Exhibit 10.1

AGREEMENT OF PURCHASE AND SALE

BY AND BETWEEN

THE REALTY ASSOCIATES FUND IX, L.P.

AND

BANC OF CALIFORNIA, NATIONAL ASSOCIATION

 

  Date:    October 2, 2015   Property:   

3 MacArthur Place (a/k/a 3 Imperial Promenade)

Santa Ana, California

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AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (the “Agreement”) is made and entered into
as of the 2nd day of October, 2015, by and between The Realty Associates Fund
IX, L.P., a Delaware limited partnership (hereinafter referred to as “Seller”),
and BANC OF CALIFORNIA, National Association (hereinafter referred to as
“Purchaser”).

In consideration of the mutual promises, covenants and agreements hereinafter
set forth and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:

ARTICLE I.

Sale of Property

1.1 Sale of Property. Seller hereby agrees to sell, assign and convey to
Purchaser and Purchaser agrees to purchase from Seller, the following:

1.1.1 Land and Improvements. Those certain parcels of real property, more
particularly described, on Exhibit A attached hereto and incorporated herein by
reference thereto (the “Land”), together with all improvements located thereon
(the “Improvements”).

1.1.2 Leases. All of Seller’s right, title and interest in and to all leases,
subleases, licenses and other occupancy agreements, together with any and all
amendments, modifications or supplements thereto (each, a “Lease” and
collectively, the “Leases”, which may include the Approved New Leases, as that
term is defined in Section 9.5 below), are hereafter referred to collectively as
the “Leases” being more particularly described on Exhibit E attached hereto, and
all prepaid rent attributable to the period following the Closing, and subject
to Section 4.2.4 below, the security deposits and tenant letters of credit (as
applicable) under such Leases (collectively, the “Leasehold Property”).

1.1.3 Real Property. All rights, privileges and easements appurtenant to
Seller’s interest in the Land and the Improvements, if any, including, without
limitation, all of Seller’s right, title and interest, if any, in and to all
mineral and water rights and all easements, licenses, covenants and other
rights-of-way or other appurtenances used in connection with the beneficial use
and enjoyment of the Land and the Improvements (the Land, the Improvements and
all such easements and appurtenances are sometimes collectively referred to
herein as the “Real Property”).

1.1.4 Personal Property. All of Seller’s right, title and interest in and to all
personal property (including equipment), if any, owned by Seller and located on
the Real Property as of the date hereof, all inventory located on the Real
Property on the date of Closing (hereinafter defined), and all fixtures (if any)
owned by Seller and located on the Real Property as of the date hereof (the
“Personal Property”).

 

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1.1.5 Intangible Property. All of Seller’s right, title and interest in and to
the following: all non-exclusive trademarks and trade names, if any, used or
useful in connection with the Real Property, but only to the extent that the
same are not trademarks or trade names of Seller or any of Seller’s affiliated
companies (collectively, the “Trade Names”), together with the Seller’s
interest, if any, in and to any service, equipment, supply and maintenance
contracts (the “Existing Contracts”) (the Existing Contracts, together with any
Approved Service Contract Amendment or Approved New Service Contract, as those
terms are defined in Section 9.6 below, are collectively referred to as the
“Contracts”) guarantees, licenses, approvals, certificates, permits and
warranties relating to the property, to the extent assignable (collectively, the
“Intangible Property”). The Real Property, the Leasehold Property, the Personal
Property, the Trade Names and the Intangible Property are sometimes collectively
hereinafter referred to as the “Property”.

1.2 Excluded Property. It is hereby acknowledged by the parties that Seller
shall not convey to Purchaser claims relating to any real property tax refunds
or rebates for periods accruing prior to the Closing, existing insurance claims
and any existing claims against tenants of the Property (“Excluded Property”),
all of which such Excluded Property shall be reserved by Seller. As of the
Effective Date of this Agreement, Seller stipulates that, except as otherwise
disclosed in the Documents, there is no Excluded Property with respect to the
Property.

ARTICLE II.

Purchase Price

2.1 Purchase Price. The purchase price for the Property shall be SEVENTY SEVEN
MILLION AND NO/100 DOLLARS ($77,000,000.00) (the “Purchase Price”). The Purchase
Price, as adjusted by all prorations as provided for herein, shall be paid to
Seller by Purchaser at Closing, as herein defined, by wire transfer of
immediately available federal funds.

ARTICLE III.

Deposit

3.1 Initial Deposit. Within one (1) business day after the Effective Date, as
defined in Section 16.4 of this Agreement and as a condition precedent to the
formation of this Agreement, Purchaser shall deposit SEVEN HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($750,000.00) (the “Initial Deposit”) with Chicago
Title Insurance Company, Suite 800, 2828 Routh Street, Dallas, Texas 75201,
Attention: Ellen Schwab (the “Escrow Agent”) in immediately available federal
funds, the receipt of which is hereby acknowledged by Escrow Agent’s execution
hereof. If Purchaser shall fail to deposit the Initial Deposit within the time
period provided for above, Seller may at any time prior to the deposit of the
Initial Deposit, terminate this Agreement, in which case this Agreement shall be
null and void ab initio and in such event Escrow Agent shall immediately deliver
to Seller all copies of this Agreement in its possession and thereafter, neither
party shall have any further rights or obligations to the other hereunder,
except as otherwise set forth in this Agreement.

 

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3.2 Additional Deposit. If Purchaser elects not to terminate this Agreement
under Section 5.5, Purchaser shall, on or before the end of the Feasibility
Period, deposit ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) (the “Additional
Deposit”) with Escrow Agent in immediately available federal funds. If Purchaser
shall fail to deposit the Additional Deposit within the time period provided for
above, Seller may at any time prior to the deposit of the Additional Deposit,
terminate this Agreement, in which case this Agreement shall be null and void ab
initio and in such event Escrow Agent shall immediately deliver the Initial
Deposit to Seller and thereafter, neither party shall have any further rights or
obligations to the other hereunder, except as otherwise set forth in this
Agreement. As used herein, the term “Deposit” means the Initial Deposit and the
Additional Deposit, together with all interest accrued thereon. The Initial
Deposit (and to the extent paid by Purchaser upon satisfaction of matters
related to the Feasibility Period and title and Survey contingencies, the
Additional Deposit) shall automatically become nonrefundable upon the expiration
of the Feasibility Period (as defined in Section 5.1 below), unless Purchaser
terminates (or is deemed to have terminated) this Agreement in accordance with
the express provisions of this Agreement and Purchaser is entitled to the
immediate return of the Initial Deposit (and to the extent paid by Purchaser
upon satisfaction of matters related to the Feasibility Period and title and
Survey contingencies, the Additional Deposit) in accordance with the express
provisions of Section 5.5 of this Agreement. Upon such delivery of the Deposit
to Purchaser, this Agreement shall terminate and neither Seller nor Purchaser
shall have any further rights or obligations hereunder, except for the Surviving
Termination Obligations (as defined in Section 16.12 herein), which shall
survive such termination.

3.3 Application of Deposit. If the Closing occurs, the Deposit shall be paid to
Seller and credited against the Purchase Price at Closing. If the Closing does
not occur in accordance with the terms hereof, the Deposit shall be held and
delivered as hereinafter provided.

3.4 Interest Bearing. The Deposit shall (i) be held in an interest-bearing
escrow account by Escrow Agent in an institution as directed by Purchaser and
reasonably acceptable to Seller and (ii) include any interest earned thereon. To
allow the interest bearing account to be opened, Purchaser’s and Seller’s tax
identification or social security numbers are set forth below their signatures.

3.5 Escrow Agent. Escrow Agent is executing this Agreement to acknowledge Escrow
Agent’s responsibilities hereunder, which may be modified only by a written
amendment signed by all of the parties. Any amendment to this Agreement that is
not signed by Escrow Agent shall be effective as to the parties thereto, but
shall not be binding on Escrow Agent. Escrow Agent shall accept the Deposit with
the understanding of the parties that Escrow Agent is not a party to this
Agreement except to the extent of its specific responsibilities hereunder, and
does not assume or have any liability of the performance or non-performance of
Purchaser or Seller hereunder to either of them. Additional provisions with
respect to the Escrow Agent are set forth in ARTICLE XVI.

3.6 Independent Consideration. Within one (1) business day after the Effective
Date, Purchaser shall pay to Seller (outside of Escrow) the sum of FIFTY AND
NO/100 DOLLARS ($50.00), as “Independent Consideration” for the execution of
this Agreement. Such Independent Consideration shall be nonrefundable and shall
not be applied against the Purchase Price.

 

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ARTICLE IV.

Closing, Prorations and Closing Costs

4.1 Closing. The closing of the purchase and sale of the Property shall occur on
or before 10:00 a.m. Pacific Time on or before Wednesday, November 11, 2015 and
shall be held through escrow at the offices of the Escrow Agent, or at such
other place agreed to by Seller and Purchaser. “Closing” shall be deemed to have
occurred when the Title Company has been instructed by both parties to release
escrow and to record the Deed. Time is hereby made of the essence. The date of
Closing is referred to in this Agreement as the “Closing Date.”

4.2 Prorations. All matters involving prorations or adjustments to be made in
connection with Closing and not specifically provided for in some other
provision of this Agreement shall be adjusted in accordance with this
Section 4.2. Except as otherwise set forth herein, all items to be prorated
pursuant to this Section 4.2 shall be prorated as of midnight of the day
immediately preceding the Closing Date, with Purchaser to be treated as the
owner of the Property, for purposes of prorations of income and expenses, on and
after the Closing Date.

4.2.1 Taxes. Real estate and personal property taxes and special assessments, if
any, shall be prorated as of the Closing Date and shall be made on the basis of
a 365-day year. Seller shall pay all real estate and personal property taxes and
special assessments attributable to the Property to, but not including, the
Closing Date. If the real estate and/or personal property tax rate and
assessments have not been set for the year in which the Closing occurs, then the
proration of such taxes shall be based upon the rate and assessments for the
preceding tax year and such proration shall be adjusted in cash between Seller
and Purchaser upon presentation of written evidence that the actual taxes paid
for the year in which the Closing occurs, differ from the amounts used in the
Closing in accordance with the provisions of Section 4.2.5 hereof. All taxes
imposed due to a change of use of the Property after the Closing Date shall be
paid by the Purchaser. If any taxes which have been apportioned shall
subsequently be reduced by abatement, the amount of such abatement, less the
cost of obtaining the same and after deduction of sums payable to tenants under
Leases or expired or terminated Leases, shall be equitably apportioned between
the parties hereto.

Purchaser acknowledges that Seller has filed (or may file) an appeal (the
“Appeal”) with respect to real estate ad valorem or other similar property taxes
applicable to the Property.

i. If such Appeal relates to any tax year prior to the Tax Year in which the
Closing occurs, Seller shall be entitled, in Seller’s sole discretion, to
continue to pursue such Appeal after the Closing Date, and, in the event that
the Appeal is successful in reducing the amount of property taxes payable with
respect to any such prior Tax Year, Seller shall be entitled to the full amount
of any rebate, refund or reduction (collectively, a “Refund”) resulting from the
Appeal. Seller shall not be obligated to continue to pursue any Appeal with
respect to the Property, including, without limitation, any Appeal that relates
to a tax year during or after the tax year in which Closing occurs. If Purchaser
receives any refund of property taxes for a prior tax year, Purchaser promptly
shall remit the same to Seller.

 

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ii. If such Appeal relates to the tax year in which Closing occurs, then, prior
to the Closing, Seller shall notify Purchaser whether Seller desires to continue
to process the Appeal from and after the Closing Date. If Seller fails to notify
Purchaser of its election to continue the Appeal, Seller will be deemed to have
elected not to continue the Appeal from and after the Closing Date and the
provisions of Section iv below shall apply.

iii. If Seller elects to continue the Appeal, then, from and after the Closing
Date, Seller agrees that it may continue, at such Seller’s sole cost and
expense, to reasonably process the Appeal to conclusion with the applicable
taxing authority (including any further appeals which such Seller deems
reasonable to pursue). In the event that the Appeal is successful in reducing
the amount of property taxes payable with respect to the tax year in which
Closing occurs, then Purchaser and Seller shall share any Refund on a pro rata
basis (in accordance with the number of days in the tax year of Closing that
each held title to the Property) after first reimbursing such Seller for its
actual, reasonable and documented third-party costs (collectively, the
“Third-Party Costs”) incurred in connection with the Appeal. If Third-Party
Costs equal or exceed the amount of the Award, then Seller shall be entitled to
the full amount of the Award.

iv. If Seller does not elect to continue the Appeal, then, from and after the
Closing Date, Purchaser agrees that it may continue, at Purchaser’s sole cost
and expense, to reasonably process the Appeal to conclusion with the applicable
taxing authority (including any further appeals which Purchaser deems reasonable
to pursue). In the event that the Appeal is successful in reducing the amount of
property taxes payable with respect to the tax year in which Closing occurs,
then Purchaser and the applicable Seller shall share any Refund on a pro rata
basis (in accordance with the number of days in the tax year of Closing that
each held title to the Property) after first reimbursing each of Purchaser and
Seller for their respective Third-Party Costs incurred in connection with the
Appeal. If Third-Party Costs equal or exceed the amount of the Award, then the
Award shall be applied to such Third-Party Costs on a pro rata basis, with each
of Purchaser and Seller receiving a portion of the Award equal to the product of
(a) a fraction, the numerator of which is the respective party’s Third-Party
Costs, and the denominator of which is the total of both parties’ Third-Party
Costs, and (b) the amount of the Award.

4.2.2 Insurance. There shall be no proration of Seller’s insurance premiums or
assignment of Seller’s insurance policies. Purchaser shall be obligated (at its
own election) to obtain any insurance coverage deemed reasonably necessary or
appropriate by Purchaser.

4.2.3 Utilities. Purchaser and Seller hereby acknowledge and agree that the
amounts of all telephone, electric, sewer, water and other utility bills, trash
removal bills, janitorial and maintenance service bills and all other operating
expenses relating to the Property and allocable to the period prior to the
Closing Date shall be determined and paid by Seller

 

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before Closing, if possible, or shall be paid thereafter by Seller or adjusted
between Purchaser and Seller immediately after the same have been determined.
Seller shall attempt to have all utility meters read as of the Closing Date.
Purchaser shall cause all utility services to be placed in Purchaser’s name as
of the Closing Date. If permitted by the applicable utilities, all utility
deposits in Seller’s name shall be assigned to Purchaser as of the Closing Date
and Seller shall receive a credit therefor at Closing.

4.2.4 Rents. Rents (including, without limitation, estimated pass-through
payments, payments for common area maintenance reconciliations and all
additional charges payable by tenants under the Leases, (collectively, “Rents”))
collected by Seller prior to Closing shall be prorated as of the Closing Date on
the basis the number of days in the calendar month in which the Closing Date
occurs. To the extent there are any Rents owing to Seller as of the Closing
which relate to periods of time prior to the Closing Date, but which have not
actually been collected by Seller as of the Closing (“Delinquent Rents”),
Purchaser shall not be obligated to pay to Seller (or give Seller a credit for),
the amount of such Delinquent Rents on the Closing. All Rents which are received
by Seller or Purchaser after the Closing Date shall be applied: first, to
amounts due and owing to Seller and Purchaser respectively for the month in
which the Closing occurs, second, to amounts due and owing to Purchaser for
periods of time from and after the month in which the Closing occurs and third,
to any other Delinquent Rents due to Seller for periods of time prior to the
month in which the Closing occurs. Unless Purchaser elects in its sole
discretion to pay Seller the applicable Delinquent Rents payable to Seller
pursuant hereto, Purchaser may not waive any Delinquent Rents, nor modify a
Lease so as to reduce any Delinquent Rents which are owed under such Lease, for
any period in which Seller is entitled to receive such charges or amounts,
without first obtaining Seller’s prior written consent, which consent shall not
be unreasonably withheld, conditioned or delayed. Seller and Purchaser hereby
agree to promptly remit to the other the amount of any Rents received and owing
to each other pursuant to the provisions of this Section 4.2.4. Notwithstanding
the foregoing, “true up” payments received from tenants attributable to a
year-end reconciliation of actual and budgeted pass-through payments shall be
allocated among Seller and Purchaser pro rata in accordance with their
respective period of ownership as set forth in Section 4.2.5 below. Seller shall
have the right, after Closing, to proceed against tenants for Rents allocable to
the period of Seller’s ownership of the Property, including, without limitation,
the right to collect (without eviction or termination of a Lease) the same from
the tenants and/or third parties responsible for payment of such Delinquent
Rents, which right shall include, without limitation, the right to file one or
more claims or causes of action that are permitted pursuant to applicable law,
but not a claim for eviction. Purchaser agrees that it shall use commercially
reasonable efforts to collect all pass-through rents payable by tenants and any
Delinquent Rents (provided, however, that Purchaser shall have no obligation to
institute legal proceedings, including an action for unlawful detainer, against
a tenant owing Delinquent Rents). The amount of any unapplied security deposits
under the Leases held by Seller in cash at the time of Closing shall be credited
against the Purchase Price; accordingly, Seller shall retain the actual cash
deposits. Seller shall also transfer to Purchaser any security provided by a
tenant under a Lease that is held in the form of letters of credit or other
non-cash forms (the “Letters of Credit”) if the same are transferable, at
Seller’s cost (including Seller’s payment of any third party transfer fees and
expenses) to

 

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the extent the applicable Lease does not obligate tenant to pay for such costs,
fees and expenses. If any of the Letters of Credit are not transferable, Seller
shall request the tenants obligated under Letters of Credit to cause new letters
of credit to be issued in favor of Purchaser in replacement thereof and in the
event such a new letter of credit is not issued in favor of Purchaser by
Closing, the parties will nonetheless proceed to the Closing and Purchaser shall
diligently pursue such replacement after Closing and Seller shall take all
reasonable action, as directed by Seller and at Seller’s expense, in connection
with the presentment of such Letters of Credit for payment as permitted under
the terms of the applicable Lease. In consideration of Seller’s foregoing
agreement, Purchaser shall indemnify, defend and hold Seller harmless from any
liability, damage, loss, cost or expense resulting from an alleged wrongful
drawing by Purchaser upon any of the Letters of Credit after the Closing.

