Document:

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                                                                   EXHIBIT 10.01

                                OPTION AGREEMENT
                 601 Townsend Street, San Francisco, California

                                 By and Between

                         Baker Hamilton Properties, LLC,
                     a California Limited Liability Company

                                   ("Seller")

                                       and

                                Macromedia, Inc.
                             a Delaware Corporation

                                    ("Buyer")

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                                OPTION AGREEMENT
                 601 Townsend Street, San Francisco, California

        THIS OPTION AGREEMENT ("Agreement") is made and entered into as of July
16, 2003 (the "Effective Date") by and between Baker Hamilton Properties, LLC, a
California limited liability company ("Seller"), and Macromedia, Inc., a
Delaware corporation ("Buyer").

                                 R E C I T A L S

        This Agreement is made with respect to the following facts and
circumstances:

        A.      Seller owns certain real property commonly known as 601 Townsend
Street, San Francisco, California, which real property, together with certain
personal property is collectively referred to in this Agreement as the
"Property" and is more particularly defined below.

        B.      Subject to the terms and conditions herein, Seller desires to
grant Buyer an option to purchase the Property, and Buyer desires to acquire
such option.

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer agree as follows:

1.      OPTION TO PURCHASE.

        1.1     Grant of Option. In consideration for the Option Payment
provided for below and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby grants to Buyer an
option ("Option") to purchase the Property in accordance with and subject to all
of the terms and conditions set forth in this Agreement.

        1.2     Option Payment. As consideration for the grant of the Option
provided herein, Buyer shall pay to Seller outside of escrow, on July 25, 2003,
the sum of Two Hundred Thousand Dollars ($200,000) in immediately available
funds ("Option Payment") provided, however, that in no event shall Buyer be
required to pay the Option Payment until one (1) business day following the date
on which the First Offer Notice (as defined immediately below) has been given by
Seller to Buyer, if at all. Seller shall give Buyer written notice ("First Offer
Notice") in the event that Omnicom (as defined below) fails to timely exercise
the right of first offer as more particularly described in Section 8.1.6 below.
Upon purchase of the Property following exercise of the Option, the Option
Payment shall be credited against the Purchase Price (as defined below) for the
benefit of Buyer. Except as otherwise provided in this Agreement, in the event
that Buyer does not exercise the Option provided for herein, or in the event
that Buyer does not purchase the Property after exercising the Option, then the
entire amount of the Option Payment shall be retained by Seller.

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        1.3     Term. The term ("Term") of the Option shall commence as of the
Effective Date and shall continue thereafter until 5:00 p.m. Pacific daylight
time, August 12, 2003.

        1.4     Exercise of the Option. The Option provided for herein shall be
exercised, if at all, by written notice ("Exercise Notice") given by Buyer to
Seller prior to the expiration of the Term. Such notice shall set forth the
unequivocal intent of the Buyer to exercise the Option. The Exercise Notice
shall be in the form attached hereto as Exhibit 1.4. Following timely exercise
of the Option provided for herein, Buyer shall purchase from Seller and Seller
shall sell to Buyer, the Property in accordance with all of the terms of this
Agreement. Notwithstanding any provision to the contrary contained in this
Agreement, including, without limitation, the provisions of this Section 1.4,
the Option shall not be considered as having been exercised by Buyer, unless (i)
the Exercise Notice is timely given prior to the expiration of the Term, (ii)
the Deposit (as defined below) is timely delivered, and (iii) the options as
provided in the King Street Agreement (as defined below) and 625 Agreement (as
defined below) are concurrently duly exercised. For purposes of this Agreement,
the term "King Street Agreement" refers to a separate agreement in connection
with certain real property commonly known as 650 King Street, San Francisco,
California ("King Street Property") pursuant to which Seller has granted and
Buyer has acquired an option to purchase the King Street Property. For purposes
of this Agreement, the term "625 Agreement" refers to a separate agreement in
connection with certain real property commonly known as 625 Townsend Street
("625 Property") pursuant to which Townsend 625, LLC, a California limited
liability company ("Townsend 625"), an affiliate of Seller, has granted to Buyer
an option to purchase the 625 Property.

        1.5     Termination. In the event that Buyer fails to duly exercise the
Option, as provided in Section 1.4, this Agreement shall terminate and neither
party shall have any further rights or obligations hereunder (except for the
obligations of Seller or Buyer which are expressly stated in this Agreement to
survive the termination of this Agreement) and, except as otherwise provided in
this Agreement, the Option Payment shall be retained by Seller.

2.      PURCHASE AND SALE.

        2.1     Property. Subject to the terms and conditions hereof, upon the
exercise of the Option provided for above, Seller hereby agrees to sell, convey
and assign to Buyer, and Buyer hereby agrees to purchase and accept from Seller
on the Closing Date (as defined below) the following (collectively, the
"Property"):

                2.1.1   That certain tract or parcel of land situated in the
City and County of San Francisco, California, which is legally described on
Exhibit 2.1.1 attached hereto, together with any and all rights, privileges and
easements appurtenant thereto (collectively, the "Land");

                2.1.2   All buildings, structures, fixtures and other
improvements of every kind and description affixed to or located in, on, over,
or under the Land (excluding fixtures

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owned by tenants and which such tenants have the right to remove under the terms
of their respective Leases, as defined below) (all of which are collectively
referred to as the "Improvements"); and

                2.1.3   All right, title and interest of Seller in and to all
tangible personal property listed on Exhibit 2.1.3 attached hereto
(collectively, the "Personal Property").

        2.2     Real Property. The Land and Improvements are collectively
referred to as the "Real Property."

        2.3     Assignment. In addition, Seller shall convey and assign to Buyer
all of the right, title and interest of Seller in and to (i) all leases,
licenses, rental and other agreements for the use or occupancy of any portion of
the Real Property (collectively, "Leases"), which Leases are listed on Exhibit
2.3(i) attached hereto; together with any guarantees of the Leases and any and
all security deposits, letters of credit, and other property given or delivered
by any tenant, lessee, or occupant under a Lease (collectively, the "Tenants"
and each, individually, a "Tenant") as collateral security for performance of
such Tenant's obligations under such Lease; (ii) all assignable service
contracts and other agreements, if any, relating to the Real Property or
Personal Property, which, pursuant to the terms of this Agreement, are to
continue in effect after the Closing (as defined below) [the service contracts
presently applicable to the Property are listed on Exhibit 2.3(ii) attached
hereto (collectively, the "Service Contracts")]; (iii) all assignable current
licenses, permits, certificates of occupancy, approvals and entitlements issued
or granted in connection with the Real Property as well as any and all
assignable development rights and any other intangible rights, interests or
privileges relating to or used in connection with the Real Property; (iv) any
assignable right to use the current names of the Real Property, logos,
trademarks, tradenames and symbols and promotional materials; and (v) all
transferable warranties, guarantees or sureties relating to the Real Property or
the Personal Property. Such assignment shall be made pursuant to the form of
Assignment and Assumption Agreement described in Section 9.1.3 below
("Assignment").

        2.4     Excluded Property. Notwithstanding any provision to the contrary
of this Agreement, the Property being conveyed pursuant to this Agreement does
not include (and Seller expressly reserves all rights with respect to) the
following: (i) any rebates of real property taxes on the Real Property paid by
Seller and attributable to the period prior to the Closing; (ii) any refund or
other amount recovered from the California Petroleum Underground Storage Tank
Clean-Up Fund, or otherwise recovered, with respect to Seller's previously
having removed one or more underground storage tanks from the Real Property; and
(iii) any and all rights to that certain letter of credit in the amount of
$1,600,000 issued at the request of Organic, Inc. for the benefit of Seller.
Following the Closing, Buyer shall reasonably cooperate with Seller with respect
to the matters described above in this Section 2.4 by executing such documents
and taking such action as may be reasonably requested by Seller in connection
with such matters, at no cost or expense to Buyer.

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3.      PURCHASE PRICE. Buyer shall pay as the total purchase price for the
Property ("Purchase Price") the sum of Thirty-Nine Million Seven Hundred
Thousand Dollars ($39,700,000). The Purchase Price shall be paid as follows:

        3.1     Option Payment. At Closing, the Option Payment shall be applied
and credited toward the payment of the Purchase Price. In the event that Buyer
fails to timely pay the Option Payment, Seller shall be entitled, at Seller's
sole option, to terminate this Agreement immediately by giving written notice of
such termination to Buyer;

        3.2     Deposit. Subject to the timely exercise of the Option by Buyer,
not later than two (2) business days following the date on which the Exercise
Notice is given, Buyer shall cause an additional Two Million Five Hundred
Thousand Dollars ($2,500,000) (the "Deposit") in immediately available funds to
be delivered into Escrow (as defined below). The failure of Buyer to timely
deliver the Deposit shall be a material default, and Seller, at Seller's sole
option, may terminate this Agreement by giving written notice of such
termination to Buyer and the Title Company (as defined below). In the event of
any such termination by reason of Buyer's failure timely to deliver the Deposit
into Escrow, Buyer shall be considered to have not exercised the Option and the
entire amount of the Option Payment shall be retained by Seller.

        3.3     Interest on Deposit. Subject to the provisions of Section 3.6
below, the Deposit shall be held in Escrow in accordance with the provisions of
this Agreement in an interest bearing, federally insured account at a bank or
other financial institution designated by the Title Company and reasonably
acceptable to Buyer, and all interest accruing thereon shall be credited to the
account of Buyer, except as otherwise provided herein, and shall be considered
to be a part of the Deposit.

        3.4     Disposition of the Deposit. At the Closing, the Deposit and all
interest accrued thereon shall be applied and credited toward the payment of the
Purchase Price. Upon exercise of the Option and delivery of the Deposit into
Escrow, the Deposit shall become non-refundable in accordance with the
provisions of Section 19.1 subject to return to Buyer only as expressly provided
in this Agreement. In the event of a return of the Deposit to Buyer, if a
portion of the Deposit has been released from Escrow to Seller, as provided in
Section 3.6 below, the released portion of the Deposit, including accrued
interest and interest deemed accrued will be reimbursed by Seller to Buyer
within two (2) business days following demand by Buyer.

        3.5     Cash Balance. On or before the Closing, Buyer shall deliver into
Escrow in immediately available funds the balance of the Purchase Price. The
Purchase Price, net of any prorations and closing costs to be paid by Seller as
provided in this Agreement and net of the Option Payment and net of any
Withdrawals (as defined below) made by Seller, and the interest deemed to have
accrued thereon, shall be paid by the Title Company to Seller on the Closing
Date by federal wire transfer of immediately available funds to a bank
account(s) designated by Seller in a written notice to the Title Company given
prior to the Closing.

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        3.6     Release of Deposit Under Specified Conditions: On or after the
Release Date (as defined below), provided that Seller has satisfied the Release
Conditions (as defined below), Seller shall be entitled to withdraw from Escrow,
on the conditions specified herein, a portion of the Deposit, on one or more
occasions (each, a "Withdrawal"), provided that the total of all Withdrawals
shall not exceed One Million Five Hundred Thousand Dollars ($1,500,000). Each
Withdrawal shall be transferred by Title Company directly to an escrow company
chosen by Seller and reasonably satisfactory to Buyer ("Other Escrow"), for
deposit to an escrow account held by Other Escrow in Seller's name or in the
name of an entity reasonably satisfactory to Buyer who will act as qualified
intermediary for Seller's disposition of the Property in a tax-deferred
exchange, to be used solely as a deposit towards the acquisition of property
intended to qualify as replacement property for Seller's tax-deferred exchange
("Exchange Property"). The transfer of the Withdrawal to the Other Escrow shall
be accompanied by written instructions executed by Seller irrevocably
instructing Other Escrow, under any circumstances where such funds would
otherwise be refundable to Seller, to instead pay such funds to Title Company.
To obtain a Withdrawal, Seller shall give written notice to Title Company and
Buyer specifying the amount of the proposed Withdrawal, the name and address of
the Other Escrow, the escrow number and name and telephone number of the escrow
officer handling the Other Escrow, the address or other information sufficient
to identify the proposed Exchange Property, wire transfer instructions for
transferring the Withdrawal to the Other Escrow, and the anticipated date for
the closing of the Other Escrow. Title Company may wire the requested funds to
the Other Escrow (subject to the limitation on total Withdrawals) on the second
business day following its receipt of Seller's request unless within such time,
Buyer gives written notice objecting to the Withdrawal and stating the reason
for such objection. Buyer may only object to release on the grounds that one or
more of the Release Conditions has not been satisfied, or that Seller is
presently in default hereunder, or that the requested Withdrawal would cause the
total of all Withdrawals to exceed the maximum amount permitted. If requested by
Title Company in connection with any Withdrawal, Buyer shall promptly sign and
deliver to the Title Company such written instructions as the Title Company may
request confirming that the requested Withdrawal may be transferred to the Other
Escrow. Notwithstanding any Withdrawal, the Deposit shall continue, as between
Seller and Buyer, to accrue interest in Escrow at the same rate of interest as
though no Withdrawal had been made and the full Deposit had remained in Escrow
at all times, and at Closing, Buyer shall be entitled to receive from Seller (by
credit against the Purchase Price at Closing) the full amount of interest that
would have accrued in accordance with the provisions of Section 3.3 had no
Withdrawal of the Deposit been made. For purposes of this Section, the "Release
Date" shall be the first date when all of the following ("Release Conditions")
have occurred;

                3.6.1   Buyer shall have acquired the King Street Property
pursuant to the King Street Agreement and the 625 Property pursuant to the 625
Agreement;

                3.6.2   Seller shall have caused a Guaranty Agreement in the
form of Exhibit 3.6.2 attached hereto to be executed by Ronaldo Cianciarulo and
delivered to Buyer,

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guaranteeing the payment and performance by Seller of its obligation to repay
Withdrawals, and interest deemed to have accrued thereon, to Buyer under any
circumstances where Closing does not occur and Buyer is entitled to return of
the Deposit ("Return Obligations").

                3.6.3   Seller shall have provided Buyer with evidence
reasonably satisfactory to Buyer that the fair market value of the Property
exceeds, by an amount of not less than $5,000,000, the sum of (a) the
outstanding principal amount of, and all accrued and unpaid interest, fees and
charges on, Seller's existing indebtedness ("Existing Debt") in favor of Fremont
Investment and Loan ("Lender") secured by a deed of trust on the Property and
the King Street Property, after giving effect to the closing under the King
Street Agreement and the resulting paydown on the Existing Debt; and (b) all
other monetary liens and encumbrances affecting the Property; without limiting
the foregoing, Seller hereby represents and warrants to Buyer that, as of the
date of this Agreement, Seller's equity in the Property, net of the amounts
described in the foregoing clauses (a) and (b), is in excess of $5,000,000.

                3.6.4   Seller shall have executed, acknowledged and delivered
to Buyer, in recordable form, and Seller and Buyer shall have caused to be
recorded in the San Francisco County, California Official Records, a deed of
trust in favor of Buyer in the form of Exhibit 3.6.4 attached hereto and
encumbering the Property as security for the Return Obligations ("Buyer Deed of
Trust").

                3.6.5   Seller shall have received from Lender, in a form
reasonably acceptable to Buyer, Lender's consent to the Buyer Deed of Trust, and
Lender's consent to this Agreement, including the provisions hereof for
Withdrawals prior to Closing of portions of Seller's anticipated proceeds of the
sale of the Property; and Lender's agreement to recognize and not to disturb
Buyer's rights under this Agreement in the event that Lender shall enforce its
rights with respect to the Existing Debt and the security therefor.

4.      TITLE.

        4.1     Vesting of Title. At Closing, Seller shall convey fee simple
title to the Real Property to Buyer by execution and delivery of the Deed (as
defined below). Issuance by the Title Company (or an unconditional commitment to
issue) as of the Closing of the Buyer's Title Policy (as defined below) shall
constitute evidence of delivery of title by Seller.

        4.2     Buyer's Title Insurance. At Closing, the Title Company shall
issue to Buyer an ALTA owner's title insurance policy (1970 form) ("Buyer's
Title Policy") in the amount of the Purchase Price insuring that fee simple
title to the Real Property is vested in Buyer subject only to the Permitted
Exceptions (as defined below). Buyer shall be entitled to request that the Title
Company issue such endorsements to the Buyer's Title Policy as Buyer may
reasonably require, provided that such endorsements shall be at no cost or
additional liability to Seller (other than any liability to the Title Company
under any customary

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affidavits or certifications reasonably requested by the Title Company) and the
Closing shall not be delayed as a result of Buyer's request.

        4.3     Permitted Exceptions. As a condition precedent of Buyer's
obligations as provided in Section 8.2.4 but not as a covenant of Seller, Seller
shall convey the Property and Buyer shall accept the Property subject to the
following matters, which are collectively referred to as the "Permitted
Exceptions":

                4.3.1   All exceptions to title shown in the Title Report (as
defined below) as it may be amended and on the Survey (as defined below) that
are approved or deemed approved by Buyer as provided in Section 7.3.2 hereof and
7.3.3 hereof, if applicable;

                4.3.2   the lien of non-delinquent real and personal property
taxes and assessments;

                4.3.3   the rights of the Tenants under the Leases referred to
in Exhibit 2.3(i);

                4.3.4   the Service Contracts, if any, to be assumed by Buyer;

                4.3.5   local, state and federal laws, ordinances or
governmental regulations, including but not limited to, building and zoning
laws, ordinances and regulations, now existing or hereafter in effect with
respect to the Real Property;

                4.3.6   matters affecting the condition of title created by or
with the written consent of Buyer; and

                4.3.7   standard printed exceptions included in an ALTA owner's
title insurance policy (1970 form).

5.      ESCROW.

        5.1     Opening of Escrow. Seller shall deliver a fully executed
counterpart of this Agreement into escrow ("Escrow") to be established at
Chicago Title Company, One Kaiser Plaza, Suite 755, Oakland, California 94612,
Attention: Ms. Kris Owens ("Title Company") on or before three (3) days
following the Effective Date.

        5.2     Instructions to Title Company. Seller and Buyer shall each be
entitled to submit escrow instructions to the Title Company in connection with
the Closing of the Escrow. Seller and Buyer shall in addition execute such
further escrow instructions as the Title Company may reasonably require in
connection with the Closing. In the event of any conflict between the terms and
conditions of this Agreement and the provisions of any escrow instructions
prepared by Seller, Buyer or the Title Company, the terns and conditions of this
Agreement shall control.

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6.      CLOSING.

        6.1     Closing. The purchase and sale of the Property as contemplated
by this Agreement, including but not limited to the recordation of the Deed and
the completion of the other matters required by this Agreement to be done
contemporaneously (the "Closing") shall occur on April 30, 2004; provided that
Seller, in its sole discretion, may advance the Closing to any date following
the date which is thirty (30) days following the date on which the Option is
exercised as is selected by Seller upon at least forty-five (45) days prior
written notice to Buyer (an "Early Closing"). Notwithstanding any provision to
the contrary, in the event that Seller has given written notice to Buyer
("Notice of Early Closing") in accordance with the above provisions of this
Section 6.1 selecting a date earlier than April 30, 2004 on which the Closing is
to occur, Seller shall, notwithstanding the giving of such Notice of Early
Closing, be entitled to cancel a scheduled Early Closing, provided that Seller
gives written notice canceling an Early Closing at least ten (10) days prior to
the scheduled date of the Early Closing. The effect of a cancellation of an
Early Closing shall be to reschedule the Closing to April 30, 2004 (subject to
Seller's right to schedule another Early Closing). In no event shall Seller have
the right to cancel more than three (3) scheduled Early Closings and in all
events, the Closing shall occur no later than April 30, 2004 as provided above.
The date on which the Closing actually occurs shall be referred to as the
"Closing Date."

        6.2     Failure to Close. If the Closing does not occur on or before the
date set forth in Section 6.1 above (as such date may be extended pursuant to
the express provisions of this Agreement), then in the absence of a written
agreement between the parties to extend the date of the Closing, either party
hereto (so long as such party is not then in default pursuant to this
Agreement), without waiving any rights it may otherwise have pursuant to the
Agreement, may elect to terminate this Agreement by giving written notice of
such termination to the other and to the Title Company. In the event of a
termination of this Agreement pursuant to this Section 6.2, if neither Seller
nor Buyer is in default pursuant to this Agreement, the Deposit, including all
Withdrawals and all interest accrued and deemed accrued thereon, shall be
returned to Buyer within two (2) business days following the date of termination
of this Agreement, and the Option Payment shall be retained by Seller, except as
otherwise provided in this Agreement. In the event of any such termination, and
(i) Seller is in default pursuant to this Agreement, the Deposit, including all
Withdrawals and the interest accrued or deemed accrued thereon, and Option
Payment shall be returned to Buyer within two (2) business days following the
date of termination, or (ii) Buyer is in default pursuant to this Agreement, the
disposition of the Deposit shall be governed by the provisions of Section 19.1
below, and the Option Payment shall be retained by Seller.

7.      DUE DILIGENCE.

        7.1     Due Diligence. Buyer shall be entitled to conduct due diligence
with respect to the Property through and including the date on which the
expiration of the Term occurs ("Expiration Date"), and, if Buyer shall exercise
the Option, thereafter Buyer shall continue to have access to the Real Property
pursuant to the provisions of Section 7.4 below.

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        7.2     Available Information. Seller shall make available to Buyer the
following documents and materials with respect to the Property (collectively,
the "Due Diligence Materials") in accordance with the following:

                7.2.1   Property Files. Seller shall make available to Buyer and
Buyer's agents and representatives, upon reasonable notice and during normal
business hours, all files in the possession of Seller, or in possession of
Seller's property manager, if any, relating to the ownership, operation,
construction, use or occupancy of the Property, or any portion of the Property,
including without limitation, all current Leases, the current operating budget,
building plans and specifications, surveys, all current service or maintenance
contracts, all other current contracts, warranties (including construction),
third party environmental or soils reports, third party seismic reports,
building and occupancy permits, all current budgets, public sector notices, and
tax assessments to the extent in Seller's possession or in the possession of
Seller's property manager, if any. Buyer, at its expense, may make photocopies
of such material relative to the Property as Buyer may determine.

                7.2.2   Restricted Information. Notwithstanding any provision to
the contrary, "Due Diligence Materials" shall not include, and Seller shall have
no obligation to furnish or otherwise make available to Buyer, (i) any federal
or state income tax returns; (ii) any information or documentation, the
disclosure of which would violate any contract or agreement binding on Seller or
any applicable law; (iii) any documents, instruments, or agreements evidencing,
securing, or relating to the mortgage loan currently encumbering the Real
Property, provided that Seller will make available to Buyer any third party
reports with respect to the Property in Seller's possession and prepared in
connection with the mortgage loan, (iv) any internally or externally prepared
reports or analysis concerning the valuation of the Real Property; or (v) any
information received from or concerning any other potential purchaser of the
Property, provided that Seller will make available to Buyer any third party
reports in the possession of Seller acquired from or in connection with any
other potential purchaser of the Property. Nothing contained in this section is
intended to limit any disclosure obligations Seller may have under applicable
law.

                7.2.3   Confidentiality. Buyer and its representatives shall
hold in strictest confidence all data and information obtained with respect to
Seller or the Property whether obtained before or after the execution and
delivery of this Agreement, and shall not disclose the same to others except as
may be required by law or with the consent of the Seller; provided, however,
that it is understood and agreed that Buyer may disclose such data and
information to the employees, brokers, lenders (actual or potential),
consultants, accountants and attorneys of Buyer provided that such persons agree
to treat such data and information confidentially. In the event this Agreement
is terminated, other than by reason of a default by Seller, Buyer shall promptly
return to Seller any statements, documents, schedules, exhibits and other
written information obtained from Seller in connection with this Agreement or
the transaction contemplated herein. The provisions of this Section 7.2.3 shall
survive Closing or any termination of this Agreement. Notwithstanding the
foregoing, any party (and any employee, representative or other agent of any
party) may disclose to any

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and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to any
party relating to such tax treatment and tax structure; provided, however, that
any such information and materials shall be kept confidential to the extent
necessary to comply with any applicable securities laws. For purposes of the
exceptions set out in the preceding sentence to the general confidentiality
provisions set forth above, the tax treatment and tax structure of the
transactions contemplated by this Agreement shall not be deemed to include the
location of the Property, the identity of the parties to this Agreement or the
Purchase Price.

        7.3     Title Review. Buyer shall have the right to review title to the
Real Property in accordance with this Section 7.3.

                7.3.1   Title Material. Promptly following the Effective Date,
Seller will obtain and deliver to Buyer a current preliminary title report
("Title Report") for the Real Property prepared by the Title Company, together
with a copy of the documents listed as exceptions therein. Buyer, at its cost,
shall obtain a survey ("Survey") of the Real Property prepared by a licensed
engineer or surveyor, which Survey shall be sufficient to provide the basis for
an ALTA owner's policy of title insurance. Buyer shall deliver a copy of the
Survey to the Title Company and to Seller.

                7.3.2   Review of Title. Buyer shall notify Seller in writing
(the "Title Notice") not later than three (3) business days prior to the
Expiration Date as to which exceptions to title as shown on the Title Report and
Survey, if any, will not be accepted by Buyer. If Buyer fails to notify Seller
in writing of its disapproval of any exceptions to title within such period of
time, Buyer shall be deemed to have approved the condition of title to the Real
Property. If Buyer notifies Seller in writing that Buyer objects to any
exceptions to title, Seller shall have two (2) business days after receipt of
the Title Notice (but, in no event, later than one (1) business day prior to the
Expiration Date) to notify Buyer (a) that Seller will remove such objectionable
exceptions from title on or before the Closing, provided that Seller may extend
the Closing for such period as shall be required to effect such cure, but not
beyond ten (10) days; or (b) that Seller elects not to cause such exceptions to
be removed. If Seller fails to timely give such notice to Buyer, the Seller
shall be deemed to have given notice to Buyer under clause (b). Seller shall
have no obligation to remove any title exceptions to which Buyer objects;
provided, however, that Seller shall be obligated to remove, as of the Closing,
all liens evidencing any deed of trust (and related documents securing
financing), all delinquent tax liens, all mechanic's liens relating to work
performed by Seller, all judgment liens and encumbrances created by Seller
violation of the provisions of Section 11.2 below. The procurement by Seller of
a commitment for the issuance of the Buyer's Title Policy (as defined in Section
4.2 hereof) or an endorsement thereto insuring Buyer against any title exception
which was disapproved pursuant to this Section 7.3.2 shall be deemed a cure by
Seller of such disapproval. If Seller gives or is deemed to have given Buyer
notice under clause (b) above, Buyer shall have two (2) business days from the
date on which such notice to Buyer is given or deemed given (but in

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no event later than the Expiration Date) in which to notify Seller that Buyer
will nevertheless proceed with the purchase and take title to the Property
subject to such exceptions. If Buyer fails to timely give such notice, and duly
exercises the Option, then Buyer will be deemed to have elected to proceed with
the purchase and take title to the Property subject to such exceptions. If
Seller gives or is deemed to have given notice to Buyer under clause (b) and
Buyer fails to exercise the Option, this Agreement shall terminate in accordance
with the provisions of Section 1.5.

                7.3.3   Subsequent Title Defects. Buyer may, at or prior to
Closing, notify Seller in writing (the "Subsequent Title Defects Notice") of any
objection(s) to title exceptions (a) raised by the Title Company between the
Expiration Date and the Closing and (b) not disclosed by the Title Company in
writing or otherwise known to Buyer prior to the Expiration Date, provided that
Buyer must notify Seller of such objection(s) to title within two (2) business
days after being made aware of the existence of such exception. If Buyer gives a
Subsequent Title Defects Notice to Seller, Seller shall have two (2) business
days after receipt of the Subsequent Title Defects Notice to notify Buyer (a)
that Seller will remove such objectionable exceptions from title on or before
the Closing, provided that Seller may extend the Closing for such period as
shall be required to effect such cure, but not beyond ten (10) days; or (b) that
Seller elects not to cause such exceptions to be removed. If Seller fails to
timely give such notice to Buyer, Seller shall have been deemed to have given
notice to Buyer under clause (b). Seller shall have no obligation to remove any
title exceptions to which Buyer objects; provided, however, that Seller shall
remove, as of the Closing, all liens evidencing any deed of trust (and related
documents securing financing), all delinquent tax liens, all mechanic's liens
relating to work performed by Seller, all judgment liens and encumbrances
created by Seller in violation of the provisions of Section 11.2 below. The
procurement by Seller of a commitment of the Title Company for Buyer's Title
Policy or an endorsement thereto insuring Buyer against any title exception
which was disapproved pursuant to this Section 7.3.3 shall be deemed a cure by
Seller of such disapproval. If Seller gives or is deemed to have given notice
under clause (b) above, Buyer shall have two (2) business days from the date on
which such notice to Buyer is given or deemed given in which to notify Seller
that Buyer will nevertheless proceed with the purchase and take title to the
Property subject to such exceptions or that Buyer elects not to proceed with the
purchase. If Buyer fails to timely give such notice and has exercised the
Option, Buyer shall be deemed to have elected to proceed with the purchase and
take title to the Property subject to such exceptions. If Buyer has exercised
the Option, and thereafter gives a Subsequent Title Defects Notice, and if
Seller gives, or is deemed to have given, notice under clause (b) above, and
Buyer timely elects not to proceed with the purchase, this Agreement shall
terminate. If this Agreement is so terminated, then neither party shall have any
further rights or obligations hereunder (except with respect to those matters
expressly set forth to survive such termination), each party shall bear its own
costs incurred hereunder, and, within two (2) business days thereafter, Buyer
shall be entitled to return of the Deposit, if delivered, together with all
Withdrawals and all interest accrued or deemed accrued thereon. Except as
otherwise provided in this Agreement, in the

                                       11

<PAGE>

event of a termination pursuant to the provisions of this Section 7.3.3, the
Option Payment shall be retained by Seller.

        7.4     Inspection; Right of Entry. Buyer and Buyer's agents,
contractors, engineers, consultants, employees and other representatives
(collectively, "Buyer's Representatives") shall have the right, during the Term
and, if Buyer exercises the Option, thereafter, and subject to the terms and
conditions of Section 7.6 below, (i) to enter the Real Property to inspect the
same (including the performance of environmental audits of the Real Property in
accordance with the terms of Section 7.4.1 and 7.4.2 below), upon reasonable
notice to Seller, provided that Buyer does not unreasonably disturb any business
of Seller in connection with the Property or any Tenant of the Real Property,
(ii) to contact representatives of the Tenants, (iii) to contact representatives
of third parties who have executed Service Contracts with Seller or Seller's
representatives regarding the Real Property; (iv) to contact representatives of
Seller's property manager, if any, regarding the Property; and (v) to contact
representatives of applicable governmental authorities concerning the Property.
Buyer shall keep the Property free and clear of any mechanics' liens,
materialmen's liens or claims arising out of any of Buyer's activities or those
of Buyer's Representatives on or with respect to the Real Property. All entries
onto the Real Property by Buyer and all inspections and examinations thereof
shall be at Buyer's sole cost and expense, shall be done in a workmanlike manner
in accordance with all applicable codes, statutes, ordinances, rules,
regulations and laws and shall not unreasonably disturb the quiet occupancy or
enjoyment of any Tenant or other occupant of the Real Property. Buyer shall not
perform any test or inspection or carry out any activity at the Real Property
which damages the Real Property in any way or which is physically intrusive into
the Improvements or soil of the Real Property without the prior written consent
of Seller, which consent Seller shall not unreasonably withhold. In connection
with the request by Buyer for any such written consent of Seller, Buyer shall
provide a detailed description of the nature of the proposed test of the Real
Property, and shall in addition provide to Seller (i) the name of the
contractor, who will perform the subject test on behalf of Buyer, (ii) proof of
insurance, with respect to such contractor, adequate in Seller's reasonable
judgment, and (iii) such other information with respect to the proposed test as
Seller may reasonably request. After each entry onto any portion of the Real
Property, Buyer, at its sole cost and expense shall repair (which shall include
replacement where necessary) any damage to the Real Property arising from such
entry. In connection with any inspections of the Real Property, Buyer and
Buyer's Representatives will carry liability insurance adequate in Seller's
reasonable judgment and, upon the request of Seller, will provide Seller with
written evidence of same. Buyer will give Seller reasonable prior notice of its
intention to conduct any inspections or tests with respect to the Real Property
or of its intention to contact any Tenant, and Seller reserves the right to have
a representative present.

                7.4.1   Phase I Environmental Audit. During the Term, Buyer may
conduct (or have conducted on its behalf by an environmental auditor) a Phase I
environmental audit of the Real Property, subject to the terms and conditions of
Sections 7.4.2 and 7.6 below.

                                       12

<PAGE>

                7.4.2   Environmental Conditions. In the event that Buyer shall
enter the Real Property for purposes of conducting a Phase I environmental audit
of the Real Property, Buyer shall provide Seller with at least twenty-four (24)
hours' prior notice of its intent thereof. Buyer shall not conduct a Phase II
environmental audit of the Real Property without the prior written consent of
Seller, which consent Seller shall not unreasonably withhold. Any request by
Buyer to conduct a Phase II environmental audit of the Real Property will be
subject to the applicable provisions of Section 7.4 relating to intrusive
testing of the Real Property. Buyer shall not disclose to any third party, other
than Buyer's consultants, agents and attorneys associated with any environmental
investigation of the Real Property, the results of any of Buyer's inspections or
testing of the Real Property, except as may be required by applicable law. Prior
to performing any environmental inspections or testing of the Real Property,
Buyer shall obtain any required permits and authorizations and shall pay all
applicable fees required by any public body or agency in connection therewith.

        7.5     Buyer's Reports. If the Escrow fails to close for any reason
other than Seller's breach of this Agreement, then all studies, surveys
(including, without limitation the Survey), if any, reports, test results and
analyses concerning the Real Property prepared by, for or on behalf of Buyer in
connection with the Real Property (collectively, "Buyer's Reports") shall at the
option of Seller, be delivered and assigned to Seller free and clear of all
claims and at no cost, expense or liability to Seller. Buyer shall not be
required to deliver to Seller internally prepared reports or analyses concerning
the valuation or potential performance of the Real Property. Any Buyer's Reports
delivered to Seller at Seller's request pursuant to this Section 7.5 shall be
delivered without representation or warranty, nor shall Seller assert any
warranty or rights against the consultants of Buyer who have prepared such
Buyer's Reports.

        7.6     Indemnity. Buyer shall indemnify, defend by counsel reasonably
acceptable to Seller, and hold Seller harmless from and against any and all
costs, expenses, claims, demands or liens, (including, without limitation,
mechanics' liens) including reasonable attorneys' fees, arising from or in any
fashion related to the entry by Buyer or Buyer's Representatives on the Real
Property or the performance by Buyer or Buyer's Representatives of any testing
or investigations of the Real Property except with respect to any loss or
liability incurred by Seller resulting from the mere discovery by Buyer or Buyer
Representatives of the presence of hazardous materials at the Property or the
existence of other defects with respect to the Property. Without limiting the
scope or generality of the foregoing indemnity, Buyer shall not permit any
mechanics', materialman's, or other lien against all or any part of the Real
Property to exist as the result of any activity by Buyer or Buyer's
Representatives undertaken in connection with the Real Property. If any such
lien shall be filed against the Real Property or any portion of the Real
Property, Buyer shall cause the lien to be discharged within ten (10) business
days after the filing thereof. The provisions of this Section 7.6 shall survive
the Closing and delivery of the Deed and shall further survive any earlier
termination of this Agreement.

