Document:

exv10w4

 

Exhibit 10.4

THIRD AMENDMENT TO LOAN AGREEMENT

     This THIRD AMENDMENT TO LOAN AGREEMENT (this “Amendment”), entered into as of March 21, 2006
and effective upon the Amendment Effective Date (as defined below), is entered into by and among
PHI, Inc. (formerly Petroleum Helicopters, Inc.), a Louisiana corporation (the “Borrower”), Air
Evac Services, Inc. (“Air Evac”), PHI Tech Services, Inc. (formerly Evangeline Airmotive, Inc.)
(“PHI Tech Services”) and International Helicopter Transport, Inc. (“IHT”, together with Air Evac
and PHI Tech Services, the “Subsidiary Guarantors”) and Whitney National Bank (the “Bank”).

Recitals:

     A. The Borrower, the Subsidiary Guarantors and the Bank are parties to that certain Loan
Agreement, dated as of April 23, 2002, as amended by the First Amendment to the Loan Agreement,
dated June 18, 2004, and the Second Amendment to the Loan Agreement, dated September 20, 2005 (as
amended, the “Loan Agreement”).

     B. The Borrower is a party to that certain Indenture, dated as of April 23, 2002
(collectively, as amended and supplemented, the “2002 Indenture”), entered into between the
Borrower as issuer, the subsidiary guarantors party thereto and The Bank of New York, as trustee,
providing for the issuance of $200 million outstanding principal
amount of 9 3/8% Senior Notes due
2009 (the “2002 Notes”).

     C. The Borrower proposes to commence an offer or series of offers (the “Tender Offer”) to
purchase or redeem any or all of the 2002 Notes from the holders thereof pursuant to the terms of a
Tender Offer and Consent Solicitation and related documents (the “Solicitation Materials”).

     D. Simultaneous with the Tender Offer, the Borrower proposes to make certain amendments as are
deemed necessary, appropriate or desirable (the “Proposed Amendments”) to the 2002 Indenture
relating to the 2002 Notes, which Proposed Amendments would, among other things, remove
substantially all the restrictive covenants, certain events of default and other provisions
contained in the 2002 Indenture.

     E. The Borrower proposes to finance the Tender Consideration through some combination of the
following: (i) cash on hand; (ii) the issuance and sale of up to a maximum of $200 million in
principal aggregate amount of new senior notes (the “New Notes”) in an offering (the “Note
Offering”) exempt from registration under the Securities Act of 1933, as amended (the “Securities
Act”), and providing for resale pursuant to Rule 144A and Regulation S under the Securities Act;
and (iii) proceeds from the Equity Offering (as defined below).

     F. The Borrower proposes to issue the New Notes pursuant to an indenture (the “New Indenture”)
to be executed by and among the Borrower, the subsidiary guarantors named therein (the “New
Indenture Guarantors”) and the trustee under the New Indenture.

     G. Under the terms of the New Indenture, the New Indenture Guarantors will guarantee the
payment of all amounts due under the New Indenture and the New Notes.

 

 

     H. The Borrower will sell the New Notes pursuant to a purchase agreement (the “Purchase
Agreement”) to be executed by the Borrower, the New Indenture Guarantors and the purchasers party
thereto.

     I. As a condition to the purchase of the New Notes, the Borrower will be required to agree,
subject to certain conditions, to issue, pursuant to an exchange offer registered under the
Securities Act (the “Exchange Offer”), a separate series of the Senior Notes due 2013 (the
“Exchange Notes”) having substantially the same terms as the New Notes (except that the Exchange
Notes will not contain transfer restrictions).

     J. In order to finance the Tender Consideration, the Borrower also proposes the offer,
issuance and sale (the “Equity Offering”) of up to 4,931,108 shares of Non-Voting Common Stock (the
“Shares”) under the shelf registration statement filed by the Borrower with the Securities and
Exchange Commission and declared effective on March 31, 2005 (the “Shelf Registration Statement”),
which includes up to 15% of such shares that may be sold pursuant to the exercise of an
overallotment option (the “Overallotment Option”) by the Underwriters (as hereinafter defined).

     K. The Borrower proposes to offer, issue and sell the Shares to a group of underwriters (the
“Underwriters”) led by UBS Investment Bank, Howard Weil Incorporated and other investment banks,
including the Overallotment Option, in the Equity Offering all at a price to be determined.

     L. Pursuant to the Loan Agreement, the Borrower may not enter into any transaction that would
substantially alter the balance sheet or create any additional obligations for borrowed money
without the prior written consent of Bank.

     M. The Borrower would like to amend the Loan Agreement to allow for, among other things, the
following: (i) the Tender Offer for the 2002 Notes; (ii) the Proposed Amendments to the 2002
Indenture; (iii) the offering and issuance of the New Notes pursuant to the New Indenture; (iv) the
entering into the New Indenture; (v) the guarantees granted by the subsidiaries pursuant to the New
Indenture; (vi) the offering and issuance of the Exchange Notes pursuant to the Exchange Offer; and
(vii) the offering of the Shares pursuant to the Equity Offering, including the related granting of
the Overallotment Option to the Underwriters.

     N. The Borrower, Subsidiary Guarantors and the Bank have agreed to enter into this Amendment
to amend and modify the Loan Agreement, among other things, to reflect the changes relating to the
transactions described above.

     NOW, THEREFORE, in consideration of the premises and the respective representations,
warranties, covenants and agreements set forth in this Amendment, and intending to be legally
bound, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

     1.1. Defined Terms.

2

 

     (a) Capitalized terms that are defined in this Amendment shall have the meanings ascribed in
this Amendment to such terms. All other capitalized terms shall have the meanings ascribed to such
terms in the Loan Agreement as amended by this Amendment. Unless the context of this Amendment
clearly requires otherwise, references to the plural include the singular; references to the
singular include the plural; the words “include,” “includes,” and “including” will be deemed to be
followed by “without limitation”; and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.”

     (b) Each reference to “hereof,” “hereunder,” “herein” and “hereby” and each other similar
reference contained in the Loan Agreement, each reference to “this Agreement”, “the Loan Agreement”
and each other similar reference contained in the Loan Agreement and each reference contained in
this Amendment to the “Loan Agreement” shall on and after the Amendment Effective Date refer to the
Loan Agreement as amended by this Amendment. Any notices, requests, certificates and other
instruments executed and delivered on or after the Amendment Effective Date may refer to the Loan
Agreement without making specific reference to this Amendment but nevertheless all such references
shall mean the Loan Agreement as amended by this Amendment unless the context otherwise requires.
This Amendment constitutes a “Loan Document” as defined in the Loan Agreement.

ARTICLE 2

AMENDMENTS AND LIMITED WAIVER

     2.1. (a) Amendment to Section C(3) of the Loan Agreement: Offering Memorandum, Notes and
Indenture. Section C(3) of the Loan Agreement is hereby deleted and replaced in its entirety with
the following:

               “(i) The Loans to be made to PHI under, and the terms and conditions of, this Agreement
do not violate the offering memorandum (the “2002 Offering Memorandum”) dated April 17,
2002, respecting promissory notes in the aggregate principal amount of TWO HUNDRED MILLION
and NO/100 DOLLARS, under an Indenture dated as of April 23, 2002 (the “2002 Indenture”),
among PHI, the Guarantors (as defined in the 2002 Offering Memorandum), and the Bank of New
York, as Trustee, or therewith, as all of the foregoing may be amended from time to time
(individually and collectively, the “2002 Indenture Notes and Documents”); and

               (ii) The Loans to be made to PHI under, and the terms and conditions of, this Agreement
do not violate the offering memorandum (the “2006 Offering Memorandum”) respecting senior
notes in the aggregate principal amount of up to TWO HUNDRED MILLION and NO/100 DOLLARS,
under an Indenture related thereto (the “2006 Indenture”), among PHI, the Guarantors (as
defined in the 2006 Offering Memorandum), and The Bank of New York Trust Company, N.A., as
Trustee, or therewith, as all of the foregoing may be amended from time to time
(individually and collectively, the “2006 Indenture Notes and Documents” and together with
the 2002 Indenture Notes and Documents, the “Indenture Notes and Documents”).”

     (b) Amendment to Section C(4) of the Loan Agreement: Litigation. Section C(4) of the Loan
Agreement is hereby deleted and replaced in its entirety with the following:

3

 

               “Except as set forth on Schedule C(4) attached hereto, to the best of PHI’s knowledge,
after due inquiry, no litigation or governmental proceedings are pending or threatened
against PHI or any of its subsidiaries, the results of which might materially affect PHI or
such subsidiaries’ financial condition or operations. Other than any liability incident to
such litigation or proceedings or provided for or disclosed in the financial statements
submitted to Bank, PHI does not have any material contingent liabilities. No subsidiaries
have any material contingent liability other than those imposed by the security documents
granted by PHI in favor of Whitney and the Indenture Notes and Documents.”

     2.2. Consent. The Bank hereby consents to the (i) the Tender Offer of the 2002 Notes, (ii)
the Proposed Amendments to the 2002 Indenture, (iii) the offering and issuance of the New Notes
pursuant to the New Indenture, (iv) the entering into the New Indenture, (v) the guarantees granted
by the subsidiaries pursuant to the New Indenture, (vi) the offering and issuance of the Exchange
Notes pursuant to the Exchange Offer, and (vii) the offering of the Shares pursuant to the Equity
Offering, including the related granting of the Overallotment Option to the Underwriters.

     2.3. Effectiveness. This Amendment shall become effective as of the first date (the
“Amendment Effective Date”) on which each of the following conditions is satisfied:

	 	(a)	 	there shall have been delivered to the Bank in accordance with Section 4.5
counterparts of this Amendment executed by each of the Borrower, the Subsidiary
Guarantors and the Bank; and
	 
	 	(b)	 	the Bank shall have received all fees and accrued and unpaid costs and expenses
(including reasonable legal fees and expenses) incurred in connection with the
preparation and execution of this Amendment.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

     3.1. Representations and Warranties. To induce the Bank to enter into this Amendment, the
Borrower represents and warrants to the Bank that: 

     (a) The representations and warranties of the Borrower in Section C of the Loan Agreement, as
modified herein, are on the date of execution and delivery of this Amendment, and will be on the
Amendment Effective Date, true, correct and complete in all material respects with the same effect
as though made on and as of such respective date (or, to the extent such representations and
warranties expressly relate to an earlier date, on and as of such earlier date).

     (b) The execution, delivery and performance by the Borrower and the Subsidiary Guarantors of
this Amendment:

	 	(i)	 	are within such Person’s corporate powers; and
	 
	 	(ii)	 	have been duly authorized by all necessary corporate or other entity

4

 

action, including the consent of the holders of its equity interests where required.

     (c) This Amendment has been duly executed and delivered by the Borrower and the Subsidiary
Guarantors. Each of this Amendment and the Loan Agreement constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or limiting creditors’ rights generally or by equitable principles relating to
enforceability.

ARTICLE 4

MISCELLANEOUS

     4.1. No Other Amendments; Reservation of Rights; No Waiver. Other than as otherwise expressly
provided herein, this Amendment shall not be deemed to operate as an amendment or waiver of, or to
prejudice, any right, power, privilege or remedy of any Secured Party under the Loan Agreement or
any other Loan Document, nor shall the entering into of this Amendment preclude any Secured Party
from refusing to enter into any further amendments with respect to the Loan Agreement or any other
Loan Document. Except as specified in Section 2.2, this Amendment shall not constitute a waiver of
(i) compliance with any covenant or other provision in the Loan Agreement or any other Loan
Document or (ii) of the occurrence or continuance of any present or future Default or Event of
Default.

     4.2. Ratification and Confirmation. Except as expressly set forth in this Amendment, the
terms, provisions and conditions of the Loan Agreement and the other Loan Documents are hereby
ratified and confirmed and shall remain unchanged and in full force and effect without interruption
or impairment of any kind.

     4.3. Governing Law. This Amendment will be governed by and construed in accordance with the
laws of the State of Louisiana.

     4.4. Headings. The article and section headings contained in this Amendment are inserted for
convenience only and will not affect in any way the meaning or interpretation of this Amendment.

     4.5. Counterparts. This Amendment may be executed in two or more counterparts, each of which
will be deemed an original but all of which together will constitute one and the same instrument.
This Amendment may be delivered by exchange of copies of the signature page by facsimile
transmission.

     4.6. Severability. The provisions of this Amendment will be deemed severable and the
invalidity or unenforceability of any provision will not affect the validity or enforceability of
the other provisions hereof; provided that if any provision of this Amendment, as applied to any
party or to any circumstance, is judicially determined not to be enforceable in accordance with its
terms, the parties agree that the court judicially making such determination may modify the
provision in a manner consistent with its objectives such that it is enforceable, and/or to delete
specific words or phrases, and in its modified form, such provision will then be enforceable and
will be enforced.

5

 

     4.7. Costs and Expenses. Regardless of whether the transactions contemplated by this
Amendment are consummated, the Borrower agrees to pay to the Bank on demand all reasonable
out-of-pocket costs and expenses of the Bank incurred in connection with the preparation, execution
and delivery of this Amendment, including the reasonable fees and expenses of legal counsel to the
Bank.

     4.8. Assignment; Binding Effect. No party may assign either this Amendment or any of its
rights, interests or obligations hereunder except in the manner specified for an assignment in the
Loan Agreement. All of the terms, agreements, covenants, representations, warranties and
conditions of this Amendment are binding upon, and inure to the benefit of and are enforceable by,
the parties and their respective successors and permitted assigns.

     4.9. Entire Agreement. The Loan Agreement as amended by this Amendment, together with the
Exhibits and Schedules thereto that are delivered pursuant thereto, constitutes the entire
agreement and understanding of the parties in respect of the subject matter of the Loan Agreement
as amended by this Amendment and supersedes all prior understandings, agreements or representations
by or among the parties, written or oral, to the extent they relate in any way to the subject
matter of the Loan Agreement as amended by this Amendment.

