be delivered to Seller the following:

13.1. Closing Statement. Two (2) Closing Statements executed in counterpart by
Purchaser.

13.2. Assignment of Leases. Two (2) Assignment of Leases executed in counterpart
by Purchaser.

13.3. Assignment of Contracts. Two (2) Assignment of Contracts executed in
counterpart by Purchaser.

13.4. Other. Such other documents as may be required by the Title Company to
issue the Title Policy.

14. PRORATIONS AND ADJUSTMENTS.

Prorations shall be made as of the Closing Date as if Purchaser were in title
for the entire Closing Date provided that no later than 12:00 p.m. California
Time on the Closing Date, the Purchase Price, plus or minus the prorations and
other adjustments hereunder, shall be received by the Title Company from
Purchaser for disbursement to Seller by Federal Reserve wire transfer of
immediately available funds to an account designated by Seller. If the net
proceeds of the Purchase Price payable to Seller (after adjustments and
prorations) are not sent by Federal Reserve wire transfer in immediately
available funds and received by the Title Company from Purchaser for
disbursement to Seller on or prior to 12:00 p.m. California Time on the Closing
Date, prorations shall be made as of the Closing Date as if Seller remained in
title as of the entire Closing Date, except that, to the extent such delay
results from Seller’s failure to provide deliveries or default, prorations shall
be made pursuant to the preceding sentence. The following shall be prorated and
adjusted between Seller and Purchaser:

 

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14.1. Security Deposits. The amount of the security deposits for the Leases, as
set forth in Schedule 14.1 attached hereto, together with any security deposits
for any New Leases actually received by Seller, shall be credited to Purchaser.

14.2. Utilities and Operating Expenses. To the extent not billed directly to
tenants, or paid as part of Additional Rent (as hereinafter defined) or
otherwise by tenants, water, electricity, sewer, gas, telephone and other
utility charges based, to the extent practicable, on final meter readings and
final invoices. Any operating expenses that are not paid by the tenants as
Additional Rent or otherwise shall be prorated between Purchaser and Seller,
with Seller receiving a credit for any operating expenses paid by Seller and
related to the period from and after Closing.

14.3. Contracts. Amounts paid or payable under the Contracts shall be prorated.

14.4. Assessments. To the extent not paid by tenants as a component of
Additional Rent or otherwise, all assessments, general or special, shall be
prorated as of the Closing Date, with Seller being responsible for any
installments of assessments that are due and payable prior to the Closing Date
and Purchaser being responsible for any installments of assessments that are due
and payable on or after the Closing Date.

14.5. Base Rent. Purchaser will receive a credit at Closing for the prorated
amount of all base or fixed rent payable pursuant to the Leases and all
Additional Rents (collectively, “Rent”) previously paid to, or collected by,
Seller and attributable to any period from and after the Closing Date. Rents are
“Delinquent” when they were due prior to the Closing Date, and payment thereof
has not been made on or before the Closing Date. Delinquent Rent shall not be
prorated at Closing. All Rent collected by Purchaser or Seller from each tenant
from and after Closing will be applied as follows: (i) first, to Delinquent Rent
owed for the month in which the Closing Date occurs (the “Closing Month”),
(ii) second, to any accrued Rents owing to Purchaser, and (iii) third, to
Delinquent Rents owing to Seller for the period prior to Closing. Any Rent
collected by Purchaser and due Seller will be promptly remitted to Seller. Any
Rent collected by Seller and due Purchaser shall be promptly remitted to
Purchaser. Purchaser shall use reasonable efforts to collect Delinquent Rents
owed to Seller in the ordinary course of its business; by billing the tenants
provided, however, that Seller hereby retains the right to pursue any tenant
under the Leases for any Rent and other sums due Seller for period attributable
to Seller’s ownership of the Property following the expiration of the six
(6) month period immediately following the Closing; and provided further,
however, Seller (i) shall be required to notify Purchaser in writing of Seller’s
intention to commence or pursue any legal proceedings; and (ii) shall not be
permitted to commence or pursue any legal proceedings against any tenant seeking
eviction of such tenant or the termination of the underlying Lease. “Additional
Rents” shall mean any and all amounts due from tenants for operating expenses,
common area maintenance charges, taxes, shared utility charges, management fees,
insurance costs, other comparable expenses and pass-through charges and any
other tenant charges. Purchaser and Seller acknowledge and agree that no
reconciliation of tenant tax or expense reimbursements will be performed at the
Closing; however, such a reconciliation will be completed prior to April 30,
2008 and Seller agrees to cooperate with Purchaser in connection with such
post-Closing reconciliation. If such reconciliation reveals that Seller has
received Additional Rents in excess of the amount that tenants were required to
pay, based on the actual expenses as of the Closing, then within thirty
(30) days after the reconciliation is completed, Seller shall remit such excess
amount(s) (the “Excess Amount”) to Purchaser and Purchaser shall promptly remit
the

