AGREEMENT OF PURCHASE AND SALE -

Exhibit 10.38

AGREEMENT OF PURCHASE AND SALE

     THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) dated as of May 19, 2005, is between OTR, an Ohio general partnership (“Seller”) acting as the duly authorized nominee of the Board of the State Teachers Retirement System of Ohio (“STRS Ohio”), and Hines REIT Properties, L.P., a Delaware limited partnership (“Buyer”).

RECITALS :

     A. Seller owns a certain fee simple interest in real estate improved by an office park consisting of multiple buildings comprising approximately 255,263 rentable square feet of space and related parking garages and structures in San Mateo, California, and commonly known as 1900 and 2000 Alameda de Las Pulgas, which property is more fully described in this Agreement.

     B. Seller desires to sell the Property to Buyer, and Buyer desires to acquire the Property from Seller, all upon the terms and subject to the conditions contained in this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and promises set forth in this Agreement, and for other valuable consideration, receipt of which is hereby acknowledged, Seller and Buyer agree as follows:

AGREEMENT :

     1. AGREEMENT TO BUY AND SELL.

     Seller shall sell and convey to Buyer, and Buyer shall purchase and accept from Seller, all of Seller’s right, title, estate, and interest in and to:

     (a) the land described on Schedule 1(a), which is attached to and made a part of this Agreement, together with all easements, privileges, and appurtenant rights belonging or in any way appertaining to the land (collectively, the “Land”);

     (b) all buildings and improvements on the Land, including, without limitation, the building and parking structure described in Recital A above, all gas and electric systems, lighting, heating, ventilating, and air conditioning equipment and systems, elevators, radiators, incinerators, furnaces, hot water heaters, water, sewage, and plumbing systems, fire protection and security systems, and all other fixtures attached to the Land and buildings (collectively, the “Improvements”, and together with the Land, the “Real Property”);

     (c) all furnishings, furniture, equipment, supplies, and other personal property as are owned by Seller and are currently located in, on, or about and are used for the operation, management, administration or repair of the Real Property, including, without limitation, the

items described on Schedule 1(c), which is attached to and made a part of this Agreement, and any similar items acquired by Seller and located at the Real Property after the date of this Agreement and prior to the Closing (collectively, the “Personal Property”);

          (d) those leases and tenancies described on Schedule 1 (d), which is attached to and made a part of this Agreement and which sets forth all of the leases and tenancies affecting the Real Property as of the date of this Agreement, and any leases and tenancies affecting the Real Property that are entered into by Seller after the date of this Agreement and prior to the Closing in accordance with the terms of this Agreement (collectively, the “Tenant Leases”), together with any security deposits held by Seller and Seller’s rights under all guaranties, letters of credit or other instruments that guarantee the performance of the obligations of the tenants (or any of them) under the Tenant Leases;

          (e) those contracts described on Schedule 1(e), which is attached to and made a part of this Agreement and which sets forth all of the service and operating agreements affecting the Property as of the date of this Agreement, to the extent assignable, and any other service and operating agreements pertaining to the Property that are entered into by Seller after the date of this Agreement and prior to the Closing in accordance with the terms of this Agreement (collectively, the “Service Contracts”); provided, however, that in no event shall Buyer assume any property management or leasing agreements for the Property; and

          (f) all intangible property owned by Seller and used in connection with the Real Property and Personal Property, including a nonexclusive right to all trademarks and trade names used in connection with the Property (including a nonexclusive right to the name “California Casualty Plaza”), all plans and specifications and other architectural and engineering drawings, if any, in the possession of Seller which were prepared in connection with the construction of the Improvements and all licenses, permits, warranties and guaranties with respect to the Property to the extent assignable (collectively, the “Intangible Property”).

     All of the foregoing assets and properties to be acquired by Buyer pursuant to this Agreement are collectively referred to in this Agreement as the “Property”.

