Document:

exv10w27

Exhibit 10.27

OPTION AGREEMENT

Younan Plaza / 6464 Savoy Street, Houston, Texas

          THIS OPTION AGREEMENT (this “Agreement”) is made as of ___, 2010 (the
“Effective Date”), by and between YOUNAN PROPERTIES, L.P., a Maryland limited partnership
(“Optionee” or the “Operating Partnership”), and YOUNAN PLAZA, LLC, a Delaware
limited liability company (“Optionor”).

RECITALS

          A. Optionor owns that certain real property described in Exhibit A attached hereto and
made a part hereof (the “Land”), together with certain other “Property” (as defined below).

          B. Optionee desires to have the right to acquire all of the Property, without becoming
obligated to acquire it, under specified terms and conditions.

          C. Optionee desires to acquire the “Option” (as defined below) as part of a series of
transactions (collectively, the “Formation Transactions”) relating to the proposed initial
public offering (the “IPO”) of common stock (the “Common Stock”) of Younan
Properties, Inc., a Maryland corporation (the “REIT”), which is the general partner of
Optionee.

AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and
conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Optionee and Optionor hereby agree as follows:

     1. Option.

          1.1 Grant of Option. Optionor hereby grants, bargains and sells to Optionee and its
successors and assigns an exclusive and irrevocable right and option (the “Option”) to
acquire all right, title and interest of Optionor in and to the Property (as hereinafter defined)
on an “as is” basis (subject to all matters of record) for the price and upon the terms and
conditions set forth herein and in the “Acquisition Agreement” (as defined below).

          1.2 Property. As used herein, “Property” shall mean the Land and all of
Optionor’s right, title and interest in and to (i) all adjacent streets, alleys and rights of way
appertaining to the Land, together with all of the rights, benefits, licenses, interests,
privileges, easements, tenements, hereditaments and appurtenances on the Land or in anywise
appertaining to the Land, (ii) all buildings, structures, fixtures and other improvements situated
on the Land or hereinafter constructed or acquired and situated on the Land, but excluding any
fixtures owned by any tenant or other occupant of the Land or Improvements (each, a
“Tenant”) under a Lease (as hereinafter defined) (the “Improvements”), (iii) all
tangible personal property located on, and used in connection with, the Land and the Improvements,
including, without limitation, all building materials, supplies, hardware, carpeting and other
inventory located on or in the Land or

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the Improvements and maintained in connection with the ownership and operation of the Land,
but excluding any such items owned by Tenants (the “Personal Property”), (iv) all leases,
subleases, licenses, and occupancy agreements relating to all or any portion of the Land or the
Improvements and, to the extent the following items are assignable and relate solely to the Land,
the Improvements and/or the Personal Property (collectively, the “Leases”), together with
all rents and other sums due thereunder from and after the “Closing Date” (as defined below)
(collectively, the “Rents”) and any and all cash security deposits, letters of credit and
other credit enhancements delivered by any Tenant in connection therewith which have not been
applied to the satisfaction of the obligations under the Leases prior to the Closing Date in
accordance with the terms of this Agreement (the “Security Deposits”), and (v) all
assignable service contracts and agreements, governmental permits, entitlements, licenses and
approvals, warranties and guarantees received in connection with any work or services performed
with respect thereto, or equipment installed therein, tenant lists, advertising material, telephone
exchange numbers, all trademarks and tradenames, non-confidential books, records and property files
and the “declarant” or the benefiting party’s interest under any covenants, conditions and
restrictions, reciprocal easement or parking agreements or similar documents or instruments
affecting the Land and/or the improvement.

          1.3 Option Consideration. For and in consideration of the Option herein granted,
Optionee has paid, and Optionor hereby acknowledges receipt of, the sum of One Hundred Dollars and
No/Cents ($100.00) (the “Option Consideration”). The Option Consideration is not refundable
under any circumstances and may not be applied against any sums payable pursuant to the Acquisition
Agreement.

          1.4 Conditions to Continued Effectiveness of Option. This Agreement and the Option
granted hereby shall not be effective unless the “IPO Closing Date” (as defined below) occurs. If
the IPO Closing Date does not occur or if the Property is conveyed by Optionor to another “Person”
(as defined below) that is not an “Affiliate” (as defined below) prior to the IPO Closing Date,
then this Agreement and the Option shall be null and void. As used herein, “Person” shall
mean any individual, corporation, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated organization or any other form of entity. As used
herein, “Affiliate” shall mean any Person that, directly or indirectly (including through
one or more intermediaries), controls or is controlled by or is under common control with any other
Person. For purposes of the foregoing, the term “control” (including the correlative
meanings of the terms “controlled by” and “under common control with”), as used
with respect to any Person, shall mean the possession, directly or indirectly (including through
one or more intermediaries), of the power to direct or cause the direction of the management and
policies of such Person, through the ownership of voting securities, partnership interests, limited
liability company interests or other equity interests, by contract or otherwise. As used herein”
“IPO Closing Date” means the date the IPO is consummated.

          1.5 Commencement of Right to Exercise Option. Subject to Section 4 hereof,
Optionee shall have the right to exercise the Option at any time on or after the date that is one
(1) year following the IPO Closing Date (the “Option Exercise Commencement Date”) until the
expiration of the “Option Term” (as defined below) pursuant to Section 1.6 hereof.

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          1.6 Term of Option. The Option and all rights and privileges granted to Optionee
hereunder shall expire on the date that is seven (7) years following the Option Exercise
Commencement Date, unless earlier terminated as described in Section 7 hereof, and subject
to the terms of Section 4 hereof (such term being the “Exercise Period” or the
“Option Term”).

          1.7 Consents. The consummation of the transactions contemplated by this Agreement are
subject to any consents required under the “Property Indebtedness” (as defined below), and are
subject to the consents to be obtained in connection with the IPO and the Formation Transactions.

          1.8 Subordination. The Option granted by this Agreement and the rights of Optionee
hereunder are and shall be subject and subordinate to any “Property Indebtedness” (as defined
below).

     2. Process for Exercise of Option.

          2.1 Exercise. Subject to Section 4 hereof, the Option may be exercised at any
time during the Exercise Period by delivery of written notice by Optionee to Optionor (the
“Exercise Notice”), stating that the Option is exercised on the terms set forth in this
Agreement. The date upon which the Exercise Notice is received by Optionor shall hereinafter be
referred to as the “Exercise Date”. If the Option is exercised, the Property shall be
conveyed within 120 days of the Exercise Date, subject to the terms of the Acquisition Agreement.

          2.2 Inspection. From and after the IPO Closing Date, if the closing of the IPO occurs,
and continuing during the Option Term, Optionor agrees to permit Optionee to enter upon the
Property or to permit Optionee’s agents, employees and contractors to enter upon the Property for
the purpose of inspecting the same, making surveys, engineering studies, soil and other surface and
subsurface tests, borings, studies or reports that Optionee may reasonably require or reasonably
deem necessary, provided, however, that by exercising any of the foregoing rights,
Optionee shall be deemed to have agreed (a) to correct any damage caused to the Property by the
exercise of such rights, if this Option is not exercised, and (b) to indemnify Optionor from all
claims, demands, losses, suits and obligations, including reasonable attorneys’ fees, arising out
of Optionee’s exercise of such rights; provided, however, that Optionee shall not
have any liability pursuant to the foregoing as a result of (i) any discovery by Optionee of an
adverse environmental or other condition during the course of its tests, studies, inspections or
examinations of the Property, except to the extent any such condition is caused or exacerbated by
the actions of Optionee or (ii) any actions or omissions of Optionor.

          2.3 Information. From and after the IPO Closing Date, if the closing of the IPO
occurs, and continuing during the Option Term, Optionor agrees to permit Optionee and its agents,
employees and contractors to review all books, records and other documentation reasonably requested
by Optionee with respect to Optionor and the Property, which are in Optionor’s possession and
control. At the request of Optionee, Optionor will provide (or cause any property manager of the
Property to provide) a report of the status of the Property on a quarterly basis which shall
include unaudited financials, the Property’s operating history and Optionor’s current estimate of
historical costs in the Property.

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     3. Acquisition Process

          3.1 Acquisition Escrow. Upon exercise of the Option by delivery of either an Exercise
Notice or an “OP Notice” (as defined below) by Optionee, the Operating Partnership shall open,
within five (5) “Business Days” (as defined below) after the Exercise Date, an escrow with a title
insurance company selected by the Operating Partnership and reasonably acceptable to Optionor at an
office of such title insurance company located in the county in which the Property is located (or
otherwise agreed to by the parties) (the “Escrow Holder”) and shall notify Optionor of the
number and location of such escrow (the “Acquisition Escrow”). Within 30 days after the
Escrow Date, the parties shall execute a mutually acceptable acquisition agreement containing terms
and conditions (including representations and warranties regarding Optionor, the Property and the
“Property Indebtedness” (as defined below)) as customary in similar “as is” transactions and, in
any case, consistent with this Agreement (which acquisition agreement shall provide for the
determination of Fair Market Value in accordance with Section 3.3 below) (an
“Acquisition Agreement”) and shall deliver one (1) executed copy (or counterpart copy) of
such Acquisition Agreement to executed by such party to the other party, and to the Escrow Holder.
Optionor and Optionee shall thereafter execute, acknowledge and deliver any and all such additional
documents and agreements reasonably necessary or appropriate to carry out the terms and conditions
of the Acquisition Agreement, including, without limitation, a special warranty deed and a bill of
sale and assignment of leases and contracts. Optionor and Optionee shall further execute and
deposit such additional escrow instructions as shall be reasonably required by the Escrow Holder to
consummate the transactions contemplated thereby and herewith; provided, however,
that in the event of any conflict between the printed portion of any such additional instructions
and the provisions of this Agreement or the Acquisition Agreement, the provisions of this Agreement
or the Acquisition Agreement, as the case may be, shall control. As used herein, “Business
Day” shall mean a day that is not a Saturday, Sunday or legal holiday. In the event that the
date for the performance or observance of any covenant or obligation under this Agreement or the
Acquisition Agreement shall fall on a Saturday, Sunday or legal holiday, the date for performance
thereof shall be extended to the next Business Day. As used herein, “Closing Date” means
the date on which the acquisition of the Property occurs under the Acquisition Agreement, and
“Closing” means the closing of the acquisition of the Property under the Acquisition
Agreement.

          3.2 Acquisition Consideration and Matters Relating to Property Indebtedness.

          (a) The acquisition consideration to be paid by Optionee for the Property (the
“Acquisition Consideration”) pursuant to an exercise of the Option under Section
2.1 shall the “Fair Market Value” (as defined below) of the Property.

          (b) Within ten (10) Business Days after Optionor’s receipt of an Exercise Notice, Optionor
shall deliver to Optionee in writing a description of all Property Indebtedness which shall
include, without limitation, a statement of the “Outstanding Debt Balance” (as defined below) of
such Property Indebtedness and any accrued and unpaid interest thereon, plus any
“Assumption/Defeasance Costs” (as defined below) that would be payable in connection with an
assumption of such Property Indebtedness or prepayment thereof at the Closing. As used herein, the
following terms shall have the following meanings:

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               (i) “Assumption/Defeasance Costs” means, with respect to any Property Indebtedness,
all charges, expenses, fees, penalties and payments that become due and payable as a direct result
of the assignment, assumption, prepayment or defeasance of such Property Indebtedness , but
specifically excluding the Outstanding Debt Balance thereof and any accrued and unpaid interest
thereon or other amounts not constituting so-called direct assignment, assumption, prepayment or
defeasance costs or fees owing as a result of such assignment, assumption, prepayment or
defeasance.

               (ii) “Existing Indebtedness” means, collectively, any financings or other arrangements
entered into by Optionor (or any Affiliate of Optionor) prior to the Effective Date relating to the
Property as reflected on Schedule 3.2(b) attached hereto.

               (iii) “Fair Market Value” means the fair market sales value of the Property that would
be obtained in an arm’s-length transaction between an informed and willing buyer and an informed
and willing seller, under no compulsion, respectively, to buy or sell, and neither of which is
related to Optionor or Optionee, as determined using the procedures described in Section
3.3 below, considering all matters of record except for matters relating to any Property
Indebtedness.

               (iv) “Lender” means each holder of a mortgage or deed of trust related to any Property
Indebtedness.

               (v) “Market Value” means the average of the daily market price of the Common Stock of
the REIT for the ten (10) consecutive trading days immediately preceding the Closing Date. For
purposes of determining Market Value, one (1) OP Unit shall equal one (1) share of Common Stock,
subject to any adjustments required under the partnership agreement in effect for Optionee or to
reflect stock splits, reclassifications, dividends in-kind, and the like.

               (vi) “New Financings” means, collectively, any financing or other arrangement entered
into by Optionor (or any Affiliate of Optionor) after the Effective Date which relates to the
Property, including, without limitation, any mezzanine or bridge financing, or amendments or
extensions of the Existing Indebtedness.

               (vii) “OP Unit” a limited partnership interest in Optionee.

               (viii) “Outstanding Debt Balance” means, as of any given date, the total outstanding
principal balance of the Property Indebtedness.

               (ix) “Property Indebtedness” means, collectively, the Existing Indebtedness and any
New Financing.