                                       13

<PAGE>

        7.7     Estoppel Certificates. Following the Effective Date, Seller and
Buyer shall reasonably cooperate so as to allow the prompt delivery of Estoppel
Certificates ("Estoppel Certificates") substantially in the form attached hereto
as Exhibit 7.7(i) to the Tenants. Seller shall thereafter reasonably endeavor to
obtain executed Estoppel Certificates from the Tenants, and copies of any of the
Estoppel Certificates received by Seller shall be promptly delivered to Buyer.
Although Seller shall reasonably endeavor to obtain signed Estoppel
Certificates, Seller shall have no obligation to do so.

        In the event that a signed Estoppel Certificate is not received from
Omnicom at least three (3) business days prior to the Expiration Date, Seller
shall provide to Buyer a Seller's Certificate with respect to the Omnicom Lease
substantially in the form attached hereto as Exhibit 7.7(ii) ("Landlord's
Certificate").

        Subsequent to the exercise of the Option by Buyer, in the event that (i)
the Estoppel Certificate obtained from Omnicom has a date earlier than thirty
(30) days prior to the intended Closing Date, or (ii) a Landlord's Certificate
is given with respect to the Omnicom Lease (by reason of the failure of Omnicom
to timely deliver an Estoppel Certificate), Buyer shall be entitled to request
that Seller obtain an updated Estoppel Certificate ("Updated Estoppel
Certificate") in connection with the Lease with Omnicom, so as to result in an
Updated Estoppel Certificate having a date no earlier than thirty (30) days
prior to the intended Closing Date. Although Seller shall reasonably endeavor to
obtain such an Updated Estoppel Certificate, Seller shall have no obligation to
do so.

        7.8     Approval by Buyer. Buyer shall have the right to review and
approve, in its sole, absolute and subjective discretion, during the Term all
aspects of the Property, including but not limited to, (i) the Due Diligence
Materials, (ii) the physical and environmental condition of the Real Property,
including, without limitation, the condition of the Improvements, the condition
of the soil at the Real Property, the condition of the ground water at the Real
Property, and the presence or absence of any hazardous materials at the Real
Property, (iii) the financial condition of the Property, including, without
limitation, the feasibility, convertibility, desirability and suitability of the
Property for Buyer's intended use and purposes, (iv) the legal condition of the
Property, including, without limitation, the Property's compliance or
non-compliance with all statutes, ordinances, codes, regulations, decrees,
orders and laws applicable to the Property, (v) the Service Contracts, if any,
being assumed by Buyer, (vi) the existence or non-existence of any governmental
or quasi-governmental entitlements, if any, affecting the Property or any
portion of the Property, (vii) any dimensions or specifications of the Real
Property or any part thereof, (viii) the zoning, building and land use
restrictions applicable to the Real Property or any portion thereof, (ix) the
Estoppel Certificates, and (x) all other matters which Buyer deems relevant to
its purchase of the Property. In the event that Buyer elects to exercise the
Option in accordance with the provisions of Section 1.4, Buyer shall be deemed
to have approved all aspects of the Property, including, without limitation, the
matters summarized in this Section 7.8. The deemed approval by Buyer pursuant to
the provisions of this Section 7.8, shall not be construed to lessen or
otherwise modify Seller's obligations pursuant to Seller's

                                       14

<PAGE>

representations and warranties as set forth in Section 12.2. If Buyer elects not
to timely exercise the Option, then as provided in Section 1.5, this Agreement
shall terminate, all rights and obligations hereunder of each party shall be at
an end (except those matters which are specifically stated in this Agreement to
survive the termination), and each party shall bear its own costs incurred
hereunder. Notwithstanding the failure of Buyer to timely exercise the Option,
the Option Payment shall be retained by Seller, except as otherwise provided in
this Agreement. If Buyer timely exercises the Option, in accordance with the
provisions of Section 1.4, then Buyer shall be considered to have elected to
proceed with the purchase of the Property in accordance with the provisions of
this Agreement.

        7.9     Approval of Service Contracts. At Buyer's election, Buyer may
specify, by a separate written notice to Seller, given prior to the date on
which the Exercise Notice is given, its approval of one or more of the Service
Contracts. Any assignable Service Contracts so approved, shall not be terminated
by Seller, and responsibility for payment thereof accruing as of and subsequent
to the Closing Date shall be assumed by Buyer effective as of the Closing. Any
Service Contract not specifically approved by Buyer by written notice given
prior to the date on which the Exercise Notice is given, shall be deemed
disapproved and shall be terminated by Seller prior to the Closing. Seller shall
be solely responsible for any such terminated Service Contracts and for the
payment of all amounts accruing under assumed Service Contracts prior to the
Closing Date.

8.      CONDITIONS TO CLOSING.

        8.1     Seller's Conditions. Following the due exercise by Buyer of the
Option, if at all, the obligation of Seller to sell and convey the Property
pursuant to this Agreement is subject to the satisfaction on or before the
Closing Date (or such earlier date as is specifically set forth in this
Agreement) of all of the following conditions precedent, which conditions are
for the benefit of Seller only and the satisfaction of which may be waived only
in writing by Seller:

                8.1.1   Buyer's Deliveries. Delivery and execution by Buyer of
all monies, items and instruments required to be delivered by Buyer pursuant to
this Agreement;

                8.1.2   Buyer's Representations. Buyer's warranties and
representations set forth herein shall be true and correct as of the Closing
Date;

                8.1.3   Buyer's Performance. Buyer shall have performed each and
every agreement to be performed by Buyer pursuant to this Agreement;

                8.1.4   Prior Closings. The "Closing" as contemplated by each of
the King Street Agreement and the 625 Agreement, shall have timely occurred (or
shall be concurrently occurring) in accordance with the King Street Agreement
and the 625 Agreement, respectively, unless either such Closing or both such
Closings shall be prevented solely by a default by Seller under the King Street
Agreement and/or a default by Townsend 625 under the 625 Agreement;

                                       15

<PAGE>

                8.1.5   Lender Consent. The written consent of Lender to the
transaction as contemplated by this Agreement, including, without limitation,
the Withdrawals and other matters as contemplated by Section 3.6, shall have
been obtained by Seller prior to July 22, 2003; and

                8.1.6   First Offer. Omnicom Group, Inc. ("Omnicom") shall have
failed to exercise the right of first offer as set forth in Article 26 of the
lease dated November 8, 1999 by and between Seller, as landlord, and Organic,
Inc. (predecessor to Omnicom), as tenant, in response to a notice dated July 9,
2003 given by Seller to Omnicom pursuant to the provisions of such Article 26.

        8.2     Buyer's Conditions. Following the due exercise by Buyer of the
Option, if at all, the obligation of Buyer to acquire the Property pursuant to
this Agreement is subject to the satisfaction on or before the Closing Date (or
such earlier date as is specifically set forth in this Agreement) of all of the
following conditions precedent which conditions are for the benefit of Buyer
only and the satisfaction of which may be waived only in writing by Buyer:

                8.2.1   Seller's Deliveries. Delivery and execution by Seller of
all instruments and other items required to be delivered by Seller pursuant to
this Agreement;

                8.2.2   Seller's Representations. Seller's warranties and
representations set forth herein shall be true and correct as of the Closing
Date;

                8.2.3   Seller's Performance. Seller shall have performed each
and every agreement to be performed by Seller pursuant to this Agreement;

                8.2.4   Buyer's Title Policy. As of the Closing, the Title
Company shall have issued or shall have committed to issue, upon the sole
condition of the payment of its regularly scheduled premium, the Buyer's Title
Policy;

                8.2.5   Estoppel Certificate. In the event that Buyer is
entitled to request an Updated Estoppel Certificate as described in Section 7.7,
Seller shall have delivered to Buyer, and Buyer shall have approved, such
Updated Estoppel Certificate. The approval by Buyer of such Updated Estoppel
Certificate shall not be withheld unless the Updated Estoppel Certificate from
Omnicom (i) is materially different (in a manner detrimental to the landlord)
than (A) the initial Estoppel Certificate, if any, obtained from Omnicom
pursuant to the provisions of Section 7.7 or (B) the Landlord's Certificate, if
given, or (ii) reflects a default by either Seller, as landlord, or Omnicom, as
tenant, pursuant to the Omnicom Lease (which default is other than a default
described in the initial Estoppel Certificate, if any, or in the Landlord's
Certificate).

        If the Updated Estoppel Certificate is materially different or reflects
a default by either Seller or Omnicom as described in the immediately preceding
sentence, and Buyer declines to approve such Updated Estoppel Certificate, Buyer
shall promptly give written notice of such disapproval to Seller, which notice
("Disapproval Notice") shall set forth the

                                       16

<PAGE>

basis for the disapproval. Seller shall have a period of thirty (30) days
following the date on which the Disapproval Notice is given within which to
obtain an additional Updated Estoppel Certificate, which deletes or otherwise
satisfactorily modifies the initial Updated Estoppel Certificate so as to
reasonably remedy the basis for disapproval of such initial Updated Estoppel
Certificate by Buyer. If Seller fails to obtain an additional satisfactory
Updated Estoppel Certificate within the thirty-day period, this condition shall
be deemed to have failed. If Seller obtains an additional Updated Estoppel
Certificate constituting an acceptable Updated Estoppel Certificate, as
described immediately above, this condition shall be deemed to have been
satisfied. Any scheduled Closing shall be postponed so as to allow Seller
sufficient time as contemplated by this Section 8.2.5 to obtain the additional
Updated Estoppel Certificate;

                8.2.6   Other Properties. Buyer shall not have terminated the
King Street Agreement or the 625 Agreement solely by reason of a default by
Seller or 625 Townsend, respectively, thereunder, or by reason of the
nonsatisfaction of a condition precedent to Buyer's obligations thereunder;

                8.2.7   No Termination. Buyer shall not have terminated this
Agreement through exercise of a termination right provided to Buyer under this
Agreement;

                8.2.8   Lender Consent. The written consent of Lender as
contemplated by Section 8.1.5 above shall have been timely obtained by Seller.
Seller shall provide a copy of such written consent to Buyer promptly following
its receipt; and

                8.2.9   First Offer. Omnicom shall have failed to exercise the
right of first offer as more particularly described in Section 8.1.6 above.

        8.3     Failure of Conditions. If any of the conditions set forth in
Section 8.1 is not timely satisfied or waived by Seller in writing, Seller shall
have the right to terminate this Agreement by written notice given to Buyer
within five (5) business days following the date for satisfaction of such
condition. If any of the conditions set forth in Section 8.2 is not timely
satisfied or waived by Buyer in writing, Buyer shall have the right to terminate
this Agreement by written notice given to Seller within five (5) business days
following the date for satisfaction of such condition. If either party shall so
terminate this Agreement, this Agreement and the rights and obligations of Buyer
and Seller shall terminate and be of no further force or effect, except as to
those matters which are specifically stated in this Agreement to survive
termination, and except as to the rights of the nondefaulting party if the
failure of condition shall constitute a default by the other party. In the event
that this Agreement is terminated pursuant to the provisions of this Section
8.3, and neither Seller nor Buyer is in default pursuant to this Agreement, the
Title Company is hereby instructed to return promptly to the party which placed
such items into Escrow all funds (including the Deposit, and all accrued
interest thereon, which is to be promptly returned to Buyer) and documents which
are held by the Title Company on the date of termination. In the event of any
such termination, (i) Seller shall, in addition, return to Buyer any portion of
the Deposit, together with interest deemed accrued thereon, distributed to
Seller pursuant to the

                                       17

<PAGE>

provisions of Section 3.6, and (ii) the Option Payment shall be retained by
Seller. Notwithstanding any of the above provisions of Section 8.3 to the
contrary, in the event of a termination of this Agreement by reason of a failure
of the conditions set forth in Sections 8.1.5, 8.2.6 (by reason of a default of
Seller or 625 Townsend only), or 8.2.8, Seller shall return the Option Payment
to Buyer within two (2) business days thereafter. Further, in the event of a
termination of this Agreement by reason of the failure of the conditions set
forth in Sections 8.1.6 and 8.2.9, if Buyer has previously paid the Option
Payment to Seller, Seller shall return such Option Payment to Buyer within two
(2) business days following the date of termination. In the event of a default
by Buyer, the return of the Deposit and the disposition of the Option Payment
shall be governed by the provisions of Section 19.1. In the event of a default
by Seller, the Deposit and all interest accrued or deemed accrued thereon,
including any portion that is released to Seller pursuant to Section 3.6, and
the Option Payment shall be returned to Buyer within two (2) business days
thereafter.

        8.4     Satisfaction of Conditions. The occurrence of the Closing shall
constitute satisfaction of the conditions set forth in Sections 8.1 and 8.2 not
otherwise specifically satisfied or waived by Buyer or Seller.

9.      DELIVERIES INTO ESCROW.

        9.1     Deliveries by Seller. One or before the Closing, Seller shall
deliver or cause to be delivered into Escrow the following documents duly
executed and acknowledged where appropriate:

                9.1.1   Deed. A grant deed (the "Deed") in the form attached
hereto as Exhibit 9.1.1 conveying the Real Property to Buyer as provided in this
Agreement which Deed is to be duly executed and acknowledged by Seller;

                9.1.2   Bill of Sale. Bill of sale ("Bill of Sale") in the form
attached hereto as Exhibit 9.1.2 conveying the Personal Property to Buyer which
Bill of Sale is to be duly executed by Seller;

                9.1.3   Assignment. The Assignment in the form attached hereto
as Exhibit 9.1.3 which is to be duly executed by Seller and Buyer;

                9.1.4   FIRPTA. Certificate of non-foreign status to confirm
that Buyer is not required to withhold part of the Purchase Price pursuant to
Section 1445 of the Internal Revenue Code of 1986, as amended which is to be
duly executed by Seller;

                9.1.5   Form 593-W. Franchise Tax Board Form (593-W) which is to
be duly executed by Seller;

                9.1.6   Seller's Authority. Such proof of Seller's authority and
authorization to enter into this Agreement and consummate the transaction
contemplated hereby and such proof of the power and authority of the
individual(s) executing and/or delivering any

                                       18

<PAGE>

instruments, documents or certificates on behalf of Seller to act for and bind
Seller as may be reasonably required by Title Company; and

                9.1.7   Other Documents. Such other documents as may be
reasonably necessary and appropriate to complete the Closing of the transaction
contemplated herein.

        9.2     Deliveries by Buyer. On or before the Closing, Buyer shall
deliver or cause to be delivered into Escrow the following funds and documents
duly executed and acknowledged where appropriate:

                9.2.1   Cash. The cash portion of the Purchase Price and such
additional sums as are necessary to pay the Buyer's share of closing costs,
prorations and any fees as more particularly set forth in Section 10 below;

                9.2.2   Assignment. The Assignment which is to be duly executed
by Seller and Buyer;

                9.2.3   Buyer's Authority. Such proof of Buyer's authority and
authorization to enter into this Agreement and consummate the transaction
contemplated by this Agreement, and such proof of the power and authority of the
individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of Buyer to act for and bind Buyer as may be reasonably
required by Title Company; and

                9.2.4   Other Documents. Such other documents as may be
reasonably necessary and appropriate to complete the Closing of the transaction
contemplated herein.

        9.3     Tenant Notification Letters. Seller shall execute a Tenant
Notification Letter in the form attached hereto as Exhibit 9.3 to each of the
Tenants pursuant to the Leases (the "Tenant Notification Letter"), indicating
the change of ownership of the Property with the name and address of the Buyer
and the Closing Date, and shall, upon the Closing, deliver the executed Tenant
Notification Letter to Buyer.

        9.4     Delivery to Buyer Upon Closing. Seller shall deliver possession
of the Property to Buyer upon the Closing.

        9.5     Delivery Following Closing. Concurrently with the Closing,
Seller shall deliver to Buyer outside of Escrow: (i) the originals of the
Leases; (ii) the originals of the Service Contracts, if any; (iii) all building
plans and specifications with respect to the Real Property which are in the
possession of Seller or reasonably accessible to Seller or its property manager;
(iv) all structural reviews, architectural drawings, engineering, soils,
seismic, geologic and architectural reports in the possession of Seller or
reasonably accessible to Seller or its property manager; and (v) such other
matters and documents in the possession of Seller or reasonably accessible to
Seller or to its property manager as Buyer may reasonably request.

                                       19

<PAGE>

10.     PRORATIONS; CLOSING COSTS; CREDITS.

        10.1    Prorations.

                10.1.1  Rent. Rents, revenue and other income from the Property
actually collected as of the Closing with respect to the Leases shall be
prorated through Escrow as of 12:01 a.m. on the Closing Date with Seller
entitled to the prorated portion of such items attributable to the period prior
to such date and time and Buyer entitled to the prorated portion of such items
as of and following such date and time. Any prepaid rent paid by the Tenants
pursuant to the Leases shall be credited to Buyer. If any rent or other payments
under the Leases are in arrears as of the Closing Date, Buyer shall use
reasonable efforts following the Closing to collect such rent or other payments
provided that in no event shall Buyer be obligated to commence litigation or
expend funds to effect collection. Nothing in this Section 10.1.1 shall restrict
Seller's right to collect delinquent rents directly from a Tenant by any legal
means; provided, however, that Seller shall have no right to terminate a Lease
or disturb a Tenant's possession. Delinquent rent collected by Seller from a
Tenant subsequent to the Closing shall be promptly paid to Buyer to the extent
that Buyer is entitled to such rent in connection with the period on and after
the Closing Date, and delinquent rent collected by Buyer from a Tenant
subsequent to the Closing Date shall be promptly paid to Seller to the extent
that Seller is entitled to such rent pursuant to the provisions of this
Agreement relating to the period prior to the Closing Date. Seller and Buyer
agree that all rent from Tenants received by Seller or Buyer following Closing
shall be applied first to current rent, then to delinquent rent, if any, for any
period following the Closing, and then to delinquent rent, if any, for periods
prior to Closing.

                10.1.2  Taxes and Assessments. All non-delinquent real estate
taxes on the Property payable by the owner shall be prorated through Escrow
based on the actual current tax bill as of 12:01 a.m. on the Closing Date with
Seller responsible for all such taxes attributable to the period prior to such
date and time and Buyer responsible for all such taxes attributable to the
period as of and following such date and time. If after the Closing,
supplemental real estate taxes are assessed against the Property by reason of
any event occurring prior to the Closing Date, Buyer and Seller shall adjust the
proration of the real estate taxes following the Closing. Any delinquent taxes
and assessments on the Property shall be paid at the Closing from funds accruing
to Seller. Any current installments with respect to assessments on the Real
Property shall be prorated through Escrow as of 12:01 a.m. on the Closing Date
and Seller shall have no obligation to pay any amount with respect to any such
assessments other than the prorated current installment and any delinquent
installments. Any refund in connection with real estate taxes relating to the
Property attributable to the period prior to the Closing Date shall be paid to
Seller.

                10.1.3  Utility Charges; Utility charges payable by the owner of
the Real Property, and all other customary charges or costs incident to the
ownership of the Property shall be prorated through Escrow as of 12:01 a.m. on
the Closing Date. Seller shall be responsible for all such utility charges
payable by Seller accruing and attributable to the Property through the day
prior to the Closing Date and Buyer shall be responsible for all

                                       20

<PAGE>

such utility charges accruing and attributable to the Property commencing as of
the Closing Date. Seller, as landlord under the Leases, may be currently
collecting from Tenants under the Leases additional rent to cover taxes,
insurance, utilities(to the extent not paid directly by a Tenant), any other
maintenance, operating costs, and expenses (collectively, "Operating Costs") in
connection with the ownership, operation, maintenance, and management of the
Property. Tenant reimbursements for Operating Costs shall be prorated in the
same manner as rents are prorated under Section 10.1.1 above. Seller shall not
assign to Buyer any deposits, if any, which Seller has with any utility
companies servicing the Property. Buyer shall arrange with such companies to
have accounts opened in Buyer's name beginning at 12:01 a.m. on the Closing
Date. To the extent possible, Seller shall obtain billings and meter readings as
of the Closing Date and all utility charges to be prorated between Seller and
Buyer shall be prorated based upon the information then available. Seller and
Buyer shall make any adjustments required to be made subsequent to the Closing
in the event the information available at the Closing is incorrect, which
adjustments shall include, without limitation, any adjustments required in
connection with the Operating Costs, which adjustments shall be made in a
reasonable period following the availability of correct or adjusted information.

                10.1.4  Service Contracts. Amounts payable pursuant to Service
Contracts to be assumed by Buyer shall be prorated through Escrow as of 12:01
a.m. on the Closing Date. Seller shall be responsible for such amounts accruing
and attributable to the Property through the day prior to the Closing Date and
Buyer shall be responsible for such amounts accruing and attributable to the
Property commencing as of the Closing Date. Such amounts shall be prorated
between Seller and Buyer based upon information available as of the Closing and
Seller and Buyer shall make any adjustments required to be made subsequent to
the Closing in the event that the information available at the Closing is
incorrect.

                10.1.5  Calculation of Prorations. All prorations shall be made
on the basis of the actual number of days of the month which have elapsed as of
12:01 a.m. on the Closing Date.

                10.1.6  Proforma Closing Statement. Buyer and Seller shall
reasonably cooperate to produce at least one business day prior to the Closing
Date, a schedule of prorations in accordance with the provisions of this
Agreement which is as complete and accurate as is then reasonably possible. All
prorations which can be reasonably estimated as of the Closing Date shall be
made in Escrow on the Closing Date. All other prorations and any adjustments to
the initial estimated prorations, shall be made by Buyer and Seller within
thirty (30) days following the Closing or such later time as may be reasonably
required, in the exercise of due diligence to obtain the necessary information.
Any net credit due one party from the other as the result of such post-Closing
prorations and adjustments shall be paid to the other in cash immediately upon
the parties' written agreement to a final schedule of post-Closing adjustments
and prorations.

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        10.2    Closing Costs.

                10.2.1  Seller's Costs. Seller shall pay (i) all county and city
documentary transfer and other transfer or conveyance taxes; (ii) fifty percent
(50%) of all recording costs, and (iii) its own attorneys' fees.

                10.2.2  Buyer's Costs. Buyer shall pay (i) one hundred percent
(100%) of all escrow fees and fifty percent (50%) of all recording costs; (ii)
the premium for the Buyer's Title Policy, including the premium for any
endorsements; (iii) the premium for the Buyer's lender's title policy, if any;
(iv) the cost of the Survey; and (v) its own attorneys' fees.

                10.2.3  Credits. Buyer shall be credited and Seller shall be
debited in an amount equal to all cash security deposits owing to any Tenants
with respect to the Leases, except to the extent that Seller was entitled to and
did apply any part of such deposits to Tenant obligations under the Leases.
Seller shall assign to Buyer at Closing, at Seller's cost and expense (as
between Seller and Buyer), any non-cash security deposits such as letters of
credit made by the Tenants under the Leases.

                10.2.4  Other Expenses. Buyer and Seller shall each pay all
legal and professional fees and fees of other consultants incurred by Buyer and
Seller respectively.

        10.3    City Fees. Seller shall be responsible for the payment of any
child care fee owing the City of San Francisco in connection with the Real
Property.

11.     OPERATION OF PROPERTY PENDING THE CLOSING. Following the Effective Date
and pending the Closing, the Seller shall operate the Property in accordance
with the following:

        11.1    Normal Course of Business. Seller shall continue to operate,
manage and maintain the Property in such condition so that the Property shall be
in the same condition as of the Closing Date as it is as of the Effective Date,
reasonable wear and tear and casualty excepted. In no event shall Seller be
required to improve the Real Property or to undertake any expenditures resulting
in improvement of the Real Property. Seller shall maintain liability and
property insurance policies in connection with the Property and shall keep in
effect and renew without modification all licenses, permits and entitlements
applicable to the Property. Seller's existing liability and property insurance
pertaining to the Property will be canceled by Seller as of the Closing Date.

        11.2    Further Encumbrances. Seller shall not voluntarily execute any
documents or otherwise take any action which will have the result of further
encumbering the Property in any fashion;

        11.3    Leasing. Seller shall not terminate, amend or otherwise modify
the Leases, or enter into any new lease, without the prior consent of Buyer,
which consent shall not be unreasonably withheld or delayed prior to the
Expiration Date, and which consent may be withheld by Buyer in its sole
discretion if Buyer shall exercise the Option; provided,

                                       22

<PAGE>

however, that Seller shall be entitled to enter into new leases or rental
arrangements without the prior written consent of Buyer so long as such new
leases and/or rental arrangements are scheduled to terminate prior to the
intended date for Closing or are terminable upon thirty (30) days (or less)
prior written notice; and

        11.4    New Obligations. Without the prior written consent of Buyer,
which consent shall not be unreasonably withheld or delayed, Seller shall not
enter into any maintenance contract, service contract or any other contract
affecting or relating to the Property or any portion thereof which cannot be
canceled upon thirty (30) days (or less) prior written notice.

12.     REPRESENTATIONS AND WARRANTIES.

        12.1    No Representations or Warranties by Seller. Except as expressly
set forth in this Agreement, Seller has not made any warranty or representation,
express or implied, written or oral, concerning the Property.

        12.2    Seller's Representations and Warranties. Seller represents and
warrants to Buyer that:

                12.2.1  Authority. This Agreement constitutes the valid and
binding obligation of Seller and is enforceable against Seller in accordance
with its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally and general equitable principles.
Seller is a limited liability company, validly formed, duly organized and in
good standing under the laws of the State of California. Seller has full power
and authority to enter into this Agreement, to perform its obligations
hereunder, and to consummate the transactions and conveyances contemplated
hereby, and each of the persons signing this Agreement or any other document or
instrument contemplated hereby on behalf of Seller is authorized to do so. The
execution and delivery of this Agreement, delivery of money and all required
documents, Seller's performance of this Agreement and the transaction
contemplated hereby have been duly authorized by all requisite action on the
part of Seller, and no consent or approval of any third party is required for
the execution and delivery hereof by Seller, Seller's performance hereof, or the
consummation of the transactions contemplated hereby on Seller's part, except
for such consents or approvals as have been obtained and remain in full force
and effect and except for the consent of the Lender as contemplated by Section
8.1.5. Neither the execution and delivery of this Agreement, nor the transaction
contemplated by this Agreement will conflict in any material respect with, or
constitute a breach under, any agreement or instrument to which Seller is a
party or by which Seller or the Property is bound;

                12.2.2  Service Contracts. The Service Contracts listed on
Exhibit 2.3(ii) are all of the agreements concerning the operation and
maintenance of the Property to which Seller is a party; and excepting for any
such matters which Buyer has agreed in writing to permit to remain in effect
following the Closing, no such agreements will continue to be binding on the
Real Property or a successor owner of the Real Property after Closing;

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<PAGE>

                12.2.3  Condemnation. Seller has received no written notice of,
and to Seller's knowledge there are no, pending or threatened condemnation
proceedings against or relating to the Real Property;

                12.2.4  Litigation. Except as disclosed to Buyer in writing
prior to the Effective Date and listed on Schedule 12.2.4 to this Agreement, (or
as subsequently disclosed in writing to, and approved in writing by, Buyer) no
litigation has been served on Seller, and to Seller's knowledge, no litigation
is otherwise pending or threatened against Seller, to restrain or enjoin the
sale or transfer of the Property to Buyer, or which challenges the existence or
power of Seller or Seller's authority to enter into or perform under this
Agreement, or which asserts a claim of ownership of the Property or any interest
therein, or which claims any right to occupy or use the Real Property or any
portion thereof, or which could adversely affect the use or value of the
Property, or which, if determined adversely to Seller, might materially
adversely affect Seller's ability to perform its obligations under this
Agreement or to consummate the transactions contemplated hereby;

                12.2.5  Violations. Except as disclosed to Buyer in writing
prior to the Effective Date and listed on Schedule 12.2.5 to this Agreement, (or
as subsequently disclosed in writing to, and approved in writing by, Buyer),
Seller has not received written notice asserting or alleging the existence of,
and to Seller's knowledge there are no, uncured violations of any federal, state
or local law or any covenant or restriction of record which would adversely
affect the value or marketability of the Property or the ability to make use
thereof, or Seller's ability to perform hereunder. Except as disclosed to Buyer
in writing prior to the Effective Date and listed on a schedule to this
Agreement (or as subsequently disclosed in writing to, and approved in writing
by, Buyer), Seller has not received written notice asserting or alleging the
existence of, and to Seller's knowledge, there are no, uncured building code
violations, health and safety code violations, federal, state or local agency
actions regarding environmental matters or zoning violations currently affecting
the Real Property;

                12.2.6  Access. To the best of Seller's knowledge, no fact or
condition exists which may result in the termination or reduction of the current
access from the Real Property to existing roads and highways;

                12.2.7  Foreign Person. Seller is not a "foreign person" as
defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and
the income tax regulations issued thereunder;

                12.2.8  Leases. Except for the Leases listed in Exhibit 2.3(i),
true, correct and complete copies of which have been delivered or made available
by Seller to Buyer, there are no leases, rental agreements or other agreements
for the occupancy, use or possession of any portion of the Real Property, and no
person, other than the Tenants listed in such exhibit, has any right of
occupancy, use or possession with respect to the Real Property or any portion
thereof; except as disclosed on Schedule 12.2.8 attached hereto, such Leases are
in full force and effect, and the Tenants thereunder are not in default and

                                       24

<PAGE>

have no rights of setoff, abatement or deduction from the rent payable
thereunder; and the landlord under the Leases has no outstanding obligation to
provide any Tenant with an allowance to construct, or to construct at its own
expense, any tenant improvements, or to pay any other amounts to or for the
account of any Tenant;

                12.2.9  Leasing Commissions. Except as disclosed to Buyer in
writing prior to the Effective Date and listed on Schedule 12.2.9 to this
Agreement (or subsequently disclosed in writing to, and approved in writing by
Buyer), there are no leasing commissions or other compensation required to be
paid in connection with the Leases as of the date hereof, at any time during the
Term of such Leases or upon extension or renewal thereof;

                12.2.10 Developmental Requirements. Except as listed on Schedule
12.2.10 attached hereto, Seller has fully performed all of Seller's obligations
to any governmental authority, and all conditions of any consent, approval or
authorization imposed by any governmental authority, arising out of or in
connection with Seller's construction, renovation and/or rehabilitation of the
Improvements or the use or occupancy of the Real Property, including, without
limitation, the payment in full of all permit or license fees or charges, in
lieu payments, contributions to housing or other funds, dedication of property
to the public or for a public purpose and the payment and/or performance of all
other governmental exactions of any kind or nature;

                12.2.11 Hazardous Materials. To Seller's knowledge the Real
Property is in compliance with all Hazardous Materials Laws (as hereinafter
defined); and any underground or aboveground storage tanks removed by Seller
from the Real Property have been removed in compliance with applicable Hazardous
Materials Laws. For the purposes of this Agreement, "Hazardous Materials" shall
mean any oil or petroleum products, flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, or other hazardous or toxic
substance, material or waste which is regulated by any federal, state or local
governmental authority; and "Hazardous Materials Laws" means all federal, state
and local statutes, ordinances, rules and regulations relating to Hazardous
Materials, including those pertaining to health, safety, industrial hygiene or
the environment, such as, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, and any similar state laws;
and

                12.2.12 Utilities. To Seller's knowledge, all electric, natural
gas, telephone, stone drainage, water, sewer service and other utility services
required for the use, occupancy and operation of the Real Property for the
purposes for which Seller has heretofore used, occupied and operated the Real
Property are available to the Real Property, have been connected to the
Improvements and are operating pursuant to valid permits, licenses and approvals
and governmental authorities.

        12.3    Buyers Representations and Warranties. Buyer represents and
warrants to Seller that:

                                       25

<PAGE>

                12.3.1  Authority to Execute; Organization. This Agreement
constitutes the valid and binding obligation of Buyer and is enforceable against
Buyer in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles. Buyer is a corporation, validly formed, duly
organized, and in good standing under the laws of the State of Delaware. Buyer
has full power and authority to enter into this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby,
and each of the persons signing this Agreement or other document or instrument
contemplated hereby on behalf of Buyer is authorized to do so. The execution and
delivery of this Agreement, delivery of money and all other required documents,
Buyer's performance of this Agreement and the transactions contemplated hereby
have been, or prior to the duly authorized by all requisite action on the part
of Buyer and no consent or approval of any third party is required for the
execution and delivery hereof by Buyer, Buyer's performance hereof or the
consummation of the transaction contemplated hereby on Buyer's part, except for
such consents or approvals as have been obtained and remain in full force and
effect and except for the consent of Buyer's Board of Directors, which consent
is required in connection with the exercise of the Option by Buyer. Neither the
execution and delivery of this Agreement, nor the transaction as contemplated by
this Agreement will conflict in any material respect with, or constitute a
breach under, any agreement or instrument to which Buyer is a party, or to which
Buyer is bound;

                12.3.2  No Encumbrance. Prior to Closing, Buyer shall neither
encumber nor cause any liens to be created against the Property in any way, nor
shall Buyer, at any time, record this Agreement or a memorandum thereof; and

                12.3.3  Principal; Financial Resources. Buyer is acting as a
principal in connection with the transaction as contemplated by this Agreement
and presently possesses, and will possess as of the Closing, the financial
resources to timely consummate the purchase and sale transaction contemplated by
this Agreement.

        12.4    Knowledge Defined. References to the "knowledge" of Seller shall
refer only to the current actual knowledge of Ronaldo Cianciarulo and shall not
be construed, by imputation or otherwise, to refer to the knowledge of any
affiliate of Seller, to any property manager, or to any other officer, agent,
manager, representative or employee of Seller or any affiliate thereof or to
impose upon such person any duty to investigate the matter to which such actual
knowledge, or the absence thereof, pertains.

13.     INDEMNIFICATION.

        13.1    Indemnification of Buyer. Seller hereby agrees to indemnify
Buyer against, and to hold Buyer harmless from, all claims, losses, damages,
liabilities, costs and expenses, including, but not limited to, reasonable legal
fees and disbursements ("Claims") incurred or suffered by Buyer relating to the
Property which arise, result from, or relate to (i) acts, occurrences, or
matters that took place prior to the Closing, to the extent that any such Claim
described in this clause (i) is covered by the commercial general liability
insurance

                                       26

<PAGE>

policy or other applicable insurance coverage maintained by Seller, and, in this
connection, Seller represents and warrants that Seller has, during the period of
its ownership, maintained and continues to maintain commercial general liability
insurance coverage with respect to its ownership of the Real Property with a
coverage limit not less than One Million Dollars ($1,000,000) per occurrence; or
(ii) any breach of any of the representations or warranties of Seller set forth
in Section 12.2 of this Agreement subject, however, to the limitations of
Section 17.4. Without limiting the foregoing and without regard to whether or
not any such matter is covered by Seller's liability insurance as provided
above, Seller hereby represents and warrants to Buyer that no other party holds
any right or option to purchase or otherwise acquire the Property, any portion
thereof or any interest therein, and Seller shall indemnify, defend and hold
Buyer harmless from and against any Claims suffered or incurred by Buyer by
reason of any party asserting any such right or option against Seller or Buyer.
Notwithstanding the above sentence, it is acknowledged that the Tenants hold
possessory rights pursuant to their respective Leases in connection with
portions of the Real Property. In addition, without limiting the foregoing and
without regard to whether or not any such matter is covered by Seller's
liability insurance as provided above, Seller shall be solely responsible for
causing the applicable governmental authorities to issue final certificates of
occupancy with respect to the Improvements as promptly as reasonably possible,
and shall indemnify, defend, and hold Buyer harmless from and against any and
all Claims arising out of or in any way connected with any failure by Seller to
cause the applicable governmental authorities to issue final certificates of
occupancy with respect to the Improvements as promptly as is reasonably
possible. Following the Closing, Buyer shall reasonably cooperate with Seller in
connection with the securing by Seller of the above-described certificates of
occupancy.

