Document:

exv10w74

 

Exhibit 10.74

 

REAL ESTATE PURCHASE AGREEMENT

By and Between

SELLERS

 

and

HINES REIT LAGUNA CAMPUS LLC OR ASSIGNS

BUYER

Dated:
November 28, 2006

 

1

 

REAL ESTATE PURCHASE AND SALE AGREEMENT

     THIS
REAL ESTATE PURCHASE AGREEMENT (“Agreement”) is made and
entered into effective November 28, 2006 (“Date of the Agreement”), by and between the undersigned sellers, consisting of the
Laguna North Building Sellers, Laguna North Land Sellers, Laguna South Building Sellers, Laguna
South Land Sellers, and FC27 Sellers, all of whom are Washington limited liability companies
(individually a “Seller” and together “Sellers”) and Hines REIT Laguna Campus LLC, a Delaware
limited liability company and/or its assigns (“Buyer”).

W I T N E S S E T H

     WHEREAS, Laguna North Building Sellers are the owners of a building of approximately 104,345
square feet (the “Laguna North Building”), which building is legally described on Exhibit A
attached, on land leased from Laguna North Land Sellers, which land is legally described on
Exhibit B1 attached (the “Laguna North Land”); and

     WHEREAS, Laguna South Building Sellers are the owners of a building of approximately 104,443
square feet (the “Laguna South Building”), which building is legally described on Exhibit C
attached, on land leased from Laguna South Land Sellers, which land is legally described on
Exhibit B2 attached (the “Laguna South Land”); and

     WHEREAS, FC27 Sellers are owners of property known as the FC27 Campus, composed of the land
legally described on Exhibit B3 attached and the FC27 Seller’s interest in the buildings of
approximately 255,905 square feet located thereon (“FC27 Property”);

     WHEREAS, Laguna North Building Sellers wish to sell the Laguna North Building, Laguna North
Land Sellers wish to sell the Laguna North Land, Laguna South Building Sellers wish to sell the
Laguna South Building, Laguna South Land Sellers wish to sell the Laguna South Land, and FC27
Sellers desire to sell the FC27 Property, and Buyer desires to purchase such land and buildings,
together with all easements, rights of way, appurtenances and other rights and benefits thereunto
belonging, upon the terms, covenants and conditions hereinafter provided.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
hereinafter contained, it is hereby mutually agreed by and between Sellers and Buyer as follows:

     1. Agreement to Sell and Purchase. Sellers hereby agree to sell and convey to Buyer,
and Buyer hereby agrees to purchase and accept from Sellers, for the Purchase Price (hereinafter
defined) and upon and subject to the terms and conditions hereinafter set forth, all of the
Sellers’ respective interests in the following described property (hereinafter referred to
collectively as the “Property”):

 

 

	 	(a)	 	the land legally described on Exhibits B1, B2, and B3
(collectively the “Land”);
	 
	 	(b)	 	Sellers’ interest in the Laguna North Building legally described on Exhibit
A, Laguna South Building legally described on Exhibit C, the FC27 Property,
and all other improvements and related facilities situated on the Land (the
“Buildings”);
	 
	 	(c)	 	all of the rights and appurtenances pertaining to the Land and the Buildings,
including all right, title and interest of Sellers in and to adjacent streets, alleys,
easements and rights-of-way;
	 
	 	(d)	 	all of the furniture, furnishings, fixtures, appliances, equipment, machinery,
names and other items of tangible and intangible personal property owned by Sellers
situated upon or used in connection with the Land and the Buildings, if any;
	 
	 	(e)	 	those certain operating lease agreements described on Schedule 1, and
that certain ground lease described on Schedule 1 (together, the “Leases”), and
all security, advance rental and other deposits, if any, made under the Leases;
	 
	 	(f)	 	all site and as-built plans, surveys, soil and substrata studies, architectural
renderings, plans and specifications, engineering plans and studies, floor plans,
landscape plans and other plans, diagrams or studies of any kind, if any, now or
hereafter in the possession of Sellers which relate to the Property;
	 
	 	(g)	 	all operating manuals, marketing brochures, market studies, tenant data sheets
and other books, records and materials of any kind now or hereafter in the possession
or control of Sellers required in connection with the current, continuing, or prior
ownership, operation and management of the Improvements;
	 
	 	(h)	 	all of Sellers’ rights under any leases covering leased equipment, all
licenses, permits, logos, warranties, trade lists, tenant lists, trademarks, mailing
lists, utility deposits and arrangements, trade names and telephone exchanges related
to the ownership, operation and management of the Property;
	 
	 	(i)	 	maintenance records, service contracts and other contracts or documents (the
“Service Contracts”) to which each Seller is a party that relate to the operation of
the Property; and
	 
	 	(j)	 	such other rights, interests and properties as may be specified in this
Agreement to be sold, transferred, assigned or conveyed by Sellers to Buyer.

	 	 	Sellers reserve and retain all claims for the refund of sewer and traffic mitigation fees
paid by Sellers’ predecessors in interest prior to the Closing Date; provided, no such claim
or refund shall adversely affect Buyer’s capacity to operate the Property in the same manner
operated immediately preceding the Closing. Buyer agrees to reasonably

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	 	 	cooperate (at no cost or expense to Buyer) in Sellers’ efforts to collect such fee refunds,
including signing documents that may be required to assign the refunds to Sellers.

2. Condition of Property.

     (a) As Is Sale. Buyer specifically acknowledges and agrees that (i) Buyer will
have before the Date of Closing (as hereinafter defined), to the extent desired and deemed
consistent with good commercial practice and at Buyer’s sole cost and expense, completed an
investigation and inspection of the Property including, without limitation, such
investigations to determine whether or not Buyer has the necessary governmental approvals to
utilize the Property for Buyer’s proposed use, investigations regarding lot line/boundary
line adjustments affecting the Property and compliance/non-compliance of the Property with
applicable setback requirements (including, without limitation, side yard setbacks), such
investigations to determine whether or not the necessary utilities are in order to support
Buyer’s proposed use, such soils, engineering and environmental studies as may be necessary
to assess the condition of the Property and the suitability of the Property for Buyer’s
intended uses, and inspection(s) of the structure, roof, heating, ventilation, air
conditioning, electrical and plumbing systems and other components of the Building, the
parking areas and other common areas located in, on or about the Property (“Property
Inspection”), (ii) Sellers are selling and Buyer is purchasing the Property on an “AS IS
WITH ALL FAULTS” basis, and (iii) except for the representations and warranties of Sellers
expressly set forth in this Agreement or in the agreements, documents and instruments to be
delivered by Sellers at Closing, Buyer is not relying on any representations or warranties
of any kind whatsoever, express or implied, from any Sellers, its employees, directors,
officers, agents, consultants, contractors, subcontractors or brokers as to any matters
concerning the Property including, without limitation, any information contained in any
report, plan or other written material including, without limitation, the environmental
information given by Sellers to Buyer with respect to the Property.

     Without in any way limiting the generality of the preceding paragraph, in entering into
this Agreement and purchasing the Property, Buyer hereby acknowledges and agrees that except
for the representations and warranties of Sellers expressly set forth in this Agreement or
in the agreements, documents and instruments to be delivered by Sellers at Closing, Sellers
have not made, do not hereby make and will not hereafter make any representations or
warranties or guarantees, whether express or implied, with respect to the Property or the
physical condition thereof including, without limitation:

     (I) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF THE PROPERTY.

     (II) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF SOILS, GEOLOGY AND
GROUNDWATER.

 

 

     (III) THE EXISTENCE, QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF
UTILITIES SERVICING THE PROPERTY.

     (IV) THE DEVELOPMENT POTENTIAL OF THE PROPERTY, AND THE PROPERTY’S USE,
HABITABILITY, MERCHANTABILITY, FITNESS, SUITABILITY, VALUE OR ADEQUACY FOR ANY
PARTICULAR PURPOSE.

     (V) THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR ANY OTHER PUBLIC OR
PRIVATE RESTRICTIONS ON USE OF THE PROPERTY.

     (VI) THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES
AND LAWS OR WITH THE RESTRICTIONS OF ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY
OR OF ANY OTHER PERSON OR ENTITY.

     (VII) THE PRESENCE OF HAZARDOUS SUBSTANCES (AS HEREINAFTER DEFINED) ON, UNDER,
IN OR ABOUT THE PROPERTY OR THE ADJOINING OR NEIGHBORING PROPERTY OR THE EXISTENCE
OF ANY UNDERGROUND TANKS, CONTAINERS OR CONDUITS IN, ON OR ABOUT THE PROPERTY. THE
TERM “HAZARDOUS SUBSTANCES” SHALL MEAN ANY CHEMICAL, SUBSTANCE, WASTE, MATERIAL, GAS
OR EMISSION WHICH IS DEEMED HAZARDOUS, TOXIC, A POLLUTANT OR A CONTAMINANT UNDER ANY
ENVIRONMENTAL LAWS (AS HEREINAFTER DEFINED), OR WHICH HAS BEEN SHOWN TO HAVE
SIGNIFICANT ADVERSE EFFECTS ON HUMAN HEALTH OR THE ENVIRONMENT. “HAZARDOUS
SUBSTANCES” SHALL INCLUDE, WITHOUT LIMITATION, PETROLEUM AND PETROLEUM PRODUCTS,
ASBESTOS, CHLOROFLUOROCARBONS, RADON GAS AND POLYCHLORINATED BIPHENYLS. THE TERM
“ENVIRONMENTAL LAW(S)” SHALL MEAN ALL STATUTES, ORDINANCES, BYLAWS, RULES AND
REGULATIONS, EXECUTIVE ORDERS AND OTHER ADMINISTRATIVE ORDERS, JUDGMENTS, DECREES,
INJUNCTIONS AND OTHER JUDICIAL ORDERS OF OR BY ANY GOVERNMENTAL AUTHORITY, NOW OR
HEREAFTER IN EFFECT, RELATING TO POLLUTION OR PROTECTION OF HUMAN HEALTH OR THE
ENVIRONMENT INCLUDING, WITHOUT LIMITATION, EMISSIONS, DISCHARGES, RELEASES OR
THREATENED RELEASES OF HAZARDOUS SUBSTANCES, OR THE MANUFACTURE, PROCESSING,
DISTRIBUTION, USE, TREATMENT, STORAGE, DISPOSAL, TRANSPORT OR HANDLING OF HAZARDOUS
SUBSTANCES.

     (VIII) ACCESS RIGHTS TO AND FROM THE PROPERTY.

     (IX) THE CONDITION OF TITLE OF THE PROPERTY.

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     (X) THE ECONOMICS OF THE OPERATION OF THE PROPERTY.

     (XI) THE QUALITY OF ANY LABOR AND MATERIALS USED IN ANY IMPROVEMENTS ON THE
PROPERTY.

     (XII) THE LEASES, SERVICE CONTRACTS, AND OTHER AGREEMENTS AFFECTING THE
PROPERTY.

     The provisions of this Paragraph 2(a) shall survive the Date of Closing.

     (b) Release. Buyer, on behalf of itself and its successors and assigns, waives
Buyer’s right to recover from, and forever releases and discharges, each Seller, and each
Seller’s affiliates, shareholders, employees, directors and officers, for, from and against
any and all demands, claims, legal or administrative proceedings, losses, liabilities,
damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including,
without limitation, attorneys’ fees and court costs), whether direct or indirect, known or
unknown, foreseen or unforeseen, that may arise on account of or in any way be connected
with the Property, the physical condition of the Property, or any law or regulation
applicable thereto including, without limitation, Environmental Laws; provided, however,
this release shall not discharge claims arising against Sellers for breach of their
Paragraph 4(a) representations asserted within the survival period or arising against
Sellers under the agreements, documents and instruments to be delivered by Sellers at
Closing. The provisions of this Paragraph 2(b) shall survive the Date of Closing.

3. Purchase Price, Deposit of Earnest Money and Disposition of Earnest Money.

     (a) Purchase Price. The purchase price to be paid by Buyer to Sellers for
their respective interests in the Property is One Hundred Eighteen Million and No/100
Dollars ($118,000,000.00) (“Purchase Price”), which the parties agree is to be allocated as
follows:

 

 

	 	 	 	 
	 	To Laguna North Land

	 	$
              
TDB               
	 	 
	 	 
	 	To Laguna North Building

	 	$
              
TDB               
	 	 
	 	 
	 	To Laguna South Land

	 	$
              
TDB               
	 	 
	 	 
	 	To Laguna South Building

	 	$
              
TDB               
	 	 
	 	 
	 	To FC27 Property

	 	$
              
TDB               

The foregoing allocation shall be completed by Sellers and communicated to Buyer prior to
expiration of the Contingency Period. The Purchase Price is to be paid in lawful money of
the United States on the Date of Closing (hereinafter defined) by federal funds wire
transfer of immediately available funds to the accounts (as designated by Sellers) of or for
the benefit of Sellers.

     (b) Deposit of Earnest Money.

     (i) Concurrently with the execution and delivery of this Agreement by Buyer,
Buyer shall deposit with LandAmerica Commercial Services, 601 Union Street, Suite
1100, Seattle WA 98101 (“Title Company”) the sum of Five Million and No/100 Dollars
($5,000,000.00) representing the first deposit of earnest money paid hereunder by
Buyer (“Initial Deposit”). A second deposit in the amount of Three Million and
No/100 Dollars ($3,000,000.00) (“Second Deposit”) shall be payable by Buyer and
deposited with the Title Company within two (2) business days of expiration of the
Contingency Period (hereinafter defined) if Buyer does not exercise its right to
terminate the Agreement in accordance with Paragraph 5(c) hereof. The Initial
Deposit and Second Deposit, together with all interest earned thereon, are
collectively referred to herein as the “Earnest Money.”

     (ii) The Earnest Money shall be held in escrow by the Title Company, as escrow
agent, with instructions to disburse according to the terms, covenants and
conditions of this Agreement. The Earnest Money shall be deposited in an
interest-bearing account in a federally insured banking institution, with the
interest earned thereon to be retained by Sellers, applied to the Purchase Price or
returned with the Earnest Money, as the case may be, all according to the terms,
covenants and conditions of this Agreement.

     (iii) The parties acknowledge that the Title Company, in its capacity as escrow
agent, (A) is acting solely as a stakeholder at their request and for their
convenience; (B) shall not be deemed to be the agent of either of the parties; and

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(C) shall not be liable to either of the parties for any act or omission on its part
unless taken or suffered in bad faith, in willful disregard of this Agreement, or
involving negligence.

     (iv) If for any reason the Closing (as hereinafter defined) does not occur and
Sellers or Buyer makes a written demand on the Title Company for payment of the
Earnest Money, the Title Company shall give written notice of such demand to the
other party. If the Title Company does not receive a written objection from the
other party to the proposed payment within ten (10) days after the giving of such
notice, the Title Company shall be authorized to pay the Earnest Money (with the
interest earned thereon) to the party making the demand. If the Title Company
receives such written objection within the ten (10) day period, the Title Company
shall continue to hold the Earnest Money until otherwise directed by joint written
instructions from Sellers and Buyer or until otherwise directed by a court of
competent jurisdiction. Notwithstanding anything to the contrary contained herein,
if Buyer makes written demand for the return of the Earnest Money at any time prior
to the expiration of the Contingency Period and certifies to the Title Company that
Buyer has complied with its obligations under Paragraph 3(c)(i), then the Title
Company shall immediately return the Earnest Money (together with all interest
earned thereon) to Buyer and Sellers hereby irrevocably authorize and direct the
Title Company to comply immediately with such demand without any need to wait for
the expiration of the 10-day period described above.

     (v) The Title Company shall acknowledge its agreement to these provisions by
its execution of this Agreement in the space provided following the signatures of
the parties.

(c) Disposition of Earnest Money.

     (i) If the Closing does not occur, Buyer shall return immediately to Sellers
all materials and other information regarding the Property that Sellers have
provided to Buyer and destroy all photocopies thereof as well provide Sellers with
copies of any and all studies, reports, audits and/or other documentation arising
out of, relating to or resulting from Buyer’s Property Inspection including, without
limitation, environmental and engineering documents and studies. If Buyer
terminates this Agreement in accordance with the terms of this Agreement and
complies with Buyer’s obligations pursuant to the immediately preceding sentence,
Buyer shall then be entitled to the return of the Earnest Money and the interest
earned thereon.

     (ii) If the Closing occurs, Buyer shall receive a credit at Closing against the
Purchase Price in an amount equal to the Earnest Money and the interest earned
thereon (provided that the Title Company delivers the Earnest Money and the interest
earned thereon to Sellers).

 

 

     (iii) If a Buyer’s default or a Sellers’ default occurs, Sellers’ and Buyer’s
respective rights concerning the Earnest Money and the interest earned thereon shall
be governed by the terms, covenants and conditions of Paragraph 11 hereof.

	4.	 	Representations, Warranties, Covenants, and Agreements of Sellers and Buyer.

     (a) Sellers’ Representations and Warranties. To induce Buyer to enter into
this Agreement and to consummate the sale and purchase of the Property in accordance
herewith, Sellers represent and warrant to Buyer as of the date hereof and as of the Closing
Date, that:

     (i) No party has been granted by Sellers any license, lease or other right
relating to the use or possession of the Property, or any part thereof, except the
tenants under the Leases. No party has been granted by Sellers any right or option
to acquire any interest in the Property except Buyer pursuant to the terms of this
Agreement.

     (ii) Each Seller has the full right, power, and authority to sell and convey
the Property interests it owns as provided in this Agreement and to carry out its
obligations hereunder; all requisite action necessary to authorize each Seller to
enter into this Agreement and to carry out its obligations hereunder has been or by
the Closing will have been taken; and this Agreement and the documents to be
delivered hereunder by Sellers do not violate any provision of any agreement or
judicial order to which any Seller is a party or to which any Seller or the Property
is subject.

     (iii) Except as set forth in Schedule 4(a), to Sellers’ knowledge the Property
is not in material violation of any laws, statutes, rules, regulations, permits or
ordinances of any governmental unit (federal, state, county, district, municipal,
city or otherwise), including without limitation the Americans With Disabilities
Act, building codes and other rules and regulations concerning the construction or
design of the Buildings, and is not in violation of any laws pertaining to
environmental matters or Hazardous Substances, or of any covenants to which the
Property is subject, except as disclosed on Schedule 4(a). Sellers have not
approved or consented to the Release of any Hazardous Substances on the Property, as
such terms are defined in the Leases.

     (iv) To Sellers’ knowledge, the Property is in good repair and working order,
ordinary wear and tear excepted, and is free from material defects.

     (v) No condemnation proceedings or similar actions or proceedings are now
pending or, to Sellers’ knowledge, threatened against the Property or any part
thereof, except as disclosed on Schedule 4(a).

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     (vi) Sellers are not a party to any litigation, arbitration or administrative
proceeding (i) with any present or former tenant of the Property, (ii) with any
person or entity concerning any aspect of the Property or having or claiming any
interest in the Property, or (iii) which affects or questions Sellers’ title to the
Property or Sellers’ ability to perform its obligations under this Agreement.
Sellers know of no presently pending or threatened litigation, arbitration or
administrative proceeding affecting or questioning Sellers’ title to, or use of, the
Property or any part thereof. There is no other litigation relating to the Property
other than litigation that has been turned over to Sellers’ insurance carrier and in
which such carrier has accepted defense of such action without reservation of right
and which litigation is described on Schedule 4(a).

     (vii) Sellers are each duly organized, validly existing and in good standing
under the laws of the state of Washington and are qualified to transact business in
the state in which the Property is situated.

     (ix) No Seller has (A) made a general assignment for the benefit of creditors,
(B) filed any voluntary petition in bankruptcy or suffered the filing of any
involuntary petition by its creditors, (C) suffered the appointment of a receiver to
take possession of all, or substantially all, of its assets, (D) suffered the
attachment or other judicial seizure of all, or substantially all, of its assets,
(E) admitted in writing its inability to pay its debts as they come due, or (F) made
an offer of settlement, extension or composition to its creditors generally.

     (x) The Leases are in full force and effect and to each respective Seller’s
knowledge neither that Seller nor any tenants under any of that Seller’s Leases is
in default of any of the terms and conditions thereunder, nor is there any basis for
any claim by either party to any such agreement that the other party will be in
default after the expiration of any cure period provided for in the Leases. There
are no pending or unpaid leasing commissions or unfunded tenant improvement
allowances owing from Sellers. To each Seller’s respective knowledge, neither that
Seller nor any party to any Service Contracts with that Seller is in default of any
of the terms and conditions thereunder, nor is there any basis for any claim by
either party to any such Service Contracts that the other party will be in default
after the expiration of any cure period provided for in that Service Contract.
There are no service contracts other than those listed on Schedule 4(a)(x).

The representations and warranties of Sellers contained herein shall survive the Closing for
a period of one year following the Closing, and any breach of a representation or warranty
that occurs after such one-year period shall not give rise to any claim by Buyer against
Sellers. For purposes of this Agreement and any document delivered at Closing, whenever the
“knowledge” of a Seller or words of similar import are used, they shall be deemed to refer
to the current actual knowledge of William P. Hart and Glenn P. Hart, at the times
indicated, without any independent investigation having been made and without any implied
duty to investigate.

 

 

     (b) Sellers’ Operations Pending Closing. From the date hereof through the
Closing Date, Sellers agree as follows:

     (i) Sellers will not enter into any new, renewal, extension, modification or
replacement of any existing Service Contract or enter into any new employment,
maintenance, service, supply or other agreement relating to the Property without the
express written permission of Buyer.

     (ii) Sellers will keep in full force and effect all existing fire, casualty,
liability and extended coverage and other insurance policies naming Sellers as the
insured which are maintained by Sellers and are presently in effect for the
Property, or any portion of the Property.