          (c) At the Closing, the Acquisition Consideration shall be paid and/or satisfied by Optionee
as follows:

               (i) At Optionee’s election, by Optionee either (A) assuming all Property Indebtedness (subject
to obtaining any necessary consents from the applicable Lender(s)) as of the Closing, or (B) paying
in full all Property Indebtedness as of the Closing, even if, in either case of clause (A) or (B),
such Property Indebtedness as of the Closing exceeds

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the Fair Market Value of the Property; provided, however, that if Optionee
elects to proceed under clause (A) of this Section 3.2(c)(i) with respect to any Property
Indebtedness, Optionee may nonetheless, at its sole discretion, cause such Property Indebtedness to
be refinanced or repaid after the Closing. The amount of Property Indebtedness either assumed by
Optionee pursuant to clause (A) or paid in full by Optionee pursuant to clause (B), exclusive of
any Assumption/Defeasance Costs, shall be referred to herein as the “Base Debt Component”.
If Optionee elects to proceed under clause (A) above, Optionee shall notify Optionor thereof within
thirty (30) days after the Exercise Date, and in such event Optionor shall use commercially
reasonable efforts (at no out-of-pocket cost or expense to Optionor), and cooperate with Optionee,
to obtain approval of the assumption of any Property Indebtedness by Optionee. If Optionee does
not so notify Optionor of its election to proceed under clause (A) within such thirty (30) day
period, then Optionee shall be deemed to have elected to proceed under clause (B) above, and in
such event Optionor shall cooperate with Optionee to obtain all necessary documents and/or
instruments as necessary from the Lender(s) under such Property Indebtedness, including without
limitation, a payoff statement(s) from the Lender(s), as necessary to release any liens or other
encumbrances against the Property resulting from such Property Indebtedness at Closing. For
avoidance of doubt, at the Closing, Optionee shall pay all Assumption/Defeasance Costs, if any, and
such Assumption/Defeasance Costs, shall not be included in the Base Debt Component for purposes of
determining the credit towards the Acquisition Consideration to which Optionee shall be entitled
pursuant to this Section 3.2(c)(i) and Section 3.2(c)(ii) below. Optionee shall use
commercially reasonable efforts to cause each Lender related to any Property Indebtedness which
Optionee elects to assume at the Closing to release Optionor and each other obligor under the
relevant Property Indebtedness from any liability in respect of obligations first arising on or
after the Closing Date pursuant to any recourse obligations, guarantees, indemnification
agreements, letters of credit posted as security or other similar obligations (“Future
Liabilities”). From and after the Closing and until such time as all Property Indebtedness has
been refinanced or repaid in full, or each Lender has otherwise agreed in writing to release
Optionor and each other obligor under the relevant Property Indebtedness from all Future
Liabilities, Optionee shall, if applicable, indemnify Optionor and each other obligor under the
relevant Property Indebtedness in respect of any such Future Liabilities that have not been so
released, except to the extent any such Future Liabilities results from the gross negligence or
willful misconduct of Optionor or any other obligor under the relevant Property Indebtedness; and

               (ii) By Optionee paying to Optionor an amount equal to the Acquisition Consideration, less the
Base Debt Component, but in no event less than zero (0) (the “Remainder Component”). The
Remainder Component, if any, shall be paid by Optionee to Optionor in immediately available funds,
or, with respect to any consideration payable to Zaya S. Younan, at the election of Optionee, by
delivering to Zaya S. Younan, Sherry Younan or any family trust or family limited partnership or
other estate planning vehicle (collectively, the “Younan Parties”) that number of OP Units
with a Market Value equal to that portion of the Remainder Component payable to such Younan
Parties.

          (d) At the Closing, all reserves held by or on behalf of Optionor as required by applicable
Lender(s) under any Property Indebtedness or otherwise shall either be (i) returned to Optionor, or
(ii) transferred to Optionee in which event a credit shall be applied to increase the Acquisition
Consideration by the amount of such transferred reserves.

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          (e) In exercising the Option, Optionee shall use reasonable commercial efforts to cooperate
with Optionor (and current direct and indirect owners of Optionor) to minimize any taxes;
provided, however, that, except as otherwise set forth in this Agreement, such
cooperation shall not require Optionee to unreasonably delay the Closing or require Optionee to
assume additional liabilities or incur any material amount of out-of-pocket expenses in connection
therewith.

          3.3 Fair Market Value Determination; Right to Rescind.

          (a) Within ten (10) Business Days after Optionor’s receipt of an Exercise Notice, Optionor
shall deliver to Optionee a written notice of Optionor’s determination (an “Optionor’s FMV
Notice”) of the Fair Market Value. Optionee shall have ten (10) Business Days following receipt
of an Optionor’s FMV Notice to deliver to Optionor written notice of its objection to the proposed
Fair Market Value as set forth in such Optionor’s FMV Notice (a “FMV Objection Notice”). If
Optionee fails to deliver a FMV Objection Notice within the time provided above, then Optionee
shall be deemed to have agreed that the Fair Market Value shall be as proposed by Optionor in its
Optionor’s FMV Notice. If Optionee timely delivers a FMV Objection Notice, then the Fair Market
Value shall be determined as follows:

               (i) With ten (10) Business Days after Optionee’s delivery of a FMV Objection Notice (the
“Outside Appointment Date”), each of Optionor and Optionee shall select a board certified
Member of the Appraisal Institute of real estate appraisers with at least five (5) years of
full-time commercial appraisal experience who is familiar with the fair market value of commercial
office properties located in the geographic region of the Property and who is not an Affiliate of
such appointing party (each, a “Qualified Appraiser”) and shall give notice to the other
specifying the name and address of the Qualified Appraiser each has chosen; provided,
however, that if either party fails to appoint its Qualified Appraiser in the manner
provided above prior to the Outside Appointment Date, then the sole Qualified Appraiser shall
proceed to determine the Fair Market Value and deliver a written report thereof to each of Optionor
and Optionee. In such event, the determination of such sole Qualified Appraiser shall be final and
binding upon the parties.

               (ii) If two Qualified Appraisers are timely appointed, then each of the parties shall cause
their respective Qualified Appraiser to confer with the other and attempt to mutually determine the
Fair Market Value within twenty (20) Business Days after the Outside Appointment Date. If the two
Qualified Appraisers so agree, then the parties shall cause such Qualified Appraisers to issue a
joint written report setting forth the Fair Market Value as determined by such Qualified
Appraisers, and such determination shall be final and binding upon the parties.

               (iii) If the two Qualified Appraisers are unable to agree upon the Fair Market Value within
the twenty (20) Business Day period as provided in clause (ii) above, then within twenty-five (25)
Business Days following the Outside Appointment Date, the parties shall cause the two Qualified
Appraisers to appoint a third Qualified Appraiser, but if such two Qualified Appraisers fail to do
so, then either party may request JAMS or its successors (“JAMS”) to appoint a third
Qualified Appraiser within ten (10) Business Days of such request, and both parties shall be bound
by any appointment so made by JAMS. If no such third Qualified

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Appraiser shall have been appointed by JAMS within such ten (10) Business Day period or within
forty (40) Business Days of the Outside Appointment Date, whichever is earlier, either party may
apply to any court having jurisdiction to have such appointment made by such court, and both
parties shall be bound by any appointment so made by such court.

               (iv) If three Qualified Appraisers are so appointed, such three Qualified Appraisers shall
determine the Fair Market Value in accordance with the following procedures. Each shall state, in
writing, his or her determination of the Fair Market Value (the “Proposed Valuation”),
supported by the reasons therefor, and shall each make counterpart copies for the other Qualified
Appraisers. All of the Qualified Appraisers shall arrange for a simultaneous exchange of their
Proposed Valuations within fifteen (15) Business Days after appointment of the third Qualified
Appraiser. The Fair Market Value shall be the arithmetic average of the three Proposed Valuations;
provided, however, that if any of the Proposed Valuations are more than ten percent
(10%) higher or lower than the “Medium Valuation” (as hereinafter defined), then such Proposed
Valuations shall be disregarded and the Fair Market Value shall be the arithmetic average of the
remaining Proposed Valuations or, in the event two of the Proposed Valuations are disregarded
pursuant to this sentence, then the Fair Market Value shall be deemed to be the Medium Valuation.
If any Qualified Appraiser fails to timely submit a Proposed Valuation, the arithmetic average of
the Proposed Valuations submitted by the other Qualified Appraisers or by the Proposed Valuation
submitted by the sole Qualified Appraiser shall be the Fair Market Value. The term “Medium
Valuation” shall mean the Proposed Valuation which sets forth a proposed Fair Market Value
between that of the other two Proposed Valuations and which is neither the highest nor the lowest
valuation submitted by the three Qualified Appraisers.

          (b) The determination of Fair Market Value pursuant to this Section 3.3 shall be final
and binding upon the parties, without any right of appeal, and shall be specifically enforceable to
the extent such remedy is available under applicable law. Each party shall pay the fees and
expenses of its respective Qualified Appraiser and both shall share equally the fees and expenses
of any third Qualified Appraiser. Each party shall pay its own attorneys’ fees and costs.

          (c) The Closing Date under the Acquisition Agreement shall be extended to the extent necessary
to allow for the determination of Fair Market Value as contemplated by this Section 3.3.

          (d) Notwithstanding anything to the contrary in this Agreement or the Acquisition Agreement,
if Optionee shall exercise its Option as provided herein, then Optionee shall have the unilateral
right to cancel and rescind in writing to Optionor Optionee’s exercise of the same within (10)
Business Days after the Fair Market Value of the Property is “finally determined”. For purposes of
the foregoing, the Fair Market Value shall be “finally determined” upon the date that Fair Market
Value is determined or deemed determined pursuant to the appraisal procedures set forth in this
Section 3.3. If Optionee does not elect to cancel and rescind such Option within the time
and manner herein provided, then Optionee shall proceed to purchase the Property, at the
Acquisition Consideration, and otherwise in accordance with the provisions of this Agreement and
the Acquisition Agreement. If Optionee is entitled to and shall elect to cancel and rescind such
Option within the time and manner herein provided, then the following shall occur: (1) any
purchase contract formed by Optionee’s exercise of such Option shall be cancelled and terminated;
(2) the Acquisition Escrow opened upon such exercise of the

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Option shall be cancelled and Optionee shall pay all title, escrow and other cancellation
charges incurred or imposed in connection therewith; and (3) for a period of 180 days thereafter,
Optionee may not again thereafter exercise the Option granted to Optionee under this Agreement, and
Optionor shall be entitled to market the Property for sale and sell the Property to any
unaffiliated third party at a purchase price equal to or greater than the Fair Market Value of the
Property as so “finally determined,” free and clear of all rights of Optionee under this Agreement;
provided, however, that if (i) the purchase price payable by any such unaffiliated
third party during such 180 period shall be less than the Fair Market Value of the Property as so
“finally determined,” then the provisions of Section 4 hereof shall apply (i.e., Optionee
shall have the right of first refusal with respect thereto), and (ii) if such sale to an
unaffiliated third party for a purchase price equal to or greater than the Fair Market Value of the
Property as so “finally determined” is not consummated within such 180 day period, then all of
Optionee’s rights hereunder, including the right to again exercise its Option shall be reinstated.

          3.4 Withholding. Optionor shall execute, upon the conveyance of the Property, such
certificates or affidavits reasonably necessary to document the inapplicability of any federal or
state tax withholding provisions, including, without limitation, those referred to in Section
9.5 below. If Optionor fails to provide such certificates or affidavits, Optionee may withhold
a portion of the Acquisition Consideration as required by the Internal Revenue Code of 1986, as
amended (the “Code”) or applicable state law.

          3.5 Taxes. If the transactions contemplated by this Agreement and the Acquisition
Agreement are consummated, then the following shall apply:

          (a) Allocation of Acquisition Consideration. The Acquisition Consideration shall be
allocated in a manner reasonably agreed upon by Optionee and Optionor. Optionee and Optionor agree
to (i) be bound by the allocation, (ii) act in accordance with the allocation in the preparation of
financial statements and filing of all tax returns and in the course of any tax audit, tax review
or tax litigation relating thereto and (iii) take no position and cause their affiliates to take no
position inconsistent with the allocation for income tax purposes.

          (b) Cooperation and Tax Disputes. Optionor and Optionee shall provide each other with
such cooperation and information relating to the Property as the parties reasonably may request in
(i) filing any tax return, amended tax return or claim for tax refund, (ii) determining any
liability for taxes or a right to a tax refund, or (iii) conducting or defending any proceeding in
respect of taxes. Any time after the Effective Date, Optionee shall promptly notify Optionor in
writing upon receipt by Optionee or any of its affiliates of notice of (i) any pending or
threatened tax audits or assessments with respect to the Property and (ii) any pending or
threatened federal, state, local or foreign tax audits or assessments of Optionee or any of its
affiliates, in each case which may affect the liabilities for taxes of Optionor with respect to any
tax period ending on or before the Closing Date. Optionor shall promptly notify Optionee in writing
upon receipt by Optionor of notice of any pending or threatened federal, state, local or foreign
tax audits or assessments relating to the income, properties or operations of the Property. Each of
Optionee and Optionor may participate at its own expense in the prosecution of any claim or audit
with respect to taxes attributable to any taxable period ending on or before the Closing Date;
provided, however, that Optionor shall have the right to control the conduct of any
such audit or proceeding or portion thereof for which Optionor (or its direct or indirect owners,
if

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applicable) has acknowledged liability (except as a partner of Optionee) for the payment of
any additional tax liability, and Optionee shall have the right to control any other audits and
proceedings. Notwithstanding the foregoing, neither Optionee nor Optionor may settle or otherwise
resolve any such claim, suit or proceeding which could have an adverse tax effect on the other
party or its direct or indirect owners without the consent of the other party, such consent not to
be unreasonably withheld. Optionor and Optionee shall retain all tax returns, schedules and work
papers, and all material records and other documents relating thereto, until the expiration of the
statute of limitations (and, to the extent notified by any party, any extensions thereof) of the
taxable years to which such tax returns and other documents relate and until the final
determination of any tax in respect of such years.

