CONTRACT OF PURCHASE AND SALE
 
BETWEEN
 
AAT LA JOLLA COMMONS, LLC, PURCHASER
 
AND
 
HSPF LA JOLLA COMMONS I INVESTORS LLC, HSPF LA JOLLA COMMONS II INVESTORS LLC
AND HSPF LA JOLLA COMMONS III INVESTORS LLC, COLLECTIVELY, SELLER
 
June 10, 2019

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TABLE OF CONTENTS
 
 
 
 
 
 
1.
 
Purchase and Sale
2

 
 
 
 
 
2.
 
Purchase Price
2

 
 
 
 
 
3.
 
Payment of Purchase Price
2

 
3.1

 
Deposit
2

 
3.2

 
Independent Consideration
2

 
3.3

 
Closing Payment
2

 
 
 
 
 
4.
 
Title Matters; Investigations; Estoppel Certificates; Conditions Precedent
3

 
4.1

 
Title Matters
3

 
4.2

 
Investigations
7

 
4.3

 
Tenant Estoppel Certificates
11

 
4.4

 
Association Estoppel Certificate
12

 
4.5

 
Conditions Precedent to Obligations of Purchaser; No Financing Contingency
13

 
4.6

 
Conditions Precedent to Obligations of Seller
13

 
 
 
 
 
5.
 
Closing
13

 
5.1

 
Seller Deliveries
14

 
5.2

 
Purchaser Deliveries
15

 
5.3

 
Closing Costs
16

 
5.4

 
Prorations
16

 
 
 
 
 
6.
 
Condemnation or Destruction of Real Property
20

 
 
 
 
7.
 
Representations, Warranties and Covenants
21

 
7.1

 
Representations, Warranties and Covenants of Seller
21

 
7.2

 
Interim Covenants of Seller
25

 
7.3

 
Representations, Warranties and Covenants of Purchaser
27

 
 
 
 
 
8.
 
Indemnification and Release
28

 
8.1

 
Indemnification by Purchaser
28

 
8.2

 
RELEASE
29

 
8.3

 
Survival
30

 
 
 
 
 
9.
 
Remedies For Default and Disposition of the Deposit
30

 
9.1

 
SELLER DEFAULTS
30

 
9.2

 
PURCHASER DEFAULTS
31

 
9.3

 
Disposition of Deposit
33

 
9.4

 
Survival
33

 
 
 
 
 
10.
 
Miscellaneous
33

 
10.1

 
Brokers
33

 
10.2

 
Limitation of Liability
34

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10.3

 
Exhibits; Entire Agreement; Modification
34
 
10.4

 
Business Days
35
 
10.5

 
Interpretation
35
 
10.6

 
Governing Law
35
 
10.7

 
Construction
35
 
10.8

 
Successors and Assigns
35
 
10.9

 
Notices
35
 
10.10

 
Third Parties
37
 
10.11

 
Legal Costs
37

EXHIBITS
 
 
 
Exhibit A-1
-
La Jolla Commons I Land
Exhibit A-2
-
La Jolla Commons II Land
Exhibit A-3
-
La Jolla Commons III Land
Exhibit B
-
Title Proforma
Exhibit C
-
Intentionally Omitted
Exhibit D-1
Exhibit D-2
-
Tenant Estoppel Certificate
Tenant Estoppel Certificate - Base Form
Exhibit E
-
Purchaser Acknowledgement
Exhibit F
-
Deed
Exhibit G
-
Assignment and Assumption of Leases and Contracts
Exhibit H
-
Bill of Sale and General Assignment
Exhibit I
-
Certification of Non-Foreign Status
Exhibit J
-
Form of Tenant Notice
Exhibit K
-
Form of Vendor Notice
Exhibit L
-
Form of Owner’s Title Certificate
Exhibit M
-
Tenant Options, Rights of First Refusal and Other Purchase Rights
Exhibit N
-
Lease Exhibit
Exhibit O-1
-
Maintenance, Service and Supply Contracts, and Equipment Leases
Exhibit O-2
-
Leasing Commission Agreements
Exhibit P
-
Escrow Agreement
Exhibit Q
-
List of Existing Leasing Costs
Exhibit R
-
Assumed Contracts
Exhibit S
-
Identified Contracts
Exhibit T
-
Pending or Threatened Litigation - Seller
Exhibit U
-
Pending or Threatened Litigation - Purchaser
Exhibit V
-
Assignment and Assumption of Declarant Rights
Exhibit W
-
Accounting Records
Exhibit X
-
Form of Audit Letter
Exhibit Y
-
Association Estoppel Certificate