[SIGNATURE PAGE FOLLOWS]

6

 

     IN WITNESS WHEREOF, the parties have executed this Amendment, or caused this Amendment to be
executed by their authorized representatives, as of the date stated in the introductory paragraph
of this Amendment.

	 	 	 	 	 	 	 
	BORROWER:	 	PHI, INC.	 	 
	 	 	f/k/a Petroleum Helicopters, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. McCann
	 	Dated:4/12/2006
	 

	 	Name:
	 	 

Michael J. McCann
	 	 
	 

	 	Title:
	 	Chief Financial Officer, Treasurer
and Secretary	 	 
	 
	 	 	 	 	 	 
	BANK:	 	WHITNEY NATIONAL BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Harry G. Stahel	 	 
	 

	 	Name:
	 	 

Harry G. Stahel
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	SUBSIDIARY GUARANTORS:	 	AIR EVAC SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. McCann
	 	Dated:4/12/2006
	 

	 	Name:
	 	 

Michael J. McCann
	 	 
	 

	 	Title:
	 	Chief Financial Officer, Treasurer
and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	PHI TECH SERVICES, INC. (formerly	 	 
	 	 	EVANGELINE AIRMOTIVE, INC.)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. McCann
	 	Dated:4/12/2006
	 

	 	Name:
	 	 

Michael J. McCann
	 	 
	 

	 	Title:
	 	Chief Financial Officer, Treasurer
and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	INTERNATIONAL HELICOPTER	 	 
	 	 	TRANSPORT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. McCann
	 	Dated:4/12/2006
	 

	 	Name:
	 	 

Michael J. McCann
	 	 
	 

	 	Title:
	 	Chief Financial Officer, Treasurer
and Secretary	 	 

Signature Page to

Third Amendment to Loan Agreement

 

 

Schedule C(4)

     In June 2005, we received a document subpoena from the Antitrust Division of the Department of
Justice (“DOJ”). The subpoena relates to a grand jury investigation of potential antitrust
violations among providers of helicopter transportation services in the U.S. Gulf of Mexico. We
have provided the DOJ with all information that has been requested to date and intend to comply
with future requests, if any, for information from the DOJ in connection with this investigation.

Schedule C(4) to

Third Amendment to Loan Agreementexv10w58

 

Exhibit 10.58

SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE

          THIS SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this “Amendment”) is entered
into as of this 11th day of January, 2006 by and between WXIII/SCV REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership (“Seller”), and HINES 720 OLIVE WAY LP, a Delaware limited
partnership (“Buyer”).

          A. Seller and Buyer entered into that certain Agreement of Purchase and Sale dated as of
December 29, 2005, as amended by that certain First Amendment to Agreement of Purchase and Sale
dated as of January 6, 2006 (collectively, the “Agreement”). All capitalized terms used but
not defined herein shall have the meaning given such terms in the Agreement.

          B. Seller and Buyer now desire to enter into this Amendment to amend the Agreement as herein
provided.

          NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer agree as follows:

          1. Approval Notice. Buyer hereby elects to purchase the Property and Buyer’s
execution of this Amendment shall constitute Buyer’s giving of the Approval Notice pursuant to
Section 4.5 of the Agreement. Therefore, in accordance with Section 4.5 of the Agreement, the
Agreement will continue in full force and effect, Buyer waives its right to terminate the Agreement
pursuant to Section 4.5 thereof and Buyer acknowledges that it has received or had access to all
Property Documents and conducted all inspections and tests of the Property that it considers
important.

          2. Purchase Price. The Purchase Price is hereby reduced to $83,675,000.

          3. Closing Date. The Closing Date is extended to January 31, 2006 provided that on or
before January 13, 2006, Buyer deposits the Additional Deposit with Escrow Agent.

          4. Confirmation. Except as modified herein, the Agreement is hereby ratified and
confirmed and is in full force and effect. In the event of a conflict between the terms of this
Amendment and the Agreement, the terms of this Amendment shall prevail.

          5. Counterparts. This Amendment. may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which shall constitute one and the same
instrument. This Amendment shall be effective and binding on the parties upon delivery by facsimile
or electronic transmission of counterparts of this Amendment signed by Seller and Buyer. Each
signatory shall provide a counterpart copy of this Amendment bearing an original signature within
three (3) business days after written request.

 

 

          IN WITNESS WHEREOF, Seller and Buyer have executed this Second Amendment to Agreement of
Purchase and Sale as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	SELLER:	 	 	 	BUYER:
	 
	 	 	 	 	 	 	 	 
	WXM/SCV REAL ESTATE LIMITED	 	 	 	HINES 720 OLIVE WAY LP, a Delaware
	PARTNERSHIP, a Delaware limited partnership	 	 	 	limited partnership,
	 
	 	 	 	 	 	 	 	 
	By:

	 	    WXM/SCV Gen-Par, L.L.C., a
	 	 	 	By:
	 	Hines 720 Olive Way GP LLC,
	 

	 	    Delaware limited liability company
	 	 	 	 	 	a Delaware limited liability company
	 

	 	    General Partner
	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Nancy M. Haag
	 	 	 	By:
	 	/s/ Edmund A. Donaldson
	 

	 	 
	 	 	 	 	 	 
	Name: Nancy M. Haag	 	 	 	Name: Edmund A. Donaldson
	Its: Assistant Vice President	 	 	 	Its: Manager

-2-

 

FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE

          THIS FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this “Amendment”) is entered into as
of this 6`h day of January, 2006 by and between WXIII/SCV REAL ESTATE LIMITED PARTNERSHIP, a
Delaware limited partnership (“Seller”), and HINES 720 OLIVE WAY LP, a Delaware limited
partnership (“Buyer”).

          A. Seller and Buyer entered into that certain Agreement of Purchase and Sale dated as of
December 29, 2005 (the “Agreement”). All capitalized terms used but not defined herein
shall have the meaning given such terms in the Agreement.

          B. Seller and Buyer now desire to enter into this Amendment to provide for the reinstatement
of the Agreement (which has previously been terminated) so as to be in full force and effect and to
amend the Agreement as herein provided.

          NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer agree as follows:

          1. Reinstatement. The Agreement is hereby reinstated (in the same manner as if the
Agreement had never been terminated) and shall be deemed to be in full force and effect.

          2. Inspection Period. The Inspection Period is hereby amended to be the period ending
at 4:00 p.m. on January 11, 2006.

          3. Confirmation. Except as modified herein, the Agreement is hereby ratified and
confirmed and is in full force and effect. In the event of a conflict between the terms of this
Amendment and the Agreement, the terms of this Amendment shall prevail.

          4. Counterparts. This Amendment may be executed in any number of counterparts,. each
of which shall be deemed an original, but all of which shall constitute one and the same
instrument. This Amendment shall be effective and binding on the parties upon delivery by facsimile
or electronic transmission of counterparts of this Amendment signed by Seller and Buyer. Each
signatory shall provide a counterpart copy of this Amendment bearing an original signature within
three (3) business days after written request.

          IN WITNESS WHEREOF, Seller and Buyer have executed this First Amendment to Agreement of
Purchase and Sale as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	SELLER:	 	 	 	BUYER:
	 
	 	 	 	 	 	 	 	 
	WXIII/SCV REAL ESTATE LIMITED	 	 	 	HINES 720 OLIVE WAY LP, a Delaware
	PARTNERSHIP, a Delaware limited partnership	 	 	 	limited partnership,
	 
	 	 	 	 	 	 	 	 
	By:

	 	    WXIII/SCV Gen-Par, L.L.C., a
	 	 	 	By:
	 	    Hines 720 Olive Way GP LLC,
	 

	 	    Delaware limited liability company
	 	 	 	 	 	    a Delaware limited liability company
	 

	 	    General Partner
	 	 	 	 	 	    General Partner
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Nancy M. Haag
	 	 	 	By:
	 	/s/ Edmund A. Donaldson
	 

	 	 
	 	 	 	 	 	 
	Name: Nancy M. Haag	 	 	 	Name: Edmund A. Donaldson
	Its: Assistant Vice President	 	 	 	Its: Manager

 

 

AGREEMENT OF PURCHASE AND SALE

720 Olive Way

By and Between

WXIII/SCV REAL ESTATE LIMITED PARTNERSHIP,

a Delaware limited partnership

and

HINES 720 OLIVE WAY LP,

a Delaware limited partnership

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 1 BASIC INFORMATION	 	 	1	 
	 
	 	1.1	 	Certain Basic Terms	 	 	1	 
	 
	 	1.2	 	Closing Costs	 	 	2	 
	 
	 	1.3	 	Notice Addresses:	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 2 PROPERTY	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 3 EARNEST MONEY	 	 	5	 
	 
	 	3.1	 	Deposit and Investment of Earnest Money	 	 	5	 
	 
	 	3.2	 	Intentionally Omitted	 	 	5	 
	 
	 	3.3	 	Form; Failure to Deposit	 	 	5	 
	 
	 	3.4	 	Disposition of Earnest Money	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 4 DUE DILIGENCE	 	 	6	 
	 
	 	4.1	 	Due Diligence Materials	 	 	6	 
	 
	 	4.2	 	Intentionally Omitted	 	 	7	 
	 
	 	4.3	 	Physical Due Diligence	 	 	7	 
	 
	 	4.4	 	Intentionally Omitted	 	 	7	 
	 
	 	4.5	 	Due Diligence/Termination Right	 	 	7	 
	 
	 	4.6	 	Return of Documents and Reports	 	 	8	 
	 
	 	4.7	 	Service Contracts	 	 	8	 
	 
	 	4.8	 	Proprietary Information; Confidentiality	 	 	8	 
	 
	 	4.9	 	No Representation or Warranty by Seller	 	 	9	 
	 
	 	4.10	 	Buyer’s Responsibilities	 	 	9	 
	 
	 	4.11	 	Buyer’s Agreement to Indemnify	 	 	9	 
	 
	 	4.12	 	Environmental Studies; Seller’s Right to Terminate	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 5 TITLE AND SURVEY	 	 	10	 
	 
	 	5.1	 	Title Report	 	 	10	 
	 
	 	5.2	 	New or Updated Survey	 	 	10	 
	 
	 	5.3	 	Title Review	 	 	10	 
	 
	 	5.4	 	Permitted Exceptions	 	 	11	 
	 
	 	5.5	 	Delivery of Title Policy at Closing	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 6 OPERATIONS AND RISK OF LOSS	 	 	11	 
	 
	 	6.1	 	Ongoing Operations	 	 	11	 
	 
	 	6.2	 	Leases, Service Contracts and License Agreements	 	 	11	 
	 
	 	6.3	 	Damage	 	 	12	 
	 
	 	6.4	 	Condemnation	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 7 CLOSING	 	 	13	 
	 
	 	7.1	 	Closing	 	 	13	 
	 
	 	7.2	 	Conditions to Parties’ Obligation to Close	 	 	13	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	7.3	 	Seller’s Deliveries in Escrow	 	 	14	 
	 
	 	7.4	 	Buyer’s Deliveries in Escrow	 	 	15	 
	 
	 	7.5	 	Closing Statements	 	 	16	 
	 
	 	7.6	 	Purchase Price	 	 	16	 
	 
	 	7.7	 	Possession	 	 	16	 
	 
	 	7.8	 	Delivery of Books and Records	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 8 PRORATIONS; DEPOSITS; COMMISSIONS	 	 	16	 
	 
	 	8.1	 	Prorations	 	 	16	 
	 
	 	8.2	 	Leasing/Licensing Costs	 	 	18	 
	 
	 	8.3	 	Closing Costs	 	 	18	 
	 
	 	8.4	 	Final Adjustment After Closing	 	 	18	 
	 
	 	8.5	 	Security Deposits	 	 	19	 
	 
	 	8.6	 	Commissions	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 9 REPRESENTATIONS AND WARRANTIES	 	 	19	 
	 
	 	9.1	 	Seller’s Representations and Warranties	 	 	19	 
	 
	 	9.2	 	Buyer’s Representations and Warranties	 	 	20	 
	 
	 	9.3	 	Survival of Representations and Warranties	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 10 DEFAULT AND REMEDIES	 	 	21	 
	 
	 	10.1	 	Seller’s Remedies	 	 	21	 
	 
	 	10.2	 	Buyer’s Remedies	 	 	22	 
	 
	 	10.3	 	Attorneys’ Fees	 	 	22	 
	 
	 	10.4	 	Other Expenses	 	 	22	 
	 
	 	10.5	 	Buyer’s Remedies	 	 	23	 
	 
	 	10.6	 	Attorneys’ Fees	 	 	23	 
	 
	 	10.7	 	Other Expenses	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 11 DISCLAIMERS; RELEASE AND INDEMNITY	 	 	24	 
	 
	 	11.1	 	Disclaimers By Seller	 	 	24	 
	 
	 	11.2	 	Sale “As Is, Where Is	 	 	24	 
	 
	 	11.3	 	Seller Released from Liability	 	 	25	 
	 
	 	11.4	 	“Hazardous Materials” Defined	 	 	26	 
	 
	 	11.5	 	Survival	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 12 MISCELLANEOUS	 	 	26	 
	 
	 	12.1	 	Parties Bound; Assignment	 	 	26	 
	 
	 	12.2	 	Headings	 	 	26	 
	 
	 	12.3	 	Invalidity and Waiver	 	 	26	 
	 
	 	12.4	 	Governing Law	 	 	27	 
	 
	 	12.5	 	Survival	 	 	27	 
	 
	 	12.6	 	Entirety and Amendments	 	 	27	 
	 
	 	12.7	 	Time	 	 	27	 
	 
	 	12.8	 	Confidentiality	 	 	27	 
	 
	 	12.9	 	Notices	 	 	27	 
	 
	 	12.10	 	Construction	 	 	28	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	12.11	 	Calculation of Time Periods	 	 	28	 
	 
	 	12.12	 	Execution in Counterparts	 	 	28	 
	 
	 	12.13	 	No Recordation	 	 	28	 
	 
	 	12.14	 	Further Assurances	 	 	28	 
	 
	 	12.15	 	Auditor Access	 	 	28	 
	 
	 	12.16	 	ERISA	 	 	28	 
	 
	 	12.17	 	No Third Party Beneficiary	 	 	29	 
	 
	 	12.18	 	Asset Manager; Designated Representative	 	 	29	 

 

 

AGREEMENT OF PURCHASE AND SALE

[720 Olive Way, Seattle, Washington]

     This Agreement of Purchase and Sale (“Agreement”) dated as of December 29, 2005, is
made and entered into by and between Buyer and Seller.