 

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applicable portion of such Excess Amount to the applicable tenant. In such
event, Purchaser shall indemnify, protect and defend Seller and the Seller
Indemnified Parties harmless from and against any Losses that Seller or any
Seller Indemnified Party suffers or incurs as result of the failure of Purchaser
to deliver the Excess Amount, received by Purchaser from Seller, to the
applicable tenant(s); provided, however, that Purchaser’s liability with respect
to this indemnity shall be capped at the sum of (1) amount of the Excess Amount
received by Purchaser from Seller and not remitted to the applicable tenant(s)
plus (2) reasonable attorneys’ fees. If, however, the reconciliation reveals
that Seller has received Additional Rents that are less than the amount that
tenants were required to pay based on the actual expenses as of the Closing (a
“Tenant Deficiency”), then Purchaser shall deliver to Seller the amount of such
deficiency within thirty (30) days of the reconciliation pursuant to which the
tenants’ payments of such deficient amounts are received by Purchaser. Without
limitation of the foregoing, in the event there are any Tenant Deficiencies,
Purchaser covenants, for a period not to exceed sixty (60) days after such
Tenant Deficiency is realized, to bill the applicable tenant(s) for such
deficient amounts. If, at the end of the applicable sixty (60) day period, such
deficiency has not been paid by the tenant, then Seller shall have the right to
commence or pursue legal proceedings against the applicable tenant provided that
(y) Seller shall commence such action within ninety (90) days after the
expiration of the applicable sixty (60) day period and (z) in no event shall
Seller seek an eviction of such tenant or the termination of the underlying
lease. The provisions of this Section 14.5 shall survive the Closing and the
delivery of any conveyance documentation.

14.6. Taxes. To the extent not paid by the tenants directly or payable by
tenants as Additional Rent or otherwise, all ad valorem real estate and personal
property taxes with respect to the Land and the Improvements shall be prorated
as of the Closing Date, based on the most currently available final tax bill and
on a cash basis for the calendar year in which the Closing occurs, regardless of
the year for which such taxes are assessed.

14.7. Capital Costs. Except (i) as otherwise set forth in Section 10.4 of this
Agreement or (ii) to the extent required to be paid for by a tenant at the
Property, Purchaser shall be credited at Closing for the amount of all amounts
which are unsatisfied amounts for all capital contracts, contracts pertaining to
works of improvement or other contracts existing prior to Closing, pertaining to
the Property (regardless of when the work, services or other obligations were
performed or are to be performed) (“Pre-Closing Capital Costs”). Seller shall
remain responsible for satisfying any Pre-Closing Capital Costs which were not
credited (but were supposed to be credited) to Purchaser at Closing.