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CONTRACT OF PURCHASE AND SALE
THIS CONTRACT OF PURCHASE AND SALE (this “Agreement”) is made and entered into
as of the 10th day of June, 2019 (the “Effective Date”), by and between HSPF LA
JOLLA COMMONS I INVESTORS LLC (“La Jolla I Seller”), HSPF LA JOLLA COMMONS II
INVESTORS LLC (“La Jolla II Seller”) and HSPF LA JOLLA COMMONS III INVESTORS LLC
(“La Jolla III Seller”, together with La Jolla I Seller and La Jolla II Seller,
joint and severally, collectively, “Seller”), each a Delaware limited liability,
company having an address c/o J.P. Morgan Investment Management Inc., 277 Park
Avenue, New York, New York 10172 and AAT LA JOLLA COMMONS, LLC, a Delaware
limited liability company, having an address at 11455 El Camino Real, Suite 200,
San Diego, California 92130 (“Purchaser”).
W I T N E S S E T H:
A.Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, at
the price and upon the terms and conditions set forth in this Agreement, (a)
those certain parcels of land commonly known as La Jolla Commons located in the
City of San Diego, County of San Diego, State of California, and more
particularly described on Exhibit A-1 attached hereto (the “La Jolla Commons I
Land”), Exhibit A-2 attached hereto (the “La Jolla Commons II Land”) and
Exhibit A-3 attached hereto (the “La Jolla Commons III Land”, together with La
Jolla Commons I Land and La Jolla Commons II Land, collectively, the “Land”),
(b) all buildings, structures and other improvements located upon the Land
(collectively, the “Improvements”), (c) all easements, benefits, privileges,
tenements, hereditaments, rights-of-way and other rights appurtenant to the Land
(including all mineral, development, air and water rights), if any
(collectively, the “Appurtenant Rights”), (d) all licenses to occupy property
adjoining the Land, if any (collectively, the “Licenses” and together with the
Land, the Improvements and the Appurtenant Rights, the “Real Property”), (e) all
right, title and interest of Seller in, to and under the Leases (as hereinafter
defined), and, to the extent assignable, the Assumed Contracts (as hereinafter
defined), (f) all right, title and interest of Seller, if any, in and to the
fixtures, equipment, machinery, furniture, furnishings, supplies and other
tangible personal property owned by Seller and now or hereafter located on or
used exclusively in connection with the operation, ownership or maintenance of
the Real Property (collectively, the “Personal Property”) and (g) to the extent
assignable at no cost to Seller (or assignable at a cost which Purchaser elects
to pay prior to or in connection with the Closing (as hereinafter defined)), all
right, title and interest of Seller in, to and under all intangible personal
property, if any, owned by Seller and related to the Real Property, including,
without limitation, any governmental permits, licenses and approvals (including
any pending applications therefor), any warranties and guarantees (including any
warranties or guarantees that Seller has received in connection with any
equipment installed within the Real Property, any work or services performed or
materials provided in connection with the installation of the Exterior Windows
(as hereinafter defined) (collectively, the “Window Warranties”) or any other
work or services performed with respect to the Real Property), any trade names,
trademarks, URLs, symbols and other intellectual property associated with the
Real Property, any plans and specifications and other architectural and
engineering drawings for the Improvements in Seller’s possession and any
contract rights related to the Property that are not set forth in the Assumed
Contracts (collectively, the “Intangible Property”, and together with the Real
Property, the Leases, the Assumed Contracts, the Personal Property and the
Intangible Property, collectively, the “Property”).

B.Purchaser acknowledges that, except as otherwise expressly provided in this
Agreement, the Property is being sold on an “AS IS”, “WHERE IS” and “WITH ALL
FAULTS” basis on the terms and conditions hereinafter set forth.

NOW, THEREFORE, for $10.00 in hand paid and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

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1.Purchase and Sale. Upon the terms and conditions hereinafter set forth, Seller
shall sell to Purchaser, and Purchaser shall purchase from Seller, the Property.

2.Purchase Price. The purchase price (the “Purchase Price”) for the Property
shall be the sum of Five Hundred Twenty-Five Million and No/100 Dollars
($525,000,000.00).

3.Payment of Purchase Price. The Purchase Price shall be paid to Seller by
Purchaser as follows:

3.1Deposit. Within one (1) Business Day (as hereinafter defined) after the
Effective Date, Purchaser shall deposit with First American Title Insurance
Company, 3281 East Guasti Road, Suite 440, Ontario, California 91761, Attention:
Christine Siegel (in its capacity as escrow agent, “Escrowee”), by wire transfer
of immediately available federal funds to an account designated by Escrowee, the
sum of Ten Million and No/100 Dollars ($10,000,000.00) (together with all
interest thereon, but excluding the Independent Consideration (as hereinafter
defined), the “Initial Deposit”), which Initial Deposit shall be held by
Escrowee pursuant to the escrow agreement (the “Escrow Agreement”) attached
hereto as Exhibit P. If Purchaser shall fail to deposit the Initial Deposit with
Escrowee within one (1) Business Day after the Effective Date, then at Seller’s
election, this Agreement shall be null, void ab initio and of no force or
effect. The Initial Deposit and, if the Extension Deposit is delivered by
Purchaser to Escrowee in accordance with Section 5 of this Agreement, the
Extension Deposit, shall be referred to herein, collectively, as the “Deposit.”
The Deposit shall be nonrefundable to Purchaser, except as otherwise expressly
provided to the contrary in this Agreement.

3.2Independent Consideration. A portion of the Deposit in the amount of One
Thousand Dollars ($1,000) (the “Independent Consideration”) shall be earned by
Seller upon execution and delivery of this Agreement by Seller and Purchaser.
Seller and Purchaser hereby mutually acknowledge and agree that the Independent
Consideration represents adequate bargained for consideration for Seller’s
execution and delivery of this Agreement and Purchaser’s exclusive right to
purchase the Property pursuant to the terms of this Agreement. The Independent
Consideration is in addition to and independent of any other consideration or
payment provided for in this Agreement and is nonrefundable in all events. Upon
the Closing or the termination of this Agreement, the Independent Consideration
shall be paid to Seller.

3.3Closing Payment. The Purchase Price, as adjusted by the application of the
Deposit and by the prorations and credits specified herein, shall be paid by
Purchaser, by wire transfer of immediately available federal funds to an account
or accounts designated in writing by Seller on the Closing Date (as hereinafter
defined) (the amount being paid under this Section 3.3 being herein called the
“Closing Payment”).