     2. PURCHASE PRICE.

          (a) Subject to the charges and prorations set forth in section 12 of this Agreement, Buyer shall pay to Seller at Closing (as hereinafter defined) the sum of Fifty-Eight Million Five Hundred Thousand and No/100 Dollars (US$58,450,000.00) (the “Purchase Price”) for the purchase of the Property. The Purchase Price shall be payable in cash or other immediately available United States funds. Notwithstanding the foregoing, in the event the Morgan Stanley Lease Condition (as hereinafter defined) is not satisfied prior to the Closing Date (as hereinafter defined), the sum of $450,000.00 (the “Lease Holdback”) shall be withheld from the Purchase Price and deposited into an escrow with the Escrow Agent (as hereinafter defined). The Escrow Agent shall hold and disburse the Lease Holdback pursuant to an escrow agreement (the “Holdback Escrow Agreement”), the form of which shall be agreed by Buyer and Seller prior to the expiration of the Due Diligence Period (as hereinafter defined). The Holdback Escrow Agreement shall provide that the Lease Holdback shall be released (i) to Seller only if the Morgan Stanley Lease Condition is satisfied on or before the date that is 180

days after the Closing Date, or (ii) to Buyer in the event the Morgan Stanley Lease Condition is not satisfied on or before the date that is 180 days after the Closing Date. As used herein, the “Morgan Stanley Lease Condition” shall mean that (x) the lease currently being negotiated with Morgan Stanley (the “Morgan Stanley Lease”) has been fully executed and delivered by all parties thereto, and (y) such lease contains substantially the same terms as those described in the letter dated March 2, 2005, addressed to Mr. Bob Garner of Cornish & Carey Commercial (a copy of which is attached as Schedule 2(a) hereto) (the “Morgan LOI”). After the end of the Due Diligence Period, Buyer shall have the right, but not the obligation, to take over the primary role of negotiating the Morgan Stanley Lease consistent with the Morgan LOI upon notice to Seller, Buyer shall have the right to negotiate directly with the tenant under the Morgan Stanley Lease, provided that, prior to Closing, any change in the material terms of the Morgan Stanley Lease which differs from the terms set forth in the Morgan LOI shall require the prior consent of Seller before Buyer may agree to any such terms. Buyer and Seller agree to cooperate reasonably in the negotiation of the Morgan Stanley Lease.

          (b) Within two (2) business days after the execution and delivery of this Agreement by both parties, Buyer shall deposit the sum of One Million Dollars ($1,000,000.00) (the “Initial Deposit”) with Escrow Agent. If Buyer does not terminate this Agreement prior to the expiration of the Due Diligence Period pursuant to Section 5(b) below, then, not later than one (1) business day after the expiration of the Due Diligence Period, Buyer shall deposit an additional One Million Dollars ($1,000,000.00) (the “Additional Deposit”) with Escrow Agent; the Initial Deposit and, if made, the Additional Deposit (as defined below) and any Extension Deposits (as defined below), together with all interest earned thereon, are referred to collectively in this Agreement as the “Deposit”. If Buyer closes the transaction contemplated by this Agreement, the Deposit shall be applied to the Purchase Price. The Escrow Agent shall hold the Deposit as provided in this Agreement in an interest bearing account at a commercial bank reasonably acceptable to Seller and Buyer, and all interest earned thereon shall become a part of the Deposit for all purposes hereunder.

          (c) In addition to the Deposit, Buyer has delivered to Seller, and Seller has acknowledged receipt of, the sum of One Hundred Dollars ($100.00) (the “Independent Consideration”), as consideration for Buyer’s right to purchase the Property and for Seller’s execution, delivery and performance of this Agreement. The Independent Consideration is in addition to and independent of any other consideration or payment provided for in this Agreement, is non-refundable and shall be retained by Seller notwithstanding any other provision of this Agreement.

     3. ESCROW AGENT.

     The Title Company (as hereinafter defined) shall serve as escrow agent for the transaction contemplated in this Agreement (“Escrow Agent”). This Agreement shall serve as escrow instructions, and Escrow Agent has signed this Agreement in the space provided to indicate that Escrow Agent accepts its appointment as the Escrow Agent.

