**Exhibit 10.38****AGREEMENT OF PURCHASE AND SALE**     THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) dated as of May 19, 2005, isbetween OTR, an Ohio general partnership (“Seller”) acting as the duly authorized nominee of theBoard of the State Teachers Retirement System of Ohio (“STRS Ohio”), and Hines REIT Properties,L.P., a Delaware limited partnership (“Buyer”).RECITALS:     A. Seller owns a certain fee simple interest in real estate improved by an office parkconsisting of multiple buildings comprising approximately 255,263 rentable square feet ofspace and related parking garages and structures in San Mateo, California, and commonly known as1900 and 2000 Alameda de Las Pulgas, which property is more fully described in thisAgreement.     B. Seller desires to sell the Property to Buyer, and Buyer desires to acquire theProperty from Seller, all upon the terms and subject to the conditions contained in thisAgreement.     NOW, THEREFORE, in consideration of the mutual covenants and promises set forth in thisAgreement, and for other valuable consideration, receipt of which is hereby acknowledged, Sellerand Buyer agree as follows:AGREEMENT:     1. AGREEMENT TO BUY AND SELL.     Seller shall sell and convey to Buyer, and Buyer shall purchase and accept from Seller, all ofSeller’s right, title, estate, and interest in and to:     (a) theland described on Schedule 1(a), which is attached to and made a partof this Agreement, together with all easements, privileges, and appurtenant rights belongingor in any way appertaining to the land (collectively, the “Land”);     (b) all buildings and improvements on the Land, including, without limitation,the building and parking structure described in Recital A above, all gas and electric systems,lighting, heating, ventilating, and air conditioning equipment and systems, elevators,radiators, incinerators, furnaces, hot water heaters, water, sewage, and plumbing systems, fireprotection and security systems, and all other fixtures attached to the Land and buildings (collectively,the “Improvements”, and together with the Land, the “Real Property”);     (c) all furnishings, furniture, equipment, supplies, and other personal propertyas are owned by Seller and are currently located in, on, or about and are used for theoperation, management, administration or repair of the Real Property, including, without limitation, the
 

 
itemsdescribed on Schedule 1(c), which is attached to and made a part of this Agreement, and anysimilar items acquired by Seller and located at the Real Property after the date of this Agreementand prior to the Closing (collectively, the “Personal Property”);          (d) those leases and tenancies described on Schedule 1 (d), which is attachedto and made a part of this Agreement and which sets forth all of the leases and tenanciesaffecting the Real Property as of the date of this Agreement, and any leases and tenanciesaffecting the Real Property that are entered into by Seller after the date of this Agreementand prior to the Closing in accordance with the terms of this Agreement (collectively, the “TenantLeases”), together with any security deposits held by Seller and Seller’s rights under allguaranties, letters of credit or other instruments that guarantee the performance of theobligations of the tenants (or any of them) under the Tenant Leases;          (e) thosecontracts described on Schedule 1(e), which is attached to and madea part of this Agreement and which sets forth all of the service and operating agreementsaffecting the Property as of the date of this Agreement, to the extent assignable, and anyother service and operating agreements pertaining to the Property that are entered into by Sellerafter the date of this Agreement and prior to the Closing in accordance with the terms of thisAgreement (collectively, the “Service Contracts”); provided, however, that in no event shallBuyer assume any property management or leasing agreements for the Property; and          (f) all intangible property owned by Seller and used in connection with theReal Property and Personal Property, including a nonexclusive right to all trademarks andtrade names used in connection with the Property (including a nonexclusive right to the name“California Casualty Plaza”), all plans and specifications and other architectural andengineering drawings, if any, in the possession of Seller which were prepared in connection with theconstruction of the Improvements and all licenses, permits, warranties and guaranties withrespect to the Property to the extent assignable (collectively, the “Intangible Property”).     All of the foregoing assets and properties to be acquired by Buyer pursuant to thisAgreement are collectively referred to in this Agreement as the “Property”.     2. PURCHASE PRICE.          (a) Subject to the charges and prorations set forth in section 12 of this Agreement,Buyer shall pay to Seller at Closing (as hereinafter defined) the sum of Fifty-Eight Million FiveHundred Thousand and No/100 Dollars (US$58,450,000.00) (the “Purchase Price”) for the purchase ofthe Property. The Purchase Price shall be payable in cash or other immediately available UnitedStates funds. Notwithstanding the foregoing, in the event the Morgan Stanley Lease Condition (ashereinafter defined) is not satisfied prior to the Closing Date (as hereinafter defined), the sumof $450,000.00 (the “Lease Holdback”) shall be withheld from the Purchase Price and deposited intoan escrow with the Escrow Agent (as hereinafter defined). The Escrow Agent shall hold and disbursethe Lease Holdback pursuant to an escrow agreement (the “Holdback Escrow Agreement”), the form ofwhich shall be agreed by Buyer and Seller prior to the expiration of the Due Diligence Period (ashereinafter defined). The Holdback Escrow Agreement shall provide that the Lease Holdback shall bereleased (i) to Seller only if the Morgan Stanley Lease Condition is satisfied on or before thedate that is 180
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days after the Closing Date, or (ii) to Buyer in the event the Morgan Stanley Lease Condition isnot satisfied on or before the date that is 180 days after the Closing Date. As used herein, the“Morgan Stanley Lease Condition” shall mean that (x) the lease currently being negotiated withMorgan Stanley (the “Morgan Stanley Lease”) has been fully executed and delivered by all partiesthereto, and (y) such lease contains substantially the same terms as those described in the letterdated March 2, 2005, addressed to Mr. Bob Garner of Cornish & Carey Commercial (a copy of which isattached as Schedule 2(a) hereto) (the “Morgan LOI”). After the end of the Due Diligence Period,Buyer shall have the right, but not the obligation, to take over the primary role of negotiatingthe Morgan Stanley Lease consistent with the Morgan LOI upon notice to Seller, Buyer shall have theright to negotiate directly with the tenant under the Morgan Stanley Lease, provided that, prior toClosing, any change in the material terms of the Morgan Stanley Lease which differs from the termsset forth in the Morgan LOI shall require the prior consent of Seller before Buyer may agree to anysuch terms. Buyer and Seller agree to cooperate reasonably in the negotiation of the Morgan StanleyLease.          (b) Within two (2) business days after the execution and delivery of thisAgreement by both parties, Buyer shall deposit the sum of One Million Dollars ($1,000,000.00)(the “Initial Deposit”) with Escrow Agent. If Buyer does not terminate this Agreement prior tothe expiration of the Due Diligence Period pursuant to Section 5(b) below, then, not laterthan one (1) business day after the expiration of the Due Diligence Period, Buyer shall deposit anadditional One Million Dollars ($1,000,000.00) (the “Additional Deposit”) with Escrow Agent;the Initial Deposit and, if made, the Additional Deposit (as defined below) and any ExtensionDeposits (as defined below), together with all interest earned thereon, are referred tocollectively in this Agreement as the “Deposit”. If Buyer closes the transaction contemplated by thisAgreement, the Deposit shall be applied to the Purchase Price. The Escrow Agent shall hold theDeposit as provided in this Agreement in an interest bearing account at a commercial bankreasonably acceptable to Seller and Buyer, and all interest earned thereon shall become a partof the Deposit for all purposes hereunder.          (c) In addition to the Deposit, Buyer has delivered to Seller, and Seller hasacknowledged receipt of, the sum of One Hundred Dollars ($100.00) (the “IndependentConsideration”), as consideration for Buyer’s right to purchase the Property and for Seller’sexecution, delivery and performance of this Agreement. The Independent Consideration is inaddition to and independent of any other consideration or payment provided for in thisAgreement, is non-refundable and shall be retained by Seller notwithstanding any otherprovision of this Agreement.     3. ESCROW AGENT.     The Title Company (as hereinafter defined) shall serve as escrow agent for the transactioncontemplated in this Agreement (“Escrow Agent”). This Agreement shall serve as escrow instructions,and Escrow Agent has signed this Agreement in the space provided to indicate that Escrow Agentaccepts its appointment as the Escrow Agent.