RECITALS:

     A. Defined terms are indicated by initial capital letters. Defined terms shall have the
meaning set forth herein, whether or not such terms are used before or after the definitions are
set forth.

     B. Buyer desires to purchase the Property and Seller desires to sell the Property, all upon
the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants and agreements set
forth herein, as well as the sums to be paid by Buyer to Seller, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Buyer and Seller agree as
follows:

ARTICLE 1

BASIC INFORMATION

     1.1 Certain Basic Terms. The following defined terms shall have the meanings set forth
below:

          1.1.1 Seller: WXIII/SCV Real Estate Limited Partnership, a Delaware limited
partnership.

          1.1.2 Buyer: Hines 720 Olive Way LP, a Delaware limited partnership.

          1.1.3 Purchase Price: $84,000,000.

          1.1.4 Earnest Money: $2,000,000, to be deposited in accordance with Section
3.1 below, plus interest thereon, pursuant to Section 3.1.

 

 

	 	 	 	 	 
	 

	 	1.1.5 Title Company:
	 	LandAmerica Financial Group
	 

	 	 	 	601 Union Street, Suite 1100
	 

	 	 	 	Seattle, Washington 98101
	 

	 	 	 	Attention: Brandon Melton
	 

	 	 	 	Telephone: (206) 628-2834
	 

	 	 	 	Facsimile: (206) 628-1631
	 
	 	 	 	 
	 

	 	1.1.6 Escrow Agent:
	 	LandAmerica Financial Group
	 

	 	 	 	601 Union Street, Suite 1100
	 

	 	 	 	Seattle, Washington 98101
	 

	 	 	 	Attention: Brandon Melton
	 

	 	 	 	Telephone: (206) 628-2834
	 

	 	 	 	Facsimile: (206) 628-1631
	 
	 	 	 	 
	 

	 	1.1.7 Broker:
	 	Secured Capital Corp
	 

	 	 	 	11150 Santa Monica Boulevard, Suite 1400
	 

	 	 	 	Los Angeles, California 90025
	 

	 	 	 	Attention: Jay Borzi/Steve Silk
	 

	 	 	 	Telephone: (310) 477-9600
	 

	 	 	 	Facsimile: (310) 477-3436
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	Pacific Real Estate Partners, Inc.
	 

	 	 	 	225 108th Avenue N.E., Suite 550
	 

	 	 	 	Bellevue, Washington 98004
	 

	 	 	 	Attention: Ann Chamberlin
	 

	 	 	 	Telephone: (425) 974-4000
	 

	 	 	 	Facsimile: (425) 974-4020

          1.1.8 Effective Date: The date on which this Agreement is executed by the latter to
sign of Buyer or Seller, as indicated on the signature page of this Agreement. Each party shall
deliver a copy of the executed Agreement to the other upon execution.

          1.1.9 Inspection Period: The period beginning on the Effective Date and ending on
January 5, 2006.

          1.1.10 Closing Date: January 16, 2005, provided however, Buyer shall have the right
to extend the Closing Date to January 31, 2006 by (a) giving written notice to Seller and Escrow
Agent of such election to extend on or before January 13, 2006 and (b) depositing with Escrow Agent
an additional Two Million Dollars ($2,000,000) of earnest money (the “Additional Deposit”) on or
before January 13, 2006. Upon deposit with Escrow Agent, the Additional Deposit shall be considered
part of, and treated in the same manner as, the Earnest Money described under Section 1.1.4
above, and upon such deposit all references to Earnest Money shall include the Additional Deposit.
The Additional Deposit shall be applied to the Purchase Price at Closing.

     1.2 Closing Costs. Closing costs shall be allocated and paid as follows:

2

 

	 	 	 
	Cost	 	Responsible Party
	PTR required to be delivered pursuant to Section 5.1

	 	Seller
	 
	 	 
	Premium (and related sales tax) for Standard Coverage Owner’s Policy
of Title Insurance required to be delivered pursuant to Section 5.5
and any endorsements to insure over disapproved exceptions if so
elected by Seller

	 	Seller
	 
	 	 
	Premium (and related sales tax) for any costs of Title Policy
attributable Seller to ALTA Extended Coverage and any endorsements
desired by Buyer, and any inspection fee charged by the Title Company

	 	Buyer
	 
	 	 
	Costs of any revisions, modifications or recertifications to the Survey

	 	Buyer
	 
	 	 
	Costs for UCC Searches

	 	Buyer
	 
	 	 
	Recording Fees for the Deed and personal property sales and use taxes

	 	Buyer
	 
	 	 
	Washington State real estate excise tax

	 	Seller
	 
	 	 
	Any escrow fee charged by Escrow Agent for holding the Earnest

	 	Buyer 1/2
	Money or conducting the Closing

	 	Seller 1/2
	 
	 	 
	Real Estate Sales Commission to Broker

	 	Seller

     1.3 Notice Addresses:

	 	 	 	 	 	 	 
	Buyer:

	 	Hines 720 Olive Way LP
	 	Copy to:
	 	Davis Wright Tremaine LLP
	 

	 	800 Fifth Avenue
	 	 	 	1501 Fourth Avenue
	 

	 	Suite 3838
	 	 	 	2600 Century Square
	 

	 	Seattle, Washington 98104
	 	 	 	Seattle, Washington 98101
	 

	 	Attention: Robert C. Hollister
	 	 	 	Attention: Lisa Peterson, Esq.
	 

	 	Telephone: (206) 839-8400
	 	 	 	Telephone: (206) 628-7652
	 

	 	Facsimile: (206) 839-8401
	 	 	 	Facsimile: (206) 628-7699
	 
	 	 	 	 	 	 
	Copy to:

	 	Hines Interests Limited
	 	Copy to:
	 	Baker Botts L.L.P.
	 

	 	Partnership
	 	 	 	2001 Ross Avenue
	 

	 	2800 Post Oak Boulevard
	 	 	 	Dallas, Texas 75201
	 

	 	Suite 5000
	 	 	 	Attention: Joel Overton
	 

	 	Houston, Texas 77056-6118
	 	 	 	Telephone: (214) 953-6938
	 

	 	Attention: Edmund Donaldson
	 	 	 	Facsimile: (214) 953-4938
	 

	 	Telephone: (713) 966-2660	 	 	 	 
	 

	 	Facsimile: (713) 966-2075	 	 	 	 

3

 

	 	 	 	 	 	 	 
	Seller:

	 	WXIII/SVC Real Estate
	 	Copy to:
	 	Cox, Castle & Nicholson LLP
	 

	 	Limited Partnership
	 	 	 	2049 Century Park East, 28th Floor
	 

	 	c/o Archon Group L.P.
	 	 	 	Los Angeles, California 90067
	 

	 	1901 Avenue of the Stars
	 	 	 	Attention: Marlene Goodfried, Esq.
	 

	 	Suite 1450
	 	 	 	Telephone: (310) 284-2268
	 

	 	Los Angeles, California 90067
	 	 	 	Facsimile: (310) 277-7889
	 

	 	Attention: Leslie Walling	 	 	 	 
	 

	 	Telephone: (213) 633-5815	 	 	 	 
	 

	 	Facsimile: (213) 633-5870	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Archon Group L.P.
	 

	 	 	 	 	 	600 e. Las Colinas Blvd.
	 

	 	 	 	 	 	Irving, Texas 75039
	 

	 	 	 	 	 	Attention: General Counsel
	 

	 	 	 	 	 	Telephone: (972) 368-2200
	 

	 	 	 	 	 	Facsimile: (972) 368-2290

ARTICLE 2

PROPERTY

     2.1 Subject to the terms and conditions of this Agreement, Seller agrees to sell to Buyer, and
Buyer agrees to purchase from Seller, the following property (collectively, the “Property”):

          2.1.1 Real Property. The land described in Exhibit A attached hereto (the
“Land”), together with (i) all improvements located thereon (“Improvements”), (ii)
all and singular the rights, benefits, privileges, air rights, development rights, easements,
tenements, hereditaments, and appurtenances thereon or in anywise appertaining thereto, and (iii)
without warranty, all right, title, and interest of Seller, if any, in and to all strips and gores
and any land lying in the bed of any street, road or alley, open or proposed, adjoining such Land
(collectively, the “Real Property”).

          2.1.2 Leases. All of Seller’s right, title and interest, without warranty except as
expressly provided herein, in all leases of the Real Property with the tenants described on
Schedule 2.1.2 attached hereto, and any leases which may be made by Seller after the Effective Date
and prior to Closing as permitted by this Agreement (collectively, the “Leases”). Notwithstanding
the foregoing, Seller shall retain all right, title and interest in and to, and the right to
collect and receive, any amounts payable in connection with that certain former lease with Harris
and Hull, a former tenant of the Real Property (the “Harris and Hull Claim”). The Harris and Hull
Claim shall not be deemed to be part of the Property and shall not be included in the sale
contemplated by this Agreement and Buyer shall have no claim or right thereto or interest therein.

          2.1.3 Tangible Personal Property. All of Seller’s right, title and interest, without
warranty except as to title, in the equipment, machinery, furniture, furnishings, supplies and
other tangible personal property, if any, owned by Seller and now or hereafter located in and

4

 

used in connection with the operation, ownership or management of the Real Property, but
specifically excluding any items of personal property owned by tenants or licensees at or on the
Real Property and further excluding any items of personal property owned by third parties and
leased to Seller (collectively, the “Tangible Personal Property”). The Tangible Personal Property
currently owned by Seller is listed on Schedule 2.1.3 attached hereto.

          2.1.4 Intangible Personal Property. All of Seller’s right, title and interest, if
any, without warranty, in all intangible personal property related to the Real Property and the
Improvements, including, without limitation, all to the extent assignable: all trade names and
trade marks associated with the Real Property and the Improvements, including the name of the Real
Property; the plans and specifications and other architectural and engineering drawings for the
Improvements, if any; warranties, if any; contract rights related to the construction, operation or
management of the Real Property, if any (collectively, the “Service Contracts”) (but Seller’s
right, title and interest in the Service Contracts shall only be assigned to the extent Seller’s
obligations thereunder from and after the Closing are expressly assumed by Buyer pursuant to this
Agreement); all license agreements with respect to the Real Property (collectively, the “License
Agreements”); governmental permits, approvals and licenses, if any; and telephone exchange numbers
(collectively, the “Intangible Personal Property”).

          2.1.5 Security Deposits. All of Seller’s right, title and interest in and to all
refundable security deposits of tenants and licensees of the Real Property held and not applied by
Seller (collectively, the “Security Deposits”).

ARTICLE 3

EARNEST MONEY

     3.1 Deposit and Investment of Earnest Money. Within three (3) business days after the
Effective Date, Buyer shall deposit the Earnest Money with Escrow Agent. Escrow Agent shall invest
the Earnest Money in government insured interest-bearing accounts that can be liquidated
immediately without penalty and which are otherwise satisfactory to Seller and Buyer, shall not
commingle the Earnest Money with any funds of Escrow Agent or others, and shall promptly provide
Buyer and Seller with confirmation of the investments made. Such account shall have no penalty for
early withdrawal, and Buyer accepts all risks with regard to such account.

     3.2 Intentionally Omitted.

     3.3 Form; Failure to Deposit. The Earnest Money shall be in the form of a certified or
cashier’s check or the wire transfer to Escrow Agent of immediately available U.S. federal funds.
If Buyer fails to timely deposit any portion of the Earnest Money within the time periods required,
Seller may terminate this Agreement by written notice to Buyer, in which event the parties hereto
shall have no further rights or obligations hereunder, except for rights and obligations which, by
their terms, survive the termination hereof.

     3.4 Disposition of Earnest Money. The Earnest Money shall be applied as a credit to the
Purchase Price at Closing. However, if Buyer terminates this Agreement prior to, or if this

5

 

Agreement terminates upon, the expiration of the Inspection Period pursuant to Section 4.5,
Escrow Agent shall pay the entire Earnest Money to Buyer within one (1) business day following
receipt of the Due Diligence Termination Notice from Buyer or within one (1) business day after the
expiration of the Inspection Period unless Buyer has notified Seller and Escrow Agent in writing
that Buyer has elected to proceed to Closing pursuant to Section 4.5. No notice to Escrow
Agent from Seller shall be required for the release of the Earnest Money to Buyer by Escrow Agent
if this Agreement terminates or is terminated pursuant to Section 4.5. In the event of a
termination of this Agreement by either Seller or Buyer for any reason other than pursuant to
Section 4.5, Escrow Agent is authorized to deliver the Earnest Money to the party hereto
entitled to same pursuant to the terms hereof on or before the tenth (10th) business day following
receipt by Escrow Agent and the non-terminating party of written notice of such termination from
the terminating party, unless the other party hereto notifies Escrow Agent that it disputes the
right of the other party to receive the Earnest Money. In such event, Escrow Agent may interplead
the Earnest Money into a court of competent jurisdiction in the county in which the Real Property
is located. All attorneys’ fees and costs and Escrow Agent’s costs and expenses incurred in
connection with such interpleader shall be assessed against the party that is not awarded the
Earnest Money, or if the Earnest Money is distributed in part to both parties, then in the inverse
proportion of such distribution.