4.Title Matters; Investigations; Estoppel Certificates; Conditions Precedent.

4.1Title Matters.

4.1.1Title to the Property.

(a)Attached hereto as Exhibit B is a proforma title insurance policy for the
Property that Purchaser negotiated with the Title Company (as defined below)
prior to the Effective Date (the “Title Proforma”). The Title Proforma contains
all endorsements requested by Purchaser and is in form and substance acceptable
to Purchaser and Seller. As a condition to Purchaser’s obligation to consummate
the Transaction, First American Title Insurance Company (in its capacity as
title insurer, the “Title Company”), 4380 La Jolla Village Drive, Suite #110,
San Diego, California 92122, Attention: Skip Santy

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and 3281 East Guasti Road, Suite 440, Ontario, California 91761, Attention:
Wendy M. Hagen Bowen, shall have unconditionally and irrevocably committed to
insure Purchaser as the fee owner of the Real Property in the amount of the
Purchase Price by the Title Company’s issuance, at the Closing, of an ALTA
extended coverage owner’s title insurance policy in the form of the Title
Proforma, including all of the endorsements attached thereto (the Owner’s
Policy”), subject only to the Permitted Exceptions (as hereinafter defined). As
a condition to entering into this Agreement, prior to the date hereof, Title
Company shall have committed to the foregoing in writing and shall have agreed
to such issuance of the Owner’s Policy with no further requirements of the
Seller except as provided herein. In the event the Title Company informs the
parties that it will not issue at Closing the Owner’s Policy in the form of the
Title Proforma (subject to the modifications permitted pursuant to the terms of
this Agreement), Seller, in its sole discretion, shall have the right but not
the obligation, upon written notice to Purchaser, to adjourn the Scheduled
Closing Date for up to fifteen (15) days in order to endeavor to cause the Title
Company to issue the Owner’s Policy in the form of the Title Proforma to
Purchaser; provided, however, if Seller delivers written notice to Purchaser of
Seller’s election to exercise its right to adjourn the Scheduled Closing Date
under this Section 4.1.1(a), Purchaser may elect, by written notice delivered to
Seller, to accept the Owner’s Policy in the revised form provided by the Title
Company, in which case the parties shall proceed to the Closing on the Scheduled
Closing Date without extension. If the Title Company’s unwillingness to issue
the Owner’s Policy in the form of the Title Proforma results from a material
action or failure to act by Purchaser, such as a failure to provide a survey
satisfactory to the Title Company, then the condition to Closing set forth
herein and in Section 4.5 below shall be deemed to have been satisfied.

(b)Prior to the Effective Date, the Title Company issued a commitment for an
owner’s fee title insurance policy or policies with respect to the Real Property
under Commitment Order No. NCS-933038-ONT1 and with an effective date of May 6,
2019 (the “Title Commitment”), together with copies of each of the title
exceptions noted therein. Prior to the Effective Date, Purchaser ordered, at its
sole cost and expense, an update to an existing survey of the Property delivered
by Seller to Purchaser or a new survey of the Property that was prepared by a
surveyor registered in the State of California and certified by said surveyor to
Purchaser and Seller as having been prepared in accordance with the minimum
detail requirements of the ALTA land survey requirements (the “Survey”). Seller
has received a copy of the Title Commitment, the Title Proforma and the Survey.
If the Title Company amends or updates the Title Commitment after the Effective
Date and any new exceptions to title to the Real Property, other than (i) the
Permitted Exceptions, (ii) Immaterial Exceptions or (iii) any new exceptions for
matters shown on any updates to the Survey, appear in the amended or updated
Title Commitment (such exception(s) being herein called, collectively, the
“Unpermitted Exceptions”), subject to which Purchaser is unwilling to accept
title, and Purchaser shall provide Seller with written notice (the “Title
Objection Notice”) thereof on or before the date that is three (3) days after
receipt of the amended or updated Title Commitment, Seller, in its sole and
absolute discretion, may undertake to eliminate the same subject to the terms
and conditions of this Section 4.1.1. Purchaser hereby waives any right
Purchaser may have to advance, as objections to title or as grounds for
Purchaser’s refusal to close the transactions contemplated by this Agreement
(the “Transaction”), (a) any Unpermitted Exception of which Purchaser does not
timely notify Seller in a Title Objection Notice, unless Purchaser provides to
Seller a Title Objection Notice within three (3) days after the Title Company
notifies Purchaser of such Unpermitted Exception and (b) the types of exceptions
referenced above in clause (ii) and (iii) of this subsection (with all such
exceptions being deemed to constitute additional Permitted Exceptions). Seller
shall notify Purchaser, in writing, within three (3) days after receipt by
Seller of the applicable Title Objection Notice, whether or not it will
eliminate all or any of such Unpermitted Exceptions (“Seller’s Title Response”),
and if Seller fails to deliver Seller’s Title Response on or before such date,
Seller shall be deemed to have delivered a Seller’s Title Response electing not
to eliminate any such Unpermitted Exceptions. Seller, in its sole discretion,
shall have the right, upon written notice to Purchaser prior to the Scheduled
Closing Date, to adjourn the Scheduled Closing Date for up to sixty (60)