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     4. TITLE; SURVEY.          (a) Buyer acknowledges receipt of a preliminary title report no. NCS-153865-5M dated as of March 8, 2005 (the “Title Report”) issued by First American Title InsuranceCompany, 555 Marshall St., Redwood City, CA 94063, Attention: Karen Matsunaga (the “TitleCompany”) with respect to the Real Property and copies of the underlying documents for each ofthe exceptions to coverage identified in the Title Report.          (b) Within two (2) business days after execution and delivery of thisAgreement by both parties, Seller shall deliver to Buyer copies of the most recent existing ALTAsurvey of the Real Property in Seller’s possession. If Buyer desires an updated survey of the RealProperty (the “Updated Survey”), Buyer shall cause to be prepared the Updated Survey, at Buyer’ssole cost. Buyer shall provide such surveyor with a copy of the Title Report to aid in preparingthe Survey. Buyer shall have the Updated Survey completed, and a copy delivered to Seller and tothe Title Company, no later than three (3) days prior to the expiration of the Due Diligence Period(as hereinafter defined). If Buyer does not obtain and deliver the Updated Survey as providedabove, then any reference in this Agreement to “Updated Survey” shall be ignored as if no UpdatedSurvey was contemplated.          (c) On or before 5:00 p.m. (PST) on the day which is five (5) days prior to theexpiration of the Due Diligence Period, Buyer shall deliver to Seller written notice thatBuyer either:               (i) approves and accepts Seller’s title as it appears in the Title Report and on theUpdated Survey, or               (ii) objects to any matters set forth in the Title Report or on theUpdated Survey, which matters shall be described in Buyer’s notice of objection with sufficientparticularity to allow Seller to identify them.     If Buyer fails to deliver notice as provided in this subsection, then except as providedbelow, Buyer shall be deemed to have approved and accepted title to the Property as shown in theTitle Report and on the Updated Survey (if any), and all such matters shown in the Title Report andon the Updated Survey (if any) shall be considered “Permitted Exceptions”.          (d) Except as provided below, any matters set forth in the Title Report or onthe Updated Survey to which Buyer does not object as provided in the previous subsection shallbe considered “Permitted Exceptions.” In addition, the following matters set forth in theTitle Report or on the Updated Survey shall be deemed to be Permitted Exceptions: (i) those createdby or to be assumed by Buyer pursuant to the express terms of this Agreement; (ii) zoningordinances or other matters of local law; and (iii) general and special real estate taxes andassessments that are a lien on the date of Closing, but are not yet due and payable.          (e) If Buyer notifies Seller that the condition of title as shown in the TitleReport and on the Survey is unacceptable, then Seller shall have thirty (30) days during whichit may attempt to cure such defects. Notwithstanding the foregoing, Seller shall have noaffirmative obligation under this Agreement to expend any funds or incur any liabilities tocause any title exceptions to be removed from the Title Report or insured over, except that Sellershall
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pay or discharge any lien or encumbrance arising after the date hereof and voluntarily created orassumed by Seller and not created by or resulting from the acts of Buyer or other parties notrelated to Seller. Subject to Buyer’s approval, which shall not be unreasonably withheld,conditioned or delayed, Seller shall have the right to cure any defect by causing the Title Companyto insure over it at no cost or expense to Buyer. If said thirty (30) day period extends beyond theClosing Date (as hereinafter defined), the Closing Date shall be postponed to permit Seller areasonable time within which to effect a cure of such defects. If Seller fails to cure suchdefects, then Buyer may elect either to terminate this Agreement or Buyer may accept such title asSeller is able to convey, without reduction in the Purchase Price. If Buyer elects to terminatethis Agreement, Buyer shall deliver to Seller written notice of its decision to terminate thisAgreement within five (5) days after the end of Seller’s thirty (30) day cure period, whereupon alldocuments and funds (including, without limitation, the Deposit), except the IndependentConsideration, previously deposited into escrow shall be returned to the party so depositing sameand neither party shall have any further liability to the other hereunder, except as otherwiseprovided herein. If Buyer does not elect to terminate this Agreement within said five (5) dayperiod, then Buyer shall be deemed to have waived such termination right and to have elected toaccept such title as Seller is able to convey, without reduction in the Purchase Price.     5. BUYER’S DUE DILIGENCE.          (a) Buyer shall have until 5:00 p.m. (PST) on May 23, 2005 (the “Due Diligence Period”)to make such inquiries and review such documents regarding the market conditions, the financial andphysical condition of the Property, environmental matters, zoning, governmental compliance,financing and such other inquiries and documents as Buyer deems appropriate. Buyer shall havereasonable access to the Property for the purpose of making, at Buyer’s sole cost and expense,surveys, soil tests, inspections and other investigations and tenant interviews upon at leasttwenty-four (24) hours prior notice to Seller (which notice may be by telephone); provided,however, that (a) except as provided below, Buyer shall permit representatives of Seller to bepresent during any and all such surveys, tests, inspections and investigations, (b) withoutobtaining Seller’s prior written consent, which may be withheld in Seller’s reasonable discretion,(i) Buyer shall only conduct visual inspections, and (ii) Buyer shall not make excavations or testborings, drill wells, or engage in any activities in, on or around the Property that damage theProperty (provided, however, that nothing herein shall prohibit Buyer or any of its engineers orcontractors from performing non-invasive activities such as a Phase I environmental assessment orreport, testing for mold, moisture-related conditions, asbestos and asbestos containing materials,seismic evaluations, air quality tests or any similar test which does not result in any materialdamage to the Property) and (c) Buyer’s investigation of the Property shall be subject to therights of existing tenants. Buyer’s right of entry onto the Property shall be for the limitedpurpose of performing such surveys, tests, inspections and investigations, and tenant interviewsand Buyer shall have no right to use the Property for any other purpose until after the Closing.Buyer shall conduct such surveys, tests, inspections and investigations in a manner notunreasonably disruptive to tenants or to the operation of the Property. Notwithstanding anything tothe contrary contained herein, Seller shall request of California Casualty Management Company thatBuyer have the opportunity to conduct one or more interviews and other meetings withrepresentatives of California Casualty Management Company without any representatives or agents ofSeller being present, provided that Seller shall not be in default of this Agreement if CaliforniaCasualty Management Company refuses to
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agree, and provided further that Seller shall not be required to make any indemnity, representationor further assurance to California Casualty Management Company in order to cause that tenant toagree to meet with Seller. Seller shall also make available for inspection by Buyer copies of thedocuments and other materials that the property manager currently maintains in its possession orare otherwise reasonably available to Seller or Seller’s property manager, Seagate Properties, Inc.(“Seagate”), including, without limitation, the documents and other materials listed on Schedule5(a) (collectively, the “Due Diligence Documents”). For the purposes of this Agreement, any item inthe possession of or control of Seagate relating to the Property and in the property managementoffice at the Property or at Seagate’s corporate office shall be deemed to be under the possessionand control of Seller. Notwithstanding any provision hereof to the contrary, Buyer shall not havethe right to review or copy any Excluded Documents. “Excluded Documents” are documents involvingSeller’s financing or refinancing of the Property, any purchase or escrow agreements, anycorrespondence pertaining to Seller’s acquisition of the Property, any documents pertaining to thepotential acquisition of the Property by any past or prospective purchaser (excluding any duediligence investigation reports, if any, received by Seller from any such prospective purchaser),appraisals of the Property, internal budgets, internal financial projections, analyses, documentsor provisions of documents which are subject to confidentiality covenants, and any other internalor confidential, privileged or proprietary documents or communications. Before entering theProperty, Buyer shall obtain and furnish to Seller a certificate of insurance showing that Buyermaintains commercial general liability insurance with a reputable insurer licensed in the state inwhich the Property is located, with a Best’s rating of A10 or better, providing minimum limits ofliability of One Million Dollars ($1,000,000) per occurrence, Two Million Dollars ($2,000,000)aggregate, with an umbrella excess liability policy in minimum amount of Five Million Dollars($5,000,000) per occurrence bodily injury/ property and Five Million Dollars ($5,000,000) aggregatedamage/occurrence, naming Seller as an additional insured. Such certificate shall expresslyprovide that such insurance may not be canceled or reduced in scope or coverage without at leastthirty (30) days’ prior written notice to Seller.          (b) On or before the expiration of the Due Diligence Period, Buyer shall havethe right, in Buyer’s sole and absolute discretion, to terminate this Agreement, by deliveringto Seller written notice of its decision to terminate this Agreement. If Buyer elects toterminate this Agreement, all documents and funds (including, without limitation, the Deposit), except theIndependent Consideration, previously deposited into escrow shall be returned to the party sodepositing same and neither party shall have any further liability to the other hereunder,except as otherwise provided herein. If Buyer does not elect to terminate this Agreement on or beforethe expiration of the Due Diligence Period, then Buyer shall be deemed to have waived suchtermination right under this Section 5(b).          (c) Buyer shall (i) indemnify, defend and hold Seller harmless from andagainst any and all liability, claims, demands, damages or expenses of any kind, includingreasonable attorneys’ fees, directly or indirectly caused by Buyer’s entry upon or activitiesat the Property or the making of such tests and investigations, and (ii) restore the Property asnearly as practicable to the condition existing immediately prior to the performance of such tests andinvestigations. Notwithstanding the foregoing, Buyer’s indemnification obligations hereundershall expressly exclude consequential or punitive damages, and Buyer shall have no liabilityarising out of the discovery of any liabilities, conditions or other matters at the Propertywhich
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Buyer did not cause, contribute to or exacerbate. This subsection 5(c) shall have survive thetermination of, or the closing of the transactions contemplated by, this Agreement.          (d) If the Closing does not take place for any reason whatsoever, Buyer shall not,directly or indirectly, disclose to any person or party or use in any manner any information ofSeller acquired by Buyer with respect to Seller or the Property, except as may be required by lawor as may be necessary to comply with any applicable federal or state securities laws, rules, orregulations or in connection with filings made with the Securities and Exchange Commission, the NewYork Stock Exchange or any similar agency or body; provided, however, the foregoing shall notprohibit Buyer, its affiliates or any entity advised by its affiliates, from disclosing (i) anysuch information if required by subpoena or other legal action in connection with any agency,administrative, regulatory or other similar filing, report or disclosure by any such parties, (ii)as may be necessary in connection with any court action or proceeding with respect to thisAgreement provided the Buyer provides Seller with prompt written notice of such request so thatSeller may seek an appropriate protective order and/or waive Buyer’s compliance, or (iii) anyinformation published as public knowledge or which is generally available in the public domain.Upon termination of this Agreement for any reason other than Closing, Buyer shall return to Sellerany and all documents, information and property of Seller in Buyer’s possession and shall alsodeliver to Seller copies of all surveys and third-party reports prepared for the benefit of Buyerin connection with the Property, without representation, warranty or liability of any kind. Thissubsection 5(d) shall survive the termination of this Agreement.     6. ESTOPPEL CERTIFICATES AND SNDAS.     As a condition to Closing, Seller shall obtain and deliver to Buyer Acceptable EstoppelCertificates (as hereinafter defined) from (i) all Major Tenants (as hereinafter defined), and (ii)from a sufficient number of non-Major Tenant’s such that, when considered with the estoppelcertificates received from Major Tenants, Buyer shall have received Acceptable EstoppelCertificates from tenants occupying 82% of the leased area of the Property (the Acceptable EstoppelCertificates described in clauses (i) and (ii), the “Required Estoppel Certificates”); provided,however, Seller shall request Acceptable Estoppel Certificates from all tenants of the Property.Seller shall use commercially reasonable efforts to obtain and deliver the Required AcceptableEstoppel Certificates to Buyer prior to the expiration of the Due Diligence Period, and shalldeliver to Buyer a copy of each executed Required Estoppel Certificate and any other estoppelcertificate that Seller obtains not later than one (1) business days after receipt thereof. Sellershall have no obligation to update any such estoppel certificate prior to Closing. In order tofacilitate the timely receipt of Acceptable Estoppel Certificates, (x) Seller shall prepare draftsof the estoppel certificates, utilizing the form attached as Schedule 6A, for all tenants exceptCalifornia Casualty Management Company, for which Seller shall use the form attached as Schedule 6B(either form, as applicable, the “Approved Estoppel Form”) with the requisite information completedfor the applicable tenant, and submit such drafts to Buyer for its review promptly upon executionof this Agreement, (y) Buyer shall either approve or request changes to such drafts within three(3) business days after Buyer’s receipt thereof, and (z) provided Buyer shall have approved theapplicable estoppel certificate(s), Seller shall submit the same to the tenants of the Propertypromptly. As used herein, the term “Major Tenants” shall mean California Casualty ManagementCompany, Mark Logic and CFN.
