Exhibit 10.27

 

AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY

 

LAGUNA MEDICAL OFFICE PORTFOLIO

 

UC DAVIS MEDICAL BUILDING

8110 LAGUNA BOULEVARD, ELK GROVE, CA 95758

 

AND

 

LAGUNA PROFESSIONAL CENTER

9390-9394 BIG HORN BOULEVARD, ELK GROVE, CA 95758

 

THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY (this “Agreement”) is made
and entered into as of the Effective Date by and among AR CAPITAL, LLC, a
Delaware limited liability company (“Buyer”), as buyer, and JACKSON-LAGUNA, a
California general partnership (“UCD I Seller”), as to an undivided 88.15%
interest in the UCD Property (defined below), JACKSON II, LLC, a California
limited liability company (“UCD II Seller”; UCD II Seller and UCD I Seller are
referred to herein, individually and collectively, as “UCD Seller”), as to an
undivided 11.85% interest in the UCD Property, and JACKSON-BIG HORN, LLC, a
California limited liability company (“Laguna Professional Seller”; Laguna
Professional Seller and UCD Seller are referred to herein, individually and
collectively, as “Seller”), as seller.

 

BACKGROUND

 

A.          UCD I Seller, as to an undivided 88.15% interest, and UCD II Seller,
as to an undivided 11.85% interest, are the fee owners of the Land (defined
below) described on Exhibit A-1 attached hereto and made a part hereof (the “UCD
Land”).

 

B.          Laguna Professional Seller is the fee owner of the Land (defined
below) described on Exhibit A-2 attached hereto and made a part hereof (the
“Laguna Professional Land”).

 

C.          Buyer desires to purchase the Property (defined below) and Seller
desires to sell the Property to Buyer on the terms and conditions set forth in
this Agreement.

 

In consideration of the mutual promises set forth herein and for other good and
valuable consideration (including the payment of One Hundred Dollars ($100.00)
by Buyer to Seller (the “Nonrefundable Consideration”), which is independent
Nonrefundable Consideration to Seller with respect to the rights provided to
Buyer under this Agreement), the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

 

1.          Terms and Definitions. The terms listed below shall have the
respective meaning given them as set forth adjacent to each term.

 

(a)          “Broker” shall mean Palmer Capital, LLC, acting as Seller’s agent.

 

 

 

 

(b)          “Closing” shall mean the date that the Purchase Price (less
prorations and other adjustments pursuant to the terms of this Agreement) is
released to Seller, which shall occur, subject to any applicable extension
periods set forth in this Agreement, on the date that is five (5) business days
following the expiration of the Due Diligence Period (as defined herein) unless
the Buyer waives the full Due Diligence Period and elects to close earlier by
providing written notice thereof to Seller. The date of Closing is sometimes
hereinafter referred to as the “Closing Date.” Neither party will need to be
present at Closing, it being anticipated that the parties will deliver all
Closing documents and deliverables in escrow to the Escrow Agent (or if both
Buyer and Seller agree, to Buyer’s and/or Seller’s counsel) prior to the date of
Closing.

 

(c)          “Due Diligence Period” shall mean the period beginning upon the
Effective Date and extending until 11:59 PM EDT on the date that is the earlier
to occur of (i) twenty-five (25) days thereafter, or (ii) the date on which
Seller receives written notice of Buyer’s waiver of the Due Diligence Period.
Seller shall deliver to Buyer all of the Due Diligence Materials within five (5)
business days after the Effective Date.

 

(d)          “Earnest Money” shall mean One Million Two Hundred Fifty Thousand
and No/100 Dollars ($1,250,000.00). The Earnest Money shall be delivered to
Escrow Agent within three (3) business days after the Effective Date. The
Earnest Money shall be deposited by Buyer in escrow with Escrow Agent, to be
applied as part payment of the Purchase Price at the time of Closing, or
disbursed as agreed upon in accordance with the terms of this Agreement. Seller
and Buyer each shall pay one-half of all reasonable escrow fees charged by
Escrow Agent.

 

(e)          “Effective Date” The date that is one (1) business day after the
date of execution and delivery of this Agreement by both Seller and Buyer shall
be the “Effective Date” of this Agreement.

 

(f)          “Escrow Agent” shall mean Stewart Title Guaranty Company, whose
address is One Washington Mall - Suite 1400, Boston, MA 02108, Attention:
Annette Comer, Telephone: 617-933-2441, Telecopy: 617-727-8372; E-Mail:
acomer@stewart.com. The parties agree that the Escrow Agent and Buyer’s title
agent, if any, shall be responsible for (x) organizing the issuance of the Title
Commitment (hereinafter defined) and Title Policy (hereinafter defined), (y)
preparation of the closing statement, and (z) collections and disbursement of
the funds.

 

(g)          “Guarantor” shall mean each guarantor of the Leases.

 

(h)          “Guaranty” shall mean each guaranty executed by a Guarantor.

 

(i)           “Laguna Professional Property” shall mean the Laguna Professional
Land and all matters described in (ii)-(vii) of the definition of “Property” in
connection with the Laguna Professional Land.

 

(j)           “Leases” shall mean those certain Leases described on Exhibit A-3
attached hereto and made a part hereof and referred to in Section 6(b)(i) of
this Agreement between Seller, as landlord, and the tenants described on Exhibit
A-3 attached hereto, as tenant (each tenant, individually, a “Tenant”, and
collectively, the “Tenants”), as amended. Each of the Leases may be referred to
herein individually as a “Lease” or the “Lease”).

 

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(k)         “Property” shall collectively mean (i) those certain parcels of real
property which are listed on Exhibits A-1and A-2 attached hereto, together with
all right, title and interest, if any, of Seller in and to the land lying in the
bed of any street or highway in front of or adjoining such real property, and
all appurtenances and all the estate and rights, if any, of Seller in and
appurtenant to such parcels of real property, including, without limitation, all
appurtenant easements and rights-of-way, and Buildings (as hereinafter defined)
and all other improvements thereon, and all air and subsurface rights
appurtenant to such parcels of real property, as the case may be (such parcels
of real property, together with all such rights and appurtenances, being
collectively referred to herein as the “Land”); (ii) all of the buildings (each
individually called a “Building” and collectively called the “Buildings”),
facilities and other improvements situated on the Land or required to be
constructed under the respective Leases (collectively, the “Improvements”);
(iii) all right, title and interest, if any, of Seller in and to the lighting,
electrical, mechanical, plumbing and heating, ventilation and air conditioning
systems used in connection with the Land and the Buildings, and all carpeting,
draperies, appliances and other fixtures and equipment permanently attached or
appurtenant to the Land together with all tangible personal property (other than
furniture, equipment not necessary to operate the Buildings or building systems
and not permanently affixed to the Buildings or Land, trade fixtures and
inventory) owned by Seller and located on the Land or on and/or in the Buildings
and used exclusively in connection with the Buildings and Land (collectively,
the “Personal Property”); (iv) all right, title and interest, if any, of Seller
in and to all plans and specifications, architectural drawings, building permits
and other permits issued in connection with the construction, operation, use or
occupancy of the Improvements, and all warranties and guaranties respecting the
Buildings and Personal Property; (v) to the extent not otherwise described in
subsection (i), all right, title and interest of Seller in and to all leases
respecting the Buildings and Personal Property, including, without limitation,
all prepaid rent or security or other deposits thereunder and all right, title
and interest of the Affiliates under the Guaranties; (vi) all right, title and
interest, if any, of Seller in and to all licenses, permits, authorizations and
approvals issued by any governmental agency or authority which pertain solely to
the Land and the Buildings, to the extent they exist and are transferable and
assignable; and (vii) to the extent the same are assignable, Seller’s interest,
if any, in all site plans, surveys, and plans which relate to the Land. Any
references to “Property” in the singular, such as references to “a Property” or
“each Property”, refer to an individual parcel of Land and all matters described
in (ii)-(vii) in connection with such Land.

 

(l)         “Purchase Price” shall mean Twenty Seven Million Five Hundred
Thousand and No/100 Dollars ($27,500,000.00).

 

(m)        “Real Estate Taxes” shall mean all real estate taxes, personal
property taxes, water and sewer use charges, or payments in lieu of taxes, and
any other charges and assessments constituting a lien on the Property.

 

(n)         Seller and Buyer’s Notice address

 

(i)          “Seller’s Notice Address” shall be as follows, except as same may
be changed pursuant to the Notice section herein:

 

c/o Jackson Properties, Inc.

 

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5665 Power Inn Road, Suite 140

Sacramento, CA 95824

Attn: John Jackson, Jr.

Tel. No.: (916) 381-8113

Fax No: (916) 381-3153

Email: jjackson@jacksonprop.com

 

And to:

 

c/o Jackson Properties, Inc.

5665 Power Inn Road, Suite 140

Sacramento, CA 95824

Attn: Gregg Mason

Tel. No.: (916) 381-8113

Fax No: (916) 381-3153

Email: gmason@jacksonprop.com

 

And to:

 

Stewart Ward & Josephson LLP

1601 Response Rd., Suite 390

Sacramento, CA 95815

Attn: Thomas F. Stewart, Esq.

Tel. No.: (916) 569-8121

Email: tstewart@swjllp.com

 

(ii)         “Buyer’s Notice Address” shall be as follows, except as same may be
changed pursuant to the Notice section herein:

 

Michael Weil

c/o AR Capital, LLC

405 Park Avenue, 15th Floor

New York, NY 10022

Tel. No.: (212) 415-6505

Fax No.: (857) 207-3397

Email: mweil@arlcap.com

 

And to:

 

Jesse Galloway, Esq.

c/o AR Capital, LLC

405 Park Avenue, 15th Floor

New York, NY 10022

Tel. No.: (212) 415-6516

Fax No.: (646) 861-7751

Email: jgalloway@arlcap.com

 

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And Due Diligence Materials (if provided by email) to:

 

duediligence@arlcap.com

 

With hard copies and/or cds to:

 

James A. (Jim) Mezzanotte

c/o AR Capital, LLC

7621 Little Avenue, Suite 200

Charlotte, North Carolina 28226

Tel. No.: (704) 626-4410

Fax No.: (212) 415.6507

Email: jmezzanotte@arlcap.com

 

(o)          “UCD Property” shall mean the UCD Land and all matters described in
(ii)-(vii) of the definition of “Property” in connection with the UCD Land.

 

2.           Purchase and Sale of the Property. Subject to the terms of this
Agreement, Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, the Property for the Purchase Price.

 

3.           Payment of Purchase Price.

 

(a)          The Purchase Price to be paid by Buyer to Seller shall be paid by
wire transfer of immediately available funds in the amount of the Purchase Price
plus or minus prorations, credits and adjustments as provided in Section 4 and
elsewhere in this Agreement to Escrow Agent, at the time of Closing, or as
otherwise agreed to between Buyer and Seller. The allocation of the Purchase
Price and Earnest Money among the Properties is set forth on Schedule 3(a)
attached hereto.

 

(b)          The parties agree that the value of the Personal Property is de
minimis, and no part of the Purchase Price is allocated to it.

 

4.           Proration of Expenses and Payment of Costs and Recording Fees.

 

(a)          Prorations. The following items will be prorated as of 12:01 A.M.
on the Closing Date, with all items of income and expense for the Property being
borne by Buyer from and after (and including) the Closing Date: Tenant
Receivables (hereinafter defined) and other income and rents that have been
collected by Seller as of Closing; fees and assessments; prepaid expenses and
obligations under service contracts which are assigned, if any; accrued
operating expenses; Real Estate Taxes; and any assessments by private covenant
for the then-current calendar year of Closing.

 

(b)          Taxes

 

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(i)          All non-delinquent Real Estate Taxes shall be prorated as of the
Closing based on the actual current tax bill. All delinquent Real Estate Taxes,
if any, shall be paid at the Closing from funds accruing to Seller. All
supplemental taxes pursuant to this transaction that are billed or assessed
after the Closing and which are attributable to the period of time after the
Closing shall be the responsibility of Buyer.

 

(ii)         If Seller has engaged or will engage prior to the expiration of the
Due Diligence Period, consultants for the purpose of protesting the amount of
taxes or the assessed valuation for certain tax periods for the Property
(“Protest Proceedings”), any cash refunds or proceeds actually distributed
(collectively, “Cash Refunds”) will be apportioned as described below. Any Cash
Refunds (including interest thereon) on account of a favorable determination,
after deduction of costs and expenses incurred for such Protest Proceedings,
shall be: (A) the property of Seller to the extent such Cash Refunds were for
Real Estate Taxes paid by Seller applicable to a period prior to the Closing
Date; (B) prorated between Buyer and Seller for taxes paid for a period during
which the Closing Date occurred; and (C) the property of Buyer for Real Estate
Taxes for a period after the Closing Date. Seller and Buyer agree to notify the
other in writing of any receipt of a Cash Refund within fifteen (15) business
days of receipt of such Cash Refund. To the extent either party obtains a Cash
Refund, a portion of which is owed to the other party, the receiving party shall
deliver the Cash Refund to the other party within fifteen (15) Business Days of
its receipt. Buyer agrees and acknowledges that Seller has the right to initiate
proceedings to protest the valuation of any of the Property prior to the
expiration of the Due Diligence Period. Seller agrees to give Buyer notice of
Seller’s intent to initiate such proceedings prior to initiation of such
proceedings and at any time subsequent to the end of the Due Diligence Period
shall obtain Buyer’s consent to initiation of such proceedings, which consent
may be unreasonably withheld.         