     4. TITLE; SURVEY.

          (a) Buyer acknowledges receipt of a preliminary title report no. NCS-153865- 5M dated as of March 8, 2005 (the “Title Report”) issued by First American Title Insurance Company, 555 Marshall St., Redwood City, CA 94063, Attention: Karen Matsunaga (the “Title Company”) with respect to the Real Property and copies of the underlying documents for each of the exceptions to coverage identified in the Title Report.

          (b) Within two (2) business days after execution and delivery of this Agreement by both parties, Seller shall deliver to Buyer copies of the most recent existing ALTA survey of the Real Property in Seller’s possession. If Buyer desires an updated survey of the Real Property (the “Updated Survey”), Buyer shall cause to be prepared the Updated Survey, at Buyer’s sole cost. Buyer shall provide such surveyor with a copy of the Title Report to aid in preparing the Survey. Buyer shall have the Updated Survey completed, and a copy delivered to Seller and to the Title Company, no later than three (3) days prior to the expiration of the Due Diligence Period (as hereinafter defined). If Buyer does not obtain and deliver the Updated Survey as provided above, then any reference in this Agreement to “Updated Survey” shall be ignored as if no Updated Survey was contemplated.

          (c) On or before 5:00 p.m. (PST) on the day which is five (5) days prior to the expiration of the Due Diligence Period, Buyer shall deliver to Seller written notice that Buyer either:

               (i) approves and accepts Seller’s title as it appears in the Title Report and on the Updated Survey, or

               (ii) objects to any matters set forth in the Title Report or on the Updated Survey, which matters shall be described in Buyer’s notice of objection with sufficient particularity to allow Seller to identify them.

     If Buyer fails to deliver notice as provided in this subsection, then except as provided below, Buyer shall be deemed to have approved and accepted title to the Property as shown in the Title Report and on the Updated Survey (if any), and all such matters shown in the Title Report and on the Updated Survey (if any) shall be considered “Permitted Exceptions”.

          (d) Except as provided below, any matters set forth in the Title Report or on the Updated Survey to which Buyer does not object as provided in the previous subsection shall be considered “Permitted Exceptions.” In addition, the following matters set forth in the Title Report or on the Updated Survey shall be deemed to be Permitted Exceptions: (i) those created by or to be assumed by Buyer pursuant to the express terms of this Agreement; (ii) zoning ordinances or other matters of local law; and (iii) general and special real estate taxes and assessments that are a lien on the date of Closing, but are not yet due and payable.

          (e) If Buyer notifies Seller that the condition of title as shown in the Title Report and on the Survey is unacceptable, then Seller shall have thirty (30) days during which it may attempt to cure such defects. Notwithstanding the foregoing, Seller shall have no affirmative obligation under this Agreement to expend any funds or incur any liabilities to cause any title exceptions to be removed from the Title Report or insured over, except that Seller shall

pay or discharge any lien or encumbrance arising after the date hereof and voluntarily created or assumed by Seller and not created by or resulting from the acts of Buyer or other parties not related to Seller. Subject to Buyer’s approval, which shall not be unreasonably withheld, conditioned or delayed, Seller shall have the right to cure any defect by causing the Title Company to insure over it at no cost or expense to Buyer. If said thirty (30) day period extends beyond the Closing Date (as hereinafter defined), the Closing Date shall be postponed to permit Seller a reasonable time within which to effect a cure of such defects. If Seller fails to cure such defects, then Buyer may elect either to terminate this Agreement or Buyer may accept such title as Seller is able to convey, without reduction in the Purchase Price. If Buyer elects to terminate this Agreement, Buyer shall deliver to Seller written notice of its decision to terminate this Agreement within five (5) days after the end of Seller’s thirty (30) day cure period, whereupon all documents and funds (including, without limitation, the Deposit), except the Independent Consideration, previously deposited into escrow shall be returned to the party so depositing same and neither party shall have any further liability to the other hereunder, except as otherwise provided herein. If Buyer does not elect to terminate this Agreement within said five (5) day period, then Buyer shall be deemed to have waived such termination right and to have elected to accept such title as Seller is able to convey, without reduction in the Purchase Price.