        13.2    Defense of Claims Against Buyer. With respect to any Claim for
which Buyer has requested indemnification under Section 13.1, Seller shall be
entitled to assume the defense of any related litigation, arbitration or other
proceeding, provided that Buyer may at its election and expense, participate in
such defense, and provided further that if there is any difference of opinion or
strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Seller's counsel will, after
consultation with Buyer's counsel, determine the actual strategy, defense or
counterclaim to be employed. At Seller's reasonable request, Buyer will
cooperate with Seller in the preparation of any defense for any such Claim and
Seller will reimburse Buyer for any reasonable expenses incurred in connection
with such request. If Seller does not elect to assume the defense of any such
matter and such matter is defended by Buyer, Seller shall have the right, at its
sole expense, to employ separate counsel acceptable to Buyer and participate in
such defense, provided that if there is any difference of opinion or strategy
with respect to the defense of such action or the assertion of counterclaims to
be brought with respect thereto, Buyer's counsel will, after consultation with
Seller's counsel, determine the actual strategy, defense and/or counterclaim to
be employed.

        13.3    Indemnification of Seller. Buyer hereby agrees to indemnify
Seller against, and to hold Seller harmless from, all Claims incurred or
suffered by Seller relating to the

                                       27

<PAGE>

Property which arise, result from or relate to (i) acts, occurrences or matters
that take place subsequent to the Closing to the extent that any such Claim
described in this clause (i) is covered by a commercial general liability
insurance policy or other applicable insurance coverage maintained by Buyer,
and, in this connection, Buyer represents and warrants that Buyer will, during
the period of its ownership, maintain commercial general liability insurance
coverage with respect to its ownership of the Real Property; or (ii) any breach
of any of the representations or warranties of Buyer set forth in Section 12.3
of this Agreement.

        13.4    Defense of Claims Against Seller. With respect to any Claim for
which Seller has requested indemnification under Section 13.3, Buyer shall be
entitled to assume the defense of any related litigation, arbitration or other
proceeding, provided that Seller may at its election and expense, participate in
such defense, and provided further that if there is any difference of opinion or
strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Buyer's counsel will, after
consultation with Seller's counsel, determine the actual strategy, defense or
counterclaim to be employed. At Buyer's reasonable request, Seller will
cooperate with Buyer in the preparation of any defense for any such Claim and
Buyer will reimburse Seller for any reasonable expenses incurred in connection
with such request. If Buyer does not elect to assume the defense of any such
matter, and such matter is defended by Seller, Buyer shall have the right, at
its sole expense, to employ separate counsel acceptable to Seller and
participate in such defense, provided that if there is any difference of opinion
or strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Seller's counsel will, after
consultation with Buyer's counsel, determine the actual strategy, defense and/or
counterclaim to be employed.

14.     CASUALTY OR CONDEMNATION.

        14.1    Notice of Casualty. If, following the exercise of the Option and
prior to the Closing Date, any part of the Real Property is damaged or destroyed
by earthquake, flood, landslide, fire or other casualty ("Casualty"), Seller
shall promptly notify Buyer of such fact.

                14.1.1  Insured Casualty. If any Improvements located upon the
Real Property are destroyed or substantially damaged by a Casualty during the
period following the exercise of the Option and prior to the Closing, and such
damage is fully covered (except for a deductible or self-insured retention not
exceeding Twenty-Five Thousand Dollars ($25,000)) by insurance carried by Seller
(an "Insured Casualty"), and (a) the cost of repairing or restoring the damaged
Improvements (as agreed between Buyer and Seller or as determined under Section
14.1.4) ("Restoration Costs") shall exceed Four Million Dollars ($4,000,000)
(the "Insured Casualty Threshold Amount"), or (b) by reason of the Casualty, the
tenant under the Lease in favor of Omnicom shall have the right to terminate
such Lease ("Lease Termination"), Buyer shall have the right to terminate this
Agreement by giving Seller written notice of termination within ten (10)
business days following the date of receipt of Seller's notice of the occurrence
of such destruction or damage (or if a

                                       28

<PAGE>

longer period of time is reasonably required to determine whether a Casualty is
an Insured Casualty, or to agree upon or determine Restoration Costs, within
five (5) business days after the amount of Restoration Costs has been determined
and Buyer has received written confirmation, in a form reasonably satisfactory
to Buyer, from Seller's insurance carrier or carriers that Seller's insurance
will cover such damage). If this Agreement is so terminated, then neither party
shall have any further rights or obligations hereunder (except with respect to
those matters expressly stated to survive such termination), the Deposit
including all Withdrawals, and all interest accrued or deemed to have accrued
thereon, shall be returned to Buyer within two (2) business days thereafter, and
each party shall bear its own costs incurred hereunder. In all events, however,
Seller shall be entitled to retain the Option Payment. If Buyer does not elect
to terminate this Agreement, or if damage to such Improvements occurs, the
Restoration Costs of which are less than the Insured Casualty Threshold Amount
and such Casualty shall not result in a Lease Termination, Buyer shall remain
obligated to perform all of its obligations under this Agreement, and at
Closing, Buyer shall receive a credit against the Purchase Price in the amount
of any insurance proceeds collected and retained by Seller as a result of any
such damage or destruction (other than proceeds of business interruption
insurance), plus the amount of any applicable policy deductible (but reduced by
the costs of any repairs performed by Seller with Buyer's approval, which
approval shall not be unreasonably withheld), and Seller shall assign to Buyer
all rights to such insurance proceeds (other than proceeds of business
interruption insurance relating to periods prior to the Closing) as shall not
have been collected prior to the Closing. Buyer shall have the right to
participate in any adjustment of the insurance claim in connection with any
Casualty, whether or not such Casualty is an Insured Casualty.

                14.1.2  Uninsured Casualty. If any Improvements located upon the
Real Property are destroyed or substantially damaged during the period following
the exercise of the Option and prior to the Closing by a Casualty which is not
an Insured Casualty, and the Restoration Costs (as agreed between Buyer and
Seller or as determined under Section 14.1.4) shall exceed the available
insurance proceeds, if any (other than proceeds of business interruption
insurance), by more than One Million Dollars ($1,000,000) (the "Uninsured
Casualty Threshold Amount"), or if such Casualty shall result in a Lease
Termination, Buyer shall have the right to terminate this Agreement by giving
Seller written notice of termination within ten (10) business days following the
date of receipt of Seller's notice of the occurrence of such destruction or
damage (or if a longer period of time is reasonably required to determine
whether a Casualty is or is not an Insured Casualty, or to agree upon or
determine Restoration Costs or the amount of insurance proceeds which will be
available, within five (5) business days after all such determinations have been
made); whereupon this Agreement shall terminate, except as specified in Section
14.1.3. If this Agreement is so terminated, then neither party shall have any
further rights or obligations hereunder (except with respect to those matters
expressly stated to survive such termination), the Deposit including all
Withdrawals, and all interest accrued or deemed to have accrued thereon, shall
be returned to Buyer within two (2) business days thereafter, and each party
shall bear its own costs incurred hereunder. In all events, however, Seller
shall be entitled to retain the Option Payment. If (a) damage to such
Improvements occurs, but

                                       29

<PAGE>

the Restoration Costs, less the available insurance proceeds, if any (other than
proceeds of business interruption insurance), is less than or equal to the
Uninsured Casualty Threshold Amount and such Casualty does not result in a Lease
Termination, or if (b) Buyer does not elect to terminate this Agreement, or if
(c) Buyer elects to terminate this Agreement, but this Agreement nevertheless
does not terminate due to the operation of Section 14.1.3, then, in any of such
cases, Buyer shall remain obligated to perform all of its obligations under this
Agreement, and at Closing, Buyer shall receive a credit against the Purchase
Price in the amount of (A) any insurance proceeds collected and retained by
Seller as a result of any such damage or destruction (other than proceeds of
business interruption insurance relating to periods prior to the Closing), plus
(B) an amount equal to the lesser of (i) the uninsured Restoration Costs, or
(ii) One Million Dollars ($1,000,000); plus (C) if Section 14.1.3 is applicable,
the Additional Amount specified in Section 14.1.3; but reduced by the costs of
any repairs performed by Seller with Buyer's approval, which approval shall not
be unreasonably withheld, and Seller shall assign to Buyer all rights to such
insurance proceeds as shall not have been collected prior to the Closing (other
than proceeds of business interruption insurance relating to periods prior to
close of escrow). Buyer shall have the right to participate in any adjustment of
the insurance claim in connection with any Casualty, whether or not such
Casualty is an Insured Casualty.

                14.1.3  Additional Credit. If any Improvements located upon the
Real Property are destroyed or substantially damaged during the period following
the exercise of the Option and prior to the Closing by a Casualty which is not
an Insured Casualty, and the Restoration Costs (as agreed between Buyer and
Seller or as determined under Section 14.1.4) shall exceed the available
insurance proceeds, if any (other than proceeds of business interruption
insurance), by an amount greater than the Uninsured Casualty Threshold Amount,
and as a result, Buyer gives notice of termination of this Agreement pursuant to
Section 14.1.2, Seller shall have the right, at its option, for a period of five
(5) business days after Buyer's notice of termination is given, to give notice
to Buyer by which Seller agrees to reduce the Purchase Price by the amount (the
"Additional Amount") by which the Restoration Costs, less the amount of any
available insurance proceeds (other than proceeds of business interruption
insurance), exceeds the Uninsured Casualty Threshold Amount. In such event,
Buyer's notice of termination given under Section 14.1.2 shall be of no effect,
this Agreement shall not be terminated, and the Purchase Price shall be reduced
by giving Buyer a credit at Closing for the Additional Amount as specified in
this Section 14.1.3 above; provided, however, that if the Additional Amount so
computed equals or exceeds Four Million Dollars ($4,000,000), then
notwithstanding the foregoing, Seller's agreement to reduce the Purchase Price
by crediting Buyer the Additional Amount will become effective, and this
Agreement will not be terminated, only if Buyer agrees to accept such price
reduction and purchase the Property.

                14.1.4  Arbitration of Disputes. In the event Seller and Buyer
cannot mutually agree upon the amount of Restoration Costs, such disputed amount
shall be determined in the manner provided in Exhibit 14.1.4 attached hereto.
Either Party may invoke the provisions of this Section 14.1.4 at any time that a
dispute as to any such amount exists, by

                                       30

<PAGE>

delivering written notice to the other party. With respect to the arbitration
provided for in this Section 14.1.4, the Parties agree as follows:

        NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
        DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF
        DISPUTES" PROVISIONS IN THIS AGREEMENT DECIDED BY NEUTRAL ARBITRATION AS
        PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT
        POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY
        INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
        DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN
        THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
        ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO
        ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
        YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

        WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
        ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
        PROVISION TO NEUTRAL ARBITRATION.

                /s/ [ILLEGIBLE]                  /s/ [ILLEGIBLE]
                --------------------------       ------------------------
                Seller's Initial                 Buyer's Initial

                14.1.5  Postponement of Closing. If any of the Improvements
located upon the Real Property are destroyed or substantially damaged during the
period following the exercise the Option and this Agreement is not terminated as
a result thereof, the scheduled Closing shall be postponed to the extent
reasonably necessary to determine whether a Casualty is or is not an Insured
Casualty, to agree upon or determine Restoration Costs or the amount of
insurance proceeds which will be available, or to determine whether this
Agreement will be terminated. Once it has been determined that this Agreement
will not be terminated, and such other matters as may be relevant have also been
determined, either party may give notice to the other requiring that the Closing
occur not more than ten (10) business days following the date such notice is
given.

        14.2    Condemnation. Provided that Buyer has exercised the Option, in
the event that all or any portion of the Real Property shall be taken in
condemnation or under the right of eminent domain after the Effective Date and
before the Closing Date, Buyer, notwithstanding such taking, shall be obligated
to proceed to close the transaction contemplated herein pursuant to the terms
hereof and Seller shall assign and turn over to Buyer, and Buyer shall be
entitled and receive and keep all awards for the taking by eminent domain which
accrue to Seller and there shall be no reduction in the Purchase Price.

                                       31

<PAGE>

15.     COMMISSIONS.

        Seller represents and warrants to Buyer that no real estate broker or
agent has been authorized to act on Seller's behalf, except for GVA Whitney
Cressman, Ltd. ("Seller's Broker"). Buyer represents and warrants to the Seller
that no real estate broker or agent has been authorized to act on Buyer's
behalf, except for Cushman & Wakefield ("Buyer's Broker"). Subject to the
occurrence of the Closing, Seller shall pay real estate brokerage commissions
through Escrow at Closing to Seller's Broker and Buyer's Broker (collectively,
"Brokers") in an amount as separately agreed. Any and all such commissions shall
be paid through Escrow. Buyer and Seller each indemnifies the other party and
agrees to defend and hold the other party harmless from any and all Claims which
now or hereafter may be asserted against the other party for any brokerage fees,
finder's fees, commissions or similar types of compensation which may be claimed
by any person as a result of the indemnifying party's acts in connection with
this transaction, except as otherwise provided herein.

16.     NOTICES.

        All notices, requests or demands to a party hereunder shall be in
writing and shall be given or served upon the other party by personal service,
by certified return receipt requested or registered mail, postage prepaid, or by
Federal Express or other nationally recognized commercial courier, charges
prepaid, addressed as set forth below. Any such notice, demand, request or other
communication shall be deemed to have been given upon the earlier of personal
delivery thereof, three (3) business days after having been mailed as provided
above, or one (1) business day after delivery to a commercial courier for next
business day delivery, as the case may be. Each party shall be entitled to
modify its address by notice given in accordance with this Section 16.

        If to Seller:           Baker Hamilton Properties, LLC
                                601 Townsend Street, Suite 107
                                San Francisco, CA 94103
                                Attention: Ronaldo Cianciarulo

        With a copy to:         Kay & Merkle
                                100 The Embarcadero, Penthouse
                                San Francisco, CA 94105
                                Attn: Walter F. Merkle, Esq.

        If to Buyer:            Macromedia, Inc.
                                600 Townsend Street, Suite 310W
                                San Francisco, CA 94103
                                Attn: Loren Hillberg

        With a copy to:         Heller Ehrman White and McAuliffe
                                333 Bush Street

                                       32

<PAGE>

                                San Francisco, California 94104
                                Attn: Carl Johnson, Esq.

17.     LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.

        17.1    No Reliance on Documents. Except as expressly stated herein,
Seller makes no representation or warranty as to the truth, accuracy or
completeness of any materials, data or information delivered by Seller or its
agents to Buyer in connection with the transaction contemplated hereby. Buyer
acknowledges and agrees that all materials, data and information delivered by
Seller to Buyer in connection with the transaction contemplated hereby are
provided to Buyer as a convenience only and that any reliance on or use of such
materials, data or information by Buyer shall be at the sole risk of Buyer.
Neither Seller, nor any affiliate of Seller, nor the person or entity which
prepared any report or reports delivered by Seller to Buyer shall have any
liability to Buyer for any inaccuracy in or omission from any such reports.

        17.2    As-Is Sale: Disclaimers. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT
ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.

        BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND
CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL
FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT.
BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND
BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS
OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING
SPECIFICALLY, WITHOUT LIMITATION, OFFERING PACKAGES DISTRIBUTED WITH RESPECT TO
THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY
EMPLOYEES OR AGENTS REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER
MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY
SET FORTH IN THIS AGREEMENT. BUYER ALSO ACKNOWLEDGES THAT THE PURCHASE PRICE
REFLECTS AND TAKES INTO ACCOUNT THAT, EXCEPT WITH RESPECT TO THE EXPRESS
REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS AGREEMENT, THE
PROPERTY IS BEING SOLD "AS-IS."

        BUYER REPRESENTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL CONDUCT
PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED
TO, THE PHYSICAL AND

                                       33

<PAGE>

ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER 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 ANY 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, OTHER THAN SUCH REPRESENTATIONS,
WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT.
UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT
NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL
CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS, AND, EXCEPT
WITH RESPECT TO SELLER'S EXPRESS REPRESENTATIONS, WARRANTIES, AND COVENANTS SET
FORTH IN THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SELLER AND DELIVERED
PURSUANT TO THIS AGREEMENT AT CLOSING, BUYER, UPON CLOSING, SHALL BE DEEMED TO
HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS, DIRECTORS,
SHAREHOLDERS, MEMBERS, EMPLOYEES, PROPERTY MANAGER AND AGENTS) FROM AND AGAINST
ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN
TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH
BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS,
DIRECTORS, SHAREHOLDERS, MEMBERS, EMPLOYEES, PROPERTY MANAGER AND AGENTS) AT ANY
TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR
PHYSICAL CONDITIONS AND ANY VIOLATIONS OF ANY APPLICABLE LAWS, INCLUDING,
WITHOUT LIMITATION, ANY HAZARDOUS MATERIALS LAWS REGARDING THE PROPERTY. BUYER
HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 WHICH
PROVIDES THAT:

        "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
        KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
        RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
        SETTLEMENT WITH THE DEBTOR."

                /s/ [ILLEGIBLE]                  /s/ [ILLEGIBLE]
                ------------------              -------------------
                  Buyer's Initial                Seller's Initial

        17.3    Material Change. Seller shall promptly notify Buyer in writing
of any change in any condition with respect to the Property or any event or
circumstance which makes any

                                       34

<PAGE>

representation or warranty of Seller as set forth in Section 12.2 of this
Agreement materially untrue or misleading or any covenant of Seller under this
Agreement incapable of being performed. In no event shall Seller be liable to
Buyer for, or be deemed to be in default pursuant to this Agreement by reason of
any inaccuracy of a representation or warranty which results from any change
that (i) occurs between the Effective Date and the Closing Date; and (ii) is
expressly permitted under the terms of this Agreement or is beyond the
reasonable control of Seller to prevent; provided, however, that the occurrence
of a material change which is not permitted hereunder will constitute the
non-fulfillment of the condition set forth in Section 8.2.2 hereof. If, in spite
of such non-fulfillment of the conditions set forth in such Section 8.2.2 the
Closing occurs, Seller's representations and warranties set forth in this
Agreement shall be deemed to have been modified by all statements made in any
notice or notices of modification as given by Seller to Buyer pursuant to this
Section 17.3 prior to the Closing.

        17.4    Survival of Seller's Representations and Warranties. The
representations and warranties of Seller set forth in Section 12.2 hereof (as
such may have been updated as of the Closing in accordance with Section 17.3) in
accordance with the terms of this Agreement, shall survive Closing for a period
of twelve (12) months. No claim for a breach of any representation or warranty
of Seller shall be actionable or payable if the breach in question results from
or is based on a condition, state of facts, or other matter, which was actually
known to Buyer prior to the Closing. Seller shall have no liability to Buyer for
a breach of any representation or warranty unless and until the valid claims for
all such breaches collectively aggregate more than Fifty Thousand Dollars
($50,000) (including all claims arising in relation to the King Street Agreement
and 625 Agreement), in which event the amount of such valid claims in excess of
Fifty Thousand Dollars ($50,000) shall be actionable, up to the Maximum (as
defined in this Section), and unless written notice containing a description of
the specific nature of such breach shall have been given by Buyer to Seller
prior to the expiration of said twelve (12) month period and any action shall
have been commenced by Buyer against Seller within fourteen (14) months of
Closing. Buyer agrees to first seek recovery under any insurance policies,
Service Contracts and the Leases, as applicable, prior to seeking recovery from
Seller (although the foregoing shall not prevent Buyer from commencing an action
against Seller to recover such damages), and Seller shall not be liable to Buyer
if Buyer's remaining claim after recovery from such insurance policies, Service
Contracts and/or Leases is less than Fifty Thousand Dollars ($50,000). As used
herein, the term "Maximum" shall mean the total aggregate amount (including
claims arising under or in relation to the King Street Agreement and 625
Agreement) of Five Million Dollars ($5,000,000). References to "known to Buyer"
shall refer only to the current actual knowledge of James Morgensen and shall
not be construed, by imputation or otherwise, to refer to the knowledge of any
affiliate of Buyer, or to any other officer, agent, manager, representative or
employee of Buyer or any affiliate thereof or to impose upon such person any
duty to investigate the matter to which such actual knowledge, or the absence
thereof, pertains.

                                       35

<PAGE>

        17.5    Survival of Limitations. The provisions of this Article 17 shall
survive Closing or any termination of this Agreement.

18.     MISCELLANEOUS.

        18.1    Time. Time is of the essence in the perfomance of each party's
obligations hereunder; however, if the final date of any period which is set out
in any provision of this Agreement falls on a Saturday, Sunday or legal holiday
under the laws of the United States or the State in which the Property is
located, then, in such event, the time of such period shall be extended to the
next day which is not a Saturday, Sunday or legal holiday.

        18.2    Attorneys' Fees. If any legal action, arbitration or other
proceeding is commenced to enforce or interpret any provision of this Agreement,
the prevailing party shall be entitled to an award of its attorneys' fees and
expenses. The phrase "prevailing party" shall include a party who receives
substantially the relief desired whether by dismissal, summary judgment,
judgment or otherwise.

        18.3    No Waiver. No waiver by any party of the performance or
satisfaction of any covenant or condition shall be valid unless in writing and
shall not be considered to be a waiver by such party of any other covenant or
condition hereunder.

        18.4    Entire Agreement. This Agreement contains the entire agreement
between the .parties regarding the Property and supersedes all prior agreements,
whether written or oral, between the parties regarding the same subject. This
Agreement may only be modified in writing.

        18.5    Survival. The provisions of this Agreement shall not merge with
the delivery of the Deed but shall, except as otherwise provided in this
Agreement, survive the Closing.

        18.6    Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the heirs, executors, administrators and successors and
assigns of Seller and Buyer. Buyer shall have the right to assign Buyer's rights
and obligations pursuant to this Agreement to any party without the prior
written consent of Seller; provided, however, that Buyer shall not be released
from liability under this Agreement by reason of any such assignment and Buyer
shall give Seller written notice of any such assignment at least ten (10) days
prior to the Closing.

        18.7    Severability. In the case that any one or more of the provisions
contained in this Agreement are for any reason held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

        18.8    Captions. Paragraph titles or captions contained in this
Agreement are inserted as a matter of convenience only and for reference, and in
no way define, limit, extend or describe the scope of this Agreement.

                                       36

<PAGE>

        18.9    Exhibits. All exhibits attached hereto shall be incorporated
herein by reference as if set out herein in full.

        18.10   Relationship of the Parties. The parties acknowledge that
neither party is an agent for the other party, and that neither party shall or
can bind or enter into agreements for the other party.

        18.11   Governing Law. This Agreement and the legal relations between
the parties hereto shall be governed by and be construed in accordance with the
laws of the State of California.

        18.12   Review by Counsel. The parties acknowledge that each party and
its counsel have reviewed and approved this Agreement, and the parties hereby
agree that the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments or exhibits hereto.

        18.13   Non-Disclosure. Except as otherwise provided in Section 7.2.3
the parties hereto shall not disclose any of the material terms of this
Agreement or the existence of this Agreement (except to the extent as may be
required by law or as required by the Title Company or to the officers,
directors, partners, employees, accountants, attorneys, and other consultants of
the parties hereto in the ordinary course of business) without the prior written
consent of the other party. Notwithstanding the foregoing, any party (and any
employee, representative or other agent of any party) may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax structure
of the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to any party
relating to such tax treatment and tax structure; provided, however, that any
such information and materials shall be kept confidential to the extent
necessary to comply with any applicable securities laws. For purposes of the
exceptions set out in the preceding sentence to the general confidentiality
provisions set forth above, the tax treatment and tax structure of the
transactions contemplated by this Agreement shall not be deemed to include the
location of the Property, the identity of the parties to this Agreement or the
Purchase Price.

        18.14   Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original. This Agreement shall only be
effective if a counterpart is signed by both Seller and Buyer.

        18.15   Filing of Reports. The Title Company shall be solely responsible
for the timely filing of any reports or returns required pursuant to the
provisions of Section 6045(e) of the Internal Revenue Code of 1986 as amended
(and any similar reports or returns required under any state or local laws) in
connection with the Closing.

        18.16   Third Party Beneficiaries. This Agreement is for the benefit of
Buyer and Seller and their respective agents, employees, shareholders, officers,
directors, partners and

                                       37

<PAGE>

successors and no third party shall be entitled to the benefit of any of the
provisions of this Agreement.

        18.17   Tax Deferred Exchange. In connection with the transactions
contemplated by this Agreement, Seller may wish to engage in a tax deferred
exchange of the Real Property. Buyer agrees to reasonably cooperate with Seller
in connection with such exchange, provided, however, that (i) the exchange shall
not delay (except as expressly provided in this Agreement) the Closing; (ii)
Buyer will not be required to take title to any other real property; (iii) Buyer
shall not incur any additional liability or cost by reason of such exchange;
(iv) Seller will indemnify, defend and hold Buyer harmless for, from and against
any claim, demand, cause of action, liability, cost or expense (including
attorney's fees) in connection therewith, including, without limitation, any
increase in escrow fees or charges resulting from such exchange; and (v) Seller
acknowledges and agrees and that Buyer has not made and will not make
representation or warranty as to the effectiveness for tax purposes of any such
exchange.

        18.18   Parking Fees. Notwithstanding any provisions to the contrary of
that certain Parking Easement Agreement applicable to the Real Property recorded
in the official records of the City and County of San Francisco on August 24,
2000 (Reel 8708 image 0270). Seller shall have no obligation to pay parking fees
with respect to the Real Property in connection with the King Street Property
during the period in which the King Street Property is held and owned by Buyer
or any assignee or affiliate of Buyer and the Real Property continues to be held
and owned by Seller. The above sentence shall not be construed to limit the
obligation of Omnicom to pay for parking leased by Omnicom in the King Street
Property.

19.     DEFAULT.

        19.1    Liquidated Damages. FROM AND AFTER THE EXERCISE OF THE OPTION,
IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS NOT
CONSUMMATED DUE TO A DEFAULT OF BUYER, THE DEPOSIT SHALL BE PAID TO AND RETAINED
BY SELLER AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL
DAMAGES IN THE EVENT THAT THE SALE IS NOT CONSUMMATED WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY EXECUTING THIS
SECTION 19.1 BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES
AND AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT THE CLOSING DOES NOT
OCCUR AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER ARISING FROM SUCH
FAILURE OF THE SALE TO CLOSE. IN ADDITION, BUYER SHALL PAY ALL TITLE, SURVEY AND
ESCROW CANCELLATION CHARGES. NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL
THIS SECTION 19.1 LIMIT THE DAMAGES RECOVERABLE BY EITHER PARTY AGAINST THE
OTHER PARTY DUE TO (A) THE OTHER

                                       38

<PAGE>

PARTY'S OBLIGATION TO INDEMNIFY SUCH PARTY IN ACCORDANCE WITH THIS AGREEMENT, OR
(B) THIRD PARTY CLAIMS. BY THEIR SEPARATELY EXECUTING THIS SECTION 19.1 BELOW,
BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE
PROVISION COVERING LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY
COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT
THE TIME THIS AGREEMENT WAS EXECUTED. CONSISTENT WITH THE PROVISIONS OF SECTION
1.5, IN THE EVENT OF A TERMINATION OF THIS AGREEMENT BY REASON OF A DEFAULT OF
BUYER PURSUANT TO THIS SECTION 19.1, THE OPTION PAYMENT IN ALL EVENTS SHALL BE
RETAINED BY SELLER.

                /s/ [ILLEGIBLE]                  /s/ [ILLEGIBLE]
                --------------------             --------------------
                  Buyer's Initials                 Seller's Initials

        19.2    Default by Seller. In the event the sale of the Property as
contemplated hereunder is not consummated due to default by Seller hereunder,
Buyer shall be entitled, as its sole remedy for Seller's default, either (a) to
receive the return of the Option Payment and the Deposit including all
Withdrawals (together with all interest accrued or deemed accrued thereon), and
to recover from Seller Buyer's actual third party out of pocket costs incurred
in connection with Buyer's due diligence (which costs, together with any costs
incurred by Buyer in connection with the King Street Property and 625 Property,
shall not exceed Two Hundred Thousand Dollars ($200,000); or (b) to enforce
specific performance of Seller's obligation to convey the Property to Buyer in
accordance with the terms of this Agreement, it being understood and agreed that
the remedy of specific performance shall not be available to enforce any other
obligation of Seller hereunder. Except as otherwise expressly provided in this
section 19.2 above, Buyer expressly waives its rights to seek damages in the
event of Seller's default hereunder. Buyer shall be deemed to have elected to
terminate this agreement if Buyer fails to file suit for specific performance
against seller in a court having jurisdiction in the county and state in which
the Real Property is located, on or before one hundred twenty (120) days
following the date upon which Closing was to have occurred.

        Notwithstanding the above provisions of this Section 19.2 to the
contrary, Buyer shall be entitled to seek damages against Seller as allowed by
applicable law in the event that Buyer shall be prevented from obtaining
specific performance of Seller's obligation to convey title to the Property to
Buyer as required under this Agreement by reason of Seller's grant or conveyance
of the Property, any right or interest therein or any lien or encumbrance
thereon to any other party.

                                       39

<PAGE>

20.     DEFINITIONS. For ease of reference, the defined terms as employed in
this agreement and as listed below are defined in the designated sections:

        1.      "625 Property" as defined in Section 1.4

        2.      "625 Agreement" as defined in Section 1.4

        3.      "Additional Amount" as defined in Section 14.1.3

        4.      "Agreement" as defined in the first paragraph

        5.      "Assignment" as defined in Section 2.3

        6.      "Bill of Sale" as defined in Section 9.1.2

        7.      "Brokers" as defined in Section 15

        8.      "Buyer" as defined in the first paragraph

        9.      "Buyer's Broker" as defined in Section 15

        10.     "Buyer's Deed of Trust" as defined in Section 3.6.4

        11.     "Buyer's Reports" as defined in Section 7.5

        12.     "Buyer's Representatives" as defined in Section 7.4

        13.     "Buyer's Title Policy" as defined in Section 4.2

        14.     "Casualty" as defined in Section 14.1

        15.     "Claims" as defined in Section 13.1

        16.     "Closing" as defined in Section 6.1

        17.     "Closing Date" as defined in Section 6.1

        18.     "Deed" as defined in Section 9.1.1

        19.     "Deposit" as defined in Section 3.2

        20.     "Disapproval Notice" as defined in Section 8.2.5

        21.     "Due Diligence Materials" as defined in Section 7.2

        22.     "Early Closing" as defined in Section 6.1

        23.     "Effective Date" as defined in the first paragraph

                                       40

<PAGE>

        24.     "Escrow" as defined in Section 5.1

        25.     "Estoppel Certificate(s)" as defined in Section 7.7

        26.     "Exchange Property" as defined in Section 3.6

        27.     "Exercise Notice" as defined in Section 1.4

        28.     "Existing Debt" as defined in Section 3.6.3

        29.     "Expiration Date" as defined in Section 7.1

        30.     "First Offer Notice" as defined in Section 1.2

        31.     "Improvements" as defined in Section 2.1.2

        32.     "Insured Casualty" as defined in Section 14.1.1

        33.     "Insured Casualty Threshold Amount" as defined in Section 14.1.1

        34.     "King Street Agreement" as defined in Section 1.4

        35.     "King Street Property" as defined in Section 1.4

        36.     "Land" as defined in Section 2.1.1

        37.     "Leases" as defined in Section 2.3

        38.     "Landlord's Certificate" as defined in Section 7.7

        39.     "Lender" as defined in Section 3.6.3

        40.     "Maximum" as defined in Section 17.4

        41.     "Notice of Early Closing" as defined in Section 6.1

        42.     "Omnicom" as defined in Section 8.1.6

        43.     "Operating Costs" as defined in Section 10.1.3

        44.     "Option" as defined in Section 1.1

        45.     "Option Payment" as defined in Section 1.2

        46.     "Other Escrow" as defined in Section 3.6

        47.     "Permitted Exceptions" as defined in Section 4.3

                                       41

<PAGE>

        48.     "Personal Property" as defined in Section 2.1.3

        49.     "Property" as defined in Section 2.1

        50.     "Purchase Price" as defined in Section 3

        51.     "Real Property" as defined in Section 2.2

        52.     "Release Date" as defined in Section 3.6

        53.     "Release Conditions" as defined in Section 3.6

        54.     "Restoration Costs" as defined in Section 14.1.1

        55.     "Seller" as defined in the first paragraph

        56.     "Seller's Broker" as defined in Section 15

        57.     "Service Contracts" as defined in Section 2.3

        58.     "Subsequent Title Defects Notice" as defined in Section 7.3.3

        59.     "Survey" as defined in Section 7.3.1

        60.     "Tenant Notification Letter", as defined in Section 9.3

        61.     "Tenants" as defined in Section 2.3

        62.     "Term" as defined in Section 1.3

        63.     "Title Company" as defined in Section 5.1

        64.     "Title Notice" as defined in Section 7.3.2

        65.     "Title Report" as defined in Section 7.3.1

        66.     "Townsend 625" as defined in Section 1.4

        67.     "Uninsured Casualty Threshold Amount" as defined in Section
                14.1.2

        68.     "Updated Estoppel Certificate" as defined in Section 7.7

        69.     "Withdrawal" as defined in Section 3.6

                             SIGNATURE PAGE FOLLOWS:

                                       42

<PAGE>

        IN WITNESS WHEREOF, the parties hereto have caused this Option Agreement
to be duly executed and delivered as of the day and year first above written.

SELLER:                                    BUYER:

BAKER HAMILTON PROPERTIES, LLC,            MACROMEDIA, INC.,
a California limited liability company     a Delaware corporation

By:   /s/ Ronaldo Cianciarulo              By:   /s/ James L. Morgensen
      ------------------------                   ------------------------
      Ronaldo Cianciarulo,                 Name: James L. Morgensen
Its   President                            Its:  Vice President

                                       43

<PAGE>

                                LIST OF EXHIBITS

                 601 Townsend Street, San Francisco, California

Exhibit 1.4          -     Form of Exercise Notice
Exhibit 2.1.1        -     Legal Description of Land
Exhibit 2.1.3        -     Schedule of Tangible Personal Property
Exhibit 2.3(i)       -     Schedule of Leases
Exhibit 2.3(ii)      -     Schedule of Service Contracts
Exhibit 3.6.2        -     Form of Guaranty Agreement
Exhibit 3.6.4        -     Form of Buyer Deed of Trust
Exhibit 7.7(i)       -     Form of Estoppel Certificate
Exhibit 7.7(ii)      -     Form of Landlord's Certificate
Exhibit 9.1.1        -     Form of Grant Deed
Exhibit 9.1.2        -     Form of Bill of Sale
Exhibit 9.1.3        -     Form of Assignment and Assumption Agreement
Exhibit 9.3          -     Form of Tenant Notification Letter
Exhibit 14.1.4       -     Arbitration of Disputes Relating to Estimated
                           Restoration Costs

<PAGE>

                                LIST OF SCHEDULES

Schedule 12.2.4            -     Description of Litigation
Schedule 12.2.5            -     Description of Violations
Schedule 12.2.8            -     Description of Lease Issues
Schedule 12.2.9            -     Description of Commission Issues
Schedule 12.2.10           -     Description of Issues Relating to Developmental
                                 Requirements

<PAGE>

                                   EXHIBIT 1.4

                             FORM OF EXERCISE NOTICE

                                     [date]
                                ----------------

Baker Hamilton Properties, LLC
601 Townsend Street, Suite 107
San Francisco, CA 94103
Attention: Ronaldo Cianciarulo

        Re: Option Agreement ("Agreement") dated July ____, 2003, by and between
            Baker Hamilton Properties, LLC, ("Seller") and Macromedia, Inc.
            ("Buyer")

Gentlemen:

        With reference to the above Agreement and specifically with reference to
Section 1.4 of the above Agreement, please consider this letter notice of
Buyer's unequivocal exercise of the Option as described in the Agreement.