          (c) Transfer Taxes. Optionee shall pay the cost of all documentary transfer taxes
arising from the sale of the Property pursuant to the exercise by Optionee of the Option.

          (d) Closing Costs and Prorations. All recording fees, escrow fees, and other closing
costs (except documentary transfer taxes as provided in Section 3.5(c) above) shall be
allocated according to custom and practice based on the location of the Property. All income and
expenses of the Property shall be prorated according to custom and practice based on the location
of the Property.

          (e) Survivability. This Section 3.5 shall survive the expiration or earlier
termination of this Agreement for a period of one year from the date of such expiration or earlier
termination.

     4. Right of First Refusal. Subject to Section 3.3(d) above, if Optionor
receives a bona fide good faith offer from an unaffiliated third party (herein, an
“Offeree”) to purchase the entire Property, including, without limitation, in connection
with Optionor’s effort to market the Property for sale in accordance with Section 6 hereof
(the “Offer”) at any time during the “ROFR Term” (as defined below), then, subject only to
Optionee’s right of first refusal contained in this Section 4, Optionor shall have the
right to convey the Property to such Offeree during the term of this Agreement. If Optionor desires
to accept the Offer form such Offeree, Optionor shall first give written notice (the “ROFR
Notice”) thereof to Optionee (the date the ROFR Notice is received by Optionee is referred to
as the “Notice Date”), which ROFR Notice shall include the name of the Offeree, the
proposed purchase price for the Property and the other material economic terms of the proposed
transfer (collectively, the “Acquisition Terms”). Optionee shall have thirty (30) days from
the Notice Date to give written notice to Optionor (the “OP Notice”) of its election to
acquire the Property for the same purchase price and on substantially the same Acquisition Terms;
provided that, at the election of Optionee, all or any portion of the purchase price payable to the
Younan Parties may be paid by delivering to the Younan Parties that number of OP Units with a
Market Value equal to the cash consideration payable to the Younan Parties. Notwithstanding
anything to the contrary in this Agreement, from and after Optionee’s receipt of any such ROFR
Notice, Optionee shall not have the right to exercise its Option pursuant to Section 3
hereof, except as otherwise provided below. If Optionee fails to make such election on a timely
basis, Optionee’s rights under this Section 4 shall expire and be of no further force or
effect; provided, however, that such rights under this Section 4,and
Optionee’s right to exercise its Option pursuant to Section 3 hereof, shall each be revived
and reinstated in favor of Optionee in the event Optionor has not, within 180 days following the

10

 

Notice Date, consummated the transaction with the applicable Offeree on terms which are
generally as good or more favorable to Optionor than the Acquisition Terms offered to Optionee. The
term of the right of first refusal contained in this Section 4 shall commence upon the IPO
Closing Date and shall continue until the earlier of (i) the date this Agreement terminates
pursuant to Section 7 below and (ii) the expiration of the Option Term (the “ROFR
Term”).

     5. Covenants of Optionor. From and after the IPO Closing Date and continuing through
the Option Term:

          5.1 Maintenance/Operation. Optionor shall, subject to this Section 5, continue
to operate and maintain the Property in a commercially prudent manner and consistent with its past
business practices, and in any event in compliance with the terms of the Leases and any documents
or instruments evidencing or otherwise securing the Property Indebtedness.

          5.2 Insurance. Optionor shall keep in full force and effect with respect to the
Property policies of insurance providing coverage at least as extensive as that maintained on the
Effective Date, and in any event in compliance with the terms of the Leases and any documents or
instruments evidencing or otherwise securing the Property Indebtedness.

          5.3 Service and Equipment Agreements. Without the prior consent of Optionee, Optionor
shall not enter into, materially modify or terminate any service contract or equipment leasing
contract relating to the Property except in a commercially prudent manner and consistent with its
past business practices; provided, however, that in no event shall Optionor enter
into any service or equipment leasing contract relating to the Property that cannot be terminated
without penalty on 30 days notice, or less, except for such contracts that customarily require a
longer term (e.g., elevator or security system contracts), unless consented to by Optionee.
Optionor shall give Optionee prior notice before taking any action referred to in the preceding
sentence, which notice shall include the material terms of the proposed action, as well as a
request for Optionee’s consent thereto. If Optionee does not respond to such notice within five (5)
Business Days after its receipt thereof, Optionee shall be deemed to have consented to such action.

          5.4 Leases. Optionor may continue to offer the Property for lease in the same manner
as it was offered by it prior to the Effective Date pursuant to its normal course of business and,
upon request, Optionor shall keep Optionee reasonably informed as to the status of material leasing
activities known to Optionor. Optionor shall not enter into any new “Major Lease” (i.e., a
lease in excess of 10,000 square feet of net rentable area) or materially modify or terminate any
then-existing Major Lease without the prior consent of Optionee, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that after the
exercise by Optionee of the Option, Optionee may grant or withhold its consent to the foregoing in
its sole and absolute discretion. Optionor shall give Optionee prior notice before taking any
action referred to in the preceding sentence, which notice shall include the material terms of the
proposed action, as well as a request for Optionee’s consent thereto. If Optionee does not respond
to such notice within five (5) Business Days after its receipt thereof, Optionee shall be deemed to
have consented to such action.

11

 

          5.5 Encumbrances; Property Indebtedness. Optionor shall not execute any easement
agreement or other document or agreement affecting title to the Property without the prior consent
of Optionee (which consent shall not be unreasonably withheld, conditioned or delayed). In
addition, from and after the Effective Date, Optionor shall not cause or permit the aggregate
Outstanding Debt Balance of all Property Indebtedness to exceed the Outstanding Debt Balance of the
Existing Indebtedness as of the Effective Date, unless otherwise approved by Optionee, such
approval not to be unreasonably conditioned, withheld or delayed. Further, Optionor shall provide
Optionee with notice of any known default under any Property Indebtedness and shall provide copies
of any written default notices Optionor may receive from the Lenders thereunder promptly upon
receipt of the same.

     6. Marketing the Property for Sale. Optionor shall have the right to affirmatively
market the Property for sale during the term of this Agreement, subject to the rights of Optionee
hereunder, including, without limitation, the rights of Optionee under Section 4 hereof.

     7. Termination of this Agreement. This Agreement shall terminate and be of no further
force or effect upon the earliest to occur of (i) the sale, transfer or contribution (directly or
indirectly) of all the parcels comprising the Property to any party (including Optionee) in
accordance with this Agreement, (ii) subject to Optionee’s right to rescind the exercise of the
Option pursuant to Section 3.3(d) above and the reinstatement thereof as provided therein,
the failure by Optionee to timely close on the acquisition of the Property after opening the
Acquisition Escrow and (iii) the expiration of the Option Term prior to Optionee’s exercise of the
Option pursuant to Section 3 hereof or its right of first refusal pursuant to Section
4 hereof.

     8. Procedure Upon Termination.

          8.1 Notice of Termination. If the Option expires or this Agreement is earlier
terminated, Optionor will provide notice of such expiration or termination to Optionee (the
“Termination Notice”). The delivery of the Termination Notice shall not be a condition
precedent to the effectiveness of such expiration or earlier termination.

          8.2 Verification of Termination. Upon receipt of the Termination Notice, Optionee
agrees that it will execute, acknowledge and deliver to Optionor in recordable form with
appropriate authorization for recording, within ten (10) days from request therefor, a quitclaim
deed or any other document reasonably requested by Optionor or a title insurance company to verify
such termination.

          8.3 Right to Documents. Upon receipt of the Termination Notice, Optionee shall
forthwith deliver (or cause to be delivered) to Optionor and shall be deemed to have assigned (but
only to the extent assignable) to Optionor (without the execution of further documentation or
instruments), any governmental applications, permits, maps, plans, specifications and other
documents in its possession or that it has made or contracted to be made respecting the Property,
including, without limitation all engineering reports, surveys, soil tests, seismic studies,
environmental reports, grading, flood control and drainage plans, design renderings, market
analyses, feasibility studies, proposed tentative, parcel and final maps, and all correspondence
with governmental agencies and their personnel concerning the same.

12

 

          8.4 Survivability. This Section 8 shall survive the expiration or earlier
termination of this Agreement.

     9. Representations and Warranties. As of the Effective Date, Optionor represents and
warrants to Optionee as follows:

          9.1 Organization; Authority. Optionor is duly formed, validly existing and in good
standing (to the extent applicable) under the laws of its jurisdiction of formation. Optionor is
qualified to do business in the state where the Property is located. Optionor has the legal
capacity to enter this Agreement.

          9.2 Due Authorization. This Agreement and each agreement, document and instrument
executed and delivered by or on behalf of Optionor pursuant to this Agreement constitutes, or when
executed and delivered will constitute, the legal, valid and binding obligation of Optionor, each
enforceable against Optionor in accordance with its terms.

          9.3 Title to the Property. Optionor represents and warrants that (a) it holds
insurable fee simple title to the Property and (b) it has not granted an option or right of first
refusal to purchase the Property to any party other than Optionee.

          9.4 Consents and Approvals. Optionor has full right, authority, power and capacity,
and, except as may be obtained in connection with the IPO or the Formation Transactions, no
consent, waiver, approval or authorization of any governmental entity, lender or other Person is
required for Optionor: (i) to enter into this Agreement and each agreement, document and instrument
to be executed and delivered by or on behalf of Optionor pursuant to this Agreement; and (ii)
except as required by any applicable financing agreement, to carry out the transactions
contemplated hereby and thereby.

          9.5 Non-Foreign Status. Optionor is a United States person as defined in the Code, and
is, therefore, not subject to the provisions of the Code relating to the withholding of sales
proceeds to foreign persons, and is not subject to any state withholding requirements.

          9.6 No Brokers. Optionor has not employed or made any agreement with any broker,
finder or similar agent or any other Person or firm which will result in the obligation of Optionee
or any of its affiliates to pay any finder’s fee, brokerage fees or commission or similar payment
in connection with the transactions contemplated by this Agreement.

          9.7 No Other Agreements to Sell. Except for the Option granted hereby, Optionor has
made no agreement and has no obligation (absolute or contingent) to sell or option the Property.

          9.8 Assets. The Property is the sole asset of the Optionor other than cash or cash
equivalents. Optionor covenants not to acquire any assets other than those to be made part of or
used in connection with the Property.

          9.9 Indemnity. Optionor shall indemnify, defend and hold harmless Optionee for
all costs and expenses (including reasonable attorneys’ fees) incurred by Optionee as a result of a
breach of the representations contained in this Section 9.

13

 

     10. Assignment. Optionee may not assign its rights under this Agreement without
Optionor’s prior written consent, which consent may be conditioned, withheld or delayed in
Optionor’s sole and absolute discretion; provided, however, that Optionee may
assign its rights under this Agreement without Optionor’s consent to (i) the REIT, (ii) any direct
or indirect affiliate of the REIT or Optionee, or (iii) any entity into which Optionee has merged
or otherwise is the result of a business combination directly involving Optionee or the REIT.

     11. Notices. Any notice or demand which must or may be given under this Agreement
(including the exercise by Optionee of the Option, any ROFR Notice given by Optionor or any OP
Notice given by Optionee) or by law shall, except as otherwise provided, be in writing and shall be
deemed to have been given (i) when physically received by personal delivery (which shall include
the confirmed receipt of a telecopied facsimile transmission), or (ii) three (3) Business Days
after being deposited in the United States certified or registered mail, return receipt requested,
postage prepaid, or (iii) one (1) Business Day after being deposited with a nationally known
commercial courier service providing next day delivery service (such as Federal Express).

          Any such notice shall be addressed and delivered or telecopied (a) in the case of a notice to
Optionee at the following address and facsimile number:

Younan Properties, L.P.

c/o Younan Properties

5959 Topanga Canyon Boulevard

Suite 201

Woodland Hills, California 91367

Facsimile: (818) 703-5907

Attention: Chief Executive Officer

and (b), in the case of a notice to Optionor, to the address and facsimile number set forth on the
Signature Page of Optionor hereto.

     12. Miscellaneous.

          12.1 Amendment. This Agreement may not be amended except by an instrument in writing
signed by both Optionor and Optionee.

          12.2 Entire Agreement; Counterparts; Applicable Law. This Agreement (a) constitutes
the entire agreement and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof, (b) may be executed in one or more
counterparts, each of which will be deemed an original and all of which shall constitute but one
and the same instrument and (c) shall be governed in all respects by the laws of the State of Texas
without giving effect to the conflict of law provisions thereof.

          12.3 Severability. If any provision of this Agreement, or the application thereof, is
for any reason held to any extent to be invalid or unenforceable, the remainder of this Agreement
and application of such provision to other Persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree to

14

 

replace such void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and other purposes of
the void or unenforceable provision and to execute any amendment, consent or agreement deemed
necessary or desirable by Optionee to effect such replacement.