     5. BUYER’S DUE DILIGENCE.

          (a) Buyer shall have until 5:00 p.m. (PST) on May 23, 2005 (the “Due Diligence Period”) to make such inquiries and review such documents regarding the market conditions, the financial and physical condition of the Property, environmental matters, zoning, governmental compliance, financing and such other inquiries and documents as Buyer deems appropriate. Buyer shall have reasonable access to the Property for the purpose of making, at Buyer’s sole cost and expense, surveys, soil tests, inspections and other investigations and tenant interviews upon at least twenty-four (24) hours prior notice to Seller (which notice may be by telephone); provided, however, that (a) except as provided below, Buyer shall permit representatives of Seller to be present during any and all such surveys, tests, inspections and investigations, (b) without obtaining Seller’s prior written consent, which may be withheld in Seller’s reasonable discretion, (i) Buyer shall only conduct visual inspections, and (ii) Buyer shall not make excavations or test borings, drill wells, or engage in any activities in, on or around the Property that damage the Property (provided, however, that nothing herein shall prohibit Buyer or any of its engineers or contractors from performing non-invasive activities such as a Phase I environmental assessment or report, testing for mold, moisture-related conditions, asbestos and asbestos containing materials, seismic evaluations, air quality tests or any similar test which does not result in any material damage to the Property) and (c) Buyer’s investigation of the Property shall be subject to the rights of existing tenants. Buyer’s right of entry onto the Property shall be for the limited purpose of performing such surveys, tests, inspections and investigations, and tenant interviews and Buyer shall have no right to use the Property for any other purpose until after the Closing. Buyer shall conduct such surveys, tests, inspections and investigations in a manner not unreasonably disruptive to tenants or to the operation of the Property. Notwithstanding anything to the contrary contained herein, Seller shall request of California Casualty Management Company that Buyer have the opportunity to conduct one or more interviews and other meetings with representatives of California Casualty Management Company without any representatives or agents of Seller being present, provided that Seller shall not be in default of this Agreement if California Casualty Management Company refuses to

agree, and provided further that Seller shall not be required to make any indemnity, representation or further assurance to California Casualty Management Company in order to cause that tenant to agree to meet with Seller. Seller shall also make available for inspection by Buyer copies of the documents and other materials that the property manager currently maintains in its possession or are otherwise reasonably available to Seller or Seller’s property manager, Seagate Properties, Inc. (“Seagate”), including, without limitation, the documents and other materials listed on Schedule 5(a) (collectively, the “Due Diligence Documents”). For the purposes of this Agreement, any item in the possession of or control of Seagate relating to the Property and in the property management office at the Property or at Seagate’s corporate office shall be deemed to be under the possession and control of Seller. Notwithstanding any provision hereof to the contrary, Buyer shall not have the right to review or copy any Excluded Documents. “Excluded Documents” are documents involving Seller’s financing or refinancing of the Property, any purchase or escrow agreements, any correspondence pertaining to Seller’s acquisition of the Property, any documents pertaining to the potential acquisition of the Property by any past or prospective purchaser (excluding any due diligence investigation reports, if any, received by Seller from any such prospective purchaser), appraisals of the Property, internal budgets, internal financial projections, analyses, documents or provisions of documents which are subject to confidentiality covenants, and any other internal or confidential, privileged or proprietary documents or communications. Before entering the Property, Buyer shall obtain and furnish to Seller a certificate of insurance showing that Buyer maintains commercial general liability insurance with a reputable insurer licensed in the state in which the Property is located, with a Best’s rating of A10 or better, providing minimum limits of liability of One Million Dollars ($1,000,000) per occurrence, Two Million Dollars ($2,000,000) aggregate, with an umbrella excess liability policy in minimum amount of Five Million Dollars ($5,000,000) per occurrence bodily injury/ property and Five Million Dollars ($5,000,000) aggregate damage/occurrence, naming Seller as an additional insured. Such certificate shall expressly provide that such insurance may not be canceled or reduced in scope or coverage without at least thirty (30) days’ prior written notice to Seller.