4.2.5 Calculations. For purposes of calculating prorations, Purchaser shall be
deemed to be in title to the Property, and, therefore entitled to the income
therefrom and responsible for the expenses thereof for the entire day upon which
the Closing occurs. All such prorations shall be made on the basis of the actual
number of days of the month which shall have elapsed as of the day of the
Closing and based upon the actual number of days in the month and a three
hundred sixty five (365) day year. The amount of such prorations shall be
initially performed at Closing but shall be subject to adjustment in cash after
the Closing as and when complete and accurate information becomes available, if
such information is not available at the Closing. Seller and Purchaser agree to
cooperate and use their best efforts to make such adjustments no later than
sixty (60) days after the Closing (or as soon thereafter as may be practicable,
with respect to common area maintenance and other additional rent charges
(including pass-throughs for real estate and personal property taxes and special
assessments) payable by tenants under the Leases). Except as set forth in this
Section 4.2, all items of income and expense which accrue for the period prior
to the Closing will be for the account of Seller and all items of income and
expense which accrue for the period on and after the Closing will be for the
account of Purchaser. The provisions of Section 4.2 shall survive the Closing.

4.2.6 Leasing Commissions and Leasing Costs. Seller shall be responsible for all
leasing commissions and other leasing costs due and payable by the landlord with
respect to Leases executed prior to the Effective Date (other than any renewal
or expansion of any such Leases after the Effective Date). Purchaser shall be
responsible for all leasing commissions and other leasing costs attributable to
any Approved New Lease (as defined in Section 9.5 below), the renewal or
expansion of any existing Lease approved by Purchaser in advance (but only to
the extent required pursuant to the terms of Section 9.5 below) after the
Effective Date and/or due and payable with respect to any existing Lease which
arise, accrue and/or relate to any time period on or after the Closing Date. If
Seller has, prior to the Closing, paid any leasing commissions or other leasing
costs which are Purchaser’s responsibility hereunder, Seller will receive a
credit for same from Purchaser at the Closing.

4.2.7 Prepaid Items. Any prepaid items, including, without limitation, fees for
licenses which are transferred to the Purchaser at the Closing and annual permit
and inspection fees shall be apportioned between the Seller and the Purchaser at
the Closing.

 

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4.2.8 Declaration Assessments. Any assessments and other charges paid by Seller
under any private declaration affecting the Property shall be prorated between
Seller and Purchaser at the Closing.

4.2.10 Contracts. All expenses accruing under, arising out of or relating to any
of the Contracts (which includes any approved Existing Contract, Approved
Service Contract Amendment or Approved New Service Contract, as those terms are
defined in Section 1.1.5 above and in Section 9.6 below, respectively) to be
assumed by Purchaser pursuant to this Agreement shall be prorated between Seller
and Purchaser at the Closing, together with the amounts, if any, to be paid by
Purchaser with respect to the Existing Contracts to be terminated at the Closing
under Section 9.6.

4.3 Closing Costs. Seller shall pay the basic title premium for the Owner’s
Policy; all State and County transfer taxes and the cost of the Existing Survey
(as hereinafter defined). Purchaser shall pay the cost of any endorsements to
the Owner’s Policy, any local transfer taxes, the cost of the updated Phase I
report obtained by Seller and included in the Documents (as defined in
Section 5.3) and the cost of the Survey and any update or other changes
requested by Purchaser to the Survey, including the cost of any ALTA Table A
items or other certifications. Purchaser shall also pay all costs associated
with Purchaser’s due diligence, except as otherwise set forth herein. Each party
shall be responsible for its own attorney’s fees. There are no City of Santa Ana
transfer taxes, other than the portion thereof included in the County transfer
taxes of $1.10/$1,000.

ARTICLE V.

Purchaser’s Right of Inspection; Feasibility Period

5.1 Right to Evaluate. Commencing on the Effective Date and continuing until
5:00 p.m. Pacific Time on Monday, October 12, 2015 (the “Feasibility Period”),
Purchaser and its agents shall have the right during business hours (with
reasonable advance notice to Seller and subject to the rights of the tenants in
possession), at Purchaser’s sole cost and expense and at Purchaser’s and its
agents’ sole risk, to perform inspections and tests of the Property and to
perform such other analyses, inquiries and investigations as Purchaser shall
deem necessary or appropriate; provided, however, that in no event shall
(i) such inspections or tests unreasonably disrupt or disturb the on-going
operation of the Property or the rights of the tenants at the Property, or
(ii) Purchaser or its agents or representatives conduct any physical testing,
drilling, boring, sampling or removal of, on or through the surface of the
Property (or any part or portion thereof) including, without limitation, any
ground borings or invasive testing of the Improvements (collectively, “Physical
Testing”), without Seller’s prior written consent, which consent may be given or
withheld in Seller’s sole and absolute discretion. In the event Purchaser
desires to conduct any such Physical Testing of the Property, then Purchaser
shall submit to Seller, for Seller’s approval, a written detailed description of
the scope and extent of the proposed Physical Testing, which approval may be
given or withheld in Seller’s sole and absolute discretion. If Seller does not
approve the Physical Testing or approves only a portion thereof, Purchaser may,
at its option, by sending written notice to Seller, elect to, either
(i) terminate this Agreement, or (ii) conduct during the Feasibility Period that
portion of the Physical Testing approved by Seller, if any, or if Seller
disapproves the entire proposed Physical Testing, affirmatively agree to forego
any Physical Testing of the Property. In the event

 

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Purchaser terminates this Agreement as aforesaid, the Deposit shall be
immediately refunded to Purchaser from the Escrow Agent and this Agreement shall
terminate and be of no further force and effect other than the Surviving
Termination Obligations (as defined in Section 16.12 herein). In no event shall
Seller be obligated as a condition of this transaction to perform or pay for any
environmental remediation of the Property recommended by any such Physical
Testing. After making such tests and inspections, Purchaser agrees to promptly
restore the Improvements and surface of the Real Property to its condition prior
to such tests and inspections (which obligation shall survive the Closing or any
termination of this Agreement). Prior to Purchaser entering the Property to
conduct the inspections and tests described above, Purchaser shall obtain and
maintain, at Purchaser’s sole cost and expense, and shall deliver to Seller
evidence of, the following insurance coverage, and shall cause each of its
agents and contractors to obtain and maintain, and, upon request of Seller,
shall deliver to Seller evidence of, the following insurance coverage: general
liability insurance, from an insurer reasonably acceptable to Seller, in the
amount of Two Million and No/100 Dollars ($2,000,000.00) combined single limit
for personal injury and property damage per occurrence, such policy to name
Seller as an additional insured party, which insurance shall provide coverage
against any claim for personal liability or property damage caused by Purchaser
or its agents, employees or contractors in connection with such inspections and
tests. Before the entry unto the Property by Purchaser or any of its agents,
Purchaser must furnish Seller with a certificate of insurance, evidencing the
above coverages, on ACORD Form 27 (and not ACORD Form 25-S), which certificate
must provide that such insurance shall not be cancelled or changed until at
least ten (10) days’ written notice is given to Seller. Seller shall have the
right, in its discretion, to accompany Purchaser and/or its agents during any
inspection (including, but not limited to, tenant interviews) provided Seller or
its agents do not unreasonably interfere with Purchaser’s inspection.

5.2 Inspection Obligations and Indemnity. Purchaser and its agents and
representatives shall: (a) not unreasonably disturb the tenants of the
Improvements or interfere with their use of the Real Property pursuant to their
respective Leases; (b) not interfere with the operation and maintenance of the
Real Property; (c) not damage any part of the Property or any personal property
owned or held by any tenant; (d) not injure or otherwise cause bodily harm to
Seller, its agents, contractors and employees or any tenant; (e) promptly pay
when due the costs of all tests, investigations and examinations done with
regard to the Property; (f) not permit any liens to attach to the Property by
reason of the exercise of its rights hereunder; (g) restore the Improvements and
the surface of the Real Property to the condition in which the same was found
before any such inspection or tests were undertaken; (h) not reveal or disclose
any information obtained during the Feasibility Period concerning the Property
to anyone outside Purchaser’s organization other than its agents, consultants,
representatives, lenders, financial partners and their agents, consultants and
representatives; (i) not contact or otherwise interview any tenant except in the
presence of Seller or one of Seller’s representatives; and (j) not contact any
Federal, State or local governmental authority concerning the Property, other
than standard requests for zoning verification materials. Purchaser shall, at
its sole cost and expense, comply with all applicable Federal, State and local
laws, statutes, rules, regulations, ordinances or policies in conducting its
inspection of the Property and Physical Testing. Purchaser shall, and does
hereby agree to indemnify, defend and hold the Seller, its partners, officers,
directors, employees, agents, attorneys and their respective successors and
assigns (“Seller Exculpated Parties”), harmless from and against any and all
claims, demands, suits, obligations, payments,

 

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damages, losses, penalties, liabilities, costs and expenses (including but not
limited to attorneys’ fees) arising out of Purchaser’s or Purchaser’s agents’
actions taken in, on or about the Property in the exercise of the inspection
right granted pursuant to Section 5.1, including, without limitation, (i) claims
made by any tenant against Seller for Purchaser’s entry into such tenant’s
premises or any interference with any tenant’s use or damage to its premises or
property in connection with Purchaser’s review of the Property, and (ii) the
breach of Purchaser’s obligations pursuant to this Section 5.2, but exclusive of
any damages to the marketability of the Property resulting from any adverse
tests or inspections obtained by Purchaser; provided, however, that Purchaser’s
obligations under this Section 5.2 shall not apply to the mere discovery of a
pre-existing environmental or physical condition at the Property that becomes
evident during or from any inspection undertaken in compliance with the terms of
this Agreement or claims that arise out of Seller or any Seller Exculpated
Party’s negligence or willful misconduct. This Section 5.2 shall survive the
Closing and/or any termination of this Agreement.

5.3 Seller Deliveries. Seller shall use its reasonable, good faith efforts to
deliver to Purchaser or make available at the Property, at Seller’s option, all
of the items specified on Exhibit B attached hereto (the “Documents”) to the
extent such items are in Seller’s possession and control; provided, however,
except as otherwise expressly set forth in Section 7.1 hereof, Seller makes no
representations or warranties of any kind regarding the accuracy, thoroughness
or completeness of or conclusions drawn in the information contained in such
documents, if any, relating to the Property. Purchaser hereby waives any and all
claims against Seller arising out of the accuracy, completeness, conclusions or
statements expressed in materials so furnished and any and all claims arising
out of any duty of Seller to acquire, seek or obtain such materials.
Notwithstanding anything contained in the preceding sentence, Seller shall not
deliver or make available to Purchaser Seller’s internal memoranda,
attorney-client privileged materials, roof or other physical inspection reports,
internal appraisals and economic evaluations of the Property, and reports
regarding the Property prepared by Seller or its affiliates solely for internal
use or for the information of the investors in Seller. Purchaser acknowledges
that any and all of the Documents that are not otherwise known by or available
to the public are proprietary and confidential in nature and will be delivered
to Purchaser solely to assist Purchaser in determining the feasibility of
purchasing the Property. Purchaser agrees not to disclose such non-public
Documents, or any of the provisions, terms or conditions thereof, to any party
outside of Purchaser’s organization other than its agents, consultants,
representatives, lenders and financial partners and their agents, consultants
and representatives, or as required by all applicable Federal, State and local
laws, statutes, rules, regulations, ordinances or policies. Purchaser shall
return all of the Documents, on or before three (3) business days after the
first to occur of (a) such time as Purchaser notifies Seller in writing that it
shall not acquire the Property, or (b) such time as this Agreement is terminated
for any reason. This Section 5.3 shall survive any termination of this Agreement
without limitation.

5.4 Independent Examination. Purchaser hereby acknowledges that it has been, or
will have been given, prior to the termination of the Feasibility Period, a
full, complete and adequate opportunity to make such legal, factual and other
determinations, analyses, inquiries and investigations as Purchaser deems
necessary or appropriate in connection with the acquisition of the Property.
Purchaser is relying upon its own independent examination of the Property and
all matters relating thereto and not upon any statements of Seller (excluding
the

 

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limited matters expressly represented by Seller in ARTICLE VII hereof) or of any
officer, director, employee, agent or attorney of Seller with respect to
acquiring the Property. Seller shall not be deemed to have represented or
warranted the completeness or accuracy of any studies, investigations and
reports heretofore or hereafter furnished to Purchaser. The provisions of this
Section 5.4 shall survive Closing and/or termination of this Agreement.

5.5 Termination Right. In the event that Purchaser fails to provide Seller with
written notice on or before the end of the Feasibility Period whether or not it
desires to acquire the Property, for any reason or no reason whatsoever, then
Purchaser shall be deemed to have elected to not purchase the Property and,
subject to the Surviving Termination Obligations (as defined in Section 16.12
herein), this Agreement shall terminate, the Deposit shall be immediately
delivered to Purchaser from the Escrow Agent without any further instruction by
either party, and thereupon neither party shall have any further rights or
obligations to the other hereunder. Except as expressly provided in this
Agreement, Purchaser’s failure to provide such notice on or before the end of
the Feasibility Period shall constitute Purchaser’s election herein-described
termination right. This is an “all or none” transaction and Purchaser has no
right to terminate this Agreement as to any part of the Property.

5.6 Copies of Reports. As additional consideration for the transaction
contemplated herein, Purchaser agrees that it will provide to Seller, within
five (5) days following a written request therefor, copies of any and all third
(3rd) party reports, tests or studies relating to the Property in Purchaser’s
possession, including but not limited to those involving environmental matters
(all of which shall be provided to Seller without any representation or
warranty, express or implied of any kind whatsoever), but specifically excluding
any Purchaser’s work product, or any materials subject to the attorney-client
privilege. Upon receipt of such written request from Seller, Purchaser shall
provide Seller with copies of the invoices evidencing the costs incurred in
connection with obtaining such reports, and Seller shall reimburse Purchaser for
the cost of any report of which Seller elects to obtain copies within such five
(5) day period. Notwithstanding any other provision of this Agreement to the
contrary, Purchaser’s delivery of all such documentation, if requested by
Seller, shall not be a condition precedent to Purchaser’s right to obtain
disbursement of the Deposit upon termination of this Agreement. Notwithstanding
any provision of this Agreement, no termination of this Agreement shall
terminate Purchaser’s obligations pursuant to the foregoing sentence.

ARTICLE VI.

Title and Survey Matters

6.1 Title. Purchaser hereby acknowledges receipt of a title insurance commitment
(the “Commitment”) for an Owner’s Policy of Title Insurance, issued by Chicago
Title Insurance Company (the “Title Company”), covering the Real Property,
together with legible copies of all documents of record referred to in the
Commitment as exceptions to title to the Real Property (the “Title Documents”).
Purchaser shall notify Seller within ten (10) days after the date Purchaser
receives the Commitment, the Title Documents and the Survey but in no event
later than the expiration of the Feasibility Period in writing of any title
exceptions identified in the Commitment which Purchaser disapproves
(“Unpermitted Title/Survey Matters”). Any exception shown in the Commitment as
of the end of the Feasibility Period or otherwise not disapproved in writing
within said time period shall be deemed approved by

 

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Purchaser and shall constitute a “Permitted Exception” hereunder. Seller shall
have five (5) business days following the receipt of any such notice in which to
give Purchaser notice that Seller will either (a) endeavor to cause such
Unpermitted Title/Survey Matter(s) to be deleted from the Commitment or Survey
or insured against by the Title Company in a manner reasonably satisfactory to
Seller and Purchaser or (b) not endeavor to cause such Unpermitted Title/Survey
Matter(s) to be deleted from the Commitment or Survey or insured against by the
Title Company. If Seller gives notice pursuant to clause (a) above, then Seller
will endeavor to cause such Unpermitted Title/Survey Matter(s) to be deleted
from the Commitment or Survey, or endeavor to cause such Unpermitted
Title/Survey Matter(s) to be insured against by the Title Company in a manner
reasonably satisfactory to Seller and Purchaser prior to the Closing Date (and
Seller shall have the right to adjourn the Closing Date one or more times (but
for not more than fifteen (15) days in the aggregate) in order to effectuate
same); provided, however, if at Closing Seller has failed to cause any such
Unpermitted Title/Survey Matter(s) to be deleted from the Commitment or Survey,
or insured against by the Title Company in a manner reasonably satisfactory to
Seller and Purchaser, then Seller shall not be in default hereunder and
Purchaser’s sole and absolute remedy shall be to terminate this Agreement at
Closing (in which event the provisions of Section 5.5 of this Agreement shall
apply to such termination). If Seller (I) fails to give any such notice within
said five (5) business day period, or (II) gives notice pursuant to clause
(b) above, then Purchaser shall give written notice to Seller within two
(2) business days following the earlier of the expiration of such five
(5) business day period or the giving of notice by Seller either (x) terminating
this Agreement (in which event the provisions of Section 5.5 of this Agreement
shall apply to such termination) or (y) waiving the right to terminate this
Agreement as a result of any such Unpermitted Title/Survey Matter(s). If
Purchaser fails to deliver such notice terminating this Agreement pursuant to
clause (x) above within said two (2) business day period, then Purchaser shall
be deemed to have elected under clause (x) above. If Purchaser elects under
clause (y) above in accordance with the foregoing, then any Unpermitted
Title/Survey Matters previously objected to by Purchaser shall become Permitted
Exceptions. Notwithstanding any contrary time period to review, respond or
object set forth herein, if Purchaser elects not to terminate this Agreement
under Section 5.5, Purchaser will be deemed to have waived any objections to the
Commitment, Title Documents or Survey which remain uncured as of the end of the
Feasibility Period and such uncured title objections (other than those, if any,
which Seller, in Seller’s sole discretion pursuant to this Section 6.1, agrees
in writing prior to the end of the Feasibility Period to cure prior to Closing)
shall be considered Permitted Exceptions. Purchaser and Seller hereby agree that
(i) all non-delinquent property taxes and assessments, (ii) the rights of the
tenants under the Leases and Approved New Leases (as defined in Section 9.5
below), (iii) all matters created by or on behalf of Purchaser, including,
without limitation, any documents or instruments to be recorded as part of any
financing for the acquisition of the Property by Purchaser and (iv) the
exceptions to title identified on Exhibit D attached hereto that have been
approved in writing by Purchaser, shall constitute “Permitted Exceptions”.
Notwithstanding anything to the contrary, (i) any deed of trust liens created by
Seller against the Property, (ii) any mechanic’s, materialman’s or similar liens
arising from any work or improvements at the Property ordered or contracted for
by, through or at the direction of Seller that encumber the Property (unless
resulting from any act or omission of Purchaser or any of its agents,
contractors, representatives or employees), (iii) the lien of ad valorem real or
personal property taxes, assessments and governmental charges affecting all or
any portion of Seller’s interest in the Property which are delinquent, (iv) any

 

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judgment of record against Seller or the Property in the County or other
applicable jurisdiction in which the Property is located and (v) matters other
than the foregoing, if any, that Seller affirmatively elects in its sole and
absolute discretion in writing to cure or remedy and first appearing on any
supplemental title reports or updates to the Commitment issued by Title Company
after the Feasibility Period and arising by, through or under Seller, in each
case whether or not timely objected, shall be Unpermitted Title/Survey Matters
and shall be removed or terminated, as applicable, by Seller on or before
Closing. Without Seller’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed, Purchaser shall not make any
application to any governmental agency for any permit, approval, license or
other entitlement for the Property or the use or development thereof. If
Purchaser elects to terminate this Agreement, Purchaser shall be responsible for
any title fees due Title Company as a result of the actions of Purchaser.