14.8. Tax Appeals. If Seller has engaged consultants for the purpose of
protesting the amount of taxes or the assessed valuation for certain tax periods
for the Property (“Protest Proceedings”) any cash refunds or proceeds actually
distributed (collectively, “Cash Refunds”) will be apportioned as described
below. Any Cash Refunds (including interest thereon) on account of a favorable
determination, after deduction of costs and expenses incurred for such Protest
Proceedings and payment of any reimbursements owing to tenants, shall be:
(i) the property of Seller to the extent such Cash Refunds were for taxes paid
by Seller applicable to a period prior to the Closing Date, (ii) prorated
between Purchaser and Seller for taxes paid for a period during which the
Closing Date occurred, and (iii) the property of Purchaser for taxes for a
period after the Closing Date. Seller shall have the obligation to refund to any
tenants in good standing as of the date of such Cash Refund, any portion of such
Cash Refund paid to it which may be owing to such tenants,

 

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which payment shall be paid to Purchaser within fifteen (15) business days of
delivery to Seller by Purchaser of written confirmation of such tenant’s
entitlement to such Cash Refunds. Purchaser shall have the obligation to refund
to tenants in good standing as of the date of such Cash Refund, any portion of
such Cash Refund paid to it which may be owing to such tenants. Seller and
Purchaser agree to notify the other in writing of any receipt of a Cash Refund
within fifteen (15) business days of receipt of such Cash Refund. To the extent
either party obtains a Cash Refund, a portion of which is owed to the other
party, the receiving party shall deliver the Cash Refund to the other party
within fifteen (15) business days of its receipt. Following the Closing,
Purchaser shall have the sole and exclusive right (but not the obligation) to
pursue and continue all Protest Proceedings.

14.9. Credit for Brokerage Commission. At Closing, Purchaser shall provide
Seller with a credit in the amount of $200,000 to be applied towards the
brokerage commission to be paid by Seller in connection with the consummation of
the transaction described herein. Without limitation of the foregoing, such
credit shall only be payable by Purchaser if, and only if, the Closing occurs.

14.10. Other. Such other items as are customarily prorated in transactions of
this nature shall be ratably prorated.

14.11. Adjustments. In the event any prorations made pursuant hereto shall prove
incorrect for any reason whatsoever, or in the event the prorations set forth
above are estimated on the most currently available (rather than based on the
actual final) bills, either party shall be entitled to an adjustment to correct
the same provided that it makes written demand on the other within twelve
(12) months after the Closing Date. The provisions of this Section 14.11 shall
survive Closing.

15. CLOSING EXPENSES.

Seller shall pay for one-half of the cost of any escrows hereunder. Purchaser
shall pay for all transfer taxes, one-half of any escrow costs hereunder, the
cost of recording the Deed, the entire premium for the Title Policy (inclusive,
without limitation, of any endorsements thereto and any “extended form
coverage”) and the cost of the Updated Surveys.

16. DESTRUCTION, LOSS OR DIMINUTION OF PROPERTY.

If, prior to Closing, all or any portion of any or all of the Land and the
Improvements is damaged by fire or other natural casualty (collectively
“Damage”), or is taken or made subject to condemnation, eminent domain or other
governmental acquisition proceedings (collectively “Eminent Domain”), then:

16.1. If any Damage is not Material (as defined below) or the value of any
portion of the Property subject to Eminent Domain is not Material in the opinion
of Purchaser’s and Seller’s respective engineering consultants, Purchaser shall
close and take the Property as diminished by such events, with an assignment by
Seller of (a) any casualty insurance proceeds (together with a credit from
Seller to Purchaser of the full amount of any deductible not paid directly by
Seller and the amount of any uninsured loss) or (b) condemnation proceeds, and
in the case of either (a) or (b), less any amounts reasonably incurred by Seller
to repair the Property and collect the insurance proceeds or condemnation award.

 

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16.2. If the aggregate cost of repair and/or replacement is Material or the
value of any portion of the Property subject to any Eminent Domain proceeding is
Material, in the opinion of Purchaser’s and Seller’s respective engineering
consultants, then Purchaser, at its sole option, may elect either to
(i) terminate this Agreement by written notice to Seller delivered within ten
(10) days after Purchaser is notified of such Damage or Eminent Domain, in which
event the Deposit shall be returned to Purchaser and neither party shall have
any further liability to the other hereunder, except for those liabilities that
expressly survive a termination of this Agreement; or (ii) proceed to close and
take the Property as diminished by such events, together with an assignment of
the proceeds of Seller’s casualty insurance (together with a credit from Seller
to Purchaser of the full amount of any deductible not paid directly by Seller
and the amount of an uninsured loss) for all Damage (or condemnation awards for
any Eminent Domain), less any amounts reasonably incurred by Seller to repair
the Property and collect the insurance proceeds or condemnation award. For
purposes hereof, Damage to all or portions of the Property and any Eminent
Domain proceeding with respect to all or portions of the Property shall be
considered “Material” if it: (i) causes access to or parking on the Property to
be materially and adversely affected; (ii) if any Critical Tenant terminates its
Lease; or (iii) if, as to any Damage, it costs more than $5,000,000 to repair,
and as to any Eminent Domain proceeding, the value of the Property affected
exceeds $5,000,000.