          (b) On or before the expiration of the Due Diligence Period, Buyer shall have the right, in Buyer’s sole and absolute discretion, to terminate this Agreement, by delivering to Seller written notice of its decision to terminate this Agreement. If Buyer elects to terminate this Agreement, all documents and funds (including, without limitation, the Deposit), except the Independent Consideration, previously deposited into escrow shall be returned to the party so depositing same and neither party shall have any further liability to the other hereunder, except as otherwise provided herein. If Buyer does not elect to terminate this Agreement on or before the expiration of the Due Diligence Period, then Buyer shall be deemed to have waived such termination right under this Section 5(b).

          (c) Buyer shall (i) indemnify, defend and hold Seller harmless from and against any and all liability, claims, demands, damages or expenses of any kind, including reasonable attorneys’ fees, directly or indirectly caused by Buyer’s entry upon or activities at the Property or the making of such tests and investigations, and (ii) restore the Property as nearly as practicable to the condition existing immediately prior to the performance of such tests and investigations. Notwithstanding the foregoing, Buyer’s indemnification obligations hereunder shall expressly exclude consequential or punitive damages, and Buyer shall have no liability arising out of the discovery of any liabilities, conditions or other matters at the Property which

Buyer did not cause, contribute to or exacerbate. This subsection 5(c) shall have survive the termination of, or the closing of the transactions contemplated by, this Agreement.

          (d) If the Closing does not take place for any reason whatsoever, Buyer shall not, directly or indirectly, disclose to any person or party or use in any manner any information of Seller acquired by Buyer with respect to Seller or the Property, except as may be required by law or as may be necessary to comply with any applicable federal or state securities laws, rules, or regulations or in connection with filings made with the Securities and Exchange Commission, the New York Stock Exchange or any similar agency or body; provided, however, the foregoing shall not prohibit Buyer, its affiliates or any entity advised by its affiliates, from disclosing (i) any such information if required by subpoena or other legal action in connection with any agency, administrative, regulatory or other similar filing, report or disclosure by any such parties, (ii) as may be necessary in connection with any court action or proceeding with respect to this Agreement provided the Buyer provides Seller with prompt written notice of such request so that Seller may seek an appropriate protective order and/or waive Buyer’s compliance, or (iii) any information published as public knowledge or which is generally available in the public domain. Upon termination of this Agreement for any reason other than Closing, Buyer shall return to Seller any and all documents, information and property of Seller in Buyer’s possession and shall also deliver to Seller copies of all surveys and third-party reports prepared for the benefit of Buyer in connection with the Property, without representation, warranty or liability of any kind. This subsection 5(d) shall survive the termination of this Agreement.

     6. ESTOPPEL CERTIFICATES AND SNDAS.

     As a condition to Closing, Seller shall obtain and deliver to Buyer Acceptable Estoppel Certificates (as hereinafter defined) from (i) all Major Tenants (as hereinafter defined), and (ii) from a sufficient number of non-Major Tenant’s such that, when considered with the estoppel certificates received from Major Tenants, Buyer shall have received Acceptable Estoppel Certificates from tenants occupying 82% of the leased area of the Property (the Acceptable Estoppel Certificates described in clauses (i) and (ii), the “Required Estoppel Certificates”); provided, however, Seller shall request Acceptable Estoppel Certificates from all tenants of the Property. Seller shall use commercially reasonable efforts to obtain and deliver the Required Acceptable Estoppel Certificates to Buyer prior to the expiration of the Due Diligence Period, and shall deliver to Buyer a copy of each executed Required Estoppel Certificate and any other estoppel certificate that Seller obtains not later than one (1) business days after receipt thereof. Seller shall have no obligation to update any such estoppel certificate prior to Closing. In order to facilitate the timely receipt of Acceptable Estoppel Certificates, (x) Seller shall prepare drafts of the estoppel certificates, utilizing the form attached as Schedule 6A, for all tenants except California Casualty Management Company, for which Seller shall use the form attached as Schedule 6B (either form, as applicable, the “Approved Estoppel Form”) with the requisite information completed for the applicable tenant, and submit such drafts to Buyer for its review promptly upon execution of this Agreement, (y) Buyer shall either approve or request changes to such drafts within three (3) business days after Buyer’s receipt thereof, and (z) provided Buyer shall have approved the applicable estoppel certificate(s), Seller shall submit the same to the tenants of the Property promptly. As used herein, the term “Major Tenants” shall mean California Casualty Management Company, Mark Logic and CFN.