ARTICLE 4

DUE DILIGENCE

     4.1 Due Diligence Materials. Prior to execution of this Agreement, Seller delivered to
Buyer and Buyer received copies of those documents listed on Exhibit B attached hereto (“Property
Information”). In addition, during the Inspection Period and following at least twenty-four (24)
hours’ prior telephone or written notice from Buyer, Seller agrees to allow Buyer, its authorized
agents or representatives, at Buyer’s expense, to inspect at the Real Property and make copies of
any other documents and property records (other than the Excluded Documents, as defined below)
relating to the ownership, operation and maintenance of the Property, but only if and to the extent
such documents and property records are in Seller’s possession at the Real Property (which shall
include review of copies of such documents located at the property management office at the Real
Property) (“Additional Property Information”). All of such Property Information and
Additional Property Information delivered to, made available to, copied and/or reviewed by Buyer
pursuant to this Section 4.1 (including all Leases, Service Contracts and License
Agreements) shall sometimes be referred to collectively herein as the “Property Documents”.
Notwithstanding anything in this Section 4.1 to the contrary, Seller shall have no
obligation to make available to Buyer, and Buyer shall have no right to inspect or make copies of,
any of the Excluded Documents. As used herein, “Excluded Documents” shall mean any
documents in electronic form or involving either Seller’s financing or refinancing of the Property,
any purchase and escrow agreements and correspondence pertaining to Seller’s acquisition of the
Property (other than documents pertaining to the Leases or the physical or environmental condition
of the Real Property), any documents pertaining to the potential acquisition of the Property by any
past or prospective purchasers (other than documents relating to the Leases or the physical or
environmental condition of Real Property), any third party purchase inquiries and correspondence,
appraisals of the Property,
internal budgets (other than operating budgets for calendar years 2005
and earlier) or financial projections, and any other

6

 

internal documents (other than documents consisting of correspondence or notices to and from the
tenants or licensees or with respect to Service Contracts to be assumed by Buyer pursuant to this
Agreement or documents relating to the physical or environmental condition of Real Property).

     4.2 Intentionally Omitted.

     4.3 Physical Due Diligence. Buyer has been given access to the Property prior to the
Effective Date, and continuing until the Closing (or earlier termination of this Agreement), Buyer
shall have reasonable access to the Real Property at all reasonable times during normal business
hours, upon appropriate notice to tenants and licensees as permitted or required under the Leases
and License Agreements, for the purpose of conducting reasonably necessary tests, including surveys
and architectural, engineering, geotechnical and environmental inspections and tests, provided that
(i) Buyer must give Seller twenty-four (24) hours’ prior telephone or written notice of any such
inspection or test, and with respect to any intrusive inspection or test (i.e., core sampling) must
obtain Seller’s prior written consent (which consent may not be unreasonably withheld, conditioned
or delayed), (ii) prior to performing any inspection or test, Buyer must deliver a certificate of
insurance to Seller evidencing that Buyer and its contractor performing such test or inspection
each have in place reasonable amounts of commercial general liability insurance on commercially
reasonably terms for its activities on the Real Property covering any accident arising in
connection with the presence of Buyer, its contractors, agents and representatives on the Real
Property, which insurance shall name Seller and Asset Manager as additional insureds thereunder,
and (iii) all such tests shall be conducted by Buyer in compliance with Buyer’s responsibilities
set forth in Section 4.12 below. Buyer shall bear the cost of all such inspections or tests
and shall be responsible for and act as the generator with respect to any wastes generated by those
tests, if any. Subject to the provisions of Section 4.8 hereof, Buyer or Buyer’s
representatives may meet with any tenant or licensee; provided, however, Buyer must contact Seller
at least forty-eight (48) hours in advance by telephone or fax to inform Seller of Buyer’s intended
meeting and to allow Seller the opportunity to attend such meeting if Seller desires. Subject to
the provisions of Section 4.8 hereof, Buyer or Buyer’s representatives may meet with any
governmental authority for any good faith, reasonable purpose in connection with the transaction
contemplated by this Agreement; provided, however, Buyer must contact Seller at least forty-eight
(48) hours in advance by telephone or fax to inform Seller of Buyer’s intended meeting and to allow
Seller the opportunity to attend such meeting if Seller desires, except that the foregoing shall
not apply to any inspection of city files by Buyer or its representatives nor to any efforts by
Buyer or its representatives to obtain a zoning compliance letter from the City of Seattle.

     4.4 Intentionally Omitted.

     4.5 Due Diligence/Termination Right. Buyer shall have through the last day of the
Inspection Period in which to (i) examine, inspect, and investigate the Property Documents and the
Property and, in Buyer’s sole and absolute judgment and discretion, determine whether the Property
(including the condition of title to the Real Property, as described in Section 5.3) is
acceptable to Buyer, (ii) obtain all necessary internal approvals, and (iii) satisfy all other
contingencies of Buyer except as otherwise expressly provided herein. Notwithstanding anything to
the contrary in this Agreement, Buyer may terminate this Agreement for any reason or no

7

 

reason by giving written notice of termination to Seller and Escrow Agent (the “Due Diligence
Termination Notice”) on or before the last day of the Inspection Period, in which event this
Agreement shall immediately terminate and the Earnest Money shall be promptly refunded to Buyer. If
Buyer does not give written notice to Seller on or before the last day of the Inspection Period
that Buyer elects to purchase the Property (the “Approval Notice”), this Agreement shall
immediately terminate and the Earnest Money shall be promptly refunded to Buyer. If Buyer gives the
Approval Notice, this Agreement shall continue in full force and effect, Buyer shall be deemed to
have waived its right to terminate this Agreement pursuant to Section 4.4 and this
Section 4.5, and Buyer shall be deemed to have acknowledged that it has received or had
access to all Property Documents and conducted all inspections and tests of the Property that it
considers important.

     4.6 Return of Documents and Reports. If this Agreement terminates for any reason other
than Seller’s default hereunder, Buyer shall, following Seller’s request, promptly return and/or
deliver to Seller all Property Documents and copies thereof. Additionally, if this Agreement
terminates for any reason other than Seller’s default, then Buyer must deliver to Seller copies of
all third party reports, investigations and studies concerning the physical or environmental
condition of the Property, other than communications from Buyer’s attorneys, economic analyses,
appraisals or financial projections (collectively, the “Reports” and, individually, a
“Report”) prepared for Buyer in connection with its due diligence review of the Property.
The Reports shall be delivered to Seller without any representation or warranty as to the
completeness or accuracy of the Reports or any other matter relating thereto, and Seller shall have
no right to rely on any Report without the written consent of the party preparing same. Buyer’s
obligation to deliver the Property Documents and the Reports to Seller shall survive the
termination of this Agreement.

     4.7 Service Contracts. Buyer shall assume Seller’s obligations under the Service Contracts
listed on Schedule 4.7 from and after the Closing (which assumption shall be subject to the
rights of the vendors thereunder). Seller shall terminate all other Service Contracts as of the
Closing.

     4.8 Proprietary Information; Confidentiality. Buyer acknowledges that the Property
Documents are proprietary and confidential and will be delivered to Buyer or made available for
Buyer’s review solely to assist Buyer in determining the feasibility of purchasing the Property.
Unless the Closing occurs, Buyer shall not use the Property Documents for any purpose other than as
set forth in the preceding sentence. Buyer shall not disclose the contents of the Property
Documents to any person other than to its attorneys, advisors and other persons who are responsible
for determining the feasibility of Buyer’s acquisition of the Property and who have been advised to
preserve the confidentiality of such information as required hereby (collectively, “Permitted
Outside Parties”). At any time and from time to time, within two (2) business days after
Seller’s request, Buyer shall deliver to Seller a list of all parties to whom Buyer has provided
any Property Documents or any information taken from the Property Documents. Buyer shall not
divulge the contents of the Property Documents and other information except in strict accordance
with the confidentiality standards set forth in this Section 4.8. In permitting Buyer to
review the Property Documents or any other information, Seller has not waived any privilege or
claim of confidentiality with respect thereto, and no third party benefits or relationships of any
kind, either express or implied, have been offered, intended or created.

8

 

     4.9 No Representation or Warranty by Seller. Buyer acknowledges that, except as expressly
set forth in this Agreement, neither Seller nor Asset Manager has made nor makes any warranty or
representation regarding the truth, accuracy or completeness of the Property Documents or the
source(s) thereof. Buyer further acknowledges that some if not all of the Property Documents were
prepared by third parties other than Seller and Asset Manager. Seller and Asset Manager expressly
disclaim any and all liability for representations or warranties, express or implied, statements of
fact and other matters contained in such information, or for omissions from the Property Documents,
or in any other written or oral communications transmitted or made available to Buyer. Buyer shall
rely solely upon its own investigation with respect to the Property, including, without limitation,
the Property’s physical, environmental or economic condition, compliance or lack of compliance with
any ordinance, order, permit or regulation or any other attribute or matter relating thereto.
Seller and Asset Manager have not undertaken any independent investigation as to the truth,
accuracy or completeness of the Property Documents and are providing the Property Documents or
making the same available for Buyer’s review solely as an accommodation to Buyer.

     4.10 Buyer’s Responsibilities. In conducting any inspections, investigations or tests of
the Property and/or Property Documents, Buyer and its agents and representatives shall: (i) not
unreasonably disturb the tenants or licensees or unreasonably interfere with their use of the
Property pursuant to their respective Leases and License Agreements; (ii) not unreasonably
interfere with the operation and maintenance of the Property; (iii) not damage any part of the
Property or any personal property owned or held by any tenant, licensee or other third party; (iv)
not injure or otherwise cause bodily harm to Seller, Asset Manager, or their respective agents,
guests, invitees, contractors and employees or any tenants or licensees or their respective guests
or invitees; (v) comply with all applicable laws; (vi) promptly pay when due the costs of all
tests, investigations, and examinations done with regard to the Property; (vii) not permit any
liens to attach to the Property by reason of the exercise of its rights hereunder; (viii) repair
any damage to the Real Property resulting directly or indirectly from any such inspection or tests;
and (ix) not reveal or disclose prior to Closing any information obtained by Buyer prior to Closing
concerning the Property and the Property Documents to anyone other than the Permitted Outside
Parties, in accordance with the confidentiality standards set forth in Section 4.8 above,
or except as may be otherwise required by law.

     4.11 Buyer’s Agreement to Indemnify. Buyer indemnifies and holds Seller and Asset Manager
harmless from and against any and all liens, claims, causes of action, damages, liabilities and
expenses (including reasonable attorneys’ fees) arising out of Buyer’s inspections or tests of the
Property or any violation of the provisions of Sections 4.3, 4.8 and 4.10;
provided, however, the indemnity shall not extend to protect Seller from any pre-existing
liabilities for matters merely discovered by Buyer (e.g., latent environmental contamination).
Buyer’s obligations under this Section 4.11 shall survive the termination of this Agreement
and shall survive the Closing with respect to events occurring prior to Closing.

     4.12 Environmental Studies; Seller’s Right to Terminate. As additional consideration for
the transaction contemplated in this Agreement, Buyer must provide to Seller, immediately following
the receipt of same by Buyer, copies of any and all third party reports, tests or studies involving
contamination of or other environmental concerns relating to the Property; provided, however, Buyer
shall have no obligation to cause any such tests or studies to be performed on the

9

 

Property. Seller acknowledges that Buyer has not made and does not make any warranty or
representation regarding the truth or accuracy of any such studies or reports. Notwithstanding
Section 4.11 above, Buyer shall have no liability or culpability of any nature as a result
of having provided such information to Seller or as a result of Seller’s reliance thereon or
arising out of the fact that Buyer merely conducted such tests or studies, except to the extent
Buyer’s actions aggravate any preexisting liability of Seller.

ARTICLE 5

TITLE AND SURVEY

     5.1 Title Report. Prior to execution of this Agreement, Seller or the Title Company
delivered to Buyer, and Buyer received: (i) a title report with an effective date of August 11,
2005, under order number RT-20168775 (the “PTR”) issued by the Title Company, (ii) copies
of all documents of record referred to in the PTR as exceptions to title to the Real Property
(“Title Documents”), and (iii) a survey #05-1208 dated “9/05” prepared by Van Cleave and
Associates (the “Survey”).

     5.2 New or Updated Survey. Buyer may elect to obtain a new survey or revise, modify, or
re-certify the Survey as necessary in order for the Title Company to delete the survey exception
from the Title Policy or to otherwise satisfy Buyer’s objectives; provided, however, in no event
shall the issuance and/or receipt of such new or revised survey be a condition precedent to, or
delay, Closing.

     5.3 Title Review. Buyer has reviewed the PTR and the Survey and has approved Schedule B,
special exceptions 2, 3 and 4 (with respect to non-delinquent installments only), 5, 6, 7, 8 and 9
of the PTR (the “Approved Exceptions”). If the Title Company issues a supplement to the PTR
that includes any new exceptions to title, Buyer shall have three (3) business days after receipt
of such supplement to deliver to Seller a notice disapproving such new exception to title. Buyer’s
failure to so object to such new exception shall be conclusively deemed to be Buyer’s approval of
such new exception. If Buyer timely delivers to Seller such disapproval notice, then Seller, within
five (5) business days after receipt of such disapproval notice, may but shall not be obligated to,
notify Buyer in writing (“Seller’s Title Notice”) that Seller will eliminate or cure (by
title endorsement paid for by Seller and acceptable to Buyer from the Title Company or otherwise)
such new exception, and if Seller so elects, the elimination or curing by Seller of such exception
shall be a condition precedent to Buyer’s obligation to close. If Seller does not deliver Seller’s
Title Notice to Buyer within such period, Buyer is deemed to be notified that Seller is unable or
unwilling to eliminate or cure the new exception. If Seller (i) does not timely deliver Seller’s
Title Notice or (ii) notifies or is deemed to have notified Buyer that Seller is unable or
unwilling to cure any new exception, Buyer may elect to terminate this Agreement by written notice
to Seller delivered within three (3) business days following notice or deemed notice that Seller is
unable or unwilling to cure any new exception. Buyer’s failure to so terminate this Agreement shall
be deemed Buyer’s waiver of any objection to such new exception. Notwithstanding the foregoing
provisions of this Section 5.3 to the contrary, subject to Buyer’s full performance under
this Agreement, Seller does agree to deliver title to the Real Property at Closing free and clear
of liens of the deeds of trust and/or mortgages created by, under or through Seller, which liens
Seller shall cause to be released at or prior to Closing (with

10

 

Seller having the right to apply the Purchase Price or a portion thereof for such purpose), and
Seller further agrees to remove any title exceptions or encumbrances to title which are voluntarily
created by, under or through Seller after the Effective Date without Buyer’s consent.