          12.4 Binding Effect. This Agreement shall be binding upon, and shall be enforceable by
and inure to the benefit of, Optionor and Optionee and their respective successors and permitted
assigns.

          12.5 Equitable Remedies. The parties hereto agree that irreparable damage would occur
if any provision of this Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any federal or state court located in the California (as to which the parties
agree to submit to jurisdiction for the purposes of such action), this being in addition to any
other remedy to which they are entitled at law or in equity.

          12.6 Attorneys’ Fees. In the event that either party hereto brings an action or
proceeding against the party to enforce or interpret any of the covenants, conditions, agreements
or provisions of this Agreement (or any other agreement contemplated by or related to this
Agreement), the prevailing party in such action or proceeding shall be entitled to recover all
reasonable costs and expenses of such action or proceeding, including, without limitation,
attorneys’ fees, charges, disbursements and the fees and costs of expert witnesses.

          12.7 Recording. Subject to applicable consents required under any Property
Indebtedness related to the Property, at Optionee’s request, Optionor shall duly execute,
acknowledge and deliver to Optionee a short form memorandum of this Agreement in form and substance
reasonably acceptable to Optionee and Optionor (the “Memorandum”). Upon receipt of such
Memorandum from Optionor, Optionee shall have the right to record the same in the real property
records of the county in which the Property is situated. If Optionee records such Memorandum,
Optionee covenants and agrees to record an appropriate notice of termination or cancellation upon
the expiration or earlier termination of this Agreement as provided in Section 8 hereof.

          12.8 Reliance. Each party to this Agreement acknowledges and agrees that it is not
relying on tax advice or other advice from the other party to this Agreement and that it has or
will consult with its own advisors.

          12.9 Survival. Except as otherwise provided in this Agreement, it is the intention of
the parties hereto that the provisions of this Agreement that contemplate performance after the
Closing Date or the date of acquisition of the Property by Optionee pursuant to the exercise of its
rights pursuant to Section 4 hereof and the obligations of the parties not fully performed
on the Closing Date or such date of acquisition shall survive the Closing Date or such date of
acquisition, as applicable, and shall not be deemed to be merged into or waived by the instruments
executed in connection therewith.

(Signature Pages Follow)

15

 

OPTION AGREEMENT

SIGNATURE PAGES

          IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the Effective
Date set forth above.

	 	 	 	 	 	 	 

	OPTIONOR:	 	 
	 
	 	 	 	 	 	 
	YOUNAN PLAZA, LLC,	 	 
	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

OPTIONOR’S NOTICE ADDRESS

21700 Oxnard Boulevard, 8th Floor

Woodland Hills, California 91367

Phone: (818) 703-9600

Facsimile: (818) 703-5907

S-1

 

	 	 	 	 	 	 	 	 	 

	OPERATING PARTNERSHIP:	 	 
	 
	 	 	 	 	 	 	 	 
	YOUNAN PROPERTIES, L.P.,	 	 
	a Maryland limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	YOUNAN PROPERTIES, INC.,	 	 
	 	 	a Maryland corporation,	 	 
	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

S-2

 

EXHIBIT A

TO

OPTION AGREEMENT

Legal Description

TRACT 1:

BEING a tract or parcel containing 4.0365 acres (175,831 square feet) of land situated in a W. E.
Ford Survey, Abstract Number 1026, Harris County, Texas, being out of and part of Unrestricted
Reserves “C” and “D”, Block 2 of Regency Square Office Park, Section One, a subdivision of record
in Volume 185, Page 62, Harris County Map Records (H. C. M .R.), and being all of a called 4.0365
acre tract conveyed to LSF5 Savoy, LLC, a Delaware limited liability company by deed recorded under
Harris County Clerk’s File (H. C. C. F.) Number 20070198591, Harris County, Texas; said 4.0365 acre
tract being more particularly described as follows (bearings are oriented to the bearing base
reflected on the record plat of said Regency Square Office Park, Section One):

COMMENCING at a point for the most southerly east corner of Unrestricted Reserve “C”, of said Block
2 and for the southerly end of a 10 foot cut-back line at the intersection of the northwesterly
right-of-way (R. O. W.) line of U.S. Highway 59 (Southwest Freeway-300 feet wide) and Savoy Drive
(width Varies) as delineated on the record plat of said Regency Square Office Park, Section One;

THENCE, North 00 deg. 15 min. 48 sec. East, a distance of 14.14 feet to a 3/4-inch galvanized iron
pipe found marking the most northerly east corner of said Unrestricted Reserve “C” and the
northerly end of said cut-back line;

THENCE, North 44 deg. 44 min. 12 sec. West, along the northeasterly line of said Unrestricted
Reserve “C” and along the southwesterly R. O. W. line of said Savoy Drive, a distance of 448.91
feet to a cross in concrete found marking the northerly corner of a called 2.799 acre tract as
recorded under H. C. C. F. Number R614061 and marking the POINT OF BEGINNING and easterly corner of
the herein described tract;

THENCE, South 45 deg. 15 min. 48 sec. West, departing said southwesterly R. O. W. line and along
the northwesterly line of said 2.799 acre tract, and a 2.952 acre tract as recorded under H. C. C.
F. Number S945778 a distance of 580.69 feet to a 3/4-inch galvanized iron pipe found in the
southerly line of the aforesaid Unrestricted Reserve “D”, marking the westerly corner of said 2.952
acre tract and marking the southeasterly corner of the herein described tract;

THENCE, West, along the northerly line of a called 0.85104 acre tract of record under H. C. C. F.
Number R805404, a called 8.5675 acre tract recorded under H. C. C. F. Number S296281 and along the
southerly line of said Unrestricted Reserve “D”, a distance of 359.46 feet to a 3/4-inch galvanized
iron pipe found marking the southeasterly corner of a called 5.4434 acre tract as recorded under H.
C. C. F. Number S775963 and marking the southwesterly corner of the herein described tract;

THENCE, North 45 deg. 15 min. 48 sec. East, along the southeasterly line of said 5.4434 acre tract,
a distance of 779.93 feet to a tack of lead plug found in the curved southwesterly R. O. W. line of
the

A-1

 

aforesaid Savoy Drive, marking the easterly corner of said 5.4434 acre tract and the northerly
corner of the herein described tract;

THENCE, Southeasterly, continuing along said southwesterly R. O. W. line of Savoy Drive, an arc
distance of 45.49, along a curve to the left, having a radius of 358.47 feet, a central angle of 07
deg. 16 min. 14 sec. and a chord which bears South 71 deg. 32 min. 04 sec. East, 45.46 feet to a
5/8 inch iron rod with cap stamped “Terra Surveying” marking a point of reverse curvature;

THENCE, Southeasterly, continuing along said southwesterly R. O. W. line of Savoy Drive, an arc
distance of 137.29 feet along a curve to the right, having a radius of 258.47 feet, a central angle
of 30 deg. 25 min. 58 sec. and a chord which bears South 59 deg. 57 min. 11 sec. East, 135.68 feet
to a 3/4-inch galvanized iron pipe found marking a point of tangency;

THENCE, South 44 deg. 44 min. 12 sec. East, along said southwesterly R. O. W. line of Savoy Drive,
a distance of 81.51 feet to the POINT OF BEGINNING and containing 4.0365 acres (175,831 square
feet) of land.

NOTE; COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE CALCULATIONS ARE
CORRECT.

TRACT 2:

Right-of-Way Easement dated May 15, 1979, executed by Anrem Corporation and Lamardia Holdings N. V.
to Regency Square Improvement Association as filed for record under Harris County Clerk’s File No.
G314062.

TRACT 3:

Right-of-Way Easement dated October 31, 1979, executed by Anrem Corporation, American National
Insurance Company and One Regency Square to Regency Square Improvement Association as filed for
record under Harris County Clerk’s File No. G313941.

TRACT 4:

Declaration of Easement (Parking) dated December 21, 2000 by Canit Regency Limited partnership and
Regency Savoy Group, Ltd. and filed for record under Harris County Clerk’s File No. U796415.

A-2

 

SCHEDULE 3.2(b)

TO

OPTION AGREEMENT

Existing Financings

Noneexv10w28

Exhibit 10.28

OPTION AGREEMENT

(1010 Lamar / Younan Square

1010 Lamar Street, Houston, Texas and 1111 Main Street, Houston, Texas)

     THIS OPTION AGREEMENT (this “Agreement”) is made as of                      ___, 2010 (the
“Effective Date”), by and between YOUNAN PROPERTIES, L.P., a Maryland limited partnership
(“Optionee”), and YPI 1010 LAMAR, LLC, a Delaware limited liability company
(“Optionor”).

RECITALS

          A. Optionor owns that certain real property described in Exhibit A attached hereto and
made a part hereof (the “Land”), together with certain other “Property” (as defined below).

          B. Optionee desires to have the right to acquire all of the Property, without becoming
obligated to acquire it, under specified terms and conditions.

          C. Optionee desires to acquire the “Option” (as defined below) as part of a series of
transactions (collectively, the “Formation Transactions”) relating to the proposed initial
public offering (the “IPO”) of common stock (the “Common Stock”) of Younan
Properties, Inc., a Maryland corporation (the “REIT”), which is the general partner of
Optionee.

AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and
conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Optionee and Optionor hereby agree as follows:

     1. Option.

          1.1 Grant of Option. Optionor hereby grants, bargains and sells to Optionee and its
successors and assigns an exclusive and irrevocable right and option (the “Option”) to
acquire all right, title and interest of Optionor in and to the Property (as hereinafter defined)
on an “as is” basis (subject to all matters of record) for the price and upon the terms and
conditions set forth herein and in the “Acquisition Agreement” (as defined below).

          1.2 Property. As used herein, “Property” shall mean the Land and all of
Optionor’s right, title and interest in and to (i) all adjacent streets, alleys and rights of way
appertaining to the Land, together with all of the rights, benefits, licenses, interests,
privileges, easements, tenements, hereditaments and appurtenances on the Land or in anywise
appertaining to the Land, (ii) all buildings, structures, fixtures and other improvements situated
on the Land or hereinafter constructed or acquired and situated on the Land, but excluding any
fixtures owned by any tenant or other occupant of the Land or Improvements (each, a
“Tenant”) under a Lease (as hereinafter defined) (the “Improvements”), (iii) all
tangible personal property located on, and used in connection with, the Land and the Improvements,
including, without limitation, all

1

 

building materials, supplies, hardware, carpeting and other inventory located on or in the
Land or the Improvements and maintained in connection with the ownership and operation of the Land,
but excluding any such items owned by Tenants (the “Personal Property”), (iv) all leases,
subleases, licenses, and occupancy agreements relating to all or any portion of the Land or the
Improvements and, to the extent the following items are assignable and relate solely to the Land,
the Improvements and/or the Personal Property (collectively, the “Leases”), together with
all rents and other sums due thereunder from and after the “Closing Date” (as defined below)
(collectively, the “Rents”) and any and all cash security deposits, letters of credit and
other credit enhancements delivered by any Tenant in connection therewith which have not been
applied to the satisfaction of the obligations under the Leases prior to the Closing Date in
accordance with the terms of this Agreement (the “Security Deposits”), and (v) all
assignable service contracts and agreements, governmental permits, entitlements, licenses and
approvals, warranties and guarantees received in connection with any work or services performed
with respect thereto, or equipment installed therein, tenant lists, advertising material, telephone
exchange numbers, all trademarks and tradenames, non-confidential books, records and property files
and the “declarant” or the benefiting party’s interest under any covenants, conditions and
restrictions, reciprocal easement or parking agreements or similar documents or instruments
affecting the Land and/or the improvement.

          1.3 Option Consideration. For and in consideration of the Option herein granted,
Optionee has paid, and Optionor hereby acknowledges receipt of, the sum of One Hundred Dollars and
No/Cents ($100.00) (the “Option Consideration”). The Option Consideration is not refundable
under any circumstances and may not be applied against any sums payable pursuant to the Acquisition
Agreement.

          1.4 Conditions to Continued Effectiveness of Option. This Agreement and the Option
granted hereby shall not be effective unless the “IPO Closing Date” (as defined below) occurs. If
the IPO Closing Date does not occur or if the Property is conveyed by Optionor to another “Person”
(as defined below) that is not an “Affiliate” (as defined below) prior to the IPO Closing Date,
then this Agreement and the Option shall be null and void. As used herein, “Person” shall
mean any individual, corporation, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated organization or any other form of entity. As used
herein, “Affiliate” shall mean any Person that, directly or indirectly (including through
one or more intermediaries), controls or is controlled by or is under common control with any other
Person. For purposes of the foregoing, the term “control” (including the correlative
meanings of the terms “controlled by” and “under common control with”), as used
with respect to any Person, shall mean the possession, directly or indirectly (including through
one or more intermediaries), of the power to direct or cause the direction of the management and
policies of such Person, through the ownership of voting securities, partnership interests, limited
liability company interests or other equity interests, by contract or otherwise. As used herein”
“IPO Closing Date” means the date the IPO is consummated.

          1.5 Commencement of Right to Exercise Option. Subject to Section 4 hereof,
Optionee shall have the right to exercise the Option at any time on or after the date that is one
(1) year following the IPO Closing Date (the “Option Exercise Commencement Date”) until the
expiration of the “Option Term” (as defined below) pursuant to Section 1.6 hereof.