        This letter constitutes the "Exercise Notice" as defined in the
Agreement.

                                                Very truly yours,

        cc:    Walter F. Merkle

<PAGE>

                                  EXHIBIT 2.1.1

                            LEGAL DESCRIPTION OF LAND

Real property in the City of San Francisco, County of San Francisco, State of
California, described as follows:

Beginning at a point formed by the intersection of the southwesterly line of
Seventh Street with the southeasterly line of Townsend Street; running thence
southeasterly along the southwesterly line of Seventh Street 275 feet to the
northwesterly line of King Street; thence at a right angle southwesterly along
the said northwesterly line of King Street 275 feet; thence at a right angle
northwesterly 275 feet to the southeasterly line of Townsend Street; and thence
at a right angle northeasterly along the said southeasterly line of Townsend
Street 275 feet to its intersection with the southwesterly line of Seventh
Street and the point of beginning.

Being a portion of 100 Vara Block No. 413.

APN: Lot: 001 Block: 3799

<PAGE>

                                  EXHIBIT 2.1.3

                     SCHEDULE OF TANGIBLE PERSONAL PROPERTY

1st FLOOR ELECTRICAL ROOM
Building Automation Computer Work Station:
        IBM CPU model 160, serial #23G7803
        IBM monitor, serial #66-46502
        IBM keyboard, serial #0265793
        IBM mouse, serial #23-060287
        1-folding table
        1-folding chair
Citizen GSX-190 fire alarm printer, serial #AKA0029374
1-set elevator pads for protecting elevator
1-6 foot ladders

2nd FLOOR
BUILDING ACCESS SYSTEM:
10-Nothern Computers models N-1000 to P200-IV-X access control system units, no
serial numbers
10-Altroniscs AL400ULX power supply cabinets
Virtual Micro PC, no serial number
Sony Multiscan 200sf model CPD-200sf, serial #7132813
HP Laserjet 6p Model C3980A, serial #USDH015332

<PAGE>

                                 EXHIBIT 2.3(i)

                               SCHEDULE OF LEASES

1.      Lease by and between Baker Hamilton Properties, LLC and Omnicom Group,
        Inc., (successor-in-interest to Organic, Inc.) dated November 8, 1999 as
        amended by that certain First Amendment to Lease and Payment Agreement
        dated March 20, 2001, and as further amended by that certain Second
        Amendment to Lease and Payment Agreement dated December 3, 2001. The
        above-described lease was assigned by Organic, Inc. to Omnicom Group,
        Inc. pursuant to that certain Assignment of Lease dated January 1, 2003.

2.      Lease by and between Baker-Hamilton Properties, LLC and Winstar, dated
        October 31, 2000.

<PAGE>

                                 EXHIBIT 2.3(ii)

                          SCHEDULE OF SERVICE CONTRACTS

1.      Agreement with Able Engineering Services, dated October 16, 2000 for the
        providing of building maintenance services.

2.      Agreement with Crane Pest Control, dated September 21, 2000 for the
        providing of Pest Control Services.

3.      Agreement with Diversified Fire Protection, dated September 25, 2002 for
        providing fire alarm monitoring services.

4.      Agreement with Otis Elevator Company, dated November 1, 2001 for
        providing elevator maintenance services.

5.      Agreement with Trinity Building Maintenance, dated July 18, 2000 for
        janitorial services.

<PAGE>

                                  EXHIBIT 3.6.2

                           FORM OF GUARANTY AGREEMENT
                               GUARANTY AGREEMENT

        THIS GUARANTY AGREEMENT ("Guaranty") is made as of July _________ ___,
2003, by RONALDO CIANCIARULO ("Guarantor") in favor of MACROMEDIA, INC., a
Delaware corporation ("Macromedia").

                                R E C I T A L S:

A.      Baker Hamilton Properties LLC, a California limited company ("Seller"),
        and Macromedia have entered into Option Agreement dated as of July ___,
        2003 ("Agreement"), pursuant to which Seller granted to Macromedia an
        option to purchase the Property (as defined therein). Pursuant to the
        Agreement, Macromedia has made the Deposit with the Title Company (as
        each such term as defined in the Agreement).

B.      Under Section 3.6 of the Agreement, Seller has the right to withdraw
        from Escrow (as defined in the Agreement) a portion of the Deposit on
        one or more occasions in the maximum amount provided therein, subject to
        Seller's satisfaction of the Release Conditions (as defined in the
        Agreement). Guarantor's execution and delivery of this Guaranty to
        Macromedia constitutes one of the Release Conditions. Unless otherwise
        defined herein, capitalized terms used in this Guaranty shall have the
        meanings attributed to such terms in the Agreement.

        NOW, THEREFORE, in order to satisfy one of the Release Conditions, and
in consideration of Macromedia's agreements in the Agreement, Guarantor
unconditionally guarantees and agrees as follows:

1.      GUARANTY. Guarantor hereby unconditionally guarantees to Macromedia the
payment and performance by Seller of its obligations under the Agreement to
repay to Macromedia all Withdrawals, and interest deemed to accrue thereon,
under any circumstances where the Closing shall not occur and Macromedia is
entitled to the return of the Deposit pursuant to the provisions of the
Agreement, together with all attorneys' fees, expenses, and other sums paid or
incurred by Macromedia by reason of Seller's failure to perform such
obligations, and all extensions, renewals or modifications of such obligations
(collectively, "Return Obligations").

2.      REMEDIES. If Guarantor fails to promptly perform its obligations under
this Guaranty, Macromedia may from time to time, and without first requiring
performance by Seller or exhausting any or all security for the Return
Obligations, if any, bring any action at law or in equity or both to compel
Guarantor to perform its obligations hereunder, and to

<PAGE>

collect in any such action compensation for all loss, cost, damage, injury and
expense sustained or incurred by Macromedia as a direct or indirect consequence
of the failure of Guarantor to perform its obligations, together with interest
thereon at the rate of interest equal to the lesser of ten percent (10%) or the
maximum rate permitted by applicable law.

3.      RIGHTS OF MACROMEDIA. Guarantor authorizes Macromedia, without giving
notice to Guarantor or obtaining Guarantor's consent and without affecting the
liability of Guarantor, from time to time to: (a) renew or extend all or any
portion of the Return Obligations; (b) otherwise modify the terms of the
Agreement or the Buyer Deed of Trust; (c) take and hold security for the
performance of the Return Obligations and exchange, enforce, waive and release
any such security; (d) apply such security and direct the order or manner of
sale thereof as Macromedia in its discretion may determine; (e) release,
substitute or add any one or more guarantors of the Return Obligations; (f)
apply amounts received by Macromedia from Seller to any obligations of Seller to
Macromedia, in such order as Macromedia shall determine in its sole discretion,
whether or not any such obligations are covered by this Guaranty; (g) assign
this Guaranty in whole or in part; and (h) assign, transfer or negotiate all or
any part of the obligations guaranteed by this Guaranty.

4.      GUARANTOR'S WAIVERS. Guarantor waives: (a) any defense based upon any
legal disability or other defense of Seller, any other guarantor or other
person, or by reason of the cessation or limitation of the liability of Seller
from any cause other than full payment and performance of all of the Return
Obligations; (b) any defense based upon any lack of authority of the officers,
directors, partners or agents acting or purporting to act on behalf of Seller or
any principal of Seller or any defect in the formation of Seller or any
principal of Seller; (c) any and all rights and defenses arising out of an
election of remedies by Macromedia; (d) any defense based upon Macromedia's
failure to disclose to Guarantor any information concerning Seller's financial
condition or any other circumstances bearing on Seller's ability to perform all
of its obligations under the Agreement; (e) any defense based upon any statute
or rule of law which provides that the obligation of a surety must be neither
larger in amount nor in any other respects more burdensome than that of a
principal; (f) any defense based upon Macromedia's election, in any proceeding
instituted under the Federal Bankruptcy Code, of the application of Section 1111
(b)(2) of the Federal Bankruptcy Code or any successor statute; (g) any defense
based upon any borrowing or any grant of a security interest under Section 364
of the Federal Bankruptcy Code; (h) any right of subrogation, any right to
enforce any remedy which Macromedia may have against Seller and any right to
participate in, or benefit from, any security for the Agreement now or hereafter
held by Macromedia; (i) presentment, demand, protest and notice of any kind; and
(j) the benefit of any statute of limitations affecting the liability of
Guarantor hereunder or the enforcement hereof. Guarantor agrees that the
performance of any act or any payment which tolls any statute of limitations
applicable to Seller's liability under the Agreement shall similarly operate to
toll the statute of limitations applicable to Guarantor's liability hereunder.
Guarantor understands that if Macromedia forecloses by trustee's sale on a deed
of trust securing any of the indebtedness and obligations guaranteed by this
Guaranty,

<PAGE>

Guarantor will then have a defense preventing Macromedia from thereafter
enforcing Guarantor's liability for the unpaid portion of such indebtedness and
obligations. This defense arises because the trustee's sale would eliminate
Guarantor's right of subrogation, and therefore Guarantor would be unable to
obtain reimbursement from Seller. Guarantor specifically waives this defense and
all rights and defenses that Guarantor may have because such indebtedness and
obligations are secured by real property. This means, among other things: (i)
Macromedia may collect from Guarantor without first foreclosing on any real or
personal property collateral pledged by Seller; and (ii) if Macromedia
forecloses on any real property collateral pledged by Seller: (A) the amount of
such indebtedness and obligations may be reduced only by the price by which the
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price; and (B) Macromedia may collect from Guarantor even if
Macromedia, by foreclosing on the real property collateral, has destroyed any
right Guarantor may have to collect from Seller. This is an unconditional and
irrevocable waiver of any rights and defenses Guarantor may have because such
indebtedness and obligations are secured by real property. These rights and
defenses include, but are not limited to, any rights or defenses based upon the
Sections 580a, 580b, 580d or 726 of the California Code Civil Procedure or
similar laws in another states.

5.      GUARANTOR'S WARRANTIES. Guarantor warrants and acknowledges that: (a)
Macromedia would not enter into the Agreement but for this Guaranty; (b) there
are no conditions precedent to the effectiveness of this Guaranty; (c) Guarantor
has established adequate means of obtaining from sources other than Macromedia,
on a continuing basis, financial and other information pertaining to Seller's
financial condition, and the status of Seller's performance of its obligations
under the Agreement, and Guarantor agrees to keep adequately informed from such
means of any facts, events or circumstances which might in any way affect
Guarantor's risks hereunder and Macromedia has made no representation to
Guarantor as to any such matters; (d) Guarantor has not and will not, without
the prior written consent of Macromedia, sell, lease, assign, encumber,
hypothecate, transfer or otherwise dispose of all or substantially all of
Guarantor's assets.

6.      SUBORDINATION. Guarantor subordinates all present and future
indebtedness owing by Seller to Guarantor to the obligations at any time owing
by Seller to Macromedia under the Agreement. Guarantor assigns all such
indebtedness to Macromedia as security for this Guaranty and the Agreement.
Guarantor agrees to make no claim for such indebtedness until all obligations of
Seller under the Agreement have been fully discharged. Guarantor further agrees
not to assign all or any part of such indebtedness unless Macromedia is given
prior notice and such assignment is expressly made subject to the terms of this
Guaranty.

7.      BANKRUPTCY OF SELLER. In any bankruptcy or other proceeding in which the
filing of claims is required by law, Guarantor shall file all claims which
Guarantor may have against Seller relating to any indebtedness or obligations of
Seller to Guarantor and shall assign to Macromedia all rights of Guarantor
thereunder. If Guarantor does not file any such

<PAGE>

claim, Macromedia, as attorney-in-fact for Guarantor, is hereby authorized to do
so in the name of Guarantor or, in Macromedia's discretion, to assign the claim
to a nominee and to cause proof of claim to be filed in the name of Macromedia's
nominee. The foregoing power of attorney is coupled with an interest and cannot
be revoked. Macromedia or its nominee shall have the right, in its reasonable
discretion, to accept or reject any plan proposed in such proceeding and to take
any other action which a party filing a claim is entitled to do. In all such
cases, whether in administration, bankruptcy or otherwise, the person or persons
authorized to pay such claim shall pay to Macromedia the amount payable on such
claim and, to the full extent necessary for that purpose, Guarantor hereby
assigns to Macromedia all of Guarantor's rights to any such payments or
distributions; provided, however, that Guarantor's obligations hereunder shall
not be satisfied except to the extent that Macromedia receives cash by reason of
any such payment or distribution. If Macromedia receives anything hereunder
other than cash, the same shall be held as collateral for amounts due under this
Guaranty. If all or any portion of the obligations guaranteed hereunder are paid
or performed, the obligations of Guarantor hereunder shall continue and shall
remain in full force and effect in the event that all or any part of such
payment or performance is avoided or recovered directly or indirectly from
Macromedia as a preference, fraudulent transfer or otherwise under the
Bankruptcy Code or other similar laws, irrespective of (a) any notice of
revocation given by Guarantor prior to such avoidance or recovery, or (b) full
payment and performance of all of the indebtedness and obligations arising under
the Agreement.

8.      ASSIGNMENT Guarantor agrees that Macromedia shall have the right to
assign its rights under this Guaranty to any assignee of Macromedia's rights and
obligations under the Agreement.

9.      ADDITIONAL, INDEPENDENT AND UNSECURED OBLIGATIONS. This Guaranty is a
guaranty of payment and not of collection and cannot be revoked by Guarantor and
shall continue to be effective with respect to any indebtedness and obligations
referenced in Section 1 hereof arising or created after any attempted revocation
hereof or after the death of Guarantor (if Guarantor is a natural person, in
which event this Guaranty shall be binding upon Guarantor's estate and
Guarantor's legal representatives and heirs). The obligations of Guarantor
hereunder shall be in addition to and shall not limit or in any way affect the
obligations of Guarantor under any other existing or future guaranties unless
said other guaranties are expressly modified or revoked in writing. This
Guaranty is independent of the obligations of Seller under the Agreement.
Macromedia may bring a separate action to enforce the provisions hereof against
Guarantor without taking action against Seller or any other party or joining
Seller or any other party as a party to such action. Except as otherwise
provided in this Guaranty, this Guaranty is not secured and shall not be deemed
to be secured by any security instrument unless such security instrument
expressly recites that it secures this Guaranty.

10.     ATTORNEYS' FEES; ENFORCEMENT. If any attorney is engaged by

<PAGE>

Macromedia to enforce or defend any provision of this Guaranty, with or without
the filing of any legal action or proceeding, Guarantor shall pay to Macromedia,
immediately upon demand, all attorneys' fees and costs incurred by Macromedia in
connection therewith, together with interest thereon from the date of such
demand until paid at the rate of interest specified in Section 1 above.

11.     RULES OF CONSTRUCTION. The word "Seller" as used herein shall include
both the named Seller and any other person at any time assuming or otherwise
becoming primarily liable for all or any part of the obligations of the named
Seller under the Agreement. The teen "person" as used herein shall include any
individual, company, trust or other legal entity of any kind whatsoever. If this
Guaranty is executed by more than one person, the term "Guarantor" shall include
all such persons. When the context and construction so require, all words used
in the singular herein shall be deemed to have been used in the plural and vice
versa. All headings appearing in this Guaranty are for convenience only and
shall be disregarded in construing this Guaranty.

12.     GOVERNING LAW. This Guaranty shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, except to the
extent preempted by federal laws. Guarantor and all persons and entities in any
manner obligated to Macromedia under this Guaranty consent to the jurisdiction
of any federal or state court within the State of California having proper venue
and also consent to service of process by any means authorized by California or
federal law.

13.     MISCELLANEOUS. The provisions of this Guaranty will bind and benefit the
heirs, executors, administrators, legal representatives, nominees, successors
and assigns of Guarantor and Macromedia. If any provision of this Guaranty shall
be determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that portion shall be deemed severed from this Guaranty and the
remaining parts shall remain in full force as though the invalid, illegal or
unenforceable portion had never been part of this Guaranty.

14.     ENFORCEABILITY. Guarantor hereby acknowledges that: (a) the obligations
undertaken by Guarantor in this Guaranty are complex in nature, and (b) numerous
possible defenses to the enforceability of these obligations may presently exist
and/or may arise hereafter, and (c) as part of Macromedia's consideration for
entering into this transaction, Macromedia has specifically bargained for the
waiver and relinquishment by Guarantor of all such defenses, and (d) Guarantor
has had the opportunity to seek and receive legal advice from skilled legal
counsel in the area of financial transactions of the type contemplated herein.
Given all of the above, Guarantor does hereby represent and confirm to
Macromedia that Guarantor is fully informed regarding, and that Guarantor does
thoroughly understand: (i) the nature of all such possible defenses, and (ii)
the circumstances under which such defenses may arise, and (iii) the benefits
which such defenses might confer upon Guarantor, and (iv) the legal consequences
to Guarantor of waiving such defenses. Guarantor acknowledges that Guarantor
makes this Guaranty with the intent that this Guaranty and all of the informed
waivers herein shall each and all be fully enforceable by Macromedia, and

<PAGE>

that Macromedia is induced to enter into this transaction in material reliance
upon the presumed full enforceability thereof.

15.     WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS GUARANTY, AND BY
ITS ACCEPTANCE HEREOF, MACROMEDIA, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THE
AGREEMENT OR THIS GUARANTY, INCLUDING WITHOUT LIMITATION, ANY PRESENT OR FUTURE
MODIFICATION THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE
AGREEMENT OR THIS GUARANTY (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY AND MACROMEDIA HEREBY AGREES AND CONSENTS THAT ANY PARTY TO THIS
GUARANTY AND MACROMEDIA MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO
AND MACROMEDIA TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

16.     NOTICES. All notices, demands, or other communications under this
Guaranty shall be in writing and shall be delivered to the appropriate party at
the address set forth on the signature page of this Guaranty, in the case of
Guarantor, or at the address as set forth in the Agreement, in the case of
Macromedia (subject to change from time to time by written notice pursuant to
this Section 16). All communications shall be deemed served upon delivery of the
same, or if mailed, upon the first to occur of receipt, the expiration of four
(4) business days after the deposit in the United States Postal Service mail,
postage prepaid and addressed to the address of Guarantor or Macromedia at the
address specified, or upon receipt of electronic confirmation by sender of
addressee's receipt of telefacsiumile; provided, however, that non-receipt of
any communication as the result of any change of address of which the sending
party was not notified or as the result of a refusal to accept delivery shall be
deemed receipt of such communication.

17.     JOINT AND SEVERAL LIABILITY. The liability under this Guaranty of the
persons and/or entities constituting Guarantor shall be joint and several, and
no failure by any such person or entity constituting Guarantor to perform any of
its obligations under this Guaranty shall impair or affect in any manner the
obligations under this Guaranty of any other person or entity constituting
Guarantor.

<PAGE>

        IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
appearing on the first page of this Guaranty.

                                        "GUARANTOR"

                                        -----------------------------------
                                        RONALDO CIANCIARULO

                                        Address:
                                        601 Townsend Street, Suite 107
                                        San Francisco, CA 94103

<PAGE>

                                  EXHIBIT 3.6.4

                           FORM OF BUYER DEED OF TRUST

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Macromedia, Inc.
600 Townsend Street
San Francisco, CA 94103
Attn: Loren E. Hillberg, Esq.

--------------------------------------------------------------------------------

                     DEED OF TRUST WITH ASSIGNMENTS OF RENTS

THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS is made as of ___________, 2003, by
BAKER HAMILTON PROPERTIES, LLC, a California limited liability company, as
trustor ("Trustor"), whose address is 601 Townsend Street, Suite 107, San
Francisco, California 94103, to CHICAGO TITLE COMPANY, a corporation, as trustee
("Trustee"), for the benefit and security of MACROMEDIA, INC., a Delaware
corporation, whose address is 600 Townsend Street, San Francisco, California
94103, as beneficiary ("Beneficiary").

Trustor irrevocably grants, transfers and assigns to Trustee in trust, with
power of sale, and right of entry and possession, that certain real property
situated in the City and County of San Francisco, State of California, and more
particularly described in Exhibit A attached hereto and incorporated herein by
this reference.

Together with rents, issues and profits thereof, subject, however, to the right,
power and authority hereinafter given to and conferred upon Beneficiary to
collect and apply such rents, issues and profits.

For the purpose of securing (1) payment and performance by Trustor of its
obligation to repay Withdrawals (as defined in the Option Agreement, as defined
below), and interest deemed to have accrued thereon, to Beneficiary under any
circumstances where the Closing (as defined in the Option Agreement) does not
occur and Beneficiary is entitled to return of the Deposit (as defined in the
Option Agreement) pursuant to the provisions of this Option Agreement; (2) the
performance of each agreement of Trustor incorporated by reference or contained
herein or reciting it is so secured; and (3) payment and performance of any
additional indebtedness and obligation of Trustor to Beneficiary, when evidenced
by a written instrument executed by Trustor and reciting that they are

<PAGE>

secured by this Deed of Trust. For the purposes of this Deed of Trust, the tern
"Option Agreement" shall mean that certain Option Agreement dated as of July __,
2003, between Trustor and Beneficiary, pursuant to which Trustor granted to
Beneficiary an option to purchase the real property described in Exhibit A
attached hereto.

        A       To protect the security of this Deed of Trust, and with respect
to the property above described, Trustor agrees:

                (1)     To keep said property in good condition and repair; not
to remove or demolish any building thereon; to complete or restore promptly and
in good and workmanlike manner any building which may be constructed, damaged or
destroyed thereon and to pay when due all claims for labor performed and
materials furnished therefor; to comply with all laws affecting said property or
requiring any alterations or improvements to be made thereon; not to commit or
permit waste thereof; not to commit, suffer or permit any act upon said property
in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do
all other acts which from the character or use of said property may be
reasonably necessary, the specific enumerations herein not excluding the
general.

                (2)     To provide, maintain and deliver to Beneficiary full
replacement cost property insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any property or other insurance policy
may be applied by Beneficiary upon any indebtedness secured hereby and in such
order as beneficiary may determine, or at option of Beneficiary the entire
amount so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice

                (3)     To appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Beneficiary
or Trustee; and to pay all costs and expenses, including cost of evidence of
title and attorney's fees in a reasonable sum, in any action or proceeding in
which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary
to foreclose this Deed of Trust.

                (4)     To pay before delinquency all taxes and assessments
affecting said property, including assessments on appurtenant water stock; to
pay when due all encumbrances, charges and liens, with interest, on said
property or any part thereof, which appear to be prior or superior to the lien
of this Deed of Trust; and to pay all costs, fees and expenses of this Trust.

Should Trustor fail to make any payment or to do any act as herein provided,
then Beneficiary or Trustee, but without obligation to do so and without notice
to or demand upon Trustor and without releasing Trustor from any obligation
hereof, may: make or do the same in such manner and to such extent as either may
deem necessary to protect the security hereof, Beneficiary or Trustee being
authorized to enter upon said property for

<PAGE>

such purposes; appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary or Trustee;
pay, purchase, contest or compromise any encumbrance, charge or lien which in
the judgement of either appears to be prior or superior hereto; and in
exercising any such powers, pay necessary expenses, employ counsel and pay his
or her reasonable fees.

                (5)     To pay immediately and without demand all sums so
expended by Beneficiary or Trustee, with interest from date of expenditure, at
the lesser of ten percent (10%) per annum or the maximum rate permitted by
applicable law, and to pay for any statement provided for by law in effect at
the date hereof regarding the obligation secured hereby, any amount demanded by
the Beneficiary not to exceed the maximum allowed by law at the time when said
statement is demanded.

        B       It is mutually agreed:

                (1)     That any award of damages in connection with any
condemnation for public use of or injury to said property or any part thereof is
hereby assigned and shall be paid to Beneficiary who may apply or release such
moneys received by Beneficiary in the same manner and with the same effect as
above provided for disposition of the proceeds of property or other insurance.

                (2)     That by accepting payment of any sum secured hereby
after its due date, Beneficiary does not waive Beneficiary's right either to
require prompt payment when due of all other sums so secured or to declare
default for failure so to pay.

                (3)     That at any time or from time to time, without liability
therefor and without notice, upon written request of Beneficiary and
presentation of this Deed of Trust and the obligations secured hereby for
endorsement, and without affecting the personal liability of any person for
payment of the obligations secured hereby, Trustee may: reconvey any part of
said Property; consent to the making of any map or plat thereof; join in
granting any easement thereon; or join in any extension agreement or any
agreement subordinating the lien or charge hereof.

                (4)     That upon written request of Beneficiary stating that
all sums secured hereby have been paid, and upon surrender of this Deed of Trust
to Trustee for cancellation and retention or other disposition as Trustee in its
sole discretion may choose and upon payment of its fees, Trustee shall reconvey,
without warranty, the property then held hereunder. The recitals in such
reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof. The grantee in such reconveyance may be described as the
"person or persons legally entitled thereto."

                (5)     That as additional security, Trustor hereby gives and
confers upon Beneficiary the right, power and authority, during the continuance
of these trusts, to collect the rents, issues and profits of said property,
reserving unto Trustor the right, prior

<PAGE>

to any default by Trustor in payment of any indebtedness or obligations secured
hereby or in performance of any agreement hereunder, to collect and retain such
rents, issues and profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent, or by a
receiver to be appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, enter upon and take possession of
said property or any part thereof, in his or her own name sue for or otherwise
collect such rents, issues, and profits, including those past due and unpaid,
apply the same, less costs and expenses of operation and collection, including
reasonable attorney's fees, upon any indebtedness secured hereby, and in such
order as Beneficiary may determine. The entering upon and taking possession of
said Property, the collection of such rents, issues and profits and the
application thereof as aforesaid, shall not cure or waive any default or notice
of default hereunder or invalidate any act done pursuant to such notice.

                (6)     That upon default by Trustor in payment of any
indebtedness secured hereby or in performance of any agreement hereunder,
Beneficiary may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale and of
written notice of default and of election to cause to be sold said property,
which notice Trustee shall cause to be filed for record. Beneficiary shall
deposit with Trustee this Deed of Trust, said note and all documents evidencing
expenditures secured hereby.

After the lapse of such time as may be required by law following the recordation
of said notice of default, and notice of sale having been given as then required
by law, Trustee without demand on Trustor, shall sell said property at the time
and place fixed by it in said notice of sale, either as a whole or in separate
parcels, and in such order as it may determine, at public auction to the highest
bidder for cash in lawful money of the United States, payable at time of sale,
Trustee may postpone sale of all or any portion of said property by public
announcement at such time and place of sale and from time to time thereafter may
postpone such sale by public announcement at the time fixed by the preceding
postponement. Trustee shall deliver to such purchaser its deed conveying the
property so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may
purchase at such sale.

After deducting all costs, fees and expenses of Trustee and of this trust,
including the cost of evidence of title in connection with the sale, Trustee
shall apply the proceeds of sale to payment of all sums expended under the terms
hereof, not then repaid, with accrued interest at the amount allowed by law in
effect at the date hereof; all other sums then secured hereby; and the
remainder, if any, to the person or persons legally entitled thereto.

                (7)     Beneficiary, or any successor in ownership of any
indebtedness or obligations secured hereby, may from time to time, by instrument
in writing, substitute a

<PAGE>

successor or successors to any Trustee named herein or acting hereunder, which
instrument, executed by Beneficiary and duly acknowledged and recorded in the
office of the recorder of the county or counties where said property is
situated, shall be conclusive proof of proper substitution of such successor
Trustee or Trustees, who shall, without conveyance from the Trustee predecessor,
succeed to all of its title, estate, rights, powers and duties. Said instrument
must contain the name of the original Trustor, Trustee and Beneficiary
hereunder, the book and page where this Deed of Trust is recorded and the name
and address of the new Trustee.

                (8)     That this Deed of Trust applies to, inures to the
benefit of, and binds all parties hereto, their heirs legatees, devisees,
administrators, executors, successors and assigns. The term Beneficiary shall
mean the owner and holder, including pledgees, of the indebtedness and
obligations secured hereby, whether or not named as Beneficiary herein. In this
Deed of Trust, whenever the context so requires, the masculine gender includes
feminine and/or the neutral, and the singular number includes the plural.

                (9)     The Trustee accepts this trust when this Deed of Trust,
duly executed and acknowledged, is made public record as provided by law.
Trustee is not obligated to notify any party hereto pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or
Trustee shall be a party unless brought by Trustee.

                (10)    This Deed of Trust and the lien of this Deed of Trust;
the obligations of Trustor hereunder; and the rights and interests of
Beneficiary hereunder shall be subject and subordinate to that certain deed of
trust executed by Trustor in favor of Fremont Investment and Loan and recorded
___________, as Instrument No. ___________, San Francisco County, California
Official Records.

Beneficiary may charge for a statement regarding the obligation secured hereby,
provided the charge thereof does not exceed the maximum allowed by law.

The undersigned Trustor requests that a copy of any notice of default and any
notice of sale hereunder be mailed to Trustor at Trustor's address hereinbefore
set forth.

Trustor

   BAKER HAMILTON PROPERTIES, LLC,
   a California limited liability company

                                         By
                                           -------------------------------------
                                              Ronaldo Cianciarulo, President

<PAGE>

STATE OF CALIFORNIA          )
                             )ss
COUNTY OF ____________       )

        On this ____________ day of ________________, __________, before me,
____________________________________ a Notary Public in and for the State of
California, personally appeared _______________________________________
personally known to me (or proved on the basis of satisfactory evidence) to be
the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

        WITNESS my hand and official seal

        Signature ___________________

My commission expires ________________.

STATE OF CALIFORNIA          )
                             )ss
COUNTY OF ____________       )

        On this ____________ day of ________________, __________, before me,
_________________________________ a Notary Public in and for the State of
California, personally appeared _______________________________________
personally known to me (or proved on the basis of satisfactory evidence) to be
the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

        WITNESS my hand and official seal

        Signature ___________________

My commission expires ________________.

<PAGE>

                                 EXHIBIT 7.7(i)

                          FORM OF ESTOPPEL CERTIFICATE

        Omnicom Group Inc., a New York corporation ("Tenant"), hereby certifies
for the benefit of Macromedia, Inc., a Delaware corporation ("Buyer"), with
respect to those certain Premises (as defined below) located in San Francisco,
California, that all of the following statements are true, except as may be
indicated to the contrary herein by Tenant:

        Tenant has accepted, and is in possession of, the premises consisting of
the full second floor ("Premises") of the building (the "Building") located at
601 Townsend Street (together with the adjoining parking garage and 625 Townsend
Street, the "Property"), consisting of approximately 71,498 square feet, as
successor-in-interest to Organic, Inc. ("Organic"), under the terms of that
certain lease ("Original Lease") dated November 8, 1999, executed by Baker
Hamilton Properties, LLC, a California limited liability company (together with
any successor to the interest of the landlord under the Lease [as defined
below], "Landlord"), and Organic. The only amendments to said Lease are the
following: that certain First Amendment to Lease and Payment Agreement ("First
Amendment") dated as of March 20, 2001 by and between Landlord and Organic and
that certain Second Amendment to Lease and Payment Agreement dated as of
December 3, 2001 by and between Landlord and Organic (the "Second Amendment").
The Original Lease as so amended is referred to herein as the "Lease". All
capitalized and undefined terms used in this Estoppel Certificate shall have the
meanings given to them in the Lease. The Lease does not include the November 5
Agreement, as defined in the Second Amendment; the November 5 Agreement is of no
further force or effect; and Buyer would not be bound by the November 5
Agreement if Buyer were to acquire the Property.

        The interest of the original tenant under the Lease was assigned to
Tenant under the teens of that certain Assignment of Lease dated as of January
1, 2003 between Organic, as assignor, and Tenant, as assignee (the
"Assignment"), as consented to by Landlord under the provisions of that certain
letter dated as of January 29, 2003, as executed by Landlord, Organic and
Tenant. The Lease is in full force and effect and constitutes the entire
agreement between Landlord and Tenant with respect to the Premises or Property.
There are no other agreements, options or rights with respect to the Premises or
Property in favor of Tenant or any affiliate of Tenant.

        The term of the Lease commenced on ________________, and expires by its
terms on October 31, 2010, unless sooner terminated. The current installment of
monthly base rent required to be paid under the Lease is $119,163 and has been
paid through _____________, 2003 and no rent has been paid for more than thirty
(30) days in advance of its due date. On November 1, 2006, Monthly Base Rent
will increase to $135,412 and will remain at that amount until October 31, 2010.
Tenant's rights to terminate the Lease under the provisions

<PAGE>

of Sections 2.2(c) and 2.3 of the Original Lease have expired and are of no
further force or effect.

        Tenant is not in a period of free rent, rental credit, rental
concession, rental abatement or other benefit granted to Tenant and is not due
any free rent, rental credit, rental concession, rental abatement or other
benefit granted to Tenant during the remaining term of the Lease. Without
limiting the generality of the foregoing statement, Tenant has no further right
to any rent credit under the provisions of Sections 5 or 8 of the First
Amendment or Section 4(d) of the Second Amendment. Tenant asserts no claim of
default, right of offset, or defense against the payment of rents or other
amounts payable under the Lease.

        Tenant is obligated to reimburse Landlord for Tenant's Share (equal to
33.958%) of all Operating Expenses and Taxes. Tenant's Share of Taxes and
Operating Expenses is collected monthly based on the estimated amount defined as
the Tenant's Additional Rent Deposit in the Original Lease. Tenant's Additional
Rent Deposit is currently in the amount of $__________ per month. Tenant is
current in the payment of its Tenant's Additional Rent Deposits.

        The total number of parking spaces presently leased by Tenant under the
Lease is 72, pursuant to Section 4(h) of the Second Amendment, and the total
current monthly parking rent is $________________________.

        Tenant has no right or option to renew or extend the term of the Lease
or to enlarge the leased premises or lease additional space in the Building or
Property except as follows: pursuant to Section 2.5 of the Original Lease,
Tenant may extend the term of the Lease for up to two additional periods of five
years each.

        Tenant has no option to purchase or lease, or first right of refusal to
purchase or lease with respect to the Premises, the Building or the Property, or
any portion thereof, or Landlord's interest therein. Tenant's right to lease or
purchase the Expansion Space under the provisions of Article 26 of the Original
Lease has expired and is of no further force or effect.