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     For purposes hereof, the term “Acceptable Estoppel Certificate “ shall mean either (i) anestoppel certificate in the form of the Approved Estoppel Form; (ii) an estoppel certificate in theform the Approved Estoppel Form with such deletions or changes thereto made by the tenant so longas such estoppel certificate contains, at a minimum, the matters which such tenant is required toaddress in an estoppel certificate as required by such tenant’s Tenant Lease; (iii) an estoppelcertificate in the form required by such tenant’s Tenant Lease (provided Seller first requests suchtenant to provide an estoppel certificate in the form of the Approved Estoppel Form); or (iv) withrespect to California Casualty Management Company, an estoppel certificate on the Approved EstoppelForm set forth on Schedule 6B; provided, however, notwithstanding the foregoing, (i) an estoppelcertificate shall be deemed an Acceptable Estoppel Certificate only to the extent that suchestoppel certificate does not reveal any material adverse matters, and (ii) the tenant estoppelcertificate from California Casualty Management Company shall not be acceptable unless it is in theform described in subsection (iv) above, and is in compliance with the terms and provisions ofCalifornia Casualty Management Company’s Tenant Lease.     Additionally, Seller shall submit to the tenants of the Property such subordination,non-disturbance and attornment agreements as may be requested by Buyer or Buyer’s lender; provided,however, Buyer’s receipt of such subordination, non-disturbance and attornment agreements shall notconstitute a condition to Closing.     7. OPERATION OF THE PROPERTY PRIOR TO CLOSING.          (a) From the date of this Agreement to the Closing Date, Seller shall:               (i) continue to maintain and operate the Property in accordance with Seller’s pastpractices;               (ii) maintain and keep in full force and effect insurance on the Property in amountscurrently in effect; and               (iii) comply with the terms and provisions of all existing Tenant Leases and ServiceContracts in all material respects;               (iv) deliver written notice to Buyer of any defaults under the Tenant Leases which areknown (or become known) to Seller;               (v) deliver to Buyer any written notice received by Seller relating to the Property fromany governmental authority, insurance carrier or tenant;               (vi) not make any material alterations to the Property without the prior written consentof Buyer other than as required under the Tenant Leases or by law (and, in the event any suchalterations are so required, Seller shall promptly notify Buyer prior to the commencement thereof);               (vii) not enter into any contract or agreement regarding the sale,financing or other disposition of all or any part of, or any interest in, the Property or authorizeany broker, agent or other party to do so on its behalf;
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               (viii) not sell, assign, or convey any right, title or interest whatsoever in or to theProperty, or create or permit to exist any lien, encumbrance, or charge thereon (other than thePermitted Exceptions);               (ix) update all documents delivered, or made available, to Buyerpursuant to this Agreement from time to time, as appropriate and provide Buyer with copies of suchupdates; and               (x) not knowingly take or omit to take any action that would have the effect ofviolating any of the representations, warranties, covenants, and agreements of Seller contained inthis Agreement.          (b) During the period between the date of execution of this Agreement and theend of the Due Diligence Period, Seller will not enter into any new Tenant Lease or occupancyagreement affecting the Property (collectively, “New Lease”), or modify or amend in anymaterial respect, or terminate, any of the existing Tenant Leases, without Buyer’s priorwritten consent in each instance, which consent shall not be unreasonably withheld. After the end ofthe Due Diligence Period, Seller shall not enter into any New Lease, or modify or amend in anymaterial respect, or terminate, any of the existing Tenant Leases, without the prior writtenconsent of Buyer, which may be withheld in Buyer’s sole and absolute discretion. Buyer shalladvise Seller, in writing, whether Buyer approves or disapproves any proposed New Lease orany such proposed modification, amendment or termination, within one (1) business day afterBuyer’s receipt of Seller’s written request therefor, each of which requests shall beaccompanied by (i) a term sheet describing the material terms of the proposed transaction, and (ii)appropriate financial information on the applicable tenant and such other information as Buyer mayreasonably require. If Buyer fails to notify Seller within such one (1) business day period,Buyer shall be deemed to have disapproved the proposed transaction. Notwithstanding the foregoing,prior to executing any such New Lease or any modification, amendment or termination of anyexisting Lease, Seller shall provide Buyer with copies of the execution versions thereof, andin the event such New Lease, modification, amendment or termination varies in any materialrespect from the terms identified in the term sheet previously provided to and approved byBuyer, Buyer shall again have the right to approve such New Lease, modification, amendment ortermination and shall advise Seller, in writing, of Buyer approval or disapproval, withinthree (3) business day after Buyer’s receipt of such execution versions thereof.          (c) If Buyer timely disapproves of any proposed New Lease or any proposedmodification, amendment or termination of an existing Tenant Lease, (x) prior to theexpiration of the Due Diligence Period, Seller may nevertheless enter into such transaction (provided,however, Buyer shall have no responsibility or liability for any free rent, tenant improvementallowances, brokerage commissions or other costs and expenses arising out of or in connectiontherewith, and Seller shall be solely liable therefor), or (y) after the expiration of the DueDiligence Period, Seller shall not enter into such New Lease. As of Closing, Buyer shallassume and be responsible for (and to the extent previously paid by Seller, reimburse Seller on thedate of Closing for) any and all tenant improvement allowances, brokerage commissions and out-of-pocket costs and expenses actually paid or incurred by Seller arising out of or in connectionwith only those New Leases approved (or deemed approved) by Buyer and entered into by Sellerpursuant to the foregoing provisions of subsection 7(b) and this subsection (c). Seller shallpay
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or provide an appropriate credit to Buyer at Closing for all other free rent, tenant improvementallowances, brokerage commissions and out-of-pocket costs and expenses (i) arising under New Leasesor modification or amendments of existing Tenant Leases not approved by Buyer as provided in clause(x) above, and (ii) which are due and payable under any Tenant Leases existing as of the datehereof.          (d) After the date hereof, Seller shall not, without Buyer’s prior consent in eachinstance (which consent shall not be unreasonably withheld, conditioned or delayed), enter into anynew Service Contracts affecting the Property, except for agreements which are terminable on orprior to Closing, which agreements shall be terminated by Seller on or before Closing. Buyer shalladvise Seller in writing whether Buyer approves or disapproves any such new agreements,modifications or terminations requiring its approval within three (3) business days after Buyer’sreceipt of the proposed document. If Buyer fails to notify Seller within such period, Buyer shallbe deemed to have approved the proposed document. All new Service Contracts approved or deemedapproved by Buyer under this subsection (d), as well as any existing Service Contract which Buyerdoes not elect to have Seller terminate at Closing as hereinafter provided, shall be assigned toand assumed by Buyer upon Closing pursuant to the Assignment of Service Contracts and IntangibleProperty (as hereinafter defined). On or prior to the last day of the Due Diligence Period, Buyershall advise Seller in writing of any existing Service Contracts which Buyer requires Seller toterminate at Closing, and Seller shall terminate all such designated Service Contracts effective asof the Closing Date, and all termination fees or other expenses required in connection therewithshall be paid by Seller at or prior to Closing.     8. REPRESENTATIONS AND WARRANTIES.          (a) Seller represents and warrants to Buyer as follows:               (i) Seller is and will be on the Closing Date a general partnership duly organized andvalidly existing under the laws of the State of Ohio, and qualified to do business in the State ofCalifornia, and Seller has and will have on the Closing Date all necessary power and authority to:(A) carry on the business for which it has been organized; (B) own and operate the Property; and(C) enter into and perform Seller’s obligations under this Agreement.               (ii) Seller has taken all actions required to be taken under the laws of the State ofOhio and under Seller’s partnership agreement to approve or authorize the execution and delivery ofthis Agreement and consummation of the transactions contemplated in this Agreement.               (iii) Neither the execution of this Agreement nor the consummation of the transactionscontemplated in this Agreement will constitute a violation of, be in conflict with, or constitute adefault under (or with the passage of time or delivery of notice, or both, would constitute adefault under) any term or provision of Seller’s partnership agreement or any other agreement,lease, or other instrument to which the Property is bound.               (iv) Seller has no employees performing services at the Property.               (v) To Seller’s knowledge, except as disclosed on Schedule 8(a)(v), which is attached toand made a part of this Agreement (as such Schedule may be updated in
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writing by Seller prior to the Closing, subject to the terms of the last paragraph of thissubsection 8(a)), no litigation, proceeding, or action is pending or threatened against or relatingto the Property or Seller.               (vi) No condemnation proceeding is pending or threatened against or, to Seller’sknowledge, relating to the Property.               (vii) As of the Closing, except for the Tenant Leases and the ServiceContracts assumed (or deemed assumed) by Buyer in accordance with this Agreement, there will not beany outstanding contracts for any improvements to the Property or any other contracts affecting orin any way relating to the Property, including any construction, management, leasing or listingagreements, or any other written or oral agreements with adjacent or nearby property owners orlessees, or other third parties, which will be binding on Buyer.               (viii) To Seller’s actual knowledge, the rent roll attached hereto asSchedule 8(a)(viii) is a true copy of such rent roll for the Property prepared by Seller’s propertymanager, Seagate Properties, Inc., as of the date set forth thereon in the ordinary course ofbusiness; however, such rent roll is not certified and constitutes only the working rent rollutilized by Seagate Properties, Inc. in the ordinary course of its business in operating theProperty as of the date set forth thereon. Any item in the possession of Seagate Properties, Inc.shall be deemed to be under the control of Seller.               (ix) As to the Tenant Leases,                    (1) complete, true, and correct copies of all Tenant Leasesdisclosed on Schedule l(d), including all modifications and amendments thereof or thereto have beendelivered to Buyer or have been made available to Buyer in the office of Seller’s property manager;                    (2) except as disclosed on Schedule 8(a)(ix)(2), which isattached to and made a part of this Agreement (as such Schedule may be updated in writing by Sellerprior to the Closing, subject to the terms of the last paragraph of this subsection 8(a)), toSeller’s knowledge, neither Seller nor any tenant under any Tenant Lease is in default under anyTenant Lease, and no condition exists nor has any event occurred that by notice, the passage oftime, or otherwise, would constitute an event of default under any Tenant Lease; and                    (3) to Seller’s knowledge, the rents and other charges set forthon the Rent Roll are the actual rents and other charges presently being collected by Seller underthe Tenant Leases for the calendar months immediately preceding the date of this Agreement, notenant is entitled to any free rent, concessions, improvement or refurbishment allowances, rebatesor refunds, except as set forth on the Rent Roll or in any Tenant Lease; and except as set forth onthe Rent Roll or in any Tenant Lease, no tenant has prepaid any rents or other charges for morethan one (1) month in advance.