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days in order to eliminate any Unpermitted Exception which Seller has agreed to
eliminate under this Agreement or which Seller has agreed to eliminate pursuant
to Seller’s Title Response; provided, however, if Seller delivers written notice
to Purchaser of Seller’s election to exercise its right to adjourn the Scheduled
Closing Date under this Section 4.1.1(b), Purchaser may elect, by written notice
delivered to Seller, to waive Purchaser’s objection to the Unpermitted Exception
which Seller is endeavoring to eliminate, in which case the parties shall
proceed to the Closing on the Scheduled Closing Date without extension.
Notwithstanding the foregoing or anything to the contrary set forth in this
Agreement, Seller shall not under any circumstance be required or obligated to
eliminate any Unpermitted Exception including, without limitation, to bring any
action or proceeding, to make any payments or otherwise to incur any expense in
order to eliminate any Unpermitted Exception or to arrange for title insurance
insuring against enforcement of such Unpermitted Exception against, or
collection of the same out of, the Real Property, notwithstanding that Seller
may have attempted to do so, or may have adjourned the Scheduled Closing Date
for such purpose; provided, however, Seller shall (x) satisfy any mortgage,
security instrument or deed of trust placed on the Real Property by Seller and
(y) cause the removal (by bonding or otherwise) of (i) any mechanics’ liens or
materialmen’s liens which arise as a result of work undertaken on behalf of
Seller and encumber all or any portion of the Property, (ii) any encumbrances
that have been voluntarily placed upon the Property by Seller after the
Effective Date and are not otherwise permitted pursuant to the provisions hereof
and (iii) any other monetary liens encumbering the Real Property in an amount
not to exceed One Hundred Thousand and 00/100 Dollars ($100,000.00) in the
aggregate, provided that such monetary lien shall not be the result of any act
or omission of Purchaser or any of Purchaser’s Representatives or any of the
tenants at the Real Property (collectively, “Mandatory Objections”). Seller
shall not have the right to adjourn the Scheduled Closing Date in order to
eliminate any Mandatory Objection and shall be required, subject to the right to
bond over exceptions in accordance with this subsection, to utilize a portion of
the Purchase Price to eliminate any such Mandatory Objection on the Closing Date
in accordance with Section 4.1.1(d). For purposes herein, “Immaterial Exception”
means any non-monetary title exception that first appears in an amendment or
update to the Title Commitment that is issued after the Effective Date and does
not materially and adversely affect the use or operation of the Real Property;
provided that in no event shall either a Mandatory Objection or a title
exception arising as a result of Seller’s default hereunder constitute an
Immaterial Exception.

(c)Except as to Mandatory Objections (which Seller will be obligated to
eliminate), if Seller elects in Seller’s Title Response not, or is deemed to
elect not, to eliminate all Unpermitted Exceptions noted in the applicable Title
Objection Notice, Purchaser shall have the right, as its sole remedy by delivery
of written notice to Seller within three (3) Business Days following delivery or
deemed delivery of Seller’s Title Response, to either (i) terminate this
Agreement by written notice delivered to Seller and Escrowee or (ii) accept
title to the Real Property subject to such Unpermitted Exception(s) without a
reduction in, abatement of, or credit against, the Purchase Price. If Purchaser
elects to terminate this Agreement pursuant to this Section 4.1.1(c),
(1) Escrowee shall return the Deposit to Purchaser, and (2) no party hereto
shall have any further obligation under this Agreement except under those
obligations, liabilities and provisions that expressly survive the Closing or a
termination of this Agreement (collectively, the “Surviving Obligations”). The
failure of Purchaser to deliver timely any written notice of election to
terminate this Agreement under this Section 4.1.1(c) shall be conclusively
deemed to be an election under the applicable clause (ii) above.

(d)If there are any Mandatory Objections, Unpermitted Exceptions noted in the
Title Objection Notice or other liens or encumbrances that Seller is obligated
or elects to eliminate under this Agreement, then Seller shall either (i)
arrange, at Seller’s cost and expense, for a bond, affirmative title insurance
or special endorsements insuring against enforcement of such liens or
encumbrances against, or collection of the same out of, the Real Property, or
(ii) use any portion of the Purchase Price to pay and discharge the same, either
by way of payment or by alternative manner reasonably satisfactory to the Title
Company, and the same shall not be deemed to be Unpermitted Exceptions.

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(e)Notwithstanding any provisions of this Agreement to the contrary, the
Scheduled Closing Date shall be automatically adjourned in order to provide each
party hereto with the full amount of all review and notice periods set forth in
this Section 4.1.1; provided, however, Purchaser shall have the right to waive
any such automatic adjournment of the Scheduled Closing Date by delivering
written notice to Seller and Escrowee of Purchaser’s election to accept title to
the Property subject to the matter that would cause such adjournment, in which
case the parties shall proceed to the Closing on the Scheduled Closing Date
without such adjournment.

(f)If the Closing is not consummated because of a default hereunder or the
failure of a condition precedent to Purchaser’s obligation to purchase, or
Seller’s obligation to sell, the Property to be satisfied on the Closing Date,
the defaulting party shall be responsible for any title or escrow cancellation
charges, otherwise the title and escrow charges will be paid in accordance with
Section 5.3 of this Agreement.