6.2 Survey. Seller has provided Purchaser with a copy of Seller’s existing
survey of the Property (the “Existing Survey”). Purchaser shall have the right
to request a new survey or an update to the Existing Survey (any such new or
updated survey, the “Survey”) during the Feasibility Period. If the Survey
discloses any matters which are unacceptable to Purchaser, in Purchaser’s sole
and absolute discretion, Purchaser shall notify Seller in writing no later than
the expiration of the Feasibility Period (such date being the “Title/Survey
Objection Out Date”) as to any matters to which Purchaser shall object (any such
exception being referred to herein as an “Unpermitted Title/Survey Matters”).
Any matters revealed by the Commitment and/or Survey that are not objected to by
Purchaser on or prior to the Title/Survey Objection Out Date shall be deemed
“Permitted Title/Survey Exceptions” with respect to the Property. Seller shall
have five (5) business days following the receipt of any such notice in which to
give Purchaser notice that Seller will either (a) endeavor to cause such
Unpermitted Title/Survey Matter(s) to be deleted from the Commitment or Survey
or insured against by the Title Company in a manner reasonably satisfactory to
Seller and Purchaser or (b) not endeavor to cause such Unpermitted Title/Survey
Matter(s) to be deleted from the Commitment or Survey or insured against by the
Title Company. If Seller gives notice pursuant to clause (a) above, then Seller
will endeavor to cause such Unpermitted Title/Survey Matter(s) to be deleted
from the Commitment or Survey, or endeavor to cause such Unpermitted
Title/Survey Matter(s) to be insured against by the Title Company in a manner
reasonably satisfactory to Seller and Purchaser prior to the Closing Date (and
Seller shall have the right to adjourn the Closing Date one or more times (but
for not more than fifteen (15) days in the aggregate) in order to effectuate
same); provided, however, if at Closing Seller has failed to cause any such
Unpermitted Title/Survey Matter(s) to be deleted from the Commitment or Survey,
or insured against by the Title Company in a manner reasonably satisfactory to
Seller and Purchaser, then Seller shall not be in default hereunder and
Purchaser’s sole and absolute remedy shall be to terminate this Agreement at
Closing (in which event the provisions of Section 5.5 of this Agreement shall
apply to such termination). If Seller (I) fails to give any such notice within
said five (5) business day period, or (II) gives notice pursuant to clause
(b) above, then Purchaser shall give written notice to Seller within two
(2) business days following the earlier of the expiration of such five
(5) business day period or the giving of notice by Seller either (x) terminating
this Agreement (in which event the provisions of Section 5.5 of this Agreement
shall apply to such termination) or (y) waiving the right to terminate this
Agreement as a result of any such Unpermitted Title/Survey Matter(s). If
Purchaser fails to deliver such notice terminating this Agreement pursuant to
clause (x) above

 

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within said two (2) business day period, then Purchaser shall be deemed to have
elected under clause (x) above. If Purchaser elects under clause (y) above in
accordance with the foregoing, then any Unpermitted Title/Survey Matters
previously objected to by Purchaser shall become “Permitted Exceptions” for the
Property. Purchaser acknowledges that Seller shall have the right, but not the
obligation, to deliver its notice under clause (a) or clause (b) above in its
sole and absolute discretion subject to the provisions of Section 6.3 of this
Agreement. Any survey matter shown on the Survey not disapproved in writing
within said time period (or otherwise shown on the Survey as of the last day of
the Feasibility Period) shall be deemed approved by Purchaser and shall
constitute a Permitted Exception hereunder. Notwithstanding any contrary time
period to review, respond or object set forth herein, if Purchaser elects not to
terminate this Agreement under Section 5.5, Purchaser will be deemed to have
waived any survey objections which remain uncured as of the end of the
Feasibility Period and such uncured survey objections (other than those, if any,
which Seller in Seller’s sole discretion pursuant to the terms of this
Section 6.2 has agreed in writing prior to the end of the Feasibility Period to
cure prior to Closing) shall be considered Permitted Exceptions. If Purchaser
fails, for any or no reason, to obtain the Survey during the Feasibility Period,
Purchaser will be deemed to have waived any requirement set forth in this
Agreement regarding the Survey and all matters shown on the Existing Survey or
which would be shown on a current survey of the Property had one been obtained,
shall also be considered “Permitted Exceptions.”

6.3 Commitment and Survey Updates. Purchaser has the right to object to any
title or survey matter which materially adversely affects the Property and
arises after the end of the Feasibility Period and prior to the Closing. In
connection with the foregoing, in the event that any update of the Commitment or
the Survey delivered to Purchaser after the expiration of the Feasibility Period
shows any new matters or conditions which are both (a) not included within the
Commitment and not disclosed by the Survey, and (b) material and adverse to
Purchaser in Purchaser’s good faith business judgment, Purchaser shall deliver
notice (each such notice, a “Purchaser’s Title/Survey Update Notice”) thereof to
Seller prior to the date that is the earlier of (i) the Closing Date or (ii) the
date that is five (5) business days after Purchaser receives such update of the
Commitment or the Survey (and if Purchaser fails to deliver such notice within
such five (5) business days (or shorter) period, then Purchaser shall be deemed
to have objected to such matters or conditions as Permitted Title/Survey
Exceptions). Seller shall have three (3) business days following the receipt of
any Purchaser’s Title/Survey Update Notice (and if the expiration of such three
(3) business day period is after the Closing Date, then, at the option of
Seller, the Closing shall be adjourned to the date three (3) business days after
the expiration of such three (3) business day period) in which to give Purchaser
notice (each such notice, a “Seller’s Title/Survey Update Response”) that Seller
will either (a) endeavor to cause such new matter or condition to be deleted
from the Commitment or Survey or insured against by the Title Company in a
manner satisfactory to Purchaser, or (b) not endeavor to cause such new matter
or condition to be deleted from the Commitment or Survey or insured against by
the Title Company. If Seller gives Seller’s Title/Survey Update Response
pursuant to clause (a), then Seller will endeavor to cause such new matter or
condition to be deleted from the Commitment or Survey for the Real Property or
insured against by the Title Company in a manner satisfactory to Purchaser, to
occur on or prior to the Closing Date, as same may be adjourned pursuant to the
foregoing provisions of this Section 6.3 (and Seller shall have the further
right to adjourn the Closing Date one or more times (but for not more than
fifteen (15)

 

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days in the aggregate) in order to effectuate same); provided, however, if at
Closing Seller has failed to cause any such Unpermitted Title/Survey Matter(s)
to be deleted from the Commitment or Survey, or insured against by the Title
Company in a manner satisfactory to Purchaser, then Seller shall not be in
default hereunder and Purchaser’s sole and absolute remedy shall be to terminate
this Agreement at Closing (in which event the provisions of Section 5.5 of this
Agreement shall apply to such termination). If Seller (A) fails to give any
Seller’s Title/Survey Update Response within said three (3) business day period,
or (B) gives notice pursuant to clause (b), then Purchaser will deliver written
notice to Seller on or before the earlier of (I) one (1) business day prior to
the Closing Date (as same may be adjourned pursuant to the foregoing provisions
of this Section 6.3) or (II) the date that is two (2) Business Days following
the earlier of the expiration of such three (3) business day period or the
delivery of the Seller’s Title/Survey Update Response either (x) terminating
this Agreement (in which event the provisions of Section 5.5 of this Agreement
shall apply to such termination) or (y) waiving the right to terminate this
Agreement as a result of any such new matter or condition with respect to the
applicable Property. If Purchaser fails to deliver such notice terminating this
Agreement pursuant to clause (x) within said two (2) business day (or shorter)
period, then Purchaser shall be deemed to have elected under clause (y) above.
If Purchaser elects to waive the to terminate this Agreement pursuant to clause
(y) above, then any new matter or condition previously objected to by Purchaser
shall become Permitted Title/Survey Exceptions for the Property. Purchaser
acknowledges that Seller shall have the right, but not the obligation, to
deliver its notice under clause (a) or clause (b) above in its sole and absolute
discretion subject to the provisions of this ARTICLE VI.

ARTICLE VII.

Representations and Warranties of the Seller

7.1 Seller’s Representations. Seller represents and warrants that the following
matters are true and correct as of the Effective Date with respect to the
Property and as a condition of Closing, these matters will be true and correct
at Closing.

7.1.1 Authority. Seller is a limited partnership, duly organized, validly
existing and in good standing under the laws of the State of Delaware. To the
best of Seller’s knowledge, this Agreement has been duly authorized, executed
and delivered by Seller, is the legal, valid and binding obligation of Seller,
and does not, to the best of Seller’s knowledge, violate any provision of any
agreement or judicial order to which Seller is a party or to which Seller is
subject. All documents to be executed by Seller which are to be delivered at
Closing, will (i) be duly authorized, executed and delivered by Seller, (ii) be
legal, valid and binding obligations of Seller, and (iii) not violate, to the
best of Seller’s knowledge, any provision of any agreement or judicial order to
which Seller is a party or to which Seller is subject.

7.1.2 Foreign Person. Seller is not a foreign person within the meaning of
Section 1445(f) of the Internal Revenue Code, and Seller agrees to execute any
and all documents necessary or required by the Internal Revenue Service or
Purchaser in connection with such declaration(s).

 

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7.1.3 No Default. The execution and delivery of this Agreement, and consummation
of the transaction described in this Agreement, will not constitute a default
under any Contract, Lease, or agreement to which Seller is a party and relating
to the Property.

7.1.4 No Suits. There is no action, suit or proceeding pending, or to Seller’s
knowledge, threatened, against Seller and relating to or arising out of the
ownership, management or operation of the Property, in any court or before or by
and federal, state, or municipal department, commission, board, bureau or agency
or other governmental instrumentality.

7.1.5 Compliance with Laws. To the actual knowledge of Seller, and except as
otherwise disclosed to Purchaser, Seller has not received any written notice
from any governmental authority that the Property is in material violation of
any applicable law, statute, code, ordinance, rule or regulation, including in
respect of any environmental conditions caused by hazardous materials, except
for such violations as have been cured prior to the Effective Date or are
otherwise disclosed as part of Seller’s Environmental Reports (as defined in
Section 8.6 below) or in any environmental report obtained by Purchaser prior to
Closing.

7.1.6 Hazardous Materials. To the current actual conscious knowledge of Seller,
except as disclosed by Seller to Purchaser on or before the expiration of the
Feasibility Period, and except as disclosed in any documents or reports
delivered by Seller to Purchaser or made available to Purchaser before the
expiration of the Feasibility Period, Seller has not received written notice
from any governmental authority on or before the Effective Date of the need of
Seller to take any remedial or corrective action under any environmental laws
with respect to any hazardous materials on or under the Property, which action
has not been completed as of the Effective Date. As used in this Agreement,
“environmental laws” means all present and future statutes, ordinances, orders,
rules and regulations of all federal, state and local governmental agencies
relating to the use, generation, manufacture, installation, release, discharge,
storage, transportation or disposal of hazardous materials; and “hazardous
materials” means petroleum, asbestos, polychlorinated biphenyls, radioactive
materials, radon gas, underground storage tanks or any chemical, material or
substance now or hereafter defined as or included in the definition of
“hazardous substances”, “hazardous wastes”, “hazardous materials”, “extremely
hazardous waste”, “restricted hazardous waste” or “toxic substances”, or words
of similar import, under any environmental laws.

7.1.7 Correct Copies. The copies of the Leases and the Existing Contracts
delivered or made available to Purchaser pursuant to Section 5.3 or as delivered
by Seller pursuant to Section 10.2.7 below are, to the best of Seller’s
knowledge, true, correct and complete copies of the same documents contained in
Seller’s files and there are, to the best of Seller’s knowledge, no material
inaccuracies in such Leases or Existing Contracts. The rent roll attached hereto
as Schedule 7.1.7 and as required to be updated pursuant to Section 10.2.7 below
(collectively, the “Rent Roll”) is the rent roll used by Seller in the ordinary
course of Seller’s management and operation of the Property. As used in the
provisions of this Section 7.1, “Leases” means the leases and agreements listed
on the Rent Roll and any leases entered into by Seller after the Effective Date
in accordance with this Agreement, including those as more particularly set
forth in Section 9.5 below.

 

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7.1.8 Conflict with Contracts. The execution and delivery of this Agreement does
not, and the performance by Seller of its obligations hereunder does not and
will not conflict with any provision of any of the Contracts (which as of the
Closing Date shall include any Approved Service Contract Amendment or any
Approved New Service Contract). To the best of Seller’s knowledge, all of the
Existing Contracts relating to the ownership and operation of the Property are
listed on Schedule 7.1.8 attached hereto and such list of Existing Contracts is
true, correct and complete. Except as disclosed in the Documents, during the
twelve (12) months prior to the Effective Date, Seller has not given to, or to
Seller’s knowledge, received from, any other party to an Existing Contract any
written notice of a default that has not been subsequently cured.

7.1.9 Leases. Except as disclosed in the Leases and the other Documents, to the
best of Seller’s knowledge, (i) Seller has not granted any options or rights of
first refusal or rights of first offer to any tenant under any Lease, and no
tenant under any Lease has any rights or option to renew or extend the Lease
term or to terminate the Lease, except as provided in its Lease; (ii) Seller has
not received any advance payment of rent (other than for the current month) on
account of any of the Leases except as shown on the Rent Roll (as the same shall
be updated pursuant to Section 10.2.7 below); (iii) there are no written or oral
leases or tenancies affecting the Property other than those listed in the Rent
Roll (as the same shall be updated pursuant to Section 10.2.7 below);
(iv) Seller, as landlord, has not received any written notice of default from
any tenant under any Lease; and (v) no commissions to any broker are due or will
become due on account of any of the Leases existing as of the date hereof.

7.1.10 Prohibited Persons and Transactions. Seller is not: (i) a country,
territory, Person, organization, or entity named on any list of prohibited
countries, individuals, organizations and entities that is administered or
maintained by OFAC (an “OFAC List”), including: (1) Section 1(b), (c) or (d) of
Executive Order No. 13224 (September 23, 2001) issued by the President of the
United States (Executive Order Blocking Property and Prohibiting Transactions
with Persons Who Commit, Threaten to Commit, or Support Terrorism), any related
enabling legislation or any other similar executive orders, (2) the List of
Specially Designated Nationals and Blocked Persons (the “SDN List”) maintained
by OFAC, and/or on any other similar list (“Other Lists”) maintained by OFAC
pursuant to any authorizing statute, executive order or regulation, (3) a
“Designated National” as defined in the Cuban Assets Control Regulations, 31
C.F.R. Part 515 (as amended and published in the Federal Register on January 16,
2015), or (4) a senior official of a major non-United States political party or
a senior executive of a government-owned corporation not organized within the
United (collectively, a “Senior Foreign Political Figure”), including, without
limitation, any corporation, business or other entity that has been formed by or
for the benefit of a Senior Foreign Political Figures.