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               (x) As to the Service Contracts,                    (1) complete, true, and correct copies of all written ServiceContracts disclosed on Schedule l(e), including all modifications and amendments thereof orthereto, have been delivered to Buyer; and                    (2) except as disclosed on Schedule 8(a)(x)(2) which isattached to and made a part of this Agreement (as such Schedule may be updated in writing by Sellerprior to the Closing, subject to the terms of the last paragraph of this subsection 8(a)), toSeller’s knowledge, neither Seller nor any other party under any Service Contract is in defaultunder any Service Contract, and no condition exists nor has any event occurred that by notice, thepassage of time, or otherwise, would constitute an event of default under any Service Contract.               (xi) Seller has received no notice from a public authority that there are contemplatedimprovements to or adjoining the Real Property by public authority, the cost of which are to beassessed as special taxes against the Real Property.               (xii) The environmental reports made available to Buyer in connection with this Agreementas set forth in Section 5(a) above are complete copies of all of the environmental reportsregarding the presence of Hazardous Substances (as defined in Section 16(f) below) in connectionwith the Property in Seller’s possession or under Seller’s control.               (xiii) Seller has not received any written notice from any insurancecompany or board of fire underwriters of any defects or inadequacies in or on the Property or anypart or component thereof that would adversely affect the insurability of the Property or cause anyincrease in the premiums for insurance for the Property.               (xiv) There are no lease brokerage agreements, leasing commissionagreements or other agreements providing for payments of any amounts for leasing activities orprocuring tenants with respect to the Property or any portion or portions thereof other than asdisclosed in Schedule 8(a)(xv) attached hereto. All leasing commissions, brokerage fees andproperty management fees due and payable under the agreements disclosed on such Schedule have beenor shall be paid by Seller in full.               (xv) Neither Seller nor any partner or other constituent of Seller hasfiled for bankruptcy, is subject to an involuntary bankruptcy proceeding, or has been adjudicatedbankrupt, admitted in writing its inability to pay its debts as they become due or had a receiverappointed for any of its assets. Seller has not commenced any dissolution proceedings.               (xvi) Seller has not received any written notices from any governmental agency, authority,board or any tenant regarding the failure of any portion of the Property to comply with any codes,ordinances, statutes or other laws applicable to the Property, including without limitation anyapplicable environmental law, and to Seller’s knowledge, there exists no proceeding, investigationor inquiry regarding any alleged violation.               (xvii) Seller does not hold “plan assets” as defined in regulations at 29 C.F.R. Section25610.3-101, of any “plan” within the meaning of Section 3(3) of the Employee
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Retirement Income Security Act of 1974, as amended, or Section 4975(e) of the Internal RevenueCode of 1986, as amended.     If at any time before the Closing Seller or Buyer discovers facts, or facts arise, that makeone or more of the representations and warranties made by Seller in this subsection 8(a) materiallyinaccurate, Seller or Buyer (as the case may be) shall immediately notify the other in writing ofsuch facts (in the case of a discovery by Seller, such notification may be in the form of providingan update to any applicable Schedule referenced above in this subsection 8(a)). Thereafter, Sellermay elect to correct the representation and warranty and to cure the matter referred to so that itsrepresentations and warranties are no longer materially inaccurate, or may decline to do so. IfSeller declines to cure such matter or if such cure is not completed to Buyer’s reasonablesatisfaction by Closing, Buyer may, at its option, (i) proceed to purchase the Property pursuant tothis Agreement, in which case Buyer’s objection to the inaccuracy of Seller’s representations andwarranties shall be deemed waived by Buyer, or (ii) terminate this Agreement and, if suchinaccuracy is in any of the representations and warranties made by Seller in subsections 8(a)(i),(a)(ii) or (a)(iii) and is attributable to events or circumstances that existed prior to theexecution of this Agreement or to acts or omissions of Seller between the date of this Agreementand the Closing, be entitled to the remedies provided in Section 15(a). Additionally, if Buyerelects to terminate this Agreement, all documents and funds (including, without limitation, theDeposit), except the Independent Consideration, previously deposited into escrow shall be returnedto the party so depositing same and neither party shall have any further liability to the otherhereunder, except as otherwise provided herein.     When the phrase “to Seller’s knowledge” or similar phrase is used, it shall mean the currentactual, as distinguished from implied, imputed or constructive, knowledge of Julia Viskanta, who isthe employee of Seller with day-to-day responsibility for the Property, without any obligation tomake any independent inquiry or investigation whatsoever, except for a duty to inquire of SueMcCullough, the on-site property manager who is an employee of Seagate Properties, Inc., and withrespect to Section 8(a)(xiii), of Seller’s risk management department. Nothing in this Agreement,under any circumstance whatsoever, shall be deemed to create or impose any personal liability ofany kind whatsoever on Julia Viskanta, Sue McCullough, or any other employee of Seller. Therepresentations and warranties of Seller set forth in this section 8(a) shall survive for theperiod of six (6) months after the Closing and thereafter shall be of no further force or effect.          (b) Buyer represents and warrants to Seller as follows:               (i) Buyer is a limited partnership duly organized, validly existing and in goodstanding under the laws of the State of Delaware, and Buyer has and will have on the Closing Dateall necessary power and authority to: (A) carry on the business for which it has been organized;(B) own and operate the Property; and (C) enter into and perform Buyer’s obligations under thisAgreement.               (ii) Buyer has taken all actions required to be taken under the laws of the State ofDelaware and under Buyer’s partnership agreement to approve or authorize the execution and deliveryof this Agreement and consummation of the transactions contemplated in this Agreement.
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               (iii) Neither the execution of this Agreement nor the consummation of the transactionscontemplated in this Agreement will constitute a violation of, be in conflict with, or constitute adefault under (or with the passage of time or delivery of notice, or both, would constitute adefault under) any term or provision of Buyer’s partnership agreement or any other agreement orother instrument to which Buyer is bound.               (iv) Buyer is not controlled by, a person who during the preceding three (3) years wasemployed by, an officer of, or a board member of STRS Ohio, and no employee of Buyer who holds afiduciary, administrative, supervisory, or trust position, or any other position in which suchperson would be involved on behalf of Buyer in decisions or recommendations pertaining to theProperty, is a person who during the preceding three (3) years was employed by, an officer of, or aboard member of STRS Ohio.     9. CONDITIONS PRECEDENT TO CLOSING.          (a) Buyer’s obligations under this Agreement are expressly conditioned uponcompletion or satisfaction of the following conditions:               (i) The Title Company shall, at Closing, be ready, willing and able to issue to Buyeran ALTA extended coverage (Form 1970-10/17/70)) owner’s policy of title insurance for the Propertyin an amount equal to the Purchase Price insuring fee simple title to the Property in Buyer,subject only to the Permitted Exceptions (and, if Buyer did not deliver an Updated Survey to Sellerand the Title Company at least three (3) days prior to the expiration of the Due Diligence Period,an exception for such matters as would be shown on an accurate survey of the Property) andcontaining such endorsements as the Title Company shall have committed to issue as of the end ofthe Due Diligence Period (said commitment to be evidenced by a pro forma policy containing suchendorsements provided to Seller) (the “Policy”);               (ii) Seller shall have deposited with the Escrow Agent all documents required of Sellerto be delivered into Escrow hereunder;               (iii) The representations and warranties of Seller contained insubsection 8(a) of this Agreement shall be true and correct in all material respects as of theClosing Date;               (iv) Seller shall have performed, in all material respects, all covenants, agreements andundertakings of Seller contained in this Agreement;               (v) Originals of all Required Estoppel Certificates shall have been delivered toBuyer; and               (vi) No material adverse change shall occur with respect to theProperty or any Major Tenant from the expiration of the Due Diligence Period through theClosing Date.          (b) Seller’s obligations to perform hereunder are expressly contingent andconditional upon the satisfaction of the following conditions:
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               (i) Buyer shall have deposited or have caused to be deposited with the Escrow Agent alldocuments and funds required of Buyer to be deposited into Escrow hereunder; and               (ii) The representations and warranties of Buyer contained insubsection 8(b) of this Agreement shall be true and correct in all material respects as of theClosing Date.          (c) The parties acknowledge that the conditions precedent set forth in subsection (a)above are for the benefit of Buyer and that the conditions precedent set forth in subsection (b)above are for the benefit of Seller. Unless otherwise specifically set forth herein, the date bywhich the conditions precedent must be satisfied shall be the Closing Date. If any of theconditions precedent set forth in subsection (a) or subsection (b) above are not satisfied on orbefore the date by which they are required to be satisfied, the party for whose benefit thecondition precedent exists shall have the right to terminate this Agreement by written notice oftermination given to the other party within ten (10) days after the date by which the conditionmust be satisfied. If such notice of termination is given, all documents and funds, except theIndependent Consideration, previously deposited into escrow shall be returned to the party sodepositing same, except if the events described in subsections 9(b)(i) and 9(b)(ii) are notsatisfied, the Deposit shall be transferred to Seller and neither party shall have any furtherliability to the other hereunder, except as otherwise provided herein. Notwithstanding theforegoing, a party for whose benefit the condition precedent exists shall have the right to waivesatisfaction thereof, in which event this Agreement shall proceed to Closing as otherwise providedherein. Unless notice of failure to satisfy conditions precedent is given as above provided, allconditions precedent shall be deemed satisfied.     10. RISK OF LOSS.          (a) If any part of the Property is damaged or destroyed by fire or any othercause (“Damage”) or subject to a pending, threatened, or completed taking by condemnation oreminent domain, or a proposed conveyance under threat of either (“Taking”), Seller shallpromptly notify Buyer of the same.          (b) If the extent of the Damage is in excess of One Million Dollars($1,000,000.00), as set forth in an estimate (the “Estimate”) made by a contractor selected bySeller and approved by Buyer, said approval not to be unreasonably withheld, conditioned ordelayed, or if the Taking materially adversely affects the operation of the Property as itexisted prior to the Taking, then Buyer may terminate this Agreement by giving written notice of suchtermination to Seller within ten (10) days after Seller delivers to Buyer a copy of theEstimate or notice of the Taking, as applicable. If the extent of the Damage is less than or equal to OneMillion Dollars ($1,000,000.00) as set forth in the Estimate, and the Damage is not fullycovered by Seller’s insurance, then Buyer may terminate this Agreement by giving written notice ofsuch termination to Seller within said ten (10) day period unless Seller either repairs the Damageprior to the Closing or agrees to credit against the Purchase Price the estimated cost of suchDamage less the cost of any repairs performed by Seller prior to the Closing (the “Uninsured DamageCredit”). If Buyer terminates this Agreement pursuant to this subsection 10(b), all documentsand funds, except the Independent Consideration, previously deposited into escrow shall be