     (iii) Sellers shall not enter into or record any easement, covenant, license,
permit, agreement or other instrument against the Property or any portion thereof
without Buyer’s prior written consent, which consent shall not be unreasonably
withheld or delayed.

     (iv) Sellers shall give Buyer prompt notice of the institution of any
litigation, arbitration or administrative proceeding of which it becomes aware prior
to the Closing Date involving any Seller or the Property.

     (v) Sellers shall not enter into any new Leases or any other agreement
affecting the Property, or amend, extend or terminate any Leases or any other
agreement affecting the Property, without the prior written consent of Buyer.

     (c) Buyer’s Representations and Warranties. To induce Sellers to enter into
this Agreement and to consummate the sale and purchase of the Property in accordance
herewith, Buyer represents and warrants to Sellers, as of the date hereof and as of the
Closing Date, that:

     (i) Buyer has the full right, power, and authority to purchase the Property as
provided in this Agreement and to carry out its obligations hereunder; all requisite
action necessary to authorize Buyer to enter into this Agreement and to carry out
its obligations hereunder has been or by the Closing will have been taken; and this
Agreement and the documents to be delivered and actions to be taken by Buyer
hereunder do not violate any provision of any agreement or judicial order to which
any Buyer is a party or is subject.

     (ii) Buyer is not a party to any litigation, arbitration or administrative
proceeding that affects or questions Buyer’s ability to perform its obligations
under this Agreement.

     (iii) Buyer is duly organized, validly existing and in good standing under the
laws of the state of its incorporation or formation, as set forth in the preamble to
this Agreement.

11

 

     (iv) Buyer has not (A) made a general assignment for the benefit of creditors,
(B) filed any voluntary petition in bankruptcy or suffered the filing of any
involuntary petition by its creditors, (C) suffered the appointment of a receiver to
take possession of all, or substantially all, of its assets, (D) suffered the
attachment or other judicial seizure of all, or substantially all, of its assets,
(E) admitted in writing its inability to pay its debts as they come due, or (F) made
an offer of settlement, extension or composition to its creditors generally.

The representations and warranties of Buyer contained herein shall survive the Closing for a
period of one year following the Closing, and any breach of a representation or warranty
that is first asserted after such one-year period shall not give rise to any claim by
Sellers against Buyer.

5. Buyer’s Conditions Precedent to Closing. The Closing on Buyer’s obligation to
purchase the Property is made specifically contingent upon the following:

     (a) Buyer’s Due Diligence. Buyer shall have the right for a period ending at
5:00 pm Seattle time on December 13, 2006 (the “Contingency Period”), to inspect the
Property and all books and records maintained by or for Sellers with respect to the Property
and the operation thereof, and to conduct such investigations, tests and studies (including
without limitation environmental investigations, tests and studies, and zoning, land use,
and building regulations affecting the Property) as Buyer may deem necessary or appropriate
in its sole discretion in order to determine if Buyer desires to purchase the Property. The
costs and expenses of such inspection, investigations, tests and studies shall be borne
solely by Buyer. To facilitate Buyer’s inspection and review, Sellers agree that upon
Buyer’s acceptance of this Agreement, Sellers shall furnish to Buyer the following
information and documents and Buyer shall promptly acknowledge in writing to Sellers its
receipt of each listed item:

     (i) a current rent roll, certified as true and correct to Sellers’ knowledge,
and copies of existing leases and all amendments thereto;

     (ii) a copy of Sellers’ current title insurance policy;

     (iii) a copy of any environmental or hazardous waste inspection reports in
Sellers’ possession;

     (iv) the ALTA Survey obtained by Sellers at the time of acquisition of the
Property, and any as built surveys and updates to the ALTA Survey in Sellers’
possession or control;

     (v) aerial and premises photographs of the Land and Buildings in Sellers’
possession, if any;

 

 

     (vi) a copy of all “as-built” plans and specifications with respect to the
Buildings that Sellers possess, together with a copy of all engineering, soils,
seismic and structural reports, if any, in Sellers’ possession;

     (vii) a list of all personal property, included in the Property, if any;

     (viii) a summary of the historic and current operating costs of the Property,
itemized by year and by month and by account;

     (ix) all assessments, all certificates of occupancy, and relevant permits
required for the operation of the Property;

     (x) maintenance records, Service Contracts and other contracts or documents to
which each Seller is a party that relate to the ownership, operation, repair,
maintenance or leasing of the Property.

Additionally, during the Contingency Period, Sellers shall furnish to Buyer or make
available to Buyer for review at Sellers’ offices such other documents, materials and
information in Seller’s possession and relating to the Property as Buyer shall reasonably
request.

All information provided by Sellers to Buyer or obtained by Buyer relating to the Property
in the course of its review shall be treated as confidential information by Buyer in
accordance with the provisions of Paragraph 30 hereof. Costs to update any such information
shall be borne by Buyer.

     (b) Property Inspection. Buyer, at Buyer’s sole cost and expense shall have
until the end of the Contingency Period to conduct Buyer’s Property Inspection. Buyer shall
conduct Buyer’s Property Inspection pursuant to the following terms, covenants and
conditions:

     (i) Prior to commencement of Buyer’s Property Inspection, Buyer shall submit to
Sellers, in writing, for Sellers’ approval, which approval shall not be unreasonably
withheld or delayed, Buyer’s proposals for any environmental or physical property
testing. In such regard:

     (A) Buyer shall provide to Sellers at least two (2) business days (or
such longer period as may be required by the lease of any affected tenant)
prior written notice should Buyer elect to take soil and groundwater samples
from the Property. Buyer shall not undertake any such sampling without first
having submitted a sampling plan to Sellers for Sellers’ prior written
approval, which approval shall not be unreasonably withheld or delayed. The
sampling plan must be submitted to Sellers no less than two (2) business
days prior to commencement of any such sampling activities.

13

 

     (B) Buyer shall retain split samples for Sellers and shall deliver such
split samples to Sellers’ Representative (as hereinafter defined), within
five (5) days of such samples being taken.

     (C) Buyer shall provide to Sellers copies of all results of such
sampling and other reports conducted by or for Buyer regarding the
environmental condition of the Property, and all drafts thereof reviewed by
Buyer, within five (5) days of receipt of such reports or drafts by Buyer.

     (ii) Buyer’s Property Inspection shall be conducted in a reasonable manner and
shall not disturb the quiet enjoyment of Sellers or Sellers’ tenants.

     (iii) Sellers will have the right to have Sellers’ Representative accompany
Buyer’s Representative (as hereinafter defined) and any other agents or designees of
Buyer while they are in, on or about the Property.

     (iv) Buyer shall provide Sellers two (2) days prior notice (which may be oral)
before accessing the Property to conduct Buyer’s Property Inspection.

     (v) Buyer will restore any damage to the Property as a result of Buyer’s
Property Inspection, at Buyer’s sole cost and expense. Until restoration is
complete, Buyer shall take all steps necessary to insure that any conditions on the
Property created by Buyer’s Property Inspection will not interfere with the quiet
enjoyment or operation of the Property or create any dangerous, unhealthy, unsightly
or noisy condition on the Property.

     (vi) Buyer shall indemnify Sellers, and defend and hold harmless Sellers from
and against any and all loss, costs, liability and expense (including reasonable
attorneys’ fees) arising out of any deaths, personal injury or property damage, or
mechanics liens or claims thereof, resulting from or in connection with Buyer’s
Property Inspection or Buyer’s activities in, on or about the Property, except in
each case to the extent arising from the negligence or willful misconduct of Sellers
or their employees or agents; provided, however, Buyer’s indemnity obligation shall
not apply to the costs to remediate, to reporting requirements, or to diminution of
the value of the Property resulting from the discovery of a preexisting condition
(“Buyer’s Indemnification”). Buyer’s Indemnification shall survive the Date of
Closing or any earlier termination of the Agreement.

     (vii) Buyer shall provide Sellers with evidence of workers’ compensation and
liability insurance satisfactory to Sellers to protect Sellers from any liability
with respect to Buyer’s activities in, on or about the Property.

     (viii) Sellers and Buyer shall each designate representatives to act on their
behalf in scheduling and arranging visits to and inspections of the Property. The
representative of Sellers shall be Bill Hart or Glenn Hart, 14850 N.E.
31st

 

 

Circle, Redmond WA 98052, Telephone: 425-556-9100 (“Sellers’ Representative”),
or such other individual to whom Sellers’ Representative delegates responsibility by
written notice to Buyer from time to time. The representatives of Buyer shall be Ty
Bennion, Bill Plantz, Randy Dixon, and Andy Wattula, Telephone: (206) 839-8400
(“Buyer’s Representative”) or such other individual to whom Buyer’s Representative
may delegate responsibility by written notice to Sellers from time to time. Each
party shall have the right to change its respective representative(s) by notice to
the other party given in accordance with Paragraph 13 hereof.

     (ix) Sellers have made available, and will continue to make available, during
the Contingency Period, to Buyer for examination, documentation in Sellers’
possession which directly relates and is relevant to the Property (including
environmental documentation), except for documentation withheld by Sellers to
preserve the work product or attorney/client privileges. Costs to update any
information referred to in this subparagraph (b) shall be borne by Buyer.

     (c) Buyer’s Right to Terminate. If Buyer is not satisfied with the results of
Buyer’s Due Diligence or Property Inspection prior to expiration of the Contingency Period,
and Sellers will not agree to correct any matter to which Buyer objects, then Buyer may
terminate this Agreement by giving written notice of termination to Sellers prior to
expiration of the Contingency Period. If Buyer does not so terminate the Agreement prior to
expiration of the Contingency Period, Buyer shall be conclusively presumed to have waived
its right to terminate. In the event that this Agreement is terminated prior to expiration
of the Contingency Period, except as expressly provided otherwise herein, (i) this Agreement
shall become null and void and all Earnest Money paid by Buyer pursuant to Paragraph 3(b)
hereof and the interest earned thereon shall be returned to Buyer (provided that Buyer
complies with the requirements of Paragraph 3(c)(i)), (ii) neither party shall be liable for
damages or have any further duties or obligations hereunder, and (iii) Buyer and Sellers
shall execute such documentation as shall be necessary to relieve each party from all duties
and obligations under this Agreement.

6. Insurability of Title.

     (a) Within five (5) days of Buyer’s acceptance of this Agreement, Sellers shall deliver
to Buyer a commitment for an owner’s policy of title insurance, together with complete and
legible copies of all exception and other documents or instruments referenced therein
(collectively, the “Commitment”) issued by the Title Company committing to insure Buyer’s
interest in the Property in an amount of insurance of not less than the Purchase Price. On
the Date of Closing the Title Company, if requested by Buyer, shall issue an ALTA Owner’s
Extended Coverage Policy of Title Insurance, or have irrevocably committed and agreed to
issue such policy of title insurance, pursuant to the Commitment, insuring that title to the
Land is vested in Buyer, free and clear of any and all liens, charges and encumbrances,
except (i) the usual printed exceptions and exclusions contained in such policies of title
insurance (other than such exceptions deleted in a policy of extended coverage, to the
extent Buyer requests an ALTA Owner’s

15

 

Extended Coverage Policy); (ii) the lien of any real estate taxes and assessments,
sewer and water and other utility rents and charges, personal property taxes, and other
similar taxes and charges, which Buyer is obligated to assume and pay pursuant hereto; (iii)
matters identified on the Survey which do not materially and adversely affect the use and
operation of the Property in the manner currently used and operated; and (iv) the other
title matters to which Buyer does not object (or is deemed to have waived objection)
pursuant to Paragraph 6(b) or Paragraph 6(c) below (all of the matters referred to in
clauses (i) through (iv) being hereinafter collectively referred to as the “Permitted
Encumbrances”), and Buyer agrees that it will accept title to the Property subject to the
Permitted Encumbrances, and that the sole evidence of title to the Property which Sellers is
required to deliver to Buyer is the Commitment.

     (b) Within the period expiring on the later of twenty (20) days after the Date of the
Agreement or fifteen (15) days after delivery to Buyer of the Commitment and the Survey
(“Title Review Period”), Buyer shall give Sellers written notice of any objections to the
condition of title as set forth in the Commitment and the Survey (other than with respect to
the Sellers’ Liens [hereinafter defined]). In the event Buyer fails to give a written
notice to Sellers of objections to title within the Title Review Period, Buyer shall be
deemed to have waived any objections to title (other than with respect to Sellers’ Liens)
and to have accepted the condition of title as reflected by the Commitment and Survey. In
the event Buyer gives a written notice to Sellers of objections to title within the Title
Review Period, Sellers shall have the right, but not the obligation, to cure Buyer’s
objections for a period of ten (10) days following receipt by Sellers of notice of Buyer’s
objections (the “Cure Period”). If Sellers are unwilling or unable to cure Buyer’s
objections within the Cure Period, Sellers shall so notify Buyer, in which event Buyer shall
either (i) accept title in its current condition, without any adjustment in the Purchase
Price, in which event Buyer’s objections shall be deemed to have been waived for all
purposes, or (ii) terminate this Agreement by written notice to Sellers and the Title
Company, in which event the Earnest Money shall be paid to Buyer. Notwithstanding anything
to the contrary contained herein, Sellers shall satisfy in full, at or prior to Closing, any
and all mortgages, deed of trusts and similar security instruments encumbering all or any
part of the Property, any mechanic’s, materialman’s or similar lien (unless resulting from
any act or omission of Buyer or any of its agents), any delinquent taxes, assessments and
governmental charges affecting all or any portion of the Property, and any judgment of
record affecting the Property (all of the foregoing, collectively, the “Sellers’ Liens”),
and in no event shall any of the Sellers’ Liens be deemed to be Permitted Encumbrances
regardless of whether or not Buyer objects to them.

     (c) If, on the Date of Closing, the Title Company is unwilling to issue the title
insurance policy, or to agree to issue the title insurance policy, as provided in the first
paragraph of this Paragraph 6, without making exception for a lien, charge or encumbrance
which is not a Permitted Encumbrance or accepted by Buyer as provided in the preceding
paragraph, Sellers shall have a period of sixty (60) days thereafter within which to cause
the Title Company to remove said exception or to agree to insure Buyer against any loss or
damage which Buyer may sustain or incur by reason of the existence thereof. During said
sixty (60) day period, the closing of the sale and purchase

 

 

contemplated hereby shall be postponed, but upon removal of said exception or agreement
by the Title Company to insure Buyer against any and all loss or damage which Buyer may
sustain or incur by reason of the existence thereof, and within five (5) business days
thereafter, the sale and purchase contemplated hereby shall be closed in accordance with the
terms, covenants and conditions of this Agreement. If, within said sixty (60) day period,
the Title Company does not remove said exception or agree to insure Buyer against any and
all loss or damage which Buyer may sustain or incur by reason of the existence thereof,
Buyer, as Buyer’s sole and exclusive remedy, may elect to either (i) terminate this
Agreement, in which event (A) this Agreement shall become null and void and all Earnest
Money paid by Buyer pursuant to Paragraph 3(b) hereof and the interest earned thereon shall
be returned to Buyer (provided that Buyer complies with the requirements of Paragraph
3(c)(i)), (B) neither party shall be liable for damages or have any further duties or
obligations hereunder, and (C) Buyer and Sellers shall execute such documentation as shall
be necessary to relieve each party from all duties and obligations under this Agreement; or
(ii) consummate the transaction contemplated by this Agreement in the same manner as if
there had been no such exception made by the Title Company, with no reduction of the
Purchase Price, in which event Sellers shall have no obligation to expend any money or take
any further action with regard to such exception.

7. Closing Documents.

     (a) At Closing (except that the Tenant Estoppel Certificates required by Paragraph
7(a)(iii) shall be delivered to Buyer at least two (2) business days prior to Closing)
Sellers shall take the following actions and/or deliver or cause to be delivered the
following items:

     (i) Deed and Bills of Sale. Laguna North Land Sellers, Laguna South
Land Sellers, and FC27 Sellers shall convey fee simple title to the Land free and
clear of all liens, charges and encumbrances, except the Permitted Encumbrances, by
statutory warranty deed. The other Sellers shall convey their interests in leases
and improvements thereon by deeds and/or assignments and bills of sale in
substantially the form attached hereto as Exhibit F.

     (ii) Non-Foreign Person Certificate. Certifications of non-foreign
status representing as to each Seller that it is not a “foreign person” as defined
in Code Section 1445(f)(3) of the Internal Revenue Code of 1954, as amended.

     (iii) Estoppel Certificates. Tenant Estoppel Certificates from each
tenant of the Property, in substantially the form attached hereto as Exhibit
G, and disclosing no adverse matters.

     (iv) Assignments. Assignments of Leases, Rents, and Deposits in
substantially the form attached hereto as Exhibit H, and Assignment of
Contracts, Permits, Rights, and Intangibles in substantially the form attached
hereto as Exhibit I.

17

 

     (v) The ALTA Owner’s Extended Coverage Policy of Title Insurance issued by the
Title Company as provided for herein.

     (vi) Notices to the tenants under the Leases (the “Tenant Notices”), executed
by the respective Sellers, advising the tenants of the sale of the Property to
Buyer, and stating that future rents should be paid as specified by Buyer. The
Tenant Notices shall also be executed by Buyer and shall contain a statement
acknowledging that Buyer has received and is responsible for the tenants’ security
deposits and specifying the exact dollar amount of the deposits, if any.

     (vii) Executed originals of the Leases and Service Contracts assumed by Buyer,
if originals are in Sellers’ possession.

     (viii) Sellers’ agreement to indemnify and hold Buyer harmless of and from all
liabilities, losses, damages, costs, expenses (including reasonable attorneys’ fees)
which the Buyer may suffer or incur by reason of (A) any breach of any of the
Sellers’ representations or warranties set forth in this Agreement, and (B) any act
or cause of action occurring or accruing prior to the Closing Date and arising out
of any act or failure to act of the Sellers relating to this Agreement or to the
Property (other than any claim arising out of the condition of the Property,
liability for which is limited to the Sellers’ representations and warranties
herein).

     (ix) Keys and electronic pass cards or devices to all entrance doors to, and
equipment and utility rooms and vault boxes located in, the Property, which keys and
electronic pass cards or devices shall be properly tagged for identification;
provided, Buyer shall enter into all required security arrangements with tenants, if
any, prior to receipt of access to tenants’ secured areas.

     (x) The deposits, if any, under the Leases.

     (xi) Certificates of occupancy for the portions of the Buildings occupied by
the tenants under the Leases.

     (xii) Such evidence of the authority of Sellers to consummate the Closing as
the Title Company may require.

     (xiii) An inventory of personal property included in the Property as of the
Closing Date.

     (xiv) Such other documents as may be reasonably required to consummate the sale
and purchase contemplated hereby, which are not inconsistent with this Agreement,
including, without limitation, receipt by the Title Company of written payoff
instructions from all secured lenders.

 

 

     (xv) An executed original of that certain lease agreement in the form to be
agreed upon by Sellers and Buyer prior to the expiration of the Contingency Period,
and a deposit of One Million Five Hundred Thousand Dollars ($1,500,000) to an escrow
account acceptable to Buyer with instructions to the escrow agent to pay from such
deposit to Buyer monthly, as rent under such lease, all accrued interest on such
deposit plus One Hundred Twenty-five Thousand Dollars ($125,000) for a period of
twelve (12) months.

     (b) At Closing, Buyer shall deliver or cause to be delivered to Sellers the following
items at the Closing:

     (i) The Purchase Price by wire transfer to Sellers, allocated as provided
herein.

     (ii) The Buyer’s agreement to indemnify and hold Sellers harmless of and from
all liabilities, losses, damages, costs, expenses (including reasonable attorneys’
fees) which the Sellers may suffer or incur by reason of (A) any breach of any of
the Buyer’s representations or warranties set forth in this Agreement, and (B) any
act or cause of action occurring or accruing subsequent to the Closing Date and
arising out of any act or failure to act of the Buyer relating to this Agreement or
to the Property.

     (iv) Such evidence of the authority of Buyer to consummate the Closing as the
Title Company may require.

     (v) The Buyer’s agreement to assume (A) all ground and operating leases and
amendments thereto in effect pertaining to the Property, including, without
limitation, all obligations thereunder, if any, of Sellers, to pay for future tenant
improvement and leasing commissions, and (B) all Service Contracts pertaining to the
Property.

     (vi) Such other documents as may be reasonably required to consummate the sale
and purchase contemplated hereby, which are not inconsistent with this Agreement.

     (vii) An executed original of that certain lease agreement described in
Paragraph 7(a)(xv).

8. Closing Costs and Prorations.

     (a) Title Insurance and Escrow Charges. Sellers shall pay one-half (1/2) of
the escrow charges of the Title Company and the entire cost of the standard coverage owner’s
policy of title insurance. Buyer shall pay one-half (1/2) of the escrow charges of the
Title Company and the difference in cost (premiums and related taxes) between the standard
coverage and the extended coverage. Buyer shall pay for any endorsements that Buyer elects
to obtain.

19

 

     (b) Survey. Sellers shall deliver to Buyer the Survey. Any other survey
requirements of Buyer shall be satisfied by Buyer, at Buyer’s expense.

     (c) Attorneys’ Fees. Buyer and Sellers shall each pay their respective counsel
fees.

     (d) Taxes and Other Closing Costs. Sellers shall pay the real estate excise
tax payable upon conveyance of that portion of the Property subject to the real estate
excise tax. Buyer shall pay sales/use taxes payable on conveyance of that portion of the
Property subject to sales/use taxes. Buyer shall pay any and all other costs associated
with Closing including, without limitation, Deed recording fees, and any costs, expenses and
fees relating to Buyer’s financing of the Property, including points, recording fees, and
taxes relating to financing documents, commitment fees, etc.