     5.4 Permitted Exceptions. The term “Permitted Exceptions” shall mean: the Approved
Exceptions; matters created by, through or under Buyer or approved by Buyer pursuant to Section
5.3 above; items shown on the Survey; real estate taxes not yet due and payable; tenants under
the Leases; and licensees under the License Agreements.

     5.5 Delivery of Title Policy at Closing. In the event that the Title Company does not
issue at Closing, or unconditionally commit at Closing to issue, to Buyer, an ALTA extended
coverage owner’s title policy (1970 form) in accordance with the terms of this Agreement, insuring
Buyer’s title to the Real Property in the amount of the Purchase Price, subject only to the
standard exceptions and exclusions from coverage contained in such policy form and the Permitted
Exceptions (the “Title Policy”), Buyer shall have the right to terminate this Agreement, in
which case the Earnest Money shall be immediately returned to Buyer and the parties hereto shall
have no further rights or obligations, other than those that by their terms survive the termination
of this Agreement.

ARTICLE 6

OPERATIONS AND RISK OF LOSS

     6.1 Ongoing Operations. From the Effective Date through Closing:

     6.2 Leases, Service Contracts and License Agreements. Seller will perform its material
obligations under the Leases, Service Contracts and License Agreements.

          6.2.1 New Contracts. Except as provided in Section 6.1.4, Seller will not
enter into any contract that will be an obligation affecting the Property subsequent to the
Closing. Seller shall not amend any Service Contract being assumed by Buyer in a manner that will
affect the Property subsequent to the Closing.

          6.2.2 Maintenance of Improvements; Removal of Personal Property. Subject to
Sections 6.2 and 6.3, Seller shall maintain all Improvements substantially in their
present condition (ordinary wear and tear and casualty excepted) and in a manner consistent with
Seller’s maintenance of the Improvements during Seller’s period of ownership. Seller will not
remove any Tangible Personal Property except as may be required for necessary repair or
replacement, and replacement shall be of approximately equal quality and quantity as existed as the
removed item of Tangible Personal Property.

          6.2.3 Leasing and License Agreements. Seller will not amend or terminate any existing
Lease or License Agreement or enter into any new Lease or new License Agreement without providing
Buyer (i) all relevant supporting documentation, as reasonably determined by Seller, including,
without limitation, financial information of the tenant and/or licensee, as applicable, and
Leasing/Licensing Costs, to the extent in Seller’s possession, and (ii) as to any such amendment or
termination of a Lease or License Agreement or new Lease or new License Agreement which is to be
executed after the expiration of the Inspection Period, Seller’s request

11

 

for Buyer’s approval thereof. If Buyer’s consent is requested by Seller as to any amendment or
termination of a Lease or License Agreement or new Lease or new License Agreement, Buyer agrees to
give Seller written notice of approval or disapproval of a proposed amendment or termination of a
Lease or License Agreement or new Lease or new License Agreement within three (3) business days
after Buyer’s receipt of the items in (i) and (ii) of this Section 6.1.4. If Buyer does not
respond to Seller’s request within such time period, then Buyer will be deemed to have approved
such amendment, termination or new Lease or new License Agreement. Buyer’s approval rights and
obligations will vary depending on whether the request for approval from Seller is delivered to
Buyer before or after the expiration of the Inspection Period, as follows:

               (i) With respect to a request for approval delivered by Seller to Buyer before the expiration
of the Inspection Period, Buyer’s consent shall not be unreasonably withheld or conditioned.

               (ii) With respect to a request for approval delivered by Seller to Buyer after the expiration
of the Inspection Period, Buyer may withhold its consent at its sole discretion.

     6.3 Damage. If prior to Closing the Real Property is damaged by fire or other casualty,
Seller shall estimate the cost to repair and the time required to complete repairs and will provide
Buyer written notice of Seller’s estimation (the “Casualty Notice”) as soon as reasonably
possible after the occurrence of the casualty.

          6.3.1 Material. In the event of any Material Damage to or destruction of the Real
Property or any portion thereof prior to Closing, Buyer may, at its option, terminate this
Agreement by delivering written notice to Seller on or before the expiration of thirty (30) days
after the date Seller delivers the Casualty Notice to Buyer (which Casualty Notice shall specify
Seller’s estimate of the amount of any deductible) (and if necessary, the Closing Date shall be
extended to give Buyer the full thirty (30) day period to make such election and for the parties to
obtain insurance settlement agreements with Seller’s insurers). Upon any such termination, the
Earnest Money shall be returned to Buyer and the parties hereto shall have no further rights or
obligations hereunder, other than those that by their terms survive the termination of this
Agreement. If Buyer does not terminate this Agreement within said thirty (30) day period, then the
parties shall proceed under this Agreement and close on schedule (subject to extension of Closing
as provided above), and as of Closing Seller shall assign to Buyer, without representation or
warranty by or recourse against Seller, all of Seller’s rights in and to any resulting insurance
proceeds (including any rent loss insurance applicable to any period on and after the Closing Date)
due Seller as a result of such damage or destruction and Buyer shall assume full responsibility for
all needed repairs, and Buyer shall receive a credit at Closing for any deductible amount under
such insurance policies (provided however, the credit for any deductible amount shall not exceed
$500,000 in the aggregate and the amount of the deductible plus insurance proceeds shall not exceed
the cost of repair). For the purposes of this Agreement, “Material Damage” and
“Materially Damaged” means damage which, in Seller’s reasonable estimation, exceeds
$500,000 to repair or which, in Seller’s reasonable estimation, will take longer than ninety (90)
days to repair or for which there is no insurance coverage.

12

 

          6.3.2 Not Material. If the Real Property is not Materially Damaged, then neither
Buyer nor Seller shall have the right to terminate this Agreement, and Seller shall, at its option,
either (i) repair the damage before the Closing in a manner reasonably satisfactory to Buyer, or
(ii) assign to Buyer, without representation or warranty by or recourse against Seller, all of
Seller’s rights in and to any resulting insurance proceeds (including any rent loss insurance
applicable to any period on and after the Closing Date) due Seller as a result of such damage or
destruction, Buyer shall assume full responsibility for all needed repairs, and Buyer shall receive
a credit at Closing for any deductible amount under such insurance policies (provided the amount of
the deductible plus insurance proceeds shall not exceed the cost of repair).

     6.4 Condemnation. If proceedings in eminent domain are instituted with respect to the
Property or any portion thereof, then Buyer may, at its option, by written notice to Seller given
within ten (10) days after Seller notifies Buyer of such proceedings (and if necessary the Closing
Date shall be automatically extended to give Buyer the full ten (10) day period to make such
election), either: (i) terminate this Agreement, in which case the Earnest Money shall be
immediately returned to Buyer and the parties hereto shall have no further rights or obligations,
other than those that by their terms survive the termination of this Agreement, or (ii) proceed
under this Agreement, in which event Seller shall, at the Closing, assign to Buyer its entire
right, title and interest in and to any condemnation award, and Buyer shall have the sole right
after the Closing to negotiate and otherwise deal with the condemning authority in respect of such
matter. If Buyer does not give Seller written notice of its election within the time required
above, then Buyer shall be deemed to have elected option (ii) above.

ARTICLE 7

CLOSING

     7.1 Closing. The consummation of the transaction contemplated herein (“Closing”)
shall occur on the Closing Date at the offices of Escrow Agent (or such other location as may be
mutually agreed upon by Seller and Buyer). Funds shall be deposited into and held by Escrow Agent
in a closing escrow account with a bank satisfactory to Buyer and Seller. Upon satisfaction or
completion of all closing conditions and deliveries, the parties shall direct Escrow Agent to
immediately record and deliver the closing documents to the appropriate parties and make
disbursements according to the closing statements executed by Seller and Buyer.

     7.2 Conditions to Parties’ Obligation to Close. In addition to all other conditions set
forth herein, the obligation of Seller, on the one hand, and Buyer, on the other hand, to
consummate the transactions contemplated hereunder are conditioned upon the following:

          7.2.1 Representations and Warranties. The other party’s representations and
warranties contained herein shall be true and correct in all material respects as of the date of
this Agreement and the Closing Date (provided, however, if Buyer has actual knowledge that any of
Seller’s representations and warranties are not true and correct in all material respects prior to
the end of the Inspection Period but Buyer nevertheless did not terminate this Agreement pursuant
to Section 4.5 above, the accuracy of such representations and warranties shall no longer
be a condition to Buyer’s obligation to purchase the Property hereunder);

13

 

          7.2.2 Deliveries. As of the Closing Date, the other party shall have tendered all
deliveries to be made at Closing; and

          7.2.3 Actions, Suits, etc. There shall exist no pending actions, suits, arbitrations,
claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings, actually filed against the other party that would (i) prevent
such party from performing its obligations under this Agreement, or (ii) except for any matters
disclosed to Buyer in the Property Documents, materially and adversely affect the operation or
value of the Property.

          7.2.4 Estoppels. Seller shall have obtained and delivered to Buyer at least two (2)
business days prior to the Closing Date estoppel certificates substantially in the form of Exhibit
G attached hereto with no material adverse disclosure from tenants leasing at least 80% of the
leased rentable area in the Improvements, including from all tenants leasing a full floor or more
of space in the Improvements. This condition is for the sole benefit of Buyer and if this condition
is not so satisfied, Buyer shall have the right to terminate this Agreement. Notwithstanding
anything to the contrary contained herein, if Buyer fails to terminate this Agreement on or before
the date which is two (2) business days prior to the Closing Date, Buyer shall be deemed to have
waived receipt of such tenant estoppel certificates as a condition of the Closing. Seller shall not
be obligated to expend any funds in connection with obtaining any such tenant estoppel certificates
(unless Seller is specifically required to do so under the terms of any Lease), and the failure of
Seller to obtain any such tenant estoppel certificates shall not be a breach or default hereunder.

               So long as a party is not in default hereunder, if any condition to such party’s obligation to
proceed with the Closing hereunder has not been satisfied as of the Closing Date (or such earlier
date as is provided herein), such party may, in its sole discretion, terminate this Agreement by
delivering written notice to the other party on or before the Closing Date in which case the
Earnest Money shall be returned to Buyer and the parties hereto shall have no further rights or
obligations other than those that by their terms survive the termination of this Agreement, or
elect to close notwithstanding the non-satisfaction of such condition, in which event such party
shall be deemed to have waived any such condition. In the event such party elects to close,
notwithstanding the non-satisfaction of such condition, said party shall be deemed to have waived
said condition, and there shall be no liability on the part of any other party hereto for breaches
of representations and warranties of which the party electing to close had knowledge at the
Closing.

     7.3 Seller’s Deliveries in Escrow. As of or prior to the Closing Date, Seller shall
deliver in escrow to Escrow Agent the following:

          7.3.1 Deed. A bargain and sale deed in the form of Exhibit C attached hereto
(the “Deed”) executed and acknowledged by Seller, conveying to Buyer Seller’s interest in
the Real Property;

          7.3.2 Bill of Sale, Assignment and Assumption. A Bill of Sale, Assignment and
Assumption in the form of Exhibit D attached hereto (the “Assignment”), executed by Seller,

14

 

vesting in Buyer, without warranty except as expressly provided in Section 2.1.3,
Seller’s right, title and interest in and to the property described therein;

          7.3.3 Conveyancing or Transfer Tax Forms or Returns. Such conveyancing or transfer
tax forms or returns, if any, as are required to be delivered or signed by Seller by applicable
state and local law in connection with the conveyance of the Real Property;

          7.3.4 Non-Foreign Certificate. An affidavit as required by the Foreign Investors Real
Property Tax Act, as amended, in the form of Exhibit E attached hereto, executed by Seller;

          7.3.5 Tenant Notice. A notice to each tenant in the form of Exhibit F
(“Tenant Notice”), duly executed by Seller, informing the tenant of the change of ownership
of the Property and a transfer of such tenant’s security deposit (if any) to such new owner. Buyer
shall promptly provide to Seller all necessary information regarding the Buyer required to complete
the Tenant Notices.

          7.3.6 Authority. Evidence of the existence, organization and authority of Seller and
of the authority of the persons executing documents on behalf of Seller reasonably satisfactory to
the underwriter for the Title Policy; and

          7.3.7 Additional Documents. Any additional documents that Escrow Agent or the Title
Company may reasonably require for the proper consummation of the transaction contemplated by this
Agreement (provided, however, no such additional document shall expand any obligation, covenant,
representation or warranty of Seller or result in any new or additional obligation, covenant,
representation or warranty of Seller under this Agreement beyond those expressly set forth in this
Agreement).

     7.4 Buyer’s Deliveries in Escrow. As of or prior to the Closing Date, Buyer shall deliver
in escrow to Escrow Agent the following:

          7.4.1 Bill of Sale, Assignment and Assumption. The Assignment, executed by Buyer;

          7.4.2 ERISA Letter. A letter to Seller in the form of Exhibit H attached hereto duly
executed by Buyer, confirming that Buyer is not acquiring the Property with the assets of an
employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974 (“ERISA”);

          7.4.3 Conveyancing or Transfer Tax Forms or Returns. Such conveyancing or transfer
tax forms or returns, if any, as are required to be delivered or signed by Buyer by applicable
state and local law in connection with the conveyance of Real Property; and

          7.4.4 Additional Documents. Any additional documents that Seller, Escrow Agent or the
Title Company may reasonably require for the proper consummation of the transaction contemplated by
this Agreement (provided, however, no such additional document shall expand any obligation,
covenant, representation or warranty of Buyer or result in any new or additional obligation,
covenant, representation or warranty of Buyer under this Agreement beyond those expressly set forth
in this Agreement).