 

(c)          Utilities. Buyer will take all steps necessary to effectuate the
transfer of all utilities to its name as of the Closing Date, and where
necessary, post deposits with the utility companies. The Seller will ensure that
all utility meters are read as of the Closing Date. Seller will be entitled to
recover any and all deposits held by any utility company as of the Closing Date.

 

(d)          Tenant Receivables. Rents due from Tenants under Leases (including
operating expense and real estate tax contributions or reimbursements and
similar charges (collectively, “Pass-Through Expenses”)), set-offs due or
required to be paid under or by reason of the Leases (collectively called
“Tenant Receivables”) shall be adjusted by appropriate credit to the Seller or
Buyer (as the case may be) on the Closing Date. If, at the Closing Date, any
Tenant is in arrears in the payment of rents (“Uncollected Delinquent Tenant
Receivables”), Seller will disclose the same to Buyer in writing or on the rent
roll to be delivered to Buyer pursuant to Section 10 hereof and such amounts
shall not be adjusted on the Closing Date. Prior to the Closing Date, Seller
shall use Seller’s current business practices to collect Uncollected Delinquent
Tenant Receivables, but shall not be obligated to pursue an eviction proceeding.
If Buyer shall collect Uncollected Delinquent Tenant Receivables within ninety
(90) days after the Closing Date, then Buyer shall turn over to Seller the
arrearages so collected, less the reasonable cost of collection thereof, if any;
provided, however, Seller may continue to seek to collect the Uncollected
Delinquent Tenant Receivables by legal action following the Closing Date. All
rents collected by Buyer after the Closing Date (except for amounts specifically
billed and paid

 

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as end of year reconciliation payments for Pass-Through Expenses, which shall be
separately accounted for and allocated, pro rata, between Seller and Buyer as
their interest may appear) shall be first applied to rents due and payable after
the Closing Date and only the excess thereof shall be paid over to Seller on
account of the Uncollected Delinquent Tenant Receivables. Seller shall prepare
the reconciliation for Pass-Through Expenses for the Property and provide such
reconciliation to Buyer and Buyer’s property manager. Buyer agrees to cause its
property manager to cooperate with Seller in preparing such reconciliation. To
the extent that items to be apportioned hereunder may be required to be paid
directly by a Tenant under its Lease, the same shall not be apportioned,
provided, however, that such items shall have been paid by such Tenant currently
through the month including the Closing Date. The provisions of this
subparagraph 4(d) shall survive Closing and the delivery of the Deed
(hereinafter defined). Seller expressly agrees that if Seller receives any
amounts after the Closing Date which are attributable, in whole or in part, to
any period after the Closing Date, Seller will notify Buyer of such fact and
will remit to Buyer that portion of the monies so received by Seller to which
Buyer is entitled within ten (10) business days after receipt thereof. With
respect to unbilled Tenant Receivables, Buyer covenants and agrees to cause its
property manager to (A) bill the same in the ordinary course of its business and
(B) cooperate with Seller to determine the correct amount of operating expenses
and/or taxes due.

 

A reconciliation or determination of Pass-Through Expenses, Uncollected
Delinquent Tenant Receivables and unbilled Tenant Receivables due under the
Leases shall be made at Closing to the extent possible. To the extent such
information is not available at Closing, the foregoing shall be subject to
adjustment following the Closing in accordance with the terms of Section 4(e),
below. The provisions of this Section 4(d) will survive the Closing.

 

(e)          If final bills are not available or cannot be issued prior to
Closing for any item being prorated under Section 4(a) through (d), then, for
each separate item for which an adjustment is to be made, the following will
apply: (i) initially the matter subject to allocation at Closing (including
without limitation the Pass-Through Expenses) shall be re-prorated within sixty
(60) days following the Closing; and (ii) a final adjustment of prorated items
shall occur one hundred twenty (120) days following the close of the calendar
year in which the Closing occurs. All such rights and obligations under this
Section 4(e) will survive the Closing.

 

(f)          All security deposits under the Leases collected and not properly
applied by Seller as of the Closing (and interest thereon if required by law or
contract) must be transferred or credited to Buyer at Closing. As of the
Closing, Buyer will assume each Seller’s obligations related to the security
deposits, but only to the extent they are credited or transferred to Buyer.

 

(g)          Seller shall pay or be charged with the following costs and
expenses in connection with this transaction:

 

(i)          Up to $15,000 of the premium for the Title Policy attributable to
standard CLTA coverage, including search costs, but excluding any other
endorsements issued in connection with such policies, other than endorsements
that Seller elects to purchase to cover title issues, if any;

 

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(ii)         Transfer taxes and conveyance fees on the sale and transfer of the
Property;

 

(iii)        Broker’s commission payments in accordance with Section 24 of this
Agreement;

 

(iv)        All fees relating to the granting, executing and recording of the
Deed for the Property; and

 

(v)         Any leasing commissions, tenant improvement allowances or rent
abatements related to the Leases, including the Khattab Amendment (defined
below).

 

(h)          Buyer shall pay or be charged with the following costs and expenses
in connection with this transaction:

 

(i)          Title Policy premiums (A) in excess of Seller’s maximum obligation
set forth in Section 4(g)(i) above and (B) for any endorsements issued in
connection therewith, other than endorsements that Seller elects to purchase to
cover title issues, if any;

 

(ii)         All costs and expenses in connection with Buyer’s financing,
including appraisal, points, commitment fees and the like and costs for the
filing of all documents necessary to complete such financing and related
documentary stamp tax and intangibles tax; and

 

(iii)        Buyer shall pay for the cost of its own survey, Phase I
environmental study and due diligence investigations.

 

(i)          Each party shall pay its own legal fees incidental to the
negotiation, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.

 

(j)          Seller and Buyer each shall pay one-half of all reasonable escrow
fees charged by Escrow Agent.

 

5.           Title. At Closing, Seller agrees to convey to Buyer fee simple
title to the Land and Improvements by the Deed (as defined below), subject to
the Permitted Exceptions (as hereinafter defined).

 

6.           Examination of Property. Seller and Buyer hereby agree as follows:

 

(a)          Buyer shall order a title commitment (the “Title Commitment”) from
Escrow Agent, a survey and a zoning report for each Property promptly after the
date hereof. All matters shown in the Title Commitment, survey or zoning report
(“Title Matters”) with respect to which Buyer fails to object prior to the
expiration of the Due Diligence Period shall be deemed “Permitted Exceptions”.
The Permitted Exceptions shall in all events include (i) a lien for Real
Property Taxes not then delinquent; (ii) matters affecting the condition of
title to the Property created by or with the written consent of Buyer; (iii)
zoning or permit conditions; and (iv) the Leases. However, Permitted Exceptions
shall not include, and Seller shall be obligated to remove of record (or cause
the Title Company to insure against by payment, bond deposit or

 

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indemnity acceptable to Escrow Agent) prior to or at Closing, any mechanic’s
lien or any monetary lien, fine or penalty, or any deeds of trust, mortgage, or
other loan documents secured by the Property, or any judgments and federal and
state tax liens (collectively, “Liens”). Seller shall be required to cure or
remove all Liens (by payment, bond deposit or indemnity acceptable to Escrow
Agent). Seller shall have no obligation to cure any Title Matter objected to,
except the Liens as aforesaid, and those Title Matters, if any, that Seller
notifies Buyer as to which Seller elects to remove or cure within five (5)
business days following receipt of Buyer’s objections; Seller’s failure to
deliver such written notice shall be deemed Seller’s election not to cure or
remove such Title Matter. The parties agree that (i) except as expressly
provided in this Agreement, Seller makes no express or implied warranties
regarding the condition of title to the Property, (ii) Buyer shall rely on the
Title Policy for protection against any title defects, and (iii) except as
expressly provided in this Section 6(a), Seller shall have no obligation to cure
any Title Matters. In the event that Seller refuses to remove or cure any
objections, Buyer shall have the right to terminate this Agreement upon written
notice to Seller given within five (5) business days after receipt of Seller’s
notice, upon which termination the Earnest Money, and all interest earned
thereon, shall be returned to Buyer and neither party shall have any further
obligation hereunder, except as otherwise expressly set forth herein. If any
matter not revealed in the Title Commitment is discovered by Buyer or by the
Escrow Agent and is added to the Title Commitment by the Escrow Agent at or
prior to Closing (each, a “New Exception”), Buyer shall have until the earlier
of (i) five (5) business days after the Buyer’s receipt of the updated, revised
Title Commitment showing the New Exception, together with a legible copy of any
such new matter, or (ii) the Closing Date, to provide Seller with written notice
of its objection to any such New Exception (an “Objection”). If Seller does not
remove or cure such Objection prior to the Closing Date, Buyer may, as its sole
remedy, terminate this Agreement, in which case the Earnest Money, together with
all interest earned thereon, shall be returned to Buyer, and neither party shall
have any further obligation hereunder, except as otherwise expressly set forth
herein; in addition, Seller shall reimburse Buyer up to $75,000.00 for all out
of pocket costs and expenses incurred hereunder, but only if Seller caused such
New Exception from and after the effective date of the Title Commitment and such
New Exception has a material and adverse affect on the value of the Property.

 

(b)          Within five (5) business days following the Effective Date, Seller
shall provide to Buyer copies of the following documents and materials
pertaining to each Property to the extent within Seller’s possession: (i) a
complete copy of all leases and lease guaranties affecting the Property and all
amendments thereto and of all material correspondence relating thereto; (ii) a
copy of all surveys and site plans of the Property, including without limitation
any as-built survey obtained or delivered to tenants of the Property in
connection with its construction; (iii) a copy of all architectural plans and
specifications and construction drawings and contracts for improvements located
on the Property; (iv) a copy of Seller’s title insurance commitments and
policies relating to the Property; (v) a copy of the certificate of occupancy
(or local equivalent) and zoning reports for the Property; and of all
governmental permits/approvals; (vi) a copy of all environmental, engineering
and physical condition reports for the Property; (vii) copies of the Property’s
real estate tax bills for the current and prior two (2) tax years or, if the
Property has been owned by Seller for less than two (2) tax years, for the
period of ownership; (viii) the operating budget and any common area maintenance
(CAM) reconciliations of the Property for the current year and following year,
if available; (ix) the operating statements and delinquency reports of the
Property for the twenty four (24) calendar months immediately

 

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preceding the Effective Date or if a Tenant has been operating for less than
twenty-four (24) months, for the period of operation; (x) all service contracts
and insurance policies which affect the Property, if any; (xi) a copy of all
warranties relating to the improvements constructed on the Property, including
without limitation any structural slab or roof warranties; (xii) a written
inventory of all items of personal property to be conveyed to Buyer, if any;
(xiii) Tenant financials for each Tenant, to the extent reasonably available to
Seller and consistent with each such Tenant’s reporting requirements; (xiv) a
complete copy of any feasibility study completed by the developer of the
Property (Seller hereby advises Buyer that there are none); (xv) a copy of all
primary and secondary state licenses or regulatory permits for the Property; and
(xvi) a copy of any documents relating to a waiver of life safety code or
physical plant requirements (collectively, the “Due Diligence Materials”).
Seller shall use good faith efforts to deliver any other documents relating to
the Property reasonably requested by Buyer, to the extent in Seller’s
possession, within three (3) business days following such request, provided that
such documents are not privileged, confidential or proprietary, including, but
not limited to: internal memoranda, analyses and business plans; financial
information; and correspondence and other materials to or from Seller’s
attorneys and potential third-party buyers. Additionally, during the term of
this Agreement, Buyer, its agents and designees, shall have the right to enter
the Property for the purposes of inspecting the Property, conducting soil tests,
and making surveys, mechanical and structural engineering studies, inspecting
construction, and conducting any other non-invasive investigations and
inspections as Buyer may reasonably require to assess the condition and
suitability of the Property; provided, however, that such activities by or on
behalf of Buyer on the Property shall not damage the Property nor materially
interfere with construction on the Property or the conduct of business by
Tenants under the Leases; and provided further, however, that Buyer shall
indemnify and hold Seller harmless from and against any and all claims or
damages to the extent resulting from the activities of Buyer on the Property,
and Buyer shall repair any and all damage caused, in whole or in part, by Buyer
and return the Property to substantially its condition prior to such damage,
which obligation shall survive Closing or any termination of this Agreement.
Seller shall reasonably cooperate with the efforts of Buyer and the Buyer’s
representatives to inspect the Property. After the Effective Date, Buyer shall
be permitted to speak and meet with the Tenants in connection with Buyer’s due
diligence, and Seller may, at its election, require that a Seller representative
be present during such meetings. Upon signing this Agreement, Seller shall
provide Buyer with the name of a contact person(s) for the purpose of arranging
site visits. Buyer shall give Seller reasonable written notice (which in any
event shall not be less than two (2) business days) before entering the
Property, and Seller may have a representative present during any and all
examinations, inspections and/or studies on the Property. Buyer shall have the
unconditional right, for any reason or no reason, to terminate this Agreement by
giving written notice thereof to Seller and the Escrow Agent prior to the
expiration of the Due Diligence Period, in which event this Agreement shall
become null and void, Buyer shall receive a refund of the Earnest Money, and all
rights, liabilities and obligations of the parties under this Agreement shall
expire, except as otherwise expressly set forth herein. Buyer agrees that, in
making its physical and environmental inspections of the Property, including any
due diligence activities at or about the Property, Buyer shall maintain (i)
commercial general liability insurance on an occurrence basis, including
contractual liability coverage (designating the indemnity provisions of this
section above) and broad form property damage endorsement coverage, providing
that Buyer is the named insured and that Seller and Seller’s property manager
are additional insureds, and providing liability limits of not less than

 

10

 

 

$1,000,000 combined single limit per occurrence with respect to bodily and
personal injury, death and property damage and $2,000,000 in the aggregate, (ii)
workmen’s compensation insurance at statutory limits, including employer’s
liability insurance in an amount not less than $1,000,000 as required by law,
and (iii) for any of Buyer’s consultants who conduct environmental inspections
of the Property, professional liability insurance of not less than $1,000,000.
Buyer shall provide Seller with Certificates of Insurance in form reasonably
satisfactory to Seller which evidences such insurance prior to obtaining access
to the Property. Such insurance shall contain a waiver of subrogation provision
with respect to Seller.