        As of this date, there exists no breach or default under the Lease on
the part of either the Tenant or Landlord. Tenant has no right or option to
terminate the Lease.

        There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment for the benefit of creditors, any
petition seeking reorganization or arrangement under the Bankruptcy laws of the
United States or any state thereof, or any other action brought under said
Bankruptcy laws with respect to Tenant.

        Tenant has not assigned its interest in the Lease, nor has it sublet any
portion of the Premises, except as follows: Organic assigned its interest as
tenant in the Lease to Tenant pursuant to the Assignment, and Tenant subleased
the Premises back to Organic pursuant to

<PAGE>

that certain Sublease Agreement dated as of January 1, 2003 by and between
Tenant, as overtenant, and Organic, as undertenant.

        Landlord has no further obligation to make or pay for any improvements
to Tenant's space or the Property, and any obligation to this effect contained
the Lease has been fully performed. Without limiting the foregoing, Tenant
agrees that Landlord has paid in full all of the Tenant Improvement Allowance,
and that there is no further obligation on the part of Landlord to make any of
the Tenant Improvement Allowance available to Tenant or any permitted successor
or assign thereof.

        The undersigned is the Tenant under the Lease and has authority to sign
this document and to bind said Tenant.

        This Certificate may be relied upon by Landlord, Buyer and any lender to
Buyer in connection with Buyer's acquisition or financing of the Building and
Property, and acceptance by any lender of an assignment of Buyer's interest in
the Lease, as additional security for making a loan.

        [Note: This form is specific to Omnicom and will need to be modified for
other tenants.]

Dated: _______________________, 2003

                                  OMNICOM GROUP INC.,
                                  a New York corporation

                                  By: ________________________________

                                  Name: _______________________________

                                  Title: ______________________________

<PAGE>

                                 EXHIBIT 7.7(ii)
                         FORM OF LANDLORD'S CERTIFICATE

        Baker Hamilton Properties, LLC, a California limited liability company
("Landlord") hereby certifies for the benefit of Macromedia, Inc., a Delaware
corporation ("Buyer"), with respect to those certain Premises (as defined below)
located in San Francisco, California, that all of the following statements are
true, except as may be indicated to the contrary herein by Landlord:

        1.      Omnicom Group, Inc., a New York corporation ("Tenant") has
accepted, and is in possession of, the premises ("Premises") located at 601
Townsend Street, San Francisco, California (together with 650 King Street and
625 Townsend Street, San Francisco, California, the "Property"), as
successor-in-interest to Organic, Inc. ("Organic"), under the terms of that
certain lease ("Original Lease") dated November 8, 1999, executed by Landlord
and Organic. The only amendments to said Lease are the following: That certain
First Amendment to Lease and Payment Agreement dated as of March 20, 2001 by and
between Landlord and Organic and that certain Second Amendment to Lease and
Payment Agreement dated as of December 2001, by and between Landlord and
Organic. The Original Lease as so amended is referred to herein as the "Lease."
The Lease is in full force and effect and constitutes the entire agreement
between Landlord and Tenant with respect to the Premises. There are no other
agreements, options or rights with respect to the Premises or Property in favor
of Tenant or any affiliate of Tenant.

        The interest of Organic under the Lease was assigned to Tenant under the
terms of that certain Assignment of Lease dated as of January 1, 2003 between
Organic, as assignor, and Tenant, as assignee (the "Assignment"). Landlord has
consented to the Assignment.

        2.      The term of the Lease commenced on _______________, _________,
and expires by its terms on ___________________, _________, unless sooner
terminated. The current monthly installment of base rent required to be paid
under the Lease is $_______ and has been paid through ______ 2003 and no rent
has been paid for more than thirty (30) days in advance of its due date. Tenant
is not in a period of free rent, rental credit, rental concession, rental
abatement or other benefit granted to Tenant and is not due any free rent,
rental credit, rental concession, rental abatement or other benefit granted to
Tenant during the remaining term of the Lease, except as set forth in the Lease.
Tenant has not asserted, and to Landlord's knowledge, no basis exists for Tenant
to assert, any claim of default, right of offset, or defense against the payment
of rents or other amounts payable under the Lease except -----------------.

        3.      Tenant is obligated to reimburse Landlord for its percentage
share of all real property taxes, operating expenses, common area maintenance
and insurance expenses affecting the Building of which the Premises are a part,
and the current estimated amount of such reimbursements payable monthly by
Tenant is $_______________. Tenant is current in the payment of such
reimbursable expenses except ________________________________________.

        4.      The total number of parking spaces presently leased by Tenant
under the Lease is ____________________________, and the total current monthly
parking rent is $______________.

<PAGE>

        5.      Tenant has no right or option to renew or extend the term of the
Lease or to enlarge the leased premises except as
follows:________________________________________.

        6.      Tenant has no option to purchase, or first right of refusal with
respect to the Building, of which the Premises are a part, or the Property, or
any portion thereof, or Landlord's interest therein except the right of Tenant
pursuant to Article 26 of the Original Lease with respect to the Property known
as 625 Townsend Street, San Francisco, California.

        7.      As of this date, Landlord has no knowledge of any pending or
threatened breach or default under the Lease on the part of either the Tenant or
Landlord except____________________________. Tenant has no right or option to
terminate the Lease.

        8.      To Landlord's knowledge, there has not been filed by or against
Tenant a petition in bankruptcy, voluntary or otherwise, any assignment for the
benefit of creditors, any petition seeking reorganization or arrangement under
the Bankruptcy laws of the United States or any state thereof, or any other
action brought under said Bankruptcy laws with respect to Tenant.

        9.      To landlord's knowledge, Tenant has not assigned its interest in
the Lease, nor has it sublet any portion of the Premises, except as follows:
Organic assigned its interest as tenant under the Lease to Tenant pursuant to
the Assignment and Tenant subleased the Premises back to Organic pursuant to
that certain Sublease Agreement dated as of January 1, 2003 by and between
Tenant, as sublessor and Organic, as sublesee..

        10.     To Landlord's knowledge, Landlord has no further obligation to
make or pay for any improvements to Tenant's space, and any obligation of
Landlord to this effect contained in the Lease has been fully performed.

        11.     The undersigned has authority to sign this document on behalf of
Landlord.

        12.      This Certificate may be relied upon by Buyer and any lender to
Buyer in connection with Buyer's acquisition or financing of the Building of
which the Premises are a part, and acceptance by any lender of an assignment of
Buyer's interest in the Lease, as additional security for making a loan.

        For purposes of this Certificate, "to Landlord's Knowledge," or words of
similar import, shall mean the actual knowledge of Ronaldo Cianciarulo without
any obligation to make inquiry of any kind.

Dated:____________________, 2003

                                  BAKER HAMILTON PROPERTIES, LLC,
                                  a California limited liability company

                                  By: _______________________________

                                  Name: _____________________________

                                  Title: ____________________________

<PAGE>

                                  EXHIBIT 9.1.1

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO

MAIL TAX STATEMENTS TO

                               FORM OF GRANT DEED

        FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
Baker Hamilton Properties, LLC, a California limited liability company
("Grantor") hereby grants to Macromedia, Inc., a Delaware corporation, that
certain real property (the "Real Property") located in the City and County of
San Francisco, State of California, as more particularly described on Exhibit A
attached hereto, together with all easements, privileges and rights appurtenant
to the Real Property and pertaining or held or enjoyed in connection therewith
and all of Grantor's right, title and interest in and to any real property,
lying in the bed of any street, alley, road or avenue to the centerline thereof
adjoining the Real Property. The conveyance hereunder is made subject to matters
of record in the Official Records of the City and County of San Francisco,
California as of the date of this conveyance.

        IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of
_________, 2003.

                                   GRANTOR:

                                   Baker Hamilton Properties, LLC,
                                   a California limited liability company

                                  By: _______________________________

                                  Name: _____________________________

                                  Title: ____________________________

<PAGE>

STATE OF CALIFORNIA                  )
                                     ) ss.
COUNTY OF __________________         )
                                     )
___________________________________

        On _________________________, 2003, before me, ________________________,
personally appeared, ___________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity, and that by
his/her/their signature(s) on the instrument, the person(s) or the entity upon
behalf of which the person(s) acted, executed the instrument.

        WITNESS my hand and official seal.

_________________________________        (Seal)

<PAGE>

                                    EXHIBIT A
                                  TO GRANT DEED

                                LEGAL DESCRIPTION

Real property in the City of San Francisco, County of San Francisco, State of
California, described as follows:

Beginning at a point formed by the intersection of the southwesterly line of
Seventh Street with the southeasterly line of Townsend Street; running thence
southeasterly along the southwesterly line of Seventh Street 275 feet to the
northwesterly line of King Street; thence at a right angle southwesterly along
the said northwesterly line of King Street 275 feet; thence at a right angle
northwesterly 275 feet to the southeasterly line of Townsend Street; and thence
at a right angle northeasterly along the said southeasterly line of Townsend
Street 275 feet to its intersection with the southwesterly line of Seventh
Street and the point of beginning.

Being a portion of 100 Vara Block No. 413.

APN: Lot: 001 Block: 3799

<PAGE>

                                  EXHIBIT 9.1.2

                              FORM OF BILL OF SALE

        THIS BILL OF SALE (the "Bill of Sale") is made as of the ____ day of
________, 2003 by Baker Hamilton Properties, LLC, a California limited liability
company ("Seller"), in favor of Macromedia, Inc., a Delaware corporation
("Buyer").

                Seller and Buyer are parties to an Option Agreement (the "Option
Agreement") dated July ____, 2003 which provides for the sale of certain real
property located at 601 Townsend Street, San Francisco, California (the "Real
Property").

        In connection with the Option Agreement, Seller is required to convey to
Buyer certain items of tangible personal property as hereinafter described.

        NOW, THEREFORE, for valuable consideration, receipt and sufficiency of
which are hereby acknowledged, Seller hereby conveys, transfers and delivers to
Buyer, its legal representatives, successors and assigns, all of its right,
title and interest in and to all tangible personal property of any type owned by
Seller and located at the Real Property and used exclusively in connection with
the operation of the Real Property (collectively, "Personal Property"). The
Personal Property is transferred "As-Is", "Where-Is" without warranties of any
kind including without limitation, implied warranties of merchantability or
fitness for any particular purpose; provided, however, that Seller does warrant
good and marketable title to the Personal Property, free and clear of all liens
and encumbrances, save and except for any liens or encumbrances relating to or
arising out of the Permitted Exceptions identified pursuant to the Option
Agreement.

        IN WITNESS WHEREOF, the undersigned have caused this Bill of Sale to be
duly executed and delivered as of the day and year first above written.

                                   SELLER:

                                   Baker Hamilton Properties, LLC,
                                   a California limited liability company

                                  By: _______________________________

                                  Name: _____________________________

                                  Title: ____________________________

<PAGE>

                                  EXHIBIT 9.1.3

                    FORM OF ASSIGNMENT & ASSUMPTION AGREEMENT

        THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") is dated as
of _________________, 2003 by and between Baker Hamilton Properties, LLC, a
California limited liability company ("Assignor") and Macromedia, Inc., a
Delaware corporation ("Assignee").

                                 R E C I T A L S

        A.      Assignor and Assignee entered into that certain Option Agreement
dated as of July ___, 2003 ("Agreement") with respect to the sale of certain
Property (as defined in the Agreement).

        B.      Pursuant to the Agreement, Assignor is assigning to Assignee and
Assignee is acquiring all of Assignor's interest in, to, and under those certain
leases described on Exhibit A, attached hereto and incorporated herein by this
reference (the "Leases") together with any security deposits paid pursuant to
the Leases, except to the extent that Assignor was entitled to and did apply any
part of such deposits to tenant obligations under the Leases.

        C.      Pursuant to the Agreement, Assignor is obligated to assign to
Assignee all assignable current licenses, permits, certificates of occupancy,
approvals and entitlements issued, granted or existing in connection with the
Real Property (as defined in the Agreement) as well as any and all assignable
development rights and other intangible rights, interests or privileges directly
relating to or used directly in connection with the Real Property, any
assignable right to use the current names of the Real Property, logos,
trademarks, tradenames, symbols and promotional materials, and all transferable
warranties, guarantees or sureties relating to the Real Property or to the
Personal Property (as defined in the Agreement) (collectively, the "Intangible
Property"). Assignor is further obligated to assign to Assignee all Service
Contracts and other agreements, if any, affecting the Property and listed on
Exhibit B attached hereto and incorporated herein by this reference
(collectively, the "Service Contracts").

        NOW THEREFORE, for good and valuable consideration, Assignor and
Assignee agree:

                                    AGREEMENT

        1.      Assignment of Leases. Assignor hereby assigns, conveys,
transfers and sets over to Assignee all of Assignor's right, title and interest
in, to and under the Leases, together with the security deposits (including
without limitation any of the letters of credit given in connection with any of
the Leases) paid under the Leases, except to the extent that Assignor was
entitled to and did apply any part of such deposits to tenant

<PAGE>

obligations under the Leases, subject to the rights of the Tenants under the
Leases and Assignee hereby accepts such assignment.

        2.      Assignment of Service Contracts and Intangible Property.
Assignor hereby assigns, sells, transfers, sets over and delivers to Assignee
all of Assignor's right, title and interest in and to the Intangible Property
and the Service Contracts, and Assignee hereby accepts such assignment.

        3.      Assumption of Leases. Assignee hereby assumes and agrees to
perform, fulfill and comply with all covenants and obligations to be performed,
fulfilled or complied with by the landlord under the Leases accruing from and
after the Closing Date, including, but not limited to, payment of all valid
claims made by the Tenants with respect to the tenant security deposits, to the
extent such security deposits were assigned, and were either paid or credited,
to Assignee by Assignor. Assignor shall remain responsible for all Assignor's
obligations under or with respect to the Leases accruing prior to the Closing
Date.

        4.      Additional Assumption. Assignee hereby assumes and agrees to
perform, fulfill and comply with all covenants and obligations to be performed,
fulfilled or complied with by the owner of the Real Property with respect to the
Intangible Property and the Service Contracts accruing on or after the Closing
Date. Assignor shall remain responsible for all of Assignor's obligations under
or with respect to the Intangible Property and the Service Contracts accruing
prior to the Closing Date.

        5. Indemnification. Assignee shall and does hereby indemnify Assignor
against, and agrees to hold Assignor harmless of and from all liabilities,
obligations, actions, suits, proceedings or claims and costs or expenses,
including, but not limited to, reasonable attorneys' fees based upon or arising
out of any breach or failure of Assignee to observe or perform any of the
obligations of Assignee as set forth in this Assignment. Assignor shall and does
hereby indemnify Assignee against, and agrees to hold Assignee harmless of and
from all liabilities, obligations, actions, suits, proceedings or claims and
costs or expenses, including, but not limited to, reasonable attorneys' fees
based upon or arising out of any breach or failure of Assignor to observe or
perform any of the obligations of Assignor as set forth in this Assignment.

        6.      Binding Effect. This Assignment shall inure to the benefit of
and shall be binding upon the parties hereto and their respective successors and
assigns.

        7.      Defined Terms. Except as otherwise specifically provided in this
Assignment, defined terms employed in this Assignment shall have the same
meaning as described in the Agreement.

<PAGE>

        8.      Governing Law. This Assignment and the legal relations between
the parties hereto shall be governed by and be construed in accordance with the
laws of the State of California.

        9.      Counterparts. This Assignment may be executed in counterparts,
each of which shall constitute an original. This Assignment shall only be
effective if a counterpart is signed by both Assignor and Assignee.

        10.     Survival. The provisions of this Assignment shall survive the
Closing.

ASSIGNOR:                       ASSIGNEE:

Baker Hamilton Properties,      Macromedia, Inc., a Delaware corporation
LLC, a California limited
liability company

By:                             By:
   --------------------------      ------------------------------------

<PAGE>

                                    EXHIBIT A
                     TO ASSIGNMENT AND ASSUMPTION AGREEMENT

                               DESCRIPTION LEASES

                                [To be attached]

<PAGE>

                                    EXHIBIT B
                     TO ASSIGNMENT AND ASSUMPTION AGREEMENT

                                SERVICE CONTRACTS

                                [To be attached]

<PAGE>

                                   EXHIBIT 9.3

                       FORM OF TENANT NOTIFICATION LETTER

Certified Mail, Return
Receipt Requested

__________________________                          Dated:______________________
__________________________
__________________________

Attn: ________________

                                NOTICE TO TENANT

Tenant address:____________________________

Premises:__________________________________

Lease dated:_______________________________

Landlord:__________________________________

Tenant:____________________________________

        This is to notify you that the undersigned has conveyed its fee interest
in the property located at 601 Townsend Street, San Francisco California to
Macromedia, Inc., a Delaware corporation ("Buyer"), and in connection therewith
has assigned its interest as landlord under your lease, to Buyer, whose address
is:

_____________________________
_____________________________
_____________________________

Attn: _______________________

        Commencing as of the date hereof, all rental and other payments under
your lease shall be paid to Buyer at the address specified above unless you are
otherwise notified in writing by Buyer. All notices to the landlord pursuant to
your lease should hereafter be sent to Buyer at the address specified above and
all inquires with respect to (and responsibility for) your security deposit
should hereafter be directed to Buyer.

                                        Very truly yours,

                                         Baker Hamilton Properties, LLC
                                         a California limited liability company

                                         By: _______________________________

<PAGE>

                                 EXHIBIT 14.1.4

                             ARBITRATION OF DISPUTES
                    RELATING TO ESTIMATED RESTORATION COSTS.

        1.      Estimators. Within twenty (20) business days after delivery of
notice invoking the provisions of this Section, each party shall designate, by
written notice to the other party, a licensed general contractor having at least
ten (10) years experience in estimating construction costs of major construction
projects in the City and County of San Francisco ("City") to estimate the cost
or amount in dispute. Each such estimator shall be competent, licensed,
qualified by training and experience in the City, disinterested and independent.
Each estimator (or if either party fails to appoint its estimator within such
twenty (20) business day period, the estimator appointed by the other party)
shall make an independent determination of the disputed amount in accordance
with the provisions hereof. The estimators may share and have access to
objective information in preparing their estimates, but they will otherwise act
independently. Each estimator shall complete, sign and submit its written
estimate of the disputed construction or replacement cost, as applicable, within
fifteen (15) business days after the appointment of both estimators, unless the
parties agree to permit a longer period of time. If the higher estimate is not
more than one hundred ten percent (110%) of the lower estimate, the disputed
amount shall be determined for purposes of this Agreement to equal the average
of the two (2) estimates.

        2.      Arbitration. If the higher estimate is more than one hundred ten
percent (110%) of the lower estimate, the parties shall agree upon and appoint
an independent arbitrator within ten (10) business days after the first two (2)
estimates have been submitted to the parties. The arbitrator shall have
experience acting as an arbitrator of disputes involving construction costs or
construction disputes. If the parties do not appoint such arbitrator within such
thirty (30) day period, then either party may apply to the Superior Court of the
State of California in and for the County of San Francisco for appointment of an
arbitrator meeting the foregoing qualifications. If the court denies or
otherwise refuses to act upon such application, either party may apply to the
Judicial Arbitration and Mediation Services, Inc. ("JAMS"), or any similar
provider of professional commercial arbitration services in San Francisco,
California, for a list of available arbitrators containing three (3)
arbitrators, and each party may strike one potential arbitrator. The remaining
arbitrator shall serve as the arbitrator. The arbitrator shall consider the
estimates submitted by the parties as well as any other relevant written
evidence which the parties may choose to submit. If a party chooses to submit
any such evidence, it shall deliver a complete and accurate copy to the other
party at the same time it submits the same to the arbitrator. Neither party
shall conduct ex parte communications with the arbitrator regarding the subject
matter of the arbitration. Within fifteen (15) business days after his or her
appointment, the arbitrator shall conduct

<PAGE>

a hearing, at which Seller and Buyer may each make supplemental oral and/or
written presentations, with an opportunity for testimony by the estimators and
questioning by the parties and the arbitrator. Within ten (10) business days
following the hearing, the arbitrator shall select the estimate submitted by one
or the other of the first two (2) estimators, as the more accurate estimate of
the disputed amount, in the opinion of the arbitrator. The determination of the
arbitrator shall be limited solely to the issue of deciding which of the
estimates is closest to the actual disputed value or amount. The arbitrator
shall have no right to propose a middle ground or to modify either of the two
estimates, or to modify any provision of this Agreement.

        3.      Conclusive Determination. Except as provided in California Code
of Civil Procedure Section 1286.2 (or its successor), the determination by the
estimators or the arbitrator, as applicable, shall be conclusive, final and
binding on the parties. Neither the estimators nor the arbitrator shall have any
power to modify any of the provisions of this Agreement. Subject to the
provisions of this Section, the parties will cooperate to provide all
appropriate information to the estimators and the arbitrator. The estimators and
the arbitrator will each report their respective determinations in writing,
supported by the reasons for the determination.

        4.      Conduct of Arbitration Proceeding. Any arbitration proceeding
under this Section 14.1.4 shall be subject to California Code of Civil Procedure
Sections 1280 to 1294.2 (but excluding Section 1283.05 with respect to
discovery), or successor California laws then in effect relating to arbitration
generally. Any such proceeding shall be conducted in the City of San Francisco.

        5.      Fees and Costs; Waiver. Each party shall bear the fees, costs
and expenses of the estimator it selects. The fees, costs and expenses of the
arbitrator and the costs and expenses of the arbitration proceeding, if any,
shall be shared equally by Seller and Buyer. The parties waive any claims
against the estimator appointed by the other party, and against the arbitrator,
for negligence, malpractice, or similar claims in the performance of the
estimates or arbitration contemplated by this Section.

<PAGE>

                                 SCHEDULE 12.2.4

                            DESCRIPTION OF LITIGATION

NONE

<PAGE>

                                 SCHEDULE 12.2.5

                            DESCRIPTION OF VIOLATIONS

The width of the sidewalk running along Townsend Street adjacent to the Real
Property is not in compliance with applicable zoning requirements. The width of
the sidewalk is less than that required.

<PAGE>

                                 SCHEDULE 12.2.8

                           DESCRIPTION OF LEASE ISSUES

        With reference to the Lease with Omnicom Group, Inc., discussions are
occurring between Seller and such Tenant relating to differences in
determination of the amount of reimbursable expenses having been paid and
payable by such Tenant to Seller. In addition, differences exist between Seller
and Tenant with respect to the return to Tenant of a letter of credit in the
amount of $4.3 million dollars in conjunction with issues relating to the
performance by Tenant of certain work with respect to the computer server room
maintained by Tenant in the premises.

<PAGE>

                                 SCHEDULE 12.2.9

                        DESCRIPTION OF COMMISSION ISSUES

        There is a claim being made for additional leasing commissions payable
in connection with the Lease with Omnicom Group, Inc. Any such leasing
commissions shall be the responsibility of Seller, and Seller shall indemnify,
defend, and hold Buyer harmless with respect to such leasing commissions.

<PAGE>

                                SCHEDULE 12.2.10

                 DESCRIPTION OF ISSUES RELATING TO DEVELOPMENTAL
                                  REQUIREMENTS

        1.      One or more certificates of occupancy may remain to be issued in
connection with the Improvements.

        2.      A child care fee to the City of San Francisco remains unpaid in
connection with the Real Property.

<PAGE>

                                                            [LOGO OF MACROMEDIA]

August 12, 2003

Baker Hamilton Properties, LLC
601 Townsend Street, Suite 107
San Francisco, CA 94103
Attention: Ronaldo Cianciarulo

     Re:    Option Agreement ("Agreement") dated July 16 2003, by and between
            Baker Hamilton Properties, LLC, ("Seller") and Macromedia, Inc.
            ("Buyer")

Gentlemen:

     With reference to the above Agreement and specifically with reference to
Section 1.4 of the above Agreement, please consider this letter notice of
Buyer's unequivocal exercise of the Option as described in the Agreement.

     This letter constitutes the "Exercise Notice" as defined in the Agreement.

                                                     Very truly yours,

                                                     /s/ James L. Morgensen
                                                     James L. Morgensen
                                                     Vice President, Real Estate

cc:  Walter F. Merkle

                                                                      Macromedia

                                                             600 Townsend Street
                                                                   San Francisco
                                                           California 94103, USA

                                                              www.macromedia.com<PAGE>

                                                                   EXHIBIT 10.02

                                OPTION AGREEMENT
                 625 Townsend Street, San Francisco, California

                                 By and Between

                               TOWNSEND 625, LLC,
                     A CALIFORNIA LIMITED LIABILITY COMPANY

                                   ("Seller")

                                       and

                                MACROMEDIA, INC.
                             A DELAWARE CORPORATION

                                    ("Buyer")

<PAGE>

                                OPTION AGREEMENT
                 625 Townsend Street, San Francisco, California

        THIS OPTION AGREEMENT ("Agreement") is made and entered into as of July
16, 2003 (the "Effective Date") by and between Townsend 625, LLC, a California
limited liability company ("Seller"), and Macromedia, Inc., a Delaware
corporation ("Buyer").

                                 R E C I T A L S

        This Agreement is made with respect to the following facts and
circumstances:

        A.      Seller owns certain real property commonly known as 625 Townsend
Street, San Francisco, California, which real property, together with certain
personal property is collectively referred to in this Agreement as the
"Property" and is more particularly defined below.

        B.      Subject to the terms and conditions herein, Seller desires to
grant Buyer an option to purchase the Property, and Buyer desires to acquire
such option.

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer agree as follows:

1.      OPTION TO PURCHASE.

        1.1     Grant of Option. In consideration for the Option Payment
provided for below and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby grants to Buyer an
option ("Option") to purchase the Property in accordance with and subject to all
of the terms and conditions set forth in this Agreement.

        1.2     Option Payment. As consideration for the grant of the Option
provided herein, Buyer shall pay to Seller outside of escrow, on the second
business day following the Effective Date, the sum of Twenty Five Thousand
Dollars ($25,000) in immediately available funds ("Option Payment") provided,
however, that in no event shall Buyer be required to pay the Option Payment
until one (1) business day following the date on which the First Offer Notice
(as defined immediately below) has been given by Seller to Buyer, if at all.
Seller shall give Buyer written notice ("First Offer Notice") in the event that
Omnicom (as defined below) fails to timely exercise the right of first offer as
more particularly described in Section 8.1.6 below. Upon purchase of the
Property following exercise of the Option, the Option Payment shall be credited
against the Purchase Price (as defined below) for the benefit of Buyer. Except
as otherwise provided in this Agreement, in the event that Buyer does not
exercise the Option provided for herein, or in the event that Buyer does not
purchase the Property after exercising the Option, then the entire amount of the
Option Payment shall be retained by Seller.

<PAGE>

        1.3     Term. The term ("Term") of the Option shall commence as of the
Effective Date and shall continue thereafter until 5:00 p.m. Pacific daylight
time, August 12, 2003.

        1.4     Exercise of the Option. The Option provided for herein shall be
exercised, if at all, by written notice ("Exercise Notice") given by Buyer to
Seller prior to the expiration of the Term. Such notice shall set forth the
unequivocal intent of the Buyer to exercise the Option. The Exercise Notice
shall be in the form attached hereto as Exhibit 1.4. Following timely exercise
of the Option provided for herein, Buyer shall purchase from Seller and Seller
shall sell to Buyer, the Property in accordance with all of the terms of this
Agreement. Notwithstanding any provision to the contrary contained in this
Agreement, including, without limitation, the provisions of this Section 1.4,
the Option shall not be considered as having been exercised by Buyer, unless (i)
the Exercise Notice is timely given prior to the expiration of the Term, (ii)
the Deposit (as defined below) is timely delivered, and (iii) the options as
provided in the 601 Agreement (as defined below) and the King Street Agreement
(as defined below) are concurrently duly exercised. For purposes of this
Agreement, the term "601 Agreement" refers to a separate agreement in connection
with certain real property commonly known as 601 Townsend Street, San Francisco,
California ("601 Property") pursuant to which Baker Hamilton Properties, LLC, a
California limited liability company ("Baker Hamilton"), an affiliate of Seller,
has granted and Buyer has acquired an option to purchase the 601 Property. For
purposes of this Agreement, the term "King Street Agreement" refers to a
separate agreement in connection with certain real property commonly known as
650 King Street, San Francisco, California ("King Street Property") pursuant to
which Baker Hamilton has granted to Buyer an option to purchase the King Street
Property.

        1.5     Termination. In the event that Buyer fails to duly exercise the
Option, as provided in Section 1.4, this Agreement shall terminate and neither
party shall have any further rights or obligations hereunder (except for the
obligations of Seller or Buyer which are expressly stated in this Agreement to
survive the termination of this Agreement) and, except as otherwise provided in
this Agreement, the Option Payment shall be retained by Seller.

2.      PURCHASE AND SALE.

        2.1     Property. Subject to the terms and conditions hereof, upon the
exercise of the Option provided for above, Seller hereby agrees to sell, convey
and assign to Buyer, and Buyer hereby agrees to purchase and accept from Seller
on the Closing Date (as defined below) the following (collectively, the
"Property"):

                2.1.1   That certain tract or parcel of land situated in the
City and County of San Francisco, California, which is legally described on
Exhibit 2.1.1 attached hereto, together with any and all rights, privileges and
easements appurtenant thereto (collectively, the "Land");

                                        2

<PAGE>

                2.1.2   All buildings, structures, fixtures and other
improvements of every kind and description affixed to or located in, on, over,
or under the Land (excluding fixtures owned by tenants and which such tenants
have the right to remove under the terms of their respective Leases, as defined
below) (all of which are collectively referred to as the "Improvements"); and

                2.1.3   All right, title and interest of Seller in and to all
tangible personal property listed on Exhibit 2.1.3 attached hereto
(collectively, the "Personal Property").

        2.2     Real Property. The Land and Improvements are collectively
referred to as the "Real Property."

        2.3     Assignment. In addition, Seller shall convey and assign to Buyer
all of the right, title and interest of Seller in and to (i) all leases,
licenses, rental and other agreements, if any, for the use or occupancy of any
portion of the Real Property (collectively, "Leases"), which Leases are listed
on Exhibit 2.3(i) attached hereto; together with any guarantees of the Leases
and any and all security deposits, letters of credit, and other property given
or delivered by any tenant, lessee, or occupant under a Lease (collectively, the
"Tenants" and each, individually, a "Tenant") as collateral security for
performance of such Tenant's obligations under such Lease; (ii) all assignable
service contracts and other agreements, if any, relating to the Real Property or
Personal Property, which, pursuant to the terns of this Agreement, are to
continue in effect after the Closing (as defined below) [the service contracts
presently applicable to the Property are listed on Exhibit 2.3(ii) attached
hereto (collectively, the "Service Contracts")]; (iii) all assignable current
licenses, permits, certificates of occupancy, approvals and entitlements issued
or granted in connection with the Real Property as well as any and all
assignable development rights and any other intangible rights, interests or
privileges relating to or used in connection with the Real Property; (iv) any
assignable right to use the current names of the Real Property, logos,
trademarks, tradenames and symbols and promotional materials; and (v) all
transferable warranties, guarantees or sureties relating to the Real Property or
the Personal Property. Such assignment shall be made pursuant to the form of
Assignment and Assumption Agreement described in Section 9.1.3 below
("Assignment").

        2.4     Excluded Property. Notwithstanding any provision to the contrary
of this Agreement, the Property being conveyed pursuant to this Agreement does
not include (and Seller expressly reserves all rights with respect to) the
following: (i) any rebates of real property taxes on the Real Property paid by
Seller and attributable to the period prior to the Closing; and (ii) any refund
or other amount recovered from the California Petroleum Underground Storage Tank
Clean-Up Fund, or otherwise recovered, with respect to Seller's previously
having removed one or more underground storage tanks from the Real Property.
Following the Closing, Buyer shall reasonably cooperate with Seller with respect
to the matters described above in this Section 2.4 by executing such

                                        3

<PAGE>

documents and taking such action as may be reasonably requested by Seller in
connection with such matters, at no cost or expense to Buyer.

3.      PURCHASE PRICE. Buyer shall pay as the total purchase price for
the property ("Purchase Price") the sum of nine million five hundred thousand
dollars ($9,500,000). The purchase price shall be paid as follows:

        3.1     Option Payment. At Closing, the Option Payment shall be applied
and credited toward the payment of the Purchase Price. In the event that Buyer
fails to timely pay the Option Payment, Seller shall be entitled, at Seller's
sole option, to terminate this Agreement immediately by giving written notice of
such termination to Buyer;

        3.2     Deposit. Subject to the timely exercise of the Option by Buyer,
not later than two (2) business days following the date on which the Exercise
Notice is given, Buyer shall cause an additional Six Hundred Thousand Dollars
($600,000) (the "Deposit") in immediately available funds to be delivered into
Escrow (as defined below). The failure of Buyer to timely deliver the Deposit
shall be a material default, and Seller, at Seller's sole option, may terminate
this Agreement by giving written notice of such termination to Buyer and the
Title Company (as defined below). In the event of any such termination by reason
of Buyer's failure timely to deliver the Deposit into Escrow, Buyer shall be
considered to have not exercised the Option and the entire amount of the Option
Payment shall be retained by Seller.

        3.3     Interest on Deposit. The Deposit shall be held in Escrow in
accordance with the provisions of this Agreement in an interest bearing,
federally insured account at a bank or other financial institution designated by
the Title Company and reasonably acceptable to Buyer, and all interest accruing
thereon shall be credited to the account of Buyer, except as otherwise provided
herein, and shall be considered to be a part of the Deposit.

        3.4     Disposition of the Deposit. At the Closing, the Deposit and all
interest accrued thereon shall be applied and credited toward the payment of the
Purchase Price. Upon exercise of the Option and delivery of the Deposit into
Escrow, the Deposit shall become non-refundable in accordance with the
provisions of Section 19.1 subject to return to Buyer only as expressly provided
in this Agreement.

        3.5     Cash Balance. On or before the Closing, Buyer shall deliver into
Escrow in immediately available funds the balance of the Purchase Price. The
Purchase Price, net of any prorations and closing costs to be paid by Seller as
provided in this Agreement and net of the Option Payment, shall be paid by the
Title Company to Seller on the Closing Date by federal wire transfer of
immediately available funds to a bank account(s) designated by Seller in a
written notice to the Title Company given prior to the Closing.

                                        4

<PAGE>

4.      TITLE.

        4.1     Vesting of Title. At Closing, Seller shall convey fee simple
title to the Real Property to Buyer by execution and delivery of the Deed (as
defined below). Issuance by the Title Company (or an unconditional commitment to
issue) as of the Closing of the Buyer's Title Policy (as defined below) shall
constitute evidence of delivery of title by Seller.

        4.2     Buyer's Title Insurance. At Closing, the Title Company shall
issue to Buyer an ALTA owner's title insurance policy (1970 form) ("Buyer's
Title Policy") in the amount of the Purchase Price insuring that fee simple
title to the Real Property is vested in Buyer subject only to the Permitted
Exceptions (as defined below). Buyer shall be entitled to request that the Title
Company issue such endorsements to the Buyer's Title Policy as Buyer may
reasonably require, provided that such endorsements shall be at no cost or
additional liability to Seller (other than any liability to the Title Company
under any customary affidavits or certifications reasonably requested by the
Title Company) and the Closing shall not be delayed as a result of Buyer's
request.