15

 

     7.5 Closing Statements. Seller shall deliver to Buyer and Escrow Agent at least three (3)
business days before the Closing Date, a draft proration statement for amounts due under the
Leases, License Agreements, and Service Contracts assumed by Buyer pursuant to this Agreement. As
of or prior to the Closing Date, Seller and Buyer shall deposit with Escrow Agent executed closing
statements consistent with this Agreement in the form required by Escrow Agent. At least two (2)
business days prior to the Closing Date, Buyer and Seller shall cooperate with each other and
Escrow Agent to cause Escrow Agent to deliver drafts of the closing statements to Buyer and Seller
for review and comment so that the final closing statements can be executed by the Closing Date as
required hereinabove.

     7.6 Purchase Price. On or before 10:00 a.m. (California time) on the Closing Date, Buyer
shall deliver to Escrow Agent the Purchase Price, less the Earnest Money which shall be applied to
the Purchase Price, plus or minus applicable prorations, in immediate, same-day U.S. federal funds
wired for credit into Escrow Agent’s escrow account, which funds must be delivered in a manner to
permit Escrow Agent to deliver good funds to Seller or its designee on the Closing Date (and, if
requested by Seller, by wire transfer); in the event that Escrow Agent is unable to deliver good
funds to Seller or its designee on the Closing Date, then the closing statements and related
prorations will be revised as necessary.

     7.7 Possession. Seller shall deliver possession of the Real Property and Tangible Personal
Property to Buyer at the Closing subject only to the rights of tenants under the Leases and the
Permitted Exceptions.

     7.8 Delivery of Books and Records. After the Closing, Seller shall deliver to the offices
of Buyer’s property manager or to the Real Property to the extent in Seller’s or its property
manager’s possession or control: the original Leases and Lease files; the original License
Agreements and related files; maintenance records and warranties; plans and specifications;
licenses, permits and certificates of occupancy and other permits relating to the Property; copies
or originals of all books and records of account, contracts, and copies of correspondence with
tenants, licensees and suppliers; receipts for deposits, unpaid bills and other papers or documents
which pertain to the Property; all advertising materials; booklets; keys; and other items, if any,
used in the operation of the Property.

ARTICLE 8

PRORATIONS; DEPOSITS; COMMISSIONS

     8.1 Prorations. At Closing, the following items shall be prorated as of the date of
Closing with all items of income and expense for the Property being borne by Buyer from and after
(and including) the date of Closing: Tenant Receivables (as defined below) and other income and
rents; fees and assessments; prepaid expenses and obligations under Service Contracts; accrued
operating expenses; real and personal ad valorem taxes (“Taxes”); and any assessments by
private covenant for the then-current calendar year of Closing. Specifically, the following shall
apply to such prorations:

          8.1.1 Taxes. If Taxes for the year of Closing are not known or cannot be reasonably
estimated, Taxes shall be prorated based on Taxes for the year prior to Closing.

16

 

          8.1.2 Utilities. Buyer shall take all steps necessary to effectuate the transfer of
all utilities to its name as of the Closing Date, and where and to the extent necessary, post
deposits with the utility companies. Seller shall endeavor to have all utility meters read as of
the Closing Date. Seller shall be entitled to recover any and all deposits held by any utility
company as of the Closing Date or, at Seller’s option, take a credit for same on the closing
statement described in Section 7.5 above.

          8.1.3 Tenant Receivables. Rents due from tenants under Leases, license fees and
payments due from licensees under the License Agreements, and operating expenses and/or taxes
payable by tenants under Leases and licensees under the License Agreements (collectively, “Tenant
Receivables”) shall be apportioned on the basis of the period for which the same is payable and if,
as and when collected, as follows:

               (a) Buyer shall apply rent, license fees and other income and payments received from tenants
under Leases and licensees under the License Agreements after Closing in the following order of
priority: (i) first, to payment of the current Tenant Receivables then due for the month in which
the Closing Date occurs, which amount shall be apportioned between Buyer and Seller as of the
Closing Date as set forth in Section 8.1 hereof (with Seller’s portion thereof to be
delivered to Seller); (ii) second, to Tenant Receivables first coming due after Closing and
applicable to the period of time after Closing, which amount shall be retained by Buyer; (iii)
third, to payment of Tenant Receivables first coming due after Closing but applicable to the period
of time before Closing, including, without limitation, the Tenant Receivables described in
Section 8.1.3(b) below (collectively, “Unbilled Tenant Receivables”), which amount shall be
delivered to Seller; and (iv) thereafter, to delinquent Tenant Receivables which were due and
payable as of Closing but not collected by Seller as of Closing (collectively, “Uncollected
Delinquent Tenant Receivables”), which amount shall be delivered to Seller. Notwithstanding the
foregoing, Seller shall have the right to pursue the collection of Uncollected Delinquent Tenant
Receivables for a period of one (1) year after Closing without prejudice to Seller’s rights or
Buyer’s obligations hereunder; provided, however, Seller shall have no right to cause any such
tenant or licensee to be evicted or to exercise any other “landlord” or “licensor” remedy (as set
forth in such tenant’s Lease or such licensee’s License Agreement, as the case may be) against such
tenant or licensee other than to sue for collection and if any sums are received as a result of
such collection efforts, such sums (less reasonable, actual costs and expenses of collection,
including reasonable attorneys’ fees, court costs and disbursements, if any) shall be distributed
in accordance with the foregoing clauses (i) to (iv). Any sums received by Buyer to which Seller is
entitled shall be held in trust for Seller on account of such past due rents and license fees
payable to Seller, and Buyer shall remit to Seller any such sums received by Buyer to which Seller
is entitled within ten (10) business days after receipt thereof less reasonable, actual costs and
expenses of collection, including reasonable attorneys’ fees, court costs and disbursements, if
any. Seller expressly agrees that if Seller receives any amounts after the Closing Date which are
attributable, in whole or in part, to any period after the Closing Date, Seller shall remit to
Buyer that portion of the monies so received by Seller to which Buyer is entitled within ten (10)
business days after receipt thereof. With respect to Unbilled Tenant Receivables, Buyer covenants
and agrees to (A) bill the same when billable if the accounting records provided by Seller are in
such a state that Buyer can determine the amounts to be billed; and (B) cooperate with Seller to
determine the correct amount of operating expenses and/or taxes due. Buyer shall

17

 

use commercially reasonable efforts to bill for Uncollected Delinquent Tenant Receivables. The
provisions of this Section 8.1.3(a) shall survive the Closing.

               (b) Without limiting the generality of the requirements of Section 8.1.3(a)(ii) above,
if the final reconciliation or determination of operating expenses and/or taxes due under the
Leases and/or License Agreements shows that a net amount is owed by Seller to Buyer, Buyer’s pro
rata portion shall be paid by Seller to Buyer within ten (10) business days of such final
determination under the Leases or License Agreements, as the case may be. If the final
determination of operating expenses and/or taxes due under the Leases shows that a net amount is
owed by Buyer to Seller, Buyer shall, within ten (10) business days of such final determination,
remit to Seller Seller’s portion of operating expenses and/or taxes for the period up to and
including the Closing Date, if, as and when received. Buyer agrees to receive and hold any monies
received on account of such past due expenses and/or taxes in trust for Seller and to pay same
promptly to Seller as aforesaid. The provisions of this Section 8.1.3(b) shall survive the
Closing for a period of six (6) months.

     8.2 Leasing/Licensing Costs. Seller agrees to pay or discharge at or prior to Closing all
brokerage commissions, costs for tenant improvements/allowances, legal fees and other costs and
expenses (collectively, “Leasing/Licensing Costs”) that are due and payable in connection
with Leases and License Agreements in force as of or prior to the Effective Date and to pay all
Leasing/Licensing Costs relating to the expansion of Community Health Network into Suite 500 or to
credit Buyer at Closing with the amount of all Leasing/Licensing Costs relating to the expansion of
Community Health Network into Suite 500 (such Leasing/Licensing Costs relating to the Community
Health Network expansion not to exceed $126,561); provided, however, that (except as expressly
provided above) Seller shall have no obligation to pay, and as of the Closing, Buyer shall assume
the obligation to pay, (i) all Leasing/Licensing Costs payable with respect to any option to renew
or option to expand that has not been exercised as of or prior to the Effective Date, and (ii) all
Leasing/Licensing Costs incurred with respect to Leases and License Agreements and renewals,
extensions, amendments and terminations thereof executed subsequent to the Effective Date in
accordance with the terms of this Agreement. The provisions of this Section 8.2 shall
survive the Closing.

     8.3 Closing Costs. Closing costs shall be allocated between Seller and Buyer in accordance
with Section 1.2.

     8.4 Final Adjustment After Closing. If final bills are not available or cannot be issued
prior to Closing for any item being prorated under Section 8.1, then Buyer and Seller agree
to allocate such items on a fair and equitable basis as soon as such bills are available, final
adjustment to be made as soon as reasonably possible after the Closing; provided, however, such
final adjustment shall be made by the date which is six (6) months after the Closing or, with
respect to the reconciliation of operating expenses and taxes under the Leases and License
Agreements discussed in Section 8.1.3(b) above, which shall be performed by Seller within
sixty (60) days following the Closing. Payments in connection with the final adjustment shall be
due within thirty (30) days of written notice. All such rights and obligations shall survive the
Closing.

18

 

     8.5 Security Deposits. All Security Deposits not applied by Seller (and interest thereon
if required by law or contract) shall be transferred or credited to Buyer at Closing. As of the
Closing, Buyer shall assume Seller’s obligations related to the Security Deposits, but only to the
extent they are credited or transferred to Buyer. If all or any part of any tenant’s Security
Deposit has been applied by Seller, then Seller shall either (a) ensure that such tenant
acknowledges in writing the actual amount held by Seller as of the Closing Date or Seller shall
hold harmless Buyer from any claim by the tenant for any amount in excess of the credit given to
Buyer by Seller at Closing (which obligation shall survive Closing), or (b) cause such tenant to
replenish the Security Deposit to the full amount required under such tenant’s Lease if the Lease
requires such replenishment.

     8.6 Commissions. Seller shall be responsible to Broker for a real estate sales commission
at Closing (but only in the event of a Closing in strict accordance with this Agreement) in
accordance with a separate agreement between Seller and Broker. Broker may share its commission
with any other licensed broker involved in this transaction, but the payment of the commission by
Seller to Broker shall fully satisfy any obligations of Seller to pay a commission hereunder. Under
no circumstances shall Seller owe a commission or other compensation to any other broker, agent or
person. Any cooperating broker shall not be an affiliate, subsidiary or related in any way to
Buyer. Other than as stated above in this Section 8.6, Seller and Buyer each represent and
warrant to the other that no real estate brokerage commission is payable to any person or entity in
connection with the transaction contemplated hereby, and each agrees to and does hereby indemnify
and hold the other harmless against the payment of any commission to any other person or entity
claiming by, through or under Seller or Buyer, as applicable. This indemnification shall extend to
any and all claims, liabilities, costs and expenses (including reasonable attorneys’ fees and
litigation costs) arising as a result of such claims and shall survive the Closing.

ARTICLE 9

REPRESENTATIONS
AND WARRANTIES

     9.1 Seller’s Representations and Warranties. Seller represents and warrants to Buyer that:

          9.1.1 Organization and Authority. Seller has been duly organized, is validly
existing, and is in good standing in the state in which it was formed. Seller has the full right
and authority and has obtained any and all consents required to enter into this Agreement and to
consummate or cause to be consummated the transactions contemplated hereby. This Agreement has
been, and all of the documents to be delivered by Seller at the Closing will be, authorized and
executed and constitute, or will constitute, as appropriate, the valid and binding obligation of
Seller, enforceable in accordance with their terms.

          9.1.2 Conflicts and Pending Actions. There is no agreement to which Seller is a party
or, to Seller’s knowledge, that is binding on Seller which is in conflict with this Agreement. To
Seller’s knowledge, there is no action or proceeding pending or threatened against Seller which
challenges or impairs Seller’s ability to execute or perform its obligations under this Agreement.

19

 

          9.1.3 Notices from Governmental Authorities. To Seller’s knowledge, Seller has not
received from any governmental authority having jurisdiction over the Property written notice of
any material violation of any laws applicable (or alleged to be applicable) to the Real Property,
or any part thereof, that has not been corrected.

          9.1.4 Leases. The tenants under the Leases in effect as of the Effective Date are
identified on Schedule 2.1.2 attached hereto. To Seller’s knowledge, the Leases (including
amendments) listed on Schedule 9.1.4 attached hereto constitute all of the Leases (including
amendments) for space in the Improvements (excluding storage agreements) as of the Effective Date.

          9.1.5 Service Contracts. To Seller’s knowledge, the Service Contracts in effect as of
the Effective Date are identified on Schedule 9.1.5 attached hereto.

          9.1.6 Condemnation. To Seller’s knowledge, no condemnation actions are pending or
contemplated against the Property or any part thereof.

          9.1.7 Litigation. To Seller’s knowledge, there is no litigation pending or threatened
against Seller with respect to the Property which if determined adversely would materially and
adversely affect the use or operation of the Property for its intended purposes or would materially
and adversely affect the ability of Seller to perform its obligation under this Agreement.

          9.1.8 Environmental Reports. To Seller’s knowledge, Seller has delivered to Buyer all
third-party environmental reports in Seller’s possession.

     9.2 Buyer’s Representations and Warranties. Buyer represents and warrants to Seller that:

          9.2.1 Organization and Authority. Buyer has been duly organized and is validly
existing as a limited partnership in good standing in the State of Delaware and is qualified to do
business in the state in which the Real Property is located. Buyer has the full right and authority
and has obtained any and all consents required to enter into this Agreement and to consummate or
cause to be consummated the transactions contemplated hereby. This Agreement has been, and all of
the documents to be delivered by Buyer at the Closing will be, authorized and properly executed and
constitute, or will constitute, as appropriate, the valid and binding obligation of Buyer,
enforceable in accordance with their terms.