 

(c)          Within five (5) business days following the Effective Date, Seller
shall deliver to Buyer completed drafts of each Tenant Estoppel Certificate
(defined below) and Guarantor Estoppel Certificate (defined below) required to
be requested by Seller hereunder, and request a waiver of each Tenant’s right of
first refusal, right of first offer or other purchase option, if any, to
purchase the Property (and simultaneously provide Buyer with a copy of such
request). It shall be a condition of Closing that Seller shall have obtained an
estoppel certificate in the form attached hereto as Exhibit F or such other form
as may be required by the Lease in question (the “Tenant Estoppel Certificate”)
from each Tenant and an estoppel certificate in the form attached hereto as
Exhibit G (the “Guarantor Estoppel Certificate”) from each Guarantor, and Seller
shall use good faith efforts to obtain the same. Seller shall promptly deliver
to Buyer photocopies or pdf files of each executed Tenant Estoppel Certificate
and Guarantor Estoppel Certificate when Seller receives the same. Buyer’s
failure to notify Seller of any objections to any executed estoppel certificate
within four (4) business days of Buyer’s receipt of the same shall constitute
Buyer’s acknowledgement that such estoppel certificate satisfies the
requirements of this Section.

 

(d)          Intentionally Omitted.

 

(e)           Seller shall use good faith efforts to obtain estoppel
certificates with respect to reciprocal easement agreements (each, an “REA”) as
may be reasonably requested by Buyer in writing, provided that such request (i)
is accompanied by a commercially reasonable form of estoppel that is consistent
with the terms of the REA in question, and (ii) is made prior to the expiration
of the Due Diligence Period.

 

(f)           Seller represents that Seller and Mahmoud Khattab, an individual,
have entered into that certain Lease Amendment No. Three, dated May 1, 2014, for
the 1,352 square foot space at the Laguna Professional Property known as Suite
145 (the “Khattab Amendment”). A copy of the Khattab Amendment shall be included
in the Due Diligence Materials to be provided to Buyer. At Closing, Seller shall
escrow with Escrow Agent an amount equal to one hundred twenty-five percent
(125%) of the remaining cost of the Tenant Improvements described in Section 6
of the Khattab Amendment (the “Work Escrow”). The disbursement of the Work
Escrow will be governed by a post-closing escrow agreement to be entered into at
Closing by and among Buyer, Laguna Professional Seller and Escrow Agent (the
“Post-Closing Escrow Agreement”). The Post-Closing Escrow Agreement shall be in
form and substance mutually satisfactory to Buyer and Seller.

 

7.           Risk of Loss/Condemnation. Upon an occurrence of a casualty,
condemnation or taking with respect to any Property, Seller shall notify Buyer
in writing of same. Until

 

11

 

 

Closing, the risk of loss or damage to the Property, except as otherwise
expressly provided herein, shall be borne by Seller. In the event all or any
portion of any Property is damaged in any casualty or condemned or taken (or
notice of any condemnation or taking is issued) so that: (a) any Tenant has a
right of termination or abatement of rent under its Lease, or (b) with respect
to any casualty, if the cost to repair such casualty would exceed $50,000, or
(c) with respect to any condemnation, any Improvements or access to the Property
or more than five percent (5%) of the Property is (or will be) condemned or
taken, then, Buyer may elect to terminate this Agreement by providing written
notice of such termination to Seller within ten (10) business days after Buyer’s
receipt of written notice of such condemnation, taking or damage, upon which
termination the Earnest Money shall be returned to Buyer, and neither party
hereto shall have any further rights, obligations or liabilities under this
Agreement with respect to such Property, except as otherwise expressly set forth
herein. With respect to any condemnation or taking (of any notice thereof), if
Buyer does not elect to cancel this Agreement as aforesaid, there shall be no
abatement of the Purchase Price and Seller shall assign to Buyer at the Closing
the rights of Seller to the awards, if any, for the condemnation or taking, and
Buyer shall be entitled to receive and keep all such awards. With respect to a
casualty, if Buyer does not elect to terminate this Agreement with respect to
any such Property or does not have the right to terminate this Agreement as
aforesaid, there shall be no abatement of the Purchase Price and Seller shall
assign to Buyer at the Closing the rights of Seller to the proceeds under
Seller’s insurance policies covering such Property with respect to such damage
or destruction (or pay to Buyer any such proceeds received prior to Closing) and
pay to Buyer the amount of any deductible with respect thereto, and Buyer shall
be entitled to receive and keep any monies received from such insurance
policies.

 

8.           Earnest Money Disbursement. The Earnest Money shall be held by
Escrow Agent, in trust, and disposed of only in accordance with the following
provisions:

 

(a)          If the Closing occurs, Escrow Agent shall deliver the Earnest Money
to, or upon the instructions of, Seller and Buyer on the Closing Date to be
applied as part payment of the Purchase Price. If for any reason the Closing
does not occur, Escrow Agent shall deliver the Earnest Money to Seller or Buyer
only upon receipt of a written demand therefor from such party, subject to the
following provisions of this clause (a). Subject to the last sentence of this
clause (a), if for any reason the Closing does not occur and either party makes
a written demand (the “Demand”) upon Escrow Agent for payment of the Earnest
Money, Escrow Agent shall give written notice to the other party of the Demand
within one (1) business day after receipt of the Demand. If Escrow Agent does
not receive a written objection from the other party to the proposed payment
within five (5) business days after the giving of such notice by Escrow Agent,
Escrow Agent is hereby authorized to make the payment set forth in the Demand.
If Escrow Agent does receive such written objection within such period, Escrow
Agent shall continue to hold such amount until otherwise directed by written
instructions signed by Seller and Buyer or a final judgment of a court.
Notwithstanding the foregoing provisions of this clause (a), if Buyer delivers a
notice to Escrow Agent stating that Buyer has terminated this Agreement on or
prior to the expiration of the Due Diligence Period, then Escrow Agent shall
immediately return the Earnest Money to Buyer without the necessity of
delivering any notice to, or receiving any notice from Seller.

 

12

 

 

(b)          The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties, and that Escrow Agent
shall not be liable to either of the parties for any action or omission on its
part taken or made in good faith, and not in disregard of this Agreement, but
shall be liable for its negligent acts and for any liabilities (including
reasonable attorneys’ fees, expenses and disbursements) incurred by Seller or
Buyer resulting from Escrow Agent’s mistake of law respecting the scope or
nature of Escrow Agent’s duties. Seller and Buyer shall jointly and severally
indemnify and hold Escrow Agent harmless from and against all liabilities
(including reasonable attorneys’ fees, expenses and disbursements) incurred in
connection with the performance of Escrow Agent’s duties hereunder, except with
respect to actions or omissions taken or made by Escrow Agent in bad faith, in
disregard of this Agreement or involving negligence on the part of Escrow Agent.
Escrow Agent has executed this Agreement in the place indicated on the signature
page hereof in order to confirm that Escrow Agent shall hold the Earnest Money
in escrow, and shall disburse the Earnest Money pursuant to the provisions of
this Section 8.

 

9.           Default

 

(a)          In the event that Seller is ready, willing and able to close in
accordance with the terms and provisions hereof, and Buyer defaults in any of
its obligations undertaken in this Agreement, Seller shall be entitled, as its
sole and exclusive remedy to either: (i) if Buyer is willing to proceed to
Closing, waive such default and proceed to Closing in accordance with the terms
and provisions hereof; or (ii) declare this Agreement to be terminated, and
Seller shall be entitled to immediately receive all of the Earnest Money as
liquidated damages as and for Seller’s sole remedy. Upon such termination,
neither Buyer nor Seller shall have any further rights, obligations or
liabilities hereunder, except as otherwise expressly provided herein. Seller
hereby waives any right to recover the balance of the Purchase Price, or any
part thereof, and the right to pursue any other remedy permitted at law or in
equity against Buyer. In no event under this Section or otherwise shall Buyer be
liable to Seller for any punitive, speculative or consequential damages. BUYER
AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO
ESTIMATE THE DAMAGES SUFFERED BY SELLER AS A RESULT OF BUYER’S DEFAULT OR
FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY PURSUANT TO THIS AGREEMENT, AND
THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS AGREEMENT, THE
LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION REPRESENT A REASONABLE ESTIMATE
OF THE DAMAGES WHICH SELLER SHALL INCUR AS A RESULT OF SUCH FAILURE; PROVIDED,
HOWEVER THAT THIS PROVISION SHALL NOT LIMIT SELLER’S RIGHT TO RECEIVE
REIMBURSEMENT FOR ATTORNEYS’ FEES AS AUTHORIZED BY SECTION 26, NOR WAIVE OR
AFFECT BUYER’S INDEMNITY OBLIGATIONS AND SELLER’S RIGHTS TO THOSE INDEMNITY
OBLIGATIONS UNDER THIS AGREEMENT, NOR WAIVE OR AFFECT BUYER’S OBLIGATIONS TO
RETURN THE DUE DILIGENCE MATERIALS TO SELLER PURSUANT TO APPLICABLE PROVISIONS
OF THIS AGREEMENT. THE PAYMENT OF THE EARNEST MONEY AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO
SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671,

 

13

 

 

1676 AND 1677. UPON DEFAULT BY BUYER, AND SELLER’S TERMINATION OF THIS
AGREEMENT, EXCEPT FOR THE SURVIVING OBLIGATIONS, WHICH MAY BE ENFORCED BY SELLER
(IN ADDITION TO COLLECTION AND RETENTION BY SELLER OF BUYER’S DEPOSIT AS
PROVIDED HEREUNDER), NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS
HEREUNDER, EACH TO THE OTHER EXCEPT FOR THE RIGHT OF SELLER TO COLLECT SUCH
LIQUIDATED DAMAGES FROM BUYER AND ESCROW HOLDER.

 

Buyer’s Initials: /s/ NSS    Seller’s Initials: /s/ JMJ

 

(b)          In the event that Buyer is ready, willing and able to close in
accordance with the terms and provisions hereof, and Seller defaults in the
obligations herein taken by Seller, with respect to any or all of the
Properties, and Seller fails to cure such default within five (5) business days
following written notice from Buyer, Buyer may, as its sole and exclusive
remedy, either: (i) waive any unsatisfied conditions and proceed to Closing in
accordance with the terms and provisions hereof; or (ii) terminate this
Agreement by delivering written notice thereof to Seller no later than Closing,
upon which termination the Earnest Money shall be refunded to Buyer, Seller
shall pay to Buyer all of the out-of-pocket costs and expenses incurred by Buyer
as to such Property or Properties in connection with this Agreement (in an
amount not to exceed $75,000), which return and payment shall operate as
liquidated damages and to terminate this Agreement and release Seller and Buyer
from any and all rights, obligations and liability hereunder, except those which
are specifically stated herein to survive any termination hereof; or (iii)
enforce specific performance of Seller’s obligations hereunder; or (iv) by
notice to Seller given on or before the Closing Date, extend the Closing Date
for a period of up to thirty (30) days (the “Closing Extension Period”), and the
“Closing Date” shall be moved to the last day of the Closing Extension Period.
If Buyer so extends the Closing Date, then Seller may, but shall not be
obligated to, cause said conditions to be satisfied during the Closing Extension
Period. If Seller does not cause said conditions to be satisfied during the
Closing Extension Period, then Buyer shall have the remedies set forth in
Section 9(b) (i) through (iii) above except that the term “Closing” shall read
“Extended Closing”. Notwithstanding the foregoing, in no event shall Seller be
liable to Buyer for monetary damages, including, without limitation, general,
punitive, speculative or indirect consequential damages (with exception of the
sums, if any, to be paid pursuant to clause (ii) above or the final paragraph of
Section 11 below).