7.1.11 Patriot Act. Neither Seller nor any person, group, entity or nation that
Seller is acting, directly or indirectly for, or on behalf of, is named by any
Executive Order (including the September 23, 2001, Executive Order Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism) or the United States Treasury Department as a
terrorist, “Specially Designated National and Blocked Person,” or is otherwise a
banned or blocked person, group, entity, or nation pursuant to any applicable
Federal, State or local law, rule or regulation (each a “Law” and collectively,
the

 

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“Laws”) that is enforced or administered by the Office of Foreign Assets
Control, and Seller is not engaging in the transaction described in this
Agreement, directly or indirectly, on behalf of, or instigating or facilitating
such transaction, directly or indirectly, on behalf of, and is not controlled by
(with ownership of 20% of more of Seller’s voting securities being a presumptive
control position) any such person, group, entity or nation. Neither Seller, nor
any person that controls Seller, has its principal place of business or conducts
the majority of its business operations (measured by revenue) in any nation
described in the preceding sentence. Seller is not engaging in this transaction,
directly or indirectly, in violation of any Laws relating to drug trafficking,
money laundering or predicate crimes to money laundering. None of the funds of
Seller have been or will be derived from any unlawful activity with the result
that the investment of direct or indirect equity owners in Seller is prohibited
by Law or that the transaction or this Agreement is or will be in violation of
Law. Seller has and will continue to implement procedures, and has consistently
and will continue to consistently apply those procedures, to ensure the
foregoing representations and warranties remain true and correct at all times
prior to Closing.

7.1.12 Bankruptcy or Debt of Seller. Seller has not made a general assignment
for the benefit of creditors, filed any voluntary petition in bankruptcy or
suffered the filing of an involuntary petition by Purchaser’s creditors,
suffered the appointment of a receiver to take possession of all, or
substantially all, of Seller’s assets, suffered the attachment or other judicial
seizure of all, or substantially all, of Purchaser’s assets, admitted in writing
its inability to pay its debts as they come due or made an offer of settlement,
extension or composition to its creditors generally.

7.1.13 No Consents. No consent to the sale of the Property by Seller is required
to be obtained from any person or entity, including, without limitation, any
governmental agency or public administrative body. No consent to the sale of the
Property by Seller is required to be obtained from any person or entity,
including, without limitation, any governmental agency or public administrative
body.

7.1.14. Employees/Management. There are no employees of Seller employed in
connection with the use, management, maintenance or operation of the Property
for which Buyer shall be responsible following the Closing. Seller is not a
party to any management agreements which affect the Property and which will
survive the Closing.

7.2 Seller’s Knowledge. For purposes of this Agreement and any document
delivered at Closing, whenever the phrases “to the best of Seller’s knowledge”,
“to the current, actual, conscious knowledge of Seller” or the “knowledge” of
Seller or words of similar import are used, they shall be deemed to refer to the
current, actual, conscious knowledge only, and not any implied, imputed or
constructive knowledge, without any independent investigation having been made
or any implied duty to investigate, of James P. Raisides and Kendrick Leckband
and Seller represents that the foregoing are those employees of TA Realty, LLC
with the responsibility for overseeing the sale, management and operation of the
Property. Such individuals have no personal liability under this Agreement or
otherwise with respect to the Property.

 

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7.3 Change in Representation/Waiver. Notwithstanding anything to the contrary
contained herein, Purchaser acknowledges that Purchaser shall not be entitled to
rely on any representation made by Seller in this ARTICLE VII to the extent,
prior to or at Closing, Purchaser shall have or obtain actual knowledge of any
information that was contradictory to such representation or warranty and that
any of Seller’s representations or warranties were untrue when made or have
become untrue, or if Seller has delivered or made available to Purchaser, or its
agents and/or representatives information with respect to the Property at any
time prior to the Closing Date, and such information is inconsistent with any of
the representations and warranties herein and/or indicates that any such
representations or warranties were not true or accurate when made; provided,
however, if Purchaser determines prior to Closing that there is a breach of any
of the representations and warranties made by Seller above, then Purchaser may,
at its option, by sending to Seller written notice of its election either
(i) terminate this Agreement or (ii) waive such breach and proceed to Closing,
with no adjustment in the Purchase Price and Seller shall have no further
liability as to such matter thereafter, Purchaser shall be deemed to have
knowledge of such misrepresentation, and Purchaser shall not have the right to
bring any lawsuit or other legal action against Seller, nor pursue any other
remedies against Seller, as a result of the breach of the representation caused
thereby. Purchaser’s sole remedy as a result such breach of the representation
for the reasons set forth above shall be to terminate this Agreement and receive
an immediate refund of the Deposit from the Escrow Agent, and neither Purchaser
nor Seller shall thereafter have any other rights or remedies hereunder other
than under Section 16.12 hereof. In furtherance thereof, Seller shall have no
liability with respect to any of the foregoing representations and warranties or
any representations and warranties made in any other document executed and
delivered by Seller to Purchaser, to the extent that, prior to the Closing,
Purchaser discovers or learns of information (from whatever source, including,
without limitation the property manager, the Tenant Estoppel Certificates
(defined in Section 10.2.2 below), as a result of Purchaser’s due diligence
tests, investigations and inspections of the Property, or disclosure by Seller
or Seller’s agents and employees) that contradicts any such representations and
warranties, or renders any such representations and warranties untrue or
incorrect, and Purchaser nevertheless consummates the transaction contemplated
by this Agreement.

7.4 Survival. The express representations and warranties made in this Agreement
shall not merge into any instrument or conveyance delivered at the Closing;
provided, however, that any action, suit or proceeding with respect to the
truth, accuracy or completeness of such representations and warranties shall be
commenced, if at all, within one (1) year of the Closing Date and, if not
commenced on or before such date, thereafter such representations and warranties
shall be void and of no force or effect.

 

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ARTICLE VIII.

Representations and Warranties of Purchaser

8.1 Purchaser represents and warrants to Seller that the following matters are
true and correct as of the Effective Date.

8.1.1 Authority. Seller is a nationally chartered bank under a charter issued by
the United States Office of the Comptroller. To the best of Purchaser’s
knowledge, this Agreement has been duly authorized, executed and delivered by
Purchaser, is the legal, valid and binding obligation of Purchaser, and does not
violate any provision of any agreement or judicial order to which Purchaser is a
party or to which Purchaser is subject. To the best of Purchaser’s knowledge,
all documents to be executed by Purchaser which are to be delivered at Closing,
at the time of Closing will be duly authorized, executed and delivered by
Purchaser, at the time of Closing will be legal, valid and binding obligations
of Purchaser, and at the time of Closing will not violate any provision of any
agreement or judicial order to which Purchaser is a party or to which Purchaser
is subject.

8.1.2 Bankruptcy or Debt of Purchaser. Purchaser has not made a general
assignment for the benefit of creditors, filed any voluntary petition in
bankruptcy or suffered the filing of an involuntary petition by Purchaser’s
creditors, suffered the appointment of a receiver to take possession of all, or
substantially all, of Purchaser’s assets, suffered the attachment or other
judicial seizure of all, or substantially all, of Purchaser’s assets, admitted
in writing its inability to pay its debts as they come due or made an offer of
settlement, extension or composition to its creditors generally.

8.1.3 ERISA Compliance. Purchaser has informed Seller and Purchaser hereby
represents and warrants to Seller that Purchaser is not a “plan” nor a plan
“fiduciary” nor an entity holding “plan assets” (as those terms are defined
under the Employee Retirement Income Security Act of 1974, as amended, and its
applicable regulations as issued by the Department of Labor and the Internal
Revenue Service, “ERISA”) nor an entity whose assets are deemed to be plan
assets under ERISA and that Purchaser is acquiring the Property for Purchaser’s
own personal account and that the Property shall not constitute plan assets
subject to ERISA upon conveyance of the Property by Seller and the closing of
this Agreement between Purchaser and Seller. Seller shall not have any
obligation to close the transaction contemplated by this Agreement if the
transaction for any reason constitutes a prohibited transaction under ERISA or
if Purchaser’s representation is found to be false or misleading in any respect.
The foregoing representation and warranty shall survive the Closing.

8.1.4 No Financing Contingency. It is expressly acknowledged by Purchaser that
this transaction is not subject to any financing contingency, and no financing
for this transaction shall be provided by Seller.

8.1.5 No Consents. No consent to the acquisition of the Property by Purchaser is
required to be obtained from any person or entity, including, without
limitation, any governmental agency or public administrative body.

 

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8.1.6 Patriot Act. Neither Purchaser nor any person, group, entity or nation
that Purchaser is acting, directly or indirectly for, or on behalf of, is named
by any Executive Order (including the September 23, 2001, Executive Order
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism) or the United States Treasury Department as a
terrorist, “Specially Designated National and Blocked Person,” or is otherwise a
banned or blocked person, group, entity, or nation pursuant to any applicable
Laws that are enforced or administered by the Office of Foreign Assets Control,
and Purchaser is not engaging in the transaction described in this Agreement,
directly or indirectly, on behalf of, or instigating or facilitating such
transaction, directly or indirectly, on behalf of, and is not controlled by
(with ownership of 20% of more Purchaser’s voting securities being a presumptive
control position) any such person, group, entity or nation. Neither Purchaser,
nor any person that controls Purchaser, has its principal place of business or
conducts the majority of its business operations (measured by revenue) in any
nation described in the preceding sentence. Purchaser is not engaging in this
transaction, directly or indirectly, in violation of any Laws relating to drug
trafficking, money laundering or predicate crimes to money laundering. None of
the funds of Purchaser have been or will be derived from any unlawful activity
with the result that the investment of direct or indirect equity owners in
Purchaser is prohibited by Law or that the transaction or this Agreement is or
will be in violation of Law. Purchaser has and will continue to implement
procedures, and has consistently and will continue to consistently apply those
procedures, to ensure the foregoing representations and warranties remain true
and correct at all times prior to Closing.

8.2 Purchaser’s Acknowledgment. Purchaser acknowledges and agrees that, except
as expressly provided in this Agreement, Seller has not made, does not make and
specifically disclaims any representations, warranties, promises, covenants,
agreements or guaranties of any kind or character whatsoever, whether express or
implied, oral or written, past, present or future, of, as to, concerning or with
respect to (a) the nature, quality or condition of the Property, including,
without limitation, the water, soil and geology, (b) the income to be derived
from the Property, (c) the suitability of the Property for any and all
activities and uses which Purchaser may conduct thereon, (d) the compliance of
or by the Property or its operation with any laws, rules, ordinances or
regulations of any applicable governmental authority or body, including, without
limitation, the Americans with Disabilities Act and any rules and regulations
promulgated thereunder or in connection therewith, (e) the habitability,
merchantability or fitness for a particular purpose of the Property, or (f) any
other matter with respect to the Property, and specifically that, except as
provided herein, Seller has not made, does not make and specifically disclaims
any representations regarding solid waste, as defined by the U.S. Environmental
Protection Agency regulations at 40 C.F.R., Part 261, or the disposal or
existence, in or on the Property, of any hazardous substance, as defined by the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, California Health and Safety Code Sections 25117 and 25316 and other
applicable state laws, and regulations promulgated thereunder. Purchaser further
acknowledges and agrees that, except as expressly provided in this Agreement,
having been given the opportunity to inspect the Property, Purchaser is relying
solely on its own investigation of the Property and not on any information
provided or to be provided by Seller. Purchaser further acknowledges and agrees
that any information provided or to be provided 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

 

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information. Purchaser further acknowledges and agrees that, except as expressly
provided in this Agreement, and as a material inducement to the execution and
delivery of this Agreement by Seller, the sale of the Property as provided for
herein is made on an “as is, where is” condition and basis “with all faults.”
Purchaser acknowledges, represents and warrants that Purchaser is not in a
significantly disparate bargaining position with respect to Seller in connection
with the transaction contemplated by this Agreement; that Purchaser freely and
fairly agreed to this acknowledgment as part of the negotiations for the
transaction contemplated by this Agreement; that Purchaser is represented by
legal counsel in connection with this transaction and Purchaser has conferred
with such legal counsel concerning this waiver and that Purchaser has assets in
excess of $5,000,000. Notwithstanding anything herein to the contrary, in no
event shall Seller have any liability for any breach of a representation,
warranty, covenant and/or indemnity set forth herein or in any of the closing
documents in excess of ONE MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($1,250,000.00) in the aggregate for all claims, including court costs and
reasonable attorneys’ fees for enforcement, in the aggregate. The provisions of
this Section 8.2 shall survive Closing and/or termination of this Agreement.

8.3 Purchaser’s Release. Purchaser on behalf of itself and its successors and
assigns waives its right to recover from, and forever releases and discharges,
Seller, Seller’s affiliates, Seller’s investment manager, property manager, the
partners, trustees, shareholders, beneficiaries, directors, officers, employees,
attorneys and agents of each of them, and their respective heirs, successors,
personal representatives and assigns from any and all demands, claims, legal or
administrative proceedings, losses, liabilities, damages, penalties, fines,
liens, judgments, costs or expenses known or unknown, foreseen or unforeseen,
that may arise on account of or in any way be connected with (i) the physical
condition of the Property, (ii) the condition of title to the Property,
(iii) the presence on, under or about the Property of any hazardous or regulated
substance, (iv) the Property’s compliance with any applicable federal, state or
local law, rule or regulation, or (v) any other aspect of the Property;
provided, however, this release does not apply to Seller’s breach of any of the
representations and warranties of Seller set forth in Article VII or any of its
obligations under this Agreement which expressly survives the Closing. The terms
and provisions of this Section 8.3 shall survive Closing and/or termination of
this Agreement.

PURCHASER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 (“SECTION 1542”), WHICH IS SET
FORTH BELOW:

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

 

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PURCHASER HEREBY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH
THE MATTERS WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES.

/s/ SS        

Purchaser’s Initials

8.4 Survival. The express representations and warranties made in this Agreement
by Purchaser shall not merge into any instrument of conveyance delivered at the
Closing; provided, however, that any action, suit or proceeding with respect to
the truth, accuracy or completeness of all such representations and warranties
(except for the representation and warranty set forth in Section 8.1.3) shall be
commenced, if at all, within one (1) year of the Closing Date and, if not
commenced on or before such date, thereafter shall be void and of no force or
effect. The representation and warranty set forth in Section 8.1.3 hereof shall
survive Closing and/or termination of this Agreement.

8.5 Natural Hazard Areas. Seller may, but is not obligated to, deliver to
Purchaser a Natural Hazard Disclosure Statement (the “Statement”) in the form
provided under California law. If Seller provides a Statement to Purchaser, the
Statement will purport to disclose whether the Real Property is located in a
special flood hazard area, a dam inundation failure area, a high fire severity
area, a wildland fire area, an earthquake fault zone and/or a seismic hazard
area (collectively, the “Natural Hazard Areas”). Purchaser represents and
warrants to Seller as follows: (a) Purchaser and its agents are sophisticated
investors in real estate and possess the expertise to assess whether the Real
Property is located in any of the Natural Hazard Areas and the impact on
Purchaser’s use, operation, development and enjoyment of the Real Property if
the Real Property is located in any of the Natural Hazard Areas, (b) prior to
the last day of the Feasibility Period, independent of the Statement, Purchaser
shall have determined whether the Real Property is located in any of the Natural
Hazard Areas and will have assessed the impact on Purchaser’s use, operation,
development and enjoyment of the Real Property if the Real Property is located
in any of the Natural Hazard Areas, and (c) Purchaser is not relying on the
Statement (if one is delivered) in consummating the transactions contemplated
hereby. If Seller delivers a Statement to Purchaser, Purchaser agrees that
Seller shall have no liability to Purchaser for any errors or omissions in the
Statement. Purchaser hereby waives any right it may have to receive a Statement
from Seller and such waiver includes any right Purchaser may have to terminate
this Agreement as a result of any such failure under California Civil Code
Section 1103.3 or otherwise. Purchaser hereby releases Seller from any liability
Seller may have to Purchaser as a result of Seller’s failure to deliver a
Statement to Purchaser, including, without limitation, any damages recoverable
under California Civil Code Section 1103.13. The representations, warranties and
agreements set forth herein shall survive the consummation of the transactions
contemplated hereby.

8.6 Section 25359.7 of Health and Safety Code. Section 25359.7 of the California
Health and Safety Code requires owners of non-residential real property who
know, or have reasonable cause to believe, that any release of hazardous
substance has come to be located on or beneath the real property to provide
written notice of such to a buyer of the real property. Purchaser acknowledges
and agrees that the sole inquiry and investigation Seller has conducted in
connection with the environmental condition of the Property is to obtain and/or
review those certain environmental assessments and studies of the Property
delivered to Purchaser pursuant to this Agreement (collectively, “Seller’s
Environmental Reports”). Purchaser (a) acknowledges Purchaser’s receipt of the
foregoing notice given pursuant to Section 25359.7 of the California Health and
Safety Code; (b) will be, prior to the expiration of the Feasibility Period,
fully aware

 

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of the matters described in the Seller’s Environmental Reports; and (c) after
receiving advice of Purchaser’s legal counsel, waives any and all rights
Purchaser may have to assert that Seller has not complied with the requirements
of Section 25359.7 of the California Health and Safety Code. The
representations, warranties and agreements set forth herein shall survive the
consummation of the transactions contemplated hereby.

8.7 Energy Performance Disclosure Information. Section 25402.10 of the
California Public Resources Code requires building owners to disclose the energy
performance of certain non-residential buildings to a prospective buyer prior to
the execution of a sales contract. Purchaser hereby acknowledges and agrees
that, at least 24 hours prior to the execution of this Agreement, Seller
disclosed to Purchaser, to the extent in Seller’s possession and control, the
Energy Use Data, the ENERGY STAR® Score and Data Verification Checklist (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”). Purchaser acknowledges and agrees
that the Energy Performance Disclosure Information is for the current occupancy
and use of the Improvements and that the energy profile of the Improvements will
vary depending on future occupancy/use of the Improvements. Purchaser agrees
that Seller shall have no liability to Purchaser for any errors or omissions in
the Energy Performance Disclosure Information. If and to the extent not
prohibited by applicable law, Purchaser hereby waives any right it may have to
receive the Energy Performance Disclosure Information, including any right
Purchaser may have to terminate this Agreement as a result of any such failure.
Further, Purchaser hereby releases Seller from any liability Seller may have to
Purchaser as a result of Seller’s failure to deliver the Energy Performance
Disclosure Information to Purchaser prior to the execution of this Agreement.
The terms of this Section 8.7 shall survive the Closing and any earlier
termination of this Agreement.