        4.3     Permitted Exceptions. As a condition precedent of Buyer's
obligations as provided in Section 8.2.4 but not as a covenant of Seller, Seller
shall convey the Property and Buyer shall accept the Property subject to the
following matters, which are collectively referred to as the "Permitted
Exceptions":

                4.3.1   All exceptions to title shown in the Title Report (as
defined below) as it may be amended and on the Survey (as defined below) that
are approved or deemed approved by Buyer as provided in Section 7.3.2 hereof and
7.3.3 hereof, if applicable;

                4.3.2   the lien of non-delinquent real and personal property
taxes and assessments;

                4.3.3   the rights of the Tenants, if any, under the Leases
referred to in Exhibit 2.3 (i);

                4.3.4   the Service Contracts, if any, to be assumed by Buyer;

                4.3.5   local, state and federal laws, ordinances or
governmental regulations, including but not limited to, building and zoning
laws, ordinances and regulations, now existing or hereafter in effect with
respect to the Real Property;

                4.3.6   matters affecting the condition of title created by or
with the written consent of Buyer; and

                4.3.7   standard printed exceptions included in an ALTA owner's
title insurance policy (1970 form).

                                        5

<PAGE>

5.      ESCROW.

        5.1     Opening of Escrow. Seller shall deliver a fully executed
counterpart of this Agreement into escrow ("Escrow") to be established at
Chicago Title Company, One Kaiser Plaza, Suite 755, Oakland, California 94612,
Attention: Ms. Kris Owens ("Title Company") on or before three (3) days
following the Effective Date.

        5.2     Instructions to Title Company. Seller and Buyer shall each be
entitled to submit escrow instructions to the Title Company in connection with
the Closing of the Escrow. Seller and Buyer shall in addition execute such
further escrow instructions as the Title Company may reasonably require in
connection with the Closing. In the event of any conflict between the terms and
conditions of this Agreement and the provisions of any escrow instructions
prepared by Seller, Buyer or the Title Company, the terms and conditions of this
Agreement shall control.

6.      CLOSING.

        6.1     Closing. The purchase and sale of the Property as contemplated
by this Agreement, including but not limited to the recordation of the Deed and
the completion of the other matters required by this Agreement to be done
contemporaneously (the "Closing") shall occur on August 15, 2003, or on such
earlier date as is agreed upon by Seller and Buyer. The date on which the
Closing actually occurs shall be referred to as the "Closing Date."

        6.2     Failure to Close. If the Closing does not occur on or before the
date set forth in Section 6.1 above (as such date may be extended pursuant to
the express provisions of this Agreement), then in the absence of a written
agreement between the parties to extend the date of the Closing, either party
hereto (so long as such party is not then in default pursuant to this
Agreement), without waiving any rights it may otherwise have pursuant to the
Agreement, may elect to terminate this Agreement by giving written notice of
such termination to the other and to the Title Company. In the event of a
termination of this Agreement pursuant to this Section 6.2, if neither Seller
nor Buyer is in default pursuant to this Agreement, the Deposit, including all
interest accrued thereon, shall be returned to Buyer within two (2) business
days following the date of termination of this Agreement, and the Option Payment
shall be retained by Seller, except as otherwise provided in this Agreement. In
the event of any such termination, and (i) Seller is in default pursuant to this
Agreement, the Deposit, including the interest accrued thereon, and Option
Payment shall be returned to Buyer within two (2) business days following the
date of termination, or (ii) Buyer is in default pursuant to this Agreement, the
disposition of the Deposit shall be governed by the provisions of Section 19.1
below, and the Option Payment shall be retained by Seller.

                                        6

<PAGE>

7.      DUE DILIGENCE.

        7.1     Due Diligence. Buyer shall be entitled to conduct due diligence
with respect to the Property through and including the date on which the
expiration of the Term occurs ("Expiration Date"), and, if Buyer shall exercise
the Option, thereafter Buyer shall continue to have access to the Real Property
pursuant to the provisions of Section 7.4 below.

        7.2     Available Information. Seller shall make available to Buyer the
following documents and materials with respect to the Property (collectively,
the "Due Diligence Materials") in accordance with the following:

                7.2.1   Property Files. Seller shall make available to Buyer and
Buyer's agents and representatives, upon reasonable notice and during normal
business hours, all files in the possession of Seller, or in possession of
Seller's property manager, if any, relating to the ownership, operation,
construction, use or occupancy of the Property, or any portion of the Property,
including without limitation, all current Leases, the current operating budget,
building plans and specifications, surveys, all current service or maintenance
contracts, all other current contracts, warranties (including construction),
third party environmental or soils reports, third party seismic reports,
building and occupancy permits, all current budgets, public sector notices, and
tax assessments to the extent in Seller's possession or in the possession of
Seller's property manager, if any. Buyer, at its expense, may make photocopies
of such material relative to the Property as Buyer may determine.

                7.2.2   Restricted Information. Notwithstanding any provision to
the contrary, "Due Diligence Materials" shall not include, and Seller shall have
no obligation to furnish or otherwise make available to Buyer, (i) any federal
or state income tax returns; (ii) any information or documentation, the
disclosure of which would violate any contract or agreement binding on Seller or
any applicable law; (iii) any documents, instruments, or agreements evidencing,
securing, or relating to the mortgage loan currently encumbering the Real
Property, provided that Seller will make available to Buyer any third party
reports with respect to the Property in Seller's possession and prepared in
connection with the mortgage loan, (iv) any internally or externally prepared
reports or analysis concerning the valuation of the Real Property; or (v) any
information received from or concerning any other potential purchaser of the
Property, provided that Seller will make available to Buyer any third party
reports in the possession of Seller acquired from or in connection with any
other potential purchaser of the Property. Nothing contained in this section is
intended to limit any disclosure obligations Seller may have under applicable
law.

                7.2.3   Confidentiality. Buyer and its representatives shall
hold in strictest confidence all data and information obtained with respect to
Seller or the Property whether obtained before or after the execution and
delivery of this Agreement, and shall

                                        7

<PAGE>

not disclose the same to others except as may be required by law or with the
consent of the Seller; provided, however, that it is understood and agreed that
Buyer may disclose such data and information to the employees, brokers, lenders
(actual or potential), consultants, accountants and attorneys of Buyer provided
that such persons agree to treat such data and information confidentially. In
the event this Agreement is terminated, other than by reason of a default by
Seller, Buyer shall promptly return to Seller any statements, documents,
schedules, exhibits and other written information obtained from Seller in
connection with this Agreement or the transaction contemplated herein. The
provisions of this Section 7.2.3 shall survive Closing or any termination of
this Agreement. Notwithstanding the foregoing, any party (and any employee,
representative or other agent of any party) may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to any party
relating to such tax treatment and tax structure; provided, however, that any
such information and materials shall be kept confidential to the extent
necessary to comply with any applicable securities laws. For purposes of the
exceptions set out in the preceding sentence to the general confidentiality
provisions set forth above, the tax treatment and tax structure of the
transactions contemplated by this Agreement shall not be deemed to include the
location of the Property, the identity of the parties to this Agreement or the
Purchase Price.

        7.3     Title Review. Buyer shall have the right to review title to the
Real Property in accordance with this Section 7.3.

                7.3.1   Title Material. Promptly following the Effective Date,
Seller will obtain and deliver to Buyer a current preliminary title report
("Title Report") for the Real Property prepared by the Title Company, together
with a copy of the documents listed as exceptions therein. Buyer, at its cost,
shall obtain a survey ("Survey") of the Real Property prepared by a licensed
engineer or surveyor, which Survey shall be sufficient to provide the basis for
an ALTA owner's policy of title insurance. Buyer shall deliver a copy of the
Survey to the Title Company and to Seller.

                7.3.2   Review of Title. Buyer shall notify Seller in writing
(the "Title Notice") not later than three (3) business days prior to the
Expiration Date as to which exceptions to title as shown on the Title Report and
Survey, if any, will not be accepted by Buyer. If Buyer fails to notify Seller
in writing of its disapproval of any exceptions to title within such period of
time, Buyer shall be deemed to have approved the condition of title to the Real
Property. If Buyer notifies Seller in writing that Buyer objects to any
exceptions to title, Seller shall have two (2) business days after receipt of
the Title Notice (but, in no event, later than one (1) business day prior to the
Expiration Date) to notify Buyer (a) that Seller will remove such objectionable
exceptions from title on or before the Closing, provided that Seller may extend
the Closing for such period as shall be required to effect such cure, but not
beyond ten (10) days; or (b) that Seller elects not to

                                        8

<PAGE>

cause such exceptions to be removed. If Seller fails to timely give such notice
to Buyer, the Seller shall be deemed to have given notice to Buyer under clause
(b). Seller shall have no obligation to remove any title exceptions to which
Buyer objects; provided, however, that Seller shall be obligated to remove, as
of the Closing, all liens evidencing any deed of trust (and related documents
securing financing), all delinquent tax liens, all mechanic's liens relating to
work performed by Seller, all judgment liens and encumbrances created by Seller
violation of the provisions of Section 11.2 below. The procurement by Seller of
a commitment for the issuance of the Buyer's Title Policy (as defined in Section
4.2 hereof) or an endorsement thereto insuring Buyer against any title exception
which was disapproved pursuant to this Section 7.3.2 shall be deemed a cure by
Seller of such disapproval. If Seller gives or is deemed to have given Buyer
notice under clause (b) above, Buyer shall have two (2) business days from the
date on which such notice to Buyer is given or deemed given (but in no event
later than the Expiration Date) in which to notify Seller that Buyer will
nevertheless proceed with the purchase and take title to the Property subject to
such exceptions. If Buyer fails to timely give such notice, and duly exercises
the Option, then Buyer will be deemed to have elected to proceed with the
purchase and take title to the Property subject to such exceptions. If Seller
gives or is deemed to have given notice to Buyer under clause (b) and Buyer
fails to exercise the Option, this Agreement shall terminate in accordance with
the provisions of Section 1.5.

                7.3.3   Subsequent Title Defects. Buyer may, at or prior to
Closing, notify Seller in writing (the "Subsequent Title Defects Notice") of any
objection(s) to title exceptions (a) raised by the Title Company between the
Expiration Date and the Closing and (b) not disclosed by the Title Company in
writing or otherwise known to Buyer prior to the Expiration Date, provided that
Buyer must notify Seller of such objection(s) to title within two (2) business
days after being made aware of the existence of such exception. If Buyer gives a
Subsequent Title Defects Notice to Seller, Seller shall have two (2) business
days after receipt of the Subsequent Title Defects Notice to notify Buyer (a)
that Seller will remove such objectionable exceptions from title on or before
the Closing, provided that Seller may extend the Closing for such period as
shall be required to effect such cure, but not beyond ten (10) days; or (b) that
Seller elects not to cause such exceptions to be removed. If Seller fails to
timely give such notice to Buyer, Seller shall have been deemed to have given
notice to Buyer under clause (b). Seller shall have no obligation to remove any
title exceptions to which Buyer objects; provided, however, that Seller shall
remove, as of the Closing, all liens evidencing any deed of trust (and related
documents securing financing), all delinquent tax liens, all mechanic's liens
relating to work performed by Seller, all judgment liens and encumbrances
created by Seller in violation of the provisions of Section 11.2 below. The
procurement by Seller of a commitment of the Title Company for Buyer's Title
Policy or an endorsement thereto insuring Buyer against any title exception
which was disapproved pursuant to this Section 7.3.3 shall be deemed a cure by
Seller of such disapproval. If Seller gives or is deemed to have given notice
under clause (b) above, Buyer shall have two (2) business

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<PAGE>

days from the date on which such notice to Buyer is given or deemed given in
which to notify Seller that Buyer will nevertheless proceed with the purchase
and take title to the Property subject to such exceptions or that Buyer elects
not to proceed with the purchase. If Buyer fails to timely give such notice and
has exercised the Option, Buyer shall be deemed to have elected to proceed with
the purchase and take title to the Property subject to such exceptions. If Buyer
has exercised the Option, and thereafter gives a Subsequent Title Defects
Notice, and if Seller gives, or is deemed to have given, notice under clause (b)
above, and Buyer timely elects not to proceed with the purchase, this Agreement
shall terminate. If this Agreement is so terminated, then neither party shall
have any further rights or obligations hereunder (except with respect to those
matters expressly set forth to survive such termination), each party shall bear
its own costs incurred hereunder, and, within two (2) business days thereafter,
Buyer shall be entitled to return of the Deposit, if delivered, together with
all interest accrued thereon. Except as otherwise provided in this Agreement, in
the event of a termination pursuant to the provisions of this Section 7.3.3, the
Option Payment shall be retained by Seller.

        7.4     Inspection; Right of Entry. Buyer and Buyer's agents,
contractors, engineers, consultants, employees and other representatives
(collectively, "Buyer's Representatives") shall have the right, during the Term
and, if Buyer exercises the Option, thereafter, and subject to the terms and
conditions of Section 7.6 below, (i) to enter the Real Property to inspect the
same (including the performance of environmental audits of the Real Property in
accordance with the terms of Section 7.4.1 and 7.4.2 below), upon reasonable
notice to Seller, provided that Buyer does not unreasonably disturb any business
of Seller in connection with the Property or any Tenant of the Real Property,
(ii) to contact representatives of the Tenants, (iii) to contact representatives
of third parties who have executed Service Contracts with Seller or Seller's
representatives regarding the Real Property; (iv) to contact representatives of
Seller's property manager, if any, regarding the Property; and (v) to contact
representatives of applicable governmental authorities concerning the Property.
Buyer shall keep the Property free and clear of any mechanics' liens,
materialmen's liens or claims arising out of any of Buyer's activities or those
of Buyer's Representatives on or with respect to the Real Property. All entries
onto the Real Property by Buyer and all inspections and examinations thereof
shall be at Buyer's sole cost and expense, shall be done in a workmanlike manner
in accordance with all applicable codes, statutes, ordinances, rules,
regulations and laws and shall not unreasonably disturb the quiet occupancy or
enjoyment of any Tenant or other occupant of the Real Property. Buyer shall not
perform any test or inspection or carry out any activity at the Real Property
which damages the Real Property in any way or which is physically intrusive into
the Improvements or soil of the Real Property without the prior written consent
of Seller, which consent Seller shall not unreasonably withhold. In connection
with the request by Buyer for any such written consent of Seller, Buyer shall
provide a detailed description of the nature of the proposed test of the Real
Property, and shall in addition provide to Seller (i) the name of the
contractor, who will perform the subject test on behalf of Buyer, (ii) proof of
insurance, with respect to such contractor,

                                       10

<PAGE>

adequate in Seller's reasonable judgment, and (iii) such other information with
respect to the proposed test as Seller may reasonably request. After each entry
onto any portion of the Real Property, Buyer, at its sole cost and expense shall
repair (which shall include replacement where necessary) any damage to the Real
Property arising from such entry. In connection with any inspections of the Real
Property, Buyer and Buyer's Representatives will carry liability insurance
adequate in Seller's reasonable judgment and, upon the request of Seller, will
provide Seller with written evidence of same. Buyer will give Seller reasonable
prior notice of its intention to conduct any inspections or tests with respect
to the Real Property or of its intention to contact any Tenant, and Seller
reserves the right to have a representative present.

                7.4.1   Phase I Environmental Audit. During the Term, Buyer may
conduct (or have conducted on its behalf by an environmental auditor) a Phase I
environmental audit of the Real Property, subject to the terms and conditions of
Sections 7.4.2 and 7.6 below.

                7.4.2   Environmental Conditions. In the event that Buyer shall
enter the Real Property for purposes of conducting a Phase I environmental audit
of the Real Property, Buyer shall provide Seller with at least twenty-four (24)
hours' prior notice of its intent thereof. Buyer shall not conduct a Phase II
environmental audit of the Real Property without the prior written consent of
Seller, which consent Seller shall not unreasonably withhold. Any request by
Buyer to conduct a Phase II environmental audit of the Real Property will be
subject to the applicable provisions of Section 7.4 relating to intrusive
testing of the Real Property. Buyer shall not disclose to any third party, other
than Buyer's consultants, agents and attorneys associated with any environmental
investigation of the Real Property, the results of any of Buyer's inspections or
testing of the Real Property, except as may be required by applicable law. Prior
to performing any environmental inspections or testing of the Real Property,
Buyer shall obtain any required permits and authorizations and shall pay all
applicable fees required by any public body or agency in connection therewith.

        7.5     Buyer's Reports. If the Escrow fails to close for any reason
other than Seller's breach of this Agreement, then all studies, surveys
(including, without limitation the Survey), if any, reports, test results and
analyses concerning the Real Property prepared by, for or on behalf of Buyer in
connection with the Real Property (collectively, "Buyer's Reports") shall at the
option of Seller, be delivered and assigned to Seller free and clear of all
claims and at no cost, expense or liability to Seller. Buyer shall not be
required to deliver to Seller internally prepared reports or analyses concerning
the valuation or potential performance of the Real Property. Any Buyer's Reports
delivered to Seller at Seller's request pursuant to this Section 7.5 shall be
delivered without representation or warranty, nor shall Seller assert any
warranty or rights against the consultants of Buyer who have prepared such
Buyer's Reports.

                                       11

<PAGE>

        7.6     Indemnity. Buyer shall indemnify, defend by counsel reasonably
acceptable to Seller, and hold Seller harmless from and against any and all
costs, expenses, claims, demands or liens, (including, without limitation,
mechanics' liens) including reasonable attorneys' fees, arising from or in any
fashion related to the entry by Buyer or Buyer's Representatives on the Real
Property or the performance by Buyer or Buyer's Representatives of any testing
or investigations of the Real Property except with respect to any loss or
liability incurred by Seller resulting from the mere discovery by Buyer or Buyer
Representatives of the presence of hazardous materials at the Property or the
existence of other defects with respect to the Property. Without limiting the
scope or generality of the foregoing indemnity, Buyer shall not permit any
mechanics', materialman's, or other lien against all or any part of the Real
Property to exist as the result of any activity by Buyer or Buyer's
Representatives undertaken in connection with the Real Property. If any such
lien shall be filed against the Real Property or any portion of the Real
Property, Buyer shall cause the lien to be discharged within ten (10) business
days after the filing thereof. The provisions of this Section 7.6 shall survive
the Closing and delivery of the Deed and shall further survive any earlier
termination of this Agreement.

        7.7     Estoppel Certificates. Following the Effective Date, Seller and
Buyer shall reasonably cooperate so as to allow the prompt delivery of Estoppel
Certificates ("Estoppel Certificates") substantially in the form attached hereto
as Exhibit 7.7 to the Tenants, if any. Seller shall thereafter reasonably
endeavor to obtain executed Estoppel Certificates from the Tenants, and copies
of any of the Estoppel Certificates received by Seller shall be promptly
delivered to Buyer. Although Seller shall reasonably endeavor to obtain signed
Estoppel Certificates, Seller shall have no obligation to do so.

        7.8     Approval by Buyer. Buyer shall have the right to review and
approve, in its sole, absolute and subjective discretion, during the Term all
aspects of the Property, including but not limited to, (i) the Due Diligence
Materials, (ii) the physical and environmental condition of the Real Property,
including, without limitation, the condition of the Improvements, the condition
of the soil at the Real Property, the condition of the ground water at the Real
Property, and the presence or absence of any hazardous materials at the Real
Property, (iii) the financial condition of the Property, including, without
limitation, the feasibility, convertibility, desirability and suitability of the
Property for Buyer's intended use and purposes, (iv) the legal condition of the
Property, including, without limitation, the Property's compliance or
non-compliance with all statutes, ordinances, codes, regulations, decrees,
orders and laws applicable to the Property, (v) the Service Contracts, if any,
being assumed by Buyer, (vi) the existence or non-existence of any governmental
or quasi-governmental entitlements, if any, affecting the Property or any
portion of the Property, (vii) any dimensions or specifications of the Real
Property or any part thereof, (viii) the zoning, building and land use
restrictions applicable to the Real Property or any portion thereof, (ix) the
Estoppel Certificates, and (x) all other matters which Buyer deems relevant to
its purchase of the Property. In the

                                       12

<PAGE>

event that Buyer elects to exercise the Option in accordance with the provisions
of Section 1.4, Buyer shall be deemed to have approved all aspects of the
Property, including, without limitation, the matters summarized in this Section
7.8. The deemed approval by Buyer pursuant to the provisions of this Section
7.8, shall not be construed to lessen or otherwise modify Seller's obligations
pursuant to Seller's representations and warranties as set forth in Section
12.2. If Buyer elects not to timely exercise the Option, then as provided in
Section 1.5, this Agreement shall terminate, all rights and obligations
hereunder of each party shall be at an end (except those matters which are
specifically stated in this Agreement to survive the termination), and each
party shall bear its own costs incurred hereunder. Notwithstanding the failure
of Buyer to timely exercise the Option, the Option Payment shall be retained by
Seller, except as otherwise provided in this Agreement. If Buyer timely
exercises the Option, in accordance with the provisions of Section 1.4, then
Buyer shall be considered to have elected to proceed with the purchase of the
Property in accordance with the provisions of this Agreement.

        7.9     Approval of Service Contracts. At Buyer's election, Buyer may
specify, by a separate written notice to Seller, given prior to the date on
which the Exercise Notice is given, its approval of one or more of the Service
Contracts. Any assignable Service Contracts so approved, shall not be terminated
by Seller, and responsibility for payment thereof accruing as of and subsequent
to the Closing Date shall be assumed by Buyer effective as of the Closing. Any
Service Contract not specifically approved by Buyer by written notice given
prior to the date on which the Exercise Notice is given, shall be deemed
disapproved and shall be terminated by Seller prior to the Closing. Seller shall
be solely responsible for any such terminated Service Contracts and for the
payment of all amounts accruing under assumed Service Contracts prior to the
Closing Date.

8.      CONDITIONS TO CLOSING.

        8.1     Seller's Conditions. Following the due exercise by Buyer of the
Option, if at all, the obligation of Seller to sell and convey the Property
pursuant to this Agreement is subject to the satisfaction on or before the
Closing Date (or such earlier date as is specifically set forth in this
Agreement) of all of the following conditions precedent, which conditions are
for the benefit of Seller only and the satisfaction of which may be waived only
in writing by Seller:

                8.1.1   Buyer's Deliveries. Delivery and execution by Buyer of
all monies, items and instruments required to be delivered by Buyer pursuant to
this Agreement;

                8.1.2   Buyer's Representations. Buyer's warranties and
representations set forth herein shall be true and correct as of the Closing
Date;

                8.1.3   Buyer's Performance. Buyer shall have performed each and
every agreement to be performed by Buyer pursuant to this Agreement;

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<PAGE>

                8.1.4   Prior Closings. The "Closing" as contemplated by the
King Street Agreement, shall be concurrently occurring in accordance with the
King Street Agreement, unless such Closing shall be prevented solely by a
default by Baker Hamilton under the King Street Agreement;

                8.1.5   Lender Consent. The written consent of Fremont
Investment & Loan ("Lender") to the transactions as contemplated by the 601
Agreement and the King Street Agreement, shall have been obtained by Baker
Hamilton prior to July 22, 2003; and

                8.1.6   First Offer. Omnicom Group, Inc. ("Omnicom") shall have
failed to exercise the right of first offer as set forth in Article 26 of the
lease dated November 8, 1999 by and between Baker Hamilton, as landlord, and
Organic, Inc. (predecessor to Omnicom), as tenant, in response to a notice dated
July 9, 2003 given by Baker Hamilton to Omnicom pursuant to the provisions of
such Article 26.

        8.2     Buyer's Conditions. Following the due exercise by Buyer of the
Option, if at all, the obligation of Buyer to acquire the Property pursuant to
this Agreement is subject to the satisfaction on or before the Closing Date (or
such earlier date as is specifically set forth in this Agreement) of all of the
following conditions precedent which conditions are for the benefit of Buyer
only and the satisfaction of which may be waived only in writing by Buyer:

                8.2.1   Seller's Deliveries. Delivery and execution by Seller of
all instruments and other items required to be delivered by Seller pursuant to
this Agreement;

                8.2.2   Seller's Representations. Seller's warranties and
representations set forth herein shall be true and correct as of the Closing
Date;

                8.2.3   Seller's Performance. Seller shall have performed each
and every agreement to be performed by Seller pursuant to this Agreement;

                8.2.4   Buyer's Title Policy. As of the Closing, the Title
Company shall have issued or shall have committed to issue, upon the sole
condition of the payment of its regularly scheduled premium, the Buyer's Title
Policy;

                8.2.5   Other Properties. Buyer shall not have terminated the
601 Agreement or the King Street Agreement solely by reason of a default by
Baker Hamilton, thereunder, or by reason of the nonsatisfaction of a condition
precedent to Buyer's obligations thereunder;

                8.2.6   No Termination. Buyer shall not have terminated this
Agreement through exercise of a termination right provided to Buyer under this
Agreement;

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<PAGE>

                8.2.7   Lender Consent. The written consent of Lender as
contemplated by Section 8.1.5 above shall have been timely obtained by Baker
Hamilton. Seller shall provide a copy of such written consent to Buyer promptly
following its receipt; and

                8.2.8   First Offer. Omnicom shall have failed to exercise the
right of first offer as more particularly described in Section 8.1.6 above.

        8.3     Failure of Conditions. If any of the conditions set forth in
Section 8.1 is not timely satisfied or waived by Seller in writing, Seller shall
have the right to terminate this Agreement by written notice given to Buyer
within five (5) business days following the date for satisfaction of such
condition. If any of the conditions set forth in Section 8.2 is not timely
satisfied or waived by Buyer in writing, Buyer shall have the right to terminate
this Agreement by written notice given to Seller within five (5) business days
following the date for satisfaction of such condition. If either party shall so
terminate this Agreement, this Agreement and the rights and obligations of Buyer
and Seller shall terminate and be of no further force or effect, except as to
those matters which are specifically stated in this Agreement to survive
termination, and except as to the rights of the nondefaulting party if the
failure of condition shall constitute a default by the other party. In the event
that this Agreement is terminated pursuant to the provisions of this Section
8.3, and neither Seller nor Buyer is in default pursuant to this Agreement, the
Title Company is hereby instructed to return promptly to the party which placed
such items into Escrow all funds (including the Deposit, and all accrued
interest thereon, which is to be promptly returned to Buyer) and documents which
are held by the Title Company on the date of termination. In the event of any
such termination, the Option Payment shall be retained by Seller.
Notwithstanding any of the above provisions of Section 8.3 to the contrary, in
the event of a termination of this Agreement by reason of a failure of the
conditions set forth in Sections 8.1.5, 8.2.5 (by reason of a default of Baker
Hamilton only), or 8.2.7, Seller shall return the Option Payment to Buyer within
two (2) business days thereafter. Further, in the event of a termination of this
Agreement by reason of the failure of the conditions set forth in Sections 8.1.6
and 8.2.8 if Buyer has previously paid the Option Payment to Seller, Seller
shall return such Option Payment to Buyer within two (2) business days following
the date of termination. In the event of a default by Buyer, the return of the
Deposit and the disposition of the Option Payment shall be governed by the
provisions of Section 19.1. In the event of a default by Seller, the Deposit and
all interest accrued thereon and the Option Payment shall be returned to Buyer
within two (2) business days thereafter.

        8.4     Satisfaction of Conditions. The occurrence of the Closing shall
constitute satisfaction of the conditions set forth in Sections 8.1 and 8.2 not
otherwise specifically satisfied or waived by Buyer or Seller.

                                       15

<PAGE>

9.      DELIVERIES INTO ESCROW.

        9.1     Deliveries by Seller. One or before the Closing, Seller shall
deliver or cause to be delivered into Escrow the following documents duly
executed and acknowledged where appropriate:

                9.1.1   Deed. A grant deed (the "Deed") in the form attached
hereto as Exhibit 9.1.1 conveying the Real Property to Buyer as provided in this
Agreement which Deed is to be duly executed and acknowledged by Seller;

                9.1.2   Bill of Sale. Bill of sale ("Bill of Sale") in the form
attached hereto as Exhibit 9.1.2 conveying the Personal Property to Buyer which
Bill of Sale is to be duly executed by Seller;

                9.1.3   Assignment. The Assignment in the form attached hereto
as Exhibit 9.1.3 which is to be duly executed by Seller and Buyer;

                9.1.4   FIRPTA. Certificate of non-foreign status to confirm
that Buyer is not required to withhold part of the Purchase Price pursuant to
Section 1445 of the Internal Revenue Code of 1986, as amended which is to be
duly executed by Seller;

                9.1.5   Form 593-W. Franchise Tax Board Form (593-W) which is to
be duly executed by Seller;

                9.1.6   Seller's Authority. Such proof of Seller's authority and
authorization to enter into this Agreement and consummate the transaction
contemplated hereby and such proof of the power and authority of the
individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of Seller to act for and bind Seller as may be reasonably
required by Title Company; and

                9.1.7   Other Documents. Such other documents as may be
reasonably necessary and appropriate to complete the Closing of the transaction
contemplated herein.

        9.2     Deliveries by Buyer. On or before the Closing, Buyer shall
deliver or cause to be delivered into Escrow the following funds and documents
duly executed and acknowledged where appropriate:

                9.2.1   Cash. The cash portion of the Purchase Price and such
additional sums as are necessary to pay the Buyer's share of closing costs,
prorations and any fees as more particularly set forth in Section 10 below;

                9.2.2   Assignment. The Assignment which is to be duly executed
by Seller and Buyer;

                                       16

<PAGE>

                9.2.3   Buyer's Authority. Such proof of Buyer's authority and
authorization to enter into this Agreement and consummate the transaction
contemplated by this Agreement, and such proof of the power and authority of the
individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of Buyer to act for and bind Buyer as may be reasonably
required by Title Company; and

                9.2.4   Other Documents.. Such other documents as may be
reasonably necessary and appropriate to complete the Closing of the transaction
contemplated herein.

        9.3     Tenant Notification Letters. Seller shall execute a Tenant
Notification Letter in the form attached hereto as Exhibit 9.3 to each of the
Tenants, if any, pursuant to the Leases (the "Tenant Notification Letter"),
indicating the change of ownership of the Property with the name and address of
the Buyer and the Closing Date, and shall, upon the Closing, deliver the
executed Tenant Notification Letter to Buyer.

        9.4     Delivery to Buyer Upon Closing. Seller shall deliver possession
of the Property to Buyer upon the Closing.

        9.5     Delivery Following Closing. Concurrently with the Closing,
Seller shall deliver to Buyer outside of Escrow: (i) the originals of the
Leases, if any; (ii) the originals of the Service Contracts, if any; (iii) all
building plans and specifications with respect to the Real Property which are in
the possession of Seller or reasonably accessible to Seller or its property
manager; (iv) all structural reviews, architectural drawings, engineering,
soils, seismic, geologic and architectural reports in the possession of Seller
or reasonably accessible to Seller or its property manager; and (v) such other
matters and documents in the possession of Seller or reasonably accessible to
Seller or to its property manager as Buyer may reasonably request.

10.     PRORATIONS; CLOSING COSTS; CREDITS.

        10.1    Prorations.

                10.1.1  Rent. Rents, revenue and other income from the Property
actually collected as of the Closing with respect to the Leases shall be
prorated through Escrow as of 12:01 a.m. on the Closing Date with Seller
entitled to the prorated portion of such items attributable to the period prior
to such date and time and Buyer entitled to the prorated portion of such items
as of and following such date and time. Any prepaid rent paid by the Tenants
pursuant to the Leases shall be credited to Buyer. If any rent or other payments
under the Leases are in arrears as of the Closing Date, Buyer shall use
reasonable efforts following the Closing to collect such rent or other payments
provided that in no event shall Buyer be obligated to commence litigation or
expend funds to effect collection. Nothing in this Section 10.1.1 shall restrict
Seller's right to collect delinquent rents directly from a Tenant by any legal
means; provided, however, that Seller shall have no right to terminate a Lease
or disturb a Tenant's possession.

                                       17

<PAGE>

Delinquent rent collected by Seller from a Tenant subsequent to the Closing
shall be promptly paid to Buyer to the extent that Buyer is entitled to such
rent in connection with the period on and after the Closing Date, and delinquent
rent collected by Buyer from a Tenant subsequent to the Closing Date shall be
promptly paid to Seller to the extent that Seller is entitled to such rent
pursuant to the provisions of this Agreement relating to the period prior to the
Closing Date. Seller and Buyer agree that all rent from Tenants received by
Seller or Buyer following Closing shall be applied first to current rent, then
to delinquent rent, if any, for any period following the Closing, and then to
delinquent rent, if any, for periods prior to Closing.

                10.1.2  Taxes and Assessments. All non-delinquent real estate
taxes on the Property payable by the owner shall be prorated through Escrow
based on the actual current tax bill as of 12:01 a.m. on the Closing Date with
Seller responsible for all such taxes attributable to the period prior to such
date and time and Buyer responsible for all such taxes attributable to the
period as of and following such date and time. If after the Closing,
supplemental real estate taxes are assessed against the Property by reason of
any event occurring prior to the Closing Date, Buyer and Seller shall adjust the
proration of the real estate taxes following the Closing. Any delinquent taxes
and assessments on the Property shall be paid at the Closing from funds accruing
to Seller. Any current installments with respect to assessments on the Real
Property shall be prorated through Escrow as of 12:01 a.m. on the Closing Date
and Seller shall have no obligation to pay any amount with respect to any such
assessments other than the prorated current installment and any delinquent
installments. Any refund in connection with real estate taxes relating to the
Property attributable to the period prior to the Closing Date shall be paid to
Seller.

                10.1.3  Utility Charges. Utility charges payable by the owner of
the Real Property, and all other customary charges or costs incident to the
ownership of the Property shall be prorated through Escrow as of 12:01 a.m. on
the Closing Date. Seller shall be responsible for all such utility charges
payable by Seller accruing and attributable to the Property through the day
prior to the Closing Date and Buyer shall be responsible for all such utility
charges accruing and attributable to the Property commencing as of the Closing
Date. Seller, as landlord under the Leases, may be currently collecting from
Tenants under the Leases additional rent to cover taxes, insurance, utilities(to
the extent not paid directly by a Tenant), any other maintenance, operating
costs, and expenses (collectively, "Operating Costs") in connection with the
ownership, operation, maintenance, and management of the Property. Tenant
reimbursements for Operating Costs shall be prorated in the same manner as rents
are prorated under Section 10.1.1 above. Seller shall not assign to Buyer any
deposits, if any, which Seller has with any utility companies servicing the
Property. Buyer shall arrange with such companies to have accounts opened in
Buyer's name beginning at 12:01 a.m. on the Closing Date. To the extent
possible, Seller shall obtain billings and meter readings as of the Closing Date
and all utility charges to be prorated between Seller and Buyer shall be
prorated based

                                       18

<PAGE>

upon the information then available. Seller and Buyer shall make any adjustments
required to be made subsequent to the Closing in the event the information
available at the Closing is incorrect, which adjustments shall include, without
limitation, any adjustments required in connection with the Operating Costs,
which adjustments shall be made in a reasonable period following the
availability of correct or adjusted information.

                10.1.4  Service Contracts. Amounts payable pursuant to Service
Contracts to be assumed by Buyer shall be prorated through Escrow as of 12:01
a.m. on the Closing Date. Seller shall be responsible for such amounts accruing
and attributable to the Property through the day prior to the Closing Date and
Buyer shall be responsible for such amounts accruing and attributable to the
Property commencing as of the Closing Date. Such amounts shall be prorated
between Seller and Buyer based upon information available as of the Closing and
Seller and Buyer shall make any adjustments required to be made subsequent to
the Closing in the event that the information available at the Closing is
incorrect.