 

10.        Closing. The Closing shall consist of the execution and delivery of
documents by Seller and Buyer, with respect to each Property as set forth below,
and delivery by Buyer to Seller of the Purchase Price in accordance with the
terms of this Agreement. Seller shall deliver to Escrow Agent for the benefit of
Buyer at Closing the following executed documents for the Property:

 

(a)          A grant deed in the form attached hereto as Exhibit B (the “Deed”);

 

(b)          An Assignment and Assumption of Leases, Guaranties and Security
Deposits, in the form attached hereto as Exhibit C;

 

(c)          A Bill of Sale for the Personal Property, if any, in the form
attached hereto as Exhibit D;

 

14

 

 

(d)          An Assignment of Contracts, Permits, Licenses and Warranties in the
form of Exhibit E;

 

(e)          An original Tenant Estoppel Certificate from each Tenant dated no
earlier than thirty (30) days prior to the original date of Closing stated in
Section 1(b) above. In addition, the business terms of each Tenant Estoppel
Certificate must be in accordance with and not materially contradict the
corresponding Lease. If any Lease and any amendments, bearing the original
signatures of the landlord and tenant thereunder have not been delivered to
Buyer previously, a copy thereof confirming that the copy is true, correct and
complete shall be attached to the corresponding Tenant Estoppel Certificate.
Buyer acknowledges that the satisfaction of the requirements of this Section
10(e) constitute a condition to close for Buyer’s benefit, but so long as Seller
exercises a good faith effort to satisfy such condition in compliance with the
terms of Section 6(c) above, the failure of Seller to deliver the Tenant
Estoppel Certificates shall not be a default or breach by Seller;

 

(f)          An original Guarantor Estoppel Certificate from each Guarantor
dated no earlier than thirty (30) days prior to the date of Closing. Buyer
acknowledges that the satisfaction of the requirements of this Section 10(f)
constitute a condition to close for Buyer’s benefit, but so long as Seller
exercises a good faith effort to satisfy such condition in compliance with the
terms of Section 6(c) above, the failure of Seller to deliver the Guarantor
Estoppel Certificates shall not be a default or breach by Seller;

 

(g)          A settlement statement setting forth the Purchase Price, all
prorations and other adjustments to be made pursuant to the terms hereof, and
the funds required for Closing as contemplated hereunder;

 

(h)          All transfer tax statements, declarations and filings as may be
necessary or appropriate for purposes of recordation of the Deed;

 

(i)           Good standing certificates and corporate resolutions or member or
partner consents, as applicable, and such other documents, all to the extent, if
any, reasonably requested by Escrow Agent;

 

(j)           Copies of the Warranties (as hereinafter defined);

 

(k)          A certificate pursuant to Section 1445 of the Internal Revenue Code
of 1986, as amended, or the regulations issued pursuant thereto, certifying the
non-foreign status of Seller;

 

(l)           To the extent required by Escrow Agent, an owner’s title affidavit
as to mechanics’ liens and possession and other matters in customary form
reasonably acceptable to Escrow Agent;

 

(m)         With respect to each Tenant, a Letter to Tenant in form of Exhibit H
attached hereto;

 

(n)          An updated Rent Roll (defined below), arrears report and schedule
of security deposits and letters of credit, certified by Seller to be true and
correct;

 

15

 

 

(o)         To the extent in Seller’s possession or control, certificates of
insurance or other evidence of insurance memorializing and confirming that the
Tenants are then maintaining policies of insurance of the types and amounts
required by the Leases;

 

(p)         A bring-down certificate with respect to Seller’s representations
and warranties provided herein in a form reasonably satisfactory to Seller and
Buyer; such certificate shall be limited to confirming the continued accuracy of
Seller’s representations and warranties set forth herein, or specifying the
factors rendering or likely to render such representations and warranties
inaccurate, and shall in no manner expand the scope of those representations and
warranties or otherwise modify the terms of this Agreement; and

 

(q)          Such other instruments as are reasonably required by Escrow Agent
to close the escrow and consummate the purchase of the Property in accordance
with the terms hereof.

 

At Closing, Buyer shall instruct Escrow Agent to deliver the Earnest Money to
Seller which shall be applied to the Purchase Price, shall deliver the balance
of the Purchase Price to Seller and shall execute and deliver execution
counterparts of the closing documents referenced in clauses (b), (g) and (h)
above. Buyer shall have the right to advance the Closing upon five (5) days’
prior written notice to Seller; provided that all conditions precedent to both
Buyer’s and Seller’s respective obligations to proceed with Closing under this
Agreement have been satisfied (or, if there are conditions to a party’s
obligation to proceed with Closing that remain unsatisfied, such conditions have
been waived by such party). Buyer shall have a one-time right to extend the
Closing for up to fifteen (15) business days upon written notice to Seller to be
received by Seller on or prior to the date that is five (5) business days prior
to the scheduled Closing Date. If Buyer timely exercises this right to extend,
any document that Seller is obligated to provide that is “time sensitive” does
not need to be provided again by Seller. The Closing shall be held through the
mail by delivery of the closing documents to the Escrow Agent on or prior to the
Closing or such other place or manner as the parties hereto may mutually agree.

 

11.        Representations by Seller. For the purpose of inducing Buyer to enter
into this Agreement and to consummate the sale and purchase of the Property in
accordance herewith, Seller makes the following representations and warranties
to Buyer as of the date hereof:

 

(a)          Seller is duly formed, validly existing and in good standing under
the laws of its state of organization, and to the extent required by law, the
State in which the Property is located. Seller has the power and authority to
execute and deliver this Agreement and all closing documents to be executed by
Seller, and to perform all of Seller’s obligations hereunder and thereunder.
Neither the execution and delivery of this Agreement and all closing documents
to be executed by Seller, nor the performance of the obligations of Seller
hereunder or thereunder will result in the violation of any law or any provision
of the organizational documents of Seller or will conflict with any order or
decree of any court or governmental instrumentality of any nature by which
Seller is bound. The execution, delivery and performance of this Agreement does
not require the consent or approval of any court, administrative or governmental
authority and does not result in the creation or imposition of any lien or
equity of any kind whatsoever upon, or give to any other person any interest or
right (including any right of termination or

 

16

 

 

cancellation) in or with respect to, any material agreement to which Seller is a
party or the business or operations of Seller or any of its properties or
assets;

 

(b)          Except for any tax appeals and/or contests initiated by Seller
and/or Tenants, if any, Seller has not received any written notice of any
current or pending litigation, condemnation proceeding or tax appeals affecting
Seller or the Property and Seller does not have any actual knowledge of any
pending litigation, condemnation proceeding or tax appeals against Seller or the
Property; Seller has not initiated, nor is Seller participating in, any action
for a change or modification in the current subdivision, site plan, zoning or
other land use permits for the Property and Seller has no actual knowledge that
the Property may be rezoned;

 

(c)          Seller has not entered into any leases, subleases, contracts,
licenses or other agreements affecting the Property which will be binding upon
Buyer after the Closing other than the Leases and the agreements referenced on
Exhibit J annexed hereto;

 

(d)          Except for violations which have been cured or remedied on or
before the date hereof, Seller has not received any written notice from (or
delivered any notice to) (i) any governmental authority regarding any
outstanding violation of any law applicable to the Property and Seller does not
have actual knowledge of any such violations and (ii) any third party that the
Property or the current use thereof violates any private covenant, restriction,
easement or encumbrance and Seller does not have any actual knowledge of any
such violation;

 

(e)           Seller has fee simple title to the Property (and to Seller’s
actual knowledge, such title is free and clear of all liens and encumbrances
except for Permitted Exceptions), and Seller is the sole owner of the entire
lessor’s interest in each Lease. The Property constitutes one or more separate
tax parcels for purposes of ad valorem taxation;

 

(f)           With respect to each Lease: (i) the Lease forwarded to Buyer under
Section 6(b) is a true, correct and complete copy of the Lease; (ii) the Lease
is in full force and effect, and to Seller’s actual knowledge there is no
default thereunder; (iii) no brokerage or leasing commissions or other
compensation is or will be due or payable to any person, firm, corporation or
other entity with respect to or on account of the current term of the Lease or
any extension or renewal thereof; (iv) Seller has no outstanding obligation to
provide Tenant with an allowance to construct, or to construct at its own
expense, any tenant improvements, except as set forth in Schedule 11(f)(iv)
attached hereto or as set forth in the Khattab Amendment; (v) intentionally
deleted; (vi) Tenant is not entitled to rental concessions or abatements for any
period subsequent to the scheduled date of Closing, except as set forth in
Schedule 11(f)(vi) attached hereto; (vii) Tenant has not prepaid any rents as of
the date hereof nor has Tenant delivered a security deposit, letter of credit or
other security in connection with the Lease, except as set forth on Schedule
11(f)(vii) attached hereto; (viii) Tenant has not made any request for any
assignment, transfer, or subletting in connection with all or a portion of the
premises demised to Tenant which is presently pending or under consideration by
Seller; (ix) all specified work required to be performed by the landlord under
the Lease up to the date of Closing has been completed or will be completed, at
Seller’s expense, prior to the Closing; (x) Seller has not received and has no
actual knowledge of any pending notices from Tenant electing to vacate the
premises leased to Tenant or exercising any right of Tenant to terminate the
Lease; and (xi)

 

17

 

 

Seller has heretofore billed Tenant for all fixed rent and additional rent due
under the Lease as of the date hereof;

 

(g)          Attached hereto as Exhibit A-4 and made a part hereof is a true,
correct and complete copy of the rent roll for the Property (the “Rent Roll”);

 

(h)          There are no occupancy rights, leases or tenancies affecting the
Property other than the Leases, and to Seller’s actual knowledge there are no
existing subleases, with the exception of the sublease whereby Dignity Health
subleased a portion of its premises to Quest Diagnostics (the “Quest Sublease”).
Neither this Agreement nor the consummation of the transactions contemplated
hereby is subject to any first right of refusal or other purchase right in favor
of any other person or entity; and apart from this Agreement, Seller has not
entered into any written agreements for the purchase or sale of the Property, or
any interest therein which has not been terminated;

 

(i)           The transactions contemplated hereby either (i) will not
constitute a sale of all or substantially all the assets of Seller, or (ii) if
such transaction does constitute a sale of all or substantially all the assets
of any Seller, Seller shall take all steps, if any, necessary to comply with
laws to the extent required by the law of the relevant state;

 

(j)           To Seller’s actual knowledge, except as set forth in the
environmental reports previously delivered by Seller to Buyer or as disclosed in
the Due Diligence Materials, no hazardous substances have been generated,
stored, released, or disposed of on or about the Property in violation of any
law, rule or regulation applicable to the Property which regulates or controls
matters relating to the environment or public health or safety (collectively,
“Environmental Laws”). Seller has not received any written notice from (nor
delivered any notice to) any federal, state, county, municipal or other
governmental department, agency or authority (1) concerning any petroleum
product or other hazardous substance discharge or seepage at, on, around or
under the Property, or migrating from the Property, in violation of any
Environmental Laws or; (2) of any pending actions, suits, claims and/or
proceedings claiming that Seller, any Tenant or the Property is in violation of
any Environmental Laws. For purposes of this Subsection, “hazardous substances”
shall mean any substance or material which is defined or deemed to be hazardous
or toxic pursuant to any Environmental Laws. To Seller’s actual knowledge, there
are no underground storage tanks located on the Property;

 

(k)          Exhibit I attached hereto is a true, correct and complete listing
of all warranties currently in effect for the Property (the “Warranties”);

 

(l)           Seller is not a “foreign person” within the meaning of Section
1445(f)(3) of the Internal Revenue Code;

 

(m)         There presently exists no unrestored casualty or condemnation
affecting the Property; and

 

(n)          With respect to each Guaranty: (a) the Guaranty forwarded to Buyer
under Section 6(b) is a true, correct and complete copy of the Guaranty; and (b)
the Guaranty is in full force and effect and there is no default thereunder.

 

18

 

 

As used herein “to the best of Seller’s knowledge,” “Seller’s actual knowledge”
or “Seller has not received written notice” shall mean the actual knowledge of
or receipt of written notice by Gregg Mason and/or Eric Edelmayer. Seller
represents and warrants to Buyer that (i) Gregg Mason (title: Vice President)
has a day-to-day working knowledge of the Laguna Professional Property and the
subject matter of the representations and warranties of Seller set forth herein
with respect to the Laguna Professional Property, and (ii) Eric Edelmayer
(title: Vice President) has a day-to-day working knowledge of the UCD Property
and the subject matter of the representations and warranties of Seller set forth
herein with respect to the UCD Property. There shall be no duty imposed or
implied to investigate, inspect or audit any such matters, and there shall be no
personal liability on the part of such persons.

 

The representations and warranties of Seller shall survive Closing for a period
of one (1) year (the “Survival Period”). No claim for a breach of any
representation or warranty in this Section 11 shall be actionable or payable (i)
unless and until the valid claims for all such breaches collectively aggregate
more than Twenty-Five Thousand and no/100 Dollars ($25,000.00), and (ii) unless
written notice containing a description of the specific nature of such breach
shall have been given to Seller prior to the expiration of the Survival Period,
and an action shall have been commenced in a court having jurisdiction within
sixty (60) days after the expiration of the Survival Period. In no event shall
the total liability of Seller to Buyer for all breaches of all representations
and warranties of Seller in this Agreement exceed the amount of One Million Two
Hundred Fifty Thousand Dollars ($1,250,000). Notwithstanding anything in this
Agreement to the contrary, if (a) on the Effective Date Buyer has actual
knowledge that any of Seller’s representations or warranties set forth in
Section 11 are untrue in any respect, then the breach by Seller of the
representations or warranties as to which Buyer has such knowledge shall be
deemed waived by Buyer, and Seller shall not be in default hereunder and shall
have no liability to Buyer or its successors or assigns in respect thereof, and
(b) after the Effective Date and prior to Closing, Buyer obtains actual
knowledge that any of Seller’s representations or warranties set forth in this
Agreement, or any of Seller’s representations or warranties made in any
documents delivered by Seller in connection with the Closing, are untrue in any
respect, then Seller shall have no liability to Buyer or its successors or
assigns in respect thereof following the Closing for the breach of such
representations or warranties. For purposes of this Section 11, Buyer shall be
deemed to have or to have obtained knowledge of any such matter or thing only if
such matter or thing (i) is set forth in any Lease, the Due Diligence Materials,
or any other document delivered to Buyer, or (ii) is made available for review
by Buyer to the extent Seller actually notified Buyer in writing that such
matter or thing were available for Buyer’s review, or (iii) was set forth in any
written studies or reports furnished to Buyer including, without limitation, any
environmental reports, or (iv) was set forth in any letter, memorandum, or other
written communication provided to or otherwise made available for inspection by
Buyer or Buyer’s attorneys to the extent Seller actually notified Buyer in
writing that such letter, memorandum, or other written communication were
available for Buyer’s review, or (v) was otherwise within the actual knowledge
of Buyer.