     (e) Prorations of Rents, Real Estate Taxes, Assessments, Utilities and Operating
Costs. Rents which have been collected as of the Closing Date (but not uncollected or
delinquent rents), real estate taxes, assessments payable in installments, utility charges
and/or operating costs shall be prorated as of 12:01 a.m. (Seattle time) on the Closing
Date. All uncollected or delinquent rents received by Buyer after the Closing shall be
collected by Buyer as the agent of Sellers, and remitted to Sellers within ten (10) days of
receipt; provided, all receipts after Closing shall be applied first to current rents due
and owing; provided, further, in the event any delinquent rents are not collected by Buyer
and remitted to Sellers within ninety (90) days following the Closing, Buyer shall assign to
Sellers the claim for delinquent rents. Sellers shall submit preliminary prorations to
Buyer and the Title Company for rents, operating costs, and utilities three (3) business
days before closing. The Title Company shall prepare and submit to Buyer and Sellers
settlement statements one (1) business day before Closing.

     (f) Other Prorations and Adjustments. Sellers and Buyer are not aware of any
other costs and expenses that must be adjusted between them on the Date of Closing and, if
any such costs or expenses arise or become known to them on or before the Date of Closing,
they shall be equitably adjusted between Sellers and Buyer in accordance with customary
practice in King County, Washington.

     (g) Adjustment of Prorations/Price. Upon written notice delivered to Sellers
no later than three (3) business days before Closing, Buyer may elect to pay portions of the
closing costs which are otherwise to be prorated to or paid by Sellers at Closing (based
upon the full purchase price), such as the real estate excise tax and the commission payable
to Broker (hereinafter defined), with an equal reduction in the Purchase Price (such that
the net proceeds to Sellers are not adversely affected by such combined adjustments).

     9. Date and Place of Closing. For the purposes of this Agreement, subject to the
remaining provisions of this Paragraph 9, the terms “Closing,” “Closing Date,” and/or “Date of
Closing” shall mean that date designated by Sellers upon no less that five (5) business days

 

 

advance written notice (the “Sellers’ Closing Notice”) delivered to Buyer following the expiration
of Buyer’s Contingency Period, or such later date to which the Closing may be postponed pursuant to
Paragraph 6 hereof (subject to the remainder of this Paragraph 9). The date designated in the
Sellers’ Closing Notice shall be deemed accepted by Buyer unless, within two (2) business days
following Buyer’s receipt of such notice, Buyer (i) delivers written notice to Sellers (the
“Buyer’s Alternate Closing Notice”) specifying an alternate Closing Date which must be no later
than seven (7) business days after the date designated in the Sellers’ Closing Notice, and (ii)
within three (3) business days after the delivery of the Buyer’s Alternate Closing Notice Buyer
doubles the Earnest Money deposit. In the event Sellers have failed to give the Sellers’ Closing
Notice to Buyer on or before April 1, 2007, Buyer may either (x) terminate this Agreement (in which
case the Earnest Money and all interest earned thereon shall be immediately returned to Buyer so
long as Buyer has complied with its obligations under Paragraph 3(c)(i)) or (y) enforce this
Agreement pursuant to the terms of Paragraph 11(b), and in the event Buyer elects to proceed under
this clause (y) Sellers shall be deemed to have given the Sellers’ Closing Notice on April 1, 2007
and designated April 6, 2007 as the Closing Date. The time of Closing shall be 9:00 a.m. (Seattle
time) and the place of Closing shall be at the offices of the Title Company. Buyer hereby
acknowledges and agrees that time is of the essence with respect to Closing and, provided all
conditions to Closing have been satisfied and Sellers are prepared to fulfill completely their
obligations hereunder and are not in default hereunder, the failure of Buyer to fulfill its
obligations hereunder and cause Closing to occur by the Date of Closing shall constitute a material
default hereunder. Sellers hereby covenant and agree to use good faith efforts to obtain all
necessary items and deliverables in order to cause the Closing to occur on or before April 1, 2007.

	 	10.	 	Intentionally Omitted.
	 
	 	11.	 	Default.

     (a) If all conditions to Closing have been satisfied and Sellers are prepared to fulfill
completely their obligations hereunder and are not in default hereunder, then should Buyer fail to
fulfill its obligations hereunder and cause Closing to occur by the Date of Closing, Sellers’ sole
remedy shall be to terminate this Agreement and collect and retain, as liquidated damages, the
Earnest Money together with any interest earned thereon (collectively, the “Liquidated Damages”).
In the event Sellers terminate this Agreement and receive the Liquidated Damages, (i) this
Agreement shall be null and void, (ii) neither party shall be liable for damages (except with
respect to the Liquidated Damages received by Sellers, as well as Buyer’s obligation to pay
Sellers’ attorney’s fees, if any, incurred as a result of Buyer’s default) or have any further
duties or obligations hereunder, and (iii) Buyer and Sellers shall execute such documentation as
shall be necessary to release each party from all further duties and obligations under or with respect
to this Agreement. In the event of such termination, the Title Company is hereby irrevocably
authorized and directed to pay the Liquidated Damages to Sellers.

     (b) Should Sellers or any one of them default in the performance of their obligations
hereunder, and such default shall continue for a period of thirty (30) days (except as otherwise
provided in Paragraph 6(c)) after written notice from Buyer to Sellers (provided, however, if (i)
the nature of the default is such that it cannot be cured, there shall be no cure period, and (ii)
the nature of the default is such that it cannot be cured within a period of thirty (30) days, but
Sellers

21

 

have commenced to cure said default within said thirty (30) day period and is diligently
pursuing such cure, such period shall be extended to the period reasonably required to cure such
default), Buyer shall have the right, at Buyer’s option, as Buyer’s sole and exclusive remedies,
either (i) to terminate this Agreement, in which event (A) this Agreement shall be null and void
and all Earnest Money paid by Buyer pursuant to Paragraph 3(b) hereof and the interest earned
thereon shall be returned to Buyer (provided that Buyer complies with the requirements of Paragraph
3(c)(i) hereof), (B) neither party shall be liable for damages or have any further duties or
obligations hereunder (except that Sellers shall pay Buyer’s attorneys’ fees, if any, incurred as a
result of Sellers’ default), and (C) Buyer and Sellers shall execute such documentation as shall be
necessary to release each party from all duties and obligations under this Agreement, or (ii)
provided that such action is commenced within sixty (60) days after the originally scheduled
Closing Date, to bring an action for specific performance of Sellers’ obligations hereunder and
such further equitable relief as the court considering the issue shall determine appropriate,
including attorneys fees to the substantially prevailing party. In the event of such termination,
the Title Company is hereby irrevocably authorized and directed to forward the Earnest Money held
by it pursuant to this Agreement, together with any interest earned thereof, to Buyer. In the
event Buyer shall bring an action for specific performance, the Title Company shall retain the
Earnest Money pending resolution of the action, either to be delivered to Sellers as a part of the
Purchase Price or returned by Buyer, based upon the resolution of the dispute.

     The parties have agreed that Sellers’ actual damages, in the event of a failure to consummate
this sale due to Buyer’s default, would be extremely difficult or impracticable to determine.
After negotiation, the parties have agreed that, considering all the circumstances existing on the
date of this Agreement, the amount of the Earnest Money is a reasonable estimate of the damages
that Sellers would incur in such event. By placing their initials below, each party specifically
confirms the accuracy of the statements made above and the fact that each party was represented by
counsel who explained, at the time this Agreement was made, the consequences of this liquidated
damages provision.

	 	 	 	 	 	 	 	 	 
	 

	 	 

Sellers
	 	 	 	 

Buyer
	 	 

	 	12.	 	Damage and Destruction/Condemnation.

     (a) From and after the Date of the Agreement to the Date of Closing, Sellers shall continue to
be considered the owner of the Property for all purposes and, except as set forth herein, shall be
entitled to receive all insurance proceeds and/or condemnation awards that may
become payable with regard to any damage or destruction and/or condemnation thereof. Sellers,
between the Date of the Agreement and the Date of Closing, shall carry “all risk” (sometimes
referred to as special extended form) property insurance coverage to the extent of full replacement
cost on the Buildings.

     (b) Sellers and Buyer waive the provisions of all applicable laws relating to the occurrence
of a casualty or condemnation between the Date of the Agreement and the Date of Closing, and
Sellers and Buyer agree that the following provisions of this Paragraph 12 shall govern in lieu
thereof.

22

 

     (c) If prior to the Closing hereunder all or a material part of the Property is damaged or
destroyed by fire or other cause, or is taken by right of eminent domain or by condemnation, then
in either of such events either Sellers or Buyer may, by notice given to the other party at or
prior to the Date of Closing (but not more than fifteen (15) days after notice of such damage or
destruction and/or taking is received by the party giving such notice), terminate this Agreement,
in which event (i) this Agreement shall become null and void and all Earnest Money paid by Buyer
pursuant to Paragraph 3(b) hereof and the interest earned thereon shall be returned to Buyer
(provided that Buyer complies with the requirements of Paragraph 3(c)(i)), (ii) neither party shall
be liable for damages or have any further duties or obligations hereunder, and (iii) Buyer and
Sellers shall execute such documentation as shall be necessary to relieve each party from all
duties and obligations under this Agreement. For the purposes of this paragraph 12, a “material
part of the Property” shall mean (a) any damage, destruction, or taking of twenty-five percent
(25%) or more of the net rentable area of the Buildings, or (b) any damage, destruction, or taking
that allows for the termination of Leases aggregating twenty-five percent (25%) or more of the net
rentable area of the Buildings.

     (d) If prior to the Closing a non-material part of the Property is damaged or destroyed by
fire or other cause, or is taken by right of eminent domain or by condemnation, or a material part
of the Property is damaged or destroyed by fire or other cause or taken by right of eminent domain
or condemnation and neither Sellers nor Buyer have terminated this Agreement in accordance with the
above-stated provisions, then Sellers as their sole obligation and at their sole election shall
either (i) credit on account of the Purchase Price an amount equal to the net proceeds of any fire
insurance plus Sellers’ insurance deductible and/or insurance retention and/or condemnation award
actually received by Sellers (the term “net proceeds” as used in this paragraph to mean such
proceeds reduced by (a) the reasonable cost of collection, and (b) the cost of any repairs effected
by or on behalf of Sellers with Buyer’s consent, which consent shall not be unreasonably withheld
or delayed), or (ii) if any such proceeds have not been received by Sellers, transfer and assign to
Buyer, all of Sellers’ right, title and interest in and to any insurance proceeds and claims plus
Sellers’ insurance deductible and/or insurance retention and/or condemnation proceeds payable to
Sellers, and there shall be no abatement or credit on account of the Purchase Price and no duty or
obligation on Sellers to repair or restore any damage or to make any repairs to the Property by
reason of such fire, casualty or taking.

     13. Notices. Whenever in this Agreement it shall be required or permitted that notice
or demand be given or served by either party to this Agreement, such notice
or demand shall be given or served in writing and sent to Sellers and Buyer at the addresses set
forth below:

	 	 	 	 	 
	 

	 	To Sellers:
	 	14850 N.E. 31st Circle
	 

	 	 	 	Redmond WA 98052
	 

	 	 	 	Attention: Bill Hart/Glenn Hart
	 

	 	 	 	Facsimile: 425-556-9200
	 
	 	 	 	 
	 

	 	With copy to:
	 	Kinne Hawes
	 

	 	 	 	600 University Street, Suite 2424
	 

	 	 	 	Seattle WA 98101-1192
	 

	 	 	 	Facsimile: 206-464-0484

23

 

	 	 	 	 	 
	 

	 	To Buyer:
	 	Hines REIT Laguna Campus LLC
	 

	 	 	 	c/o Hines Interests Limited Partnership
	 

	 	 	 	800 Fifth Avenue Suite 3838
	 

	 	 	 	Seattle, WA 98104
	 

	 	 	 	Attention: W. Rand Dixon
	 

	 	 	 	Facsimile: 206-839-8401
	 
	 	 	 	 
	 

	 	With copy to:
	 	Hines REIT Laguna Campus LLC
	 

	 	 	 	c/o Hines Interests Limited Partnership
	 

	 	 	 	2800 Post Oak Boulevard, Suite 5000
	 

	 	 	 	Houston, Texas 77056-6118
	 

	 	 	 	Attention: Charles N. Hazen
	 

	 	 	 	Facsimile: 713-966-7851
	 
	 	 	 	 
	 

	 	And with a copy to:
	 	Hines REIT Laguna Campus LLC
	 

	 	 	 	c/o Hines Interests Limited Partnership
	 

	 	 	 	2800 Post Oak Boulevard, Suite 5000
	 

	 	 	 	Houston, Texas 77056-6118
	 

	 	 	 	Attention: Jason Maxwell
	 

	 	 	 	Facsimile: 713-966-2075
	 
	 	 	 	 
	 

	 	And with a copy to:
	 	Baker Botts L.L.P.
	 

	 	 	 	2001 Ross Avenue, Suite 600
	 

	 	 	 	Dallas, TX 75201-2980
	 

	 	 	 	Attention: Joel M. Overton, Jr.
	 

	 	 	 	Facsimile: 214-661-4938

All such notices shall be sent by (i) certified or registered mail and shall be effective three (3)
days after the date of mailing; (ii) Federal Express or similar overnight courier and shall be
effective one (1) day after delivery to Federal Express or similar overnight courier; (iii)
facsimile transmission and shall be effective on the date of confirmed electronic receipt of the
transmission; or (iv) personal service and shall be effective on the same day as service. Any
such address may be changed from time to time by either party serving notices as above provided.

     14. Successors and Permitted Assigns.

     (a) The terms, conditions and covenants hereof shall extend to and be binding upon and
inure to the benefit of the heirs, personal representatives, successors and permitted
assigns of the parties hereto.

     (b) Buyer shall not assign this Agreement without the prior written consent of Sellers
in each instance, which shall not be unreasonably withheld, conditioned, or delayed. Any
attempted assignment without consent shall be null and void. Any assignment of Buyer’s
interest hereunder shall be pursuant to a written assignment and

24

 

assumption wherein the
assignee shall assume and agree to pay and perform all of the terms, covenants and
conditions of this Agreement to be paid or performed by Buyer hereunder, and shall not
relieve or release Buyer of any liability hereunder.

     (c) Notwithstanding the limitations of Paragraph 14(b) above, either party may assign
its rights hereunder (i) to an entity in which it has an economic interest and/or managerial
control, or, as to Sellers, in which members of the family (i.e., children, siblings,
nieces, nephews, grandchildren, and spouses of any of the foregoing) of a member of a Seller
have an economic interest and/or managerial control, and (ii) but not its obligations, to an
intermediary so that any one or more of the Sellers and/or the Buyer may effect a
tax-deferred exchange under the Internal Revenue Code Section 1031, and the non-assigning
party shall fully cooperate with the assigning party to facilitate the exchange, provided,
however, that (A) the assigning party shall notify the other party of such assignment in
writing no later than no later than ten (10) business days prior to the Date of Closing and
shall deliver to the other party or parties a fully executed original of the assignment
agreement with that notice; (B) the non-assigning party shall not incur any fees, costs,
liability or costs associated with such exchange, and (C) the assigning party shall
indemnify and hold the non-assigning party and any broker harmless from and against any
liability or action that arises as a result of the exchange. No permitted assignment
hereunder shall release the assigning party from any of its obligations to the other party
hereunder or cause a delay in the Date of Closing.

     15. Survival of Covenants. Except as specifically set forth herein, the covenants,
agreements and representations herein contained shall not survive the Date of Closing and shall not
bind the parties subsequent to the Closing.

     16. Applicable Law. This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State of Washington, without giving effect to the principles of
conflicts of law thereof.

     17. Amendments. This Agreement may not be amended, modified, extended, revised or
otherwise altered, nor may any party hereto be relieved of any of its liabilities or obligations
hereunder, except by a written instrument duly executed by both
parties. Any such written instrument entered into in accordance with the provisions of the
preceding sentence shall be valid and enforceable notwithstanding the lack of separate legal
consideration therefor.

     18. Headings. The title of this Agreement and the paragraph and other headings used
in this Agreement have been inserted for convenience of reference only, are not part of the
parties’ agreement, shall not be deemed in any manner to modify, expand, explain or restrict any of
the provisions of this Agreement and are not intended to have any legal effect. Accordingly, no
reference shall be made to any such title or heading for the purpose of interpreting, construing or
enforcing any of the provisions of this Agreements.

     19. Integration. This Agreement, including the exhibits and schedules attached to
this Agreement, which are incorporated herein by this reference, constitute the entire agreement
and understanding of the parties hereto with respect to the subject matter hereof and supersedes
all

25

 

prior agreements, proposals, offers, counteroffers, agreements and understandings of the
parties regarding said subject matter, whether written or oral, all of which are hereby merged into
and superseded by this Agreement.

     20. No Recordation of Agreements. Except as expressly permitted by Paragraph 30, none
of this Agreement, any memorandum hereof, and any other document or instrument making reference to
this Agreement shall be recorded or filed in any public records and any purported recordation or
filing shall be deemed null, void and of no force or effect.

     21. Construction. This Agreement shall not be construed more strictly against one
party than against the other merely by virtue of the fact that it may have been prepared by counsel
for one of the parties, it being recognized that both Sellers and Buyer have contributed to the
preparation of this Agreement.

     22. Waiver. Except as expressly provided herein, no waiver by any party of any
failure or refusal of the other party to comply with its obligations under this Agreement shall be
deemed a waiver of any other subsequent failure or refusal to so comply by such other party. No
waiver shall be valid unless in writing signed by the party to be charged and only to the extent
therein set forth.

     23. Severability. If any term or provision of this Agreement or application thereof
to any person or circumstances shall, to any extent, be found by a court of competent jurisdiction
to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or
provision to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each other term or provision of this Agreement
shall be valid and be enforced to the fullest extent permitted by law.

     24. Parties Not Partners. Nothing contained in this Agreement or any of the documents
or instruments to be executed pursuant hereto shall constitute any one or more of Buyer and its
officers, directors, successors and assigns, as partners
with, agents for or principals of any one or more of Sellers and its officers, directors,
successors and assigns.

     25. Attorneys’ Fees, Costs and Expenses. Anything to the contrary herein
notwithstanding, in any action, proceeding or dispute resolution process arising from, out of or in
connection with this Agreement and the transactions contemplated hereby, the prevailing party
therein shall be entitled to recover from the other party hereto the costs, expenses and reasonable
attorneys’ fees incurred by the prevailing party in connection therewith. Nothing contained in
this Paragraph 25 is intended to limit any provision regarding payment of attorneys’ fees, costs,
expenses and similar matters contained elsewhere in this Agreement or in any document or instrument
executed and delivered pursuant to this Agreement.

     26. Cumulative Remedies. Unless expressly provided otherwise herein, the remedies of
the parties provided for herein shall be cumulative and concurrent, and may be pursued singly,
successively or together, at the sole and absolute discretion of the party for whose benefit such
remedies are provided, and may be exercised as often as occasion therefor shall arise.

26

 

     27. Currency. All amounts to be paid hereunder shall be paid in the currency of the
United States of America.

     28. Counterparts/Facsimile Signature. This Agreement may be executed simultaneously
in two or more counterparts each of which shall be deemed an original, but all of which shall
constitute one and the same Agreement. Sellers and Buyer agree that the delivery of an executed
copy of this Agreement by facsimile shall be legal and binding and shall have the same full force
and effect as if an original executed copy of this Agreement had been delivered.

     29. Brokerage Fees. Conditioned upon the actual consummation of the sale contemplated
hereby, Sellers agree to pay to CB Richard Ellis Real Estate Services, LLC (the “Broker”) a
commission in accordance with a separate commission agreement between Sellers and Broker. If the
sale contemplated hereby is not actually consummated for any reason, including the default of
either or both parties, no commission shall be payable. Neither Sellers nor Buyer has contracted
with any other real estate broker, agent, finder or similar person in connection with the
negotiation and execution of this Agreement, the transactions contemplated hereby or the sale and
purchase of the Property. It is agreed that if any claims for any brokerage fees are ever made
against Sellers or Buyer in connection with the transactions contemplated by this Agreement, all
such claims shall be paid by the party whose commitments form the basis of such claims. Sellers
and Buyer each agree to indemnify and hold harmless the other from and against any and all
liabilities, claims, demands or actions for or with respect to any other brokerage fees asserted by
any person, firm or corporation in connection with this Agreement or the transactions contemplated
hereby, and any court costs, attorneys’ fees or other costs and expenses arising therefrom, insofar
as any such liabilities, claims, demands or actions are based upon a contract or commitment of the
indemnifying party. The provisions of this Paragraph 29 shall survive the Closing.

     30. Confidentiality. The parties shall keep the existence of this Agreement, the terms
hereof, and any and all material obtained about the other party and the Property strictly
confidential, and shall not disclose such information to any third party. Neither party shall make
any public statement or disclosure concerning the existence or terms and conditions of this
Agreement without prior notice to and approval of the other party, which approval shall not be
unreasonably withheld, conditioned, or delayed. The foregoing shall not prohibit a party’s
disclosure of the existence and terms and conditions of this Agreement to its attorneys,
accountants, and other advisors assisting with the transaction, nor prohibit Buyer’s disclosure of
same to prospective investors or otherwise as required by law, or as may reasonably be necessary
for Buyer, its affiliates or any entity advised by Buyer’s affiliates to comply with any applicable
federal or state securities laws, rules, or regulations, or to comply with the requirements of the
Securities and Exchange Commission (“SEC”), the New York Stock Exchange (“NYSE”), or any similar
agency or body, provided that each such person (other than the SEC, NYSE, and any similar agency or
body) to whom disclosure is permitted is advised of the terms of this Paragraph 30 and agrees to
comply with its terms. This provision shall survive the Closing or termination of this Agreement
for a term of one (1) year.