ARTICLE IX.

Seller’s Interim Operating Covenants

9.1 Operations. Seller agrees to continue to operate, manage and maintain the
Improvements through the Closing Date in the ordinary course of Seller’s
business and substantially in accordance with Seller’s present practice, subject
to ordinary wear and tear and further subject to ARTICLE XII of this Agreement,
provided that the foregoing shall not have the effect of requiring Seller to
make any repairs or replacements of a capital nature to the Property without
first obtaining Purchaser’s consent, which consent may be withheld in
Purchaser’s sole and absolute discretion.

9.2 Maintain Insurance. Seller agrees to maintain until the Closing Date fire
and extended coverage insurance on the Property which is at least equivalent in
all material respects to the insurance policies covering the Real Property and
the Improvements as of the Effective Date.

9.3 Personal Property. Seller agrees not to transfer or remove any Personal
Property from the Improvements after the Effective Date except for repair or
replacement thereof. Any items of Personal Property replaced after the Effective
Date shall be promptly installed prior to Closing and shall be of substantially
similar quality to the item of Personal Property being replaced.

 

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9.4 No Sales. Except for the execution of tenant Leases pursuant to Section 9.5,
Seller agrees that it shall not convey any interest in the Property to any third
party.

9.5 Tenant Leases. Seller shall not, from and after the expiration of the
Feasibility Period, (i) grant any consent or waive any material rights under the
Leases, (ii) terminate any Lease, or (iii) enter into a new lease, modify an
existing Lease or renew, extend or expand an existing Lease in each case without
the prior written approval of Purchaser (an “Approved New Lease” and
collectively, the “Approved New Leases”), which in each case shall not be
unreasonably withheld, conditioned or delayed, and which shall be deemed granted
if Purchaser fails to respond to a request for approval within ten (10) business
days after receipt of the request therefor together with a summary of lease
terms and credit information of the proposed tenant. In the event that Seller
shall enter into, modify, renew, grant concessions or terminate a Lease prior to
the expiration of the Feasibility Period, it shall promptly notify Purchaser in
writing thereof and shall include a copy of such document entered into by Seller
by the date which is the earlier of (i) within three (3) days of such occurrence
or (ii) the expiration of the Feasibility Period.

9.6 Contracts. Purchaser acknowledges that Seller has disclosed to it that the
Property is subject to those certain Existing Contracts relating to the
management, maintenance and/or operation of the Property set forth on Schedule
7.1.8 attached hereto and made a part hereof, as applicable. In the event that
Purchaser objects to any Existing Contract(s), Purchaser shall provide written
notice to Seller of such objection prior to the expiration of the Feasibility
Period, and in such a case, Seller shall deliver a termination notice with
respect to such objected to Existing Contract(s) at the Closing (and, in such
event, Purchaser shall be responsible for any monthly charges due under such
objected to Existing Contracts from and after the Closing until the effective
date of termination); provided, however, that Seller shall not be obligated to
terminate, and Purchaser shall be required to assume, at Closing any Existing
Contracts that are not terminable upon not more than thirty (30) days prior
written notice and/or without premium or penalty (any Existing Contract which
Purchaser does not object to or is otherwise required to assume is referred to
herein as an “Approved Existing Contract”). Except as set forth in the
immediately preceding sentence, at Closing, Seller shall assign to Purchaser and
Purchaser shall assume all assignable Service Contracts with respect to the
Property – it being agreed, however, that Purchaser has no obligation to assume
any Service Contracts which were not either listed on Schedule 7.1.8 or
otherwise approved by Purchaser as provided below. From and after the last day
of the Feasibility Period through the earlier of the Closing Date or the
termination of this Agreement in accordance with the terms hereof, in the event
that Seller desires to enter into (i) any amendment, modification, renewal or
extension of any Contract (a “Proposed Service Contract Amendment”), or (ii) any
new Contract (a “Proposed New Service Contract”), Seller shall deliver written
notice to Purchaser requesting Purchaser’s consent to such Proposed Service
Contract Amendment or Proposed New Service Contract. Within five (5) business
days after Seller delivers such request to Purchaser, Purchaser shall deliver
written notice to Seller approving or disapproving, in Purchaser’s sole
discretion, such Proposed Service Contract Amendment or Proposed New Service
Contract (and if Purchaser disapproves any such Proposed Service Contract
Amendment or Proposed New Service Contract, Purchaser shall specify in such
notice the reasons for such disapproval). In the event that Purchaser fails to
deliver notice disapproving a Proposed Service Contract Amendment or Proposed
New Service Contract within

 

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the five (5) business day period set forth above, Purchaser shall be deemed to
have disapproved such Proposed Service Contract Amendment or Proposed New
Service Contract. If Purchaser shall approve a Proposed Service Contract
Amendment or Proposed New Service Contract, then Seller shall have the right to
execute such Proposed Service Contract Amendment or Proposed New Service
Contract and upon such execution and delivery, the same shall be deemed to be an
“Approved Service Contract Amendment” or “Approved New Service Contract”, as the
case may be, for purposes of this Agreement. If Purchaser shall disapprove a
Proposed Service Contract Amendment or Proposed New Service Contract in
accordance with the foregoing standards, then Seller shall not enter into such
Proposed Service Contract Amendment or Proposed New Service Contract, as
applicable. Notwithstanding the foregoing, Seller shall have the right, without
the necessity of obtaining the approval of Purchaser, to execute any amendment,
modification, renewal or extension of an Contract and any new Contract if and to
the extent that such amendment, modification, renewal or extension of a Contract
or such new Contract will not be binding upon Purchaser after the Closing Date
or (b) if such amendment, modification, renewal or extension of a Contract
pertains to a Contract that is, or such Contract is, terminable by Purchaser on
not more than thirty (30) days’ notice without penalty and same shall be deemed
to be an “Approved Service Contract Amendment” or “Approved New Service
Contract,” as the case may be, for purposes of this Agreement.

ARTICLE X.

Closing Conditions

10.1 Conditions to Obligations of Seller. The obligations of Seller under this
Agreement to sell the Property and consummate the other transactions
contemplated hereby shall be subject to the satisfaction of the following
conditions on or before the Closing Date except to the extent that any of such
conditions may be waived by Seller in writing at Closing (and the failure of
which shall entitle Seller to terminate this Agreement, whereupon neither party
shall have any further liability or obligation hereunder, except for the
Surviving Obligations, unless the failure of such condition precedent also
constitutes a default by Purchaser, in which event Seller may pursue its
remedies for a default by Purchaser as provided in Section 13.2 of this
Agreement).

10.1.1 Representations, Warranties and Covenants of Purchaser. All
representations and warranties of Purchaser in this Agreement shall be true and
correct in all material respects as of the Closing Date, with the same force and
effect as if such representations and warranties were made anew as of the
Closing Date and Purchaser shall have performed and complied with all covenants
and agreements required by this Agreement to be performed or complied with by
Purchaser prior to the Closing Date.

10.2 Conditions to Obligations of Purchaser. The obligations of Purchaser under
this Agreement to purchase the Property and consummate the other transactions
contemplated hereby shall be subject to the satisfaction of the following
conditions on or before the Closing Date, except to the extent that any of such
conditions may be waived by Purchaser in writing at Closing (and the failure of
which shall entitle Purchaser to terminate this Agreement and receive an
immediate refund of the Deposit from the Escrow Agent, whereupon neither party
shall have any further liability or obligation hereunder, except for the
Surviving Obligations, unless the failure of such condition precedent also
constitutes a default by Seller, in which event

 

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Purchaser may pursue its remedies for a default by Seller as provided in
Section 13.1 of this Agreement).

10.2.1 Representations, Warranties and Covenants of Seller. All representations
and warranties of Seller in this Agreement shall be true and correct in all
material respects as of the Closing Date, with the same force and effect as if
such representations and warranties were made anew as of the Closing Date and
Seller shall have performed and complied in all material respects with all
covenants and agreement required by this Agreement to be performed or complied
with by Seller prior to the Closing Date. Notwithstanding the foregoing, no
change in circumstances or status of the tenants (e.g., defaults, bankruptcies
or other adverse matters relating to such tenant) occurring after the end of the
Feasibility Period, shall permit Purchaser to terminate this Agreement or
constitute grounds for Purchaser’s failure to close in accordance with the terms
hereof.

10.2.2 Tenant Estoppels. Purchaser shall have received a tenant estoppel
certificate (each, a “Tenant Estoppel Certificate” and collectively, the “Tenant
Estoppel Certificates”) substantially in the form attached hereto as Exhibit C
(or, if different, the form and content required under the applicable Lease)
from (a) the following tenants (collectively, the “Major Tenants”): Pacific
Union Financial, Suite 400 and Suite 500, Archstone Smith, Suite 600, Lehman
Millet, Suite 700, The Planning Center, Suite 1100, Aitken, Aitkin & Cohn, Suite
800 and ProMark Financial, Suite 920; and (b) such other tenants which, together
with the Major Tenants, occupy at least seventy percent (70%) of the leased
rentable square footage of the Property (“Required Estoppel Amount”); provided,
however, if Purchaser has not notified Seller in writing of the failure of the
conditions set forth in this Section 10.2.2 prior to 5:00 p.m. Pacific Time on
that day that is five (5) business days prior to Closing, these conditions shall
be deemed satisfied. Notwithstanding the foregoing, at Seller’s sole option,
Seller may extend the Closing Date for up to an additional thirty (30) days in
order to satisfy the foregoing requirement in which event Seller shall deliver
notice of such extension to Purchaser not less than one (1) day prior to the
then existing Closing Date. In order to be treated as a delivered Tenant
Estoppel Certificate for purposes of this Section 10.2.2, the Tenant Estoppel
Certificate delivered by a tenant shall be dated no earlier than the Effective
Date. In no event shall Seller be obligated to deliver updates to any of the
Tenant Estoppel Certificates. Seller will deliver Purchaser copies of the signed
Tenant Estoppel Certificates promptly following Seller’s receipt and, if
Purchaser fails to deliver a written objection notice to Seller within three
(3) business days following the date of delivery, such signed Tenant Estoppel
Certificates will be deemed approved by Purchaser. Purchaser acknowledges that
the tenants may use their own form of Tenant Estoppel Certificate or may modify
the form attached hereto and Purchaser agrees to accept such substitute or
modified Tenant Estoppel Certificate as long as same is consistent with the
applicable Lease. Seller shall not be in default for failure to deliver any
required Tenant Estoppel Certificate, it being agreed that Purchaser’s sole
remedy for such failure shall be to terminate this Agreement and receive an
immediate refund of the Deposit from the Escrow Agent. A Tenant Estoppel
Certificate that discloses (1) a material default by a tenant or Seller as
landlord under the applicable Lease, (2) any material adverse document or term
constituting part of the Lease, (3) any material claim or right to set off
against Seller as landlord in favor of a tenant which, in each case, was not
disclosed by Seller or otherwise known to Purchaser prior to the expiration of
the Feasibility Period, or (4) contains economic lease information that is

 

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inconsistent with that shown on the Rent Roll or in the tenant files for the
Lease, shall not be deemed to be the delivery of a Tenant Estoppel Certificate
for purposes of this Section 10.2.2; provided, however, that the provisions in
the following sentences shall apply with respect to any Seller default under a
Lease which is disclosed by such Tenant Estoppel Certificate and (z) the
provisions of ARTICLE VII shall apply with respect to any materially untrue
Seller’s Representations disclosed by such Tenant Estoppel Certificate. If a
Tenant Estoppel Certificate delivered by a tenant discloses a default by Seller
under such tenant’s Lease, then Seller shall have the right, at Seller’s sole
option, to either (i) cure such default prior to Closing (and Seller shall be
entitled to adjourn the Closing one or more times (but for not more than fifteen
(15) days in the aggregate) to effectuate such cure), (ii) grant Purchaser a
credit against the Purchase Price in the amount reasonably necessary to
effectuate such cure as reasonably determined by Seller, or (iii) notify
Purchaser that Seller does not intend to cure such default or grant Purchaser
such credit against the Purchase Price. If Seller acts under item (i) of the
foregoing sentence, then Seller shall endeavor to cure the applicable default by
Seller prior to Closing, provided that if Seller is unable to cause such default
to be corrected at or prior to Closing, then Purchaser’s sole remedy shall be to
terminate this Agreement, in which event the provisions of Section 5.5 of this
Agreement shall apply to such termination. If Seller acts under item (ii) of the
sentence prior to the foregoing sentence, then Seller will grant Purchaser the
credit at Closing required under clause (ii) above. If Seller acts under item
(iii) above, then Purchaser shall, on or before the earlier of two (2) business
days after Purchaser receives notice from Seller pursuant to such item (iii) or
one (1) business day prior to the Closing Date, deliver notice to Seller stating
either (A) that Purchaser elects to proceed to the Closing without abatement of
the Purchase Price and without further obligation of Seller in respect of such
Tenant Estoppel Certificate or (B) that Purchaser elects to terminate this
Agreement, in which event the provisions of Section 5.5 of this Agreement shall
apply to such termination.

10.2.3 Title Policy. Upon recordation of the Deed and payment of the title
insurance premiums, the Title Company shall be prepared to issue to Purchaser an
Owner’s Policy of Title Insurance.

10.2.5 Possession of the Property. Delivery by Seller of possession of the
Property, subject to the Permitted Exceptions and the rights of tenants under
the Leases and Approved New Leases.

10.2.7 Rent Roll. Seller shall deliver an updated Rent Roll to Purchaser not
later than three (3) business days prior to the Closing Date, which shall be
consistent in form with the information provided in the Rent Roll provided to
Purchaser as a part of the Documents delivered by Seller in accordance with the
provisions of this Agreement.

ARTICLE XI.

Closing

11.1 Purchaser’s Closing Obligations. Purchaser, at its sole cost and expense,
shall deliver or cause to be delivered to Seller at Closing the following:

 

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11.1.1 The Purchase Price, after all adjustments are made at the Closing as
herein provided, by wire transfer or other immediately available federal funds,
which amount shall be received in escrow by the Title Company at or before 11:00
a.m. Pacific Standard Time.

11.1.2 A blanket conveyance and bill of sale, substantially in the form attached
hereto as Exhibit G (the “General Assignment”), duly executed by Purchaser,
conveying and assigning to Purchaser the Personal Property, the Contracts, the
records and plans, and the Intangible Property.

11.1.3 Written notice executed by Purchaser and addressed to the tenants,
(i) acknowledging the sale of the Property to Purchaser, (ii) acknowledging that
Purchaser has received and is responsible for any security deposits identified
in the Rent Roll, and (iii) indicating that rent should thereafter be paid to
Purchaser and giving instructions therefore, substantially in the form attached
hereto as Exhibit H.

11.1.4 Evidence reasonably satisfactory to Seller and the Title Company that the
person executing the Closing documents on behalf of Purchaser has full right,
power and authority to do so.

11.1.5 A closing statement duly executed by Purchaser setting forth the Purchase
Price and any adjustments thereto.

11.1.6 Receipt of the Tenant Estoppel Certificates from the Major Tenants in
accordance with the provisions set forth in Section 10.2.2 above.

11.1.7 Such other documents as may be reasonably necessary or appropriate to
effect the consummation of the transactions which are the subject of this
Agreement.

11.2 Seller’s Closing Obligations. Seller, at its sole cost and expense, shall
deliver or cause to be delivered to Purchaser the following:

11.2.1 A grant deed (the “Deed”) in recordable form duly executed and
acknowledged by Seller conveying to Purchaser the Land and Improvements
described on Exhibit A in fee simple, subject only to the Permitted Exceptions,
substantially in the form attached hereto as Exhibit F.

11.2.2 The General Assignment, duly executed by Seller, conveying and assigning
to Purchaser the Personal Property, the Contracts, the records and plans, and
the Intangible Property.

11.2.3 Written notice executed by Seller (i) acknowledging the sale of the
Property to Purchaser, (ii) acknowledging that Purchaser has received and is
responsible for any security deposits (or any letters of credit, as the case may
be) identified in the Rent Roll, and (iii) indicating that rent should
thereafter be paid to Purchaser, substantially in the form attached hereto as
Exhibit H.

 

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11.2.4 Evidence reasonably satisfactory to Purchaser and the Title Company that
the person executing the Closing documents on behalf of Seller has full right,
power and authority to do so.

11.2.5 A certificate duly executed by Seller substantially in the form attached
hereto as Exhibit I (“Non-foreign Entity Certification”) certifying that Seller
is not a “foreign person” as defined in Section 1445 of the Internal Revenue
Code of 1986, as amended.

11.2.6 The following items, to the extent in Seller’s possession: (i) all keys
for all entrance door and spaces which may be locked (whether occupied or not)
in the Improvements; and (ii) all original (to the extent available, otherwise
copies of) Leases, Contracts, permits, books, records, tenant files, tenant
database, operating reports, plains and specifications and other materials
reasonably necessary to the continuity of operation of the Property – the
foregoing items may be delivered at the Property and not at the Closing.