     For purposes hereof, the term “Acceptable Estoppel Certificate “ shall mean either (i) an estoppel certificate in the form of the Approved Estoppel Form; (ii) an estoppel certificate in the form the Approved Estoppel Form with such deletions or changes thereto made by the tenant so long as such estoppel certificate contains, at a minimum, the matters which such tenant is required to address in an estoppel certificate as required by such tenant’s Tenant Lease; (iii) an estoppel certificate in the form required by such tenant’s Tenant Lease (provided Seller first requests such tenant to provide an estoppel certificate in the form of the Approved Estoppel Form); or (iv) with respect to California Casualty Management Company, an estoppel certificate on the Approved Estoppel Form set forth on Schedule 6B; provided, however, notwithstanding the foregoing, (i) an estoppel certificate shall be deemed an Acceptable Estoppel Certificate only to the extent that such estoppel certificate does not reveal any material adverse matters, and (ii) the tenant estoppel certificate from California Casualty Management Company shall not be acceptable unless it is in the form described in subsection (iv) above, and is in compliance with the terms and provisions of California Casualty Management Company’s Tenant Lease.

     Additionally, Seller shall submit to the tenants of the Property such subordination, non-disturbance and attornment agreements as may be requested by Buyer or Buyer’s lender; provided, however, Buyer’s receipt of such subordination, non-disturbance and attornment agreements shall not constitute a condition to Closing.

     7. OPERATION OF THE PROPERTY PRIOR TO CLOSING.

          (a) From the date of this Agreement to the Closing Date, Seller shall:

               (i) continue to maintain and operate the Property in accordance with Seller’s past practices;

               (ii) maintain and keep in full force and effect insurance on the Property in amounts currently in effect; and

               (iii) comply with the terms and provisions of all existing Tenant Leases and Service Contracts in all material respects;

               (iv) deliver written notice to Buyer of any defaults under the Tenant Leases which are known (or become known) to Seller;

               (v) deliver to Buyer any written notice received by Seller relating to the Property from any governmental authority, insurance carrier or tenant;

               (vi) not make any material alterations to the Property without the prior written consent of Buyer other than as required under the Tenant Leases or by law (and, in the event any such alterations are so required, Seller shall promptly notify Buyer prior to the commencement thereof);

               (vii) not enter into any contract or agreement regarding the sale, financing or other disposition of all or any part of, or any interest in, the Property or authorize any broker, agent or other party to do so on its behalf;

               (viii) not sell, assign, or convey any right, title or interest whatsoever in or to the Property, or create or permit to exist any lien, encumbrance, or charge thereon (other than the Permitted Exceptions);

               (ix) update all documents delivered, or made available, to Buyer pursuant to this Agreement from time to time, as appropriate and provide Buyer with copies of such updates; and

               (x) not knowingly take or omit to take any action that would have the effect of violating any of the representations, warranties, covenants, and agreements of Seller contained in this Agreement.