     31. SEC Compliance. Sellers acknowledge that audited financial statements pertaining
to the Property for the three (3) full calendar years prior to Closing and that portion of

27

 

the
calendar year prior to Closing in which Closing occurs are required to be filed by Buyer with the
SEC after the Closing. Accordingly, Sellers agree to provide Buyer and its representatives
reasonable access to Sellers’ books and records after the close of escrow upon reasonable advance
notice for the sole purpose of conducting the required audit. Sellers shall cooperate (at no cost
to Sellers) with Buyer and its auditor in the conduct of such audit by making its files available
and allowing Buyer and its auditors the right to interview Sellers’ staff upon request of Buyer;
provided, however, that (i) neither Sellers nor its staff shall have any obligation to sign or
execute any letter or any other document in connection therewith, and (ii) none of Buyer, the SEC,
or Buyer’s auditors shall have the right to rely on any interview with Sellers’ staff, and none of
Sellers or any of Sellers’ staff shall have any liability in connection therewith. The provisions
of this Paragraph 31 shall survive the Closing.

     32. Sellers’ Termination Option. This Agreement is being contemporaneously executed
with a separate Real Estate Purchase Agreement dated of even date herewith between certain
affiliates of Sellers and an affiliate of Buyer (the “Other Purchase Agreement”). The parties
agree that in the event Buyer’s affiliate elects to terminate the Other Purchase Agreement for any
reason, or fails to close under the Other Purchase Agreement for any reason, other than (i) a
default by the sellers thereunder, (ii) in connection with a material casualty or condemnation
entitling the buyer thereunder to terminate the Other Purchase Agreement, (iii) the failure of a
condition to closing thereunder, or (iv) Microsoft’s exercise of its right of first refusal to
purchase the property subject to the Other Purchase Agreement, then Sellers may elect the terminate
this Agreement upon written notice to Buyer, provided that as a condition to any such termination
of this Agreement the Earnest Money and all interest earned thereon are immediately returned to
Buyer.

End of Page; Signature Pages Follow

28

 

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed the day and
year first above written.

SELLERS:

LAGUNA NORTH BUILDING SELLERS:

	 	 	 	 	 	 	 	 	 	 	 
	GPH Laguna North Building LLC	 	 	 	WPH Laguna North Building LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JPH Laguna North Building LLC	 	 	 	CAC Laguna North Building LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart	 	 	 	By:	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	 	 	Glenn P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 

29

 

	 	 	 	 	 	 	 	 	 	 	 
	LAGUNA NORTH LAND SELLERS:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GPH Laguna North Land LLC	 	 	 	WPH Laguna North Land LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JPH Laguna North Land LLC	 	 	 	CAC Laguna North Land LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart	 	 	 	By:	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	 	 	Glenn P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	LAGUNA SOUTH BUILDING SELLERS:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GPH Laguna South Building LLC	 	 	 	WPH Laguna South Building LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JPH Laguna South Building LLC	 	 	 	CAC Laguna South Building LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart	 	 	 	By:	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	 	 	Glenn P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 

30

 

	 	 	 	 	 	 	 	 	 	 	 
	CIH Laguna South Building LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Glenn P. Hart	 	 	 	 	 	 	 	 
	 

	 	 

Glenn P. Hart
	 	 	 	 	 	 	 	 
	Its:

	 	Manager	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ William P. Hart	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	William P. Hart	 	 	 	 	 	 	 	 
	Its:

	 	Manager	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	LAGUNA SOUTH LAND SELLERS:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GPH Laguna South Land LLC	 	 	 	WPH Laguna South Land LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JPH Laguna South Land LLC	 	 	 	CAC Laguna South Land LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart	 	 	 	By:	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	 	 	Glenn P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	FC27 SELLERS:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GPH FC27 LLC	 	 	 	WPH FC27 LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 

31

 

	 	 	 	 	 	 	 	 	 	 	 
	JPH FC27 LLC	 	 	 	CAC FC27 LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	By:	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	 	 	William P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart	 	 	 	By:	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	 	 	Glenn P. Hart	 	 
	Its:

	 	Manager
	 	 	 	Its:
	 	Manager	 	 

	 	 	 	 	 	 	 
	BUYER:	 	 	 	 
	 
	 	 	 	 	 	 
	HINES REIT LAGUNA CAMPUS LLC,	 	 
	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Authorized Signatory	 	 
	 	 	 	 	 
	 

	 	Its	 	 	 	 
	 	 	 	 	 	 	 

32

 

     The undersigned hereby executes this Agreement for the sole purpose of acknowledging its
agreement with the provisions of Paragraph 3(b) hereof relating to its duties and obligations as
escrow agent hereunder.

LANDAMERICA COMMERCIAL SERVICES

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Authorized Signatory	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Dated:
	 	 	 	 	 	, 200          	 	 
	 	 	 	 	 	 	 	 	 

33

 

FIRST AMENDMENT TO

REAL ESTATE PURCHASE AND SALE AGREEMENT

     THIS FIRST AMENDMENT TO REAL ESTATE PURCHASE AND SALE AGREEMENT (“First Amendment”) is made
and entered into effective November 29, 2006, by and between the undersigned sellers, consisting of
the Laguna North Building Sellers, Laguna North Land Sellers, Laguna South Building Sellers, Laguna
South Land Sellers, and FC27 Sellers, all of whom are Washington limited liability companies
(individually a “Seller” and together “Sellers”) and Hines REIT Laguna Campus LLC, a Delaware
limited liability company and/or its assigns (“Buyer”).

RECITALS

     On or about November 28, 2006, the parties entered into that certain real estate purchase and
sale agreement (“Agreement”) for the purchase and sale of certain real and personal property
described therein. The parties now desire to amend the Agreement.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
hereinafter contained, it is hereby mutually agreed by and between Sellers and Buyer as follows:

     1. Paragraph 9 of the Agreement shall be restated in its entirety, as follows:

     Date and Place of Closing. For the purposes of this Agreement, subject
to the remaining provisions of this Paragraph 9, the terms “Closing,” “Closing
Date,” and/or “Date of Closing” shall mean January 3, 2007. The time of Closing
shall be 9:00 a.m. (Seattle time) and the place of Closing shall be at the offices
of the Title Company. Buyer hereby acknowledges and agrees that time is of the
essence with respect to Closing and, provided all conditions to Closing have been
satisfied and Sellers are prepared to fulfill completely their obligations
hereunder and are not in default hereunder, the failure of Buyer to fulfill its
obligations hereunder and cause Closing to occur by the Date of Closing shall
constitute a material default hereunder. Sellers hereby covenant and agree to use
good faith efforts to obtain all necessary items and deliverables in order to cause
the Closing to occur on January 3, 2007.

     2. Except for the restatement of Paragraph 9 set forth herein, the Agreement shall remain
unmodified and in full force and effect. Capitalized terms not defined herein shall have the
meanings ascribed to them in the Agreement.

End of Page; Signature Pages Follow

1

 

     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed the day
and year first above written.

SELLERS:

LAGUNA NORTH BUILDING SELLERS:

	 	 	 	 	 	 	 	 	 
	GPH Laguna North Building LLC	 	WPH Laguna North Building LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	JPH Laguna North Building LLC	 	CAC Laguna North Building LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart
	 	By:
	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	Glenn P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 

2

 

	 	 	 	 	 	 	 	 	 
	LAGUNA NORTH LAND SELLERS:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	GPH Laguna North Land LLC	 	WPH Laguna North Land LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	JPH Laguna North Land LLC	 	CAC Laguna North Land LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart
	 	By:
	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	Glenn P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	LAGUNA SOUTH BUILDING SELLERS:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	GPH Laguna South Building LLC	 	WPH Laguna South Building LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	JPH Laguna South Building LLC	 	CAC Laguna South Building LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart
	 	By:
	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	Glenn P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 

3

 

	 	 	 	 	 	 	 	 	 
	CIH Laguna South Building LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Glenn P. Hart	 	 	 	 	 	 
	Its: Manager	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	William P. Hart	 	 	 	 	 	 
	Its: Manager	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LAGUNA SOUTH LAND SELLERS:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	GPH Laguna South Land LLC	 	WPH Laguna South Land LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	JPH Laguna South Land LLC	 	CAC Laguna South Land LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart
	 	By:
	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	Glenn P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart
	 	By:
	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	Glenn P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	FC27 SELLERS:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	GPH FC27 LLC	 	WPH FC27 LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 

4

 

	 	 	 	 	 	 	 	 	 
	JPH FC27 LLC	 	CAC FC27 LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glenn P. Hart
	 	By:
	 	/s/ William P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glenn P. Hart
	 	 	 	William P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William P. Hart
	 	By:
	 	/s/ Glenn P. Hart	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	William P. Hart
	 	 	 	Glenn P. Hart	 	 
	Its: Manager	 	Its: Manager	 	 

	 	 	 	 	 	 	 
	BUYER:	 	 
	 
	 	 	 	 	 	 
	HINES REIT LAGUNA CAMPUS LLC,	 	 
	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Authorized Signatory	 	 
	 	 	 	 	 
	 

	 	Its	 	 	 	 
	 

	 	 	 	 	 	 

5

 

     The undersigned hereby executes this First Amendment to the Agreement for the sole purpose of
acknowledging receipt of the first amendment and confirmation of the closing date.

	 	 	 	 	 	 	 
	 	 	     LANDAMERICA COMMERCIAL SERVICES	 	 
	 
	 	 	 	 	 	 
	 

	 	     By:
	 	/s/ Authorized Signatory
	 	 
	 

	 	 	 	 	 	 
	Its:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	     Dated:
	 	 	 	, 2006
	 

	 	 	 	 	 	 

6exv10w75

 

Exhibit 10.75

REAL ESTATE SALE AGREEMENT

EMERYVILLE OFFICE TOWER IV, EMERYVILLE, CALIFORNIA

     THIS REAL ESTATE SALE AGREEMENT (this “Agreement”) is made effective as of December ___,
2006 (the “Effective Date”), by and between CA-WATERGATE TOWER IV LIMITED PARTNERSHIP, a Delaware
limited partnership (“Seller”), and HINES REIT WATERGATE, LP, a Delaware limited partnership
(“Purchaser”). In consideration of the mutual covenants contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser agree as follows:

     1. PURCHASE AND SALE OF PROPERTY. Subject to and in accordance with the terms and
conditions set forth in this Agreement, Purchaser shall purchase from Seller and Seller shall sell
to Purchaser those certain parcels of real estate (the “Real Property”), in the City of Emeryville,
County of Alameda, State of California, which parcels are more particularly described in attached
Exhibit A and upon which is located an office building commonly known as “EMERYVILLE OFFICE
TOWER IV,” together with (a) all buildings and improvements located thereon, and any and all of
Seller’s rights, easements, licenses and privileges presently thereon or appertaining to each of
the foregoing parcels, excluding any property owned by tenants (the “Improvements”); (b) Seller’s
right, title and interest in and to the leases, occupancy agreements and license agreements
affecting the Real Property or any part thereof (the “Leases”); (c) all furniture, furnishings,
fixtures, equipment and other tangible personal property owned by Seller, located on the Property
and used solely in connection therewith, but specifically excluding any and all computer hardware
and software (the “Tangible Personal Property”), lists of which are attached hereto as Exhibit
B; (d) all right, title and interest of Seller under any and all of the maintenance, service,
leasing, brokerage, advertising and other like contracts and agreements with respect to the
ownership and operation of the Property (excluding contracts designated as “National” or “Regional”
service contracts) (the “Service Contracts”), lists of which are attached hereto as Exhibit
C; all to the extent applicable to the period from and after the Closing Date (as defined in
Section 4 below), except as expressly set forth to the contrary in this Agreement. Items
(a) through (d) above, together with the Real Property, are collectively referred to in this
Agreement as the “Property”; provided, however, the term “Property” expressly excludes all property
owned by tenants or other users or occupants of the Property, all rights with respect to any refund
of taxes applicable to any period prior to the Closing Date (as defined in Section 4
below), all rights to any insurance proceeds or settlements for events occurring prior to Closing
(subject to Section 5 below) and all property in the management office of the Property
owned by the Property Manager (as hereinafter defined).

     2. PURCHASE PRICE. The total consideration to be paid by Purchaser to Seller for the
Property is One Hundred Forty-Four Million Nine Hundred Thirty-Five Thousand Four Hundred Dollars
($144,935,400.00) (the “Purchase Price”).

     2.1 Earnest Money. Within two (2) business days after the Effective Date,
Purchaser shall deliver to Chicago Title Insurance Company (“Escrow Agent”) the sum of Two
Million Six Hundred Thousand Dollars ($2,600,000.00) (such sum, together with any interest
earned thereon and net of investment costs, is referred to in this Agreement as the “Earnest
Money”) to be received pursuant to the Escrow Agreement attached

 

 

hereto as Exhibit D. The Earnest Money shall be invested as Seller and
Purchaser so direct. Any and all interest earned on the Earnest Money shall be reported to
Purchaser’s federal tax identification number. Except as expressly set forth herein to the
contrary, the Earnest Money shall become nonrefundable upon the expiration of the Due
Diligence Period described in Section 8.1 below. Notwithstanding the prior
sentence, if the transaction fails to close because of (i) Seller’s default under this
Agreement, and Purchaser elects to exercise its remedies pursuant to Section 7.1(a),
or (ii) failure of a condition precedent to Purchaser’s obligations to close or (iii)
Purchaser’s termination of this Agreement pursuant to Section 5, the Earnest Money
shall be returned to Purchaser. If the transaction closes in accordance with the terms of
this Agreement, then Escrow Agent shall deliver the Earnest Money to Seller at Closing as
payment toward the Purchase Price.

     2.2 Cash Balance. At Closing, Purchaser shall pay to Seller the Purchase
Price, less the Earnest Money, plus or minus the prorations described in this Agreement
(such amount, as adjusted, being referred to as the “Cash Balance”). Purchaser shall pay
the Cash Balance by federal funds wire transferred through escrow to an account designated
by Seller in writing.

     3. EVIDENCE OF TITLE. Prior to the execution of this Agreement, Seller delivered to
Purchaser (a) a current commitment for a CLTA Form Owner’s Title Insurance Policy (the “Title
Commitment”), in the amount of the Purchase Price, issued by Chicago Title Insurance Company (the
“Title Insurer”), (b) available copies of all title exception documents referred to in the Title
Commitment, and (c) any existing surveys of the Real Property and the Improvements in Seller’s
possession (the “Survey”). Prior to the end of the Due Diligence Period, Purchaser shall cause the
Title Insurer to update the Title Commitment to include any exceptions required by ALTA extended
coverage or otherwise and to issue a pro forma title insurance policy in the form requested by
Purchaser and that the Title Insurer reasonably expects to be able to issue to Purchaser as of the
Closing (the “Pro Forma Policy”), subject only to those exceptions which are more fully described
on attached Exhibit E, other exceptions accepted by Purchaser, and exceptions which become
Permitted Exceptions pursuant to this Section 3 (collectively, the “Permitted Exceptions”).
Purchaser shall deliver a copy of the Pro Forma Policy to Seller. In addition, Purchaser may, if
it so elects and at its sole cost and expense, arrange for the preparation of a current survey (or
an update of the existing Survey) with respect to the Property (the “Updated Survey”). If the
Title Commitment (or update), Survey or Updated Survey for the Property discloses exceptions or
matters other than those Permitted Exceptions which are listed on Exhibit E, then on or
before five (5) business days prior to the expiration of the Due Diligence Period (the “Title
Review Period”), Purchaser shall notify Seller of any such exceptions or matters to which it
objects (such notice, the “Title Objection Notice”). Any such exceptions or matters not objected
to by Purchaser as aforesaid shall become “Permitted Exceptions.” If Purchaser notifies Seller of
any such exceptions or matters in the Title Objection Notice, Seller shall have until Closing (but
in any event at least fifteen (15) days after it receives the Title Objection Notice, with the
Closing being adjourned if necessary, at Seller’s sole election, to accommodate said fifteen (15)
day period) to cause the removal of such exceptions or matters (which removal may be by way of
waiver or endorsement (subject to Purchaser’s reasonable approval) by the Title Insurer); provided,
however, that Seller shall notify Purchaser within five (5) business days after its receipt of the
Title Objection Notice whether

2

 

Seller intends to cause the removal of such exceptions or matters at or prior to Closing (such
notice, the “Cure Notice”). If Seller fails to cause the removal of any such exceptions or matters
as aforesaid, or notifies Purchaser in the Cure Notice that Seller does not intend to cause the
removal of such exceptions or matters, or fails to deliver a Cure Notice, Purchaser shall have the
option, as its sole and exclusive remedy, to either (i) waive the unsatisfied objections and close,
or (ii) terminate this Agreement and obtain a return of the Earnest Money. If Purchaser does not
elect to terminate this Agreement within two (2) business days after the expiration of such five
(5) business day period, Purchaser shall consummate the Closing and accept title to the Property
subject to all such exceptions and matters (in which event, all such exceptions and matters shall
be deemed “Permitted Exceptions”). If after the expiration of the Title Review Period the Title
Insurer or Seller delivers an updated Title Commitment to Purchaser which includes exceptions or
matters (other than Permitted Exceptions) not previously included in the Title Commitment
originally delivered to Purchaser, a new Title Review Period shall commence upon Purchaser’s
receipt of such updated Title Commitment, and Purchaser shall again have the right to object to any
such new exceptions or matters (other than Permitted Exceptions), pursuant to the terms and
conditions of this Section 3; provided, however, Purchaser must notify Seller of each such
objection within three (3) business days after receiving written notice from the Title Insurer of
the existence of same.

     Notwithstanding anything to the contrary set forth herein, in no event shall Seller be
required to remove any title exceptions or satisfy any requirements for issuance of Purchaser’s
title policy except that Seller shall be required to remove at or prior to Closing any lien or
encumbrance affecting title to the Property that (A) constitutes, secures or evidences an
outstanding obligation of Seller under any mortgage, deed of trust or other lien encumbering title
which secures a loan or other monetary obligation of Seller and which was voluntarily granted to
the beneficiary thereof by Seller, (B) results from a judgment entered against Seller, delinquent
federal or state tax obligation, mechanics’ or materialman’s lien or similar obligation of Seller
(but not of any tenant of the Property), or (C) arises after the end of the Due Diligence Period
and can be fully and finally satisfied and discharged solely by the payment of a predetermined sum
in an amount not to exceed $200,000 in the aggregate with all other liens and encumbrances caused
to be removed by Seller and by the Related Seller under the Related Sale Agreement (as such terms
are defined in Section 8.7 below).

     4. CLOSING. The payment of the Purchase Price, the transfer of title to the Property,
and the satisfaction of all other terms and conditions of the transaction contemplated by this
Agreement (the “Closing”) shall occur at 12:00 p.m., Chicago time on December 8, 2006, subject to
Seller’s right to extend such date as provided in Section 8.2 (such day being sometimes
referred to as the “Closing Date”), through escrow at the Chicago office of the Title Insurer. In
the event of any permitted extension or adjournment of the Closing under the Related Sale
Agreement, the Closing hereunder shall be similarly extended or adjourned.

     4.1 Seller’s Closing Deliveries. At Closing, Seller shall execute (as
necessary) and deliver to Purchaser (either through escrow or as otherwise provided below)
each of the documents described below: (a) one original Grant Deed for the Property, in the
form attached hereto as Exhibit S, warranting title to the Real Property against all
persons claiming by, through or under Seller, but not otherwise, subject to the exceptions
listed on attached Exhibit F and any other matters which become Permitted

3

 

Exceptions pursuant to Section 3 above; (b) two original counterparts of a bill
of sale and assignment of Leases and Contracts for the Property, in the form attached hereto
as Exhibit G (the “General Assignment”), together with an updated Rent Roll and
schedule of rent arrearages for the Property; (c) one original notice letter to each tenant,
substantially in the form attached hereto as Exhibit H (to be delivered outside of
escrow); (d) one original notice letter to each Service Contract party, substantially in the
form attached hereto as Exhibit I; (e) Seller’s non-foreign affidavits (under
Federal and California law), in the forms attached hereto as Exhibits J and
J-1, respectively; (f) two original counterparts of the Closing Statement (as
defined in Section 4.3 below); (g) evidence of termination of the existing property
management agreement with Equity Office Management, L.L.C. (“Property Manager”) and of the
existing leasing agreement with Equity Office Properties Management Corp., a Delaware
corporation; (h) such transfer tax forms as are required by law, if any (“Transfer
Documents”); (i) assignments of Seller’s rights to any security deposit which is not in the
form of cash; (j) such evidence of Seller’s power and authority as Purchaser and the Title
Insurer may reasonably request; and (k) such affidavits as may be reasonably required by the
Title Insurer, including, without limitation, mechanics’ liens, parties in possession and
gap affidavits. The Closing Statement may be signed in facsimile counterparts on the
Closing Date. To the extent available, Seller shall leave all of the original Leases and
Service Contracts, and all plans and specifications, contracts, licenses and permits
pertaining to the Property at the Property.

     4.2 Purchaser’s Closing Deliveries. At Closing, Purchaser shall deliver or
cause to be delivered to Seller executed counterparts of the General Assignment, the Closing
Statement and the Transfer Documents, together with the Cash Balance described in
Section 2.2 above, and such evidence of Purchaser’s power and authority as Seller or
the Title Insurer may reasonably request.

     4.3 Closing Prorations and Adjustments. The provisions of this Section
4.3 shall survive the Closing. Seller shall prepare a statement of the prorations and
adjustments required by this Agreement (the “Closing Statement”), and submit it to Purchaser
for approval at least three (3) business days prior to the Closing Date. The items listed
below are to be equitably prorated or adjusted as of the close of business on the Closing
Date, it being understood that for purposes of prorations and adjustments, Purchaser shall
be deemed the owner of the Property on such day.