11.2.7 A closing statement duly executed by Seller setting forth the Purchase
Price and any adjustments thereto.

11.2.8 A California Form 593-C duly executed by Seller, as and to the extent
prescribed by California law.

11.2.9 If not already delivered, an updated Rent Roll pursuant to the provisions
of Section 10.2.7 above.

11.2.10 A signed title affidavit, or at Seller’s option, an indemnity, as
applicable and required by the Title Company, in the form reasonably acceptable
to Seller to enable the Title Company to delete the standard exceptions to the
Owner’s Policy of Title Insurance set forth in this Agreement (other than any
matters constituting any Permitted Exceptions) to be issued pursuant to the
Commitment, together with a commercially reasonable gap indemnity in order to
enable Purchaser to fund the balance of the Purchase Price funds by 10:00 a.m.
Pacific Time on the Closing Date in accordance herewith and a same-day Closing
Date.

11.2.11 Such other documents as may be reasonably necessary or appropriate to
effect the consummation of the transactions which are the subject of this
Agreement.

ARTICLE XII.

Risk of Loss

12.1 Condemnation and Casualty. If, prior to the Closing Date, all or any
portion of the Property is taken by condemnation or eminent domain, or is the
subject of a pending taking which has not been consummated, or is destroyed or
damaged by fire or other casualty, Seller shall notify Purchaser of such fact
promptly after Seller obtains knowledge thereof. If such condemnation or
casualty is “Material” (as hereinafter defined), Purchaser shall have the option
to terminate this Agreement upon notice to Seller given not later than fifteen
(15) days after receipt of Seller’s notice, or the Closing Date, whichever is
earlier. If this Agreement

 

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is terminated, the Deposit shall be immediately returned to Purchaser from the
Escrow Agent and thereafter neither Seller nor Purchaser shall have any further
rights or obligations to the other hereunder except with respect to the
Surviving Termination Obligations. If this Agreement is not terminated, Seller
shall not be obligated to repair any damage or destruction but (x) Seller shall
assign, without recourse, and turn over to Purchaser all of the insurance
proceeds and the insurance deductible or condemnation proceeds, as applicable,
net of any costs of repairs and net of reasonable collection costs (or, if such
have not been awarded, all of its right, title and interest therein) payable
with respect to such fire or other casualty or condemnation including any rent
abatement insurance for such casualty or condemnation and (y) the parties shall
proceed to Closing pursuant to the terms hereof without abatement of the
Purchase Price.

12.2 Condemnation Not Material. If the condemnation is not Material, then the
Closing shall occur without abatement of the Purchase Price and, after deducting
Seller’s reasonable costs and expenses incurred in collecting any award, Seller
shall assign, without recourse, all remaining awards or any rights to collect
awards to Purchaser on the Closing Date.

12.3 Casualty Not Material. If the Casualty is not Material, then the Closing
shall occur without abatement of the Purchase Price and Seller shall not be
obligated to repair such damage or destruction and Seller shall assign, without
recourse, and turn over to Purchaser all of the insurance proceeds and the
insurance deductible net of any costs of repairs and net of reasonable
collection costs (or, if such have not been awarded, all of its right, title and
interest therein) payable with respect to such fire or such casualty including
any rent abatement insurance for such casualty.

12.4 Materiality. For purposes of this ARTICLE XII (i) with respect to a taking
by eminent domain, the term “Material” shall mean any taking whatsoever,
regardless of the amount of the award or the amount of the Property taken,
excluding, however, any taking solely of (x) subsurface rights or takings for
utility easements or right of way easements, if the surface of the Property,
after such taking, may be used in the same manner, as reasonably determined by
Purchaser, as though such rights had not been taken, or (y) one lease of less
than 10% of the rentable square feet for a term of less than five years, and
(ii) with respect to a casualty, the term “Material” shall mean any casualty
such that the cost of repairs are greater than five percent (5%) of the Purchase
Price.

 

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ARTICLE XIII.

Default

13.1 Default by Seller. In the event the Closing and the transactions
contemplated hereby do not occur as provided herein by reason of the default of
Seller, Purchaser may elect, as the sole and exclusive remedy of Purchaser, to
(i) terminate this Agreement and receive the Deposit from the Escrow Agent, and
in such event Seller shall not have any liability whatsoever to Purchaser
hereunder other than with respect to the Surviving Termination Obligations or
(ii) enforce specific performance of Seller’s obligation to convey the Property,
without adjustment to, or credit against, the Purchase Price; provided, however,
if Seller’s default hereunder makes specific performance of the Agreement
unavailable (i.e., not merely impracticable or inconvenient) because Seller
intentionally sold or conveyed the Property to anyone other than Purchaser (or
its permitted assignee) prior to Closing in breach of this Agreement then, in
addition to the return of the Deposit, Seller shall pay Purchaser, as
Purchaser’s sole and exclusive remedy, a break-up fee equal $750,000, it being
understood that Purchaser waives any right to any other fees, costs or damages.
Purchaser shall be deemed to have elected to terminate this Agreement (as
provided in subsection (i) above) if Purchaser fails to deliver to Seller
written notice of its intent to file a cause of action for specific performance
against Seller on or before ten (10) days after written notice of termination
from Seller or ten (10) days after the originally scheduled Closing Date,
whichever shall occur first, or having given Seller notice, fails to file a
lawsuit asserting such cause of action within ninety (90) days after the
originally scheduled Closing Date. Notwithstanding the foregoing, nothing
contained herein shall limit Purchaser’s remedies at law or in equity, as to the
Surviving Termination Obligations.

13.2 Default by Purchaser. IN THE EVENT THE CLOSING AND THE TRANSACTIONS
CONTEMPLATED HEREBY DO NOT OCCUR AS PROVIDED HEREIN BY REASON OF ANY DEFAULT OF
PURCHASER, PURCHASER AND SELLER AGREE IT WOULD BE IMPRACTICAL AND EXTREMELY
DIFFICULT TO FIX THE DAMAGES WHICH SELLER MAY SUFFER. THEREFORE, PURCHASER AND
SELLER HEREBY AGREE A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT SELLER
WOULD SUFFER IN THE EVENT PURCHASER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE
OF THE PROPERTY IS AND SHALL BE, AS SELLER’S SOLE AND EXCLUSIVE REMEDY (WHETHER
AT LAW OR IN EQUITY), A SUM EQUAL TO THE DEPOSIT. UPON SUCH DEFAULT BY
PURCHASER, SELLER SHALL HAVE THE RIGHT TO RECEIVE THE DEPOSIT FROM THE ESCROW
AGENT AS ITS SOLE AND EXCLUSIVE REMEDY AND THEREUPON THIS AGREEMENT SHALL BE
TERMINATED AND NEITHER SELLER NOR PURCHASER SHALL HAVE ANY FURTHER RIGHTS OR
OBLIGATIONS HEREUNDER EXCEPT WITH RESPECT TO THE SURVIVING TERMINATION
OBLIGATIONS. THE AMOUNT OF THE DEPOSIT SHALL BE THE FULL, AGREED AND LIQUIDATED
DAMAGES FOR PURCHASER’S DEFAULT AND FAILURE TO COMPLETE THE PURCHASE OF THE
PROPERTY, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING HEREBY EXPRESSLY
WAIVED BY SELLER. THE PAYMENT OF THE DEPOSIT AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF

 

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CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671,
1676 AND 1677. NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED HEREIN SHALL
LIMIT SELLER’S REMEDIES AT LAW OR IN EQUITY AS TO THE SURVIVING TERMINATION
OBLIGATIONS. THE PARTIES HAVE SET FORTH THEIR INITIALS BELOW TO INDICATE THEIR
AGREEMENT WITH THE LIQUIDATED DAMAGES PROVISION CONTAINED IN THIS SECTION.

 

/s/ JR      /s/ SS

 

SELLER’S INITIALS

    

 

PURCHASER’S INITIALS

ARTICLE XIV.

Brokers

14.1 Brokers. Purchaser and Seller each represents and warrants to the other
that it has not dealt with any person or entity entitled to a brokerage
commission, finder’s fee or other compensation with respect to the transaction
contemplated hereby other than CBRE (“Broker”) who is representing Purchaser.
Seller will be responsible for the commission owed Broker pursuant to a separate
written agreement between Seller and Broker. Broker shall be paid only upon the
Closing of the purchase and sale contemplated hereby pursuant to a separate
agreement. Purchaser hereby agrees to indemnify, defend, and hold Seller
harmless from and against any losses, damages, costs and expenses (including,
but not limited to, attorneys’ fees and costs) incurred by Seller by reason of
any breach or inaccuracy of the Purchaser’s (or its nominee’s) representations
and warranties contained in this ARTICLE XIV. Seller hereby agrees to indemnify,
defend, and hold Purchaser harmless from and against any losses, damages, costs
and expenses (including, but not limited to, attorneys’ fees and costs) incurred
by Purchaser by reason of any breach or inaccuracy of Seller’s representations
and warranties contained in this ARTICLE XIV. Seller and Purchaser agree that it
is their specific intent that no broker shall be a party to or a third party
beneficiary of this Agreement or the Deposit, that no broker shall have any
rights or cause of action hereunder, and further that the consent of a broker
shall not be necessary to any agreement, amendment, or document with respect to
the transaction contemplated by this Agreement. The provisions of this ARTICLE
XIV shall survive the Closing and/or termination of this Agreement.

ARTICLE XV.

Confidentiality

15.1 Confidentiality.

15.1.1. Purchaser Confidentiality. Purchaser expressly acknowledges and agrees
that the transactions contemplated by this Agreement, the Documents that are not
otherwise known by or available to the public and the terms, conditions and
negotiations concerning the same, whether written or oral, shall be held in the
strictest confidence by Purchaser and shall not be disclosed by Purchaser except
to its legal counsel, surveyor, title company, broker, accountants, consultants,
officers, partners, directors, investors, prospective investors and
shareholders, and any prospective lenders, financial partners and

 

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their agents, consultants and representatives (the “Purchaser Authorized
Representatives”), as required by all applicable Laws (in particular, any and
all securities reporting requirements), and except and only to the extent that
such disclosure may be necessary for the performance by such Purchaser
Authorized Representative of its diligence and related obligations hereunder,
but not otherwise. Purchaser agrees that it shall instruct each of the Purchaser
Authorized Representatives to maintain the confidentiality of such information
and shall, prior to disclosure to any such Purchaser Authorized Representative,
upon Seller’s prior written request, provide Seller with the name and contact
information for each such Purchaser Authorized Representative (or such Purchaser
Authorized Representative’s organization). Purchaser agrees to be responsible
for all actual damages, losses, costs, liabilities and expenses incurred by or
asserted against Seller due to the breach by Purchaser or any Purchaser
Authorized Representative of the confidentiality provisions set forth in this
Agreement. Purchaser further acknowledges and agrees that, unless and until the
Closing occurs, all information and materials obtained by Purchaser in
connection with the Property that are not otherwise known by or available to the
public will not be disclosed by Purchaser to any third persons (other than to
the Purchaser Authorized Representatives) without the prior written consent of
Seller, which may be withheld in Seller’s sole and absolute discretion. If the
transaction contemplated by this Agreement does not occur for any reason
whatsoever, Purchaser shall promptly return to Seller or destroy, and shall
instruct the Purchaser Authorized Representatives to return to Seller or
destroy, all copies and originals of all documents and information provided to
Purchaser by Seller; provided, however, that Purchaser shall have the right to
retain copies of any or all such documents and information to the extent
necessary to comply with Purchaser’s document retention policies, audit
procedures or applicable law. Nothing contained in this Section 15.1.1 shall
preclude or limit Purchaser from disclosing or accessing any information
otherwise deemed confidential under this Section 15.1.1 in connection with
Purchaser’s enforcement of its rights following a disagreement hereunder or in
response to lawful process or subpoena or other valid or enforceable order of a
court of competent jurisdiction or any filings with Authorities required by
reason of the transactions provided for herein. The provisions of this
Section 15.1.1 shall survive any termination of this Agreement but shall not
survive the Closing.

15.1.2. Seller Confidentiality. Seller expressly acknowledges and agrees that
the transactions contemplated by this Agreement and the terms, conditions and
negotiations concerning the same, whether written or oral, shall be held in the
strictest confidence by Seller and shall not be disclosed by Seller except to
its legal counsel, surveyor, title company, broker, accountants, consultants,
officers, partners, directors and shareholders and any lenders, financial
partners and their agents, consultants and representatives (the “Seller
Authorized Representatives”). Seller agrees that it shall instruct each of the
Seller Authorized Representatives to maintain the confidentiality of such
information. Seller agrees to be responsible for all actual damages, losses,
costs, liabilities and expenses incurred by or asserted against Purchaser due to
the breach by Seller or any Seller Authorized Representative of the
confidentiality provisions set forth in this Agreement. Nothing contained in
this Section 15.1.2 shall preclude or limit Seller from disclosing or accessing
any information otherwise deemed confidential under this Section 15.1.2 in
connection with Seller’s enforcement of its rights following a

 

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disagreement hereunder or in response to lawful process or subpoena or other
valid or enforceable order of a court of competent jurisdiction or any filings
with Authorities required by reason of the transactions provided for herein. The
provisions of this Section 15.1.2 shall survive any termination of this
Agreement but shall not survive the Closing.

15.2 Post Closing Publication. Notwithstanding the foregoing but subject to
disclosures required by Law as set forth in Section 15.1 above, each party shall
have the right to announce the acquisition of the Property in newspapers and
real estate trade publications (including “tombstones”) publicizing the
purchase, provided that any public announcement of the transaction shall be made
using only such information as is customarily found in public announcements of
such transactions. The provisions of this Section 0 shall survive Closing and/or
any termination of this Agreement.

ARTICLE XVI.

Miscellaneous

16.1 Notices. Any and all notices, requests, demands or other communications
hereunder shall be deemed to have been duly given if in writing and if
transmitted by hand delivery with receipt therefor, by facsimile or electronic
mail delivery (with confirmation by hard copy), by overnight courier, or by
registered or certified mail, return receipt requested, first class postage
prepaid addressed as follows (or to such new address as the addressee of such a
communication may have notified the sender thereof):

 

To Purchaser:

  

Banc of California

18500 Von Karman Ave, Suite 1100

Irvine, CA 92612

Attn: John Grosvenor

Telephone No.: (949) 236-5251

Fax No.: (949) 777-5350

Email: John.Grosvenor@bancofcal.com

With copies to:   

Eisner Jaffe

9601 Wilshire Blvd., Suite 700

Beverly Hills, CA 90210

Attn: Robert D. Jaffe

Telephone No.: (310) 855-3200

Fax No.: (310) 855-3201

Email: rjaffe@eisnerlaw.com

To Seller:   

c/o TA Realty, LLC

28 State Street, 10th Floor

Boston, Massachusetts 02109

Attn: James P. Raisides

Telephone: (617) 476-2700

Fax No.: (617) 476-2799

Email: jraisides@tarealty.com

 

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with copies to:   

c/o TA Realty, LLC

1301 Dove Street, Suite 860

Newport Beach, California 92660-2440

Attn: Kendrick Leckband

Phone No.: (949) 852-2030

Fax No.: (949) 852-2031

E-mail: jpowell@tarealty.com

   and   

Stutzman, Bromberg, Esserman & Plifka,

A Professional Corporation

2323 Bryan Street, Suite 2200

Dallas, Texas 75201

Attn: Kenneth F. Plifka

Phone: (214) 969-4900

Fax No.: (214) 969-4999

email: plifka@sbep-law.com

To Escrow Agent:   

Chicago Title Insurance Company

2828 Routh Street, Suite 800

Dallas, Texas 75201

Attn: Ellen Schwab

Telephone No.: (214) 965-1670

Fax No.: (214) 965-1627

Email: schwabe@ctt.com

Any such notice shall be deemed received upon (i) if transmitted by hand or via
overnight courier, the date of delivery to the person to receive such notice;
(ii) if sent by registered or certified mail, upon the date of receipt as
disclosed on the return receipt; or (iii) if given by facsimile or electronic
mail, then on the date sent (provided such day is a business day) unless after
5:00 p.m. Pacific Time of the recipient on a business day, in which event it
shall be deemed received on the next business day; provided, however, that any
notice or other communication sent by telecopy or electronic mail must be
confirmed by a letter mailed or delivered in accordance with the foregoing and
sent out the same business day as the telecopy or electronic mail. Notice of
change of address shall be given by notice in the manner detailed in this
Section. Refusal to accept or the inability to deliver because of changed
address of which no notice was given shall be deemed to constitute receipt of
the notice, demand, request or communication sent.

16.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal, substantive laws of California, without regard to
the conflict of laws principles thereof.

 

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16.3 Headings. The captions and headings herein are for convenience and
reference only and in no way define or limit the scope or content of this
Agreement or in any way affect its provisions.

16.4 Effective Date. This Agreement shall be effective upon delivery of this
Agreement fully executed by the Seller and Purchaser, which date shall be deemed
the Effective Date hereof. Either party may request that the other party
promptly execute a memorandum specifying the Effective Date.

16.5 Business Days. If any date herein set forth for the performance of any
obligations of Seller or Purchaser or for the delivery of any instrument or
notice as herein provided should be on a Saturday, Sunday or legal holiday, the
compliance with such obligations or delivery shall be deemed acceptable on the
next business day following such Saturday, Sunday or legal holiday. As used
herein, the term “legal holiday” means any state or Federal holiday for which
financial institutions or post offices are generally closed in the state where
the Property is located.

16.6 Counterpart Copies. This Agreement may be executed in two or more
counterpart copies, all of which counterparts shall have the same force and
effect as if all parties hereto had executed a single copy of this Agreement.