16.3. In the event of a dispute between Seller and Purchaser with respect to the
cost of repair and/or replacement with respect to the matters set forth in this
Section 16, an engineer designated by Seller and an engineer designated by
Purchaser shall select an independent engineer licensed to practice in the
jurisdiction where the Property is located who shall resolve such dispute. All
fees, costs and expenses of such third engineer so selected shall be shared
equally by Purchaser and Seller.

17. DEFAULT.

17.1. Default by Seller. If Seller is in material default under any of the
covenants and agreements of Seller hereunder, Purchaser may either (i) terminate
Purchaser’s obligations under this Agreement by written notice to Seller, in
which event (a) the Deposit shall be returned to Purchaser and (b) upon
Purchaser’s receipt of the Deposit, this Agreement shall terminate and neither
party shall have any further liability hereunder except for those liabilities
that expressly survive a termination of this Agreement; or (ii) Purchaser may
file an action for specific performance. Purchaser shall have no other remedy
for any default by Seller. In the event of the failure of any condition
precedent to Purchaser’s obligation to close expressly herein set forth, or in
the event of the untruth or inaccuracy, in any material respect, of any Seller
Representation as of the Contract Date (subject to the limitations contained in
Sections 8.4 and 12.13), Purchaser’s sole remedy hereunder, at law or in equity,
shall be to terminate this Agreement by delivery of written notice to Seller on
or prior to Closing (or such sooner date as may be herein specified), in which
event the Deposit shall be returned to Purchaser, and neither party shall have
any further liability hereunder except for those liabilities that expressly
survive a termination of this Agreement.

17.2. Default by Purchaser. If Purchaser fails to purchase the Property when it
is obligated to do so under the terms of this Agreement, then (i) Seller shall
be entitled (at its sole and

 

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exclusive remedy) to (and shall) receive the Deposit as fixed and liquidated
damages, this Agreement shall terminate and neither party shall have any further
liability hereunder, except for those liabilities which expressly survive the
termination of this Agreement and (ii) Purchaser shall immediately direct the
Title Company, in writing, to pay the Deposit to Seller. Seller shall have no
other remedy for any default by Purchaser, including any right to damages.
PURCHASER AND SELLER ACKNOWLEDGE AND AGREE THAT: (1) THE AMOUNT OF THE DEPOSIT
IS A REASONABLE ESTIMATE OF AND BEARS A REASONABLE RELATIONSHIP TO THE DAMAGES
THAT WOULD BE SUFFERED AND COSTS INCURRED BY SELLER AS A RESULT OF HAVING
WITHDRAWN THE PROPERTY FROM SALE AND THE FAILURE OF CLOSING TO HAVE OCCURRED DUE
TO A DEFAULT OF PURCHASER UNDER THIS AGREEMENT; (2) THE ACTUAL DAMAGES SUFFERED
AND COSTS INCURRED BY SELLER AS A RESULT OF SUCH WITHDRAWAL AND FAILURE TO CLOSE
DUE TO A DEFAULT OF PURCHASER UNDER THIS AGREEMENT WOULD BE EXTREMELY DIFFICULT
AND IMPRACTICAL TO DETERMINE; (3) PURCHASER SEEKS TO LIMIT ITS LIABILITY UNDER
THIS AGREEMENT TO THE AMOUNT OF THE DEPOSIT IN THE EVENT THIS AGREEMENT IS
TERMINATED AND THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT DOES NOT CLOSE DUE
TO A DEFAULT OF PURCHASER UNDER THIS AGREEMENT; AND (4) THE AMOUNT OF THE
DEPOSIT SHALL BE AND CONSTITUTE VALID LIQUIDATED DAMAGES. ALL OF THE FOREGOING
SHALL BE WITHOUT LIMITATION UPON THE RIGHTS AND REMEDIES OF SELLER HEREUNDER, AT
LAW OR IN EQUITY, IN THE EVENT OF A DEFAULT BY PURCHASER PURSUANT TO SECTIONS
6.1, 6.2, 6.3, 19 OR 22 HEREIN.