     4.3.1 Taxes. Real estate and personal property taxes and assessments shall be
prorated for the period for which such taxes are assessed, regardless of the period during
which such taxes are payable, on the basis of the number of days in such period the Property
will have been owned by Seller and Purchaser, respectively, except that Seller shall remain
responsible for additional property taxes payable for pre-Closing periods where tax
reassessment is due to actions occurring prior to the Closing Date, provided that: (a) any
such reassessments are based on laws, ordinances, or other applicable rules or regulations
in effect on the Effective Date, (b) Seller shall not be responsible for any such additional
taxes to the extent such taxes may be passed through to current tenants of the Property, and
(c) Seller’s obligation to pay any such additional taxes pursuant to this Section
4.3.1 shall only survive the Closing for a period terminating ten (10) years after

4

 

the Closing Date. If the current tax bill is not available at Closing, then the
proration shall be made on the basis of the most recent ascertainable tax bill. Any taxes
paid at or prior to Closing shall be prorated based upon the amounts actually paid. If
taxes and assessments for the fiscal year in which Closing occurs have been determined but
have not been paid before Closing, Seller shall be charged and Purchaser credited at Closing
with an amount equal to that portion of such taxes and assessments which relates to the
period before the date of Closing, and Purchaser shall pay the taxes and assessments prior
to the same becoming delinquent. Seller shall have the right to contest any taxes and
assessments for the Property which relate to the time period prior to, through and including
June 30, 2006, and such right to contest shall survive Closing. Purchaser agrees to
reasonably cooperate with Seller with respect to any contest by Seller relating to the year
of Closing.

     4.3.2 Rent. The “minimum” or “base” rent payable by tenants under the Leases
for the calendar month in which the Closing occurs shall be prorated on the basis of the
number of days of such month the Property will have been owned by Purchaser and Seller,
respectively. However, there shall be no proration of any such rent which is delinquent as
of the Closing Date. Rather, Purchaser shall cause any such delinquent rent for the period
prior to Closing to be remitted to Seller if, as and when collected; each such payment to be
applied to the most recently accrued obligations first until Purchaser is current on all
rent which is then due and payable. If any rents are received by Seller subsequent to the
Closing that are payable to Purchaser by reason of this Agreement, Seller shall promptly pay
such amounts to Purchaser. At Closing, Seller shall deliver to Purchaser a schedule of all
such delinquent rent. Purchaser’s sole obligation with respect to the collection of
delinquent rent shall be to include the amount of delinquent rent in the first bills
thereafter submitted to the tenants in question after the Closing, and to continue to do so
for two (2) months thereafter. Purchaser shall promptly deliver to Seller a copy of each
such bill submitted to tenants. After such two (2) month period, Seller may pursue remedies
directly against delinquent tenants, but may not sue to evict or otherwise dispossess such
tenants.

     4.3.3 Costs Relating to New Leases. Any tenant improvement costs, leasing
commissions or other leasing costs paid or payable pursuant to any New Lease (hereinafter
defined) entered into in accordance with Section 9.3.1 below shall be prorated over
the term of such New Lease, with Seller being responsible for a portion of such costs and
commissions based on the ratio of base rent payments received by Seller through the Closing
Date to the total base rent payable over the term of such New Lease.

     4.3.4 Security Deposits; Utility Deposits. Purchaser shall receive a credit at
Closing in the amount of any unapplied cash security deposits under the Leases. In
addition, Seller shall assign (to the extent assignable) and deliver to Purchaser at Closing
any and all letters of credit and other instruments held by Seller as security deposits
under Leases (with Seller agreeing to cooperate with Purchaser post-closing). Seller shall
receive a credit at Closing in the amount of all refundable cash or other deposits posted
with utility companies servicing the Property which are duly assigned to Purchaser at
Closing.

5

 

     4.3.5 Utilities. Water, electric, telephone and all other utility and fuel
charges, fuel on hand (at cost plus sales tax), and any other payments to utility companies
shall be prorated. If possible, utility prorations will be handled by final meter readings
on the Closing Date. If final readings are not possible, or if any such charges are not
separately metered, such charges will be prorated based on the most recent period for which
costs are available.

     4.3.6 Service Contracts. Amounts due and prepayments under the Service
Contracts shall be prorated.

     4.3.7 Fees Payable. Assignable license and permit fees, and similar fees and
expenses of operation shall be prorated.

     4.3.8 Tenant Inducement Costs and Leasing Commissions. Purchaser shall be
responsible for the payment of all of the following Tenant Inducement Costs (as hereinafter
defined) and leasing commissions: (a) those specifically identified as Purchaser’s
obligation on Exhibit K attached hereto; (b) those set forth in a Lease existing as
of the date hereof which, pursuant to such Lease, are not due and payable prior to the
Closing (except those which are the responsibility of Seller pursuant to subsection (ii)
below); and (c) those provided for Purchaser to pay in accordance with Section 4.3.3
above. Seller shall be responsible for the payment of all of the following Tenant
Inducement Costs and leasing commissions: (i) those specifically identified as Seller’s
obligation on Exhibit K; (ii) those not described in clauses (a) and (c) above and
attributable to the initial term or renewal term commencing on or before November 3, 2006 in
connection with a Lease that is not a New Lease, except for refurbishment, improvement or
similar allowances which by the terms of such Lease the tenant is not entitled to request or
landlord is not required to provide until after the Closing Date; and (iii) those payable
prior to the Closing Date which are not described in clauses (a) or (c) of the preceding
sentence. For purposes hereof, the term “Tenant Inducement Costs” shall mean any payments
required under a Lease to be paid by the landlord thereunder to or for the benefit of the
tenant thereunder which is in the nature of a tenant inducement, including specifically,
without limitation, tenant improvement costs, lease buyout costs (other than those accruing
as a result of a buyout option executed by Purchaser after the Closing Date, which buyout
costs shall be Purchaser’s sole and exclusive responsibility), moving, design, refurbishment
and club membership allowances, but specifically excluding legal fees or loss of income
resulting from any free rental period (it being agreed that Seller shall bear the loss
resulting from any free rental period until the date of Closing and that Purchaser shall
bear such loss from and after the Closing Date). If, as of the date of Closing, Seller
shall have paid any Tenant Inducement Costs or leasing commissions for which Purchaser is
responsible pursuant to this Section 4.3.8, Seller shall be credited with an amount
equal to such Tenant Inducement Costs and leasing commissions. If, as of the date of
Closing, Seller shall not have paid any Tenant Inducement Costs or leasing commissions for
which Seller is responsible to have paid prior to the date of Closing in accordance with the
provisions of this Section 4.3.8, Purchaser shall be credited with an amount equal
to such Tenant Inducement Costs and leasing commissions and Purchaser shall assume the
obligation to pay the same.

6

 

     If any item of income or expense set forth in this Section 4.3 is subject to
final adjustment after Closing, then Seller and Purchaser shall make, and each shall be
entitled to, an appropriate reproration to each such item promptly when accurate information
becomes available. Any amounts due from one party to the other as a result of such
reproration shall be paid promptly in cash to the party entitled thereto. Seller and
Purchaser hereby covenant and agree to make available to each other for review such records
as are necessary to complete such reprorations. The foregoing provisions of this
Section 4.3 shall survive the Closing.

     4.4 Tenant Reimbursements. Tenants under the Leases are currently paying
Seller certain amounts (referred to herein as “Tenant Reimbursements”) based on Seller’s
estimates for real estate taxes and assessments, common area maintenance, operating expenses
and similar expenses (collectively, “Tenant Reimbursable Expenses”).

     4.4.1 For the Calendar Year of the Closing. At Closing, Tenant Reimbursements
payable by tenants under the Leases for the calendar month in which the Closing occurs shall
be prorated on the basis of the number of days of such month the Property will have been
owned by Purchaser and Seller, respectively. However, there shall be no proration of any
such Tenant Reimbursements which are delinquent as of Closing. Rather, Purchaser shall
cause any such delinquent Tenant Reimbursements for the period prior to Closing to be
remitted to Seller if, as and when collected; each such payment to be applied to the most
recently accrued obligations first until Purchaser is current on all rent which is then due
and payable. If any Tenant Reimbursements are received by Seller subsequent to the Closing
that are payable to Purchaser by reason of this Agreement, Seller shall promptly pay such
amounts to Purchaser. At Closing, Seller shall deliver to Purchaser a schedule of all such
delinquent Tenant Reimbursements. Purchaser’s sole obligation with respect to the
collection of the delinquent Tenant Reimbursements shall be to include the amount of
delinquent Tenant Reimbursements in the first bills thereafter submitted to the tenants in
question after Closing, and to continue to do so for two (2) months thereafter. Purchaser
shall promptly deliver to Seller a copy of each such bill submitted to tenants. After such
two (2) month period, Seller may pursue remedies directly against delinquent tenants, but
may not sue to evict or otherwise dispossess such tenants.

     Within ninety (90) days after the end of the calendar year in which Closing occurs,
Seller shall determine Tenant Reimbursements paid to Seller by tenants and Tenant
Reimbursable Expenses incurred by Seller prior to Closing for the calendar year in which the
Closing occurs. If the amount of Tenant Reimbursements collected by Seller for such year is
less than the amount of Tenant Reimbursable Expenses paid by Seller for such year (or less
than the amount which Seller is entitled to recover under the terms of the Leases), then
Purchaser shall promptly remit the difference to Seller if, as and to the extent actually
collected from the tenants, but not otherwise. If the amount of Tenant Reimbursements
collected by Seller for the calendar year in which the Closing occurs exceeds the amount of
Tenant Reimbursable Expenses paid by Seller for such year (or greater than the amount which
Seller is entitled to recover under the terms of the Leases), then Seller shall remit such
excess amounts to Purchaser. Upon receipt of such

7

 

excess amounts, Purchaser shall be thereafter obligated to promptly remit the
applicable portion to the particular tenants entitled thereto; and Purchaser shall
indemnify, defend and hold Seller, its constituent members or partners, and its respective
directors, trustees, officers, employees and agents, and each of them, harmless from and
against any losses, claims, damages and liabilities, including, without limitation,
reasonable attorneys’ fees and expenses incurred in connection therewith, arising out of or
resulting from Purchaser’s failure to remit any amounts actually received from Seller to
tenants in accordance with the provisions hereof.

     4.4.2 For Prior Calendar Years. Seller shall be responsible for the
reconciliation with tenants of Tenant Reimbursements and Tenant Reimbursable Expenses for
any calendar year prior to that in which the Closing occurs. If the amount of Tenant
Reimbursements collected by Seller for such prior years is less than the amount of Tenant
Reimbursable Expenses paid by Seller for such period (or less than the amount which Seller
is entitled to recover under the terms of the Leases), then Seller shall be entitled to bill
such tenants and retain any such amounts due from tenants. If any Tenant Reimbursable
Expenses are received by Seller subsequent to the Closing that are payable to Purchaser by
reason of this Agreement, Seller shall promptly pay such amounts to Purchaser. If the
amount of Tenant Reimbursements collected by Seller for such prior calendar year exceeds the
amount of Tenant Reimbursable Expenses paid by Seller with respect to such period (or the
amount which Seller is entitled to recover under the terms of the Leases), then, to the
extent required under the terms of the Leases, Seller shall remit such excess amounts to the
applicable tenants. In connection with the foregoing, Seller shall be permitted to make and
retain copies of all leases and all billings concerning Tenant Reimbursements for such prior
years, and Purchaser covenants and agrees to provide Seller with reasonable access to the
books and records pertaining to such Tenant Reimbursements, and to otherwise cooperate with
Seller (at no cost to Purchaser) for the purpose of enabling Seller to adequately respond to
any claim by tenants for reimbursement of Tenant Reimbursements previously paid by such
tenants. The provisions of this Section 4.4.2 shall survive the Closing.

     4.5 Reservation of Rights to Contest. Notwithstanding anything to the contrary
contained in this Agreement, Seller reserves the right to meet with governmental officials
and to contest any reassessment or assessment of the Property or any portion thereof and to
attempt to obtain a refund for any taxes previously paid. Seller shall retain all rights
with respect to any refund of taxes applicable to any period prior to the Closing Date. The
provisions of this Section 4.5 shall survive Closing.

     4.6 Transaction Costs. Except as otherwise specifically set forth in this
Agreement, the closing costs and other costs incurred in connection with the transactions
contemplated by this Agreement shall be paid as follows: (a) Seller shall pay for the base
premium for a CLTA Form Owner’s Title Insurance Policy and all transfer taxes for the
conveyance of the Property to Purchaser, and (b) Purchaser shall pay for all other closing
and other transaction costs, as and when due and payable, including, without limitation, (i)
all other title insurance costs and fees, including for any endorsements and loan policy
charges and any additional charges to obtain an ALTA or extended coverage form of title
insurance policy, (ii) all costs incurred in connection with obtaining the Updated Survey,

8

 

(iii) recording charges, and (iv) all escrow fees payable to Escrow Agent. All other
charges shall be paid by the party customarily responsible for such charges in similar
transactions in Emeryville, California. Seller and Purchaser shall, however, be responsible
for the fees of their respective attorneys.

     4.7 Reprorations. Notwithstanding anything contained herein to the contrary,
all reprorations contemplated by this Agreement shall be completed within one (1) year of
Closing (subject to extension solely as necessary due to the unavailability of final
information, but in no event to exceed two (2) years after Closing). The provisions of this
Section 4.7 shall survive the Closing.

     5. CASUALTY LOSS AND CONDEMNATION. If, prior to Closing, the Property or the Related
Property, or any part of the Property or the Related Property, shall be condemned, destroyed or
damaged by fire or other casualty, Seller shall promptly so notify Purchaser. In the event of a
Material Loss (hereinafter defined), either party shall have the option to terminate this Agreement
by giving notice to the other party within fifteen (15) days of receiving notice of such event (but
no later than the Closing). If the condemnation, destruction or damage does not result in a
Material Loss, then Seller and Purchaser shall consummate the transaction contemplated by this
Agreement notwithstanding such condemnation, destruction or damage. If the transaction
contemplated by this Agreement is consummated, Purchaser shall be entitled to receive any
condemnation proceeds or proceeds of insurance under all policies of insurance applicable to the
destruction or damage of the Property, and shall receive a credit against the Purchase Price equal
to the amount of any applicable insurance deductible, self insurance or copayment amount and Seller
shall, at Closing, execute and deliver to Purchaser all customary proofs of loss and other similar
items. If either party elects to terminate this Agreement in accordance with this Section
5, the Earnest Money shall be returned to Purchaser and this Agreement shall, without further
action of the parties, become null and void and neither party shall have any further rights or
obligations under this Agreement except as otherwise provided for in this Agreement. For purposes
of this Section 5, a “Material Loss” means condemnation, damage or destruction affecting
the Property and/or the Related Property that is reasonably estimated to cost or be valued at (as
the case may be) more than Twelve Million and No/100 Dollars ($12,000,000.00).

     6. BROKERAGE. Seller agrees to pay upon Closing (but not otherwise) a brokerage
commission due to Eastdil Secured (the “Broker”) for services rendered in connection with the sale
and purchase of the Property. Except for the Broker, neither Seller nor Purchaser has authorized
any broker or finder to act on Purchaser’s or Seller’s behalf in connection with the sale and
purchase hereunder, and neither Seller nor Purchaser has dealt with any broker or finder purporting
to act on behalf of any other party. Seller and Purchaser shall each indemnify and hold the other
harmless from and against any and all claims of all other brokers and finders claiming by, through
or under the indemnifying party and in any way related to the sale and purchase of the Property,
this Agreement or otherwise, including, without limitation, attorneys’ fees and expenses incurred
by the indemnified party in connection with such claim. Seller shall indemnify and hold Purchaser
harmless from and against any and all claims of the Broker.

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     7. DEFAULT AND REMEDIES.

     7.1 Default under Related Agreement. A default by the Related Seller or the
Related Purchaser under the Related Sale Agreement shall constitute a default by Seller or
Purchaser, respectively, hereunder.

     7.2 Purchaser’s Remedies. Notwithstanding anything to the contrary contained
in this Agreement, if Closing does not occur due to a Seller default (including, without
limitation, a default pursuant to Section 7.1 above), then, as Purchaser’s sole and
exclusive remedy hereunder and at Purchaser’s option, either (a) the Earnest Money shall be
returned to Purchaser, in which event this Agreement shall be null and void, and neither
party shall have any rights or obligations under this Agreement (provided, however, in the
event Seller’s default is intentional, Seller shall be obligated to pay Purchaser the amount
of documented out-of-pocket due diligence costs incurred by Purchaser in connection with its
due diligence investigation of the Property, not to exceed Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00) minus any amounts payable to the Related Purchaser under the
comparable provision of the Related Sale Agreement, or (b) upon notice to Seller not more
than thirty (30) days after Purchaser becomes aware of such failure, and provided an action
is filed within sixty (60) days thereafter, Purchaser may seek specific performance of this
Agreement; provided, however, if the remedy of specific performance is not legally available
to Purchaser due to an intentional breach by Seller or due to Seller’s transfer of the
Property to a third party (or if the remedy of specific performance is not legally available
to the Related Purchaser under the Related Sale Agreement due to an intentional breach by
the Related Seller or due to the Related Seller’s transfer of the Related Property to a
third party), Purchaser shall be entitled to pursue its actual damages as a result of such
breach (but not consequential, indirect or punitive damages). Purchaser’s failure to seek
specific performance as aforesaid shall constitute its election to proceed under clause (a)
above. In no event may Purchaser make an election of remedies as described above unless the
Related Purchaser simultaneously makes the same election under the Related Sale Agreement.

     7.3 Seller’s Remedies. Purchaser and Seller acknowledge that it would be
extremely impractical and difficult to ascertain the actual damages which would be suffered
by Seller if Purchaser fails to consummate the purchase and sale contemplated herein because
of Purchaser’s default (including, without limitation, a default pursuant to Section
7.1 above). Purchaser and Seller have considered carefully the loss to Seller
occasioned by taking the Property off the market as a consequence of the negotiation and
execution of this Agreement, the expenses of Seller incurred in connection with the
preparation of this Agreement and Seller’s performance hereunder, and the other damages,
general and special, which Purchaser and Seller realize and recognize Seller will sustain
but which Seller cannot at this time calculate with absolute certainty. Based on all those
considerations, Purchaser and Seller have agreed that the damage to Seller in such event
would reasonably be expected to be equal to the sum of the Earnest Money. Accordingly, if
Purchaser fails to consummate the purchase of the Property in accordance with the terms of
this Agreement, then Seller shall have the right, as its sole and exclusive remedy, to
retain the Earnest Money as full and complete liquidated damages.

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THE PARTIES FURTHER ACKNOWLEDGE AND AGREE THAT (A) PURCHASER SEEKS TO LIMIT ITS
LIABILITY UNDER THIS AGREEMENT TO THE AMOUNT OF THE EARNEST MONEY IN THE EVENT THIS
AGREEMENT IS TERMINATED AND THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT DOES NOT
CLOSE DUE TO A DEFAULT OF PURCHASER UNDER THIS AGREEMENT, AND (B) THE PAYMENT OF
SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE
MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS
1671, 1676 AND 1677.

	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	   Seller’s initials
	 	Purchaser’s initials
	 	 

     7.4 Post-Closing Remedies. After Closing, Seller and Purchaser shall, subject
to the terms and conditions of this Agreement, have such rights and remedies as are
available at law or in equity, except that neither Seller nor Purchaser shall be entitled to
recover from the other consequential or special damages.

     8. CONDITIONS PRECEDENT.

     8.1 Due Diligence Period. Purchaser shall have until 5:00 p.m., Chicago time,
on November 28, 2006 (the “Due Diligence Period”) within which to inspect the Property,
obtain any necessary internal approvals to the transaction, and satisfy itself as to all
matters relating to the Property, including, but not limited to, environmental, engineering,
structural, financial, title and survey matters. If Purchaser determines (in its sole and
absolute discretion) that the Property is unsuitable for its purposes for any reason or no
reason, then Purchaser may terminate this Agreement by written notice to Seller given at any
time prior to the expiration of the Due Diligence Period. If Purchaser so terminates this
Agreement, then the Earnest Money shall be returned to Purchaser, and neither party shall
have any further rights or obligations under this Agreement except those which expressly
survive termination of this Agreement. Purchaser shall have no right to terminate this
Agreement as to any Property but shall only have the right to terminate this Agreement in
its entirety. Purchaser’s failure to so terminate this Agreement within the Due Diligence
Period shall be deemed a waiver by Purchaser of the condition contained in this Section
8.1, and thereafter the Earnest Money shall not be refunded to Purchaser except pursuant
to another express provision of this Agreement. Purchaser’s right of inspection pursuant to
this Section 8.1 is and shall remain subject to the rights of tenants under the
Leases and other occupants and users of the Property and Purchaser shall use reasonable
efforts to minimize interference with tenants and Seller’s operation of the Property. No
inspection shall be undertaken without forty-eight (48) hours’ prior notice to Seller.
Seller or Seller’s representative shall have the right to be present at any or all
inspections. Neither Purchaser nor its agents or representatives shall contact any tenants
without the prior consent of Seller and Purchaser shall permit Seller to participate in any
such contact. No inspection shall involve the taking of samples or

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other physically invasive procedures without the prior consent of Seller. Upon the
completion of any inspection or test, Purchaser shall restore the Property to its condition
prior to such inspection or test. Notwithstanding anything to the contrary contained in
this Agreement, Purchaser shall indemnify, defend (with counsel reasonably acceptable to
Seller) and hold Seller and its employees, tenants and agents harmless from and against any
and all loss, cost, expense, liability, damage, cause of action or claim (including, without
limitation, attorneys’ fees incurred in connection therewith) arising out of or resulting
from Purchaser’s exercise of its rights under this Agreement, including, without limitation,
its right of entry upon and inspection and testing of the Property as provided for in this
Section 8.1, and such indemnity shall survive the Closing and any termination of
this Agreement. Prior to entering upon the Property for purposes of performing any
inspection thereof, Purchaser shall provide Seller with evidence of commercial general
liability insurance, including broad form contractual liability, from an insurance company
licensed to do business in the State of California having a rating of at least “AX” by A.M.
Best Company, with limits of at least Two Million and No/100 Dollars ($2,000,000.00) for
property damage or bodily injury, which policy shall name Seller, EOP Operating Limited
Partnership, a Delaware limited partnership (“EOPOP”) and Property Manager as additional
insureds. Notwithstanding the foregoing, within fifteen (15) days after the Effective Date,
Seller shall deliver or cause to be delivered to Purchaser an executed “Natural Hazard
Disclosure Statement” in the form attached hereto as Exhibit T. The information
contained in the Natural Hazard Disclosure Statement is a disclosure only for purposes of
statutory compliance, and is compiled from and based solely on the information sources
identified in the Natural Hazard Disclosure Statement. The delivery of the Natural Hazard
Disclosure Statement is not intended to be part of any contract between Seller and
Purchaser, to limit or restrict in any way the representations, warranties, agreements and
releases of Purchaser set forth herein, or to give rise to any other rights in Purchaser
under this Agreement.