 

12.         Representations by Buyer. Buyer represents and warrants to, and
covenants with, Seller as follows:

 

(a)          Buyer is a limited liability company duly formed, validly existing
and in good standing under the laws of Delaware, is authorized to consummate the
transaction set forth

 

19

 

 

herein and fulfill all of its obligations hereunder and under all closing
documents to be executed by Buyer, and has all necessary power to execute and
deliver this Agreement and all closing documents to be executed by Buyer, and to
perform all of Buyer’s obligations hereunder and thereunder. This Agreement and
all closing documents to be executed by Buyer have been duly authorized by all
requisite corporate or other required action on the part of Buyer and are the
valid and legally binding obligation of Buyer, enforceable in accordance with
their respective terms. Neither the execution and delivery of this Agreement and
all closing documents to be executed by Buyer, nor the performance of the
obligations of Buyer hereunder or thereunder will result in the violation of any
law or any provision of the organizational documents of Buyer or will conflict
with any order or decree of any court or governmental instrumentality of any
nature by which Buyer is bound.

 

The representations and warranties of Buyer shall survive Closing for a period
of one (1) year.

 

13.         Conditions Precedent to Buyer’s Obligations. Buyer’s obligation to
pay the Purchase Price, and to accept title to the Property, shall be subject to
compliance by Seller with the following conditions precedent with respect to
each Property on and as of the date of Closing:

 

(a)          Seller shall deliver to Buyer on or before the Closing the items
set forth in Section 10 above;

 

(b)          Buyer shall receive from Escrow Agent or any other title insurer
approved by Buyer in its judgment and discretion, a current ALTA owner’s form of
title insurance policy, or irrevocable and unconditional binder to issue the
same, with extended coverage for the Real Property in the amount of the Purchase
Price, dated, or updated to, the date of the Closing, insuring, or committing to
insure, at its ordinary premium rates Buyer’s good and marketable title in fee
simple to the Real Property and otherwise in such form and with such
endorsements as provided in the title commitment approved by Buyer pursuant to
Section 6 hereof and subject only to the Permitted Exceptions (the “Title
Policy”);

 

(c)          Buyer shall have received any certificates of occupancy (or the
equivalent thereof) for the Property, to the extent in Seller’s possession;

 

(d)          No Tenant shall be in material default under its Lease (following
the giving of notice and the passage of any applicable cure or grace periods
under such Lease) and no Tenant shall have assigned its Lease or sublet the
Property (other than the Quest Sublease), except to the extent permitted without
Seller’s consent under the Leases (or to the extent permitted with Seller’s
consent, as permitted in writing by Buyer under Section 16 hereof);

 

(e)          The representations and warranties of Seller contained in this
Agreement shall have been true when made and shall be true in all material
respects at and as of the date of Closing as if such representations and
warranties were made at and as of the Closing, and Seller shall have performed
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by Seller
prior to or at the Closing;

 

20

 

 

(f)          Seller shall have delivered to Buyer a written waiver by each
applicable party of any right of first refusal, right of first offer or other
purchase option that such party has to purchase the Property, or any part
thereof, from Seller; and

 

(g)         The Khattab Amendment shall be fully executed and effective.

 

In the event that any of the foregoing conditions precedent have not been
satisfied as of the Closing Date, Buyer shall have the right terminate this
Agreement by delivering written notice thereof to Seller no later than the
earlier to occur of (i) the date which is fifteen (15) days after the Closing
Date, or (ii) the day prior to the date that such previously unsatisfied
condition precedent is actually satisfied, upon which termination the Earnest
Money shall be refunded to Buyer, and with respect to a failure under Sections
(a), (e), (f) or (g) above, Seller shall pay to Buyer upon receipt of reasonable
documentary evidence of all of the out-of-pocket costs and expenses actually
incurred by Buyer in connection with this Agreement but in no event to exceed
$75,000.00 (the “Expense Reimbursement”), which refund and payment shall operate
to terminate this Agreement and release Seller and Buyer from any and all
liability hereunder, except those which are specifically stated herein to
survive any termination hereof (provided, however, that with respect to a
failure under Section (e) above, the Seller’s obligation to pay Buyer the
Expense Reimbursement shall only apply in the circumstance in which Seller’s
representation or warranty was actually known by Seller to be untruthful when
made, or subsequently become untruthful due to a breach or default by Seller
under this Agreement or another wrongful and intentional act of Seller.

 

14.         Conditions Precedent to Seller’s Obligations. Seller’s obligation to
deliver title to the Property shall be subject to compliance by Buyer with the
following conditions precedent with respect to each Property on and as of the
date of Closing:

 

(a)          Buyer shall deliver to Escrow Agent on the Closing Date the
remainder of the Purchase Price, subject to adjustment of such amount pursuant
to Section 4 hereof; and

 

(b)          The representations and warranties of Buyer contained in this
Agreement shall have been true when made and shall be true in all material
respects at and as of the date of Closing as if such representations and
warranties were made at and as of the Closing, and Buyer shall have performed
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by Buyer
prior to or at the Closing.

 

15.         Notices. Unless otherwise provided herein, all notices and other
communications which may be or are required to be given or made by any party to
the other in connection herewith shall be in writing and shall be deemed to have
been properly given and received on the date: (i) delivered by facsimile
transmission or by electronic mail (e.g. email), (ii) delivered in person, (iii)
deposited in the United States mail, registered or certified, return receipt
requested, or (iv) deposited with a nationally recognized overnight courier, to
the addresses set out in Section 1, or at such other addresses as specified by
written notice delivered in accordance herewith. Notwithstanding the foregoing,
Seller and Buyer agree that notice may be given on behalf of each party by the
counsel for each party and notice by such counsel in accordance with this
Section 15 shall constitute notice under this Agreement.

 

21

 

 

16.         Seller Covenants. Seller agrees that as long as this Agreement
remains in full force and effect, and provided Buyer is not in default under
this Agreement, Seller: (a) shall continue to operate and manage each Property
in the same manner in which Seller has previously operated and managed such
Property; (b) shall, subject to Section 7 hereof and subject to reasonable wear
and tear, maintain each Property in the same condition as exists on the date
hereof; and (c) shall not, without Buyer’s prior written consent, which, after
the expiration of the Due Diligence Period may be withheld in Buyer’s sole
discretion (and prior thereto shall not be unreasonably withheld, delayed, or
conditioned): (i) amend the Leases or Guaranties in any manner, or enter into
any new lease, license agreement or other occupancy agreement with respect to
any Property; (ii) consent to an assignment of any Lease or a sublease of the
premises demised thereunder or a termination or surrender thereof; (iii)
terminate any Lease nor release any guarantor of or security for any Lease
unless required by the express terms of such Lease; and/or (iv) cause, permit or
consent to an alteration of the premises demised under the Leases (unless such
consent is non-discretionary). If Buyer fails to respond within five (5)
business days after receipt of a written request from Seller for Buyer’s consent
to any of the foregoing (which request shall be accompanied by a copy of the
proposed lease, lease modification or other agreement), Buyer shall be deemed to
have consented to the same. To the extent required by California law, Seller
shall promptly notify Buyer in writing of any Material Events. “Material Events”
shall be limited to physical changes to the Property occurring after the
Effective Date that (i) materially and adversely affect the value of the
Property, and (ii) are actually known to Seller, and (iii) to Seller’s knowledge
have not been independently discovered by Buyer.

 

17.         Intentionally Omitted.

 

18.         Performance on Business Days. A "business day" is a day which is not
a Saturday, Sunday or legal holiday recognized by the Federal Government.
Furthermore, if any date upon which or by which action is required under this
Agreement is not a business day, then the date for such action shall be extended
to the first day that is after such date and is a business day. When calculating
the period of time before which, within which or following which any act is to
be done or step taken pursuant to this Agreement, the date that is the reference
date in calculating such period shall be excluded. If the last day of such
period is a non-business day, the period in question shall end on the next
succeeding business day.

 

19.         Entire Agreement. This Agreement constitutes the sole and entire
agreement among the parties hereto and no modification of this Agreement shall
be binding unless in writing and signed by all parties hereto. No prior
agreement or understanding pertaining to the subject matter hereof (including,
without limitation, any letter of intent executed prior to this Agreement) shall
be valid or of any force or effect from and after the date hereof.

 

20.         Severability. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall be invalid or unenforceable, at any
time or to any extent, then the remainder of this Agreement, or the application
of such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby. Each provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.

 

22

 

 

21.         No Representations or Warranties. Buyer hereby acknowledges,
understands and agrees that it has an opportunity to inspect the Property as set
forth in Section 6 herein, and except as expressly set forth in this Agreement,
the Property shall be conveyed at Closing to Buyer in “as-is” condition with no
representation or warranties whatsoever.

 

22.         Applicable Law. This Agreement shall be construed under the laws of
the State or Commonwealth in which the Property is located, without giving
effect to any state's conflict of laws principles.

 

23.         Tax-Deferred Exchange. Buyer and Seller respectively acknowledge
that the purchase and sale of the Property contemplated hereby may be part of a
separate exchange (an “Exchange”) being made by each party pursuant to Section
1031 of the Internal Revenue Code of 1986, as amended, and the regulations
promulgated with respect thereto. In the event that either party (the
“Exchanging Party”) desires to effectuate such an exchange, then the other party
(the “Non-Exchanging Party”) agrees to cooperate fully with the Exchanging Party
in order that the Exchanging Party may effectuate such an exchange; provided,
however, that with respect to such Exchange (a) all additional costs, fees and
expenses related thereto shall be the sole responsibility of, and borne by, the
Exchanging Party; (b) the Non-Exchanging Party shall incur no additional
liability as a result of such exchange; (c) the contemplated exchange shall not
delay any of the time periods or other obligations of the Exchanging Party
hereby, and without limiting the foregoing, the scheduled date for Closing shall
not be delayed or adversely affected by reason of the Exchange; (d) the
accomplishment of the Exchange shall not be a condition precedent or condition
subsequent to the Exchanging Party's obligations under the Agreement; and (e)
the Non-Exchanging Party shall not be required to hold title to any land other
than the Property for purposes of the Exchange. The Exchanging Party agrees to
defend, indemnify and hold the Non-Exchanging Party harmless from any and all
liability, damage or cost, including, without limitation, reasonable attorney's
fees that may result from Non-Exchanging Party's cooperation with the Exchange.
The Non-Exchanging Party shall not, by reason of the Exchange, (i) have its
rights under this Agreement, including, without limitation, any representations,
warranties and covenants made by the Exchanging Party in this Agreement
(including but not limited to any warranties of title, which, if Seller is the
Exchanging Party, shall remain warranties of Seller), or in any of the closing
documents (including but not limited to any warranties of title, which, if
Seller is the Exchanging Party, shall remain warranties of Seller) contemplated
hereby, adversely affected or diminished in any manner, or (ii) be responsible
for compliance with or deemed to have warranted to the Exchanging Party that the
Exchange complies with Section 1031 of the Code.

 

24.         Broker’s Commissions. Buyer and Seller each hereby represent that,
except for the Broker listed herein, there are no other brokers involved or that
have a right to proceeds in this transaction. Seller shall be responsible for
payment of commissions to the Broker pursuant to a separate written agreement
executed by Seller. Seller and Buyer each hereby agree to indemnify and hold the
other harmless from all loss, cost, damage or expense (including reasonable
attorneys' fees at both trial and appellate levels) incurred by the other as a
result of any claim arising out of the acts of the indemnifying party (or others
on its behalf) for a commission, finder's fee or similar compensation made by
any broker, finder or any party who claims to have dealt with such party (except
that Buyer shall have no obligations hereunder with

 

23

 

 

respect to any claim by Broker). The representations, warranties and indemnity
obligations contained in this section shall survive the Closing or the earlier
termination of this Agreement.

 

25.         Assignment. This Agreement may not be assigned by Buyer without the
prior written consent of Seller, which consent may be withheld in Seller’s sole
and absolute discretion; provided, however, that Buyer may assign this Agreement
without Seller’s consent to an Approved Assignee (as defined below), provided,
however, that (i) no such assignment shall relieve Buyer of any of its
obligations hereunder until Closing is complete (and such release shall only be
effective to the extent that all of Buyer’s obligations, both pre-Closing and
post-Closing, have been expressly assumed by the assignee), and (ii) such
assignee shall assume all obligations of Buyer hereunder in a written agreement
reasonably acceptable to Seller, including, specifically, reaffirmation of the
release set forth in Section 33 below. Buyer is entering into this Agreement for
and on behalf of two related special purpose entities titled ARHC LPELKCA01,
LLC, with respect to the Laguna Professional Property, and ARHC UCELKCA01, LLC,
with respect to the UC Davis Property (individually and collectively, “Approved
Assignee”) and intends to assign each respective Approved Assignee its rights
hereunder prior to Closing, subject to the terms of this Section 25.

 

26.         Attorneys’ Fees. In any action between Buyer and Seller as a result
of failure to perform or a default under this Agreement, the prevailing party
shall be entitled to recover from the other party, and the other party shall pay
to the prevailing party, the prevailing party’s reasonable attorneys’ fees and
disbursements and court costs incurred in such action.

 

27.         Time of the Essence. Time is of the essence with respect to each of
Buyer’s and Seller’s obligations hereunder.

 

28.         Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each of the parties and delivered to the other party. Signatures on this
Agreement which are transmitted electronically shall be valid for all purposes,
however any party shall deliver an original signature on this Agreement to the
other party upon request.