18. SUCCESSORS AND ASSIGNS.

Neither party shall assign this Agreement without the prior written consent of
the other, except that either party may assign its interest in and obligations
under this Agreement to a so-called “Qualified Intermediary” in order to
accomplish an Exchange. Notwithstanding the foregoing, Purchaser may assign, in
whole or in part, all of its rights, title, liability, interest and obligation
pursuant to this Agreement to an affiliate of Purchaser; provided that (i) no
such assignment shall act to release Purchaser hereunder and (ii) Purchaser
provides Seller with a copy of a written assignment agreement between Purchaser
and its assignee(s), which instrument shall be in form reasonably acceptable to
Seller.

Notwithstanding the foregoing, Purchaser shall have the right to assign its
rights and obligations under this Agreement to an entity that is a real estate
investment trust (“REIT”) (or that is wholly owned directly or indirectly by a
REIT) for which Purchaser or an affiliate of Purchaser acts as the investment
advisor without the prior written consent of Seller, provided Purchaser delivers
written notice of such assignment to Seller at least five (5) business days
prior to Closing.

19. LITIGATION.

In the event of litigation between the parties with respect to the Property,
this Agreement, the performance of their respective obligations hereunder or the
effect of a termination under this Agreement, the losing party shall pay all
costs and expenses incurred by the prevailing party in connection with such
litigation, including, but not limited to, reasonable attorneys’ fees of

 

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counsel selected by the prevailing party. Notwithstanding any provision of this
Agreement to the contrary, the obligations of the parties under this Section 19
shall survive termination of this Agreement or the Closing and the delivery of
any conveyance documentation.

20. NOTICES.

Any notice, demand or request which may be permitted, required or desired to be
given in connection therewith shall be given in writing and directed to Seller
and Purchaser as follows:

 

Seller:    FirstCal Industrial 2 Acquisition, LLC   

311 South Wacker Drive, Suite 4000

Chicago, Illinois 60606

   Attn: Michael Schack    Facsimile: 312-895-9306

With a copy to

its attorneys:

   Barack Ferrazzano Kirschbaum & Nagelberg LLP   

200 West Madison Street, Suite 3900

Chicago, Illinois 60606

   Attn: Brett Feinberg    Facsimile: 312-984-3150 Purchaser:    c/o KBS Capital
Advisors LLC   

1133 21st Street NW, Suite 400

Washington, DC 20036

   Attn: Chuck Lindwall    Phone: 202-822-1230    Facsimile: 202-822-1340
With a copy to:    KBS Capital Advisors LLC   

620 Newport Center Drive, Suite 1300

Newport Beach, California 92660

   Attention: Jim Chiboucas, Esq.    Phone: 949-417-6555    Facsimile:
949-417-6523 With a copy to its attorneys:    Morgan, Lewis & Bockius LLP   

5 Park Plaza, Suite 1750

Irvine, California 92614

   Attn: L. Bruce Fischer, Esq.    Phone: 949-399-7145    Facsimile:
949-399-7001

Notices shall be deemed properly delivered and received: (i) when and if
personally delivered; or (ii) one (1) business day after deposit with Federal
Express or other comparable commercial overnight courier; or (iii) the same day
when sent by confirmed facsimile before 5:00 p.m. (Eastern Time) on a business
day provided such facsimile is confirmed verbally. Notices may be delivered on
behalf of the parties by their respective attorneys.

 

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21. BENEFIT.