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returned to the party so depositing same and neither party shall have any further liability to theother hereunder, except as otherwise provided herein.          (c) If this Agreement is not terminated pursuant to subsection 10(b) above, Seller mayelect to either (i) repair and restore the Property in a good and workmanlike manner or (ii) atClosing assign to Buyer Seller’s rights to the proceeds of any compensation or insurance (includingrental value or business interruption insurance to the extent allocable to any period of time afterthe Closing) payable on account of such Taking or Damage, and in the case of Damage Buyer shallreceive a credit against the Purchase Price in an amount equal to (i) the deductible applicable toany Damage covered by Seller’s insurance plus (ii) the Uninsured Damage Credit, if any, agreed toby Seller pursuant to subsection 10(b) above. In the case of any Taking, Seller shall assign toBuyer at Closing all right, title and interest of Seller in and to any awards or other paymentsmade or to be made in connection therewith (or in connection with any deeds-in-lieu or otherconveyances with respect thereto).     11. CLOSING.     The term “Closing” as used in this Agreement shall mean the consummation of the transactioncontemplated under this Agreement, which shall occur on June 2, 2005 (the “Closing Date”)(provided, however, that if the Closing Date as so determined is the day after a non-business day,then the Closing Date shall be postponed to the next succeeding business day) in the offices of theEscrow Agent. Buyer shall have the right to extend the Closing Date up to June 28, 2005 (in oneextension of 18 business days or one or two extensions of 9 business days each) by depositing withthe Escrow Agent for each business day of such extension an additional $100,000 (each such deposit,the “Extension Deposit”), which Extension Deposit shall be added to and become a part of theDeposit for all purposes under this Agreement. If Buyer elects the 18 business day extensionoption, the entire Extension Deposit *(i.e.,*$1,800,000) shall be deposited with the Escrow Agent onJune 2, 2005. If, however, Buyer elects to exercise the 9 business day extension option(s), anExtension Deposit of $900,000 shall be deposited with the Escrow Agent on June 2, 2005 and, unlessthe Closing occurs on or before June 15, 2005, an additional Extension Deposit of $900,000 shall bedeposited with the Escrow Agent on such date. The Closing shall be deemed to have occurred when theDeed (as defined below) is recorded. On the Closing Date, Escrow Agent shall file for record theDeed and such other instruments as Buyer may require to be recorded or as may be necessary to allowthe Title Company to issue the Policy. Subject to the rights of Tenants, Seller shall deliverpossession of the Property to Buyer at Closing.     12. PRORATIONS AND CHARGES.          (a) Each of Seller and Buyer shall receive its pro rata share of income and shall beresponsible for its pro rata share of expenses for 2005 (each party’s pro rata share is to bedetermined based on the number of days during 2005 which it owned the Property). At Closing, Buyerand Seller shall prorate as of the Closing Date those items of income and expense that are capableof an exact determination. For those items of income and expense that are incapable of an exactdetermination as of the Closing Date, Buyer and Seller shall make a good faith estimate of theclosing prorations using the most recent ascertainable amounts of or other reliable information inrespect to each such item of income and expense, except that any percentage rent
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payable under the Tenant Leases for 2005 shall not be prorated at the Closing. At least five (5)business days prior to the Closing Date, Buyer shall provide Seller with notice of the Closing Date(taking into account any anticipated extensions of the Closing Date pursuant to Section 11 hereof).At least three (3) business days prior to the Closing Date, provided Buyer has delivered notice ofthe Closing Date, as provided in the immediately preceding sentence, Seller shall deliver to Buyeran initial draft of a proration statement setting forth Seller’s good faith estimates of all itemsof income and expense to be prorated hereunder. General real estate taxes and assessments that arenot yet due and payable shall be apportioned using the rates and valuation shown on the latestavailable tax bill. Subject to subsections 12(a)(i) through (iii) below, Buyer and Seller shall usetheir best efforts to obtain an exact determination of the remaining items of income and expensewithin one hundred twenty (120) days after the Closing Date and on or before such date Buyer shalldeliver a report to Seller, indicating which estimated closing itemshave been determined, togetherwith such documentation enabling Buyer to make such exact determination and the amount either owedby, or owed to, Seller. Seller shall have ten (10) days to review such report and indicate itsapproval of such determinations. If Seller fails to object to such report within such 10 dayperiod, then Seller shall be deemed to have approved such report. After approval or deemed approvalof such report or after receipt of the actual bill for real estate taxes, Buyer shall promptly payto Seller any amounts owed to Seller, or if Seller owes Buyer money, Seller shall promptly pay theamount so owed to Buyer, in each case subject to subsections 12(a)(i) through (iii) below. ThisSection 12 shall survive the Closing and the recording of the Deed and shall not be merged thereby.For purposes of computing any prorations required under this section, the Closing Date shall be aday of income and expense to Buyer unless the Closing Date occurs on the last day of a month, inwhich event the Closing Date shall be a day of income and expense to Seller. Attached as Schedule12(a) hereto is a true and correct listing of all outstanding tenant improvement allowances andleasing commission obligations under the existing Tenant Leases.               (i) Percentage rent payable under any of the Tenant Leases for 2005 shall beapportioned between Seller and Buyer based on their respective periods of ownership during 2005.If, in 2006, Buyer receives a payment from a tenant under a Tenant Lease for percentage rent owedfor 2005, then Buyer shall forward Seller’s pro rata share thereof to Seller not later than fifteen(15) days after Buyer’s receipt thereof.               (ii) Not later than one hundred twenty (120) days after the Closing,Seller shall prepare and deliver to Buyer reconciliation statements for each tenant’s share of theobligations of Tenants for operating costs, taxes, insurance and other items required to be paid byTenants according to the Tenant Leases (“Tenant Pass-Throughs”) for the portion of 2005 duringwhich the Property was owned by Seller. In 2006, Buyer shall prepare reconciliation statements foreach tenant’s share of the Tenant Pass-Throughs for the portion of 2005 during which the Propertywas owned by Buyer. Buyer shall then send each tenant the two reconciliation statements (or aconsolidated reconciliation statement) and, if applicable, a bill in the amount of such tenant’sunderpayment. If it is determined that Seller received less than its pro rata share of the TenantPass-Throughs for 2005, then Buyer shall pay Seller the amount owed Seller not later than fifteen(15) days after Buyer receives the tenant’s reconciliation payment for 2005. If it is determinedthat Seller received more than its pro rata share of the Tenant Pass-Throughs for 2005, then Sellershall pay Buyer the amount owed Buyer not later than fifteen (15) days after
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Seller’s receipt of a written demand therefor from Buyer (which demand shall be accompanied by thereconciliation statement prepared by Buyer for 2005).          (b) If on the Closing Date, any tenant is delinquent in the payment of rent orany other monetary obligations, such delinquent rent shall remain the property of Seller andno proration with respect thereto shall be made at Closing. Seller shall have the right tocollect the same from such tenant, including the right to sue such tenant for nonpayment of rent providedthat in no event may Seller maintain an unlawful detainer action or otherwise seek toterminate such tenant’s lease or disturb its possession thereunder. Any amounts received from a tenantafter the Closing shall first be applied to the most current monthly rental obligations, thento any delinquent rental obligation arising after Closing, and then to the oldest receivable. Ifrents or any portion thereof received by Seller or Buyer after the Closing are due and payable to theother party by reason of this allocation, the appropriate sum shall promptly be paid to the otherparty.          (c) At Closing, Seller shall be charged the following:               (i) prorated general real estate taxes and assessments;               (ii) the Lease Holdback (if applicable);               (iii) prorated charges for Service Contracts and any other obligations assumed by Buyerand any other operating expense items for which payments are made in arrears;               (iv) prorated prepaid rents and other charges prepaid under the Tenant Leases;               (v) security deposits held by Seller pursuant to the TenantLeases;               (vi) cost of the title examination and the Title Report;               (vii) cost of the “CLTA portion” of the Policy and any endorsement thereto to insureover any title defect;               (viii) cost of any county real estate transfer tax and conveyance fee, and one-half of anycity transfer tax and conveyance fee;               (ix) one-half (1/2) of the fees of the Escrow Agent;               (x) all brokerage fees payable in connection with this transaction, as required bysection 19 of this Agreement;               (xi) all free rent, tenant improvement costs, tenant improvementallowances, brokerage commissions and other costs and expenses relating to the Tenant Leases whichare Seller’s obligation under this Agreement; and               (xii) Seller’s attorneys’ fees.