2

 

          1.6 Term of Option. The Option and all rights and privileges granted to Optionee
hereunder shall expire on the date that is two (2) years following the Option Exercise Commencement
Date, unless earlier terminated as described in Section 7 hereof, and subject to the terms
of Section 4 hereof (such term being the “Exercise Period” or the “Option
Term”); provided, however, that effective upon the date on which the Existing Indebtedness (as
described on Schedule 3.2(b)) is paid in full, but subject to this Section 1.6, the
“Exercise Period” and the “Option Term” shall automatically be extended through,
and all references in this Agreement to such respective terms shall mean, the period ending on the
seventh (7th) anniversary of the Option Exercise Commencement Date. If this Agreement
expires or terminates pursuant to Section 7(iii) hereof before the Existing Indebtedness
has been paid in full, then, following the repayment in full of the Existing Indebtedness and
subject to the receipt of the written consent of the Lender(s) holding any indebtedness evidencing
a New Financing, Optionor concurrently shall enter into a new option agreement with Optionee, which
new option agreement shall be in a form identical to this Agreement in all material respects,
except that (i) the “Option Exercise Commencement Date” shall be the date of the new option
agreement, and (ii) each of the “Exercise Period” and the “Option Period” shall be the period
ending on the seventh (7th) anniversary of the “Option Exercise Commencement Date” under
this Agreement. Notwithstanding the foregoing, nothing contained in this Section 1.6 shall
amend or modify the provisions hereof that effect a termination of this Agreement, including,
without limitation, as a result of the sale or transfer of the Property to any party pursuant to a
foreclosure sale, a trustee’s sale, a receiver’s sale or a deed in lieu of foreclosure and,
immediately upon any such termination, this Agreement, including this Section 1.6, shall be
of no further force or effect; provided that the obligation of Optionor to enter into a new option
agreement and the automatic extension of the Exercise Period and the Option Term as set forth above
shall survive any termination pursuant to Section 7(iii) hereof..

          1.7 Consents. Notwithstanding anything to the contrary set forth in this Agreement,
the consummation of the transactions contemplated by this Agreement (including, without limitation,
the acquisition of the Property pursuant to an exercise of the Option and the assumption of any
“Property Indebtedness” (as defined below) by Optionee in connection therewith, as applicable) are
subject to any and all consents required under the documents and agreements evidencing, securing or
relating to Property Indebtedness and the satisfaction of any and all conditions set forth in any
agreement between Optionor and the holder of any Existing Indebtedness, and are subject to the
consents to be obtained in connection with the IPO and the Formation Transactions. Optionee
acknowledges that it has reviewed the provisions of that certain Consent to Transfer of Interests
of Managing Member and Loan Modification Agreement by and among Optionor, Zaya S. Younan and
“Existing Lender” (as defined in Schedule 3.2(b)),including, without limitation,
the provisions applicable to a one-time Sale of the Property or Transfer of Interests (each as
defined therein) (the “One-Time Transfer Provisions”), and agrees that nothing herein shall
permit Optionee to acquire the Property or any direct or indirect interest in Optionor in violation
of, or without satisfaction of each condition set forth in, the One-Time Transfer Provisions.

          1.8 Subordination. This Agreement, the Option granted by this Agreement and the rights
of Optionee hereunder are and shall be subject and subordinate to any “Property Indebtedness” (as
defined below). Without limiting the foregoing, this Agreement and the Option and the rights of
Optionee hereunder are subject and subordinate to that certain Deed of Trust,

3

 

Security Agreement and Financing Statement (With Assignment of Rents) executed as of November
30, 2007 (as the same shall be amended, restated, supplemented or otherwise modified from time to
time, the “Existing Deed of Trust”)), by Optionor to Rebecca Conrad, an individual, as
trustee, for the benefit of Existing Lender, and no amendment or modification to the Existing Deed
of Trust shall adversely effect such subordination.

     2. Process for Exercise of Option.

          2.1 Exercise. Subject to the terms and provisions hereof (including, without
limitation, Section 4 hereof), the Option may be exercised at any time during the Exercise
Period by delivery of written notice by Optionee to Optionor (the “Exercise Notice”),
stating that the Option is exercised on the terms set forth in this Agreement. The date upon which
the Exercise Notice is received by Optionor shall hereinafter be referred to as the “Exercise
Date”. If the Option is exercised, the Property shall be conveyed within 120 days of the
Exercise Date, subject to the terms of the Acquisition Agreement.

          2.2 Inspection. From and after the IPO Closing Date, if the closing of the IPO occurs,
and continuing during the Option Term, Optionor agrees to permit Optionee to enter upon the
Property or to permit Optionee’s agents, employees and contractors to enter upon the Property for
the purpose of inspecting the same, making surveys, engineering studies, soil and other surface and
subsurface tests, borings, studies or reports that Optionee may reasonably require or reasonably
deem necessary, provided, however, that by exercising any of the foregoing rights,
Optionee shall be deemed to have agreed (a) to correct any damage caused to the Property by the
exercise of such rights, if this Option is not exercised, and (b) to indemnify Optionor from all
claims, demands, losses, suits and obligations, including reasonable attorneys’ fees, arising out
of Optionee’s exercise of such rights; provided, however, that Optionee shall not
have any liability pursuant to the foregoing as a result of (i) any discovery by Optionee of an
adverse environmental or other condition during the course of its tests, studies, inspections or
examinations of the Property, except to the extent any such condition is caused or exacerbated by
the actions of Optionee or (ii) any actions or omissions of Optionor.

          2.3 Information. From and after the IPO Closing Date, if the closing of the IPO
occurs, and continuing during the Option Term, Optionor agrees to permit Optionee and its agents,
employees and contractors to review all books, records and other documentation reasonably requested
by Optionee with respect to Optionor and the Property, which are in Optionor’s possession and
control. At the request of Optionee, Optionor will provide (or cause any property manager of the
Property to provide) a report of the status of the Property on a quarterly basis which shall
include unaudited financials, the Property’s operating history and Optionor’s current estimate of
historical costs in the Property.

     3. Acquisition Process

          3.1 Acquisition Escrow. Upon exercise of the Option by delivery of either an Exercise
Notice or an “OP Notice” (as defined below) by Optionee, the Operating Partnership shall open,
within five (5) “Business Days” (as defined below) after the Exercise Date, an escrow with a title
insurance company selected by the Operating Partnership and reasonably acceptable to Optionor at an
office of such title insurance company located in the county in which the

4

 

Property is located (or otherwise agreed to by the parties) (the “Escrow Holder”) and
shall notify Optionor of the number and location of such escrow (the “Acquisition Escrow”).
Within 30 days after the Escrow Date, the parties shall execute a mutually acceptable acquisition
agreement containing terms and conditions (including representations and warranties regarding
Optionor, the Property and the “Property Indebtedness” (as defined below)) as customary in similar
“as is” transactions and, in any case, consistent with this Agreement (which acquisition agreement
shall provide for the determination of Fair Market Value in accordance with Section 3.3
below) (an “Acquisition Agreement”) and shall deliver one (1) executed copy (or counterpart
copy) of such Acquisition Agreement executed by such party to the other party, and to the Escrow
Holder. Optionor and Optionee shall thereafter execute, acknowledge and deliver any and all such
additional documents and agreements reasonably necessary or appropriate to carry out the terms and
conditions of the Acquisition Agreement, including, without limitation, a special warranty deed and
a bill of sale and assignment of leases and contracts. Optionor and Optionee shall further execute
and deposit such additional escrow instructions as shall be reasonably required by the Escrow
Holder to consummate the transactions contemplated thereby and herewith; provided,
however, that in the event of any conflict between the printed portion of any such
additional instructions and the provisions of this Agreement or the Acquisition Agreement, the
provisions of this Agreement or the Acquisition Agreement, as the case may be, shall control. As
used herein, “Business Day” shall mean a day that is not a Saturday, Sunday or legal
holiday. In the event that the date for the performance or observance of any covenant or obligation
under this Agreement or the Acquisition Agreement shall fall on a Saturday, Sunday or legal
holiday, the date for performance thereof shall be extended to the next Business Day. As used
herein, “Closing Date” means the date on which the acquisition of the Property occurs under
the Acquisition Agreement, and “Closing” means the closing of the acquisition of the
Property under the Acquisition Agreement.

          3.2 Acquisition Consideration and Matters Relating to Property Indebtedness.

          (a) The acquisition consideration to be paid by Optionee for the Property (the
“Acquisition Consideration”) pursuant to an exercise of the Option under Section
2.1 shall the “Fair Market Value” (as defined below) of the Property, subject to the provisions
of Section 3.2(c) hereof.

          (b) Within ten (10) Business Days after Optionor’s receipt of an Exercise Notice, Optionor
shall deliver to Optionee in writing a description of all Property Indebtedness which shall
include, without limitation, a statement of the “Outstanding Debt Balance” (as defined below) of
such Property Indebtedness and any accrued and unpaid interest thereon, plus any
“Assumption/Defeasance Costs” (as defined below) that would be payable in connection with an
assumption of such Property Indebtedness or prepayment thereof at the Closing. As used herein, the
following terms shall have the following meanings:

               (i) “Assumption/Defeasance Costs” means, with respect to any Property Indebtedness,
all charges, expenses, fees, penalties and payments that become due and payable as a direct result
of the assignment, assumption, prepayment or defeasance of such Property Indebtedness , but
specifically excluding the Outstanding Debt Balance thereof and any accrued and unpaid interest
thereon or other amounts not constituting so-called direct

5

 

assignment, assumption, prepayment or defeasance costs or fees owing as a result of such
assignment, assumption, prepayment or defeasance.

               (ii) “Existing Indebtedness” means, collectively, any financings or other arrangements
entered into by Optionor (or any Affiliate of Optionor) prior to the Effective Date relating to or
secured by the Property as reflected on Schedule 3.2(b) attached hereto and any amendments
or modifications thereof.

               (iii) “Fair Market Value” means the fair market sales value of the Property that would
be obtained in an arm’s-length transaction between an informed and willing buyer and an informed
and willing seller, under no compulsion, respectively, to buy or sell, and neither of which is
related to Optionor or Optionee, as determined using the procedures described in Section
3.3 below, considering all matters of record except for matters relating to any Property
Indebtedness.

               (iv) “Lender” means each holder of a mortgage or deed of trust related to any Property
Indebtedness.

               (v) “Market Value” means the average of the daily market price of the Common Stock of
the REIT for the ten (10) consecutive trading days immediately preceding the Closing Date. For
purposes of determining Market Value, one (1) OP Unit shall equal one (1) share of Common Stock,
subject to any adjustments required under the partnership agreement in effect for Optionee or to
reflect stock splits, reclassifications, dividends in-kind, and the like.

               (vi) “New Financings” means, collectively, any financing or other arrangement entered
into by Optionor (or any Affiliate of Optionor) after the Effective Date which relates to the
Property, including, without limitation, any mezzanine or bridge financing, or amendments or
extensions of the Existing Indebtedness.

               (vii) “OP Unit” a limited partnership interest in Optionee.

               (viii) “Outstanding Debt Balance” means, as of any given date, the total outstanding
principal balance of the Property Indebtedness.

               (ix) “Property Indebtedness” means, collectively, the Existing Indebtedness and any
New Financing.

          (c) At the Closing, the Acquisition Consideration shall be paid and/or satisfied by Optionee
as follows:

               (i) At Optionee’s election, by Optionee either (A) assuming all Property Indebtedness (subject
to obtaining any necessary consents from the applicable Lender(s) and the requirement of any
Lender(s) to repay certain of the Property Indebtedness as a condition to the assumption) as of the
Closing, or (B) paying in full all Property Indebtedness as of the Closing, even if, in either case
of clause (A) or (B), such Property Indebtedness as of the Closing exceeds the Fair Market Value of
the Property; provided, however, that if Optionee elects to proceed under clause
(A) of this Section 3.2(c)(i) with respect to any Property Indebtedness, Optionee may
nonetheless, at its sole discretion, cause such Property Indebtedness

6

 

to be refinanced or repaid after the Closing. The amount of Property Indebtedness either
assumed by Optionee pursuant to clause (A) or paid in full by Optionee pursuant to clause (B),
exclusive of any Assumption/Defeasance Costs, shall be referred to herein as the “Base Debt
Component”. If Optionee elects to proceed under clause (A) above, Optionee shall notify
Optionor thereof within thirty (30) days after the Exercise Date, and in such event Optionor shall
use commercially reasonable efforts (at no out-of-pocket cost or expense to Optionor), and
cooperate with Optionee, to obtain approval of the assumption of any Property Indebtedness by
Optionee. If Optionee does not so notify Optionor of its election to proceed under clause (A)
within such thirty (30) day period, then Optionee shall be deemed to have elected to proceed under
clause (B) above, and in such event Optionor shall cooperate with Optionee to obtain all necessary
documents and/or instruments as necessary from the Lender(s) under such Property Indebtedness,
including without limitation, a payoff statement(s) from the Lender(s), as necessary to release any
liens or other encumbrances against the Property resulting from such Property Indebtedness at
Closing. For avoidance of doubt, at the Closing, Optionee shall pay all Assumption/Defeasance
Costs, if any, and such Assumption/Defeasance Costs, shall not be included in the Base Debt
Component for purposes of determining the credit towards the Acquisition Consideration to which
Optionee shall be entitled pursuant to this Section 3.2(c)(i) and Section
3.2(c)(ii) below. Optionee shall use commercially reasonable efforts to cause each Lender
related to any Property Indebtedness which Optionee elects to assume at the Closing to release
Optionor and each other obligor under the relevant Property Indebtedness from any liability in
respect of obligations first arising on or after the Closing Date pursuant to any recourse
obligations, guarantees, indemnification agreements, letters of credit posted as security or other
similar obligations (“Future Liabilities”). From and after the Closing and until such time
as all Property Indebtedness has been refinanced or repaid in full, or each Lender has otherwise
agreed in writing to release Optionor and each other obligor under the relevant Property
Indebtedness from all Future Liabilities, Optionee shall, if applicable, indemnify Optionor and
each other obligor under the relevant Property Indebtedness in respect of any such Future
Liabilities that have not been so released, except to the extent any such Future Liabilities
results from the gross negligence or willful misconduct of Optionor or any other obligor under the
relevant Property Indebtedness; and

               (ii) By Optionee paying to Optionor an amount equal to the Acquisition Consideration, less the
Base Debt Component, but in no event less than zero (0) (the “Remainder Component”). The
Remainder Component, if any, shall be paid by Optionee to Optionor in immediately available funds,
or, with respect to any consideration payable to Zaya S. Younan, at the election of Optionee, by
delivering to Zaya S. Younan, Sherry Younan or any family trust or family limited partnership or
other estate planning vehicle (collectively, the “Younan Parties”) that number of OP Units
with a Market Value equal to that portion of the Remainder Component payable to such Younan
Parties.