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

16.8 Assignment. Purchaser shall not have the right to assign the Agreement
without Seller’s prior written consent, which consent may be given or withheld
in Seller’s sole and absolute discretion; provided, however, Seller’s consent
shall not be required in connection with an assignment of this Agreement by
Purchaser to an Affiliated Assignee (as defined below), so long as,
(i) Purchaser shall provide Seller with the name, signature block, address,
federal taxpayer identification number and other information pertaining to the
proposed Affiliated Assignee as may be reasonably requested by Seller
(including, without limitation, evidence that the Affiliated Assignee satisfies
the ownership and control requirements set forth in the definition of same) not
later than ten (10) days prior to the Closing Date, (ii) such Affiliated
Assignee assumes all of the obligations of Purchaser under this Agreement
pursuant to an assignment and assumption agreement in form and substance
mutually agreed to by the parties hereof, (iii) no assignment of this Agreement
to an Affiliated Assignee shall relieve Purchaser from any of Purchaser’s
obligations hereunder, (iv) no such assignment shall have the effect of delaying
the Closing in any respect, (v) no such assignment shall obligate Seller to
cause any other third party to re-deliver any document, instrument or other
agreement previously delivered by such third party pursuant to the terms of this
Agreement and (vi) any such assignment will not be effective until the Closing
Date (i.e., Purchaser’s ability to assign hereunder shall be limited to an
assignment that is effective concurrently with the Closing hereunder). Purchaser
shall in no event be released from any of its obligations or liabilities
hereunder as a result of any assignment. Additionally, Purchaser shall have the
right to assign this Agreement to a Section 1031 exchange intermediary subject
to the terms of Section 16.20 hereof without Seller’s consent. Whenever
reference is made in this Agreement to Seller or Purchaser, such reference shall
include the successors and assigns of such party under this Agreement. As used
herein the

 

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term “Affiliated Assignee” shall mean an entity which is (i) owned, in whole or
in part, directly or indirectly, by Purchaser, or (ii) controlled or managed on
a day-to-day basis, either directly or indirectly, by Purchaser.

16.9 Interpretation. This Agreement shall not be construed more strictly against
one party than against the other merely by virtue of the fact that it may have
been prepared by counsel for one of the parties, it being recognized that both
Seller and Purchaser have contributed substantially and materially to the
preparation of this Agreement.

16.10 Entire Agreement. This Agreement and the Exhibits attached hereto contain
the final and entire agreement between the parties hereto with respect to the
sale and purchase of the Property and are intended to be an integration of all
prior negotiations and understandings. Purchaser, Seller and their agents shall
not be bound by any terms, conditions, statements, warranties or
representations, oral or written, not contained herein. No change or
modifications to this Agreement shall be valid unless the same is in writing and
signed by the parties hereto. Each party reserves the right to waive any of the
terms or conditions of this Agreement which are for their respective benefit and
to consummate the transaction contemplated by this Agreement in accordance with
the terms and conditions of this Agreement which have not been so waived. Any
such waiver must be in writing signed by the party for whose benefit the
provision is being waived.

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

16.12 Survival. Except as otherwise specifically provided for in Sections 4.2,
5.1, 5.2, 5.3, 5.4, 7.3, 7.4, 8.2, 8.3, 12.1, 14, 15.1, 16.15, 16.16, 16.19,
16.20 and 16.21 (collectively, the “Surviving Termination Obligations”), the
provisions of this Agreement and the representations and warranties herein shall
not survive after the conveyance of title and payment of the Purchase Price but
be merged therein.

16.13 Exhibits. Exhibits A through I and Schedules 7.1.7 and 7.1.8, attached
hereto are incorporated herein by reference.

16.14 Time. Time is of the essence in the performance of each of the parties’
respective obligations contained herein.

16.15 Limitation of Liability. The obligations of Seller are binding only on
Seller’s interest in the Property and shall not be personally binding upon, nor
shall any resort be had to, any other assets of Seller nor the private
properties of any of the partners, officers, directors, shareholders or
beneficiaries of Seller, or of any partners, officers, directors, shareholders
or beneficiaries of any partners of Seller, or of any of Seller’s employees or
agents. All documents to be executed by Seller shall also contain the foregoing
exculpation. The provisions of this Section 16.15 shall survive Closing and/or
any termination of this Agreement.

16.16 Prevailing Party. Should either party employ an attorney to enforce any of
the provisions hereof, (whether before or after Closing, and including any
claims or actions

 

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involving amounts held in escrow), the non-prevailing party in any final
judgment agrees to pay the other party’s reasonable expenses, including
reasonable attorneys’ fees and expenses in or out of litigation and, if in
litigation, trial, appellate, bankruptcy or other proceedings, expended or
incurred in connection therewith, as determined by a court of competent
jurisdiction. The provisions of this Section 16.16 shall survive Closing and/or
any termination of this Agreement.

16.17 Escrow Agreement.

16.17.1 Instructions. Purchaser and Seller each shall promptly deposit a copy of
this Agreement executed by such party (or either of them shall deposit a copy
executed by both Purchaser and Seller) with Escrow Agent, and, upon receipt of
the Deposit from Purchaser, Escrow Agent shall immediately execute this
Agreement where provided below. This Agreement, together with such further
instructions, if any, as the parties shall provide to Escrow Agent by written
agreement, shall constitute the escrow instructions. If any requirements
relating to the duties or obligations of Escrow Agent hereunder are not
acceptable to Escrow Agent, or if Escrow Agent requires additional instructions,
the parties hereto agree to make such deletions, substitutions and additions
hereto as counsel for Purchaser and Seller shall mutually approve, which
additional instructions shall not substantially alter the terms of this
Agreement unless otherwise expressly agreed to by Seller and Purchaser.

16.17.2 Real Estate Reporting Person. Escrow Agent is hereby designated the
“real estate reporting person” for purposes of Section 6045 of Title 26 of the
United States Code and Treasury Regulation 1.6045-4 and any instructions or
settlement statement prepared by Escrow Agent shall so provide. Upon the
consummation of the transaction contemplated by this Agreement, Escrow Agent
shall file Form 1099 information return and send the statement to Seller as
required under the aforementioned statute and regulation. Seller and Purchaser
shall promptly furnish their federal tax identification numbers to Escrow Agent
and shall otherwise reasonably cooperate with Escrow Agent in connection with
Escrow Agent’s duties as real estate reporting person.

16.17.3 Liability of Escrow Agent. The parties acknowledge that the Escrow Agent
shall be conclusively entitled to rely, except as hereinafter set forth, upon a
certificate from Purchaser or Seller as to how the Deposit (which, for purposes
of this Section shall be deemed to also include any other escrowed funds held by
the Escrow Agent pursuant to this Agreement) should be disbursed. Any notice
sent by Seller or Purchaser (the “Notifying Party”) to the Escrow Agent shall be
sent simultaneously to the other noticed parties pursuant to Section 16.1 herein
(the “Notice Parties”). If the Notice Parties do not object to the Notifying
Party’s notice to the Escrow Agent within ten (10) days after the Notice
Parties’ receipt of the Notifying Party’s certificate to the Escrow Agent, the
Escrow Agent shall be able to rely on the same. If the Notice Parties send,
within such ten (10) days, written notice to the Escrow Agent disputing the
Notifying Party’s certificate, a dispute shall exist and the Escrow Agent shall
hold the Deposit as hereinafter provided. The parties hereto hereby acknowledge
that Escrow Agent shall have no liability to any party on account of Escrow
Agent’s failure to disburse the Deposit if a dispute shall have arisen with
respect to the propriety of such disbursement and, in the event of any dispute
as to who is entitled to receive the Deposit, disburse them in accordance with
the final order of a court of competent jurisdiction, or to deposit or
interplead such funds into a court

 

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of competent jurisdiction pending a final decision of such controversy. The
parties hereto further agree that Escrow Agent shall not be liable for failure
to any depository and shall not be otherwise liable except in the event of
Escrow Agent’s gross negligence or willful misconduct. The Escrow Agent shall be
reimbursed on an equal basis by Purchaser and Seller for any reasonable expenses
incurred by the Escrow Agent arising from a dispute with respect to the Deposit.
The obligations of Seller with respect to the Escrow Agent are intended to be
binding only on Seller and Seller’s assets and shall not be personally binding
upon, nor shall any resort be had to, the private properties of any of the
partners, officers, directors, shareholders or beneficiaries of Seller, or of
any partners, officers, directors, shareholders or beneficiaries of any partners
of Seller, or of any of Seller’s employees or agents.

16.18 No Recording. Neither this Agreement nor any memorandum or short form
hereof shall be recorded or filed in any public land or other public records of
any jurisdiction, by either party and any attempt to do so may be treated by the
other party as a breach of this Agreement.

16.19 Waiver of Trial by Jury/Judicial Reference. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY. NOTWITHSTANDING
THE FOREGOING TO THE CONTRARY, IF THE JURY TRIAL WAIVER CONTAINED HEREIN SHALL
BE HELD OR DEEMED TO BE UNENFORCEABLE, EACH PARTY HERETO HEREBY EXPRESSLY AGREES
TO SUBMIT TO JUDICIAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE
SECTIONS 638 THROUGH 645.1 ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
HEREUNDER FOR WHICH A JURY TRIAL WOULD OTHERWISE BE APPLICABLE OR AVAILABLE.
PURSUANT TO SUCH JUDICIAL REFERENCE, THE PARTIES AGREE TO THE APPOINTMENT OF A
SINGLE REFEREE AND SHALL USE THEIR BEST EFFORTS TO AGREE ON THE SELECTION OF A
REFEREE. IF THE PARTIES ARE UNABLE TO AGREE ON A SINGLE REFEREE, A REFEREE SHALL
BE APPOINTED BY THE COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638
AND 640 TO HEAR ANY DISPUTES HEREUNDER IN LIEU OF ANY SUCH JURY TRIAL. EACH
PARTY ACKNOWLEDGES AND AGREES THAT THE APPOINTED REFEREE SHALL HAVE THE POWER TO
DECIDE ALL ISSUES IN THE APPLICABLE ACTION OR PROCEEDING, WHETHER OF FACT OR
LAW, AND SHALL REPORT A STATEMENT OF DECISION THEREON; PROVIDED, HOWEVER, THAT
ANY MATTERS WHICH WOULD NOT OTHERWISE BE THE SUBJECT OF A

 

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JURY TRIAL WILL BE UNAFFECTED BY THIS WAIVER AND THE AGREEMENTS CONTAINED
HEREIN. THE PARTIES HERETO HEREBY AGREE THAT THE PROVISIONS CONTAINED HEREIN
HAVE BEEN FAIRLY NEGOTIATED ON AN ARMS-LENGTH BASIS, WITH BOTH SIDES AGREEING TO
THE SAME KNOWINGLY AND BEING AFFORDED THE OPPORTUNITY TO HAVE THEIR RESPECTIVE
LEGAL COUNSEL CONSENT TO THE MATTERS CONTAINED HEREIN. ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY AND THE AGREEMENTS CONTAINED HEREIN REGARDING THE
APPLICATION OF JUDICIAL REFERENCE IN THE EVENT OF THE INVALIDITY OF SUCH JURY
TRIAL WAIVER. The provisions of this Section 16.19 shall survive the Closing or
termination of this Agreement.

16.20 Section 1031 Exchange. Purchaser may, without Seller’s consent, assign
this Agreement to a qualified intermediary in order to facilitate a like-kind
exchange transaction, which includes the Property, pursuant to Section 1031 of
the Internal Revenue Code. Seller further agrees to reasonably cooperate with
Purchaser in effecting such transaction, provided that any such exchange
transaction, and the related documentation, shall: (i) not require Seller to
expend any additional funds or execute any contract, make any commitment, or
incur any obligations, contingent or otherwise, to third parties which would
expand Seller’s obligations beyond this Agreement, (ii) not delay the Closing or
the transaction contemplated by this Agreement, (iii) not release Purchaser or
otherwise affect Purchaser’s obligation to perform in accordance with the terms
hereof or any liability of the parties to one another under the terms of this
Agreement, and (iv) not include Seller’s acquiring title to any property which
is not the subject of this Agreement. Further, Purchaser shall indemnify Seller
from and against all liability arising out of such cooperation (including
reasonable attorneys’ fees) which indemnity shall survive any closing hereunder
or termination of this Agreement and it shall be Purchaser’s responsibility to
determine whether the exchange property and the transaction qualifies as an
exchange of property of “like kind’ within the meaning of the Internal Revenue
Code, and Purchaser shall be solely responsible for the tax consequences to
Purchaser of the exchange, it being agreed that Seller shall have no obligation
or liability to Purchaser in connection therewith. The respective obligations of
Seller and Purchaser under this Section 16.20 shall survive the Closing and
shall not be merged therein.

16.21 Submission to Jurisdiction. PURCHASER AND SELLER HEREBY IRREVOCABLY SUBMIT
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN ORANGE COUNTY,
STATE OF CALIFORNIA, OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT. SELLER MAY, IN ITS SOLE DISCRETION, ELECT THE STATE
OF CALIFORNIA, ORANGE COUNTY, OR THE UNITED STATES OF AMERICA, FEDERAL DISTRICT
COURT HAVING JURISDICTION OVER ORANGE COUNTY, STATE OF CALIFORNIA, AS THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING. PURCHASER HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
TO SUCH VENUE AS BEING AN INCONVENIENT FORUM. THE FOREGOING SHALL NOT, HOWEVER,
HAVE THE EFFECT OF PROHIBITING SELLER FROM BRINGING AN ACTION AGAINST

 

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PURCHASER ARISING OUT OF THIS AGREEMENT IN ANY OTHER COURT OR VENUE. THE
PROVISIONS OF THIS SECTION 16.21 SHALL SURVIVE THE CLOSING OR EARLIER
TERMINATION OF THIS AGREEMENT.

16.22 Exclusivity. During the period of time commencing on the Effective Date
and ending on the earlier to occur of (i) the Closing Date or (ii) the date this
Agreement is terminated in accordance with the terms of this Agreement, Seller
will not (a) actively solicit the submission of any proposal or offer from any
person (other than Purchaser or Purchaser’s affiliates) relating to the
acquisition of the Property by such person, or (b) actively participate in any
negotiations regarding the acquisition of the Property by any person other than
Purchaser or Purchaser’s affiliates. For so long as this Agreement remains in
effect, Seller will notify Purchaser promptly if any person makes a written
offer to acquire the Property and the terms of any such offer.

[SIGNATURES ON NEXT PAGES]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
on the date or dates set forth below.

 

SELLER:

The Realty Associates Fund IX, L.P.,

a Delaware limited partnership

By:   Realty Associates Fund IX, LLC,   its general partner   By:   TA Realty
LLC,     its manager     By:   /s/ James P. Raisides     Name:   James P.
Raisides     Title:   Senior Vice President   By: Realty Associates Fund IX
Texas Corporation,  

a Texas corporation,

general partner

  By:   /s/ James P. Raisides   Name:   James P. Raisides   Title:   Senior Vice
President

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

PURCHASER: BANC OF CALIFORNIA, National Association By:/s/ Steven
Sugarman                                     Name: Steven Sugarman Title:
President and Chief Executive Officer

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

The Escrow Agent hereby executes this Agreement for the sole purpose of
acknowledging receipt of the Initial Deposit and its responsibilities hereunder
and to evidence its consent to serve as Escrow Agent in accordance with the
terms of this Agreement.

 

ESCROW AGENT: CHICAGO TITLE INSURANCE COMPANY By:  

/s/ Ellen Schwab

Name:  

Ellen Schwab

Title:  

Senior Commercial Escrow Officer

Date: October 2, 2015

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

LIST OF EXHIBITS

EXHIBITS

 

Exhibit A    -    Legal Description Exhibit B    -    Due Diligence Documents to
be Delivered by Seller Exhibit C    -    Form of Tenant Estoppel Certificate
Exhibit D    -    Permitted Exceptions Exhibit E    -    Lease Schedule Exhibit
F    -    Form of Grant Deed Exhibit G    -    Form of General Assignment
Exhibit H    -    Form of Notice Letter to Tenants Exhibit I    -    Form of
Non-Foreign Entity Certificate Schedule 7.1.7    -    Rent Roll Schedule 7.1.8
   -    List of Contracts

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

EXHIBIT A

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SANTA ANA, COUNTY
OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PARCEL 1:

LOT 6 OF TRACT 13802, IN THE CITY OF SANTA ANA, AS PER MAP RECORDED IN BOOK 649,
PAGE(S) 44 THROUGH 48, INCLUSIVE OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA.

PARCEL 2:

EASEMENTS AS SUCH EASEMENTS ARE MORE PARTICULARLY DESCRIBED IN THE SECTIONS
ENTITLED “CERTAIN EASEMENTS FOR OWNERS” AND “SUPPORT, SETTLEMENT AND
ENCROACHMENT” ON THE ARTICLE ENTITLED “EASEMENTS” OF THE MASTER DECLARATION OF
COVENANTS, CONDITIONS AND RESTRICTIONS RECORDED JULY 31, 1991, AS INSTRUMENT NO.
91-405476, OF OFFICIAL RECORDS.

APN: 411-073-01

 

EXHIBIT A - PAGE 1 OF 1

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EXHIBIT B

DUE DILIGENCE DOCUMENTS

TO BE DELIVERED BY SELLER

Tenant Information

 

1. Rent Roll in the form currently maintained by Seller.

 

2. All leases and amendments thereto, including subleases.

 

3. Seller correspondence with tenants

Operating Information

 

1. Copies of all Contracts.

 

2. Copies of real estate tax bills (including special assessments) for prior two
(2) years.

Other

 

1. Seller’s most current title policy, report or commitment.

 

2. Seller’s most recent survey.

 

3. [RESERVED].