          (b) During the period between the date of execution of this Agreement and the end of the Due Diligence Period, Seller will not enter into any new Tenant Lease or occupancy agreement affecting the Property (collectively, “New Lease”), or modify or amend in any material respect, or terminate, any of the existing Tenant Leases, without Buyer’s prior written consent in each instance, which consent shall not be unreasonably withheld. After the end of the Due Diligence Period, Seller shall not enter into any New Lease, or modify or amend in any material respect, or terminate, any of the existing Tenant Leases, without the prior written consent of Buyer, which may be withheld in Buyer’s sole and absolute discretion. Buyer shall advise Seller, in writing, whether Buyer approves or disapproves any proposed New Lease or any such proposed modification, amendment or termination, within one (1) business day after Buyer’s receipt of Seller’s written request therefor, each of which requests shall be accompanied by (i) a term sheet describing the material terms of the proposed transaction, and (ii) appropriate financial information on the applicable tenant and such other information as Buyer may reasonably require. If Buyer fails to notify Seller within such one (1) business day period, Buyer shall be deemed to have disapproved the proposed transaction. Notwithstanding the foregoing, prior to executing any such New Lease or any modification, amendment or termination of any existing Lease, Seller shall provide Buyer with copies of the execution versions thereof, and in the event such New Lease, modification, amendment or termination varies in any material respect from the terms identified in the term sheet previously provided to and approved by Buyer, Buyer shall again have the right to approve such New Lease, modification, amendment or termination and shall advise Seller, in writing, of Buyer approval or disapproval, within three (3) business day after Buyer’s receipt of such execution versions thereof.

          (c) If Buyer timely disapproves of any proposed New Lease or any proposed modification, amendment or termination of an existing Tenant Lease, (x) prior to the expiration of the Due Diligence Period, Seller may nevertheless enter into such transaction (provided, however, Buyer shall have no responsibility or liability for any free rent, tenant improvement allowances, brokerage commissions or other costs and expenses arising out of or in connection therewith, and Seller shall be solely liable therefor), or (y) after the expiration of the Due Diligence Period, Seller shall not enter into such New Lease. As of Closing, Buyer shall assume and be responsible for (and to the extent previously paid by Seller, reimburse Seller on the date of Closing for) any and all tenant improvement allowances, brokerage commissions and out-of- pocket costs and expenses actually paid or incurred by Seller arising out of or in connection with only those New Leases approved (or deemed approved) by Buyer and entered into by Seller pursuant to the foregoing provisions of subsection 7(b) and this subsection (c). Seller shall pay

or provide an appropriate credit to Buyer at Closing for all other free rent, tenant improvement allowances, brokerage commissions and out-of-pocket costs and expenses (i) arising under New Leases or modification or amendments of existing Tenant Leases not approved by Buyer as provided in clause (x) above, and (ii) which are due and payable under any Tenant Leases existing as of the date hereof.

          (d) After the date hereof, Seller shall not, without Buyer’s prior consent in each instance (which consent shall not be unreasonably withheld, conditioned or delayed), enter into any new Service Contracts affecting the Property, except for agreements which are terminable on or prior to Closing, which agreements shall be terminated by Seller on or before Closing. Buyer shall advise Seller in writing whether Buyer approves or disapproves any such new agreements, modifications or terminations requiring its approval within three (3) business days after Buyer’s receipt of the proposed document. If Buyer fails to notify Seller within such period, Buyer shall be deemed to have approved the proposed document. All new Service Contracts approved or deemed approved by Buyer under this subsection (d), as well as any existing Service Contract which Buyer does not elect to have Seller terminate at Closing as hereinafter provided, shall be assigned to and assumed by Buyer upon Closing pursuant to the Assignment of Service Contracts and Intangible Property (as hereinafter defined). On or prior to the last day of the Due Diligence Period, Buyer shall advise Seller in writing of any existing Service Contracts which Buyer requires Seller to terminate at Closing, and Seller shall terminate all such designated Service Contracts effective as of the Closing Date, and all termination fees or other expenses required in connection therewith shall be paid by Seller at or prior to Closing.