          9.2.2 Conflicts and Pending Action. There is no agreement to which Buyer is a party
or to Buyer’s knowledge binding on Buyer which is in conflict with this Agreement. There is no
action or proceeding pending or, to Buyer’s knowledge, threatened against Buyer which challenges or
impairs Buyer’s ability to execute or perform its obligations under this Agreement.

     9.3 Survival of Representations and Warranties. The representations and warranties set
forth in this Article 9 are made as of the Effective Date and, with respect to Sections
9.1.1 and 9.1.2, are remade as of the Closing Date and shall not be deemed to be merged
into or waived by the instruments of Closing, but shall survive the Closing for a period of twelve
(12) months (the “Survival Period”). Terms such as “to Seller’s knowledge,” “to the best of
Seller’s

20

 

knowledge” or like phrases mean the actual present and conscious awareness or knowledge of Leslie
Walling asset manager of the Property (“Asset Manager’s Employee”), without any duty of
inquiry or investigation; provided that so qualifying Seller’s knowledge shall in no event give
rise to any personal liability on the part of Asset Manager’s Employee or any other officer or
employee of Seller or its Asset Manager, on account of any breach of any representation or warranty
made by Seller herein. Said terms do not include constructive knowledge, imputed knowledge, or
knowledge Seller or such persons do not have but could have obtained through further investigation
or inquiry. No broker, agent, or party other than Seller is authorized to make any representation
or warranty for or on behalf of Seller. Terms such as “to Buyer’s knowledge,” “to the best of
Buyer’s knowledge” or like phrases mean the actual present and conscious awareness or knowledge of
Robert C. Hollister, without any duty of inquiry or investigation; provided that so qualifying
Buyer’s knowledge shall in no event give rise to any personal liability on the part of Mr.
Hollister or any other officer or employee of Buyer, on account of any breach of any representation
or warranty made by Buyer herein. Said terms do not include constructive knowledge, imputed
knowledge, or knowledge Buyer or such persons do not have but could have obtained through further
investigation or inquiry. No broker, agent or party other than Buyer is authorized to make any
representation or warranty for or on behalf of Buyer. Each party shall have the right to bring an
action against the other on the breach of a representation or warranty hereunder, but only on the
following conditions: (i) the party bringing the action for breach first learns of the breach after
Closing and files such action within the Survival Period; and (ii) neither party shall have the
right to bring a cause of action for a breach of a representation or warranty unless the damage to
such party on account of such breach (individually or when combined with damages from other
breaches) equals or exceeds $25,000.00. Neither party shall have any liability after Closing for
the breach of a representation or warranty hereunder of which the other party hereto had knowledge
as of Closing. Furthermore, Buyer agrees that the post-Closing maximum liability of Seller for the
alleged breach of any or all representations or warranties set forth in this Agreement is limited
to $1,000,000.00. The provisions of this Section 9.3 shall survive the Closing. Any breach
of a representation or warranty that occurs prior to Closing shall be governed by Article
10.

ARTICLE 10

DEFAULT AND REMEDIES

     10.1 Seller’s Remedies. IF THE CLOSING DOES NOT OCCUR AS A RESULT OF BUYER’S DEFAULT
HEREUNDER, SELLER SHALL BE ENTITLED, AS ITS SOLE REMEDY (EXCEPT AS PROVIDED IN SECTIONS
4.11, 8.6, 10.3 AND 10.4 HEREOF), TO TERMINATE THIS AGREEMENT AND
RECOVER THE EARNEST MONEY AS LIQUIDATED DAMAGES AND NOT AS PENALTY, IN FULL SATISFACTION OF CLAIMS
AGAINST BUYER HEREUNDER. SELLER AND BUYER AGREE THAT SELLER’S DAMAGES RESULTING FROM BUYER’S
DEFAULT ARE DIFFICULT, IF NOT IMPOSSIBLE, TO DETERMINE AND THE EARNEST MONEY IS A FAIR ESTIMATE OF
THOSE DAMAGES WHICH HAS BEEN AGREED TO IN AN EFFORT TO CAUSE THE AMOUNT OF SUCH DAMAGES TO BE
CERTAIN. THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY. NOTWITHSTANDING ANYTHING IN THIS SECTION 10.1 TO THE CONTRARY, IN
THE EVENT OF BUYER’S DEFAULT,

21

 

OTHER THAN THE FAILURE TO CLOSE AS A RESULT OF BUYER’S DEFAULT, SELLER SHALL HAVE ALL REMEDIES
AVAILABLE AT LAW OR IN EQUITY.

	 	 	 
	     SELLER’S INITIALS:                                         
	 	BUYER’S INITIALS:                                        

     10.2 Buyer’s Remedies. If Seller fails to perform its obligations pursuant to this
Agreement for any reason except failure by Buyer to perform hereunder, or if prior to Closing any
one or more of Seller’s representations or warranties are breached in any material respect and
Buyer was not aware of such breach of such representations and warranties prior to the end of the
Inspection Period, then, Buyer shall elect, as its sole remedy, either to (i) terminate this
Agreement by giving Seller timely written notice of such election prior to or at Closing and
recover the Earnest Money and Seller shall pay to Buyer an amount equal to the lesser of (a)
Buyer’s out-of-pocket expenditures incurred in connection with negotiating this Agreement and/or
conducting due diligence activities contemplated hereunder, or (b) $100,000.00, (ii) enforce
specific performance, or (ill) waive said failure or breach and proceed to Closing. Notwithstanding
anything herein to the contrary, Buyer shall be deemed to have elected to terminate this Agreement
if Buyer fails to deliver to Seller written notice of its intent to file a claim or assert a cause
of action for specific performance against Seller on or before twenty (20) business days following
the scheduled Closing Date or, having given such notice, fails to file a lawsuit asserting such
claim or cause of action in the county in which the Property is located within two (2) months
following the scheduled Closing Date. If, however, specific performance is not available to Buyer
as the result of the willful and wrongful sale or transfer of the Property by Seller to another
party, Buyer shall have the right to seek actual damages from Seller in an amount not to exceed
$250,000.00. For purposes of this provision, specific performance shall be considered not available
to Buyer only if a court of competent jurisdiction determines conclusively that Buyer is entitled
to specific performance on the merits of its claim but said court is unable to enforce specific
performance clue to reasons beyond the control of the court. Buyer’s remedies shall be limited to
those described in this Section 10.2 and Sections 10.3, and 10.4 hereof. IN
NO EVENT SHALL EITHER PARTY’S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR AFFILIATES, ANY
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON
THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY
OR OTHERWISE.

     10.3 Attorneys’ Fees. In the event either party hereto employs an attorney in connection
with claims by one party against the other arising from the operation of this Agreement, the
non-prevailing party shall pay the prevailing party all reasonable fees and expenses, including
attorneys’ fees, incurred in connection with such transaction.

     10.4 Other Expenses. If this Agreement is terminated due to the default of a party, then
the defaulting party shall pay any fees or charges due to Escrow Agent for holding the Earnest
Money as well as any escrow cancellation fees or charges and any fees or charges due to the Title
Company for preparation and/or cancellation of the PTR.

22

 

THIS SECTION 10.1 TO THE CONTRARY, IN THE EVENT OF BUYER’S DEFAULT, OTHER THAN THE FAILURE
TO CLOSE AS A RESULT OF BUYER’S DEFAULT, SELLER SHALL HAVE ALL REMEDIES AVAILABLE AT LAW OR IN
EQUITY.

	 	 	 
	     SELLER’S INITIALS:                                         
	 	BUYER’S INITIALS:                                        

     10.5 Buyer’s Remedies. If Seller fails to perform its obligations pursuant to this
Agreement for any reason except failure by Buyer to perform hereunder, or if prior to Closing any
one or more of Seller’s representations or warranties are breached in any material respect and
Buyer was not aware of such breach of such representations and warranties prior to the end of the
Inspection Period, then, Buyer shall elect, as its sole remedy, either to (i) terminate this
Agreement by giving Seller timely written notice of such election prior to or at Closing and
recover the Earnest Money and Seller shall pay to Buyer an amount equal to the lesser of (a)
Buyer’s out-of-pocket expenditures incurred in connection with negotiating this Agreement and/or
conducting due diligence activities contemplated hereunder, or (b) $100,000.00, (ii) enforce
specific performance, or (iii) waive said failure or breach and proceed to Closing. Notwithstanding
anything herein to the contrary, Buyer shall be deemed to have elected to terminate this Agreement
if Buyer fails to deliver to Seller written notice of its intent to file a claim or assert a cause
of action for specific performance against Seller on or before twenty (20) business days following
the scheduled Closing Date or, having given such notice, fails to file a lawsuit asserting such
claim or cause of action in the county in which the Property is located within two (2) months
following the scheduled Closing Date. If, however, specific performance is not available to Buyer
as the result of the willful and wrongful sale or transfer of the Property by Seller to another
party, Buyer shall have the right to seek actual damages from Seller in an amount not to exceed
$250,000.00. For purposes of this provision, specific performance shall be considered not available
to Buyer only if a court of competent jurisdiction determines conclusively that Buyer is entitled
to specific performance on the merits of its claim but said court is unable to enforce specific
performance due to reasons beyond the control of the court. Buyer’s remedies shall be limited to
those described in this Section 10.2 and Sections 10.3 and 10.4 hereof. IN
NO EVENT SHALL EITHER PARTY’S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR AFFILIATES, ANY
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON
THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY
OR OTHERWISE.

     10.6 Attorneys’ Fees. In the event either party hereto employs an attorney in connection
with claims by one party against the other arising from the operation of this Agreement, the
non-prevailing party shall pay the prevailing party all reasonable fees and expenses, including
attorneys’ fees, incurred in connection with such transaction.

     10.7 Other Expenses. If this Agreement is terminated due to the default of a party, then
the defaulting party shall pay any fees or charges due to Escrow Agent for holding the Earnest
Money as well as any escrow cancellation fees or charges and any fees or charges due to the Title
Company for preparation and/or cancellation of the PTR.

23

 

ARTICLE 11

DISCLAIMERS; RELEASE AND INDEMNITY

     11.1 Disclaimers By Seller. Except as expressly set forth in this Agreement, it is
understood and agreed that Seller and Asset Manager have not at any time made and are not now
making, and they specifically disclaim, any warranties or representations of any kind or character,
express or implied, with respect to the Property, including, but not limited to, warranties or
representations as to (i) matters of title, (ii) environmental matters relating to the Property or
any portion thereof, including, without limitation, the presence of Hazardous Materials in, on,
under or in the vicinity of the Property, (iii) geological conditions, including, without
limitation, subsidence, subsurface conditions, water table, underground water reservoirs,
limitations regarding the withdrawal of water, and geologic faults and the resulting damage of past
and/or future faulting, (iv) whether, and to the extent to which the Property or any portion
thereof is affected by any stream (surface or underground), body of water, wetlands, 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 or conditions of soil fill, or
susceptibility to landslides, or the sufficiency of any undershoring, (vii) the presence of
endangered species or any environmentally sensitive or protected areas, (viii) zoning or building
entitlements to which the Property or any portion thereof may be subject, (ix) the availability of
any utilities to the Property or any portion thereof including, without limitation, water, sewage,
gas and electric, (x) usages of adjoining Property, (xi) access to the Property or any portion
thereof, (xii) the value, compliance with the plans and specifications, size, location, age, use,
design, quality, description, suitability, structural integrity, operation, title to, or physical
or financial condition of the Property or any portion thereof, or any income, expenses, charges,
liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any part
thereof, (xiii) the condition or use of the Property or compliance of the Property with any or all
past, present or future federal, state or local ordinances, rules, regulations or laws, building,
fire or zoning ordinances, codes or other similar laws, (xiv) the existence or non-existence of
underground storage tanks, surface impoundments, or landfills, (xv) the merchantability of the
Property or fitness of the Property for any particular purpose, (xvi) the truth, accuracy or
completeness of the Property Documents, (xvii) tax consequences, or (xviii) any other matter or
thing with respect to the Property.

     11.2 Sale “As Is, Where Is.” Buyer acknowledges and agrees that upon Closing, Seller shall
sell and convey to Buyer and Buyer shall accept the Property “AS IS, WHERE IS, WITH ALL FAULTS,”
except to the extent expressly provided otherwise in this Agreement and any document executed by
Seller and delivered to Buyer at Closing. Except as expressly set forth in this Agreement, Buyer
has not relied and will not rely on, and Seller has not made and is not liable for or bound by, any
express or implied warranties, guarantees, statements, representations or information pertaining to
the Property or relating thereto (including specifically, without limitation, Property information
packages distributed with respect to the Property) made or furnished by Seller, the Asset Manager,
or any real estate broker, agent or third party representing or purporting to represent Seller, to
whomever made or given, directly or indirectly, orally or in writing. Buyer represents that it is a
knowledgeable, experienced and sophisticated purchaser of real estate and that, except as expressly
set forth in this Agreement, it is relying solely on its own expertise and that of Buyer’s
consultants in purchasing the Property and shall

24

 

make an independent verification of the accuracy
of any documents and information provided by Seller. Buyer will conduct such inspections and
investigations of the Property as Buyer deems necessary, including, but not limited to, the
physical and environmental conditions thereof, and shall rely upon same. By failing to terminate
this Agreement prior to the expiration of the Inspection Period, Buyer acknowledges that Seller has
afforded Buyer a full opportunity to conduct such investigations of the Property as Buyer deemed
necessary to satisfy itself as to the condition of the Property and the existence or non-existence
or curative action to be taken with respect to any Hazardous Materials on or discharged from the
Property, and will rely solely upon same and not upon any information provided by or on behalf of
Seller or its agents or employees with respect thereto, other than such representations, warranties
and covenants of Seller as are expressly set forth in this Agreement. Upon Closing, Buyer shall
assume the risk that adverse matters, including, but not limited to, adverse physical or
construction defects or adverse environmental, health or safety conditions, may not have been
revealed by Buyer’s inspections and investigations.