4.1.2Permitted Exceptions to Title. The Real Property shall be sold and conveyed
subject only to the following exceptions to title (the “Permitted Exceptions”):

(a)any state of facts that an accurate survey of the Property may show, other
than those items Seller is obligated to eliminate prior to the Closing in
accordance with Section 4.1.1;

(b)those matters specifically set forth on Exhibit B attached hereto;

(c)all laws, ordinances, rules and regulations of the United States, the State
of California, or any agency, department, commission, bureau or instrumentality
of any of the foregoing having jurisdiction over the Real Property (each, a
“Governmental Authority”), as the same may now exist or may be hereafter
modified, supplemented or promulgated;

(d)all presently existing and future liens of real estate taxes or assessments
and water rates, water meter charges, water frontage charges and sewer taxes,
rents and charges, if any, provided that such items are not yet due and payable
and are apportioned as provided in this Agreement;

(e)any exceptions disclosed in any amendment or update to the Title Commitment
issued by the Title Company after the Effective Date that are not disclosed by
the Title Commitment and that Purchaser shall have agreed or be deemed to have
agreed to waive as an Unpermitted Exception under Section 4.1.1;

(f)rights of the tenants under a Lease either identified in the Lease Exhibit
(as hereinafter defined) or entered into after the Effective Date in accordance
with the terms of this Agreement, as tenants in possession only, with no rights
or options to purchase any portion of the Property, except to the extent set
forth in Exhibit M of this Agreement;

(g)all utility easements of record which Seller does not agree to cause to be
removed or cured on or prior to the Closing;

(h)liens which are the responsibility of any tenant at the Real Property to
cure, correct or remove;

(i)the printed exceptions which appear in the standard form owner’s policy of
the title insurance issued by the Title Company in the State of California; and

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(j)Immaterial Exceptions.

Under no circumstance will Mandatory Objections constitute Permitted Exceptions.
4.2Investigations.

4.2.1Except for title matters not shown on the Commitment (which shall be
governed by the provisions of Section 4.1 above), Purchaser acknowledges that
pursuant to that certain Access Agreement dated May 17, 2019 (the “Access
Agreement”), Purchaser has had the opportunity to conduct examinations,
inspections, testing, studies and investigations of the Property and to review
such information regarding the Property and such documents applicable to the
Property as delivered or made available to Purchaser, in each case, as Purchaser
deemed necessary and appropriate, and examined and investigated to its full
satisfaction all facts, circumstances, and matters relating to the Property
(including the physical condition and use, availability and adequacy of
utilities, access, zoning, compliance with applicable Laws, environmental
conditions, engineering and structural matters), title and survey matters, and
any other matters it deemed necessary and appropriate, in Purchaser’s reasonable
discretion, for purposes of consummating this Transaction (collectively, the
“Investigations”), which Investigations shall at all times be subject to
Purchaser’s compliance with the provisions of this Section 4.2. Except for any
limitations as may be imposed in this Agreement, Purchaser shall have the right
to continue its Investigations subject to the terms hereof until the earlier of
(x) the Closing, and (y) the termination of this Agreement; provided that in no
event shall such continued Investigations confer any right to terminate this
Agreement except as expressly provided herein. During Purchaser’s continued
Investigations, Seller shall provide Purchaser with reasonable access to the
Real Property upon reasonable advance notice and shall also make available to
Purchaser, at the offices of Seller and/or the property manager of the Property,
access to all leases, service contracts, other contracts and agreements, and as
reasonably requested by Purchaser, other Information (as herein after defined)
with respect to the Property in Seller’s possession, all upon reasonable advance
written notice; provided, however, in no event shall Seller be obligated to make
available (1) any document or correspondence which would be subject to the
attorney-client privilege; (2) any document or item which Seller is
contractually or otherwise bound to keep confidential; (3) any documents
pertaining to the marketing of the Property for sale to prospective purchasers;
(4) any internal memoranda, reports or assessments relating to the Property; (5)
appraisals of the Property whether prepared internally by Seller or Seller’s
affiliates or externally; or (6) any documents which Seller considers
confidential or proprietary. As of the date hereof, Seller has provided, to the
extent such documents are in Seller’s possession or control, all currently in
effect articles of incorporation, by-laws and resolutions of the Association,
minutes of meetings of the board of directors of the Association and all
declarations, agreements, instruments or other documents to which the
Association is a party or under which the Association is delegated or assigned
any management or administrative powers or obligations. Any entry upon the
Property and all Investigations shall be made or performed during Seller’s
normal business hours and at the sole risk and expense of Purchaser, and shall
not interfere in any material respect with the activities on or about the Real
Property of Seller, its tenants or their respective employees and invitees.
Purchaser shall:

(a)promptly repair any damage to the Property resulting from any such
Investigations and replace, refill and regrade any holes made in, or excavations
of, any portion of the Property used for such Investigations so that the
Property shall be in the same condition that it existed in prior to such
Investigations; provided, however, Purchaser has no obligation to repair any
Pre-Existing Conditions (as defined below);

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(b)fully comply with all laws applicable to the Investigations and all other
activities undertaken in connection therewith;

(c)permit Seller to have a representative present during all Investigations
undertaken hereunder;

(d)take all actions and implement all protections necessary to ensure that the
Investigations and the equipment, materials, and substances generated, used or
brought onto the Real Property in connection with the Investigations, pose no
threat to the safety or health of persons or the environment, and cause no
damage to the Property or other property of Seller or other persons;

(e)upon Seller’s request, upon termination of this Agreement, furnish to Seller,
at no cost or expense to Seller, copies of all surveys, soil test results,
engineering, asbestos, environmental and other studies and reports (other than
internal analysis and proprietary information of Purchaser) relating to the
Investigations which Purchaser shall obtain with respect to the Property;