 

29.         Anti-Terrorism. Neither Buyer or Seller, nor any of their
affiliates, are in violation of any Anti-Terrorism Law (as hereinafter defined)
or engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law. “Anti-Terrorism Laws” shall
mean any laws relating to terrorism or money laundering, including: Executive
Order No. 13224; the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law
107-56, as the same has been, or may hereafter be, renewed, extended, amended or
replaced; the applicable laws comprising or implementing the Bank Secrecy Act;
and the applicable laws administered by the United States Treasury Department’s
Office of Foreign Asset Control (as any of the foregoing may from time to time
be amended, renewed, extended, or replaced).

 

30.         Confidentiality. Unless otherwise agreed to in writing by Seller,
Buyer shall keep confidential all documents, financial statements, reports or
other information provided to,

 

24

 

 

or generated by Buyer relating to the Property, including the and the
negotiation and execution of this Agreement or financing of the purchase of the
Property (collectively, “Confidential Information”); provided, however, that
Buyer may disclose such Confidential Information to Buyer’s directors, officers,
advisors, employees, attorneys, accountants, financing sources, consultants and
other agents. Confidential Information shall not include any information that:
(i) at the time of disclosure is generally available to the public or, after
disclosure, becomes generally available to the public other than by a breach of
this Agreement or by any breach of confidentiality by a third party; or (ii) is
already in Buyer’s possession at the time of disclosure by Seller and was not
acquired directly or indirectly from Seller; (iii) is later received by Buyer on
a non-confidential basis from a third party having the right to impart that
information; or (iv) Buyer can prove was developed independently by Buyer
without use of the Confidential Information. Upon any termination of this
Agreement for any reason, Buyer shall promptly return to Seller copies of all
documents or other information pertaining to the Property provided to Buyer by
Seller, including, without limitation, the Due Diligence Materials. The
provisions of this Section shall survive the termination of this Agreement and
shall survive the Closing.

 

31.         Limitation of Liability. The obligations of Seller hereunder are
binding only on Seller and Seller’s assets and shall not be personally binding
upon, nor shall resort be had to, the private properties of any of the partners,
officers, directors, members or shareholders of Seller, or any employees or
agents of Seller.

 

32          No Oral Agreements or Representations; As-Is Purchase. BUYER
ACKNOWLEDGES THAT, DURING THE DUE DILIGENCE PERIOD, BUYER WILL HAVE THE
OPPORTUNITY TO INDEPENDENTLY AND PERSONALLY INSPECT THE PROPERTY AND
IMPROVEMENTS. BUYER AGREES THAT BUYER SHALL ACCEPT THE PROPERTY, IN ITS THEN
CONDITION AS-IS AND WITH ALL ITS FAULTS. NO PERSON ACTING ON BEHALF OF SELLER IS
AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF, BUYER ACKNOWLEDGES AND AGREES THAT,
EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT OR IN THE CLOSING DOCUMENTS
REQUIRED TO BE DELIVERED BY SELLER HEREUNDER, IF AT ALL, SELLER HAS NOT MADE,
DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT
OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO:

 

(I) THE VALUE OF THE PROPERTY;

 

(II) THE VALUE OF THE LEASES;

 

(III) THE INCOME TO BE DERIVED FROM THE PROPERTY;

 

(IV) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH
BUYER MAY CONDUCT THEREON, INCLUDING ANY LEASING OR DEVELOPMENT OF THE PROPERTY;

 

25

 

 

(V) THE HABITABILITY, MERCHANTABILITY, MARKET-ABILITY, PROFITABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OF THE PROPERTY;

 

(VI) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY;

 

(VII) THE FINANCIAL CAPABILITY OF THE TENANTS UNDER THE LEASES;

 

(VIII) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING WITHOUT
LIMITATION, THE WATER, SOIL AND GEOLOGY;

 

(IX) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY;

 

(X) THE MANNER, CONDITION OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY,
INCORPORATED INTO THE PROPERTY;

 

(XI) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS,
RULES, REGULATION, ORDERS OR REQUIREMENTS, INCLUDING BUT NOT LIMITED TO, THE
AMERICANS WITH DISABILITIES ACT OF 1990 OR ANY OTHER LAW, RULE OR REGULATION
GOVERNING ACCESS BY DISABLED PERSONS, THE FEDERAL WATER POLLUTION CONTROL ACT,
THE FEDERAL RESOURCE CONSERVATION AND RECOVERY ACT, THE U.S. ENVIRONMENTAL
PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE
RESOURCES CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER ACT, THE SAFE
DRINKING WATER ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT, THE TOXIC
SUBSTANCE CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF THE FOREGOING;

 

(XII) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR ADJACENT
TO THE PROPERTY;

 

(XIII) THE CONTENT, COMPLETENESS OR ACCURACY OF THE SELLER’S DELIVERIES,
INCLUDING ANY INFORMATIONAL PACKAGE, OR OTHER MATERIALS PREPARED BY SELLER;

 

(XIV) THE CONFORMITY OF THE IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS FOR THE
PROPERTY, INCLUDING ANY PLANS AND SPECIFICATIONS THAT MAY HAVE BEEN OR MAY BE
PROVIDED TO BUYER;

 

(XV) THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE ZONING
OR BUILDING REQUIREMENTS, AND ANY VIOLATIONS OF SUCH REQUIREMENTS;

 

(XVI) SUFFICIENCY OF ANY UNDERSHORING;

 

26

 

 

(XVII) SUFFICIENCY OF ANY DRAINAGE;

 

(XVIII) THE FACT THAT ALL OR A PORTION OF THE PROPERTY MAY BE LOCATED ON OR NEAR
AN EARTHQUAKE FAULT LINE OR LOCATED IN AN ALQUIST PRIOLO SPECIAL STUDY ZONE;

 

(XIX) THE EXISTENCE OR LACK OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS
AFFECTING THE PROPERTY, OR

 

(XX) WITH RESPECT TO ANY OTHER MATTER CONCERNING THE PROPERTY EXCEPT AS MAY BE
OTHERWISE EXPRESSLY STATED HEREIN OR IN THE CLOSING DOCUMENTS REQUIRED TO BE
DELIVERED BY SELLER HEREUNDER, INCLUDING ANY AND ALL SUCH MATTERS REFERENCED,
DISCUSSED OR DISCLOSED IN ANY DOCUMENTS DELIVERED BY SELLER TO BUYER (OTHER THAN
THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS AGREEMENT THE
CLOSING DOCUMENTS REQUIRED TO BE DELIVERED BY SELLER HEREUNDER), IN ANY PUBLIC
RECORDS OF ANY GOVERNMENTAL AGENCY OR ENTITY OR UTILITY COMPANY, OR IN ANY OTHER
DOCUMENTS AVAILABLE TO BUYER.

 

BUYER FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO
INSPECT THE PROPERTY AND REVIEW INFORMATION AND DOCUMENTATION AFFECTING THE
PROPERTY, BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND
REVIEW OF SUCH INFORMATION AND DOCUMENTATION, AND NOT ON ANY INFORMATION
PROVIDED OR TO BE PROVIDED BY SELLER. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT
ANY INFORMATION MADE AVAILABLE TO BUYER OR PROVIDED OR TO BE PROVIDED BY OR ON
BEHALF OF SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF
SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY
OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS MAY OTHERWISE BE PROVIDED HEREIN.
BUYER AGREES TO FULLY AND IRREVOCABLY RELEASE ALL SUCH SOURCES OF INFORMATION
AND PREPARERS OF INFORMATION AND DOCUMENTATION TO THE EXTENT SUCH SOURCES OR
PREPARERS ARE SELLER, OR ITS EMPLOYEES, OFFICERS, DIRECTORS, PARTNERS,
REPRESENTATIVES, AGENTS, SERVANTS, ATTORNEYS, AFFILIATES, PARENT COMPANIES,
SUBSIDIARIES, SUCCESSORS OR ASSIGNS FROM ANY AND ALL CLAIMS THAT THEY MAY NOW
HAVE OR HEREAFTER ACQUIRE AGAINST SUCH SOURCES AND PREPARERS OF INFORMATION FOR
ANY COSTS, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION
ARISING FROM SUCH INFORMATION OR DOCUMENTATION, EXCEPT TO THE EXTENT PROVIDED IN
SECTION 11 OF THIS AGREEMENT. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY
ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY OF THE FOREGOING ENTITIES
AND INDIVIDUALS OR ANY OTHER INDIVIDUAL OR ENTITY. BUYER FURTHER ACKNOWLEDGES
AND

 

27

 

 

AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS
PROVIDED FOR HEREIN IS MADE ON AN “AS-IS” CONDITION AND BASIS WITH ALL FAULTS,
AND THAT SELLER HAS NO OBLIGATIONS TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS
EXCEPT AS MAY OTHERWISE BE EXPRESSLY STATED IN THIS AGREEMENT.

 

33.         Release of Seller.

 

(a)          Except as expressly provided in this Agreement or in the closing
documents required to be delivered by Seller hereunder, Buyer and anyone
claiming by, through or under Buyer hereby fully and irrevocably releases
Seller, and its members, managers, partners affiliates, parent companies and
subsidiaries, and each of their respective employees, officers, directors,
partners, shareholders, representatives, agents, servants, attorneys, successors
and assigns, and all persons, firms, corporations and organizations acting on
the behalf of each of the foregoing, (each a “Seller Party”, and collectively,
the “Seller Parties”) from any and all claims that it may now have or hereafter
acquire against any Seller Party for any costs, loss, liability, damage,
expenses, demand, action or cause of action arising from or related to the
condition of the Property, including, without limitation, (i) environmental
matters, (ii) matters described or referred to in the environmental reports
obtained by Buyer; (iii) matters reasonably discoverable by prudent
investigation during the Due Diligence Period; (iv) matters that are of public
record; (v) matters otherwise disclosed by Seller to Buyer or discovered by
Buyer at any time prior to the Closing; (vi) the presence of hazardous
substances in, on, about or under the Property or which have migrated from
adjacent lands to the Property or from the Property to adjacent lands, and (vii)
the matters described in Section 32 above. This release includes any claims made
by third parties.

 

(b)          THE ABOVE RELEASE INCLUDES CLAIMS OF WHICH BUYER IS PRESENTLY
UNAWARE OR WHICH BUYER DOES NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY
BUYER, WOULD MATERIALLY AFFECT BUYER’S RELEASE TO SELLER. BUYER SPECIFICALLY
WAIVES THE PROVISION OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS
FOLLOWS:

 

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

 

(c)          IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN
ADJUSTED BY PRIOR NEGOTIATIONS TO REFLECT THAT ALL OF THE PROPERTY IS SOLD BY
SELLER AND PURCHASED BY BUYER SUBJECT TO THE FOREGOING.

 

  /s/ JMJ   /s/ NSS               Seller’s Initials   Buyer’s Initials  

 

28

 

 

34.  Survival. Sections 32 and 33 above shall survive the Closing and shall not
merge with the Deed.

 

35. Energy Performance Disclosure Information. Section 25402.10 of the
California Public Resources Code requires certain building owners to disclose
the energy performance of certain non-residential buildings to a prospective
buyer. Seller agrees disclose to Buyer, to the extent in Seller’s possession,
the Disclosure Summary Sheet, the Statement of Energy Performance, the Data
Checklist and the Facility Summary (as such terms are defined in Section 1681 of
Title 20, Division 2, Chapter 4, Article 9 of the California Code of
Regulations) for the Improvements (collectively, the “Energy Performance
Disclosure Information”). Buyer agrees that Seller shall have no liability to
Buyer for any errors or omissions in the Energy Performance Disclosure
Information. If and to the extent not prohibited by applicable law, Buyer hereby
waives any right it may have to receive the Energy Performance Disclosure
Information, including any right Buyer may have to terminate this Agreement as a
result of any such failure. Further, Buyer hereby releases Seller from any
liability Seller may have to Buyer as a result of Seller's failure to deliver
the Energy Performance Disclosure Information to Buyer prior to the execution of
this Agreement. The terms of this Section 35 shall survive the Closing and any
earlier termination of this Agreement.

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGES]

 

29

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.

 

BUYER: SELLER:    

AR CAPITAL, LLC,

a Delaware limited liability company

JACKSON-LAGUNA, a California general

partnership

 

By: /s/ Nicholas Schorsch   By: /s/ John M. Jackson, Jr.  
Name: Nicholas Schorsch     Name: John M. Jackson, Jr.   Title:   Manager    
  Title: Managing Partner

 

Date: June 4, 2014   Date: June 4, 2014  

 

 

JACKSON II, LLC, a California limited 

liability company

        By: /s/ John M. Jackson, Jr.     Name: John M. Jackson, Jr.    
Title:  Managing Member

 

  Date: June 4, 2014  

 

 

JACKSON-BIG HORN, LLC, a California 

limited liability company

        By: /s/ John M. Jackson, Jr.     Name: John M. Jackson, Jr.    
Title:   Managing Member

 

  Date: June 4, 2014  

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

 

 

 

THE UNDERSIGNED HEREBY ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS OF THIS
AGREEMENT RELATING TO ESCROW AGENT AND THE EARNEST MONEY.