          (d) At the Closing, all reserves held by or on behalf of Optionor as required by applicable
Lender(s) under any Property Indebtedness or otherwise shall either be (i) returned to Optionor, or
(ii) transferred to Optionee in which event a credit shall be applied to increase the Acquisition
Consideration by the amount of such transferred reserves.

          (e) In exercising the Option, Optionee shall use reasonable commercial efforts to cooperate
with Optionor (and current direct and indirect owners of Optionor) to minimize any

7

 

taxes; provided, however, that, except as otherwise set forth in this
Agreement, such cooperation shall not require Optionee to unreasonably delay the Closing or require
Optionee to assume additional liabilities or incur any material amount of out-of-pocket expenses in
connection therewith.

          3.3 Fair Market Value Determination; Right to Rescind.

          (a) Within ten (10) Business Days after Optionor’s receipt of an Exercise Notice, Optionor
shall deliver to Optionee a written notice of Optionor’s determination (an “Optionor’s FMV
Notice”) of the Fair Market Value. Optionee shall have ten (10) Business Days following receipt
of an Optionor’s FMV Notice to deliver to Optionor written notice of its objection to the proposed
Fair Market Value as set forth in such Optionor’s FMV Notice (a “FMV Objection Notice”). If
Optionee fails to deliver a FMV Objection Notice within the time provided above, then Optionee
shall be deemed to have agreed that the Fair Market Value shall be as proposed by Optionor in its
Optionor’s FMV Notice. If Optionee timely delivers a FMV Objection Notice, then the Fair Market
Value shall be determined as follows:

               (i) With ten (10) Business Days after Optionee’s delivery of a FMV Objection Notice (the
“Outside Appointment Date”), each of Optionor and Optionee shall select a board certified
Member of the Appraisal Institute of real estate appraisers with at least five (5) years of
full-time commercial appraisal experience who is familiar with the fair market value of commercial
office properties located in the geographic region of the Property and who is not an Affiliate of
such appointing party (each, a “Qualified Appraiser”) and shall give notice to the other
specifying the name and address of the Qualified Appraiser each has chosen; provided,
however, that if either party fails to appoint its Qualified Appraiser in the manner
provided above prior to the Outside Appointment Date, then the sole Qualified Appraiser shall
proceed to determine the Fair Market Value and deliver a written report thereof to each of Optionor
and Optionee. In such event, the determination of such sole Qualified Appraiser shall be final and
binding upon the parties.

               (ii) If two Qualified Appraisers are timely appointed, then each of the parties shall cause
their respective Qualified Appraiser to confer with the other and attempt to mutually determine the
Fair Market Value within twenty (20) Business Days after the Outside Appointment Date. If the two
Qualified Appraisers so agree, then the parties shall cause such Qualified Appraisers to issue a
joint written report setting forth the Fair Market Value as determined by such Qualified
Appraisers, and such determination shall be final and binding upon the parties.

               (iii) If the two Qualified Appraisers are unable to agree upon the Fair Market Value within
the twenty (20) Business Day period as provided in clause (ii) above, then within twenty-five (25)
Business Days following the Outside Appointment Date, the parties shall cause the two Qualified
Appraisers to appoint a third Qualified Appraiser, but if such two Qualified Appraisers fail to do
so, then either party may request JAMS or its successors (“JAMS”) to appoint a third
Qualified Appraiser within ten (10) Business Days of such request, and both parties shall be bound
by any appointment so made by JAMS. If no such third Qualified Appraiser shall have been appointed
by JAMS within such ten (10) Business Day period or within forty (40) Business Days of the Outside
Appointment Date, whichever is earlier, either

8

 

party may apply to any court having jurisdiction to have such appointment made by such court,
and both parties shall be bound by any appointment so made by such court.

               (iv) If three Qualified Appraisers are so appointed, such three Qualified Appraisers shall
determine the Fair Market Value in accordance with the following procedures. Each shall state, in
writing, his or her determination of the Fair Market Value (the “Proposed Valuation”),
supported by the reasons therefor, and shall each make counterpart copies for the other Qualified
Appraisers. All of the Qualified Appraisers shall arrange for a simultaneous exchange of their
Proposed Valuations within fifteen (15) Business Days after appointment of the third Qualified
Appraiser. The Fair Market Value shall be the arithmetic average of the three Proposed Valuations;
provided, however, that if any of the Proposed Valuations are more than ten percent
(10%) higher or lower than the “Medium Valuation” (as hereinafter defined), then such Proposed
Valuations shall be disregarded and the Fair Market Value shall be the arithmetic average of the
remaining Proposed Valuations or, in the event two of the Proposed Valuations are disregarded
pursuant to this sentence, then the Fair Market Value shall be deemed to be the Medium Valuation.
If any Qualified Appraiser fails to timely submit a Proposed Valuation, the arithmetic average of
the Proposed Valuations submitted by the other Qualified Appraisers or by the Proposed Valuation
submitted by the sole Qualified Appraiser shall be the Fair Market Value. The term “Medium
Valuation” shall mean the Proposed Valuation which sets forth a proposed Fair Market Value
between that of the other two Proposed Valuations and which is neither the highest nor the lowest
valuation submitted by the three Qualified Appraisers.

          (b) The determination of Fair Market Value pursuant to this Section 3.3 shall be final
and binding upon the parties, without any right of appeal, and shall be specifically enforceable to
the extent such remedy is available under applicable law. Each party shall pay the fees and
expenses of its respective Qualified Appraiser and both shall share equally the fees and expenses
of any third Qualified Appraiser. Each party shall pay its own attorneys’ fees and costs.

          (c) The Closing Date under the Acquisition Agreement shall be extended to the extent necessary
to allow for the determination of Fair Market Value as contemplated by this Section 3.3.

          (d) Notwithstanding anything to the contrary in this Agreement or the Acquisition Agreement,
if Optionee shall exercise its Option as provided herein, then Optionee shall have the unilateral
right to cancel and rescind in writing to Optionor Optionee’s exercise of the same within (10)
Business Days after the Fair Market Value of the Property is “finally determined”. For purposes of
the foregoing, the Fair Market Value shall be “finally determined” upon the date that Fair Market
Value is determined or deemed determined pursuant to the appraisal procedures set forth in this
Section 3.3. If Optionee does not elect to cancel and rescind such Option within the time
and manner herein provided, then Optionee shall proceed to purchase the Property, at the
Acquisition Consideration, and otherwise in accordance with the provisions of this Agreement and
the Acquisition Agreement. If Optionee is entitled to and shall elect to cancel and rescind such
Option within the time and manner herein provided, then the following shall occur: (1) any
purchase contract formed by Optionee’s exercise of such Option shall be cancelled and terminated;
(2) the Acquisition Escrow opened upon such exercise of the Option shall be cancelled and Optionee
shall pay all title, escrow and other cancellation charges incurred or imposed in connection
therewith; and (3) for a period of 180 days thereafter,

9

 

Optionee may not again thereafter exercise the Option granted to Optionee under this
Agreement, and Optionor shall be entitled to market the Property for sale and sell the Property to
any unaffiliated third party at a purchase price equal to or greater than the Fair Market Value of
the Property as so “finally determined,” free and clear of all rights of Optionee under this
Agreement; provided, however, that if (i) the purchase price payable by any such
unaffiliated third party during such 180 period shall be less than the Fair Market Value of the
Property as so “finally determined,” then the provisions of Section 4 hereof shall apply
(i.e., Optionee shall have the right of first refusal with respect thereto), and (ii) if such sale
to an unaffiliated third party for a purchase price equal to or greater than the Fair Market Value
of the Property as so “finally determined” is not consummated within such 180 day period, then all
of Optionee’s rights hereunder, including the right to again exercise its Option shall be
reinstated.

          3.4 Withholding. Optionor shall execute, upon the conveyance of the Property, such
certificates or affidavits reasonably necessary to document the inapplicability of any federal or
state tax withholding provisions, including, without limitation, those referred to in Section
9.5 below. If Optionor fails to provide such certificates or affidavits, Optionee may withhold
a portion of the Acquisition Consideration as required by the Internal Revenue Code of 1986, as
amended (the “Code”) or applicable state law.

          3.5 Taxes. If the transactions contemplated by this Agreement and the Acquisition
Agreement are consummated, then the following shall apply:

          (a) Allocation of Acquisition Consideration. The Acquisition Consideration shall be
allocated in a manner reasonably agreed upon by Optionee and Optionor. Optionee and Optionor agree
to (i) be bound by the allocation, (ii) act in accordance with the allocation in the preparation of
financial statements and filing of all tax returns and in the course of any tax audit, tax review
or tax litigation relating thereto and (iii) take no position and cause their affiliates to take no
position inconsistent with the allocation for income tax purposes.

          (b) Cooperation and Tax Disputes. Optionor and Optionee shall provide each other with
such cooperation and information relating to the Property as the parties reasonably may request in
(i) filing any tax return, amended tax return or claim for tax refund, (ii) determining any
liability for taxes or a right to a tax refund, or (iii) conducting or defending any proceeding in
respect of taxes. Any time after the Effective Date, Optionee shall promptly notify Optionor in
writing upon receipt by Optionee or any of its affiliates of notice of (i) any pending or
threatened tax audits or assessments with respect to the Property and (ii) any pending or
threatened federal, state, local or foreign tax audits or assessments of Optionee or any of its
affiliates, in each case which may affect the liabilities for taxes of Optionor with respect to any
tax period ending on or before the Closing Date. Optionor shall promptly notify Optionee in writing
upon receipt by Optionor of notice of any pending or threatened federal, state, local or foreign
tax audits or assessments relating to the income, properties or operations of the Property. Each of
Optionee and Optionor may participate at its own expense in the prosecution of any claim or audit
with respect to taxes attributable to any taxable period ending on or before the Closing Date;
provided, however, that Optionor shall have the right to control the conduct of any
such audit or proceeding or portion thereof for which Optionor (or its direct or indirect owners,
if applicable) has acknowledged liability (except as a partner of Optionee) for the payment of any
additional tax liability, and Optionee shall have the right to control any other audits and

10

 

proceedings. Notwithstanding the foregoing, neither Optionee nor Optionor may settle or
otherwise resolve any such claim, suit or proceeding which could have an adverse tax effect on the
other party or its direct or indirect owners without the consent of the other party, such consent
not to be unreasonably withheld. Optionor and Optionee shall retain all tax returns, schedules and
work papers, and all material records and other documents relating thereto, until the expiration of
the statute of limitations (and, to the extent notified by any party, any extensions thereof) of
the taxable years to which such tax returns and other documents relate and until the final
determination of any tax in respect of such years.

          (c) Transfer Taxes. Optionee shall pay the cost of all documentary transfer taxes
arising from the sale of the Property pursuant to the exercise by Optionee of the Option.

          (d) Closing Costs and Prorations. All recording fees, escrow fees, and other closing
costs (except documentary transfer taxes as provided in Section 3.5(c) above) shall be
allocated according to custom and practice based on the location of the Property. All income and
expenses of the Property shall be prorated according to custom and practice based on the location
of the Property.

          (e) Survivability. This Section 3.5 shall survive the expiration or earlier
termination of this Agreement for a period of one year from the date of such expiration or earlier
termination.