(f)maintain or cause to be maintained, at Purchaser’s expense, a policy of
commercial general liability insurance, with a broad form contractual liability
endorsement and with a combined single limit of not less than $2,000,000 per
occurrence for bodily injury and property damage, automobile liability coverage
including owned and hired vehicles with a combined single limit of $2,000,000
per occurrence for bodily injury and property damage, and an excess umbrella
liability policy for bodily injury and property damage in the amount of
$1,000,000, insuring Purchaser, Seller, J.P. Morgan Investment Management Inc.,
and JPMorgan Chase Bank, N.A., as additional insureds, against any injuries or
damages to persons or property that may result from or are related to (i)
Purchaser’s and/or any of the Purchaser’s Representatives’ (as hereinafter
defined) entry upon the Real Property, (ii) any Investigations or other
activities conducted thereon, and/or (iii) any and all other activities
undertaken by Purchaser and/or any of the Purchaser’s Representatives at the
Property, all of which insurance shall be on an “occurrence form” and otherwise
in such forms reasonably acceptable to Seller and with an insurance company
reasonably acceptable to Seller and shall provide that no cancellation or
reduction thereof shall be effective until at least thirty (30) days after
receipt by Seller of written notice thereof, and deliver a copy of such
insurance policy to Seller prior to the first entry on the Real Property;

(g)not cause the Investigations or any other activities undertaken by Purchaser
or any of the Purchaser’s Representatives to result in any liens, judgments or
other encumbrances being filed or recorded against the Property (other than with
respect to any Pre-Existing Conditions), and Purchaser shall, at its sole cost
and expense, immediately discharge of record any such liens or encumbrances that
are so filed or recorded (including, without limitation, liens for services,
labor or materials furnished); and

(h)indemnify, defend and hold harmless Seller and any agent, advisor,
representative, affiliate, employee, director, officer, partner, member,
beneficiary, investor, servant, shareholder, trustee or other person or entity
(each, a “Person”) acting on Seller’s behalf or otherwise related to or
affiliated with Seller (including Seller, collectively, the “Seller Related
Parties”) from and against any and all claims, demands, causes of action,
losses, damages, liabilities, costs and expenses (including, without limitation,
attorneys’ fees and disbursements) (collectively, “Claims”), suffered or
incurred by any of the Seller Related Parties and arising out of or in
connection with (i) entry upon the Real Property by Purchaser or any of the
Purchaser’s Representatives, (ii) any Investigations or other activities
conducted thereon by Purchaser or any of the Purchaser’s Representatives, (iii)
any liens or encumbrances filed or recorded against the Property as a
consequence of the Investigations and/or (iv) any and all other activities
undertaken by Purchaser or any of the Purchaser’s Representatives with respect
to the Property. The foregoing indemnity

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shall not include any Claims to the extent resulting from (x) the mere
discovery, by Purchaser or any of the Purchaser’s Representatives, of
pre-existing conditions on the Property during Investigations conducted pursuant
to, and in accordance with, the terms of this Agreement and which are not
exacerbated by the activities of any such Person (collectively, “Pre-Existing
Conditions”), or (y) the gross negligence or willful misconduct of Seller or any
Seller Related Party.

(i)Without limiting the foregoing, in no event shall Purchaser or any of the
Purchaser’s Representatives, without the prior written consent of Seller: (x)
make any intrusive physical testing (environmental, structural or otherwise) at
the Property (such as soil borings, water samplings or the like), (y) contact
any of the tenants at the Property and/or (z) contact any Governmental Authority
with respect to matters concerning the Property, except with respect to
obtaining a zoning compliance letter and/or confirming the Entitlements (as
hereinafter defined), provided that Seller or a Seller Related Party is copied
on any correspondence and present during any discussions with any Governmental
Authority.

(j)Purchaser’s obligations under this Section 4.2.1 shall survive the Closing or
a termination of this Agreement.

4.2.2Property Information and Confidentiality. All Information (as hereinafter
defined) provided to or obtained by Purchaser, whether prior to or after the
date hereof, shall be subject to the following terms and conditions:

(a)Any Information provided or to be provided with respect to the Property is
solely for the convenience of Purchaser and was or will be obtained from a
variety of sources. None of the Seller Related Parties has made any independent
investigation or verification of such information and, except as expressly set
forth in this Agreement, makes no (and expressly disclaims all) representations
and warranties as to the truth, accuracy or completeness of the Information, or
any other studies, documents, reports or other information provided to Purchaser
hereunder and expressly disclaims any implied representations as to any matter
disclosed or omitted. None of the Seller Related Parties shall be liable for any
mistakes, omissions, misrepresentations or any failure to investigate the
Property nor shall any of the Seller Related Parties be bound in any manner by
any verbal or written statements, representations, appraisals, environmental
assessment reports, or other information pertaining to the Property or the
operation thereof, except as expressly set forth in this Agreement.

(b)Purchaser agrees that neither Purchaser nor any of the Purchaser’s
Representatives shall, at any time or in any manner, either directly or
indirectly, divulge, disclose or communicate to any Person, the Information, or
any other knowledge or information acquired by Purchaser or any of the
Purchaser’s Representatives from any of the Seller Related Parties or by
Purchaser’s own inspections and investigations, other than matters that were in
the public domain at the time of receipt by such Person. Without Seller’s prior
written consent, Purchaser shall not disclose and Purchaser shall direct each of
the Purchaser’s Representatives not to disclose to any Person, any of the terms,
conditions or other facts concerning a potential purchase of the Property by
Purchaser, including, without limitation, the status of negotiations.
Notwithstanding the foregoing, Purchaser may (x) disclose such of the
Information and its other reports, studies, documents and other matters
generated by it and the terms of this Agreement (i) as required by law or court
order (provided prior written notice of such disclosure shall be provided to
Seller) and (ii) as Purchaser deems necessary or desirable to any of the
Purchaser’s Representatives in connection with Purchaser’s Investigations and
the Transaction, provided that those to whom such Information is disclosed are
informed of the confidential nature thereof and agree(s) to keep the same
confidential in accordance with the terms and conditions hereof and (y) make the
public disclosures described in Section 10.24.