 

ESCROW AGENT:

 

STEWART TITLE GUARANTY COMPANY

 

By: /s/ Annette M. Comer         Name: Annette M. Comer         Title: Vice
President         Date:   June 5, 2014  

 

 

 

 

EXHIBITS AND SCHEDULES

 

Exhibits               Exhibit A-1   - Real Property – UCD Land         Exhibit
A-2   - Real Property – Laguna Professional Land         Exhibit A-3   - List of
Leases         Exhibit A-4   - Rent Roll         Exhibit B   - Form of Grant
Deed         Exhibit C   - Form of Assignment and Assumption of Leases,
Guaranties and Security Deposits         Exhibit D   - Form of Bill of Sale    
    Exhibit E   - Form of Assignment of Contracts, Permits, Licenses and
Warranties         Exhibit F   - Form of Tenant Estoppel Certificate        
Exhibit G   - Form of Guarantor Estoppel Certificate         Exhibit H   - Form
of Tenant Notice Letter         Exhibit I   - Warranties         Exhibit J   -
Service Contracts

 

Schedules               Schedule 3(a)   - Purchase Price Allocation        
Schedule 11(f)(iv)   - Tenant Improvement Allowances         Schedule 11(f)(vi)
  - Rent Concessions         Schedule 11(f)(vii)   - Prepaid Rents, Security
Deposits and Letters of Credit

 

 

 

 

EXHIBIT A-1

 

LEGAL DESCRIPTION OF PROPERTY

 

UCD Land

 

Page 1 of 2

 

[tpg33ex10-27.jpg]

 

A-1

 

 

EXHIBIT A-1

 

LEGAL DESCRIPTION OF PROPERTY

 

UCD Land

 

Page 2 of 2

 

[tpg34ex10-27.jpg]

 

 

 

 

EXHIBIT A-2

 

LEGAL DESCRIPTION OF PROPERTY

 

Laguna Professional Land

 

[tpg35ex10-27.jpg]

 

A-2

 

 

EXHIBIT A-3

 

LIST OF LEASES

 

·Brian B. Fong, DMD, M.D., an individual, 9390 Big Horn Boulevard, Suite 100:
Lease document dated May 10, 2006, and Lease Amendment No. One dated February 2,
2007

 

·Hao Hoang and Truc Huynh, as individuals, 9390 Big Horn Boulevard, Suite 110:
Lease document dated June 25, 2008, lease Amendment No. One dated August 27,
2008, Lease Amendment No, Two dated November 12, 2008 and Lease Amendment No.
Three dated November 5, 2013.

 

·The Regents of the University of California, 9390 Big Horn Boulevard, Suite
120; Lease dated June 1, 2012, Lease Amendment No. 1 dated November 1, 2012 and
Lease Amendment No. 2 dated June 1, 2013.

 

·Jorge Rico, DDS, an individual, 9390 Big Horn Boulevard, Suite 130: Lease
document dated December 28, 2005 and Lease Amendment No. One dated December 11,
2006.

 

·Mahmoud Khattab, M.D., an individual, 9390 Big Horn Boulevard, Suite 145: Lease
document dated January 22, 2011, Lease Amendment No. One dated May 21, 2012,
Lease Amendment No. Two dated April 4, 2013 and Lease Amendment No. Three dated
May 1, 2014.

 

·Ngoc H. Nguyen and Khanh T. Tran, as individuals, 9390 Big Horn Boulevard,
Suite 175: Lease document dated March 15, 2006 and Lease Amendment No. One dated
November 20, 2006.

 

·CHW Medical Foundation, , 9394 Big Horn Boulevard, Suite 100: Lease document
dated February 22, 2006. Tenant has a Sublease with Unilab, Inc. dba Quest
Diagnostics dated June 6, 2013.

 

·The Regents of the University of California, 8110 Laguna Boulevard: Lease
document dated May 1, 2003, lease Amendment No. 1 dated April 1, 2009, Lease
Amendment No. 2 dated September 20, 2010, Lease Amendment No. 3 dated October
27, 2010 and Lease Amendment No. 4 dated September 4, 2012.

 

A-3

 

 

EXHIBIT A-4

 

RENT ROLL

 

See attached pages

 

B-1

 

 

EXHIBIT A-4                    1 OF 3

 

[tpg38ex10-27.jpg]

 

B-2

 

 

EXHIBIT A-4                    2 OF 3

 

[tpg39ex10-27.jpg]

 

B-3

 

 

EXHIBIT A-4                    3 OF 3

 

[tpg40ex10-27.jpg]

 

B-4

 

EXHIBIT B

 

FORM OF GRANT DEED

GRANT DEED       Recorded at Request of:               When Recorded Mail to:  
            Mail Tax Statements to:                  

 

GRANT DEED

 

In accordance with Section 11932 of the California Revenue and Taxation Code,
Grantor has declared the amount of the transfer tax that is due by a separate
statement that is not being recorded with this Grant Deed.

 

FOR VALUABLE CONSIDERATION, receipt of which is acknowledged,
________________________________, a _________________ (“Grantor”), hereby grants
to ________________________________ (“Grantee”), the real property in the City
of _________________, County of_________________, State of
______________________, described in Exhibit A attached hereto and made a part
hereof (the “Property”).

 

The Property is being sold subject to the exceptions listed on Exhibit B
attached hereto.

 

B-5

 

 

Dated: ___________, 20____.

 

    ,         a             By:           Name:            Title:    

 

B-6

 

 

ACKNOWLEDGMENT

 

STATE OF ________________________)

 

COUNTY OF ______________________)

 

On _____________________, 20____, before me, __________________________, Notary
Public, personally appeared __________________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of
_______________ that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

Signature:

 

(seal)

 

B-7

 

 

EXHIBIT A

 

TO

 

GRANT DEED

 

B-8

 

 

EXHIBIT B

 

TO

 

GRANT DEED

 

B-9

 

 

STATEMENT OF TAX DUE AND REQUEST THAT TAX DECLARATION NOT BE MADE A PART OF THE
PERMANENT RECORD IN THE OFFICE OF THE COUNTY RECORDER

 

(Pursuant to Section 11932 R&T Code)

 

To:Registrar-Recorder

County of ___________________

 

Request is hereby made in accordance with the provisions of the Documentary
Transfer Tax Act that the amount of tax due not be shown on the original
document which names:

 

_________________________

(as Grantor)

 

and

 

_________________________

(as Grantee)

 

Property described in the accompanying document is located in (_____)
unincorporated area or (_____) City of __________.

 

The amount of tax due on the accompanying document is $__________.

 

__________ Computed on full value of property conveyed, or     __________
Computed on full value less liens and encumbrances remaining at time of sale.

 

    Signature of Declarant or Agent           Firm Name  

 

B-10

 

 

EXHIBIT C

 

FORM OF
ASSIGNMENT AND ASSUMPTION OF LEASES, GUARANTIES AND SECURITY
DEPOSITS

 

______________________________ ("Assignor"), in consideration of the sum of Ten
and No/100 Dollars ($10.00) in hand paid and other good and valuable
consideration, the receipt of which is hereby acknowledged, hereby assigns,
transfers, sets over and conveys to ______________________________ ("Assignee"),
all of Assignor's right, title and interest in and to those leases described in
Exhibit A attached hereto and made a part hereof (as amended from time to time,
the “Leases”), including any and all security deposits under the Leases,
together with all of Assignor’s right, title and interest in and to those lease
guaranties described in Exhibit B attached hereto and made a part hereof (as
amended from time to time).

 

Subject to the limitations set forth below, Assignor does hereby agree to
defend, indemnify and hold harmless Assignee from any liability, damages
(excluding speculative damages, consequential damages and lost profits), causes
of action, expenses and reasonable attorneys' fees incurred by Assignee by
reason of the failure of Assignor to have fulfilled, performed and discharged
all of the various commitments, obligations and liabilities of the lessor, or
landlord under and by virtue of the Leases arising or accruing prior to the date
of this Assignment. Subject to the limitations set forth below, Assignee does
hereby agree to defend, indemnify and hold harmless Assignor from any liability,
damages (excluding speculative damages, consequential damages and lost profits),
causes of action, expenses and reasonable attorneys' fees incurred by Assignor
by reason of the failure of Assignee to have fulfilled, performed and discharged
all of the various commitments, obligations and liabilities of the Landlord
under and by virtue of the Leases arising or accruing on and after the date of
this Assignment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

C-1

 

 

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment this
______ day of ______________, 2014, which Assignment is effective this date.
This Assignment may be executed in counterparts, which when taken together shall
be deemed one agreement.

 

  ASSIGNOR:                         By:     Name:     Title:            
ASSIGNEE:                         By:       Name:       Title:  

 

C-2

 

 

EXHIBIT A

 

Leases

 

(Seller to prepare Exhibit)

 

C-3

 

 

EXHIBIT B

 

Guaranties

 

(Seller to prepare Exhibit)

 

D-4

 

 

EXHIBIT D

 

FORM OF BILL OF SALE

 

For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, ______________________________, a ___________________________,
having an address at ____________________________ (“Seller”), hereby bargains,
sells, conveys and transfers to ____________________________ (“Buyer”), a
_______________________________, all of Seller’s right, title and interest, if
any, in and to those certain items of personal and intangible property
(including any warranty made by third parties in connection with the same and
the right to sue on any claim for relief under such warranties) (the “Personal
Property”) located at and used exclusively in connection with that certain real
property located in the State of California, as more particularly described on
Schedule A attached hereto and made a part hereof.

 

Seller has not made and does not make any express or implied warranty or
representation of any kind whatsoever with respect to the Personal Property,
including, without limitation, with respect to title, merchantability of the
Personal Property or its fitness for any particular purpose, the design or
condition of the Personal Property; the quality or capacity of the Personal
Property; workmanship or compliance of the Personal Property with the
requirements of any law, rule, specification or contract pertaining thereto;
patent infringement or latent defects. Buyer accepts the Personal Property on an
“as is, where is” basis.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

D-1

 

 

IN WITNESS WHEREOF, Seller has caused this instrument to be executed and
delivered as of this ___ day of _______, 2014.

 

  SELLER:                             By:               Name:              
Title:    

 

D-2

 

 

SCHEDULE A

 

TO BILL OF SALE

 

[Add legal description of Real Property]

 

D-3

 

 

EXHIBIT E

 

FORM OF ASSIGNMENT OF CONTRACTS,
PERMITS, LICENSES AND WARRANTIES

 

THIS ASSIGNMENT, made as of the ___ day of ________, 2014, by _________________,
a __________________________ (“Assignor”), to _____________________________, a
__________________________________________(“Assignee”).

 

WITNESSETH:

 

WHEREAS, by Agreement for Purchase and Sale of Real Property (the “Purchase
Agreement”) having an effective date of ________, 2014, between Assignor and AR
Capital, LLC, Assignee’s predecessor-in-interest under the Purchase Agreement,
Assignee has agreed to purchase from Assignor as of the date hereof, and
Assignor has agreed to sell to Assignee, that certain property located at
________________________ (the “Property”); and

 

WHEREAS, Assignor desires to assign to Assignee as of the date hereof all of
Assignor’s right, title and interest in those contracts set forth on Exhibit A
attached hereto and made a part hereof, and in any permits, trademarks, licenses
and warranties held by Assignor in connection with the Property (collectively,
the “Contracts”).

 

NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Assignor hereby assigns, sets over and transfers unto Assignee to
have and to hold from and after the date hereof all of the right, title and
interest of Assignor in, to and under the Contracts. Assignee does hereby accept
the foregoing assignment and does hereby assume and become responsible for and
agree to perform, discharge, fulfill and observe all of the obligations,
covenants and conditions of Assignor with respect to the Contracts which are to
be performed hereafter. Assignor agrees without additional consideration to
execute and deliver to Assignee any and all additional forms of assignment and
other instruments and documents that may be reasonably necessary or desirable to
transfer or evidence the transfer to Assignee of any of Assignor’s right, title
and interest to any of the Contracts.

 

This Assignment shall be governed by the laws of the State of California,
applicable to agreements made and to be performed entirely within said State.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

E-1

 

 

IN WITNESS WHEREOF, Assignor has duly executed this Assignment as of the date
first above written.

 

  ASSIGNOR:               a           By:     Name:     Title:  

 

E-2

 

 

Exhibit A

 

Contracts

 

E-3

 

 

EXHIBIT F

 

FORM OF TENANT ESTOPPEL CERTIFICATE

 

The undersigned hereby certifies to AR Capital, LLC (“ARC”), [ARHC LPELKCA01,
LLC][ARHC UCELKCA01, LLC] (“Approved Assignee”; ARC and Approved Assignee are
hereinafter referred to, individually and collectively, as “Buyer”), KeyBank
National Association (“Lender”), and [insert name of Seller: JACKSON-LAGUNA, a
California general partnership and JACKSON II, LLC, a California limited
liability company OR JACKSON-BIG HORN, LLC, a California limited liability
company] (“Landlord”) and their respective successors and assigns as follows:

 

1.       The undersigned is the tenant under that certain [insert title of lease
document] [(the “Lease”)], dated as of _________ __, ____, by and between
Landlord and _________________________ (“Tenant”) [, as amended by that certain
[insert title of lease amendment document], dated as of _________ __, ____, by
and between _________________________ and _________________________
(collectively, the “Lease”)], pursuant to which Tenant leases certain premises
known as [Suite ____], consisting of _______ rentable square feet, at that real
property located at _________________________________________ (the “Premises”).

 

2.       Except as set forth above, the Lease has not been modified, changed,
altered, supplemented or amended in any respect, nor have any provisions thereof
been waived.

 

3.       The Lease is valid and in full force and effect on the date hereof. The
Lease represents the entire agreement between Landlord and Tenant with respect
to the Premises and the land on which the Premises are situated.