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          (d) At Closing, Buyer shall be charged the following:               (i) charges paid in advance by Seller for items assumed by Buyer pursuant to the expressterms of this Agreement (it being agreed that Buyer shall in no event assume or be responsiblefor any of Seller’s insurance policies or the premiums therefor);               (ii) cost of the Updated Survey;               (iii) cost of recording the Deed and such other instruments as Buyer or the Title Companymay consider necessary or desirable to be recorded;               (iv) cost of the “ALTA portion” of the Policy and any endorsements (other than thosewhich are Seller’s obligation under section 12(c)(ix) above) thereto requested by Buyer;               (v) one-half (1/2) of any city transfer tax of conveyancefee;               (vi) one-half (1/2*)*of the fees of the Escrow Agent;               (vii) Buyer’s attorneys’ fees; and               (viii) except as otherwise expressly provided herein, all fees and expenses associatedwith Buyer’s due diligence and other inspections of the Property.     13. INSTRUMENTS OF CONVEYANCE AND OTHER DOCUMENTS.          (a) No later than one (1) business day prior to the Closing Date, Seller shall fully andproperly execute and deposit with Escrow Agent the following documents:               (i) a grant deed (the “Deed”) and a separate statement (not to berecorded) declaring the documentary transfer tax due thereon, each in the forms of Schedule13(a)(i), which is attached to and made a part of this Agreement;               (ii) a bill of sale (the “Bill of Sale”) in the form of Schedule 13(a)(ii), which isattached to and made a part of this Agreement;               (iii) an assignment of the Tenant Leases (the “Assignment of Leases”), in the form ofSchedule 13(a)(iii), which is attached to and made a part of this Agreement, assigning to Buyer allof Seller’s right, title, and interest as lessor under the Tenant Leases;               (iv) an assignment of the Service Contracts and the Intangible Property (the “Assignmentof Service Contracts and Intangible Property”), in the form of Schedule 13(a)(iv), which isattached to and made a part of this Agreement, assigning to Buyer all of Seller’s right, title, andinterest in and to the Service Contracts and the Intangible Property;               (v) a counterpart settlement statement (the “Settlement Statement”)setting forth the Purchase Price and all amounts charged against Seller pursuant to section 12 ofthis Agreement;
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               (vi) an affidavit in the form of Schedule 13(a)(vi), which is attached to and made a partof this Agreement and a California Form 593-W, each regarding the non-foreign status of Seller;               (vii) a certificate of the Executive Director of STRS Ohio, authorizing the transactionscontemplated hereby (“Seller’s Authorization”);               (viii) a closing certificate (the “Seller’s Closing Certificate”) in the form of Schedule13(a)(viii), which is attached to and made a part of this Agreement, stating that there is nomaterial inaccuracy in representations and warranties of Seller contained in this Agreement and, inaddition, that all such representations and warranties are true and correct in all materialrespects without exception as of the Closing Date as if made on and as of the Closing Date (orspecifying in reasonable detail any exceptions that may then exist, provided that Seller shall nottake any action or omit to take any action that would result in any such default or exception);               (ix) a letter in a form reasonably acceptable to Buyer to each tenant identified onSchedule l(d) of this Agreement, stating that the Property has been conveyed to Buyer as of theClosing Date and advising each tenant that all future payments of rent and all other futurecorrespondence regarding the Property should be delivered to Buyer (the “Tenant Letters”);               (x) such reasonable and customary owner’s affidavit and indemnities for mechanics’liens, in each case as may be required by the Title Company to issue the Policy;               (xi) the Holdback Escrow Agreement (if applicable);               (xii) such other or further instruments of conveyance, sale, assignment, certification,and transfer, and shall take or cause to be taken such other or further actions as Buyer or EscrowAgent may reasonably request to:                    (1) vest, confirm, or evidence in Buyer title to all of theProperty intended to be conveyed, sold, transferred, assigned, and delivered to Buyer under thisAgreement; and.                    (2) effectuate, in any other manner, the terms and conditions ofthis Agreement.          (b) No later than one (1) business day prior to the Closing Date, Buyer shall fullyexecute and deposit with Escrow Agent the following documents and funds:               (i) the Purchase Price, subject to the closing adjustments contemplatedhereby;               (ii) a certified resolution of the general partner of Buyer authorizing the transactionscontemplated hereby (“Buyer’s Resolution”);               (iii) a certificate (“Buyer’s Closing Certificate”) in the form of Schedule 13(b)(iii),which is attached to and made a part of this Agreement, stating that there is no
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material inaccuracy in representations and warranties of Buyer contained in this Agreementand, in addition, that all such representations and warranties are true and correct in all materialrespects without exception as of the Closing Date as if made on and as of the Closing Date (orspecifying in reasonable detail any exceptions that may then exist, provided that Buyer shall nottake any action or omit to take any action that would result in any such default or exception);               (iv) a counterpart Settlement Statement setting forth the Purchase Price and all amountsapplied on behalf of or charged against Buyer pursuant to section 12 of this Agreement;               (v) the Holdback Escrow Agreement (if applicable); and               (vi) such other or further instruments of conveyance, sale, assignment, certification,and transfer, and shall take or cause to be taken such other or further actions Escrow Agent mayreasonably request to:                    (1) vest, confirm, or evidence in Buyer title to all of theProperty intended to be conveyed, sold, transferred, assigned, and delivered to Buyer under thisAgreement; and                    (2) effectuate, in any other manner, the terms and conditions ofthis Agreement.     14. DELIVERY AND PAYMENT.     Upon consummation of the transactions contemplated in this Agreement, Escrow Agent shalldisburse funds and documents as follows:          (a) To Seller:               (i) a copy of the Settlement Statement;               (ii) the Purchase Price, less amounts charged to Seller; and               (iii) executed originals of the Buyer’s Resolution, the Buyer’s Closing Certificate, andthe Holdback Escrow Agreement (if applicable).          (b) To Buyer:               (i) a copy of the Settlement Statement;               (ii) a conformed copy of the recorded Deed;               (iii) executed originals of the Bill of Sale, Assignment of Leases, Assignment ofService Contracts and Intangible Property, Seller’s Closing Certificate, the Holdback EscrowAgreement (if applicable) and the Tenant Letters and a copy of Seller’s Authorization;
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               (iv) executed originals of all affidavits and other instruments deposited intoescrow pending Closing;               (v) the Policy; and               (vi) the balance, if any, in the escrow account to the credit of Buyer by check payableto Buyer.     Immediately after Closing, Seller shall deliver, or cause its property manager to deliver, toBuyer original executed copies of all Tenant Leases and Service Contracts, the original plans andspecifications for the Improvements, building permits, certificates of occupancy, and such othercertificates, licenses, and permits as may be necessary or desirable for operation of the Property,and the originals or photocopies of all books, accounts, and records relating to the Property andall keys, locks, security and safe codes, and other similar access items and information for theProperty. Additionally, upon the Closing, Seller and Buyer shall jointly issue a press releaseannouncing the sale of the Property.     15. LEGAL AND EQUITABLE ENFORCEMENT OF THIS AGREEMENT.          (a) Buyer’s Remedies. If the Closing fails to occur on account of Seller’s default underthis Agreement, then as Buyer’s sole remedy for such default Buyer will be entitled either (1) toterminate this Agreement and receive the return of the Deposit and reimbursement of its reasonableout-of-pocket expenses incurred in connection with the transaction or this Agreement (includingreasonable attorneys’ fees, consultants’ costs, and travel costs), provided, however, that in noevent shall Seller’s liability under this subsection 15(a) exceed $100,000 or (2) to seek specificperformance of this Agreement, without recovery of any amounts, fees, costs, expenses or damages ofany kind except attorneys’ fees pursuant to section 29 below, by formally filing an action forspecific performance with an appropriate court of competent jurisdiction within the thirty (30) dayperiod immediately following such default by Seller and serving such action upon Seller within suchthirty (30) day period. Buyer’s failure to timely file such action and serve Seller within suchthirty (30) day period shall be deemed for all purposes to be Buyer’s irrevocable waiver of allrights to seek specific performance of this Agreement.EXCEPT AS OTHERWISE EXPRESSLY SET FORTH ABOVE IN THIS SECTION 15, BUYER HEREBY WAIVES ANY RIGHT TOANY DAMAGES (WHETHER ACTUAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR OTHERWISE AND WHETHER OR NOTTHE REMEDY OF SPECIFIC PERFORMANCE IS AVAILABLE) OR ANY OTHER LEGAL OR EQUITABLE REMEDY (OTHER THANTHAT SPECIFIED ABOVE) THAT IT MAY OTHERWISE HAVE FOR SELLER’S DEFAULT.         INITIALS: /s/ STEPHEN A. MITCHELL   /s/ CHARLES N. HAZEN             SELLER   BUYER            (b) Seller’s Remedy.               (i) IF THE CLOSING FAILS TO OCCUR ON ACCOUNT OFBUYER’S DEFAULT UNDER THIS AGREEMENT, THEN, AS SELLER’S SOLE REMEDY FOR SUCH DEFAULT AND UPONWRITTEN NOTICE OF TERMINATION FROM
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SELLER TO BUYER AND ESCROW AGENT, THE ESCROW AND THIS AGREEMENT SHALL TERMINATE (EXCEPT FORTHIS SECTION 15(B), AND ALL OTHER PROVISIONS WHICH EXPRESSLY SURVIVE TERMINATION OF THIS AGREEMENT)AND SELLER SHALL RECEIVE LIQUIDATED DAMAGES AS PROVIDED IN THIS SECTION 15(B).               (ii) THE PARTIES ACKNOWLEDGE AND AGREE THAT UPONBUYER’S DEFAULT, SELLER WILL INCUR CERTAIN COSTS AND OTHER DAMAGES IN AN AMOUNT THAT WOULD BEEXTREMELY DIFFICULT OR IMPRACTICAL TO ASCERTAIN. BUYER ACKNOWLEDGES AND AGREES THAT THE AMOUNT OFTHE DEPOSIT BEARS A REASONABLE RELATIONSHIP TO THE DAMAGES WHICH THE PARTIES ESTIMATE MAY BESUFFERED BY SELLER BY REASON OF FAILURE OF THE CLOSE OF ESCROW ON ACCOUNT OF BUYER’S DEFAULT, ANDTHE DEPOSIT IS NOT AN AMOUNT UNREASONABLE UNDER THE CIRCUMSTANCES EXISTING AT THE TIME THISAGREEMENT IS MADE (BUYER ACKNOWLEDGING AND AGREEING THAT BUYER HAS FULLY CONSIDERED THE PROVISIONSOF THIS SECTION 15(C) AND SAID CIRCUMSTANCES PRIOR TO ENTERING INTO THIS AGREEMENT AND HASCONSULTED WITH BUYER’S COUNSEL WITH RESPECT THERETO).         INITIALS: /s/ STEPHEN A. MITCHELL   /s/ CHARLES N. HAZEN             SELLER   BUYER            (c) If either party elects to terminate this Agreement pursuant to this section15, all documents previously deposited into escrow shall be returned to the party so depositingsame and neither party shall have any further liability to the other hereunder, except as otherwiseprovided herein. In the event that the Closing fails to occur on account of a default by eitherparty, said party shall pay all cancellation charges and other fees payable to Escrow Agent and theTitle Company.     16. PROPERTY CONVEYED “AS-IS”; RELEASE OF SELLER.          (a)Disclaimer of Representations and Warranties by Seller. Buyeracknowledges and agrees that, except as expressly set forth herein, Buyer is acquiringthe Property in its “AS IS” condition, WITH ALL FAULTS, IF ANY, AND, EXCEPT ASEXPRESSLY SET FORTH HEREIN, WITHOUT ANY WARRANTY, EXPRESS ORIMPLIED.          (b)Sale “As Is”. NOTWITHSTANDING ANYTHING CONTAINEDHEREIN TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED THAT EXCEPT ASEXPRESSLY SET FORTH HEREIN NEITHER SELLER NOR ANY OF ITS AFFILIATES,AGENTS, SHAREHOLDERS, MEMBERS, PARTNERS, OFFICERS, PRINCIPALS,EMPLOYEES OR CONTRACTORS HAS MADE AND IS NOT NOW MAKING, ANDBUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON (DIRECTLY ORINDIRECTLY), ANY WARRANTIES, REPRESENTATIONS OR GUARANTIES OF ANYKIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENTOR FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITEDTO, WARRANTIES, REPRESENTATIONS OR GUARANTIES AS TO (I) MATTERS OF