                10.1.5  Calculation of Prorations. All prorations shall be made
on the basis of the actual number of days of the month which have elapsed as of
12:01 a.m. on the Closing Date.

                10.1.6  Proforma Closing Statement. Buyer and Seller shall
reasonably cooperate to produce at least one business day prior to the Closing
Date, a schedule of prorations in accordance with the provisions of this
Agreement which is as complete and accurate as is then reasonably possible. All
prorations which can be reasonably estimated as of the Closing Date shall be
made in Escrow on the Closing Date. All other prorations and any adjustments to
the initial estimated prorations, shall be made by Buyer and Seller within
thirty (30) days following the Closing or such later time as may be reasonably
required, in the exercise of due diligence to obtain the necessary information.
Any net credit due one party from the other as the result of such post-Closing
prorations and adjustments shall be paid to the other in cash immediately upon
the parties' written agreement to a final schedule of post-Closing adjustments
and prorations.

        10.2    Closing Costs.

                10.2.1  Seller's Costs. Seller shall pay (i) all county and city
documentary transfer and other transfer or conveyance taxes; (ii) fifty percent
(50%) of all recording costs, and (iii) its own attorneys' fees.

                10.2.2  Buyer's Costs. Buyer shall pay (i) one hundred percent
(100%) of all escrow fees and fifty percent (50%) of all recording costs; (ii)
the premium for the Buyer's Title Policy, including the premium for any
endorsements; (iii) the premium for the Buyer's lender's title policy, if any;
(iv) the cost of the Survey; and (v) its own attorneys' fees.

                                       19

<PAGE>

                10.2.3  Credits. Buyer shall be credited and Seller shall be
debited in an amount equal to all cash security deposits owing to any Tenants
with respect to the Leases, except to the extent that Seller was entitled to and
did apply any part of such deposits to Tenant obligations under the Leases.
Seller shall assign to Buyer at Closing, at Seller's cost and expense (as
between Seller and Buyer), any non-cash security deposits such as letters of
credit made by the Tenants under the Leases.

                10.2.4  Other Expenses. Buyer and Seller shall each pay all
legal and professional fees and fees of other consultants incurred by Buyer and
Seller respectively.

        10.3    City Fees. It is acknowledged that a transit impact development
fee is due to the City of San Francisco in connection with the use of the Real
Property for offices, which fee is in the amount of Two Hundred Sixty-Five
Thousand Five Hundred Eighty Dollars ($265,580) as set forth in the letter dated
July 12, 2000 from Mr. Steven Nickerson, Administrator, Municipal San Francisco
Railroad ("MUNI"). Buyer shall be responsible for the payment of such transit
impact development fee in such amount. Buyer shall, in addition, be responsible
for the unpaid child care fee owing to the City of San Francisco in connection
with the Real Property.

11.     OPERATION OF PROPERTY PENDING THE CLOSING. Following the Effective Date
and pending the Closing, the Seller shall operate the Property in accordance
with the following:

        11.1    Normal Course of Business. Seller shall continue to operate,
manage and maintain the Property in such condition so that the Property shall be
in the same condition as of the Closing Date as it is as of the Effective Date,
reasonable wear and tear and casualty excepted. In no event shall Seller be
required to improve the Real Property or to undertake any expenditures resulting
in improvement of the Real Property. Seller shall maintain liability and
property insurance policies in connection with the Property and shall keep in
effect and renew without modification all licenses, permits and entitlements
applicable to the Property. Seller's existing liability and property insurance
pertaining to the Property will be canceled by Seller as of the Closing Date.

        11.2    Further Encumbrances. Seller shall not voluntarily execute any
documents or otherwise take any action which will have the result of further
encumbering the Property in any fashion;

        11.3    Leasing. Seller shall not terminate, amend or otherwise modify
the Leases, or enter into any new lease, without the prior consent of Buyer,
which consent shall not be unreasonably withheld or delayed prior to the
Expiration Date, and which consent may be withheld by Buyer in its sole
discretion if Buyer shall exercise the Option; and

        11.4    New Obligations. Without the prior written consent of Buyer,
which consent shall not be unreasonably withheld or delayed, Seller shall not
enter into any

                                       20

<PAGE>

maintenance contract, service contract or any other contract affecting or
relating to the Property or any portion thereof which cannot be canceled upon
thirty (30) days (or less) prior written notice.

12.     REPRESENTATIONS AND WARRANTIES.

        12.1    No Representations or Warranties by Seller. Except as expressly
set forth in this Agreement, Seller has not made any warranty or representation,
express or implied, written or oral, concerning the Property.

        12.2    Seller's Representations and Warranties. Seller represents and
warrants to Buyer that:

                12.2.1  Authority. This Agreement constitutes the valid and
binding obligation of Seller and is enforceable against Seller in accordance
with its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally and general equitable principles.
Seller is a limited liability company, validly formed, duly organized and in
good standing under the laws of the State of California. Seller has full power
and authority to enter into this Agreement, to perform its obligations
hereunder, and to consummate the transactions and conveyances contemplated
hereby, and each of the persons signing this Agreement or any other document or
instrument contemplated hereby on behalf of Seller is authorized to do so. The
execution and delivery of this Agreement, delivery of money and all required
documents, Seller's performance of this Agreement and the transaction
contemplated hereby have been duly authorized by all requisite action on the
part of Seller, and no consent or approval of any third party is required for
the execution and delivery hereof by Seller, Seller's performance hereof, or the
consummation of the transactions contemplated hereby on Seller's part, except
for such consents or approvals as have been obtained and remain in full force
and effect. Neither the execution and delivery of this Agreement, nor the
transaction contemplated by this Agreement will conflict in any material respect
with, or constitute a breach under, any agreement or instrument to which Seller
is a party or by which Seller or the Property is bound;

                12.2.2  Service Contracts. The Service Contracts listed on
Exhibit 2.3(ii) are all of the agreements concerning the operation and
maintenance of the Property to which Seller is a party; and excepting for any
such matters which Buyer has agreed in writing to permit to remain in effect
following the Closing, no such agreements will continue to be binding on the
Real Property or a successor owner of the Real Property after Closing;

                12.2.3  Condemnation. Seller has received no written notice of,
and to Seller's knowledge there are no, pending or threatened condemnation
proceedings against or relating to the Real Property;

                                       21

<PAGE>

                12.2.4  Litigation. Except as disclosed to Buyer in writing
prior to the Effective Date and listed on Schedule 12.2.4 to this Agreement, (or
as subsequently disclosed in writing to, and approved in writing by, Buyer) no
litigation has been served on Seller, and to Seller's knowledge, no litigation
is otherwise pending or threatened against Seller, to restrain or enjoin the
sale or transfer of the Property to Buyer, or which challenges the existence or
power of Seller or Seller's authority to enter into or perform under this
Agreement, or which asserts a claim of ownership of the Property or any interest
therein, or which claims any right to occupy or use the Real Property or any
portion thereof, or which could adversely affect the use or value of the
Property, or which, if determined adversely to Seller, might materially
adversely affect Seller's ability to perform its obligations under this
Agreement or to consummate the transactions contemplated hereby;

                12.2.5  Violations. Except as disclosed to Buyer in writing
prior to the Effective Date and listed on Schedule 12.2.5 to this Agreement, (or
as subsequently disclosed in writing to, and approved in writing by, Buyer),
Seller has not received written notice asserting or alleging the existence of,
and to Seller's knowledge there are no, uncured violations of any federal, state
or local law or any covenant or restriction of record which would adversely
affect the value or marketability of the Property or the ability to make use
thereof, or Seller's ability to perform hereunder. Except as disclosed to Buyer
in writing prior to the Effective Date and listed on a schedule to this
Agreement (or as subsequently disclosed in writing to, and approved in writing
by, Buyer), Seller has not received written notice asserting or alleging the
existence of, and to Seller's knowledge, there are no, uncured building code
violations, health and safety code violations, federal, state or local agency
actions regarding environmental matters or zoning violations currently affecting
the Real Property.

                12.2.6  Access. To the best of Seller's knowledge, no fact or
condition exists which may result in the termination or reduction of the current
access from the Real Property to existing roads and highways;

                12.2.7  Foreign Person. Seller is not a "foreign person" as
defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and
the income tax regulations issued thereunder;

                12.2.8  Leases. Except for the Leases listed in Exhibit 2.3(i),
true, correct and complete copies of which have been delivered or made available
by Seller to Buyer, there are no leases, rental agreements or other agreements
for the occupancy, use or possession of any portion of the Real Property, and no
person, other than the Tenants listed in such exhibit, has any right of
occupancy, use or possession with respect to the Real Property or any portion
thereof; except as disclosed on Schedule 12.2.8 attached hereto, such Leases are
in full force and effect, and the Tenants thereunder are not in default and have
no rights of setoff, abatement or deduction from the rent payable thereunder;
and the landlord under the Leases has no outstanding obligation to provide

                                       22

<PAGE>

any Tenant with an allowance to construct, or to construct at its own expense,
any tenant improvements, or to pay any other amounts to or for the account of
any Tenant;

                12.2.9  Leasing Commissions. Except as disclosed to Buyer in
writing prior to the Effective Date and listed on Schedule 12.2.9 to this
Agreement (or subsequently disclosed in writing to, and approved in writing by
Buyer), there are no leasing commissions or other compensation required to be
paid in connection with the Leases as of the date hereof, at any time during the
Term of such Leases or upon extension or renewal thereof;

                12.2.10 Developmental Requirements. Except as listed on Schedule
12.2.10 attached hereto, Seller has fully performed all of Seller's obligations
to any governmental authority, and all conditions of any consent, approval or
authorization imposed by any governmental authority, arising out of or in
connection with Seller's construction, renovation and/or rehabilitation of the
Improvements or the use or occupancy of the Real Property, including, without
limitation, the payment in full of all permit or license fees or charges, in
lieu payments, contributions to housing or other funds, dedication of property
to the public or for a public purpose and the payment and/or performance of all
other governmental exactions of any kind or nature.

                12.2.11 Hazardous Materials. To Seller's knowledge the Real
Property is in compliance with all Hazardous Materials Laws (as hereinafter
defined); and any underground or aboveground storage tanks removed by Seller
from the Real Property have been removed in compliance with applicable Hazardous
Materials Laws. For the purposes of this Agreement, "Hazardous Materials" shall
mean any oil or petroleum products, flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, or other hazardous or toxic
substance, material or waste which is regulated by any federal, state or local
governmental authority; and "Hazardous Materials Laws" means all federal, state
and local statutes, ordinances, rules and regulations relating to Hazardous
Materials, including those pertaining to health, safety, industrial hygiene or
the environment, such as, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, and any similar state laws;

                12.2.12 Utilities. To Seller's knowledge, all electric, natural
gas, telephone, storm drainage, water, sewer service and other utility services
required for the use, occupancy and operation of the Real Property for the
purposes for which Seller has heretofore used, occupied and operated the Real
Property are available to the Real Property, provided, however, that it is
acknowledged that the Real Property is unoccupied and that tenant Improvements
and certain other matters with respect to the Real Property have not been
completed, such that certain of the utility services have not been fully
implemented or connected to the Improvements; and.

                                       23

<PAGE>

        12.3    Buyer's Representations and Warranties. Buyer represents and
warrants to Seller that:

                12.3.1  Authority to Execute; Organization. This Agreement
constitutes the valid and binding obligation of Buyer and is enforceable against
Buyer in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles. Buyer is a corporation, validly formed, duly
organized, and in good standing under the laws of the State of Delaware. Buyer
has full power and authority to enter into this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby,
and each of the persons signing this Agreement or other document or instrument
contemplated hereby on behalf of Buyer is authorized to do so. The execution and
delivery of this Agreement, delivery of money and all other required documents,
Buyer's performance of this Agreement and the transactions contemplated hereby
have been, or prior to the duly authorized by all requisite action on the part
of Buyer and no consent or approval of any third party is required for the
execution and delivery hereof by Buyer, Buyer's performance hereof or the
consummation of the transaction contemplated hereby on Buyer's part, except for
such consents or approvals as have been obtained and remain in full force and
effect and except for the consent of Buyer's Board of Directors, which consent
is required in connection with the exercise of the Option by Buyer. Neither the
execution and delivery of this Agreement, nor the transaction as contemplated by
this Agreement will conflict in any material respect with, or constitute a
breach under, any agreement or instrument to which Buyer is a party, or to which
Buyer is bound;

                12.3.2  No Encumbrance. Prior to Closing, Buyer shall neither
encumber nor cause any liens to be created against the Property in any way, nor
shall Buyer, at any time, record this Agreement or a memorandum thereof; and

                12.3.3  Principal; Financial Resources. Buyer is acting as a
principal in connection with the transaction as contemplated by this Agreement
and presently possesses, and will possess as of the Closing, the financial
resources to timely consummate the purchase and sale transaction contemplated by
this Agreement.

        12.4    Knowledge Defined. References to the "knowledge" of Seller shall
refer only to the current actual knowledge of Ronaldo Cianciarulo and shall not
be construed, by imputation or otherwise, to refer to the knowledge of any
affiliate of Seller, to any property manager, or to any other officer, agent,
manager, representative or employee of Seller or any affiliate thereof or to
impose upon such person any duty to investigate the matter to which such actual
knowledge, or the absence thereof, pertains.

13.     INDEMNIFICATION.

        13.1    Indemnification of Buyer. Seller hereby agrees to indemnify
Buyer against, and to hold Buyer harmless from, all claims, losses, damages,
liabilities, costs and

                                       24

<PAGE>

expenses, including, but not limited to, reasonable legal fees and disbursements
("Claims") incurred or suffered by Buyer relating to the Property which arise,
result from, or relate to (i) acts, occurrences, or matters that took place
prior to the Closing, to the extent that any such Claim described in this clause
(i) is covered by the commercial general liability insurance policy or other
applicable insurance coverage maintained by Seller, and, in this connection,
Seller represents and warrants that Seller has, during the period of its
ownership, maintained and continues to maintain commercial general liability
insurance coverage with respect to its ownership of the Real Property with a
coverage limit not less than One Million Dollars ($1,000,000) per occurrence; or
(ii) any breach of any of the representations or warranties of Seller set forth
in Section 12.2 of this Agreement subject, however, to the limitations of
Section 17.4. Without limiting the foregoing and without regard to whether or
not any such matter is covered by Seller's liability insurance as provided
above, Seller hereby represents and warrants to Buyer that no other party holds
any right or option to purchase or otherwise acquire the Property, any portion
thereof or any interest therein, except for Omnicom, as more particularly
described in Section 8.1.6, and Seller shall indemnify, defend and hold Buyer
harmless from and against any Claims suffered or incurred by Buyer by reason of
any party other than Omnicom asserting any such right or option against Seller
or Buyer. Notwithstanding the above sentence, it is acknowledged that the
Tenants, if any, hold possessory rights pursuant to their respective Leases in
connection with portions of the Real Property.

        13.2    Defense of Claims Against Buyer. With respect to any Claim for
which Buyer has requested indemnification under Section 13.1, Seller shall be
entitled to assume the defense of any related litigation, arbitration or other
proceeding, provided that Buyer may at its election and expense, participate in
such defense, and provided further that if there is any difference of opinion or
strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Seller's counsel will, after
consultation with Buyer's counsel, determine the actual strategy, defense or
counterclaim to be employed. At Seller's reasonable request, Buyer will
cooperate with Seller in the preparation of any defense for any such Claim and
Seller will reimburse Buyer for any reasonable expenses incurred in connection
with such request. If Seller does not elect to assume the defense of any such
matter and such matter is defended by Buyer, Seller shall have the right, at its
sole expense, to employ separate counsel acceptable to Buyer and participate in
such defense, provided that if there is any difference of opinion or strategy
with respect to the defense of such action or the assertion of counterclaims to
be brought with respect thereto, Buyer's counsel will, after consultation with
Seller's counsel, determine the actual strategy, defense and/or counterclaim to
be employed.

        13.3    Indemnification of Seller. Buyer hereby agrees to indemnify
Seller against, and to hold Seller harmless from, all Claims incurred or
suffered by Seller relating to the Property which arise, result from or relate
to (i) acts, occurrences or matters that take

                                       25

<PAGE>

place subsequent to the Closing to the extent that any such Claim described in
this clause (i) is covered by a commercial general liability insurance policy or
other applicable insurance coverage maintained by Buyer, and, in this
connection, Buyer represents and warrants that Buyer will, during the period of
its ownership, maintain commercial general liability insurance coverage with
respect to its ownership of the Real Property; or (ii) any breach of any of the
representations or warranties of Buyer set forth in Section 12.3 of this
Agreement.

        13.4    Defense of Claims Against Seller. With respect to any Claim for
which Seller has requested indemnification under Section 13.3, Buyer shall be
entitled to assume the defense of any related litigation, arbitration or other
proceeding, provided that Seller may at its election and expense, participate in
such defense, and provided further that if there is any difference of opinion or
strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Buyer's counsel will, after
consultation with Seller's counsel, determine the actual strategy, defense or
counterclaim to be employed. At Buyer's reasonable request, Seller will
cooperate with Buyer in the preparation of any defense for any such Claim and
Buyer will reimburse Seller for any reasonable expenses incurred in connection
with such request. If Buyer does not elect to assume the defense of any such
matter, and such matter is defended by Seller, Buyer shall have the right, at
its sole expense, to employ separate counsel acceptable to Seller and
participate in such defense, provided that if there is any difference of opinion
or strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Seller's counsel will, after
consultation with Buyer's counsel, determine the actual strategy, defense and/or
counterclaim to be employed.

14.     CASUALTY OR CONDEMNATION.

        14.1    Notice of Casualty. If, following the exercise of the Option and
prior to the Closing Date, any part of the Real Property is damaged or destroyed
by earthquake, flood, landslide, fire or other casualty ("Casualty"), Seller
shall promptly notify Buyer of such fact.

                14.1.1  Insured Casualty. If any Improvements located upon the
Real Property are destroyed or substantially damaged by a Casualty during the
period following the exercise of the Option and prior to the Closing, and such
damage is fully covered (except for a deductible or self-insured retention not
exceeding Twenty-Five Thousand Dollars ($25,000)) by insurance carried by Seller
(an "Insured Casualty"), and the cost of repairing or restoring the damaged
Improvements (as agreed between Buyer and Seller or as determined under Section
14.1.4) ("Restoration Costs") shall exceed One Million Dollars ($1,000,000) (the
"Insured Casualty Threshold Amount"), Buyer shall have the right to terminate
this Agreement by giving Seller written notice of termination within ten (10)
business days following the date of receipt of Seller's notice of the occurrence
of such destruction or damage (or if a longer period of time is

                                       26

<PAGE>

reasonably required to determine whether a Casualty is an Insured Casualty, or
to agree upon or determine Restoration Costs, within five (5) business days
after the amount of Restoration Costs has been determined and Buyer has received
written confirmation, in a form reasonably satisfactory to Buyer, from Seller's
insurance carrier or carriers that Seller's insurance will cover such damage).
If this Agreement is so terminated, then neither party shall have any further
rights or obligations hereunder (except with respect to those matters expressly
stated to survive such termination), the Deposit, and all interest accrued
thereon, shall be returned to Buyer within two (2) business days thereafter, and
each party shall bear its own costs incurred hereunder. In all events, however,
Seller shall be entitled to retain the Option Payment. If Buyer does not elect
to terminate this Agreement, or if damage to such Improvements occurs, the
Restoration Costs of which are less than the Insured Casualty Threshold Amount,
Buyer shall remain obligated to perform all of its obligations under this
Agreement, and at Closing, Buyer shall receive a credit against the Purchase
Price in the amount of any insurance proceeds collected and retained by Seller
as a result of any such damage or destruction (other than proceeds of business
interruption insurance), plus the amount of any applicable policy deductible
(but reduced by the costs of any repairs performed by Seller with Buyer's
approval, which approval shall not be unreasonably withheld), and Seller shall
assign to Buyer all rights to such insurance proceeds (other than proceeds of
business interruption insurance relating to periods prior to the Closing) as
shall not have been collected prior to the Closing. Buyer shall have the right
to participate in any adjustment of the insurance claim in connection with any
Casualty, whether or not such Casualty is an Insured Casualty.

                14.1.2  Uninsured Casualty. If any Improvements located upon the
Real Property are destroyed or substantially damaged during the period following
the exercise of the Option and prior to the Closing by a Casualty which is not
an Insured Casualty, and the Restoration Costs (as agreed between Buyer and
Seller or as determined under Section 14.1.4) shall exceed the available
insurance proceeds, if any (other than proceeds of business interruption
insurance), by more than Two Hundred Thousand Dollars ($200,000) (the "Uninsured
Casualty Threshold Amount"), Buyer shall have the right to terminate this
Agreement by giving Seller written notice of termination within ten (10)
business days following the date of receipt of Seller's notice of the occurrence
of such destruction or damage (or if a longer period of time is reasonably
required to determine whether a Casualty is or is not an Insured Casualty, or to
agree upon or determine Restoration Costs or the amount of insurance proceeds
which will be available, within five (5) business days after all such
determinations have been made); whereupon this Agreement shall terminate, except
as specified in Section 14.1.3. If this Agreement is so terminated, then neither
party shall have any further rights or obligations hereunder (except with
respect to those matters expressly stated to survive such termination), the
Deposit, and all interest accrued thereon, shall be returned to Buyer within two
(2) business days thereafter, and each party shall bear its own costs incurred
hereunder. In all events, however, Seller shall be entitled to retain the Option
Payment. If (a) damage to such Improvements occurs, but the Restoration Costs,
less the available insurance

                                       27

<PAGE>

proceeds, if any (other than proceeds of business interruption insurance), is
less than or equal to the Uninsured Casualty Threshold Amount, or if (b) Buyer
does not elect to terminate this Agreement, or if (c) Buyer elects to terminate
this Agreement, but this Agreement nevertheless does not terminate due to the
operation of Section 14.1.3, then, in any of such cases, Buyer shall remain
obligated to perform all of its obligations under this Agreement, and at
Closing, Buyer shall receive a credit against the Purchase Price in the amount
of (A) any insurance proceeds collected and retained by Seller as a result of
any such damage or destruction (other than proceeds of business interruption
insurance relating to periods prior to the Closing), plus (B) an amount equal to
the lesser of (i) the uninsured Restoration Costs, or (ii) Two Hundred Thousand
Dollars ($200,000); plus (C) if Section 14.1.3 is applicable, the Additional
Amount specified in Section 14.1.3; but reduced by the costs of any repairs
performed by Seller with Buyer's approval, which approval shall not be
unreasonably withheld, and Seller shall assign to Buyer all rights to such
insurance proceeds as shall not have been collected prior to the Closing (other
than proceeds of business interruption insurance relating to periods prior to
close of escrow). Buyer shall have the right to participate in any adjustment of
the insurance claim in connection with any Casualty, whether or not such
Casualty is an Insured Casualty.

                14.1.3  Additional Credit. If any Improvements located upon the
Real Property are destroyed or substantially damaged during the period following
the exercise of the Option and prior to the Closing by a Casualty which is not
an Insured Casualty, and the Restoration Costs (as agreed between Buyer and
Seller or as determined under Section 14.1.4) shall exceed the available
insurance proceeds, if any (other than proceeds of business interruption
insurance), by an amount greater than the Uninsured Casualty Threshold Amount,
and as a result, Buyer gives notice of termination of this Agreement pursuant to
Section 14.1.2, Seller shall have the right, at its option, for a period of five
(5) business days after Buyer's notice of termination is given, to give notice
to Buyer by which Seller agrees to reduce the Purchase Price by the amount (the
"Additional Amount") by which the Restoration Costs, less the amount of any
available insurance proceeds (other than proceeds of business interruption
insurance), exceeds the Uninsured Casualty Threshold Amount. In such event,
Buyer's notice of termination given under Section 14.1.2 shall be of no effect,
this Agreement shall not be terminated, and the Purchase Price shall be reduced
by giving Buyer a credit at Closing for the Additional Amount as specified in
this Section 14.1.3 above; provided, however, that if the Additional Amount so
computed equals or exceeds Two Million Dollars ($2,000,000), then
notwithstanding the foregoing, Seller's agreement to reduce the Purchase Price
by crediting Buyer the Additional Amount will become effective, and this
Agreement will not be terminated, only if Buyer agrees to accept such price
reduction and purchase the Property.

                14.1.4  Arbitration of Disputes. In the event Seller and Buyer
cannot mutually agree upon the amount of Restoration Costs, such disputed amount
shall be determined in the manner provided in Exhibit 14.1.4 attached hereto.
Either Party may

                                       28

<PAGE>

invoke the provisions of this Section 14.1.4 at any time that a dispute as to
any such amount exists, by delivering written notice to the other party. With
respect to the arbitration provided for in this Section 14.1.4, the Parties
agree as follows:

NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISIONS
IN THIS AGREEMENT DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW
AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED
IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP
YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE
SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE
TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED
TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR
AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO
NEUTRAL ARBITRATION.

                    /s/ [ILLEGIBLE]                     /s/ [ILLEGIBLE]
                --------------------------        ------------------------------
                    Seller's Initials                   Buyer's Initials

                14.1.5  Postponement of Closing. If any of the Improvements
located upon the Real Property are destroyed or substantially damaged during the
period following the exercise the Option and this Agreement is not terminated as
a result thereof, the scheduled Closing shall be postponed to the extent
reasonably necessary to determine whether a Casualty is or is not an Insured
Casualty, to agree upon or determine Restoration Costs or the amount of
insurance proceeds which will be available, or to determine whether this
Agreement will be terminated. Once it has been determined that this Agreement
will not be terminated, and such other matters as may be relevant have also been
determined, either party may give notice to the other requiring that the Closing
occur not more than ten (10) business days following the date such notice is
given.

        14.2    Condemnation. Provided that Buyer has exercised the Option, in
the event that all or any portion of the Real Property shall be taken in
condemnation or under the right of eminent domain after the Effective Date and
before the Closing Date, Buyer, notwithstanding such taking, shall be obligated
to proceed to close the transaction contemplated herein pursuant to the terms
hereof and Seller shall assign and turn over to Buyer, and Buyer shall be
entitled and receive and keep all awards for the taking by eminent domain which
accrue to Seller and there shall be no reduction in the Purchase Price.

                                       29

<PAGE>

15.     COMMISSIONS.

        Seller represents and warrants to Buyer that no real estate broker or
agent has been authorized to act on Seller's behalf, in connection with the
transaction as contemplated by this Agreement. Buyer represents and warrants to
the Seller that no real estate broker or agent has been authorized to act on
Buyer's behalf in connection with the transaction as contemplated by this
Agreement, except for Cushman & Wakefield ("Buyer's Broker"). Buyer and Seller
each indemnifies the other party and agrees to defend and hold the other party
harmless from any and all Claims which now or hereafter may be asserted against
the other party for any brokerage fees, finder's fees, commissions or similar
types of compensation which may be claimed by any person as a result of the
indemnifying party's acts in connection with this transaction, except as
otherwise provided herein.

16.     NOTICES.

        All notices, requests or demands to a party hereunder shall be in
writing and shall be given or served upon the other party by personal service,
by certified return receipt requested or registered mail, postage prepaid, or by
Federal Express or other nationally recognized commercial courier, charges
prepaid, addressed as set forth below. Any such notice, demand, request or other
communication shall be deemed to have been given upon the earlier of personal
delivery thereof, three (3) business days after having been mailed as provided
above, or one (1) business day after delivery to a commercial courier for next
business day delivery, as the case may be. Each party shall be entitled to
modify its address by notice given in accordance with this Section 16.

        If to Seller:              Townsend 625, LLC
                                   601 Townsend Street, Suite 107
                                   San Francisco, CA 94103
                                   Attention: Ronaldo Cianciarulo

        With a copy to:            Kay & Merkle
                                   100 The Embarcadero, Penthouse
                                   San Francisco, CA 94105
                                   Attn: Walter F. Merkle, Esq.

        If to Buyer:               Macromedia, Inc.
                                   600 Townsend Street, Suite 310W
                                   San Francisco, CA 94103
                                   Attn: Loren Hillberg

        With a copy to:            Heller Ehrman White and McAuliffe
                                   333 Bush Street
                                   San Francisco, California 94104
                                   Attn: Carl Johnson, Esq.

                                       30

<PAGE>

17.     LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.

        17.1    No Reliance on Documents. Except as expressly stated herein,
Seller makes no representation or warranty as to the truth, accuracy or
completeness of any materials, data or information delivered by Seller or its
agents to Buyer in connection with the transaction contemplated hereby. Buyer
acknowledges and agrees that all materials, data and information delivered by
Seller to Buyer in connection with the transaction contemplated hereby are
provided to Buyer as a convenience only and that any reliance on or use of such
materials, data or information by Buyer shall be at the sole risk of Buyer.
Neither Seller, nor any affiliate of Seller, nor the person or entity which
prepared any report or reports delivered by Seller to Buyer shall have any
liability to Buyer for any inaccuracy in or omission from any such reports.

        17.2    As-Is Sale: Disclaimers. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT
ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.

        BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND
CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL
FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT.
BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND
BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS
OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING
SPECIFICALLY, WITHOUT LIMITATION, OFFERING PACKAGES DISTRIBUTED WITH RESPECT TO
THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY
EMPLOYEES OR AGENTS REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER
MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY
SET FORTH IN THIS AGREEMENT. BUYER ALSO ACKNOWLEDGES THAT THE PURCHASE PRICE
REFLECTS AND TAKES INTO ACCOUNT THAT, EXCEPT WITH RESPECT TO THE EXPRESS
REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS AGREEMENT, THE
PROPERTY IS BEING SOLD "AS-IS."

        BUYER REPRESENTS TO SELLER THAT BUYER 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 BUYER DEEMS NECESSARY

                                       31

<PAGE>

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 ANY
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, OTHER THAN SUCH
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH
IN THIS AGREEMENT. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE
MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL
AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S
INVESTIGATIONS, AND, EXCEPT WITH RESPECT TO SELLER'S EXPRESS REPRESENTATIONS,
WARRANTIES, AND COVENANTS SET FORTH IN THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SELLER AND DELIVERED PURSUANT TO THIS AGREEMENT AT CLOSING, BUYER, UPON
CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND
SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, EMPLOYEES, PROPERTY MANAGER
AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION
(INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) OF ANY AND EVERY KIND OR
CHARACTER, KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST
SELLER (AND SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, EMPLOYEES,
PROPERTY MANAGER AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY
LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS AND ANY VIOLATIONS
OF ANY HAZARDOUS MATERIALS LAWS REGARDING THE PROPERTY. BUYER HEREBY WAIVES THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 WHICH PROVIDES THAT:

        "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
        KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
        RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
        SETTLEMENT WITH THE DEBTOR."

                    /s/ [ILLEGIBLE]                     /s/ [ILLEGIBLE]
                --------------------------        ------------------------------
                    Buyer's Initials                   Seller's Initials

        17.3    Material Change. Seller shall promptly notify Buyer in writing
of any change in any condition with respect to the Property or any event or
circumstance which makes any representation or warranty of Seller as set forth
in Section 12.2 of this

                                       32

<PAGE>

Agreement materially untrue or misleading or any covenant of Seller under this
Agreement incapable of being performed. In no event shall Seller be liable to
Buyer for, or be deemed to be in default pursuant to this Agreement by reason of
any inaccuracy of a representation or warranty which results from any change
that (i) occurs between the Effective Date and the Closing Date; and (ii) is
expressly permitted under the terms of this Agreement or is beyond the
reasonable control of Seller to prevent; provided, however, that the occurrence
of a material change which is not permitted hereunder will constitute the
non-fulfillment of the condition set forth in Section 8.2.2 hereof. If, in spite
of such non-fulfillment of the conditions set forth in such Section 8.2.2 the
Closing occurs, Seller's representations and warranties set forth in this
Agreement shall be deemed to have been modified by all statements made in any
notice or notices of modification as given by Seller to Buyer pursuant to this
Section 17.3 prior to the Closing.

        17.4    Survival of Seller's Representations and Warranties. The
representations and warranties of Seller set forth in Section 12.2 hereof (as
such may have been updated as of the Closing in accordance with Section 17.3) in
accordance with the terms of this Agreement, shall survive Closing for a period
of twelve (12) months. No claim for a breach of any representation or warranty
of Seller shall be actionable or payable if the breach in question results from
or is based on a condition, state of facts, or other matter, which was actually
known to Buyer prior to the Closing. Seller shall have no liability to Buyer for
a breach of any representation or warranty unless and until the valid claims for
all such breaches collectively aggregate more than Fifty Thousand Dollars
($50,000) (including all claims arising in relation to the King Street Agreement
and the 601 Agreement), in which event the amount of such valid claims in excess
of Fifty Thousand Dollars ($50,000) shall be actionable, up to the Maximum (as
defined in this Section), and unless written notice containing a description of
the specific nature of such breach shall have been given by Buyer to Seller
prior to the expiration of said twelve (12) month period and any action shall
have been commenced by Buyer against Seller within fourteen (14) months of
Closing. Buyer agrees to first seek recovery under any insurance policies,
Service Contracts and the Leases, as applicable, prior to seeking recovery from
Seller (although the foregoing shall not prevent Buyer from commencing an action
against Seller to recover such damages), and Seller shall not be liable to Buyer
if Buyer's remaining claim after recovery from such insurance policies, Service
Contracts and/or Leases is less than Fifty Thousand Dollars ($50,000). As used
herein, the tern "Maximum" shall mean the total aggregate amount (including
claims arising under or in relation to the 601 Agreement and King Street
Agreement) of Five Million Dollars ($5,000,000). References to "known to Buyer"
shall refer only to the current actual knowledge of James Morgensen and shall
not be construed, by imputation or otherwise, to refer to the knowledge of any
affiliate of Buyer, or to any other officer, agent, manager, representative or
employee of Buyer or any affiliate thereof or to impose upon such person any
duty to investigate the matter to which such actual knowledge, or the absence
thereof, pertains.

                                       33

<PAGE>

        17.5    Survival of Limitations. The provisions of this Article 17 shall
survive Closing or any termination of this Agreement.

18.     MISCELLANEOUS.

        18.1    Time. Time is of the essence in the performance of each party's
obligations hereunder; however, if the final date of any period which is set out
in any provision of this Agreement falls on a Saturday, Sunday or legal holiday
under the laws of the United States or the State in which the Property is
located, then, in such event, the time of such period shall be extended to the
next day which is not a Saturday, Sunday or legal holiday.

        18.2    Attorneys' Fees. If any legal action, arbitration or other
proceeding is commenced to enforce or interpret any provision of this Agreement,
the prevailing party shall be entitled to an award of its attorneys' fees and
expenses. The phrase "prevailing party" shall include a party who receives
substantially the relief desired whether by dismissal, summary judgment,
judgment or otherwise.

        18.3    No Waiver. No waiver by any party of the performance or
satisfaction of any covenant or condition shall be valid unless in writing and
shall not be considered to be a waiver by such party of any other covenant or
condition hereunder.

        18.4    Entire Agreement. This Agreement contains the entire agreement
between the parties regarding the Property and supersedes all prior agreements,
whether written or oral, between the parties regarding the same subject. This
Agreement may only be modified in writing.