     4. Right of First Refusal. Subject to Section 3.3(d) above, if Optionor
receives a bona fide good faith offer from an unaffiliated third party (herein, an
“Offeree”) to purchase the entire Property, including, without limitation, in connection
with Optionor’s effort to market the Property for sale in accordance with Section 6 hereof
(the “Offer”) at any time during the “ROFR Term” (as defined below), then, subject only to
Optionee’s right of first refusal contained in this Section 4, Optionor shall have the
right to convey the Property to such Offeree during the term of this Agreement. If Optionor desires
to accept the Offer from such Offeree, Optionor shall first give written notice (the “ROFR
Notice”) thereof to Optionee (the date the ROFR Notice is received by Optionee is referred to
as the “Notice Date”), which ROFR Notice shall include the name of the Offeree, the
proposed purchase price for the Property and the other material economic terms of the proposed
transfer (collectively, the “Acquisition Terms”). Optionee shall have thirty (30) days from
the Notice Date to give written notice to Optionor (the “OP Notice”) of its election to
acquire the Property for the same purchase price and on substantially the same Acquisition Terms;
provided that, at the election of Optionee, all or any portion of the purchase price payable to the
Younan Parties may be paid by delivering to the Younan Parties that number of OP Units with a
Market Value equal to the cash consideration payable to the Younan Parties. Notwithstanding
anything to the contrary in this Agreement, from and after Optionee’s receipt of any such ROFR
Notice, Optionee shall not have the right to exercise its Option pursuant to Section 3
hereof, except as otherwise provided below. If Optionee fails to make such election on a timely
basis, Optionee’s rights under this Section 4 shall expire and be of no further force or
effect; provided, however, that such rights under this Section 4,and
Optionee’s right to exercise its Option pursuant to Section 3 hereof, shall each be revived
and reinstated in favor of Optionee in the event Optionor has not, within 180 days following the
Notice Date, consummated the transaction with the applicable Offeree on terms which are generally
as good or more favorable to Optionor than the Acquisition Terms offered to Optionee

11

 

(any such sale made to Offeree within such 180-day period, a “Valid Offeree Sale”).
The term of the right of first refusal contained in this Section 4 shall commence upon the
IPO Closing Date and shall continue until the earlier of (i) the date this Agreement terminates
pursuant to Section 7 below and (ii) the expiration of the Option Term (the “ROFR
Term”). Notwithstanding anything to the contrary set forth in this Agreement, the right of
first refusal contained in this Section 4 (the “ROFR”) shall not apply to a
foreclosure sale, a trustee’s sale, a receiver’s sale or a transfer of the Property pursuant to a
deed in lieu of foreclosure.

     5. Covenants of Optionor. From and after the IPO Closing Date and continuing through
the Option Term:

          5.1 Maintenance/Operation. Optionor shall, subject to this Section 5, continue
to operate and maintain the Property in a commercially prudent manner and consistent with its past
business practices, and in any event in compliance with the terms of the Leases and any documents
or instruments evidencing or otherwise securing the Property Indebtedness.

          5.2 Insurance. Optionor shall keep in full force and effect with respect to the
Property policies of insurance providing coverage at least as extensive as that maintained on the
Effective Date, and in any event in compliance with the terms of the Leases and any documents or
instruments evidencing or otherwise securing the Property Indebtedness.

          5.3 Service and Equipment Agreements. Without the prior consent of Optionee, Optionor
shall not enter into, materially modify or terminate any service contract or equipment leasing
contract relating to the Property except in a commercially prudent manner and consistent with its
past business practices; provided, however, that in no event shall Optionor enter
into any service or equipment leasing contract relating to the Property that cannot be terminated
without penalty on 30 days notice, or less, except for such contracts that customarily require a
longer term (e.g., elevator or security system contracts), unless consented to by Optionee.
Optionor shall give Optionee prior notice before taking any action referred to in the preceding
sentence, which notice shall include the material terms of the proposed action, as well as a
request for Optionee’s consent thereto. If Optionee does not respond to such notice within five (5)
Business Days after its receipt thereof, Optionee shall be deemed to have consented to such action.

          5.4 Leases. Optionor may continue to offer the Property for lease in the same manner
as it was offered by it prior to the Effective Date pursuant to its normal course of business and,
upon request, Optionor shall keep Optionee reasonably informed as to the status of material leasing
activities known to Optionor. Optionor shall not enter into any new “Major Lease” (i.e., a
lease in excess of 10,000 square feet of net rentable area) or materially modify or terminate any
then-existing Major Lease without the prior consent of Optionee, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that after the
exercise by Optionee of the Option, Optionee may grant or withhold its consent to the foregoing in
its sole and absolute discretion. Optionor shall give Optionee prior notice before taking any
action referred to in the preceding sentence, which notice shall include the material terms of the
proposed action, as well as a request for Optionee’s consent thereto. If Optionee does not respond
to such notice within five (5) Business Days after its receipt thereof, Optionee shall be deemed to
have consented to such action.

12

 

          5.5 Encumbrances; Property Indebtedness. Optionor shall not execute any easement
agreement or other document or agreement affecting title to the Property without the prior consent
of Optionee (which consent shall not be unreasonably withheld, conditioned or delayed). In
addition, from and after the Effective Date and subject to the following proviso, Optionor shall
not cause or permit the aggregate Outstanding Debt Balance of all Property Indebtedness to exceed
the Outstanding Debt Balance of the Existing Indebtedness as of the Effective Date, unless
otherwise approved by Optionee, such approval not to be unreasonably conditioned, withheld or
delayed; provided that nothing in this sentence shall limit the ability of a lender
to make protective advances for the purpose of payment of real estate taxes (including special
payments in lieu of real estate taxes), maintenance costs, insurance premiums or other items
(including capital items, tenant improvement costs and leasing commissions) necessary in such
lender’s reasonable judgment to protect the value of the Property and/or to protect the Property
from forfeiture, casualty, loss or waste or to accrue and add interest (including default interest)
on such lender’s indebtedness, all without Optionee’s or any other Person’s consent, even if such
protective advances or interest would cause the aggregate Outstanding Debt Balance of all Property
Indebtedness to exceed the Outstanding Debt Balance of the Existing Indebtedness as of the
Effective Date. Further, Optionor shall provide Optionee with notice of any known default under any
Property Indebtedness and shall provide copies of any written default notices Optionor may receive
from the Lenders thereunder promptly upon receipt of the same. Except as set forth in this
Section 5.5, nothing in this Agreement shall restrict Optionor’s ability to modify, amend
or increase the Existing Indebtedness or to obtain New Financing. Optionee agrees that the
covenants and restrictions contained in this Section 5 shall not be binding upon a receiver
appointed for the Property.

     6. Marketing the Property for Sale. Optionor shall have the right to affirmatively
market the Property for sale during the term of this Agreement, subject to the rights of Optionee
hereunder, including, without limitation, the rights of Optionee under Section 4 hereof.

     7. Termination of this Agreement. This Agreement and all of Optionee’s rights
hereunder shall immediately and automatically terminate and be of no further force or effect upon
the earliest to occur of (i) the sale, transfer or contribution (directly or indirectly) of all the
parcels comprising the Property to any party (including Optionee) in accordance with this Agreement
(including, without limitation, a Valid Offeree Sale), (ii) subject to Optionee’s right to rescind
the exercise of the Option pursuant to Section 3.3(d) above and the reinstatement thereof
as provided therein, the failure by Optionee to timely close on the acquisition of the Property
after opening the Acquisition Escrow, (iii) the expiration of the Option Term prior to Optionee’s
exercise of the Option pursuant to Section 3 hereof or its right of first refusal pursuant
to Section 4 hereof, and (iv) the sale or transfer of the Property to any party pursuant to
a foreclosure sale, a trustee’s sale, a receiver’s sale or a deed in lieu of foreclosure (any such
sale or transfer described in this clause (iv), an “Enforcement Sale”).

     8. Procedure Upon Termination.

          8.1 Notice of Termination. If the Option expires or this Agreement is earlier
terminated, Optionor will, and any successor owner of the Property (“Successor Owner”) may,
provide notice of such expiration or termination to Optionee (the “Termination Notice”).
The

13

 

delivery of the Termination Notice shall not be a condition precedent to the effectiveness of
such expiration or earlier termination.

          8.2 Verification of Termination. Upon receipt of the Termination Notice, Optionee
agrees that it will execute, acknowledge and deliver to Optionor or Successor Owner, as applicable,
in recordable form with appropriate authorization for recording, within ten (10) days from request
therefor, a quitclaim deed or any other document reasonably requested by Optionor or Successor
Owner, as applicable, or a title insurance company to verify such termination.

          8.3 Right to Documents. Upon receipt of the Termination Notice, Optionee shall
forthwith deliver (or cause to be delivered) to Optionor or Successor Owner, as applicable, and
shall be deemed to have assigned (but only to the extent assignable) to Optionor or Successor
Owner, as applicable (without the execution of further documentation or instruments), any
governmental applications, permits, maps, plans, specifications and other documents in its
possession or that it has made or contracted to be made respecting the Property, including, without
limitation all engineering reports, surveys, soil tests, seismic studies, environmental reports,
grading, flood control and drainage plans, design renderings, market analyses, feasibility studies,
proposed tentative, parcel and final maps, and all correspondence with governmental agencies and
their personnel concerning the same.

          8.4 Survivability. This Section 8 shall survive the expiration or earlier
termination of this Agreement.

     9. Representations and Warranties. As of the Effective Date, Optionor represents and
warrants to Optionee as follows:

          9.1 Organization; Authority. Optionor is duly formed, validly existing and in good
standing (to the extent applicable) under the laws of its jurisdiction of formation. Optionor is
qualified to do business in the state where the Property is located. Optionor has the legal
capacity to enter this Agreement.

          9.2 Due Authorization. This Agreement and each agreement, document and instrument
executed and delivered by or on behalf of Optionor pursuant to this Agreement constitutes, or when
executed and delivered will constitute, the legal, valid and binding obligation of Optionor, each
enforceable against Optionor in accordance with its terms.

          9.3 Title to the Property. Optionor represents and warrants that (a) it holds
insurable fee simple title to the Property and (b) it has not granted an option or right of first
refusal to purchase the Property to any party other than Optionee.

          9.4 Consents and Approvals. Optionor has full right, authority, power and capacity,
and, except as may be obtained in connection with the IPO or the Formation Transactions, no
consent, waiver, approval or authorization of any governmental entity, lender or other Person is
required for Optionor: (i) to enter into this Agreement and each agreement, document and instrument
to be executed and delivered by or on behalf of Optionor pursuant to this Agreement; and (ii)
except as required by any applicable financing agreement, to carry out the transactions
contemplated hereby and thereby.

14

 

          9.5 Non-Foreign Status. Optionor is a United States person as defined in the Code, and
is, therefore, not subject to the provisions of the Code relating to the withholding of sales
proceeds to foreign persons, and is not subject to any state withholding requirements.

          9.6 No Brokers. Optionor has not employed or made any agreement with any broker,
finder or similar agent or any other Person or firm which will result in the obligation of Optionee
or any of its affiliates to pay any finder’s fee, brokerage fees or commission or similar payment
in connection with the transactions contemplated by this Agreement.

          9.7 No Other Agreements to Sell. Except for the Option granted hereby, Optionor has
made no agreement and has no obligation (absolute or contingent) to sell or option the Property.

          9.8 Assets. The Property is the sole asset of the Optionor other than cash or cash
equivalents. Optionor covenants not to acquire any assets other than those to be made part of or
used in connection with the Property.

          9.9 Indemnity. Optionor shall indemnify, defend and hold harmless Optionee for
all costs and expenses (including reasonable attorneys’ fees) incurred by Optionee as a result of a
breach of the representations contained in this Section 9.

     10. Assignment. Optionee may not assign its rights under this Agreement without
Optionor’s prior written consent, which consent may be conditioned, withheld or delayed in
Optionor’s sole and absolute discretion; provided, however, that Optionee may
assign its rights under this Agreement without Optionor’s consent to (i) the REIT, (ii) any direct
or indirect affiliate of the REIT or Optionee, or (iii) any entity into which Optionee has merged
or otherwise is the result of a business combination directly involving Optionee or the REIT.

     11. Notices. Any notice or demand which must or may be given under this Agreement
(including the exercise by Optionee of the Option, any ROFR Notice given by Optionor or any OP
Notice given by Optionee) or by law shall, except as otherwise provided, be in writing and shall be
deemed to have been given (i) when physically received by personal delivery (which shall include
the confirmed receipt of a telecopied facsimile transmission), or (ii) three (3) Business Days
after being deposited in the United States certified or registered mail, return receipt requested,
postage prepaid, or (iii) one (1) Business Day after being deposited with a nationally known
commercial courier service providing next day delivery service (such as Federal Express).

15

 

     Any such notice shall be addressed and delivered or telecopied (a) in the case of a notice to
Optionee at the following address and facsimile number:

Younan Properties, L.P.

c/o Younan Properties

5959 Topanga Canyon Boulevard

Suite 200

Woodland Hills, California 91367

Facsimile: (818) 703-5907

Attention: Chief Executive Officer

and (b), in the case of a notice to Optionor, to the address and facsimile number set forth on the
Signature Page of Optionor hereto.

     12. Miscellaneous.

          12.1 Amendment. This Agreement may not be amended except by an instrument in writing
signed by both Optionor and Optionee.

          12.2 Entire Agreement; Counterparts; Applicable Law. This Agreement (a) constitutes
the entire agreement and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof, (b) may be executed in one or more
counterparts, each of which will be deemed an original and all of which shall constitute but one
and the same instrument and (c) shall be governed in all respects by the laws of the State of Texas
without giving effect to the conflict of law provisions thereof.

          12.3 Severability. If any provision of this Agreement, or the application thereof, is
for any reason held to any extent to be invalid or unenforceable, the remainder of this Agreement
and application of such provision to other Persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of the void or
unenforceable provision and to execute any amendment, consent or agreement deemed necessary or
desirable by Optionee to effect such replacement.

          12.4 Binding Effect. This Agreement shall be binding upon, and shall be enforceable by
and inure to the benefit of, Optionor and Optionee and their respective successors and permitted
assigns but, for the avoidance of doubt and without limiting the provisions of Section 7
hereof, shall not be binding upon any party that acquires the Property pursuant to an Enforcement
Sale.