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TITLE (OTHER THAN SELLER’S WARRANTY OF TITLE IMPLIED IN THE GRANT DEED TO BE DELIVERED ATCLOSING), (II) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR ANY PORTION THEREOF, (III)GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION, SUBSIDENCE, SUBSURFACE CONDITIONS, WATERTABLE, UNDERGROUND WATER RESERVOIRS, LIMITATIONS REGARDING THE WITHDRAWAL OF WATER AND EARTHQUAKEFAULTS AND THE RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES, (IV) WHETHER, AND TO THE EXTENTTO WHICH, THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM (SURFACE OR UNDERGROUND),BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY OR SPECIAL FLOOD HAZARD, (V) DRAINAGE, (VI)SOIL CONDITIONS, INCLUDING THE EXISTENCE OF INSTABILITY, PAST SOIL REPAIRS, SOIL ADDITIONS ORCONDITIONS OF SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY UNDERSHORING,(VII) ZONING OR OTHER ENTITLEMENTS, OR ANY LAND USE REGULATIONS WHATSOEVER, TO WHICH THE PROPERTYOR ANY PORTION THEREOF MAY BE SUBJECT, (VIII) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY ORANY PORTION THEREOF INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (IX) USAGES OFADJOINING PROPERTY, (X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF, (XI) THE VALUE, COMPLIANCEWITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION, AGE, USE, DESIGN, QUALITY, DESCRIPTIONS,SUITABILITY, OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY PORTIONTHEREOF, (XII) ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR AFFECTINGOR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, (XIII) THE PRESENCE OF HAZARDOUS SUBSTANCES (ASDEFINED BELOW) IN OR ON, UNDER OR IN THE VICINITY OF THE PROPERTY, (XIV) THE CONDITION OR USE OFTHE PROPERTY OR COMPLIANCE OF THE PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATEOR LOCAL ORDINANCES, RULES, REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES, CODES OROTHER SIMILAR LAWS, (XV) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND STORAGE TANKS, (XVI) ANYOTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE REAL PROPERTY, (XVII) THE POTENTIAL FORFURTHER DEVELOPMENT OF THE PROPERTY, (XVIII) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS OF THEPROPERTY FOR ANY PARTICULAR PURPOSE.     BUYER REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF REALESTATE AND THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTHHEREIN, BUYER HAS RELIED AND SHALL RELY SOLELY ON (I) BUYER’S OWN EXPERTISE AND THAT OF BUYER’SCONSULTANTS IN PURCHASING THE PROPERTY, AND (II) BUYER’S OWN KNOWLEDGE OF THE PROPERTY BASED SOLELYON BUYER’S INVESTIGATIONS AND INSPECTIONS OF THE PROPERTY. THE TERMS AND CONDITIONS OF THIS SECTIONSHALL EXPRESSLY SURVIVE THE CLOSING AND NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS.SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS, ORINFORMATION PERTAINING
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TO THE PROPERTY FURNISHED BY SELLER, ANY REAL ESTATE BROKER, CONTRACTOR, AFFILIATE, AGENT,EMPLOYEE, SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH IN THIS AGREEMENT.BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE “AS IS” NATURE OF THIS SALE AND ANY FAULTS,LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE ASSOCIATED WITH THE PROPERTY. BUYERACKNOWLEDGES AND AGREES THAT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH IN THIS SECTION ARE ANINTEGRAL PART OF THIS AGREEMENT AND THAT SELLER WOULD NOT HAVE AGREED TO SELL THE PROPERTY TO BUYERFOR THE PURCHASE PRICE WITHOUT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH IN THIS SECTION.          (c)Buyer Represented by Counsel. Buyer hereby represents and warrants toSeller that: (a) Buyer is not in a significantly disparate bargaining position in relation toSeller; (b) Buyer is represented by competent legal counsel in connection with the transactioncontemplated by this Agreement; and (c) Buyer is purchasing the Property for business,commercial, investment or other similar purpose and not for use as Buyer’s residence.          (d)Buyer’s Release of Seller. Except for Seller’s representations, warrantiesand covenants expressly set forth herein, Buyer and anyone claiming by, through or under Buyerhereby waives its right to recover from and fully and irrevocably releases Seller and itsemployees, officers, directors, representatives, agents, servants, attorneys, affiliates,parent, subsidiaries, successors and assigns, and all persons, firms, corporations and organizationsin Seller’s behalf (“Released Parties”) from any and all claims, responsibility and/or liabilitythat it may now have or hereafter acquire against any of the Released Parties for any costs, loss,liability, damage, expenses, demand, action or cause of action arising from or related to (a)the condition (including any construction defects, errors, omissions or other conditions, latentor otherwise, and the presence in the soil, air, structures and surface and subsurface waters ofmaterials or substances that have been or may in the future be determined to be HazardousSubstances or otherwise toxic, hazardous, undesirable or subject to regulation and that mayneed to be specially treated, handled and/or removed from the Property under current or futurefederal, state and local laws regulations or guidelines), valuation, salability or utility of theProperty, or its suitability for any purpose whatsoever, and (b) any information furnished by the ReleasedParties under or in connection with this Agreement; provided, however, the foregoing waiverand release shall not apply to and shall specifically exclude any claims, demands, penalties,fines, liabilities, settlements, damages, costs or expenses, known or unknown, existing and future,incurred in connection with or relating to any claims (x) related to the Property accruingprior to the Closing Date that are made by third parties for personal injury, property damage or death,(y) based on any gross negligence or willful misconduct of Seller or its officers, directors,shareholders, agents, affiliates, employees and successors and assigns, or (z) made by thirdparties (including governmental authorities) against Buyer or its successors, assigns, agentsor affiliates with respect to Hazardous Substances on, under, adjacent to or otherwise affectingthe Property prior to Closing. This release includes claims of which Buyer is presently unaware orwhich Buyer does not presently suspect to exist which, if known by Buyer, would materiallyaffect Buyer’s release to Seller. Buyer specifically waives the provision of California CivilCode Section 1542, which provides as follows:
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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWOR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWNTO HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.”       /s/ CHARLES N. HAZEN         **BUYER’S INITIALS**       In this connection and to the extent permitted by law, Buyer hereby agrees, representsand warrants that Buyer realizes and acknowledges that factual matters now unknown to Buyer mayhave given or may hereafter give rise to causes of action, claims, demands, debts, controversies,damages, costs, losses and expenses which are presently unknown, unanticipated and unsuspected, andBuyer further agrees, represents and warrants that the waivers and releases herein have beennegotiated and agreed upon in light of that realization and that Buyer nevertheless hereby intendsto release, discharge and acquit Seller from any such unknown causes of action, claims, demands,debts, controversies, damages, costs, losses and expenses.          (e) Buyer’s Waiver of Objections. Buyer acknowledges that, as of the date ofClosing, Buyer will have inspected the Property and observed its physical characteristics andexisting conditions and will have had the opportunity to conduct such investigations and studies onand of said Property and adjacent areas as Buyer deems necessary, and, except as otherwiseexpressly provided in subsection 16(d) above, hereby waives any and all objections to or complaintsregarding the Property and its condition, including, but not limited to, federal, state or commonlaw based actions and any private right of action under state and federal law to which the Propertyis or may be subject, including, but not limited to, CERCLA, RCRA, physical characteristics andexisting conditions, including, without limitation, structural and geologic conditions, subsurfacesoil and water conditions and solid and hazardous waste and Hazardous Substances on, under,adjacent to or otherwise affecting the Property. Except as expressly provided in subsection 16(d)above, Buyer further hereby assumes the risk of changes in applicable laws and regulations relatingto past, present and future environmental conditions on the Property and the risk that adversephysical characteristics and conditions, including, without limitation, the presence of HazardousSubstances or other contaminants, may not have been revealed by Buyer’s investigation.     Seller has given Buyer material concessions regarding this transaction in exchange for Buyeragreeing to the provisions of this Section. Seller and Buyer have each initialed this Section tofurther indicate their awareness and acceptance of each and every provision hereof.         /s/ STEPHEN A. MITCHELL /s/ CHARLES N. HAZEN           **SELLER’S INITIALS** **BUYER’S INITIALS**           (f) Hazardous Substances Defined.For purposes of this Agreement,“Hazardous Substances” means any hazardous, toxic or dangerous waste, substance or material,pollutant or contaminant, as defined for purposes of the Comprehensive Environmental Response,Compensation and Liability Act of 1980 (42 U.S.C. Section 6901 et seq.), as amended (“CERCLA”), orthe Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.),
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as amended (“RCRA”), or any other federal, state or local law, ordinance, rule orregulation applicable to the Property, or any substance which is toxic, explosive, corrosive,flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous, or anysubstance which contains gasoline, diesel fuel or other petroleum hydrocarbons,polychlorinated biphenyls (PCBs), radon gas, urea formaldehyde, asbestos, mold, lead orelectromagnetic waves.     17. SURVIVABILITY.     Except for the rights and obligations of Seller and Buyer in sections 8, 12, 16, 17, 19,22, 33 and 34 of this Agreement, and obligations of Buyer in subsections 5(c) and 5(d) of thisAgreement, none of the rights and obligations of Buyer and Seller shall survive the Closing orthe termination of this Agreement. Notwithstanding the foregoing sentence, the rights andobligations of Seller and Buyer in section 33 shall survive for a period of seventy (70) daysafter the Closing Date.     18. NOTICES.     All notices required to be given or delivered under this Agreement shall be in writingand shall be deemed validly given (a) immediately upon hand delivery, (b) on the date ofconfirmed delivery if delivered by courier or express service or by certified mail, returnreceipt requested, or (c) immediately upon the telephonically confirmed receipt of a facsimiletransmission, addressed as follows:   If to Seller: OTR  c/o The State Teachers Retirement System of Ohio  275 East Broad Street  Columbus, Ohio 43215  Attention: Director of Real Estate Assets  Telephone: 614-227-7800  Facsimile: 614-227-7847     with duplicate copy, separately mailed, to the same address,  Attention: Real Estate Counsel  Telephone: 614-227-7867  Facsimile: 614-227-7856     and a copy to:     Allen, Matkins, Leck, Gamble & Mallory LLP  525 South Figueroa Street, 7th floor  Los Angeles, CA 90071  Attention: Kevin A. Corbett  Telephone: 213-622-5555  Facsimile: 213-620-8816   If to Buyer: Hines REIT Properties, L.P.  c/o Hines Interests Limited Partnership  2800 Post Oak Boulevard, Suite 5000
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     Houston, Texas 77056-6118  Attention: Charles N. Hazen  Facsimile: (713)966-7851     and a copy to:     Hines Interests Limited Partnership  West Regional Office  101 California Street, Suite 1000  San Francisco, California 941 1 1  Attention: James Buie  Facsimile: (415)398-1442     and a copy to:     Hines Interests Limited Partnership  West Regional Office  101 California Street, Suite 1000  San Francisco, California 941 1 1  Attention: Lisa Lewis  Facsimile: (415)398-1442     and a copy to:     Baker Botts L.L.P.  2001 Ross Avenue  Dallas, Texas 75201-2980  Attention: Joel M. Overton, Jr.  Facsimile: (214) 661-4938or to such other person or address as Seller or Buyer shall have given by notice asherein provided.     19. BROKER’S COMMISSION.     Except for Cornish & Carey Commercial (“Broker”), whose fees shall be paid pursuant to aseparate agreement between Seller and Broker, Seller and Buyer each represent and warrant to theother that the warranting party has had no dealing with any other dealer, real estate agent, orbroker so as to entitle such other dealer, agent, or broker to receive any commission or fee inconnection with sale of the Property to Buyer. If a claim for such commission or fee shall be made,the party through whom such dealer, agent, or broker claims shall indemnify, defend, and save theother party harmless from and against any and all claims for any such commission or fee and fromany attorneys’ fees and litigation or other expenses relating to any such claim.     20. BINDING EFFECT.     This Agreement shall benefit and bind the parties and the heirs, legal representatives,successors, and assigns of each of them.