        18.5    Survival. The provisions of this Agreement shall not merge with
the delivery of the Deed but shall, except as otherwise provided in this
Agreement, survive the Closing.

        18.6    Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the heirs, executors, administrators and successors and
assigns of Seller and Buyer. Buyer shall have the right to assign Buyer's rights
and obligations pursuant to this Agreement to any party without the prior
written consent of Seller; provided, however, that Buyer shall not be released
from liability under this Agreement by reason of any such assignment and Buyer
shall give Seller written notice of any such assignment at least ten (10) days
prior to the Closing.

        18.7    Severability. In the case that any one or more of the provisions
contained in this Agreement are for any reason held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

                                       34

<PAGE>

        18.8    Captions. Paragraph titles or captions contained in this
Agreement are inserted as a matter of convenience only and for reference, and in
no way define, limit, extend or describe the scope of this Agreement.

        18.9    Exhibits. All exhibits attached hereto shall be incorporated
herein by reference as if set out herein in full.

        18.10   Relationship of the Parties. The parties acknowledge that
neither party is an agent for the other party, and that neither party shall or
can bind or enter into agreements for the other party.

        18.11   Governing Law. This Agreement and the legal relations between
the parties hereto shall be governed by and be construed in accordance with the
laws of the State of California.

        18.12   Review by Counsel. The parties acknowledge that each party and
its counsel have reviewed and approved this Agreement, and the parties hereby
agree that the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments or exhibits hereto.

        18.13   Non-Disclosure. Except as otherwise provided in Section 7.2.3
the parties hereto shall not disclose any of the material terms of this
Agreement or the existence of this Agreement (except to the extent as may be
required by law or as required by the Title Company or to the officers,
directors, partners, employees, accountants, attorneys, and other consultants of
the parties hereto in the ordinary course of business) without the prior written
consent of the other party. Notwithstanding the foregoing, any party (and any
employee, representative or other agent of any party) may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax structure
of the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to any party
relating to such tax treatment and tax structure; provided, however, that any
such information and materials shall be kept confidential to the extent
necessary to comply with any applicable securities laws. For purposes of the
exceptions set out in the preceding sentence to the general confidentiality
provisions set forth above, the tax treatment and tax structure of the
transactions contemplated by this Agreement shall not be deemed to include the
location of the Property, the identity of the parties to this Agreement or the
Purchase Price.

        18.14   Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original. This Agreement shall only be
effective if a counterpart is signed by both Seller and Buyer.

        18.15   Filing of Reports. The Title Company shall be solely responsible
for the timely filing of any reports or returns required pursuant to the
provisions of

                                       35

<PAGE>

Section 6045(e) of the Internal Revenue Code of 1986 as amended (and any similar
reports or returns required under any state or local laws) in connection with
the Closing.

        18.16   Third Party Beneficiaries. This Agreement is for the benefit of
Buyer and Seller and their respective agents, employees, shareholders, officers,
directors, partners and successors and no third party shall be entitled to the
benefit of any of the provisions of this Agreement.

        18.17   Tax Deferred Exchange. In connection with the transactions
contemplated by this Agreement, Seller may wish to engage in a tax deferred
exchange of the Real Property. Buyer agrees to reasonably cooperate with Seller
in connection with such exchange, provided, however, that (i) the exchange shall
not delay (except as expressly provided in this Agreement) the Closing; (ii)
Buyer will not be required to take title to any other real property; (iii) Buyer
shall not incur any additional liability or cost by reason of such exchange;
(iv) Seller will indemnify, defend and hold Buyer harmless for, from and against
any claim, demand, cause of action, liability, cost or expense (including
attorney's fees) in connection therewith, including, without limitation, any
increase in escrow fees or charges resulting from such exchange; and (v) Seller
acknowledges and agrees and that Buyer has not made and will not make
representation or warranty as to the effectiveness for tax purposes of any such
exchange

19.     DEFAULT.

        19.1    Liquidated Damages. FROM AND AFTER THE EXERCISE OF THE OPTION,
IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS NOT
CONSUMMATED DUE TO A DEFAULT OF BUYER, THE DEPOSIT SHALL BE PAID TO AND RETAINED
BY SELLER AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL
DAMAGES IN THE EVENT THAT THE SALE IS NOT CONSUMMATED WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY EXECUTING THIS
SECTION 19.1 BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES
AND AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT THE CLOSING DOES NOT
OCCUR AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER ARISING FROM SUCH
FAILURE OF THE SALE TO CLOSE. IN ADDITION, BUYER SHALL PAY ALL TITLE, SURVEY AND
ESCROW CANCELLATION CHARGES. NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL
THIS SECTION 19.1 LIMIT THE DAMAGES RECOVERABLE BY EITHER PARTY AGAINST THE
OTHER PARTY DUE TO (A) THE OTHER PARTY'S OBLIGATION TO INDEMNIFY SUCH PARTY IN
ACCORDANCE WITH THIS AGREEMENT, OR (B) THIRD PARTY CLAIMS. BY THEIR SEPARATELY
EXECUTING THIS SECTION 19.1 BELOW, BUYER AND SELLER ACKNOWLEDGE THAT THEY

                                       36

<PAGE>

HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED DAMAGES, AND
THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF
THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED.
CONSISTENT WITH THE PROVISIONS OF SECTION 1.5, IN THE EVENT OF A TERMINATION OF
THIS AGREEMENT BY REASON OF A DEFAULT OF BUYER PURSUANT TO THIS SECTION 19.1,
THE OPTION PAYMENT IN ALL EVENTS SHALL BE RETAINED BY SELLER.

                    /s/ [ILLEGIBLE]                     /s/ [ILLEGIBLE]
                --------------------------        ------------------------------
                    Buyer's Initials                   Seller's Initials

        19.2    Default by Seller. In the event the sale of the Property as
contemplated hereunder is not consummated due to default by Seller hereunder,
Buyer shall be entitled, as its sole remedy for Seller's default, either (a) to
receive the return of the Option Payment and the Deposit (together with all
interest accrued thereon), and to recover from Seller Buyer's actual third party
out of pocket costs incurred in connection with Buyer's due diligence (which
costs, together with any costs incurred by Baker Hamilton in connection with the
601 Property and King Street Property, shall not exceed Two Hundred Thousand
Dollars ($200,000); or (b) to enforce specific performance of Seller's
obligation to convey the Property to Buyer in accordance with the terms of this
Agreement, it being understood and agreed that the remedy of specific
performance shall not be available to enforce any other obligation of Seller
hereunder. Except as otherwise expressly provided in this Section 19.2 above,
Buyer expressly waives its rights to seek damages in the event of Seller's
default hereunder. Buyer shall be deemed to have elected to terminate this
Agreement if Buyer fails to file suit for specific performance against Seller in
a court having jurisdiction in the county and state in which the Real Property
is located, on or before one hundred twenty (120) days following the date upon
which Closing was to have occurred.

        Notwithstanding the above provisions of this Section 19.2 to the
contrary, Buyer shall be entitled to seek damages against Seller as allowed by
applicable law in the event that Buyer shall be prevented from obtaining
specific performance of Seller's obligation to convey title to the Property to
Buyer as required under this Agreement by reason of Seller's grant or conveyance
of the Property, any right or interest therein or any lien or encumbrance
thereon to any other party.

20.     DEFINITIONS. For ease of reference, the defined terms as employed in
this agreement and as listed below are defined in the designated sections:

        1.      "601 Agreement" as defined in Section 1.4

        2.      "601Property" as defined in Section 1.4

                                       37

<PAGE>

        3.      "Additional Amount" as defined in Section 14.1.3

        4.      "Agreement" as defined in the first paragraph

        5.      "Assignment" as defined in Section 2.3

        6.      "Baker Hamilton" as defined in Section 1.4

        7.      "Bill of Sale" as defined in Section 9.1.2

        8.      "Buyer" as defined in the first paragraph

        9.      "Buyer's Broker" as defined in Section 15

        10.     "Buyer's Reports" as defined in Section 7.5

        11.     "Buyer's Representatives" as defined in Section 7.4

        12.     "Buyer's Title Policy" as defined in Section 4.2

        13.     "Casualty" as defined in Section 14.1

        14.     "Claims" as defined in Section 13.1

        15.     "Closing" as defined in Section 6.1

        16.     "Closing Date" as defined in Section 6.1

        17.     "Deed" as defined in Section 9.1.1

        18.     "Deposit" as defined in Section 3.2

        19.     "Due Diligence Materials" as defined in Section 7.2

        20.     "Effective Date" as defined in the first paragraph

        21.     "Escrow" as defined in Section 5.1

        22.     "Estoppel Certificate(s)" as defined in Section 7.7

        23.     "Exercise Notice" as defined in Section 1.4

        24.     "Expiration Date" as defined in Section 7.1

        25.     "First Offer Notice" as defined in Section 1.2

        26.     "Improvements" as defined in Section 2.1.2

                                       38

<PAGE>

        27.     "Insured Casualty" as defined in Section 14.1.1

        28.     "Insured Casualty Threshold Amount" as defined in Section 14.1.1

        29.     "King Street Property" as defined in Section 1.4

        30.     "King Street Agreement" as defined in Section 1.4

        31.     "Land" as defined in Section 2.1.1

        32.     "Leases" as defined in Section 2.3

        33.     "Lender" as defined in Section 8.1.5

        34.     "Maximum" as defined in Section 17.4

        35.     "Omnicom" as defined in Section 8.1.6

        36.     "Operating Costs" as defined in Section 10.1.3

        37.     "Option" as defined in Section 1.1

        38.     "Option Payment" as defined in Section 1.2

        39.     "Permitted Exceptions" as defined in Section 4.3

        40.     "Personal Property" as defined in Section 2.1.3

        41.     "Property" as defined in Section 2.1

        42.     "Purchase Price" as defined in Section 3

        43.     "Real Property" as defined in Section 2.2

        44.     "Restoration Costs" as defined in Section 14.1.1

        45.     "Seller" as defined in the first paragraph

        46.     "Service Contracts" as defined in Section 2.3

        47.     "Subsequent Title Defects Notice" as defined in Section 7.3.3

        48.     "Survey" as defined in Section 7.3.1

        49.     "Tenant Notification Letter", as defined in Section 9.3

        50.     "Tenants" as defined in Section 2.3

                                       39

<PAGE>

        51.     "Term" as defined in Section 1.3

        52.     "Title Company" as defined in Section 5.1

        53.     "Title Notice" as defined in Section 7.3.2

        54.     "Title Report" as defined in Section 7.3.1

        55.     "Uninsured Casualty Threshold Amount" as defined in Section
                14.1.2

                             SIGNATURE PAGE FOLLOWS:

                                       40

<PAGE>

        IN WITNESS WHEREOF, the parties hereto have caused this Option Agreement
to be duly executed and delivered as of the day and year first above written.

SELLER:                                          BUYER:

TOWNSEND 625, LLC,                               MACROMEDIA, INC.,
a California limited liability company           a Delaware corporation

By:     /s/ Ronaldo Cianciarulo                  By:    /s/ James L. Morgensen
   ---------------------------------------            --------------------------
        Ronaldo Cianciarulo,                     Name:  James L. Morgensen
Its     President                                Its:   Vice President

                                       41

<PAGE>

                                LIST OF EXHIBITS

                 625 Townsend Street, San Francisco, California

Exhibit 1.4           -      Form of Exercise Notice
Exhibit 2.1.1         -      Legal Description of Land
Exhibit 2.1.3         -      Schedule of Tangible Personal Property
Exhibit 2.3(i)        -      Schedule of Leases
Exhibit 2.3(ii)       -      Schedule of Service Contracts
Exhibit 7.7           -      Form of Estoppel Certificate
Exhibit 9.1.1         -      Form of Grant Deed
Exhibit 9.1.2         -      Form of Bill of Sale
Exhibit 9.1.3         -      Form of Assignment and Assumption Agreement
Exhibit 9.3           -      Form of Tenant Notification Letter
Exhibit 14.1.4        -      Arbitration of Disputes Relating to Estimated
                             Restoration Costs

<PAGE>

                                LIST OF SCHEDULES

Schedule 12.2.4       -      Description of Litigation
Schedule 12.2.5       -      Description of Violations
Schedule 12.2.8       -      Description of Lease Issues
Schedule 12.2.9       -      Description of Commission Issues
Schedule 12.2.10      -      Description of Issues Relating to Developmental
                             Requirements

<PAGE>

                                   EXHIBIT 1.4

                             FORM OF EXERCISE NOTICE

                                     [date]

Townsend 625, LLC
601 Townsend Street, Suite 107
San Francisco, CA 94103
Attention: Ronaldo Cianciarulo

        Re:  625 Townsend Street Option Agreement ("Agreement") dated July ____,
             2003, by and between Townsend 625, LLC, ("Seller") and Macromedia,
             Inc. ("Buyer")

Gentlemen:

        With reference to the above Agreement and specifically with reference to
Section 1.4 of the above Agreement, please consider this letter notice of
Buyer's unequivocal exercise of the Option as described in the Agreement.

        This letter constitutes the "Exercise Notice" as defined in the
Agreement.

                                Very truly yours,

cc:     Walter F. Merkle

<PAGE>

                                  EXHIBIT 2.1.1

                            LEGAL DESCRIPTION OF LAND

Real property in the City of San Francisco, County of San Francisco, State of
California, described as follows:

Lot 8, as shown on that certain map entitled, "Parcel Map being a Merger and
Resubdivision of Lots 4, 5 & 6 as they are shown on that map filed in Book 41 of
Parcel Maps, at page 18, Records of the City and County of San Francisco, also
being a subdivision of Lots 4, 5 & 6 of Assessor's Block 3799, San Francisco,
California", which map was filed for record in the Office of the Recorder of the
City and County of San Francisco, State of California, on July 14, 2000, in Book
44 of Parcel Maps, at pages 124 and 125.

Excepting therefrom: "All minerals and mineral rights, interests and royalties,
including without limiting the generality thereof, oil, gas and other
hydrocarbon substances, as well as metallic or other solid minerals, in and
under said property; however, grantor or its successors and assigns, shall not
have the right for any purpose whatsoever to enter upon, into or through the
surface of said property in connection therewith", as reserved in the deed
executed by Southern Pacific Transportation Company, as Grantor, recorded May
12, 1989, in book 2869 of Official Records, page 1405.

Assessor's: Lot: 8 Block: 3799

PARCEL II:

EASEMENTS for parking, pedestrian and vehicular Ingress and egress and
utilities, as provided in that certain "PARKING EASEMENT AGREEMENT" executed by
and between BAKER HAMILTON PROPERTIES, LLC, a California limited liability
company, and TOWNSEND 625, LLC, a California limited liability company, dated
August 17th, 2000 and recorded August 24th, 2000 in Official Records under
Recorder's Serial Number 2000-G819993-00, over, across, through, and under
portions of the following described parcel, as said portions are more
particularly described therein.

Lot 9, as shown on that certain map entitled, "Parcel Map being a Merger and
Resubdivision of Lots 4, 5 & 6 as they are shown on that map filed in Book 41 of
Parcel Maps, at page 18, Records of the City and County of San Francisco, also
being a subdivision of Lots 4, 5 & 6 of Assessor's Block 3799, San Francisco,
California", which map was filed for record in the Office of the Recorder of the
City and County of San Francisco, State of California, on July 14, 2000, in Book
44 of Parcel Maps, at pages 124 and 125.

<PAGE>

                                  EXHIBIT 2.1.3

                     SCHEDULE OF TANGIBLE PERSONAL PROPERTY

NONE

<PAGE>

                                 EXHIBIT 2.3(i)

                               SCHEDULE OF LEASES

NONE

<PAGE>

                                 EXHIBIT 2.3(ii)

                          SCHEDULE OF SERVICE CONTRACTS

1.      Agreement with Diversified Fire Protection for providing fire alarm
monitoring services and testing services.

<PAGE>

                                   EXHIBIT 7.7

                          FORM OF ESTOPPEL CERTIFICATE

____________________________________("Tenant") hereby certifies for the benefit
of Macromedia, Inc., a Delaware corporation ("Buyer"), with respect to those
certain Premises (as defined below) located in San Francisco, California, that
all of the following statements are true, except as may be indicated to the
contrary herein by Tenant:

        1.      Tenant has accepted, and is in possession of, the premises
("Premises") located at _______________________________ ("Property"), consisting
of approximately _____________ square feet under the terms of that certain lease
("Original Lease") dated _____________________________, executed by Townsend
625, LLC, a California limited liability company ("Landlord") and the
undersigned. The only amendments to said Lease are the following (list by date;
if none, please state "none"): _________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The Original Lease as so amended is referred to herein as the "Lease". The Lease
is in full force and effect and constitutes the entire agreement between
Landlord and Tenant with respect to the Premises or Property. There are no other
agreements, options or rights with respect to the Premises or Property in favor
of Tenant or any affiliate of Tenant.

        2.      The term of the Lease commenced on ____________________,
_________, and expires by its terms on ____________________, _________, unless
sooner terminated. The current monthly installment of base rent required to be
paid under the Lease is $__________________ and has been paid through ________
2003 and no rent has been paid for more than thirty (30) days in advance of its
due date. Tenant is not in a period of free rent, rental credit, rental
concession, rental abatement or other benefit granted to Tenant and is not due
any free rent, rental credit, rental concession, rental abatement or other
benefit granted to Tenant during the remaining term of the Lease, except as set
forth in the Lease. Tenant asserts no claim of default, right of offset, or
defense against the payment of rents or other amounts payable under the Lease.

        3.      Tenant is obligated to reimburse Landlord for its percentage
share of all real property taxes, operating expenses, common area maintenance
and insurance expenses affecting the Building of which the Premises are a part,
and the current estimated amount of such reimbursements payable monthly by
Tenant is $_____________________________. Tenant is current in the payment of
such real property taxes, including without limitation, special assessments and
other local taxes, operating expenses, common area maintenance payments and all
other expenses required to be paid in full or in part by Tenant.

        4.      The total number of parking spaces presently leased by Tenant
under the Lease is ___________________________, and the total current monthly
parking rent is $_________________________.

<PAGE>

        5.      Tenant has no right or option to renew or extend the term of the
Lease or to enlarge the leased premises except as
follows:________________________________________________.

        6.      Tenant has no option to purchase, or first right of refusal with
respect to the Building of Which the Premises are a part, or any portion
thereof, or Landlord's interest therein.

        7.      As of this date, there exists no breach or default under the
Lease on the part of either the Tenant or Landlord. Tenant has no right or
option to terminate the Lease.

        8.      There has not been filed by or against Tenant a petition in
bankruptcy, voluntary or otherwise, any assignment for the benefit of creditors,
any petition seeking reorganization or arrangement under the Bankruptcy laws of
the United States or any state thereof, or any other action brought under said
Bankruptcy laws with respect to Tenant.

        9.      Tenant has not assigned its interest in the Lease, nor has it
sublet any portion of the Premises, except as
follows:_____________________________________________________________________.

        10.     Landlord has no further obligation to make or pay for any
improvements to Tenant's space, and any obligation of Landlord to this effect
contained in the Lease has been fully performed, except as
follows:__________________________________________________________

        11.     The undersigned is the Tenant under the Lease and has authority
to sign this document and to bind said Tenant.

        12.     This Certificate may be relied upon by Landlord, Buyer and any
lender to Buyer in connection with Buyer's acquisition or financing of the
Building of which the Premises are a part, and acceptance by any lender of an
assignment of Buyer's interest in the Lease, as additional security for making a
loan.

Dated:______________________, 2003

                                 By:__________________________________

                                 Name:________________________________

                                 Title:_______________________________

<PAGE>

                                  EXHIBIT 9.1.1

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO

MAIL TAX STATEMENTS TO

                               FORM OF GRANT DEED

        FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
Townsend 625, LLC, a California limited liability company ("Grantor") hereby
grants to Macromedia, Inc., a Delaware corporation, that certain real property
(the "Real Property") located in the City and County of San Francisco, State of
California, as more particularly described on Exhibit A attached hereto,
together with all easements, privileges and rights appurtenant to the Real
Property and pertaining or held or enjoyed in connection therewith and all of
Grantor's right, title and interest in and to any real property, lying in the
bed of any street, alley, road or avenue to the centerline thereof adjoining the
Real Property. The conveyance hereunder is made subject to matters of record in
the Official Records of the City and County of San Francisco, California as of
the date of this conveyance.

        IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of
_____________, 2003.

                                      GRANTOR:

                                      Townsend 625, LLC,
                                      a California limited liability company

                                      By:_______________________________________
                                      Name:_____________________________________
                                      Its:______________________________________

<PAGE>

STATE OF CALIFORNIA                        )
                                           ) ss.
COUNTY OF _____________________            )
_________________________________________  )

On ________________________________, 2003, before me,
______________________________, personally appeared ___________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity, and that by his/her/their signature(s) on the instrument,
the person(s) or the entity upon behalf of which the person(s) acted, executed
the instrument.

WITNESS my hand and official seal.

_________________________________________      (Seal)

<PAGE>

                                    EXHIBIT A
                                  To Grant Deed

                                LEGAL DESCRIPTION

                                [To be Attached]

<PAGE>

                                  EXHIBIT 9.1.2

                              FORM OF BILL OF SALE

        THIS BILL OF SALE (the "Bill of Sale") is made as of the ____ day of
________, 2003 by Townsend 625, LLC, a California limited liability company
("Seller"), in favor of Macromedia, Inc., a Delaware corporation ("Buyer").

                Seller and Buyer are parties to an Option Agreement (the "Option
Agreement") dated July ____, 2003 which provides for the sale of certain real
property located at 625 Townsend Street, San Francisco, California (the "Real
Property").

        In connection with the Option Agreement, Seller is required to convey to
Buyer certain items of tangible personal property as hereinafter described.

        NOW, THEREFORE, for valuable consideration, receipt and sufficiency of
which are hereby acknowledged, Seller hereby conveys, transfers and delivers to
Buyer, its legal representatives, successors and assigns, all of its right,
title and interest in and to all tangible personal property of any type owned by
Seller and located at the Real Property and used exclusively in connection with
the operation of the Real Property (collectively, "Personal Property"). The
Personal Property is transferred "As-Is", "Where-Is" without warranties of any
kind including without limitation, implied warranties of merchantability or
fitness for any particular purpose; provided, however, that Seller does warrant
good and marketable title to the Personal Property, free and clear of all liens
and encumbrances, save and except for any liens or encumbrances relating to or
arising out of the Permitted Exceptions identified pursuant to the Option
Agreement.

        IN WITNESS WHEREOF, the undersigned have caused this Bill of Sale to be
duly executed and delivered as of the day and year first above written.

                                         SELLER:

                                         Townsend 625, LLC,
                                         a California limited liability company

                                         By: ___________________________________
                                         Name:__________________________________
                                         Its:___________________________________

<PAGE>

                                  EXHIBIT 9.1.3

                    FORM OF ASSIGNMENT & ASSUMPTION AGREEMENT

        THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") is dated as
of _________, 2003 by and between Townsend 625, LLC, a California limited
liability company ("Assignor") and Macromedia, Inc., a Delaware corporation
("Assignee").

                                 R E C I T A L S

A.      Assignor and Assignee entered into that certain Option Agreement dated
as of July ____, 2003 ("Agreement") with respect to the sale of certain Property
(as defined in the Agreement).

B.      Pursuant to the Agreement, Assignor is assigning to Assignee and
Assignee is acquiring all of Assignor's interest in, to, and under those certain
leases described on Exhibit A, attached hereto and incorporated herein by this
reference (the "Leases") together with any security deposits paid pursuant to
the Leases, except to the extent that Assignor was entitled to and did apply any
part of such deposits to tenant obligations under the Leases.

C.      Pursuant to the Agreement, Assignor is obligated to assign to Assignee
all assignable current licenses, permits, certificates of occupancy, approvals
and entitlements issued, granted or existing in connection with the Real
Property (as defined in the Agreement) as well as any and all assignable
development rights and other intangible rights, interests or privileges directly
relating to or used directly in connection with the Real Property, any
assignable right to use the current names of the Real Property, logos,
trademarks, tradenames, symbols and promotional materials, and all transferable
warranties, guarantees or sureties relating to the Real Property or to the
Personal Property (as defined in the Agreement) (collectively, the "Intangible
Property"). Assignor is further obligated to assign to Assignee all Service
Contracts and other agreements, if any, affecting the Property and listed on
Exhibit B attached hereto and incorporated herein by this reference
(collectively, the "Service Contracts").

        NOW THEREFORE, for good and valuable consideration, Assignor and
Assignee agree:

                                    AGREEMENT

1.      Assignment of Leases. Assignor hereby assigns, conveys, transfers and
sets over to Assignee all of Assignor's right, title and interest in, to and
under the Leases, together with the security deposits paid under the Leases,
except to the extent that Assignor was entitled to and did apply any part of
such deposits to tenant obligations under the Leases, subject to the rights of
the Tenants under the Leases and Assignee hereby accepts such assignment.

2.      Assignment of Service Contracts and Intangible Property. Assignor hereby
assigns, sells, transfers, sets over and delivers to Assignee all of Assignor's
right, title and interest in and to the Intangible Property and the Service
Contracts, and Assignee hereby accepts such assignment.

3.      Assumption of Leases. Assignee hereby assumes and agrees to perform,
fulfill and comply with all covenants and obligations to be performed, fulfilled
or complied with by the landlord under the Leases accruing from and after the
Closing Date, including, but not limited to, payment of all valid claims made by
the Tenants with respect to the tenant security deposits, to the extent such
security deposits were assigned, and were either paid or credited, to Assignee
by Assignor.

<PAGE>

Assignor shall remain responsible for all Assignor's obligations under or with
respect to the Leases accruing prior to the Closing Date.

4.      Additional Assumption. Assignee hereby assumes and agrees to perform,
fulfill and comply with all covenants and obligations to be performed, fulfilled
or complied with by the owner of the Real Property with respect to the
Intangible Property and the Service Contracts accruing on or after the Closing
Date. Assignor shall remain responsible for all of Assignor's obligations under
or with respect to the Intangible Property and the Service Contracts accruing
prior to the Closing Date.

5.      Indemnification. Assignee shall and does hereby indemnify Assignor
against, and agrees to hold Assignor harmless of and from all liabilities,
obligations, actions, suits, proceedings or claims and costs or expenses,
including, but not limited to, reasonable attorneys' fees based upon or arising
out of any breach or failure of Assignee to observe or perform any of the
obligations of Assignee as set forth in this Assignment. Assignor shall and does
hereby indemnify Assignee against, and agrees to hold Assignee harmless of and
from all liabilities, obligations, actions, suits, proceedings or claims and
costs or expenses, including, but not limited to, reasonable attorneys' fees
based upon or arising out of any breach or failure of Assignor to observe or
perform any of the obligations of Assignor as set forth in this Assignment.

6.      Binding Effect. This Assignment shall inure to the benefit of and shall
be binding upon the parties hereto and their respective successors and assigns.

7.      Defined Terms. Except as otherwise specifically provided in this
Assignment, defined terms employed in this Assignment shall have the same
meaning as described in the Agreement.

8.      Governing Law. This Assignment and the legal relations between the
parties hereto shall be governed by and be construed in accordance with the laws
of the State of California.

9.      Counterparts. This Assignment may be executed in counterparts, each of
which shall constitute an original. This Assignment shall only be effective if a
counterpart is signed by both Assignor and Assignee.

10.     Survival. The provisions of this Assignment shall survive the Closing.

ASSIGNOR:                             ASSIGNEE:

Townsend 625, LLC, a                  Macromedia, Inc., a Delaware corporation
California limited liability
company

By:______________________________     By:______________________________________

<PAGE>

                                    EXHIBIT A

                     To Assignment and Assumption Agreement

                              DESCRIPTION OF LEASES

NONE

<PAGE>

                                    EXHIBIT B
                     To Assignment and Assumption Agreement

                                SERVICE CONTRACTS

                                [To be attached]

<PAGE>

                                   EXHIBIT 8.3

                       FORM OF TENANT NOTIFICATION LETTER

Certified Mail, Return
Receipt Requested

______________________________                        Dated: ___________________
______________________________
______________________________

Attn: _________________

                                NOTICE TO TENANT

Tenant address: ____________________________

Premises:    _______________________________

Lease dated: _______________________________

Landlord:    _______________________________

Tenant:    _______________________________________

                This is to notify you that the undersigned has conveyed its fee
interest in the property located at 625 Townsend Street, San Francisco
California to Macromedia Inc., a California, a Delaware corporation ("Buyer"),
and in connection therewith has assigned its interest as landlord under your
lease, to Buyer, whose address is:

________________________
________________________
________________________
Attn:___________________

        Commencing as of the date hereof, all rental and other payments under
your lease shall be paid to Buyer at the address specified above unless you are
otherwise notified in writing by Buyer. All notices to the landlord pursuant to
your lease should hereafter be sent to Buyer at the address specified above and
all inquires with respect to (and responsibility for) your security deposit
should hereafter be directed to Buyer.

                                          Very truly yours,

                                          Townsend 625, LLC
                                          a California limited liability company

                                          By:___________________________________

<PAGE>

                                 EXHIBIT 14.1.4

                             ARBITRATION OF DISPUTES
                    RELATING TO ESTIMATED RESTORATION COSTS.

        1.      Estimators. Within twenty (20) business days after delivery of
notice invoking the provisions of this Section, each party shall designate, by
written notice to the other party, a licensed general contractor having at least
ten (10) years experience in estimating construction costs of major construction
projects in the City and County of San Francisco ("City") to estimate the cost
or amount in dispute. Each such estimator shall be competent, licensed,
qualified by training and experience in the City, disinterested and independent.
Each estimator (or if either party fails to appoint its estimator within such
twenty (20) business day period, the estimator appointed by the other party)
shall make an independent determination of the disputed amount in accordance
with the provisions hereof. The estimators may share and have access to
objective information in preparing their estimates, but they will otherwise act
independently. Each estimator shall complete, sign and submit its written
estimate of the disputed construction or replacement cost, as applicable, within
fifteen (15) business days after the appointment of both estimators, unless the
parties agree to permit a longer period of time. If the higher estimate is not
more than one hundred ten percent (110%) of the lower estimate, the disputed
amount shall be determined for purposes of this Agreement to equal the average
of the two (2) estimates.

        2.      Arbitration. If the higher estimate is more than one hundred ten
percent (110%) of the lower estimate, the parties shall agree upon and appoint
an independent arbitrator within ten (10) business days after the first two (2)
estimates have been submitted to the parties. The arbitrator shall have
experience acting as an arbitrator of disputes involving construction costs or
construction disputes. If the parties do not appoint such arbitrator within such
thirty (30) day period, then either party may apply to the Superior Court of the
State of California in and for the County of San Francisco for appointment of an
arbitrator meeting the foregoing qualifications. If the court denies or
otherwise refuses to act upon such application, either party may apply to the
Judicial Arbitration and Mediation Services, Inc. ("JAMS"), or any similar
provider of professional commercial arbitration services in San Francisco,
California, for a list of available arbitrators containing three (3)
arbitrators, and each party may strike one potential arbitrator. The remaining
arbitrator shall serve as the arbitrator. The arbitrator shall consider the
estimates submitted by the parties as well as any other relevant written
evidence which the parties may choose to submit. If a party chooses to submit
any such evidence, it shall deliver a complete and accurate copy to the other
party at the same time it submits the same to the arbitrator. Neither party
shall conduct ex parte communications with the arbitrator regarding the subject
matter of the arbitration. Within fifteen (15) business days after his or her
appointment, the arbitrator shall conduct a hearing, at which Seller and Buyer
may each make supplemental oral and/or written presentations, with an
opportunity for testimony by

<PAGE>

the estimators and questioning by the parties and the arbitrator. Within ten
(10) business days following the hearing, the arbitrator shall select the
estimate submitted by one or the other of the first two (2) estimators, as the
more accurate estimate of the disputed amount, in the opinion of the arbitrator.
The determination of the arbitrator shall be limited solely to the issue of
deciding which of the estimates is closest to the actual disputed value or
amount. The arbitrator shall have no right to propose a middle ground or to
modify either of the two estimates, or to modify any provision of this
Agreement.

        3.      Conclusive Determination. Except as provided in California Code
of Civil Procedure Section 1286.2 (or its successor), the determination by the
estimators or the arbitrator, as applicable, shall be conclusive, final and
binding on the parties. Neither the estimators nor the arbitrator shall have any
power to modify any of the provisions of this Agreement. Subject to the
provisions of this Section, the parties will cooperate to provide all
appropriate information to the estimators and the arbitrator. The estimators and
the arbitrator will each report their respective determinations in writing,
supported by the reasons for the determination.

        4.      Conduct of Arbitration Proceeding. Any arbitration proceeding
under this Section 14.1.4 shall be subject to California Code of Civil Procedure
Sections 1280 to 1294.2 (but excluding Section 1283.05 with respect to
discovery), or successor California laws then in effect relating to arbitration
generally. Any such proceeding shall be conducted in the City of San Francisco.

        5.      Fees and Costs; Waiver. Each party shall bear the fees, costs
and expenses of the estimator it selects. The fees, costs and expenses of the
arbitrator and the costs and expenses of the arbitration proceeding, if any,
shall be shared equally by Seller and Buyer. The parties waive any claims
against the estimator appointed by the other party, and against the arbitrator,
for negligence, malpractice, or similar claims in the performance of the
estimates or arbitration contemplated by this Section.

<PAGE>

                                 SCHEDULE 12.2.4

                            DESCRIPTION OF LITIGATION

NONE

<PAGE>

                                 SCHEDULE 12.2.5

                            DESCRIPTION OF VIOLATIONS

1.      The width of the sidewalk running along Townsend Street adjacent to the
Real Property is not in compliance with applicable zoning requirements. The
width of the sidewalk is less than that required.

<PAGE>

                                 SCHEDULE 12.2.8

                           DESCRIPTION OF LEASE ISSUES

NONE

<PAGE>

                                 SCHEDULE 12.2.9

                        DESCRIPTION OF COMMISSION ISSUES

NONE

<PAGE>

                                SCHEDULE 12.2.10

DESCRIPTION OF ISSUES RELATING TO DEVELOPMENTAL REQUIREMENTS

1. The transit impact development fee due the City of San Francisco in
   connection with the Real Property remains unpaid.

2. The child care fee owing to the City of San Francisco in connection with the
   Real Property remains unpaid.

<PAGE>

                                                            [LOGO OF MACROMEDIA]

August 12, 2003

Townsend 625, LLC
601 Townsend Street, Suite 107
San Francisco, CA 94103
Attention: Ronaldo Cianciarulo

     Re: 625 Townsend Street Option Agreement ("Agreement") dated July 16, 2003,
         by and between Townsend 625, LLC, ("Seller") and Macromedia, Inc.
         ("Buyer")

Gentlemen:

     With reference to the above Agreement and specifically with reference to
Section 1.4 of the above Agreement, please consider this letter notice of
Buyer's unequivocal exercise of the Option as described in this Agreement.

     This letter constitutes the "Exercise Notice" as defined in the Agreement.

                                                  Very truly yours,

                                                  /s/ James L. Morgensen
                                                  James L. Morgensen
                                                  Vice President, Real Estate

cc:  Walter F. Merkle

                                                                      Macromedia

                                                             600 Townsend Street
                                                                   San Francisco
                                                           California 94103, USA

                                                              www.macromedia.com

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