     8.2 Estoppel Certificates. As a condition to Purchaser’s obligation to close
hereunder, Purchaser shall have received at least one (1) business day prior to the
originally scheduled Closing Date estoppel certificates (“Estoppel Certificates”), dated no
more than thirty (30) days prior to the originally scheduled Closing Date, from tenants
(“Required Tenants”) occupying not less than eighty percent (80%) of the rentable space
actually leased as of the Effective Date pursuant to valid and existing Leases (excluding
license agreements), including an Estoppel Certificate from each of the tenants listed on
Exhibit R attached hereto (collectively, the “Major Tenants”) and in the form and
content as set forth herein (the aforesaid acceptable Estoppel Certificates to be delivered
are collectively referred to as the “Required Estoppel Certificates”). The Estoppel
Certificates delivered to the tenants for execution shall be in the form of Exhibit
L attached hereto (the “Form Tenant Estoppel Certificate”). The Estoppel Certificates
executed by tenants shall be in substantially the form of the Form Tenant Estoppel
Certificate; provided, however, that an Estoppel Certificate executed by a tenant shall not
be deemed an unacceptable Estoppel Certificate for purposes of this Section 8.2 if
it (a) contains the qualification by the tenant of any statement as being to its knowledge
or as being subject to any similar qualification, (b) does not contain any more information
than that which the tenant is required to give in any such certificate pursuant to its
Lease, (c) makes reference to the Existing Environmental Condition. In the event Seller is

12

 

unable to provide to Purchaser the Estoppel Certificates for the Required Tenants on or
before Closing, Seller may, at its option, with respect to tenants occupying not more than
ten percent (10%) of the rentable space actually leased as of the Effective Date pursuant to
valid and existing Leases (excluding license agreements) elect to execute and deliver to
Purchaser certificates (individually, a “Seller Estoppel Certificate,” and, collectively,
the “Seller Estoppel Certificates”), substantially in the same form as the certificate
attached hereto as Exhibit M (the “Form Seller Estoppel Certificate”), covering the
particular tenants necessary so that Purchaser shall be deemed to have received, at Closing,
Estoppel Certificates and Seller Estoppel Certificates with respect to the Required Tenants;
provided, however, at Purchaser’s option a Seller Estoppel Certificate for a Major Tenant
will not constitute a Required Estoppel Certificate. In the event that Seller elects to
deliver such Seller Estoppel Certificates, each statement therein shall survive for a period
terminating on the earlier to occur of (i) the date on which Purchaser has received an
executed Estoppel Certificate in the form and content described as acceptable herein signed
by the tenant under the Lease in question, or (ii) one hundred twenty (120) days from the
Closing Date. If Purchaser receives an Estoppel Certificate which contains some but not all
of the matters set forth in the Estoppel Certificate (a “Partial Certificate”) and Seller
provides a Seller Estoppel Certificate for such tenant, then the Seller Estoppel Certificate
may omit matters contained in the Partial Certificate. In the event that Seller does not
provide to Purchaser either Estoppel Certificates or Seller Estoppel Certificates for the
Required Tenants, Purchaser may, by written notice to Seller given on the Closing Date,
either (A) elect not to purchase the Property, in which event the Earnest Money shall be
returned to Purchaser, at which time this Agreement shall terminate and become null and void
and neither party shall have any further rights or obligations under this Agreement, except
for those which expressly survive termination of this Agreement, or (B) elect to purchase
the Property notwithstanding Seller’s inability to provide the Required Estoppel
Certificates, in which event Purchaser shall be deemed to have waived the condition
contained in this Section 8.2. If Purchaser fails to deliver such written notice as
described above, Purchaser shall be deemed to have elected item (B) above. If any Estoppel
Certificate contains statements confirming any of Seller’s representations or warranties set
forth herein or in a Seller Estoppel Certificate, then Seller shall be deemed not to have
made such representations or warranties as to such Lease. If any Estoppel Certificate or
Seller Estoppel Certificate contains statements or allegations that a default or potential
default exists on the part of Seller under the Lease in question or contains information
inconsistent with any representations of Seller contained in this Agreement or in a Seller
Estoppel Certificate and Purchaser elects to close the purchase and sale transaction
contemplated herein notwithstanding the existence of such statements, allegations or
information, then such Estoppel Certificates and/or Seller Estoppel Certificates shall be
deemed acceptable for purposes of this Section, notwithstanding the existence of such
allegations, statements or information, and except as otherwise provided in Section
11.17, Seller shall have no liability to Purchaser hereunder with respect to the
existence of such allegations, statements or information. Seller agrees to deliver to all
tenants of the Property a request for an estoppel certificate in the form contemplated by
this Agreement and agrees to use good faith commercially reasonable efforts (which shall not
include the payment of money) to obtain such estoppel certificates. Notwithstanding the
foregoing, in the event Seller is unable to

13

 

obtain the Required Estoppels on or before the Closing, Seller shall have the right to
adjourn the Closing Date for up to fifteen (15) days by giving Purchaser written notice of
the adjourned Closing Date no later than five (5) days prior to the originally scheduled
Closing Date.

     8.3 Subordination, Non-Disturbance and Attornment Agreements. Purchaser and
Seller agree that nothing contained in this Section 8.3 shall constitute a condition
to Purchaser’s obligation to close hereunder. Purchaser may, at its election, prepare a
subordination, non-disturbance and attornment agreement (each, an “SNDA”) for any tenant
under a Lease. If Purchaser prepares and delivers SNDAs for the tenants under the Leases to
Seller at least two (2) business days prior to the Closing Date, then Seller shall promptly
deliver said SNDAs to the tenants together with transmittal letters prepared by Purchaser
notifying the tenants that any communications regarding the SNDAs should be directed to
Purchaser. Seller shall have no obligation with respect to SNDAs other than the foregoing.

     8.4 Accuracy of Seller’s Representations and Warranties. As a condition to the
obligations of Purchaser to close hereunder, each of Seller’s representations and warranties
set forth in Section 9.1 below shall be materially true and correct as of the
Closing, as modified by any Pre-Closing Disclosures (as defined in Section 9.2
below). Notwithstanding the foregoing, if Seller makes any material Pre-Closing Disclosure
to Purchaser (excluding any Pre-Closing Disclosures that result from actions taken by Seller
that are permitted under Section 9.3 or otherwise under this Agreement), Purchaser
shall have the right to terminate this Agreement and receive the return of the Earnest Money
by delivering written notice thereof to Seller on or before the earlier of the Closing, or
the fifth (5th) business day after Purchaser receives written notice of such Pre-Closing
Disclosure, in which event this Agreement shall terminate and be of no further force or
effect, except as may expressly survive termination hereof. If Purchaser does not terminate
this Agreement pursuant to its rights under this Section 8.4, then such
representations and warranties shall be deemed modified to conform them to the Pre-Closing
Disclosure.

     8.5 Title Insurance. As a condition precedent to Purchaser’s obligation to
close hereunder, Title Insurer shall be prepared, subject only to the payment of the
applicable premium, to issue to Purchaser an ALTA Owner’s Policy of Title Insurance insuring
title to the Property as vested in Purchaser in the form of the Pro Forma Policy; provided,
however, that Purchaser shall be obligated to satisfy all requirements for such issuance
reasonably imposed by the Title Insurer.

     8.6 Board Approval. As a condition precedent to Seller’s obligation to close
hereunder, the Board of Trustees, Executive Committee of the Board of Trustees, or another
committee of Equity Office Properties Trust (an affiliate of Seller) (the “Trust”) shall
have approved the transactions contemplated herein (“Board Approval”). In the event Seller
notifies Purchaser in writing by the Closing Date that such approval has not been obtained,
this Agreement shall be null and void and neither party shall have any further rights or
obligations under this Agreement except (i) those that expressly survive a termination of
this Agreement as provided herein, (ii) Seller shall return and/or cause to

14

 

be returned to Purchaser the Earnest Money, and (iii) Seller shall reimburse Purchaser
for its documented out-of-pocket due diligence costs incurred by Purchaser in connection
with its due diligence investigation of the Property, not to exceed Two Hundred Fifty
Thousand Dollars ($250,000) minus any amounts payable to the Related Purchaser under the
comparable provision of the Related Sale Agreement, in which event Seller shall have no
further obligation to Purchaser, and this Agreement shall terminate and be of no further
force or effect except as to those provisions that expressly survive termination.

     8.7 Conditions of Related Transactions. The transactions contemplated under
that certain Real Estate Sale Agreement, by and between CA-Emeryville Properties Limited
Partnership, a Delaware limited partnership (the “Related Seller”), and NOP Watergate LLC, a
Delaware limited liability company (the “Related Purchaser”), dated as of even date herewith
(the “Related Sale Agreement”), relating to certain real property situated adjacent to the
Real Property and commonly known as “Emeryville Office Towers I-III and Chevy’s Restaurant
Parcel” (the “Related Property”), shall close simultaneously with the Closing hereunder. It
shall be a condition precedent to Seller’s obligation to close hereunder that the Related
Purchaser shall not have terminated the Related Sale Agreement and that the Related
Purchaser’s obligations shall have been performed and all of Related Seller’s other
conditions to Closing under the Related Sale Agreement shall have been satisfied or waived.
It shall be a condition precedent to Purchaser’s obligation to close hereunder that the
Related Seller shall not have terminated the Related Sale Agreement and that the Related
Seller’s obligations shall have been performed and all of the Related Purchaser’s other
conditions to Closing under the Related Sale Agreement shall have been satisfied or waived.
If either party elects to terminate the Related Sale Agreement as permitted therein or if
the Related Sale Agreement automatically terminates in accordance with its terms, then this
Agreement shall automatically terminate simultaneously. Each party consents to the
provisions of the Related Sale Agreement that may affect the rights and remedies available
under this Agreement by virtue of an election by the parties under the Related Sale
Agreement, including Section 10.1.

     8.8 Conditions Apply to Agreement as a Whole. The conditions precedent to
Closing set forth in this Section 8 apply to this Agreement in its entirety.

9. REPRESENTATIONS, WARRANTIES AND COVENANTS.

     9.1 Seller’s Representations and Warranties. Subject to Section 9.5
below, Seller hereby represents and warrants to Purchaser as to the following matters, as of
the date of this Agreement:

     9.1.1 Organization and Authority. Seller is duly organized and in good
standing under the laws of the state of its organization. Subject to obtaining Board
Approval, Seller has the power and authority under its organizational documents to sell,
transfer, convey and deliver the Property to be sold and purchased hereunder, and all action
and approvals required thereunder have been duly taken and obtained.

15

 

     9.1.2 No Conflict. Subject to obtaining Board Approval, the execution and
delivery of this Agreement, the consummation of the transactions provided for herein and the
fulfillment of the terms hereof will not result in a breach of any of the terms or
provisions of, or constitute a default under, any provision of Seller’s organizational
documents.

     9.1.3 Condemnation. Seller has not received from any governmental authority
any written notice of any condemnation of the Property or any part thereof.

     9.1.4 Litigation. Except as set forth on Exhibit N attached hereto,
Seller has not been served with any material litigation which is still pending against
Seller with respect to its ownership or operation of the Property.

     9.1.5 Delivery of Written Materials. To Seller’s Knowledge, (a) all Leases and
Service Contracts which Seller has delivered or shall deliver to Purchaser pursuant to this
Agreement are and shall be complete copies of the same in Seller’s possession in all
material respects, and (b) the list of Service Contracts attached hereto as Exhibit
C and the list of Leases attached hereto as Exhibit O are true, correct and
complete as of the Effective Date.

     9.1.6 Brokerage Agreements; Tenant Inducement Costs. There are no leasing
brokerage agreements, leasing commission agreements or other agreements providing for the
payment of any amount for leasing activities with respect to the Property except as set
forth in Leases or on Exhibit P. There are no Tenant Inducement Costs with respect
to the Property except as set forth in the Leases or on Exhibit K.

     9.1.7 Violations. To Seller’s Knowledge, Seller has not received from any
governmental authority written notice of, nor does Seller have any Knowledge of (other than
possibly the Existing Environmental Condition), any currently existing violation of any
zoning, building, fire, environmental or health code or any other statute, ordinance, rule,
regulation or order applicable to the Property, or any part thereof, that will not have been
corrected prior to Closing.

     9.1.8 Environmental. To Seller’s Knowledge, (a) the environmental reports
listed on Exhibit Q are all of the reports commissioned by Seller or its
predecessors in interest and prepared by third parties unrelated to Seller in Seller’s
possession which relate to the investigation of the Property for the presence of hazardous
materials (other than previously prepared reports that are referenced in or considered
updated by such reports), (b) full, correct and complete copies of such reports, to the
extent in Seller’s possession, have been or will be delivered to Purchaser during the Due
Diligence Period, and (c) except as disclosed in such reports (and possibly the Existing
Environmental Condition), there have been no releases of hazardous substances or hazardous
materials on the Property in violation of applicable environmental laws.

     9.1.9 ERISA. Seller is not a “governmental plan” within the meaning of section
3(32) of the Employee Retirement Income Security Act of 1974, as amended, and the execution
of this Agreement and the sale of the Property by Seller is not, as a result of

16

 

the structure and ownership of Seller, subject to state statutes regulating investments
of and fiduciary obligations with respect to governmental plans.

     9.1.10 Employees. Seller has no employees working at the Property.

     9.1.11 Options. Except for this Agreement, Seller has not entered into any
recorded or unrecorded contracts or agreements granting to any person any option to purchase
all or any part of the Property.

     9.1.12 No Bankruptcy. Seller has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing
of any involuntary petition by Seller’s creditors, (iii) suffered the appointment of a
receiver to take possession of all, or substantially all, of Seller’s assets, (iv) suffered
the attachment or other judicial seizure of all, or substantially all, of Seller’s assets,
(v) admitted in writing its inability to pay its debts as they come due, or (vi) made an
offer of settlement, extension or composition to its creditors generally.

     9.1.13 Executive Order.

     (a) Seller hereby represents and warrants that Seller is in compliance with the
requirements of Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 23, 2001) (the
“Order”) and other similar requirements contained in the rules and regulations of
the office of Foreign Assets Control, Department of the Treasury (“OFAC”) and in any
enabling legislation or other Executive Orders or regulations in respect thereof
(the Order and such other rules, regulations, legislation, or orders are
collectively called the “Orders”). Further, Seller covenants and agrees to make its
policies, procedures and practices regarding compliance with the Orders, if any,
available to Purchaser for its review and inspection during normal business hours
and upon reasonable prior notice.

     (b) Seller hereby represents and warrants that Seller:

     (i) is not listed on the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to the Order or on any other list
of terrorists or terrorist organizations maintained pursuant to any of the
rules and regulations of OFAC or pursuant to any other applicable Orders
(such lists are collectively referred to as the “Lists”); and

     (ii) is not a person who has been determined by competent authority to
be subject to the prohibitions contained in the Orders.

     (c) Seller hereby covenants and agrees that if Seller obtains knowledge that
Seller becomes listed on the Lists or is indicted, arraigned, or custodially
detained on charges involving money laundering or predicate crimes to money
laundering, Seller shall immediately notify Purchaser in writing, and in such event,
Purchaser shall have the right to terminate this Agreement without

17

 

penalty or liability to Seller immediately upon delivery of written notice
thereof to Seller. In such event the Earnest Money shall be returned to Purchaser.

     The terms “Governmental Authority” and “Governmental Authorities” mean the
United States of America, the State, the county and city where the Property is
located, and any other political subdivision in which the Property is located or
that exercises jurisdiction over the Property, and any agency, department,
commission, board, bureau, property owners association, utility district, flood
control district, improvement district, or similar district, or other
instrumentality of any of them.

     When used in this Agreement, the term “Seller’s Knowledge” shall mean and be limited to
the actual (and not constructive) knowledge of Michael Lynch, Senior Vice President –
Investments and Brooke Kenevan, Vice President – Investments (who have primary
responsibility for the disposition of the Property) and Mark Fancher, Vice President – Asset
Management, in each case without inquiry.

     9.2 Representations Remade. As of Closing, Seller shall be deemed to remake
and restate the representations set forth in Section 9.1, except that the
representations shall be updated by delivering written notice to Purchaser or Purchaser’s
Affiliates in order to reflect any fact, matter or circumstance which Seller’s
representatives identified in Section 9.1 become aware of that would make any of
Seller’s representations or warranties contained herein untrue or incorrect (any such
disclosure being referred to as a “Pre-Closing Disclosure”).

     9.3 Covenants. Seller hereby covenants and agrees with Purchaser as to the
following matters.

     9.3.1 New Leases. For purposes of this Agreement, any Lease entered into after
November 3, 2006, and any modification, amendment, restatement or renewal of any existing
Lease entered into after such date, shall be referred to as “New Lease(s).” Until the
expiration of the Due Diligence Period, Seller may enter into any New Leases without
Purchaser’s consent, so long as Seller delivers a copy of any New Leases to Purchaser five
(5) days prior to the expiration of the Due Diligence Period. Following the expiration of
the Due Diligence Period, Seller shall not enter into any New Lease (other than an
amendment, restatement, modification or renewal of any existing Lease pursuant to a right
granted the tenant under such existing Lease) without Purchaser’s prior written consent,
which will not be unreasonably withheld or delayed. If Purchaser does not respond in
writing to Seller’s request for approval or disapproval of a New Lease within five (5)
business days after Purchaser’s receipt of Seller’s request, Purchaser shall be conclusively
deemed to have approved of such New Lease.

     9.3.2 Service Contracts. Between the Effective Date and the Closing Date,
Seller shall not enter into any new Service Contracts, or cancel, materially modify or renew
any existing Service Contracts, without the prior written consent of Purchaser, which
consent shall not be unreasonably withheld or delayed, unless such new Service Contracts are
cancelable by Seller upon not more than thirty (30) days’ notice. If

18

 

Purchaser fails to respond to Seller’s request for consent with respect to any such
action within five (5) business days after receipt of Seller’s request, such consent shall
be deemed given. Upon the written request of Purchaser delivered prior to expiration of the
Due Diligence Period, Seller shall deliver to vendors under Service Contracts specified by
Purchaser, on or before the Closing Date, notices of termination of such Service Contracts
terminating such Service Contracts in accordance with the terms thereof at no cost to Seller
(it being understood and agreed that such Service Contracts shall remain in full force and
effect with respect to the Property, and that Purchaser shall assume the obligations of
Seller thereunder in accordance with the terms of this Agreement, from the Closing Date
until such date as such termination is effectuated in accordance with the terms of the
applicable Service Contracts); provided that Seller shall cooperate with Purchaser in good
faith to effectuate the termination of such Service Contracts as soon as practicable after
Closing, and provided that those contracts designated as “National” or “Regional” service
contracts shall not be assigned to Purchaser. Notwithstanding anything set forth herein,
Purchaser shall assume Seller’s obligations under the Asbestos Operations & Maintenance Plan
referenced in the Phase I (as defined in Section 11.17), to the extent performance
is required from and after the Closing.

     9.3.3 Operations. Between the Effective Date and the Closing Date, Seller
shall operate the Property in the normal course of Seller’s business and maintain the
Property in the same condition as of the date of this Agreement, ordinary wear and tear
excepted, and subject to Section 5 above. Notwithstanding anything in the preceding
sentence to the contrary, in no event shall Seller (i) be required to make any capital
repairs, replacements or improvements to the Property except as may be required by the
Leases (or take any actions with respect to the Existing Environmental Condition), or (ii)
perform any repairs or take any remedial action with respect to the Existing Environmental
Condition (except in the case of emergency, including danger of immediate personal injury or
property damage, or as described in Section 11.17) without Purchaser’s prior written
consent, which shall not be unreasonably withheld.

     9.3.4 Other Agreements. Between the Effective Date and the Closing Date and
except as required by law or by any of the Permitted Exceptions or as otherwise permitted
under this Agreement, Seller shall not become party to agreements granting an easement,
right-of-way or license on, under or about the Property, and Seller shall not become party
to any agreements granting easements, rights-of-way or licenses in favor of the Property or
otherwise encumber, or grant interests in, the Property.

     If Seller fails to perform any of the covenants contained in this Section 9.3
hereof and either Purchaser receives written notice thereof from Seller pursuant to the
notice provisions hereof prior to Closing or Purchaser shall have actual knowledge of a
default by Seller under this Section 9.3 prior to Closing, Purchaser shall have the
rights and remedies available to Purchaser under Section 7.1 hereof, and if
Purchaser elects to close and consummate the transaction contemplated by this Agreement in
lieu of exercising its rights and remedies under Section 7.1 hereof, then such
default by Seller shall be deemed to be waived by Purchaser at the Closing, and to the
extent such default by Seller is the entering into by Seller of New Lease(s), new Service
Contracts or any other agreements in violation of Section 9.3.1, Section
9.3.2, or Section 9.3.4 hereof, Purchaser shall at

19

 

Closing accept an assignment of Seller’s rights thereunder and assume the obligations
of Seller thereunder arising or accruing after the Closing Date.