     8. REPRESENTATIONS AND WARRANTIES.

          (a) Seller represents and warrants to Buyer as follows:

               (i) Seller is and will be on the Closing Date a general partnership duly organized and validly existing under the laws of the State of Ohio, and qualified to do business in the State of California, and Seller has and will have on the Closing Date all necessary power and authority to: (A) carry on the business for which it has been organized; (B) own and operate the Property; and (C) enter into and perform Seller’s obligations under this Agreement.

               (ii) Seller has taken all actions required to be taken under the laws of the State of Ohio and under Seller’s partnership agreement to approve or authorize the execution and delivery of this Agreement and consummation of the transactions contemplated in this Agreement.

               (iii) Neither the execution of this Agreement nor the consummation of the transactions contemplated in this Agreement will constitute a violation of, be in conflict with, or constitute a default under (or with the passage of time or delivery of notice, or both, would constitute a default under) any term or provision of Seller’s partnership agreement or any other agreement, lease, or other instrument to which the Property is bound.

               (iv) Seller has no employees performing services at the Property.

               (v) To Seller’s knowledge, except as disclosed on Schedule 8(a)(v), which is attached to and made a part of this Agreement (as such Schedule may be updated in

writing by Seller prior to the Closing, subject to the terms of the last paragraph of this subsection 8(a)), no litigation, proceeding, or action is pending or threatened against or relating to the Property or Seller.

               (vi) No condemnation proceeding is pending or threatened against or, to Seller’s knowledge, relating to the Property.

               (vii) As of the Closing, except for the Tenant Leases and the Service Contracts assumed (or deemed assumed) by Buyer in accordance with this Agreement, there will not be any outstanding contracts for any improvements to the Property or any other contracts affecting or in any way relating to the Property, including any construction, management, leasing or listing agreements, or any other written or oral agreements with adjacent or nearby property owners or lessees, or other third parties, which will be binding on Buyer.

               (viii) To Seller’s actual knowledge, the rent roll attached hereto as Schedule 8(a)(viii) is a true copy of such rent roll for the Property prepared by Seller’s property manager, Seagate Properties, Inc., as of the date set forth thereon in the ordinary course of business; however, such rent roll is not certified and constitutes only the working rent roll utilized by Seagate Properties, Inc. in the ordinary course of its business in operating the Property as of the date set forth thereon. Any item in the possession of Seagate Properties, Inc. shall be deemed to be under the control of Seller.

               (ix) As to the Tenant Leases,

                    (1) complete, true, and correct copies of all Tenant Leases disclosed on Schedule l(d), including all modifications and amendments thereof or thereto have been delivered to Buyer or have been made available to Buyer in the office of Seller’s property manager;

                    (2) except as disclosed on Schedule 8(a)(ix)(2), which is attached to and made a part of this Agreement (as such Schedule may be updated in writing by Seller prior to the Closing, subject to the terms of the last paragraph of this subsection 8(a)), to Seller’s knowledge, neither Seller nor any tenant under any Tenant Lease is in default under any Tenant Lease, and no condition exists nor has any event occurred that by notice, the passage of time, or otherwise, would constitute an event of default under any Tenant Lease; and

                    (3) to Seller’s knowledge, the rents and other charges set forth on the Rent Roll are the actual rents and other charges presently being collected by Seller under the Tenant Leases for the calendar months immediately preceding the date of this Agreement, no tenant is entitled to any free rent, concessions, improvement or refurbishment allowances, rebates or refunds, except as set forth on the Rent Roll or in any Tenant Lease; and except as set forth on the Rent Roll or in any Tenant Lease, no tenant has prepaid any rents or other charges for more than one (1) month in advance.

               (x) As to the Service Contracts,

                    (1) complete, true, and correct copies of all written Service Contracts disclosed on Schedule l(e), including all modifications and amendments thereof or thereto, have been delivered to Buyer; and

                    (2) except as disclosed on Schedule 8(a)(x)(2) which is attached to and made a part of this Agreement (as such Schedule may be updated in writing by Seller prior to the Closing, subject to the terms of the last paragraph of this subsection 8(a)), to Seller’s knowledge, neither Seller nor any other party under any Service Contra