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     21. ASSIGNMENT.     Notwithstanding the provisions of section 20 of this Agreement, this Agreement may not beassigned by Buyer without the prior written consent of Seller, which consent shall not beunreasonably withheld; provided, however, this Agreement and Buyer’s rights hereunder may betransferred and assigned without Seller’s consent to any entity or entities which are Affiliates(as hereinafter defined) of Buyer or of Hines Interests Limited Partnership, a Delaware limitedpartnership (“Hines”). In the case of any assignment of this Agreement by Buyer, (a) the originalBuyer named herein shall remain liable for the performance of all of any successor Buyer’sobligations under this Agreement; (b) Seller shall incur no additional expense on account of anyassignment; and (c) Buyer shall disclose the identity of such assignee to Seller and supply toSeller all information of such assignee as may be reasonably requested by Seller not later thanthree (3) business days prior the Closing. For purposes of this section 21, (x) the term“Affiliate” means any person or entity that directly, or indirectly through one or moreintermediaries, controls, is controlled by or is under common control with Buyer or Hines, as thecase may be, and the term “control” means the possession, directly or indirectly, of the power todirect or cause the direction of the management and policies of a person or entity, whether throughthe ownership of voting securities, by contract or otherwise, and the terms “controlling” and“controlled” have the meanings correlative to the foregoing.     22. LIMITED LIABILITY.     Buyer acknowledges and agrees that its recourse against Seller under this Agreement for adefault by Seller hereunder occurring prior to the Closing is limited to the remedies set forth inSection 15(a) of this Agreement. In connection with any post-closing remedy which Buyer may haveagainst Seller, such remedy shall be limited to actual damages incurred by Buyer not to exceed OneMillion Dollars ($1,000,000.00). In no event shall Buyer seek or attempt to obtain any recovery orjudgment against any of Seller’s partners (or their constituent partners) or any director, officer,employee or shareholder of any of the foregoing. In no event shall Buyer be entitled to seek orobtain any other damages of any kind, including, without limitation, consequential, speculative,indirect or punitive damages.     23. SECTION HEADINGS.     All section headings and other titles and captions used in this Agreement are forconvenience only, do not form a substantive part of this Agreement, and shall not restrict orenlarge any substantive provisions of this Agreement.     24. PRONOUNS.     All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine,neuter, singular, or plural, as the context and the identity of the person or persons may require.
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     25. AGREEMENT IN COUNTERPARTS.     This Agreement may be executed in counterparts and all such counterparts shall constitute oneagreement binding on all the parties, notwithstanding that all the parties are not signatories tothe same counterpart.     26. GOVERNING LAW.     This Agreement shall be governed by the laws of the State of California, without regard to itsconflict of law principles.     27. TIME OF THE ESSENCE; FAILURE TO ENFORCE NOT A WAIVER.     Time is of the essence of this Agreement. Except as may be expressly provided in thisAgreement, failure by Seller or Buyer to enforce any right shall not constitute a waiver thereof.     28. SEVERABILITY.     If any provision in this Agreement, or its application to any person or circumstance, is heldto be invalid or unenforceable to any extent, that holding shall not affect the remainder of thisAgreement or the application of that provision to persons or circumstances other than that to whichit was held invalid or unenforceable.     29. ATTORNEYS’ FEES.     If any dispute between Seller and Buyer relating to the transactions contemplated in thisAgreement should result in arbitration or litigation, the prevailing party shall be reimbursed forall reasonable costs incurred in connection therewith, including, without limitation, reasonableattorneys’ fees and court costs.     30. INTERPRETATION.     The parties agree that each party and its counsel have reviewed and revised this Agreement andthat the normal rule of construction to the effect that any ambiguities are to be resolved againstthe drafting party shall not be employed in the interpretation of this Agreement. If any of thedates specified in this Agreement falls on a Saturday, a Sunday or a day on which governmentaloffices or banks are closed in the State of California, then the date of such action shall bedeemed to be extended to the next business day.     31. FACSIMILE SIGNATURES.     Any signature on this Agreement, or any amendment or modification thereof or any document orinstrument signed by either of the parties in connection therewith, that is sent by facsimile shallbe considered valid and binding. A party sending a facsimile signature shall on the same day sendthe executed document to Escrow Agent and to the other party hereto by mail, courier or overnightcourier.
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     32. EXPIRATION OF OFFER.     When this Agreement is signed by Buyer, it shall constitute an offer to purchase the Propertyupon the terms and conditions set forth herein, which offer, unless extended by Buyer in a writingdelivered to Seller or Seller’s agents, shall expire at 5 o’clock p.m. (Pacific Time), May 20,2005, and may be accepted only by Seller delivering to Buyer a copy of this Agreement duly executedby Seller and containing on the first page the date of execution by Seller.     33. COOPERATION WITH BUYER’S AUDITORS AND SEC FILING REQUIREMENTS.     Prior to and after the Closing Date, Seller shall provide to Buyer (at Buyer’s expense) copiesof, or shall provide Buyer access to, such factual information as may be reasonably requested byBuyer, and in the possession or control of Seller, or its property manager or accountants, toenable Buyer (or Hines or an Affiliate of Hines) to allow Buyer’s auditor (Deloitte & Touche LLP orany successor auditor selected by Buyer) to conduct an audit of the income statements of theProperty for the year to date of the year in which the Closing occurs, plus up to the three (3)prior calendar years. Buyer shall be responsible for all out-of-pocket costs associated with thisaudit. Seller shall cooperate reasonably (at no cost to Seller) with Buyer’s auditor in the conductof such audit. In addition, Seller agrees to provide to Buyer’s auditor a letter of representationin the form attached as Schedule 33 hereto (the “Representation Letter”), and, if requested by suchauditor, historical financial statements for the Property, including income and balance sheet datafor the Property, whether required before or after the Closing Date. Without limiting theforegoing, (i) Buyer or its designated independent or other auditor may audit Seller’s operatingstatements of the Property, at Buyer’s expense, and Seller shall provide such documentation asBuyer or its auditor may reasonably request in order to complete such audit, and (ii) Seller shallfurnish to Buyer such financial and other information as may be reasonably required by Buyer or anyAffiliate of Buyer to make any required filings with the Securities and Exchange Commission orother governmental authority; provided, however, that the foregoing obligations of Seller shall belimited to providing such information or documentation as may be in the possession of, orreasonably obtainable by, Seller, its property manager or accountants, at no cost to Seller, and inthe format that Seller (or its property manager or accountants) have maintained such information.     34. COOPERATION WITH BUYER IN THE EVENT OF CERTAIN DISPUTES WITH CALIFORNIA CASUALTY.     If after the Closing Buyer becomes involved in a dispute with California Casualty ManagementCompany in connection with that certain provision of its Tenant Lease relating to its rights toextend or renew the term of its Tenant Lease, Seller agrees to cooperate reasonably with Buyer, asreasonably necessary (at no material cost to Seller) in order to resolve such dispute. Theprovisions of this section 34 shall not be construed to limit or modify in any way the provisionsof section 16 of this Agreement.[signatures appear on following pages]
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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth at thebeginning of this Agreement.         SELLER:           OTR,      an Ohio general partnership           By :  /s/ Stephen A. Mitchell              Stephen A. Mitchell,      Partner           [signatures continue on following pages]  
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                BUYER:           HINES REIT PROPERTIES, L.P,    a Delaware limited partnership           By:Hines Real Estate Investment Trust, Inc.,     a Maryland corporation, its general partner            By: /s/ Charles N. Hazen            Name:  Charles N. Hazen            Title:President                  [signatures continue on following page]  
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**ACCEPTANCE OF ESCROW**     Receipt of an executed copy of the foregoing instrument is hereby acknowledged, and theundersigned hereby agrees to act as Escrow Agent in accordance with the foregoing agreement.     Dated6/8/05  First American Title Insurance Company     EscrowNo. NCE 1538655M By :  /s/ Karen Matsunaga               Karen Matsunaga
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