     9.4 Purchaser’s Representations and Warranties. Subject to Section 9.5
below, Purchaser represents and warrants that:

     9.4.1 ERISA. Purchaser’s rights under this Agreement, the assets it shall use
to acquire the Property and, upon its acquisition by Purchaser, the Property itself, do not
and shall not constitute plan assets within the meaning of 29 C.F.R. §2510.3-101, and
Purchaser is not a “governmental plan” within the meaning of section 3(32) of the Employee
Retirement Income Security Act of 1974, as amended, and the execution of this Agreement and
the purchase of the Property by Purchaser is not subject to state statutes regulating
investments of and fiduciary obligations with respect to governmental plans.

     9.4.2 Organization and Authority. Purchaser is duly organized and in good
standing under the laws of the state of its organization. Purchaser has the power and
authority under its organizational documents to perform its obligations hereunder, and all
action and approvals required thereunder have been duly taken and obtained.

     9.4.3 No Conflict. The execution and delivery of this Agreement, the
consummation of the transactions provided for herein and the fulfillment of the terms hereof
will not result in a breach of any of the terms or provisions of, or constitute a default
under, any provision of Purchaser’s organizational documents.

     9.4.4 No Bankruptcy. Purchaser has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing
of any involuntary petition by Purchaser’s creditors, (iii) suffered the appointment of a
receiver to take possession of all, or substantially all, of Purchaser’s assets, (iv)
suffered the attachment or other judicial seizure of all, or substantially all, of
Purchaser’s assets, (v) admitted in writing its inability to pay its debts as they come due,
or (vi) made an offer of settlement, extension or composition to its creditors generally.

     9.4.5 Executive Order.

     (a) Purchaser hereby represents and warrants that Purchaser is in compliance
with the requirements of the Order and other similar requirements contained in the
rules and regulations of OFAC and in any enabling legislation or other Executive
Orders or regulations in respect thereof. Further, Purchaser covenants and agrees
to make its policies, procedures and practices regarding compliance with the Orders,
if any, available to Seller for its review and inspection during normal business
hours and upon reasonable prior notice.

     (b) Purchaser hereby represents and warrants that Purchaser:

     (i) is not listed on the Lists; and

20

 

     (ii) is not a person who has been determined by competent authority to
be subject to the prohibitions contained in the Orders.

     (c) Purchaser hereby covenants and agrees that if Purchaser obtains knowledge
that Purchaser becomes listed on the Lists or is indicted, arraigned, or custodially
detained on charges involving money laundering or predicate crimes to money
laundering, Purchaser shall immediately notify Seller in writing, and in such event,
Seller shall have the right to terminate this Agreement without penalty or liability
to Purchaser immediately upon delivery of written notice thereof to Purchaser. In
such event the Earnest Money shall be returned to Purchaser.

     9.5 Survival. Purchaser’s right to enforce the representations and warranties
set forth in Section 9.1, subject to modifications thereto as a result of any
Pre-Closing Disclosure, shall survive the Closing, but only as to claims of which Purchaser
notifies Seller in writing within one hundred eighty (180) days after Closing (or such
shorter period of time to the extent Purchaser receives an Estoppel Certificate which
obviates any or all of Seller’s representations and/or warranties with respect to any Lease
in accordance with Section 8.2 above), and not otherwise and provided that any suit
must be brought within thirty (30) days after the expiration of such one hundred eighty
(180) day period. Seller’s right to enforce the representations and warranties set forth in
Section 9.4 shall survive the Closing, provided Subsections 9.4.2 and
9.4.3 shall only survive the Closing as to claims of which Seller notifies Purchaser
in writing within one hundred eighty (180) days after Closing, and not otherwise and
provided that any suit must be brought within thirty (30) days after the expiration of such
one hundred eighty (180) day period.

10. LIMITATION OF LIABILITY.

     10.1 Liability Limitation; Floor Amount. Notwithstanding anything to the
contrary contained herein, if the Closing shall have occurred (and Purchaser shall not have
waived, relinquished or released any applicable rights in further limitation), (a) the
aggregate liability of Seller and the Related Seller arising pursuant to or in connection
with the representations, warranties, indemnifications, covenants or other obligations
(whether express or implied) of Seller and/or the Related Seller under or resulting from
this Agreement (or any document executed or delivered in connection herewith) and under or
resulting from the Related Sale Agreement (or any document executed or delivered in
connection with the Related Sale Agreement), but exclusive of Section 6 and
Section 6 of the Related Sale Agreement, shall not exceed Six Million and No/100
Dollars ($6,000,000.00) in the aggregate (the “Liability Limitation”) and (b) no claim by
Purchaser or the Related Purchaser alleging a breach by Seller or the Related Seller of any
representation, warranty, indemnification, covenant or other obligation of Seller and/or the
Related Seller under or resulting from this Agreement or the Related Sale Agreement (or in
any document executed or delivered in connection with this Agreement or the Related Sale
Agreement) may be made, and neither Seller nor the Related Seller shall be liable for any
judgment in any action based upon any such claim, unless and until such claim, either alone
or together with any other claims by Purchaser and the Related Purchaser against Seller and
the Related Seller alleging a breach by Seller and/or the

21

 

Related Seller of any representation, warranty, indemnification, covenant or other
obligation of Seller or the Related Seller contained herein or in the Related Sale Agreement
(or in any document executed or delivered in connection with this Agreement or the Related
Sale Agreement), is for an aggregate amount in excess of Three Hundred Thousand and No/100
Dollars ($300,000.00) (the “Floor Amount”), in which event the liability of Seller and the
Related Seller respecting any final judgment concerning such claim or claims shall be for
the entire amount thereof, subject to the limitation set forth in clause (a) above;
provided, however, that if any such final judgment is for an amount that is less than or
equal to the Floor Amount, then neither Seller nor the Related Seller shall have any
liability with respect thereto. Nothing contained in this Section 10.1 shall be
deemed to limit in any manner the obligations of Seller under Section 4.3 above or
Section 11.16 below.

     10.2 Limitation of Liability of Seller. Except as provided in Section
11.19, no constituent partner or member in or agent of Seller, nor any advisor, trustee,
director, officer, member, partner, employee, beneficiary, shareholder, participant,
representative or agent of any entity that is or becomes a constituent partner or member in
Seller or an agent of Seller, including, but not limited to, EOPOP, the Trust and Property
Manager (“Seller’s Affiliates”) shall have any personal liability, directly or indirectly,
under or in connection with this Agreement or any agreement made or entered into under or
pursuant to the provisions of this Agreement, or any amendment or amendments to any of the
foregoing made at any time or times, heretofore or hereafter, and Purchaser and its
successors and assigns and, without limitation, all other persons and entities, shall look
solely to Seller’s assets for the payment of any claim or for any performance, and
Purchaser, on behalf of itself and its successors and assigns, hereby waives any and all
such personal liability. Notwithstanding anything to the contrary contained hereinabove in
this Agreement, neither the negative capital account of any constituent partner or member in
Seller, nor any obligation of any constituent partner or member in any entity owning an
interest (directly or indirectly) in Seller to restore a negative capital account or to
contribute capital to Seller (or any entity owning an interest, directly or indirectly, in
any other constituent partner or member of Seller), shall at any time be deemed to be the
property or an asset of Seller or any such other partner or member (and neither Purchaser
nor any of its successors or assigns shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account of such party’s obligations to
restore or contribute). The foregoing shall not preclude the requirement for restitution of
sale proceeds as may be necessary to enforce Purchaser’s remedies under this Agreement.

     10.3 Limitation of Liability of Purchaser. No constituent partner or member in
or agent of Purchaser, nor any advisor, trustee, director, officer, member, partner,
employee, beneficiary, shareholder, participant, representative or agent of any entity that
is or becomes a constituent partner or member in Purchaser or an agent of Purchaser
(“Purchaser’s Affiliates”) shall have any personal liability, directly or indirectly, under
or in connection with this Agreement or any agreement made or entered into under or pursuant
to the provisions of this Agreement, or any amendment or amendments to any of the foregoing
made at any time or times, heretofore or hereafter, and Seller and its successors and
assigns and, without limitation, all other persons and entities, shall look solely to
Purchaser’s assets for the payment of any claim or for any performance, and

22

 

Seller, on behalf of itself and its successors and assigns, hereby waives any and all
such personal liability. Notwithstanding anything to the contrary contained hereinabove in
this Agreement, neither the negative capital account of any constituent partner or member in
Purchaser, nor any obligation of any constituent partner or member in any entity owning an
interest (directly or indirectly) in Purchaser to restore a negative capital account or to
contribute capital to Purchaser (or any entity owning an interest, directly or indirectly,
in any other constituent partner or member of Purchaser), shall at any time be deemed to be
the property or an asset of Purchaser or any such other partner or member (and neither
Seller nor any of its successors or assigns shall have any right to collect, enforce or
proceed against or with respect to any such negative capital account of such party’s
obligations to restore or contribute).

     10.4 Survival. The provisions of this Section 10 shall survive the
Closing and any termination of this Agreement.

11. MISCELLANEOUS.

     11.1 Entire Agreement. All understandings and agreements heretofore had
between Seller and Purchaser with respect to the Property are merged in this Agreement,
which alone fully and completely expresses the agreement of the parties. Notwithstanding
anything set forth in this Agreement to the contrary, that certain Access Agreement between
Hines Interests Limited Partnership, and its successors and assigns, and Property Manager,
dated November 6, 2006 shall be binding on the Purchaser and Seller, respectively, and shall
survive the execution or termination of this Agreement. Purchaser acknowledges that it has
inspected or will inspect the Property and that it accepts the same in its “as is” condition
subject to use, ordinary wear and tear and natural deterioration. Purchaser further
acknowledges that, except as expressly provided in this Agreement, neither Seller nor any
agent or representative of Seller has made, and Seller is not liable for or bound in any
manner by, any express or implied warranties, guaranties, promises, statements, inducements,
representations or information pertaining to the Property.

     11.2 Assignment. Except as provided in Section 11.12 below, neither
this Agreement nor any interest hereunder shall be assigned or transferred by Purchaser
without Seller’s consent; provided, however, that no such consent shall be required with
respect to Purchaser’s assignment to an entity or entities owned or controlled, directly or
indirectly, by affiliates of Purchaser; and provided, further, that upon any such assignment
permitted hereunder, the Purchaser named herein shall remain liable to Seller for the
performance of “Purchaser’s” obligations hereunder. Notwithstanding the foregoing, upon any
assignment of this Agreement by Purchaser to, and assumption of this Agreement by, the
Related Purchaser, the Purchaser named herein shall be released from the performance of
“Purchaser’s” obligations hereunder arising from and after the date of such assignment.
Seller may assign or otherwise transfer its interest under this Agreement. As used in this
Agreement, the term “Seller” shall be deemed to include any assignee or other transferee of
any Seller. Upon any such transfer by a Seller, such Seller shall be relieved of any
subsequently accruing liability under this Agreement. Subject to

23

 

the foregoing, this Agreement shall inure to the benefit of and shall be binding upon
Seller and Purchaser and their respective successors and assigns.

     11.3 Modifications. This Agreement shall not be modified or amended except in
a written document signed by Seller and Purchaser.

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

     11.5 Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the state in which the Property is located.

     11.6 Notices. All notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and delivered personally or by
certified mail, return receipt requested, postage prepaid, by facsimile transmission with
confirmed receipt, or by overnight courier (such as Federal Express), addressed as follows
below. All notices given in accordance with the terms hereof shall be deemed given when
received or upon refusal of delivery. Either party hereto may change the address for
receiving notices, requests, demands or other communication by notice sent in accordance
with the terms of this Section 11.6.

	 	 	 	 	 
	 

	 	If to Seller:
	 	CA-Watergate Tower IV Limited Partnership

c/o Equity Office Management, L.L.C.

Two North Riverside Plaza

Suite 2100

Chicago, Illinois 60606

Attention: Brooke Kenevan

Telephone: 312/466-3387

Facsimile: 312/559-5028
	 
	 	 	 	 
	 

	 	with a copy to:
	 	CA-Watergate Tower IV Limited Partnership

c/o Equity Office Management, L.L.C.

Two North Riverside Plaza

Suite 2100

Chicago, Illinois 60606

Attention: Sheila Kailus

Telephone: 312/466-3130

Facsimile: 312/775-6560

24

 

	 	 	 	 	 
	 

	 	and to:
	 	DLA Piper US LLP

153 Townsend Street

Suite 800

San Francisco, CA 94107

Attention: Caryl B. Welborn

Telephone: 415/615-6025

Facsimile: 415/659-7400
	 
	 	 	 	 
	 

	 	If to Purchaser:
	 	Hines REIT Watergate, LP

c/o Hines Interests Limited Partnership

101 California Street, Suite 1000

San Francisco, CA 94111

Attention: George Clever

Telephone: 415/982-6200

Facsimile: 415/398-1442
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Hines REIT Properties, L.P.

c/o Hines Interests Limited Partnership

2800 Post Oak Boulevard, Suite 5000

Houston, Texas 77056

Attention: Charles N. Hazen

Telephone: 713/966-7602

Facsimile: 713/966-7851
	 
	 	 	 	 
	 

	 	and to:
	 	Hines REIT Properties, L.P.

c/o Hines Interests Limited Partnership

2800 Post Oak Boulevard, Suite 5000

Houston, Texas 77056

Attention: Jason P. Maxwell, Esq.

Telephone: 713/966-7638

Facsimile: 713/966-2705
	 
	 	 	 	 
	 

	 	and to:
	 	Morrison & Foerster LLP

425 Market Street

San Francisco, CA 94105

Attention: Peter Aitelli

Telephone: 415/268-7085

Facsimile: 415/268-7522

The attorneys are authorized to give any notice specified in this Agreement on behalf of their
respective clients.

     11.7 “AS IS” SALE. ACKNOWLEDGING THE PRIOR USE OF THE PROPERTY AND PURCHASER’S
OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER AGREES, SUBJECT TO THE REPRESENTATIONS AND

25

 

WARRANTIES SET FORTH IN SECTION 9.1 ABOVE, TO TAKE THE PROPERTY “AS-IS,”
“WHERE-IS,” AND WITH ALL FAULTS AND CONDITIONS THEREON. EXCEPT AS OTHERWISE PROVIDED IN
THIS AGREEMENT, ANY INFORMATION, REPORTS, STATEMENTS, DOCUMENTS OR RECORDS INCLUDING WITHOUT
LIMITATION THE ENVIRONMENTAL MATERIALS (AS DEFINED IN SECTION 11.17) (COLLECTIVELY,
THE “DISCLOSURES”) PROVIDED OR MADE TO PURCHASER OR ITS CONSTITUENTS BY SELLER OR ANY OF
SELLER’S AFFILIATES CONCERNING THE CONDITION OF THE PROPERTY SHALL NOT BE REPRESENTATIONS OR
WARRANTIES. PURCHASER SHALL NOT RELY ON SUCH DISCLOSURES, BUT RATHER, PURCHASER SHALL RELY
ONLY ON ITS OWN INSPECTION OF THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT, SUBJECT
TO THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 9.1 ABOVE, SELLER HAS NOT
MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR
IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO
(A) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE
WATER, SOIL AND GEOLOGY; (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE SUITABILITY
OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY CONDUCT THEREON, (D)
THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR
REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (E) THE HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY; OR (F) ANY OTHER MATTER
WITH RESPECT TO THE PROPERTY, AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING
TERMITES OR WASTES, AS DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40
C.F.R., OR ANY HAZARDOUS SUBSTANCE, AS DEFINED BY THE COMPREHENSIVE ENVIRONMENTAL RESPONSE
COMPENSATION AND LIABILITY ACT OF 1980 (“CERCLA”), AS AMENDED, AND REGULATIONS PROMULGATED
THEREUNDER. EXCEPT AS OTHERWISE PROVIDED IN SECTION 11.17, PURCHASER, ITS
SUCCESSORS AND ASSIGNS, HEREBY WAIVE, RELEASE AND AGREE NOT TO MAKE ANY CLAIM OR BRING ANY
COST RECOVERY ACTION OR CLAIM FOR CONTRIBUTION OR OTHER ACTION OR CLAIM AGAINST SELLER OR
SELLER’S AFFILIATES BASED ON (A) ANY FEDERAL, STATE, OR LOCAL ENVIRONMENTAL OR HEALTH AND
SAFETY LAW OR REGULATION, INCLUDING CERCLA OR ANY STATE EQUIVALENT, OR ANY SIMILAR LAW NOW
EXISTING OR HEREAFTER ENACTED, (B) ANY DISCHARGE, DISPOSAL, RELEASE, OR ESCAPE OF ANY
CHEMICAL, OR ANY MATERIAL WHATSOEVER, ON, AT, TO, OR FROM THE PROPERTY, OR (C) THE EXISTING
ENVIRONMENTAL CONDITION OR ANY OTHER ENVIRONMENTAL CONDITIONS WHATSOEVER ON, UNDER, OR IN
THE VICINITY OF THE PROPERTY. THE PROVISIONS OF

26

 

THIS SECTION 11.7 SHALL SURVIVE THE CLOSING AND ANY TERMINATION OF THIS
AGREEMENT.

     PURCHASER CONFIRMS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO
CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL
AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY OR DESIRABLE TO SATISFY
ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE
ACTION TO BE TAKEN WITH RESPECT TO THE EXISTING ENVIRONMENTAL CONDITION OR ANY OTHER
HAZARDOUS OR TOXIC SUBSTANCES 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. UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE
MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATIONS, AND
PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER
(AND SELLER’S AFFILIATES) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION
(INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES
(INCLUDING ATTORNEYS’ FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN,
WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER’S AFFILIATES) AT
ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR
PHYSICAL OR ENVIRONMENTAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS AND ANY AND ALL
OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY (EXCEPT TO
THE EXTENT SUCH LIABILITIES EITHER (1) ARE EXPRESSLY RETAINED BY SELLER UNDER THIS AGREEMENT
OR ANY OTHER DOCUMENT EXECUTED PURSUANT HERETO OR IN CONNECTION HEREWITH, OR (2) ARISE FROM
CLAIMS OF PERSONAL INJURY OR PROPERTY DAMAGE BROUGHT BY THIRD PARTIES UNRELATED TO PURCHASER
AND RESULTING FROM THE ACTS OF SELLER OCCURRING PRIOR TO CLOSING).

     PURCHASER EXPRESSLY WAIVES ALL RIGHTS UNDER CALIFORNIA CIVIL CODE SECTION 1542, AS
AMENDED OR MODIFIED, WHICH PROVIDES THAT:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,

27

 

WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.”

     PURCHASER HEREBY SPECIFICALLY ACKNOWLEDGES THAT PURCHASER HAS CAREFULLY REVIEWED THIS
SUBSECTION, AND DISCUSSED ITS IMPORT WITH LEGAL COUNSEL, IS FULLY AWARE OF ITS CONSEQUENCES,
AND THAT THE PROVISIONS OF THIS SUBSECTION ARE A MATERIAL PART OF THIS AGREEMENT; PROVIDED,
HOWEVER, SUCH RELEASE, WAIVER OR DISCHARGE SHALL NOT APPLY AND SHALL BE OF NO FORCE OR
EFFECT FOR ANY CLAIMS ARISING OUT OF SELLER’S FRAUD.

	 	 	 	 	 	 	 	 	 
	 

	 	 

Seller’s initials
	 	 	 	 

Purchaser’s initials
	 	 

     11.8 Trial by Jury; Rescission. In any lawsuit or other proceeding initiated
by Purchaser or Seller under or with respect to this Agreement, Purchaser and Seller waive
any right they may have to trial by jury. In addition, Purchaser waives any right to seek
rescission of the transaction provided for in this Agreement.

     11.9 Confidentiality. Except as may be required by law, without the prior
written consent of Purchaser, and unless the Closing occurs, Seller and Seller’s agents,
employees, representatives and consultants shall use good faith efforts not to disclose to
any third party the existence of this Agreement or any term or condition thereof, or make
any public pronouncements or otherwise furnish any information regarding this Agreement, or
the transactions contemplated hereby to any third party; provided, however, that the
foregoing shall not be construed to prevent Seller from making (without the consent of, but
upon notice to, Purchaser) any disclosure required by any applicable law or regulation or
judicial process. Except as may be required by law, without the prior written consent of
Seller, and unless the Closing occurs, Purchaser and Purchaser’s Representatives (defined
hereinafter) shall use good faith efforts not to disclose to any third party (other than
Purchaser’s Representatives) the existence of this Agreement or any term or condition
thereof or the results of any inspections or studies undertaken in connection herewith, or
make any public pronouncements or otherwise furnish the Information (hereinafter defined) or
any information regarding this Agreement, or the transactions contemplated hereby to any
third party; provided, however, that the foregoing shall not be construed to prevent
Purchaser from making (without the consent of, but upon notice to, the other party) any
disclosure required by any applicable law or regulation or judicial process; and provided,
further, that Purchaser and Purchaser’s Affiliates and Seller and Seller’s Affiliates shall
be permitted to disclose this transaction and/or the terms of this transaction and any such
information relating to the Property in any document as may be necessary to comply with any
applicable federal or state securities laws, rules, or regulations or to comply with the
requirements of the Securities and Exchange Commission, the New York Stock Exchange or any
similar agency or body. For purposes hereof, “Information” shall mean and shall be deemed
to include, without limitation, the following written or oral information provided by or on
behalf of Seller to Purchaser, its agents, employees, representatives, consultants,
potential investors

28

 

or lenders (collectively, “Purchaser’s Representatives”) either prior to or following
the Effective Date: (a) all documentation and/or information described in or relating to
Section 1 of this Agreement, including, without limitation, Leases, Tangible
Personal Property, Service Contracts and all other information regarding the operation,
ownership, maintenance, management, or occupancy of the Property; and (b) any reports,
tests, or studies (together with the results of such studies and tests obtained or provided
by, or on behalf of, Seller).