This Agreement is for the benefit only of the parties hereto and no other person
or entity shall be entitled to rely hereon, receive any benefit herefrom or
enforce against any party hereto any provision hereof.

22. BROKERAGE.

Each party hereto represents and warrants to the other that it has dealt with no
brokers or finders in connection with this transaction, except for CB Richard
Ellis and Colliers Turley Martin Tucker (collectively, “Broker”). Seller shall
pay the brokers’ commission due to Broker pursuant to the terms of a separate
agreement between Seller and Broker. Seller hereby indemnifies, protects,
defends and holds Purchaser and the Purchaser’s Indemnified Parties harmless
from and against all Losses suffered or incurred by any or all of Purchaser and
the Purchaser’s Indemnified Parties resulting from the claims of any broker,
finder or other such party in connection with the transactions contemplated by
this Agreement claiming by, through or under the acts or agreements of Seller.
Purchaser hereby indemnifies, protects, defends and holds Seller and the Seller
Indemnified Parties harmless from and against all Losses suffered or incurred by
any or all of Seller and the Seller Indemnified Parties resulting from the
claims of any broker, finder or other such party in connection with the
transactions contemplated by this Agreement claiming by, through or under the
acts or agreements of Purchaser. The obligations of the parties pursuant to this
Section 22 shall survive any termination of this Agreement.

23. MISCELLANEOUS.

23.1. Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the transaction contemplated herein, and all
prior or contemporaneous oral agreements, understandings, representations and
statements, and all prior written agreements, understandings, letters of intent
and proposals are merged into this Agreement. Neither this Agreement nor any
provisions hereof may be waived, modified, amended, discharged or terminated
except by an instrument in writing signed by the party against which the
enforcement of such waiver, modification, amendment, discharge or termination is
sought, and then only to the extent set forth in such instrument.

23.2. Time of the Essence. Time is of the essence of this Agreement. The time in
which any act is to be done under this Agreement is computed by excluding the
first day (such as the Contract Date), and including the last day, unless the
last day herein set forth for the performance of any obligations by Seller or
Purchaser or for the delivery of any instrument or notice as herein provided
should be on a Saturday, Sunday or legal holiday, the compliance with such
obligations or delivery shall be deemed acceptable on the next business day
following such Saturday, Sunday or legal holiday. As used herein, the term
“legal holiday” means any state or federal holiday for which financial
institutions or post offices are generally closed in the State of Tennessee for
observance thereof. Unless expressly indicated otherwise, all references to time
shall be deemed to refer to Eastern time and all time periods shall expire at
5:00 p.m. Eastern time.

 

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23.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Tennessee, without reference
to its rules regarding conflicts of laws.

23.4. Partial Invalidity. The provisions hereof shall be deemed independent and
severable, and the invalidity or partial invalidity or enforceability of any one
provision shall not affect the validity of enforceability of any other provision
hereof.

23.5. No Recording. Neither this Agreement nor any memorandum thereof shall be
recorded and the act of recording by Purchaser shall be deemed a default by
Purchaser hereunder.

23.6. Counterparts; Facsimile. This Agreement may be executed in multiple
counterparts and shall be valid and binding with the same force and effect as if
all parties had executed the same Agreement. A fully executed facsimile copy of
this Agreement shall be effective as an original.

23.7. Construction of Agreement. In construing this Agreement, all headings and
titles are for the convenience of the parties only and shall not be considered a
part of this Agreement. Whenever required by the context, the singular shall
include the plural and the masculine shall include the feminine and vice versa.
This Agreement shall not be construed as if prepared by one of the parties, but
rather according to its fair meaning as a whole, as if both parties had prepared
it. All Exhibits attached hereto are incorporated in this Agreement by reference
thereto.

23.8. No Oral Modification or Waiver. This Agreement may not be changed or
amended orally, but only by an agreement in writing. No waiver shall be
effective hereunder unless given in writing, and waiver shall not be inferred
from any conduct of either party.