 

4. Copies of all final environmental reports concerning the Property.

 

5. Copies of warranties and permits

 

6. Copies of utility bills for the last 24 months

 

7. Copies of construction plans, as-built drawings, etc.

 

8. Copies of Seller’s operating expense statements for the prior 2 expense years

 

EXHIBIT B - PAGE 1 OF 1

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EXHIBIT C

TENANT ESTOPPEL CERTIFICATE

                                  (the “Tenant”) hereby certifies to THE REALTY
ASSOCIATES FUND IX, L.P., a Delaware limited partnership (the “Owner”) and
                            , its successors or assigns (“Purchaser”) as
follows:

The undersigned Tenant understands that Purchaser or its assigns intends to
purchase certain real property and improvements, which includes the Premises
(the “Property”). In connection with the purchase by Purchaser, Purchaser has
requested that the Tenant complete this tenant certificate (the “Tenant
Certificate”) with the appropriate information as it pertains to the Tenant’s
lease and to agree to the requirements set forth herein.

The undersigned Tenant hereby certifies to and agrees with Owner and Purchaser
as to the following:

1. Pursuant to that certain Lease dated                 , 20         (the
“Lease”), Tenant leases approximately                      square feet of space
(the “Premises”). The Lease, as amended, modified and supplemented, is in full
force and effect, and represents the entire agreement between Tenant and Owner
for the Premises. There are no amendments, modifications or supplements to the
Lease, whether oral or written, except as follows (include the date of each
amendment, modification or supplement):                             . A true and
correct copy of the Lease, as amended, modified and supplemented, is attached
hereto as Exhibit A.

2. The term of the Lease began on                     ,          and will end on
                    , 20        .

3. The Lease does/does not provide for an option to extend the term of the Lease
for                      years. Except as expressly provided in the Lease,
Tenant does not have any right or option to renew or extend the term of the
Lease, to lease other space at the Property, nor any preferential right to
purchase all or any part of the Premises or the Property.

4. Tenant has neither sent nor received any notice of default under the Lease
which remains uncured and to the best of Tenant’s knowledge, neither Tenant nor
Owner has committed any breach under the Lease, which alone or with the passage
of the, giving of notice, or both would constitute a default thereunder, except
as follows:                             .

5. Tenant is currently paying [Base Monthly] Rent under the Lease in the amount
of $                     and estimated monthly pass throughs in the amount of
                    .

 

EXHIBIT C - PAGE 1 OF 2

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

6. Tenant has not prepaid any rent or other charge under the Lease to Owner
other than the following:                     .

7. A cash security deposit in the amount of $                     has been paid
to Owner under the Lease, and Tenant has not given Owner any other security or
similar deposit.

8. Tenant has accepted possession of and is in full occupancy of the Premises
and any improvements required to be made by Owner, if any, have been completed
to the full satisfaction of Tenant and any tenant improvement allowances
required by the Lease, if any, to be made by Owner have been paid in full
satisfaction of Tenant, except for the following:                            .

Dated this                      day of                     , 2015.

 

[NAME OF TENANT] By:  

 

Name:  

 

Title:  

 

 

 

EXHIBIT C - PAGE 2 OF 2

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EXHIBIT D

PERMITTED EXCEPTIONS

 

1. Real estate taxes for the year of Closing and subsequent years, a lien not
yet due and payable and all general and special assessments.

 

2. Rights of tenants pursuant to unrecorded leases.

 

3. Local, state and federal laws, ordinances or governmental regulations,
including, but not limited to, building and zoning laws, ordinances and
regulations, now or hereafter in effect relating to the Property

 

4. Additional exceptions to be added subject to, and in accordance with, Article
VI of the Agreement.

 

 

EXHIBIT D - PAGE 1 OF 1

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EXHIBIT E

LIST OF LEASES

September 4, 2015 - 3 MacArthur

Aitken, Aitken & Cohn, F/K/A Wylie A. Aitken, Lease Agreement dated June 21,
1991, First Amendment to Lease, dated February 10, 1992, Second Amendment to
Lease, dated August 24, 1994, Third Amendment to Lease, dated September 15,
1998, Fourth Amendment to Lease, dated May 21, 1999, Fifth Amendment to Lease,
dated December 1, 2000, Sixth Amendment to Lease, dated July 1, 2003, Seventh
Amendment to Lease, dated November 12, 2003, Eighth Amendment to Lease, dated
June 10, 2008, Ninth Amendment to Lease, dated May 19, 2014

Archstone Communities LLC, a Delaware limited liability company, Lease Agreement
dated February 22, 2008, Consent to Sublease between Archstone Communities and
Loanleaders of America, Inc., dated July 2, 2009, Consent to Sublease and
Sublease between Archstone Communities, LLC and Lendco Group, Inc., dated
August 15, 2013

Chavos and Rau, Lease Agreement dated August 11, 2009, Lease Agreement dated
January 29, 2015

Dealey Renton & Associates, Lease Agreement dated June 14, 2002, First Amendment
to Lease, dated September 21, 2007, Second Amendment to Lease, dated
December 31, 2011

GMEP Engineering Consulting, a California corporation, Lease Agreement dated
December 5, 2014, First Amendment to Lease, dated January 1, 2015

Jeffry Yelland, Lease Agreement dated May 30, 1997, First Amendment to Lease,
dated Oct 30, 2000, Second Amendment to Lease, dated June 30, 2003, Third
Amendment to Lease, dated October 12, 2006, Fourth Amendment to Lease, dated
November 1, 2007, Fifth Amendment to Lease, dated April 30, 2009, Sixth
Amendment to Lease, dated April 30, 2012, Lease Agreement dated June 30, 2015

Laguna Pacific Energy Construction Services, LLC, a California limited liability
company, and Eco Sun Integrated Construction LP, a California limited liability
company, Lease Agreement dated June 10, 2013

Wm. Curtis Barnes, Lease Agreement dated June 6, 1997, First Amendment to Lease,
dated July 27, 2000, Second Amendment to Lease, dated December 3, 2001, Third
Amendment to Lease, dated July 8, 2003, Fourth Amendment to Lease, dated May 18,
2006, Fifth Amendment to Lease, dated June 2, 2009, Sixth Amendment to Lease,
dated July 18, 2014, Seventh Amendment to Lease, dated August 13, 2015

 

EXHIBIT E - PAGE 1 OF 2

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Lehman Millet West, LLC, a Delaware limited liability company, Lease Agreement
dated April 11, 2011

MVE Institutional, Inc., Lease Agreement dated June 29, 2012

Pacific Union Financial LLC, a California limited liability company dba
Clearvision Funding, Lease Agreement dated June 18, 2012, First Amendment to
Lease, dated June 20, 2013

Planning Center, a California corporation, Lease Agreement dated May 9, 2011

Promark Financial Insurance Marketing, Inc., a California corporation, Lease
Agreement dated November 11, 2003, First Amendment to Lease, dated October 15,
2004, Second Amendment to Lease, dated October 31, 2011, First Amendment to
Lease: 100% stock to new owner Mike Maddy, dated November 26, 2012

Socrates Vazquez dba Vazquez Prado Insurance Services, Lease Agreement dated
September 29, 2014

Tekcetera, Inc., a California corporation, Lease Agreement dated May 27, 2011

Unit Industries, Inc., a Nevada corporation, Lease Agreement dated October 23,
2012

Weneta Kosmala, Lease Agreement dated February 8, 2001, First Amendment to
Lease, dated June 30, 2003, Second Amendment to Lease, dated June 16, 2006,
Third Amendment to Lease, dated November 5, 2008, Fourth Amendment to Lease,
dated August 1, 2011, Fifth Amendment to Lease, dated April 27, 2015

 

EXHIBIT E - PAGE 2 OF 2

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EXHIBIT F

FORM OF GRANT DEED

 

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

 

 

 

GRANT DEED

THE UNDERSIGNED GRANTOR DECLARES:

Documentary transfer tax is $                                        

 

(X) computed on full value of property conveyed, or

 

(    ) computed on full value, less value of liens and encumbrances remaining at
time of sale.

 

                                                                 
                    

Signature of Declarant

Parcel No.:                                          
                                                            

FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,

THE REALTY ASSOCIATES FUND IX, L.P., a Delaware limited partnership (“Grantor”),
grants, bargains, sells and conveys to                          (“Grantee”),
that certain real property located in the City of                     , County
of                    , State of California, and more particularly described as
follows (the “Property”):

See attached Exhibit A, incorporated by reference to this document.

This Deed and the conveyance hereinabove set forth is executed by Grantor and
accepted by Grantee subject to (i) non-delinquent real estate taxes and general
and special assessments, and (ii) all other matters of record affecting the
Property.

[Signature on following page]

IN WITNESS WHEREOF, this Deed has been executed by Grantor to be effective as of
the              day of                     , 2015.

 

 

EXHIBIT F - PAGE 1 OF 3

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

GRANTOR:

The Realty Associates Fund IX, L.P.,

a Delaware limited partnership

By:   Realty Associates Fund IX LLC,   a Massachusetts limited liability
company,   general partner   By:   TA Realty LLC,     its manager     By:  

 

    Name:  

 

    Title:  

 

By:  

Realty Associates Fund IX Texas Corporation, a Texas corporation,

general partner

  By:  

 

  Name:  

 

  Title:  

 

 

 

EXHIBIT F - PAGE 2 OF 3

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

THE STATE OF                      §

COUNTY OF                      §

On                     , 2015, before me, the undersigned, a Notary Public in
and for said State, personally appeared                         , a
                         of TA Realty LLC, in its capacity as the manager of
Realty Associates Fund IX LLC, in its capacity as general partner of THE REALTY
ASSOCIATES FUND IX, L.P., a Delaware limited partnership, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.

WITNESS my hand and official seal.

(SEAL)

 

  

 

   Notary Public in and for the said State

THE STATE OF                          §

COUNTY OF                      §

On                     , 2015, before me, the undersigned, a Notary Public in
and for said State, personally appeared                     , a
                     of Realty Associates Fund IX Texas Corporation, in its
capacity as general partner of THE REALTY ASSOCIATES FUND IX, L.P., a Delaware
limited partnership, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

 

(SEAL)   

 

   Notary Public in and for the said State

 

EXHIBIT F - PAGE 3 OF 3

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Exhibit G

GENERAL ASSIGNMENT

THIS GENERAL ASSIGNMENT (the “Bill of Sale”) is made as of the              day
of                     , 2015 by: (i) The Realty Associates Fund IX, L.P., a
Delaware limited partnership (“Seller”), and
(ii)                                          ,
a                                         (“Purchaser”).

KNOW ALL MEN BY THESE PRESENTS:

Concurrently with the execution and delivery hereof, pursuant to a certain
Agreement of Purchase and Sale dated                     , 2015 (the
“Agreement”) between Seller and Purchaser, Seller is conveying to Purchaser all
of Seller’s right, title and interest in and to the real property described on
Exhibit A attached hereto and made a part hereof (the “Land”) and in and to the
building, parking areas and other structures and improvements located on the
Land (collectively, the “Improvements”) located in                     ,
California. The Land and the Improvements are hereinafter sometimes collectively
referred to as the “Property.”

It is the desire of Seller to hereby sell, assign, transfer, convey, set-over
and deliver to Purchaser all of Seller’s right, title and interest in and to the
Assigned Property (as hereinafter defined).

1. Bill of Sale and Assignment.

Seller does hereby sell, assign, transfer, set-over and deliver unto Purchaser,
its successors and assigns, subject to the limitations contained in Section 8.2
of the Agreement, all right, title and interest of Seller in and to:

a. All personal property (including equipment), if any, owned by Seller and
located on the Property as of the date hereof, all inventory located on the
Property on the date hereof, and all fixtures (if any) owned by Seller and
located on the Property as of the date hereof (the “Personal Property”); and

b. All non-exclusive trademarks and trade names, if any, used in connection with
the Property, but only to the extent that the same are not trademarks or trade
names of Seller or any of Seller’s affiliated companies (collectively, the
“Trade Names”);

c. Seller’s interest, if any, in and to any service, equipment, supply and
maintenance contracts (the “Contracts”), guarantees, licenses, approvals,
certificates, permits and warranties relating to the Property, to the extent
assignable (collectively, the “Intangible Property”);

d. All leases, subleases, licenses and other occupancy agreements, together with
any and all amendments, modifications or supplements thereto (the “Leases”)

 

EXHIBIT G - PAGE 1 OF 4

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demising space in or otherwise similarly affecting or relating to the Property
and all prepaid rent attributable to the period after the date hereof, and
unapplied security deposits thereunder (collectively, the “Leasehold Property”);
subject, however to the rights of Seller set forth in the Agreement to rents
under the leases assigned hereby attributable to the period prior to the date
hereof; and

TO HAVE AND TO HOLD the Personal Property, the Trade Names, the Intangible
Property, the Leases and the Leasehold Property (collectively, the “Assigned
Property”) unto Purchaser, its successors and assigns, forever.

2. Assumption.

Purchaser accepts the foregoing assignment and assumes and agrees to be bound by
and to perform and observe all of the obligations, covenants, terms and
conditions to be performed or observed under the Assigned Property arising on or
after the date hereof; provided, however, that to the extent that any Contract
does not constitute an Approved Existing Contract, an Approved Service Contract
Amendment or an Approved New Service Contract, Purchaser shall only assume any
such Contract through the effective date of the termination of such Contract
pursuant to its express terms.

3. Indemnification.

Seller shall indemnify, protect, defend and hold harmless Purchaser from and
against any and all claims incurred by Purchaser with respect to Seller’s breach
of any of Seller’s obligations under the Leases or Contracts prior to the date
hereof, but not otherwise. Purchaser shall indemnify, protect, defend and hold
harmless Seller from and against any and all claims incurred by Seller with
respect to Purchaser’s breach of any of Purchaser’s obligations under the Leases
or Contracts from and after the date hereof, but not otherwise.

4. Limitation of Liability.

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

5. Exclusions from Personal Property.

It is hereby acknowledged by the parties that the Assigned Property shall not
include claims relating to any real property tax refunds or rebates for periods
accruing prior to the date hereof, existing insurance claims and any existing
claims against tenants of the Property, which claims are hereby reserved by
Seller.

6. Counterpart Copies.

 

EXHIBIT G - PAGE 2 OF 4

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This Bill of Sale may be executed in two or more counterpart copies, all of
which counterparts shall have the same force and effect as if all parties hereto
had executed a single copy of this Bill of Sale.

IN WITNESS WHEREOF, the parties have caused this Bill of Sale to be executed as
of the date first written above.

 

SELLER: The Realty Associates Fund IX, L.P.,a Delaware limited partnership By:  
Realty Associates Fund IX LLC,   a Massachusetts limited liability company,  
general partner   By:   TA Realty LLC,     its manager     By:  

 

    Name:  

 

    Title:  

 

By:   Realty Associates Fund IX Texas Corporation,  

a Texas corporation,

general partner

  By:  

 

  Name:  

 

  Title:  

 

 

EXHIBIT G - PAGE 3 OF 4

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PURCHASER:

 

a  

 

By:  

 

Name:  

 

Title:  

 

 

EXHIBIT G - PAGE 4 OF 4

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EXHIBIT H

NOTICE LETTER TO TENANTS

                    , 2015

CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Dear Tenant:

We are pleased to advise you that the building in which your premises are
located at                     , has been sold by the realty associates Fund IX,
L.P. to                      (the “Purchaser”) effective as of the date set
forth above. Your lease agreement has been assigned to and accepted by Purchaser
and Purchaser has agreed to assume all responsibility for security deposits
currently held under your lease, such deposit being in the amount of
$            .

All future correspondence relating to your tenancy, as well as rent checks and
other charges, should be made payable and mailed to                      c/o
            .

The Purchaser looks forward to working with you in the operation of this
Property.

 

EXHIBIT H - PAGE 1 OF 3

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Very truly yours, SELLER: The Realty Associates Fund IX, L.P.,a Delaware limited
partnership By:  

Realty Associates Fund IX LLC, a Massachusetts limited liability company,

general partner

          By:  

TA Realty LLC,

its manager

                      By:    

 

                      Name:    

 

                      Title:    

 

By:  

Realty Associates Fund IX Texas Corporation, a Texas corporation,

general partner

         By:    

 

         Name:    

 

         Title:    

 

 

EXHIBIT H - PAGE 2 OF 3

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PURCHASER:

 

a                                          
                                                            
By:                                    
                                                              Name:
                                         
                                                  Title:
                                         
                                                   

 

EXHIBIT H - PAGE 3 OF 3

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Exhibit I

NON-FOREIGN ENTITY CERTIFICATE

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign person.
To inform the transferee that withholding of tax is not required upon the
disposition of a U.S. real property interest by The Realty Associates Fund IX,
L.P., a Delaware limited partnership (“Transferor”), the undersigned hereby
certifies on behalf of Transferor:

 

  1. Transferor is not a foreign corporation, foreign partnership, foreign trust
or foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations);

 

  2. Transferor’s U.S. employer identification number is                     ;
and

 

  3. Transferor’s office address is:

c/o TA Realty, LLC

28 State Street, 10th Floor

Boston, Massachusetts 02109.

 

  4. The Transferor is not a “disregarded entity” (as that term is defined in
the Code and the Income Tax Regulations promulgated thereunder).

Transferor understands that this certification may be disclosed to the Internal
Revenue Service and that any false statement made within this certification
could be punished by fine, imprisonment, or both.

Under penalties of perjury the undersigned declares that he has examined this
certification and that to the best of his knowledge and belief it is true,
correct and complete, and the undersigned further declares that he has the
authority to sign this document on behalf of the Transferor.

 

 

EXHIBIT I – PAGE 1 OF 2

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Dated:                    , 2015

 

TRANSFEROR:

The Realty Associates Fund IX, L.P.,

a Delaware limited partnership

By:   Realty Associates Fund IX LLC,   a Massachusetts limited liability
company,   general partner

          By:  

TA Realty LLC,

its manager

                By:    

 

                Name:    

 

                Title:    

 

By:  

Realty Associates Fund IX Texas Corporation, a Texas corporation,

general partner

          By:    

 

          Name:    

 

          Title:    

 

 

EXHIBIT I – PAGE 2 OF 2