     Notwithstanding the foregoing, Seller’s delivery and Purchaser’s use of the Information
are subject to the following terms: Purchaser shall (i) accept and hold all Information in
strict confidence in accordance with the terms of this Agreement; (ii) not copy, reproduce,
distribute or disclose the Information to any third party other than Purchaser’s
Representatives, except as permitted in the preceding paragraph; (iii) not use the
Information for any purpose other than in connection with the transactions contemplated
hereunder; and (iv) not use the Information in any manner detrimental to Seller or the
Property. Purchaser agrees to transmit the Information only to those Purchaser’s
Representatives who are actively and directly participating in the evaluation of the
acquisition of the Property, who are informed of and who have agreed to comply with the
terms of this Section 11.9 of this Agreement and who are instructed not to make use
of the Information in a manner inconsistent herewith. Purchaser shall be responsible for
any breach of the terms of this Agreement by Purchaser’ Representatives or any other person
to whom the Information is communicated. Purchaser agrees to indemnify, defend and hold
Seller, its members, officers, directors, shareholders, partners, employees, beneficiaries,
trustees, agents and representatives harmless against all losses, claims, suits, damages and
liabilities resulting from Purchaser’s breach of this Section 11.9, as well as any
breach thereof by Purchaser’s Representatives, which indemnification shall survive the
Closing or termination of this Agreement.

     Notwithstanding anything herein to the contrary, any party to this Agreement (and any
employee, representative, or other agent of any party to this Agreement) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax structure of any
transaction contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to it relating to such tax treatment and tax
structure; provided, however, that such disclosure may not be made (i) until the earlier of
(x) the date of the public announcement of discussions relating to the transaction, (y) the
date of the public announcement of the transaction and (z) the date of the execution of an
agreement to enter into the transaction and (ii) to the extent required to be kept
confidential to comply with any applicable federal or state securities laws. The provisions
of this paragraph are intended to comply with the requirements of the presumption set forth
in Treasury Regulations Section 1.6011-4 (B)(3) and are not intended to permit the
disclosure of any Information that is not subject to the requirements of such presumption.

     11.10 Reports. If for any reason Purchaser does not consummate the Closing,
then Purchaser shall, upon Seller’s written request, assign and transfer to Seller all of
its right, title and interest in and to any and all studies, reports, surveys and other
information, data and/or documents relating to the Property or any part thereof prepared

29

 

by or at the request of Purchaser, its employees and agents, and shall deliver to
Seller copies of all of the foregoing.

     11.11 Reporting Person. Seller and Purchaser hereby designate Escrow Agent to
act as and perform the duties and obligations of the “reporting person” with respect to the
transaction contemplated by this Agreement for purposes of 26 C.F.R. Section 1.6045-4(e)(5)
relating to the requirements for information reporting on real estate transactions closed on
or after January 1, 1991. In this regard, Seller and Purchaser each agree to execute at
Closing, and to cause Escrow Agent to execute at Closing, a Designation Agreement,
designating Escrow Agent as the reporting person with respect to the transaction
contemplated by this Agreement.

     11.12 Section 1031 Exchange. Either party may structure the disposition or
acquisition of the Property, as the case may be, as a like-kind exchange under Internal
Revenue Code Section 1031 at the exchanging party’s sole cost and expense. The other party
shall reasonably cooperate therein, provided that such other party shall incur no material
costs, delay, expenses or liabilities in connection with the exchanging party’s exchange.
If either party uses a qualified intermediary to effectuate an exchange, any assignment of
the rights or obligations of such party hereunder shall not relieve, release or absolve such
party of its obligations to the other party. The exchanging party shall indemnify, defend
and hold harmless the other party from all liability in connection with the indemnifying
party’s exchange, and the indemnified party shall not be required to take title to or
contract for the purchase of any other property. The provisions of this Section
11.12 shall survive the Closing.

     11.13 Press Releases. The parties hereto shall not            issue any press
releases with respect to the transactions contemplated hereby or consummated in accordance
with the terms hereof except upon the mutual agreement of the parties as to the form and
content of such press release (with consent not to be unreasonably withheld or delayed by
either party). Notwithstanding anything to the contrary contained herein, Seller shall be
permitted to make disclosures in accordance with, or required by, the disclosure
requirements applicable to the Trust, which is an indirect parent of the Seller, or its
affiliates, due to the Trust’s status as a publicly-held company listed on the New York
Stock Exchange or any other securities exchange (an “Exchange”) (including, but not limited
to, disclosure in accordance with, or required by, the rules of, or any listing agreement
with, an Exchange).

     11.14 Counterparts. This Agreement may be executed in any number of identical
counterparts, any or all of which may contain the signatures of less than all of the
parties, and all of which shall be construed together as but a single instrument.

     11.15 Construction. This Agreement shall not be construed more strictly
against Seller merely by virtue of the fact that the same has been prepared by Seller or its
counsel, it being recognized both of the parties hereto have contributed substantially and
materially to the preparation of this Agreement.

30

 

     11.16 Attorneys’ Fees. In the event of litigation between the parties with
respect to this Agreement or the transaction contemplated hereby, the prevailing party
therein shall be entitled to recover from the losing party all of its costs of enforcement
and litigation, including, but not limited to, its reasonable attorneys’ and paralegal fees,
witness fees, court reporters’ fees and other costs of suit.

     11.17 EXISTING ENVIRONMENTAL CONDITION. [OPEN] WITHOUT LIMITING THE
GENERALITY OR APPLICATION OF SECTION 11.7 OR ANY OTHER SECTION OF THIS AGREEMENT,
PURCHASER SPECIFICALLY ACKNOWLEDGES THAT SELLER HAS DISCLOSED TO PURCHASER THE EXISTENCE OF
ENVIRONMENTAL CONDITIONS INCLUDING CONTAMINATION BY HAZARDOUS MATERIALS OR WASTES (THE
“EXISTING ENVIRONMENTAL CONDITION”) AT THE PROPERTY AS DESCRIBED IN THAT CERTAIN REPORT
ENTITLED “PHASE I ENVIRONMENTAL SITE ASSESSMENT REPORT, WATERGATE OFFICE TOWERS, 1890-2200
POWELL STREET, EMERYVILLE, CA” DATED SEPTEMBER 28, 2006 PREPARED BY URS CORPORATION (“PHASE
I”), THE DOCUMENTS REFERENCED IN THE PHASE I, AND THE ENVIRONMENTAL REPORTS LISTED ON
EXHIBIT Q HERETO (COLLECTIVELY, THE “ENVIRONMENTAL MATERIALS”). PURCHASER
ACKNOWLEDGES THAT BEFORE ENTERING INTO THIS AGREEMENT, IT RECEIVED AND REVIEWED SUCH
ENVIRONMENTAL MATERIALS AND OTHER MATERIALS RELATING TO THE EXISTING ENVIRONMENTAL CONDITION
AS IT DEEMED NECESSARY AND THEREFORE AGREES, IF THE CLOSING OCCURS, TO ACCEPT THE PROPERTY
SUBJECT TO THE EXISTING ENVIRONMENTAL CONDITION AND, SUBJECT TO THIS SECTION 11.17,
THE REQUIREMENTS OF ANY RISK MANAGEMENT PLAN AND/OR DEED RESTRICTION RELATING THERETO.
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT SELLER HAS FURNISHED ANY ENVIRONMENTAL
MATERIALS AS A MATTER OF CONVENIENCE ONLY AND THAT SELLER DOES NOT REPRESENT, WARRANT OR
GUARANTEE THAT THE DISCLOSURES CONTAINED IN THE ENVIRONMENTAL MATERIALS ARE ACCURATE OR
COMPREHENSIVE. MANY OF THE ITEMS DESCRIBED THEREIN INVOLVE MATTERS OF JUDGMENT ABOUT WHICH
REASONABLE PEOPLE MAY DISAGREE. PURCHASER FURTHER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT
SELLER MAKES NO REPRESENTATION AS TO THE NECESSITY, EXTENT, COST, OR DISRUPTION TO TENANTS
ASSOCIATED WITH ANY ACTION REQUIRED TO BE TAKEN IN ORDER TO CORRECT OR PERFORM ANY
REMEDIATION ASSOCIATED WITH THE EXISTING ENVIRONMENTAL CONDITION, AND THAT PURCHASER HAS
BEEN ADVISED TO PERFORM ITS OWN DUE DILIGENCE (INCLUDING, WITHOUT LIMITATION, CONTACTING
GOVERNMENTAL AGENCIES HAVING JURISDICTION OVER THE PROPERTY) AND TO FORM ITS OWN OPINION
REGARDING AN APPROPRIATE PLAN TO CORRECT OR REMEDIATE THE EXISTING ENVIRONMENTAL CONDITION.

     Purchaser further agrees that, in connection with the soil and groundwater
contamination on and under the Property referenced in the Phase I, an environmental use

31

 

restriction could, at some point in the future, be placed of record (a “Deed
Restriction”), and/or a risk management plan, underground storage tank (“UST”) closure plan,
or other site specific health and safety plan (a “Risk Management Plan”) relating to such
contamination could be required. Notwithstanding any other provision of this Agreement, in
the event that an authorized government agency requires that a Deed Restriction be placed on
or a Risk Management Plan be developed for the Property prior to Closing, Purchaser agrees
to execute or take title to the Property subject to such Deed Restriction and subject to the
obligation to develop such a Risk Management Plan; provided, however, that any such Deed
Restriction or obligation to develop a Risk Management Plan is delivered to Purchaser no
less than five (5) business days prior to the end of the Due Diligence Period. The Due
Diligence Period shall be extended if necessary to accommodate such period of advance
delivery. Purchaser further acknowledges that a requirement for a Deed Restriction and/or
Risk Management Plan may not be forthcoming prior to the Closing but may be received by
Purchaser after the Closing, in which event Seller shall have no obligation therefor except
as may be expressly provided in this Agreement. Notwithstanding and without limiting any
other provision of this Agreement, Purchaser has agreed to take responsibility for
performing any UST closure or additional investigation, evaluation or work with respect to
potential concerns relating to the prior existence of USTs at the Property, including the
performance of work described in the proposal letters identified as items 7 and 8 on
Exhibit Q (“UST Work”). Purchaser agrees that Seller shall have no responsibility
or liability with respect to the UST Work and that Purchaser shall make no claims or demands
against Seller with respect to the UST Work except for the Seller Retained Liability
described below. Accordingly, Seller shall not initiate communication with any government
agency concerning environmental conditions at the Property without the prior written
approval of Purchaser, which approval may be given or withheld in Purchaser’s sole
discretion, unless Purchaser has made a claim against Seller or EOPOP that relates to such
environmental conditions.

     NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT, SELLER EXPRESSLY
RETAINS ANY AND ALL LIABILITIES WITH RESPECT TO ANY CLAIMS, DEMANDS, LOSSES, COSTS, DAMAGES,
AND EXPENSES OF ANY NATURE WHATSOEVER SUFFERED BY ANY THIRD PARTY UNRELATED TO PURCHASER
EXCLUDING ANY GOVERNMENT AGENCY (A “THIRD PARTY”) THAT ARISE OUT OF, PERTAIN TO OR ARE IN
ANY WAY CONNECTED WITH INJURY SUFFERED OR DAMAGE SUSTAINED PRIOR TO THE CLOSING AND CAUSED
IN WHOLE OR IN PART BY THE FAILURE OF SELLER TO COMPLY WITH A REQUIREMENT OF GOVERNMENTAL
AGENCIES WITH JURISDICTION WITH RESPECT TO THE REMOVAL OF USTs OR THE REMEDIATION OF
RELEASES RESULTING FROM SUCH USTs OR THE FAILURE OF SELLER TO OBTAIN A NO FURTHER ACTION
(NFA) LETTER FROM SUCH AGENCIES WITH RESPECT TO REMOVAL OF SUCH USTs (THE “SELLER RETAINED
LIABILITY”).

     BY SIGNING BELOW, EOPOP UNCONDITIONALLY GUARANTEES TO PURCHASER (AND ANY PERMITTED
ASSIGNEE OF THIS AGREEMENT) THE PAYMENT AND COLLECTION OF ANY AMOUNTS DUE TO PURCHASER BY

32

 

SELLER UNDER THIS SECTION WITH RESPECT TO THE SELLER RETAINED LIABILITY WHICH ARE NOT
PROMPTLY PAID BY SELLER (INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
ATTORNEYS’ FEES AND COURT COSTS INCURRED BY PURCHASER IN ENFORCING ITS RIGHTS UNDER THIS
SECTION AGAINST EOPOP); PROVIDED, HOWEVER, THAT (A) THE TOTAL LIABILITY OF EOPOP AND SELLER
UNDER THIS SECTION 11.17 AND OF EOPOP AND THE RELATED SELLER UNDER SECTION
11.17 OF THE RELATED SALE AGREEMENT SHALL NOT EXCEED IN THE AGGREGATE THE LIABILITY
LIMITATION AND (B) THE LIABILITY OF EOPOP AND SELLER WITH RESPECT TO THE SELLER RETAINED
LIABILITY UNDER THIS AGREEMENT SHALL CEASE AS TO ANY OF THE PROPERTY AS OF THE DATE
PURCHASER (OR ANY PERMITTED ASSIGNEE OF THIS AGREEMENT) SELLS SUCH PORTION OF THE PROPERTY
(DIRECTLY OR INDIRECTLY). EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THIS AGREEMENT
IS NOT INTENDED TO GIVE OR CONFER ANY BENEFITS, RIGHTS, PRIVILEGES, CLAIMS, ACTIONS, OR
REMEDIES TO ANY PERSON OR ENTITY AS A THIRD PARTY BENEFICIARY OR OTHERWISE. THE PROVISIONS
OF THIS PARAGRAPH SHALL SURVIVE CLOSING.

	 	 	 	 	 	 	 	 	 
	 

	 	 

Seller’s initials
	 	 	 	 

Purchaser’s initials
	 	 

     11.18 Cooperation with Purchaser’s Auditors and SEC Filing Requirements. At
Purchaser’s sole cost and expense, Purchaser’s auditor may conduct an audit as required of
Purchaser pursuant to Rule 3-14 of Securities and Exchange Commission Regulation S-X (the
“3-14 Audit”) of the income statements of the Property for the last complete fiscal year
immediately preceding the Closing Date (the “Covered Audit Period”), and Seller shall
reasonably cooperate (at no cost to Seller) with Purchaser’s auditor in the conduct of such
3-14 Audit. Without limiting the foregoing, (i) Purchaser or its designated independent or
other auditor may audit the operating statements of the Property, at Purchaser’s expense
and, upon Purchaser’s prior written request, Seller shall allow Purchaser’s auditors
reasonable access to such books and records maintained by Seller in respect to the Property
and pertaining to the Covered Audit Period as necessary to conduct such 3-14 Audit, and (ii)
Seller shall use reasonable efforts to provide to Purchaser such existing financial
information as may be reasonably required by Purchaser and required for Purchaser’s auditors
to conduct such 3-14 Audit; provided, however, that the ongoing obligations of Seller shall
be limited to providing such information or documentation as may be in the possession or
control of Seller, the Seller’s accountants or Property Manager, at no cost to any of such
parties, and in the format that Seller or its accountants or Property Manager have
maintained such information. Notwithstanding anything contained in this Section
11.18 to the contrary, in no event shall Seller or any of Seller’s Affiliates be
obligated to (i) make any representations or certificates regarding such financial
information, or (ii) disclose any confidential or non-public financial information with
respect to any of Seller’s Affiliates or any property of any such Seller’s Affiliate.
Purchaser acknowledges and agrees that Purchaser’s obligation to close the transaction
contemplated by this Agreement shall not

33

 

be conditioned on the completion of such 3-14 Audit and Closing shall not be delayed in
order for such 3-14 Audit to be completed.

     11.19 EOPOP Liability. By its execution of this Agreement, EOPOP hereby
guarantees the payment of any surviving obligation of Seller hereunder, including any Seller
Retained Liability, subject to all limitations on Seller’s liability under this Agreement,
including the Liability Limitation. EOPOP agrees that its liability hereunder is
independent of the liability of Seller. A separate action or actions may be brought and
prosecuted against EOPOP whether or not an action is brought against Seller or whether or
not Seller is joined in such action or actions. EOPOP authorizes Purchaser to release
Seller without in any manner or to any extent affecting the liability of EOPOP hereunder.
EOPOP waives any defense arising by reason of any disability or other defense of Seller, or
the cessation from any cause whatsoever of the liability of Seller with respect to the
surviving obligations, or any claim that EOPOP’s liability hereunder exceeds or is more
burdensome than the liability of Seller. EOPOP further waives any defense arising out of
any compromise or other modification of the surviving obligations or this Agreement without
its consent so long as Seller has agreed to the same. EOPOP acknowledges and agrees that it
will have the sole responsibility for obtaining Seller such information concerning Seller’s
financial condition and business operations as such EOPOP may require, and that Purchaser
shall not have any duty to disclose to EOPOP any information relating to the financial
condition or business operations of Seller.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their duly
authorized representatives as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	SELLER:	 	CA-WATERGATE TOWER IV LIMITED PARTNERSHIP,  
	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	EOM GP, L.L.C.,	 	 
	 	 	 	 	a Delaware limited liability company,	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Equity Office Management, L.L.C.,	 	 
	 	 	 	 	 	 	a Delaware limited liability company,	 	 
	 	 	 	 	 	 	its non-member manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Authorized Signatory	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

34

 

	 	 	 	 	 	 	 	 	 
	PURCHASER:	 	HINES REIT WATERGATE, LP,	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines REIT Watergate GP LLC,	 	 
	 	 	 	 	a Delaware limited liability company	 	 
	 	 	 	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Authorized Signatory	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

BY SIGNING BELOW, THE UNDERSIGNED AGREES TO BE BOUND BY THE PROVISIONS OF SECTIONS
11.17 AND 11.19 OF THIS AGREEMENT AS THE SAME RELATE TO THE UNDERSIGNED:

	 	 	 	 	 	 	 
	EOP OPERATING LIMITED PARTNERSHIP,	 	 
	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 
	By:	 	Equity Office Properties Trust,	 	 
	 	 	a Maryland real estate investment trust,	 	 
	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Authorized Signatory	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

35

 

LIST OF SCHEDULES AND EXHIBITS

	 	 	 
	A

	 	Legal Description
	B

	 	List of Tangible Personal Property
	C

	 	List of Service Contracts
	D

	 	Escrow Agreement
	E

	 	Permitted Exceptions
	F

	 	Exceptions to Deed
	G

	 	General Assignment
	H

	 	Notice to Tenants
	I

	 	Notice to Parties to Service Contracts
	J

	 	Non-Foreign Affidavit
	J-1

	 	California Non-Foreign Affidavit
	K

	 	Tenant Inducement Costs and Leasing Commissions
	L

	 	Form Tenant Estoppel Certificate
	M

	 	Form Seller Estoppel Certificate
	N

	 	Litigation Matters
	O

	 	List of Leases
	P

	 	List of Brokerage Agreements and Leasing Commission Agreements
	Q

	 	Environmental Reports
	R

	 	Major Tenants
	S

	 	Form Deed
	T

	 	Form Natural Hazard Disclosure Statement

36

 

FIRST AMENDMENT TO REAL ESTATE SALE AGREEMENT

Emeryville Office Tower IV, Emeryville, California

     THIS FIRST AMENDMENT TO REAL ESTATE SALE AGREEMENT (this “Amendment”) is made effective as of
December 8, 2006, by and between CA-WATERGATE TOWER IV LIMITED PARTNERSHIP, a Delaware limited
partnership (“Seller”), and HINES REIT WATERGATE, LP, a Delaware limited partnership (“Purchaser”).

RECITALS

     A. Seller and Purchaser have entered into that certain Real Estate Sale Agreement dated on or
about the date hereof (the “Agreement”). Capitalized terms used but not defined herein shall have
the meanings contained in the Agreement.

     B. The Agreement contemplates that it will be executed and have an “Effective Date” in advance
of the Closing and, accordingly, provides for certain conditions to Closing and the passage of
certain time periods between the Effective Date and the Closing Date. However, Seller and
Purchaser have agreed to execute the Agreement on or about the date hereof and on the understanding
that the Closing will occur substantially simultaneously with the execution of the Agreement.

AGREEMENT

     THEREFORE, in consideration of the foregoing and the mutual covenants contained in this
Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Purchaser agree as follows:

     1. The Due Diligence Period has expired. The Earnest Money has not been and shall not be
required to be deposited, and the Escrow Agreement attached as Exhibit D to the Agreement shall not
be executed.

     2. The Closing will occur substantially simultaneously with the execution of the Agreement.

     3. Any provisions of the Agreement requiring advance notice, delivery or approval periods or
the passage of certain time periods prior to the Closing Date are waived by Seller and Purchaser.

     4. Any conditions to Closing that are not satisfied or expressly waived as provided in the
Agreement shall be deemed to have been satisfied or waived by the parties’ respective
authorizations of the Closing.

     5. This Amendment may be executed in counterparts, which together shall constitute one and the
same original.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth
above.

 

 

	 	 	 	 	 	 	 	 	 	 	 
	SELLER:	 	CA-WATERGATE TOWER IV LIMITED PARTNERSHIP,	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	EOM GP, L.L.C.,	 	 
	 	 	 	 	a Delaware limited liability company,	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Equity Office Management, L.L.C.,	 	 
	 	 	 	 	 	 	a Delaware limited liability company,	 	 
	 	 	 	 	 	 	its non-member manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Authorized Signatory	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	PURCHASER:	 	HINES REIT WATERGATE, LP,	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines REIT Watergate GP LLC,	 	 
	 	 	 	 	a Delaware limited liability company	 	 
	 	 	 	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Authorized Signatory	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

2

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