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(c)Purchaser shall, and shall cause each of the Purchaser’s Representatives to,
use reasonable care to maintain in good condition all of the Information
furnished or made available to such Person in accordance with this
Section 4.2.2. If this Agreement is terminated, then, upon the request of
Seller, Purchaser shall, and shall cause each of the Purchaser’s Representatives
to, promptly deliver to Seller all originals and copies of the Information in
the possession of such Person, and to expunge and delete any of the Information
maintained on any word processing or computer system or in any other electronic
form to the extent practicable.

(d)As used in this Agreement, the term “Information” shall mean any of the
following: (i) all information and documents in any way relating to the
Property, the operation thereof or the sale thereof, including, without
limitation, this Agreement, all leases and contracts furnished to, or otherwise
made available (including, without limitation, in any electronic data room
established by or on behalf of Seller) for review by, Purchaser or its
directors, officers, employees, affiliates, partners, members, brokers, agents
or other representatives, including, without limitation, attorneys, accountants,
contractors, consultants, engineers and financial advisors (collectively, the
“Purchaser’s Representatives”), by any of the Seller Related Parties or any of
their agents or representatives, including, without limitation, their
contractors, engineers, attorneys, accountants, consultants, brokers or
advisors, and (ii) all analyses, compilations, data, studies, reports or other
information or documents prepared or obtained by Purchaser or any of the
Purchaser’s Representatives containing or based on, in whole or in part, the
information or documents described in the preceding clause (i), the
Investigations, or otherwise reflecting their review or investigation of the
Property.

(e)Purchaser shall indemnify and hold harmless each of the Seller Related
Parties from and against any and all Claims suffered or incurred by any of the
Seller Related Parties and arising out of or in connection with the breach by
Purchaser or any of the Purchaser’s Representatives of the provisions of this
Section 4.2.2.

(f)In addition to any other remedies available to Seller, Seller shall have the
right to seek equitable relief, including, without limitation, injunctive relief
and/or specific performance, against Purchaser or any of the Purchaser’s
Representatives in order to enforce the provisions of this Section 4.2.2.

(g)The provisions of this Section 4.2.2 shall survive a termination of this
Agreement.

4.2.3Identified Contracts. Attached hereto as Exhibit R is a list of the
Contracts (as hereinafter defined) Purchaser will assume in connection with the
Closing (collectively, the “Assumed Contracts”), and attached hereto as Exhibit
S is a list of the Contracts Seller shall terminate in connection with the
Closing (collectively, the “Identified Contracts”). For the purposes of this
Agreement, the term Identified Contracts shall additionally include all
Contracts that are not listed on Exhibits R or S attached hereto, other than any
Contracts that are entered into by Seller after the Effective Date with
Purchaser’s consent in accordance with Section 7.2.2 of this Agreement. Seller
shall, on the Closing Date, deliver notices of termination to the vendors under
the Identified Contracts, terminating such Identified Contracts effective upon
the earliest date that, pursuant to the terms of such Identified Contracts, such
Identified Contracts may be terminated. If any of the Identified Contracts
cannot be terminated without the payment of a fee, premium, penalty or other
form of early termination compensation, Purchaser shall be responsible for
paying such fee, premium, penalty or other compensation. Purchaser understands
and agrees that, at Closing, Purchaser shall assume the obligations of Seller
which arise after the Closing under any Assumed Contracts and any Contracts that
are entered into after the Effective Date with Purchaser’s approval in
accordance with this Section 7.2.2 of this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, Seller shall, on

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or before the Closing Date, deliver notice of termination and instructions to
immediately cease any performance at the Property for any existing property
management agreement with respect to the Property and any other agreements or
contracts between Seller and the property manager which relate to the Property
(including, without limitation, any office space for property management
services, any parking leases and similar agreements); provided, however,
Purchaser shall assume Seller’s right, title and interest with respect to the
lease dated September 25, 2009 between Hines Interests Limited Partnership and
Seller, which expires August 31, 2019, in connection with the Closing pursuant
to the terms of the Assignment and Assumption of Leases and Contracts (as
hereinafter defined).

4.3Tenant Estoppel Certificates.

4.3.1Seller shall use commercially reasonable efforts (and, as used in this
Agreement, commercially reasonable efforts shall not be deemed to include any
obligation to institute legal proceedings, deliver notices of default or to
expend any monies, other than monies to pay for reasonable and customary costs
normally associated with requesting and pursuing similar tenant estoppel
certificates) to obtain estoppel certificates (each, a “Tenant Estoppel
Certificate”, and collectively, the “Tenant Estoppel Certificates”) from (i) LPL
Holdings, Inc., (ii) all tenants of the Property that lease rentable space
within the Property that is equal to or greater than 4,000 square feet and (iii)
any other tenants of the Property such that Tenant Estoppel Certificates shall
have been received from tenants that collectively lease at least seventy-five
percent (75%) of the net rentable square footage within the Real Property as of
the Effective Date. The certificates shall, subject to the further provisions of
this Section, be substantially in the form (or containing substantially similar
certifications as contained in the form) attached hereto as Exhibit D-1 (or if
Seller, after attempting to obtain certificates in such form, is unable to
obtain the same, then in the form, if any, prescribed in the applicable Lease or
other operative document or in any form such that the Tenant has made
substantially similar certifications as contained in the form attached hereto as
Exhibit D‑2, which certifications shall be deemed sufficient to satisfy the
estoppel requirement for such Tenant) but in each case, the form shall be
modified to make the statements contained therein factually correct.
Notwithstanding anything to the contrary contained in this Agreement, a tenant
shall not be required to make any certifications not specifically enumerated in
the applicable Lease estoppel requirements.