23.9. Survival. Only those covenants, agreements, indemnities, undertakings and
representations and warranties of Seller that expressly survive Closing pursuant
to the terms of the Agreement shall survive Closing and the delivery of any
conveyance documentation for the period herein set forth (and if no specific
survival period is specified herein, such covenants, agreements, indemnities,
undertakings, representations and warranties of Seller shall only survive
Closing for the period in which the Seller Representations survive Closing in
accordance with Section 8.3) and all of the other covenants, agreements,
indemnities, undertakings and representations and warranties of Seller contained
herein shall not survive Closing and shall merge into the conveyance
documentation delivered at Closing.

23.10. General Escrow Provisions.

23.10.1. Escrow Instructions. This Agreement when signed by Purchaser and Seller
shall also constitute escrow instructions to Escrow Holder.

23.10.2. Opening of Escrow. When both (i) this Agreement, fully signed, or in
signed counterparts, and (ii) the Deposit have been delivered to Escrow Holder,
Escrow shall be deemed open (“Opening of Escrow”), and Escrow Holder shall
immediately notify Purchaser and Seller by telephone and in writing of the date
of Opening of Escrow.

 

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23.10.3. General Provisions. Notwithstanding anything to the contrary in this
Agreement, the general provisions of Escrow Holder, if any, which are later
signed by the parties, are incorporated by reference to the extent they are not
inconsistent with the provisions of this Agreement. If there is any
inconsistency between the provisions of those general provisions and any of the
provisions of this Agreement, the provisions of this Agreement shall control.

23.10.4. Escrow Holder Authorized to Complete Blanks. If necessary, Escrow
Holder is authorized to insert the Closing Date in any blanks in the Closing
documents.

23.10.5. Recordation and Delivery of Funds and Documents. When Purchaser and
Seller have satisfied their respective Closing obligations under Sections 12 and
13 hereof and each of the conditions under Sections 7.7.1 and 7.7.2 hereof have
either been satisfied or waived, Escrow Holder shall promptly undertake all of
the following in the manner indicated and as more particularly instructed in
Purchaser’s and Seller’s Closing instructions:

23.10.5.1. Prorations. Prorate and allocate all matters as described in
Section 14 hereof;

23.10.5.2. Recording. Cause the Deed and any other documents which the parties
hereto may mutually direct, to be recorded in the official records of the county
in which the Property is located in the order set forth in Purchaser’s and
Seller’s Closing instructions;

23.10.5.3. Funds. Disburse funds deposited by Purchaser with Escrow Holder
towards payment of all items chargeable to the account of Purchaser pursuant to
this Agreement, including, without limitation, the payment of the Purchase Price
to Seller;

23.10.5.4. Document Delivery. Deliver originals and conformed copies of all
documents to Seller and Purchaser, as appropriate; and

23.10.5.5. Title Policy. Direct the Title Company to issue the Title Policy to
Purchaser.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement of Purchase
and Sale on the date first above written.

 

SELLER:

FIRSTCAL INDUSTRIAL 2 ACQUISITION, LLC, a Delaware limited liability company By:
 

FirstCal Industrial 2, LLC,

a Delaware limited liability company,

its sole member

By:  

FR FirstCal 2, LLC,

a Delaware limited liability company,

its managing member

By:  

First Industrial Investment, Inc.,

a Maryland corporation,

its sole member

  By:  

/s/ Authorized Signatory

  Name:  

 

  Its:  

 

 

Schedule 14.1-1

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PURCHASER: KBS NASHVILLE INDUSTRIAL PORTFOLIO I, LLC, a Delaware limited
liability company By:  

KBS REIT ACQUISITION XXVIII, LLC,

a Delaware limited liability company,

its sole member

  By:  

KBS REIT PROPERTIES, LLC,

a Delaware limited liability company,

its sole member

    By:  

KBS LIMITED PARTNERSHIP,

a Delaware limited partnership,

its sole member

      By:  

KBS REAL ESTATE INVESTMENT TRUST, INC.,

a Maryland corporation,

general partner

      By:  

/s/ Charles J. Schreiber, Jr.

        Charles J. Schreiber, Jr.         Chief Executive Officer

 

Schedule 14.1-2