          12.5 Equitable Remedies. The parties hereto agree that irreparable damage would occur
if any provision of this Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any federal or state court located in the California

16

 

(as to which the parties agree to submit to jurisdiction for the purposes of such action),
this being in addition to any other remedy to which they are entitled at law or in equity.

          12.6 Attorneys’ Fees. In the event that either party hereto brings an action or
proceeding against the party to enforce or interpret any of the covenants, conditions, agreements
or provisions of this Agreement (or any other agreement contemplated by or related to this
Agreement), the prevailing party in such action or proceeding shall be entitled to recover all
reasonable costs and expenses of such action or proceeding, including, without limitation,
attorneys’ fees, charges, disbursements and the fees and costs of expert witnesses.

          12.7 Recording. Subject to applicable consents required under any Property
Indebtedness related to the Property, at Optionee’s request, Optionor shall duly execute,
acknowledge and deliver to Optionee a short form memorandum of this Agreement in form and substance
reasonably acceptable to Optionee and Optionor (the “Memorandum”). Upon receipt of such
Memorandum from Optionor, Optionee shall have the right to record the same in the real property
records of the county in which the Property is situated. If Optionee records such Memorandum,
Optionee covenants and agrees to record an appropriate notice of termination or cancellation upon
the expiration or earlier termination of this Agreement as provided in Section 8 hereof.

          12.8 Reliance. Each party to this Agreement acknowledges and agrees that it is not
relying on tax advice or other advice from the other party to this Agreement and that it has or
will consult with its own advisors.

          12.9 Survival. Except as otherwise provided in this Agreement, it is the intention of
the parties hereto that the provisions of this Agreement that contemplate performance after the
Closing Date or the date of acquisition of the Property by Optionee pursuant to the exercise of its
rights pursuant to Section 4 hereof and the obligations of the parties not fully performed
on the Closing Date or such date of acquisition shall survive the Closing Date or such date of
acquisition, as applicable, and shall not be deemed to be merged into or waived by the instruments
executed in connection therewith.

17

 

OPTION AGREEMENT

SIGNATURE PAGES

     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the Effective
Date set forth above.

OPTIONOR:

YPI 1010 LAMAR, LLC,

a Delaware limited liability company

	 	 	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

OPTIONOR’S NOTICE ADDRESS

c/o Younan Properties

5959 Topanga Canyon Boulevard

Suite 201

Woodland Hills, California 91367

Phone: (818) 703-9600

Facsimile: (818) 703-5907

S-1

 

OPERATING PARTNERSHIP:

YOUNAN PROPERTIES, L.P.,

a Maryland limited partnership

	 	 	 	 	 
	 	By:  	YOUNAN PROPERTIES, INC.,
 	 
	 	 	a Maryland corporation, 	 
	 	 	its General Partner 	 
	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

S-2

 

EXHIBIT A

TO

OPTION AGREEMENT

Legal Description

TRACT 1: (1010 Lamar)

All that certain 20,603 square feet of land, being that same 20,603 square foot tract described in
the deed dated December 21, 1998, Lamar-Fannin Partnership, Ltd. to Best Property Fund, L.P., d/b/a
BPF Real Estate, recorded at Clerk File No. T451034, Film Code No. 522-93-1904, of the Official
Public Records of Real Property of Harris County, Texas, being all of Lot 5 and a portion of Lots
4, 9, 10 and 11, of Block 255, out of South Side Buffalo Bayou (unrecorded and recognized),
Houston, Harris County, Texas and being more particularly described by metes and bounds as follows:

COMMENCING at found City of Houston Engineering Department Reference Monument No. 41 at the
intersection of the City of Houston Engineering Department Reference Lines in the center lines of
Main Street (90’ wide) and Polk Avenue; THENCE N 35° 00’ 00” E — 660.01’, with said Reference Line
in Main Street to a point; THENCE S 55° 00’ 00” E — 337.50’, with the Reference Line in Lamar
Avenue (originally 80’ wide, currently 69.3’ wide) to a point; THENCE S 35° 00’ 00” W — 29.30’,
with the Reference Line in Fannin Street to a point; THENCE N 55° 00’ 00” W — 40.00’, to a point
for the east corner of the 10.7’ wide strip described in Cause No. 87651, First Baptist Church of
Houston versus the City of Houston, recorded in Volume 8, Page 460, of the District Court Minutes,
and being the POINT OF BEGINNING of the herein described tract;

THENCE S 35° 00’ 00” W, at 10.7’ passing the east corner of aforementioned Block 255 and with
the northwest right-of-way line of Fannin Street (80’ wide) for a total distance of 108.20’, to a
found building corner for corner;

THENCE N 55° 00’ 00” W — 67.50’, with the northeast line of that certain 38,579 square foot
tract described in the deed dated January 10, 1997, from Lamar-Fannin Partnership, Ltd. to Sakowitz
Building-Houston, L.L.C., recorded at Clerk File No. S-279492, Film Code No. 511-47-1804, of the
Official Public Records of Real Property of Harris County, Texas, to a point for corner;

THENCE N 35° 00’ 00” E — 0.50’, continuing with said northeast line of the 38,579 square foot
tract, to a point for corner;

THENCE N 55° 05’ 28” W — 125,13’, continuing along said northeast line of the 38,579 square foot
tract, to a point for corner;

 

 

THENCE N 35° 01’ 04” E — 0.10’, with an interior southeast line of said 38,579 square foot
tract, to a point for corner;

THENCE S 54° 59’ 43” E — 1.24’, with the southwest line of that certain 6,644 square foot tract,
described in the deed dated August 2, 1995, from Zale Delaware, Inc. to NAJU, Inc., recorded at
Clerk File No. R-513136, Film Code No. 504-81-2419, of the Official Public Records of Real Property
of Harris County, Texas, to a point for corner;

THENCE N 35° 33’ 10” E, with the southeast line of said 6,644 square foot tract, at 97.11’ passing
the original southwest right-of-way line of aforementioned Lamar Avenue and the northeast line of
aforementioned Block 255, S.S.B.B., and continuing for a total distance of 107.81’, to a point for
corner;

THENCE S 55° 00’ 00” E, 190.35’, with the northeast line of the 10.7’ wide strip described in Cause
No. 87651, First Baptist Church of Houston versus the City of Houston, recorded in Volume 8, Page
460, of the District Court Minutes, to the POINT OF BEGINNING of the herein described tract and
containing 20,603 square feet (0.4730 acre) of land, more or less.

TRACT 2: (1111 Main)

All that certain 38,579 square feet of land, being all of Lots 1, 2, 3, 6, 7, 8, 12 and a portion
of Lot 4, 9 and 11, of Block 255, out of South Side Buffalo Bayou, Houston, Harris County, Texas,
being that same 38,579 square foot tract described in the Deed dated January 10, 1997, from
Lamar-Fannin Partnership, Ltd. to Sakowitz Building-Houston, L.L.C. filed in the Official Public
Records of Real Property of Harris County, Texas at Clerk’s File No. S279492, Film Code
No. ###-##-####, and being more particularly described by metes and bounds as follows:

COMMENCING at a found City of Houston Engineering Department Reference Monument No. 41 at the
intersection of the City of Houston Engineering Department Reference Lines in the center lines of
Main Street (90 feet wide) and Polk Avenue:

THENCE N 35 degrees 00 minutes 00 seconds East 370.01 feet with said Reference Line in Main Street
to a point;

THENCE S 55 degrees 00 minutes 00 seconds East 45.00 feet to the west corner of said Block 255 and
the POINT OF BEGINNING of the herein described tract;

THENCE N 35 degrees 00 minutes 00 seconds East 152.90 feet with the Southeast right-of-way line of
said Main Street common with the Northwest line of said Block 255, to a found building corner for
corner;

THENCE S 54 degrees 59 minutes 43 seconds East 59.87 feet with the southwest line of the 6,644
square foot tract described in the deed dated August 2, 1995, from Zale Delaware, Inc. to NAJU,
Inc., filed in the Official Public Records of Real Property of Harris County, Texas at Clerk’s File
No. R513136, Film Code No. 504-81-2419, to a point for corner;

THENCE S 35 degrees 01 minutes 04 seconds West 0.10 feet with a northwest line of the 20,789 square
foot tract described in deed dated January 3, 1994, from Rock Properties to Lamar-Fannin

 

 

Partnership, Ltd., filed in the Official Public Records of Real Property of Harris County, Texas at
Clerk’s File No. P633427, Film Code No. 196-60-1098, to a point for corner;

THENCE S 55 degrees 05 minutes 28 seconds E 125.13 feet with a Southwest line of said 20,789 square
foot tract, to a point for corner;

THENCE S 35 degrees 00 minutes 00 seconds West 0.50 feet with a northwest line of said 20,789
square foot tract, to a point for corner;

THENCE S 55 degrees 00 minutes 00 seconds East 67.50 feet with a Southwest line of said 20,789
square foot tract, to a found building corner for corner;

THENCE S 35 degrees 00 minutes 00 seconds West 152.50 feet with the Northwest right-of-way line of
Fannin Street (80 feet wide) common with the Southeast line of aforementioned Block 255, to a point
for corner;

THENCE N 55 degrees 00 minutes 00 seconds West 252.50 feet with the Northeast right-of-way line of
Dallas Avenue (80 feet wide) common with the Southwest line of said Block 255, to the POINT OF
BEGINNING of the herein described tract and containing 38,579 square feet (0.8857 acre) of land,
more or less.

TOGETHER with the rights under that certain Permit for Use and Occupancy of a Portion of the City’s
Right-of-Way executed by the City of Houston as set forth under Clerk’s File No. C609638 of the
Real Property Records of Harris County, Texas.

TRACT 3: (EASEMENT ESTATE)

An easement for use and occupancy as created in City of Houston Ordinance No. 5656, recorded in
Book 57, Pages 222-224, City of Houston Records located in the Office of the City Secretary, and as
conveyed by Lamar-Fannin Partnership, Ltd. to Sakowitz Building-Houston, L.L.C. by Warranty Deed
recorded under Clerk’s File No. S279492 of the Real Property Records of Harris County, Texas, and
being located over the following described property:

All that certain 240 square foot tract of land out of the right-of-way of Dallas Avenue (80 feet
wide), adjacent to the Southwest line of Block 255, South Side Buffalo Bayou (unrecorded and
recognized), Houston, Harris County, Texas and being more particularly described by metes and
bounds as follows:

BEGINNING at the West corner of said Block 255, at the intersection of the Northeast right-of-way
line of said Dallas Avenue with the Southeast right-of-way line of Main Street (90 feet wide);

THENCE S 35 degrees 00 minutes 00 seconds West 0.95 feet with the extension of said Main Street, to
a point for corner;

THENCE S 55 degrees 00 minutes 00 seconds East 252.50 feet with the Building Line established by
City of Houston Ordinance No. 5656, dated November 22, 1950 (also see Book 57, Page 223-224, of the
City of Secretary’s Records), to a point for corner;

 

 

THENCE N 35 degrees 00 minutes 00 seconds East 0.95 feet with the extension of the Northeast
right-of-way line of Fannin Street (80 feet wide), to a point for the South corner of said Block
255;

THENCE N 55 degrees 00 minutes 00 seconds West 252.50 feet with the aforementioned Northeast
right-of-way line of Dallas Avenue common with the Southwest line of said Block 255, to the POINT
OF BEGINNING of the herein described tract, and containing 240 square feet (0.0055 acre) of land,
more or less.

TRACT 4: (EASEMENT ESTATE)

An easement for use and occupancy as conveyed by Lamar-Fannin Partnership, Ltd. to Sakowitz
Building Houston, L.L.C. by Warranty Deed recorded under Clerk’s File No. S279492 of the Real
Property Records of Harris County, Texas, and being located over the following described property:

That certain 53 square feet of land out of the right-of-way of Fannin Street (80 feet wide),
adjacent to the Southeast line of Block 255, South Side Buffalo Bayou (unrecorded and recognized),
Houston, Harris County, Texas and being more particularly described by metes and bounds as follows:

BEGINNING at the South corner of said Block 255, at the intersection of the Northeast right-of-way
line of said Dallas Avenue with the Northwest right-of-way line of Fannin Street (90 feet wide);

THENCE S 55 degrees 00 minutes 00 seconds East 35 feet with the extension of said Dallas Avenue, to
a point for corner;

THENCE N 35 degrees 00 minutes 00 seconds East 152.50 feet with the Building Line established by
the City of Houston Ordinance No. 3072, dated January 22, 1936 (also see Book 26, Page 228-229, of
the City Secretary’s Records), to a point for corner;

THENCE N 55 degrees 00 minutes 00 seconds West 0.35 feet to a point for corner;

THENCE S 35 degrees 00 minutes 00 seconds West 152.50 feet with the aforementioned Northwest
right-of-way line of Fannin Street common with the Southeast line of said Block 255, to the POINT
OF BEGINNING of the herein described tract, and containing 53 square feet (0.0012 acre) of land,
more or less.

 

 

SCHEDULE 3.2(b)

TO

OPTION AGREEMENT

Existing Financings

Loan in the principal amount of $33,500,000 made pursuant to that certain Loan Agreement dated as
of November 30, 2007 (the “Existing Loan Agreement”), by and between Optionor and PNC Bank,
National Association (as successor by merger to National City Bank) (“Existing Lender”).

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