 

4.       Tenant is not entitled to, and has made no agreement with Landlord or
its agents or employees concerning, free rent, partial rent, rebate of rent
payments, credit or offset or reduction in rent, or any other type of rental
concession including, without limitation, lease support payments, lease
buy-outs, or assumption of any leasing or occupancy agreements of Tenant.

 

5.       The initial term of the Lease began on __________ __, _____ and expires
on ________ __, 20__. The Rent Commencement Date was __________ __, ____. Tenant
has accepted possession of the Premises and is open for business. Tenant has not
sublet all or a portion of the Premises to any sublessee and has not assigned,
transferred or encumbered any of its rights or interests under the Lease.

 

6.       Tenant has no outstanding options or rights to renew or extend the term
of the Lease, except as follows: ________________ (if none, please state
“none”). Tenant has no outstanding expansion options, other options, rights of
first refusal or rights of first offer to purchase the Premises or any part
thereof and/or the land on which the Premises are situated, or rights of first
offer to lease with respect to all or any part of the Premises.

 

7.       The [Base Annual Rent] payable under the Lease is $____________
($_________ monthly). Such [Base Annual Rent] payable under the Lease shall be
adjusted during the initial

 

F-1

 

 

term of the Lease as follows: (a) from ___________, 20__ to and including
______________, 20__, the Base Annual Rent shall be $_______ ($_______ monthly);
(b) from ___________, 20___ to and including ____________, 20___ the Base Annual
Rent shall be $________ ($________ monthly); [and from __________, 20__ to and
including __________, 20___ the Base Annual Rent shall be $_________
($__________ monthly)]. Such rent has been paid through and including the month
of ____________, 2014. Additional rent under the Lease has been paid through and
including the month of __________, 2014. No such rent (excluding security
deposits) has been paid more than one (1) month in advance of its due date.

 

8.       Tenant's security deposit, if any, is $_________________ (if none,
please state “none”).

 

9.       No event has occurred and no condition exists that constitutes, or that
with the giving of notice or the lapse of time or both, would constitute, a
default by Tenant or, to the best knowledge of Tenant, Landlord under the Lease.
Tenant has no existing defenses or offsets against the enforcement of the Lease
by Landlord.

 

10.      (a) All required contributions by Landlord to Tenant on account of
Tenant's improvements have been received by Tenant and all of Tenant's tenant
improvements have been completed in accordance with the terms of the Lease.

 

            (b)  Landlord has satisfied all its obligations to Tenant arising
out of or incurred in connection with the construction of the tenant
improvements on the Premises and no off-set exists with respect to any rents or
other sums payable or to become payable by the Tenant under the Lease.

 

11.       All licenses necessary for using and operating the Premises as a
medical office are held by Tenant and are in full force and effect.

 

12.       No voluntary actions or, to Tenant’s best knowledge, involuntary
actions are pending against Tenant under the bankruptcy laws of the United
States or any state thereof.

 

13.       This Certificate is delivered to induce Buyer to acquire the Premises
and Lender to provide certain financing to Buyer, with the understanding that
Buyer, Landlord and Lender will rely upon the truth of the matters set forth in
this Certificate.

 

[SIGNATURE PAGE FOLLOWS]

 

F-2

 

 

The undersigned is duly authorized to execute this Certificate on behalf of
Tenant.

 

Dated: ____________, 2014

 

TENANT:

 

____________________, a ________________

 

By:       Name:     Title:  

 

F-3

 

 

EXHIBIT G

 

FORM OF GUARANTOR ESTOPPEL CERTIFICATE

 

The undersigned hereby certifies to AR Capital, LLC (“ARC”), [ARHC LPELKCA01,
LLC][ARHC UCELKCA01, LLC] (“Approved Assignee”; ARC and Approved Assignee are
hereinafter referred to, individually and collectively, as “Buyer”), KeyBank
National Association (“Lender”) [insert name of Seller: JACKSON-LAGUNA, a
California general partnership and JACKSON II, LLC, a California limited
liability company OR JACKSON-BIG HORN, LLC, a California limited liability
company] (“Landlord”) and their respective successors and assigns as follows:

 

1.      The undersigned (“Guarantor”) is the guarantor of that certain [Lease
Agreement] dated as of _____________ __, ____, as amended by [insert amendments]
([collectively,] the “Lease”) by and between Landlord and
__________________________ (“Tenant”), pursuant to which Tenant leases from
Landlord certain space known as Suite ____ at the land and building located at
_______________________________, as more particularly described in the Lease
(the “Premises”). Such guaranty is made pursuant to that certain Guarantee dated
as of ________ __, ____ (the “Guaranty”) from Guarantor to Landlord.

 

2.       The Guaranty has not been modified, changed, altered, supplemented or
amended in any respect, nor have any provisions thereof been waived.

 

3.       The Guaranty is valid and in full force and effect on the date hereof.

 

4.      No voluntary actions or, to Guarantor’s best knowledge, involuntary
actions are pending against Guarantor under the bankruptcy laws of the United
States or any state thereof.

 

5.       This Certificate is delivered to induce Buyer to acquire the Premises
and Lender to provide certain financing to Buyer, with the understanding that
Buyer, Landlord and Lender will rely upon the truth of the matters set forth in
this Certificate.

 

[SIGNATURE PAGE FOLLOWS]

 

G-1

 

 

The undersigned is duly authorized to execute this Certificate on behalf of
Guarantor.

 

Dated: ____________, 2014

 

  GUARANTOR:       ______________, a ___________________         By:       Name:
    Title:

 

G-2

 

 

EXHIBIT H

 

FORM OF NOTICE TO TENANT

 

________________ ___, 2014

 

TO:[INSERT TENANT’S NOTICE ADDRESS FROM LEASE]

 

Re:Notice of Change of Ownership of ______________________________

 

Ladies and Gentlemen:

 

YOU ARE HEREBY NOTIFIED AS FOLLOWS:

 

That as of the date hereof, the undersigned has transferred, sold, assigned, and
conveyed all of its right, title and interest in and to the above-described
property, (the “Property”) to [ARHC LPELKCA01, LLC][ARHC UCELKCA01, LLC] (the
“New Owner”) and assigned to New Owner, all of the undersigned’s right, title
and interest under that certain Lease, dated _________, between ________as
tenant and ____________as landlord (the “Lease”), together with any security
deposits or letters of credit held thereunder.

 

Accordingly, New Owner is the landlord under the Lease and future notices and
correspondence with respect to your leased premises at the Property should be
made to the New Owner at the following address:

 

[ARHC LPELKCA01, LLC][ARHC UCELKCA01, LLC]

c/o American Realty Capital Healthcare Trust II, Inc.

7621 Little Avenue, Suite 200

Charlotte, North Carolina 28226

Attention: Regional Asset Manager

 

With a copy to:

 

[ARHC LPELKCA01, LLC][ARHC UCELKCA01, LLC]

c/o American Realty Capital Healthcare Trust II, Inc.

405 Park Avenue, 15th Floor

New York, NY 10022

Attention: General Counsel

 

You will receive a separate notification from New Owner regarding the new
address for the payment of rent. In addition, to the extent required by the
Lease, please amend all insurance policies you are required to maintain pursuant
to the Lease to name New Owner as an additional insured thereunder and promptly
provide New Owner with evidence thereof.

 

[SIGNATURE PAGE FOLLOWS]

 

H-1

 

 

  Very truly yours,   [PRIOR LANDLORD]         By:     Name:     Title:  

 

H-2

 

 

EXHIBIT I

 

WARRANTIES

 

There are no Warranties in place for any of the suites at 9390 Big Horn
Boulevard, 9394 Big Horn Boulevard or 8110 Laguna Boulevard.

 

J-1

 

 

EXHIBIT J

 

Service Contracts

 

9390/9394 BIG HORN BLVD.   VENDOR LIST   Service Vendor Address Account No.
Contact Office Phone Fire Extinguisher Maintenance Firecode 3722 W. Pacific
Avenue, Sacramento CA 95820     (916) 453-5561 Fire Alarm Monitoring Sacramento
Valley Alarm 5933 Folsom Blvd., Sacramento, CA 95819 9258 Stacey Himenes
 916-452-1481 HVAC Maintenance BOS Sheet Metal, Inc. 3325 52nd Avenue,
Sacramento, CA 95823   Mike Pierson 916-428-7180 Fire Sprinkler Inspection
(Qrtly) Foothill Fire Protection 4000 Alvis Court Rocklin, CA  95677    
 916-452-1481 Landscaping The Growing Company 4 Wayne Court, Bldg 3, Sacramento,
CA  95829  Jackson-08 Bettie Huerta 916-739-1420 Security Services Bayer
Protective Services 3436 American River Drive, Suite 10, Sacramento, CA 95864
5340104 Bryon Bayer 916-486-5800 Trash Removal Allied Waste / Republic Services
3326 Fitzgerald Rd., Rancho Cordova, CA 95742-6809 3-0922-0111104 Arielle Bailey
916-631-0600 Telephone / Fire Monitoring Frontier Communications P.O. Box 20550,
Rochester, NY 14602.0550 (916)691-9639-101306-8 and (916)691-9642-072506-8  
1(800) 921-8102 Window Washing High Rise Window Cleaning P.O. Box 13821,
Sacramento, CA 95853   Michelle Schmidt 916-646-1086 Electric Service SMUD P.O.
Box 15555, Sacramento, CA 95852     877-622-7683 Water/Sewer Sacramento County
Utilities P.O. Box 1804, Sacramento, CA 95812     916-875-5555

 

 

 

 

EXHIBIT J

 

Service Contracts

 

8110 LAGUNA BLVD.   VENDOR LIST   Service Vendor Address Acct. No Contact Office
Phone Fire Extinguisher Maintenance Firecode 3722 W. Pacific Avenue, Sacramento
CA 95820   Tamara Fernandez  (916) 453-5561 Fire Alarm Monitoring Sacramento
Valley Alarm 5933 Folsom Blvd., Sacramento, CA 95819

 

 

1364

Stacey Himenes 916-452-1481 Booster Pump Maintenance Airco Commercial Services
5725 Alder Avenue, Sacramento, CA  95828

 

 

C 1602

Greg Gordon 916 381-4526 HVAC Maintenance BOS Sheet Metal, Inc. 3325 52nd
Avenue, Sacramento, CA 95823

 

 

14-196

Mike Pierson 916-428-7180 Landscaping - Exterior The Growing Company 4 Wayne
Court, Bldg. 3, Sacramento, CA 95829   Bettie Huerta 916-739-1420 Pest Control
Parish Termite & Pest Management, Inc. P.O. Box 1467 Citrus Heights, CA
95611-1467   Dee Dee Parish 916-722-5000 Fire Sprinkler System Testing Foothill
Fire Protection 3299 Swetzer Road., Loomis, CA  95650   John M. Nwill
916-683-3583 Security Services Bayer Protective Services 3436 American River
Drive, Suite 10, Sacramento, CA 95864

 

 

Jackson

Bryon Bayer 916-486-5800 Trash Removal Allied Waste / Republic Services 3326
Fitzgerald Rd., Rancho Cordova, CA 95742-6809

 

 

3-092209998842

Arielle Bailey 916-631-0600 Telephone / Fire Monitoring Frontier Communications
P.O. Box 20550, Rochester, NY 14602.0550

 

916-684-3209-080304-8

  1-800-921-8102 

Window Washing

(Tenant reimburses)

High Rise Window Cleaning P.O. Box 13821, Sacramento, CA 95853   Michelle
Schmidt 916-646-1086

 

 

 

 

Schedule 3(a)

 

Purchase Price Allocation

 

Property  Purchase Price   Earnest Money  Laguna Professional Property 
$17,451,500.00   $793,250.00  UCD Property  $10,048,500.00   $456,750.00 
Totals  $27,500,000.00   $1,250,000.00 

 

Schedule 3(a)

 

 

 

Schedule 11(f)(iv)

 

Tenant Improvement Allowances

 

1)THE REGENTS OF THE UNIVERSITY OF CALIFORNIA/UCD MEDICAL GROUP 8110 LAGUNA
BOULEVARD

 

·$10/sf allowance negotiated during recent renewal. Allowance totals $258,610
and Tenant has not used the allowance as of 6/1/14.

 

2)MAHMOUD KHATTAB, MD 9390 BIG HORN BOULEVARD, SUITE 145

 

·Lease Amendment to expand Dr. Khattab has been signed and we are in the process
of completing Construction Drawings. The Tenant improvement budget is
$43,806.00.

 

Schedule 11(f)(vii)

 

 

Schedule 11(f)(vi)

 

Rent Concessions

 

As of 6/1/14 there are no rent concessions due any Tenants at 9390 Big Horn
Boulevard, 9394 Big Horn Boulevard or 8110 Laguna Boulevard.

 

 

 

 

Schedule 11(f)(vii)

 

Prepaid Rents, Security Deposits and Letters Of Credit

 

9390 BIG HORN BOULEVARD

 

TENANT  SUITE   SECURITY DEPOSIT            Brian B. Fong, M.D.   100  
$7,956.00              Hoang/Huynh   110   $3,262.00              The Regents of
the University of California
UC Davis Medical Group   120    NONE              Jorge Rico, DDS   130  
$7,804.00              Mahmoud Khattab, M.D.   145   $2,257.00             
Nguyen/Tran   175   $3,776.00              Total     $ 25,055.00             
9394 BIG HORN BOULEVARD                       CHW Medical Foundation   100  
 NONE              8110 LAGUNA BOULEVARD                       The Regents of
the University of California
UC Davis Medical Group        NONE              Total Deposits as of 6/1/14 
     $25,055.00