Buyer’s Initials                                        

     11.3 Seller Released from Liability. Buyer acknowledges that it will have the opportunity
to inspect the Property during the Inspection Period, and during such period, observe its physical
characteristics and existing conditions and the opportunity to conduct such investigation and study
on and of the Property and adjacent areas as Buyer deems necessary, and Buyer hereby FOREVER
RELEASES AND DISCHARGES Seller and Asset Manager from all responsibility and liability, including
without limitation, liabilities under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. § 9601 et seq.), as amended (“CERCLA”), regarding the
condition (including the presence in the soil, air, structures and surface and subsurface waters,
of Hazardous Materials or other materials or substances that have been or may in the future be
determined to be toxic, hazardous, undesirable or subject to regulation and that may need to be
specially treated, handled and/or removed from the Property under current or future federal, state
and local laws, regulations or guidelines), valuation, salability or utility of the Property, or
its suitability for any purpose whatsoever. This release includes claims of which Buyer is
presently unaware or which Buyer does not presently suspect to exist which, if known by Buyer,
would materially affect Buyer’s release to Seller.

     In this connection and to the extent permitted by law, Buyer hereby agrees, represents and
warrants that Buyer realizes and acknowledges that factual matters now unknown to it may have 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, and Buyer
further agrees, represents and warrants that the waivers and releases herein have been negotiated
and agreed upon in light of that realization and that Buyer nevertheless hereby intends to release,
discharge and acquit Seller from any such unknown causes of action, claims, demands, debts,
controversies, damages, costs, losses and expenses.

     Buyer further hereby WAIVES (and by closing this transaction will be deemed to have waived)
any and all objections to or complaints regarding (including, but not limited to, federal, state
and common law based actions), or any private right of action under, state and federal law to which
the Property is or may be subject, including, but not limited to, CERCLA, Resource Conservation and
Recovery Act (42 U.S.C. § 6901 et seq.), as amended (“RCRA”), physical

25

 

characteristics and
existing conditions, including, without limitation, structural and geologic conditions, subsurface
soil and water conditions and solid and hazardous waste and Hazardous Materials on, under, adjacent
to or otherwise affecting the Property. Buyer further hereby assumes the risk of changes in
applicable laws and regulations relating to past, present and future environmental conditions on
the Property and the risk that adverse physical characteristics and conditions, including, without
limitation, the presence of Hazardous Materials or other contaminants, may not have been revealed
by its investigation.

Buyer’s Initials                                         

     11.4 “Hazardous Materials” Defined. For purposes hereof, “Hazardous Materials”
means “Hazardous Material” means “Hazardous Substance,” “Pollutant or Contaminant,” and “Petroleum”
and “Natural Gas Liquids,” as those terms are defined or used in Section 101 of CERCLA, and any
other substances regulated because of their effect or potential effect on public health and the
environment, including, without limitation, PCBs, lead paint, asbestos, urea formaldehyde,
radioactive materials, putrescible, and infectious materials.

     11.5 Survival. The terms and conditions of this Article 11 shall expressly survive the
Closing, not merge with the provisions of any closing documents and shall be incorporated into the
Deed.

     Buyer acknowledges and agrees that the disclaimers and other agreements set forth herein are
an integral part of this Agreement and that Seller would not have agreed to sell the Property to
Buyer for the Purchase Price without the disclaimers and other agreements set forth above.

ARTICLE 12

MISCELLANEOUS

     12.1 Parties Bound; Assignment. This Agreement, and the terms, covenants, and conditions
herein contained, shall inure to the benefit of and be binding upon the heirs, personal
representatives, successors, and assigns of each of the parties hereto. Subject to Section
12.16 below, Buyer may assign its rights under this Agreement upon the following conditions:
(i) the assignee of Buyer must be an affiliate of Buyer or an entity controlling, controlled by, or
under common control with Buyer; (ii) all of the Earnest Money must have been delivered in
accordance herewith, (iii) the Inspection Period shall be deemed to have ended, (iv) the assignee
of Buyer shall assume all obligations of Buyer hereunder, but Buyer shall remain primarily liable
for the performance of Buyer’s obligations, (v) a copy of the fully executed written assignment and
assumption agreement shall be delivered to Seller at least four (4) business days prior to Closing;
and (vi) there shall be no increase or “mark-up” of the Purchase Price.

     12.2 Headings. The article, section, subsection, paragraph and/or other headings of this
Agreement are for convenience only and in no way limit or enlarge the scope or meaning of the
language hereof.

     12.3 Invalidity and Waiver. If any portion of this Agreement is held invalid or
inoperative, then so far as is reasonable and possible the remainder of this Agreement shall be
deemed valid and operative, and, to the greatest extent legally possible, effect shall be given to

26

 

the intent manifested by the portion held invalid or inoperative. The failure by either party to
enforce against the other any term or provision of this Agreement shall not be deemed to be a
waiver of such party’s right to enforce against the other party the same or any other such term or
provision in the future.

     12.4 Governing Law. This Agreement shall, in all respects, be governed, construed,
applied, and enforced in accordance with the law of the state in which the Real Property is
located.

     12.5 Survival. The provisions of this Agreement that contemplate performance after the
Closing and the obligations of the parties not fully performed at the Closing shall survive the
Closing and shall not be deemed to be merged into or waived by the instruments of Closing.

     12.6 Entirety and Amendments. This Agreement embodies the entire agreement between the
parties and supersedes all prior agreements and understandings relating to the Property. Seller and
Buyer acknowledge that upon full execution and delivery of this Agreement, that certain Access and
Due Diligence Agreement dated as of December 13, 2005 shall terminate in accordance with the terms
thereof. This Agreement may be amended or supplemented only by an instrument in writing executed by
the party against whom enforcement is sought.

     12.7 Time. Time is of the essence in the performance of this Agreement.

     12.8 Confidentiality. Neither Buyer nor Seller shall make any public announcement or
disclosure of any information related to this Agreement to outside brokers or third parties, before
the Closing, without the prior written specific consent of the other party; provided, however, that
Buyer may, subject to the provisions of Section 4.8, make disclosure of this Agreement to
its Permitted Outside Parties as necessary to perform its obligations hereunder and as may be
required under laws or regulations applicable to Buyer (including any applicable federal or state
securities laws or to comply with the requirements of the Securities and Exchange Commission or the
New York Stock Exchange or any similar agency or body.

     12.9 Notices. All notices required or permitted hereunder shall be in writing and shall be
given to the parties at the addresses set forth in Section 1.3. Any such notices shall,
unless otherwise provided herein, be given (i) by depositing the same in the United States mail,
postage paid, certified and addressed to the party to be notified, with return receipt requested,
(ii) by overnight delivery using a nationally recognized overnight courier, (iii) by personal
delivery, or (iv) by facsimile, evidenced by confirmed receipt followed by a confirmatory letter
sent in another manner permitted hereunder. Notice deposited in the mail in the manner hereinabove
described shall be effective on the third (3r`’) business day after such deposit. Notice given in
any other manner shall be effective only if and when received by the party to be notified between
the hours of 8:00 a.m. and 5:00 p.m. California time of any business day with delivery made after
5:00 p.m. to be deemed received the following business day. A party’s address may be changed by
written notice to the other party; provided, however, that no notice of a change of address shall
be effective until actual receipt of such notice. Copies of notices are for informational purposes
only, and a failure to give or receive copies of any notice shall not be deemed a failure to give
notice. Notices given by counsel to the Buyer shall be deemed given by Buyer and notices given by
counsel to the Seller shall be deemed given by Seller.

27

 

     12.10 Construction. The parties acknowledge that the parties and their counsel have
reviewed and revised this Agreement and agree that the normal rule of construction — to the effect
that any ambiguities are to be resolved against the drafting party — shall not be employed in the
interpretation of this Agreement or any exhibits or amendments hereto.

     12.11 Calculation of Time Periods. Unless otherwise specified, in computing any period of
time described herein, the day of the act or event after which the designated period of time begins
to run is not to be included and the last day of the period so computed is to be included, unless
such last day is a Saturday, Sunday or legal holiday for national banks in the location where the
Property is located, in which event the period shall run until the end of the next day which is
neither a Saturday, Sunday, or legal holiday. The last day of any period of time described herein
shall be deemed to end at 5:00 p.m. local time in the state in which the Real Property is located.

     12.12 Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of such counterparts shall
constitute one Agreement.

     12.13 No Recordation. Without the prior written consent of Seller, there shall be no
recordation of either this Agreement or any memorandum hereof, or any affidavit pertaining hereto,
and any such recordation of this Agreement or memorandum or affidavit by Buyer without the prior
written consent of Seller shall constitute a default hereunder by Buyer, whereupon Seller shall
have the remedies set forth in Section 10.1 hereof.

     12.14 Further Assurances. In addition to the acts and deeds recited herein and
contemplated to be performed, executed and/or delivered by either party at Closing, each party
agrees to perform, execute and deliver, but without any obligation to incur any additional
liability or expense, on or after the Closing any further deliveries and assurances as may be
reasonably necessary to consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Buyer.

     12.15 Auditor Access. If required by the rules of the Securities and Exchange Commission,
at any time before the Closing or within three (3) years after the Closing, Seller shall provide to
Buyer and Buyer’s designated independent auditor access to Seller’s financial books and records in
Seller’s possession concerning the operation the Property (other than Excluded Documents) for the
purpose of enabling Buyer to comply with any financial reporting requirements applicable to Buyer
under the Securities Act of 1933 and the Securities Exchange Act of 1934. Buyer shall give
reasonable prior notice to Seller when Buyer desires to exercise its right to inspect such books
and records. Such inspection shall take place at such offices of Seller or Seller’s asset manager
or other location as Seller shall designate during normal business hours and on a date reasonably
convenient to Seller and Buyer.

     12.16 ERISA. Under no circumstances shall Buyer have the right to assign this Agreement to
any person or entity owned or controlled by an employee benefit plan if Seller’s sale of the
Property to such person or entity would, in the reasonable opinion of Seller’s ERISA advisors or
consultants, create or otherwise cause a “prohibited transaction” under ERISA. In the event Buyer
assigns this Agreement or transfers any ownership interest in Buyer, and such

28

 

assignment or
transfer would make the consummation of the transaction hereunder a “prohibited transaction” under
ERISA and necessitate the termination of this Agreement then, notwithstanding any contrary
provision which may be contained herein, Seller shall have the right to terminate this Agreement.

     12.17 No Third Party Beneficiary. The provisions of this Agreement and of the documents to
be executed and delivered at Closing are and will be for the benefit of Seller, Asset Manager and
Buyer only and are not for the benefit of any third party (other than Asset Manager), and
accordingly, no third party (other than Asset Manager) shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered at Closing.

     12.18 Asset Manager; Designated Representative. Seller has engaged Archon Group, L.P. or
affiliated companies (“Asset Manager”) to provide certain asset management services with respect to
the Property, including acting as a liaison between Seller and Buyer in connection with the
Property and this Agreement. The Asset Manager will appoint one or more representatives
(“Designated Representative(s)”) to deal with Buyer. Whenever any approval, acceptance, consent,
direction or action of Seller is required pursuant to this Agreement, Buyer shall send to the
Designated Representative a written notice requesting same, which notice shall: (i) describe in
detail the matter for which such approval, acceptance, consent, direction or other action of Seller
is requested; (ii) be accompanied by a copy of any contract, agreement or other document to be
executed by Seller evidencing such approval, consent, acceptance, direction or action of Seller;
and (iii) be accompanied by such other documents, written explanations and information as may be
reasonably necessary to explain the request fully and completely. The Asset Manager will
communicate Seller’s response to any such requests to Buyer.

29

 

SIGNATURE PAGE TO AGREEMENT OF

PURCHASE AND SALE

BY AND BETWEEN

WXIII/SCV REAL ESTATE LIMITED PARTNERSHIP

AND

HINES 720 OLIVE WAY LP

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year
written below.

	 	 	 	 	 	 	 
	Date executed by Seller:	 	SELLER:
	 
	 	 	 	 	 	 
	December 29, 2005	 	WXIII/SCV REAL ESTATE LIMITED

PARTNERSHIP, a Delaware limited partnership
	 
	 	 	 	 	 	 
	 	 	By: WXII/SCV Gen-Par, L.L.C.,
a Delaware limited liability company
General Partner
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Nancy M. Haag
	 	 	 	 	 
	 	 	Name: Nancy M. Haag
	 	 	Its: Assistant Vice President
	 
	 	 	 	 	 	 
	Date executed by Buyer:	 	BUYER:
	 
	 	 	 	 	 	 
	 	 	HINES 720 OLIVE WAY LP, a Delaware limited

partnership,
	 
	 	 	 	 	 	 
	 	 	By:	 	Hines 720 Olive Way GP LLC,

a Delaware limited liability company

General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Edmund A. Donaldson
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Edmund A. Donaldson
	 

	 	 	 	Its: Manager

30

 

JOINDER BY ESCROW AGENT

     Escrow Agent has executed this Agreement in order to confirm that Escrow Agent has received
and shall hold the Earnest Money required to be deposited under this Agreement and the interest
earned thereto, in escrow, and shall disburse the Earnest Money, and the interest earned thereon,
pursuant to the provisions of this Agreement.

	 	 	 	 	 
	Date executed by Escrow Agent:	 	LANDAMERICA FINANCIAL GROUP
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Its:	 	 
	 

	 	 	 	 

31

 

LIST OF EXHIBITS

	 	 	 	 	 
	A

	 	-
	 	Legal Description
	 
	B

	 	-
	 	Property Information
	 
	C

	 	-
	 	Bargain and Sale Deed
	 
	D

	 	-
	 	Bill of Sale, Assignment and Assumption
	 
	E

	 	 	 	Non-Foreign Certificate
	 
	F

	 	-
	 	Tenant Notice Letter
	 
	G

	 	-
	 	Tenant Estoppel Certificate
	 
	H

	 	-
	 	ERISA Letter

32

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]