4.3.2Prior to the Effective Date, Seller has delivered to Purchaser, copies of
the Tenant Estoppel Certificates, on the form required hereunder, with all blank
spaces completed prior to their delivery to tenants under any of the Leases and
Purchaser has approved the same.

4.3.3Notwithstanding anything contained in this Section 4.3 to the contrary, if
Purchaser fails to object in writing to any Tenant Estoppel Certificate received
from a Tenant, to the extent different from the form delivered pursuant to
Section 4.3.2, or to modifications to a Tenant Estoppel Certificate made by a
Tenant, within two (2) Business Days after a copy of such certificate has been
delivered to Purchaser, Purchaser shall be deemed to have approved the same;
provided, that Purchaser shall be deemed to have objected to Tenant Estoppel
Certificates that disclose (a) any uncured defaults by such tenants or Seller
under the terms of the applicable Leases or any other material costs or other
material obligations with respect to such Leases for which Purchaser may be
reasonably likely to be liable after the Closing, in each case unless the same
were previously disclosed in writing to Purchaser or contained in the Leases or
the Information provided prior to the Effective Date or (b) material economic
terms with respect to such Leases which conflict with the material economic
terms disclosed by Seller in writing to Purchaser prior to the Effective Date.

4.4Association Estoppel Certificate.

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4.4.1Seller shall use commercially reasonable efforts to obtain an estoppel
certificate (the “Association Estoppel Certificate”) from La Jolla Commons
Master Association, a California nonprofit mutual benefit corporation (the
“Association”), with respect to the Association Documents (as hereinafter
defined). The Association Estoppel Certificate shall, subject to the further
provisions of this Section, be substantially in the form attached hereto as
Exhibit Y.

4.4.2Seller shall endeavor to deliver to Purchaser, for its review and approval,
a copy of the Association Estoppel Certificate, on the form required hereunder,
with all blank spaces completed prior to the delivery of the Association
Estoppel Certificate to the Association. Unless Purchaser objects in writing to
such completed Association Estoppel Certificate within two (2) Business Days
after receipt thereof, Purchaser shall be deemed to have approved such completed
Association Estoppel Certificate.

4.4.3Notwithstanding anything contained in this Section 4.4 to the contrary, if
Purchaser fails to object in writing to the Association Estoppel Certificate
received from the Association, or to modifications to the Association Estoppel
Certificate made by the Association, within two (2) Business Days after a copy
of such certificate has been delivered to Purchaser, Purchaser shall be deemed
to have approved the same.

4.5Conditions Precedent to Obligations of Purchaser; No Financing Contingency.
The obligation of Purchaser to consummate the Transaction shall be subject to
(i) the performance and observance, in all material respects, by Seller of all
covenants, warranties and agreements of this Agreement to be performed or
observed by Seller prior to or on the Closing Date and (ii) the fulfillment on
or before the Closing Date of all other conditions precedent to Closing
benefiting Purchaser specifically enumerated in this Agreement (including,
without limitation, the condition precedent that the Title Company be
unconditionally and irrevocably committed to issue the Owner’s Policy to
Purchaser at the Closing in accordance with Section 4.1.1(a)), any or all of
which may be waived by Purchaser in its sole discretion. In the event that any
of the conditions precedent to the Closing benefiting Purchaser are not
satisfied or waived by Purchaser prior the Scheduled Closing Date, Purchaser
shall have the right to terminate this Agreement by written notice delivered to
Seller and Escrowee, in which case Escrowee shall return the Deposit to
Purchaser. Notwithstanding anything to the contrary contained herein, Purchaser
acknowledges and agrees that, while Purchaser may at its own risk attempt to
obtain financing with regard to its acquisition of the Property, (i) Purchaser’s
obtaining, or ability to obtain, financing for its acquisition of the Property
is in no way a condition to Purchaser’s performance of its obligations under
this Agreement, (ii) Purchaser’s performance of its obligations under this
Agreement is in no way dependent or conditioned upon the availability of any
financing whether generally in the marketplace or specifically in favor of
Purchaser, and (iii) in no event shall the Closing be delayed on account of
Purchaser’s obtaining, or ability to obtain, financing.

4.6Conditions Precedent to Obligations of Seller. The obligation of Seller to
consummate the Transaction shall be subject to the performance and observance,
in all material respects, by Purchaser of all covenants, warranties and
agreements of this Agreement to be performed or observed by Purchaser prior to
or on the Closing Date and the fulfillment on or before the Closing Date of all
other conditions precedent to Closing benefiting Seller specifically enumerated
in this Agreement, any or all of which may be waived by Seller in its sole
discretion.

5.Closing. The closing (the “Closing”) of the Transaction shall occur at 1:00
p.m. (Pacific time) on or before the date that is ten (10) days following the
Effective Date (the “Scheduled Closing Date”) (as the same may be extended as
expressly provided herein), TIME BEING OF THE ESSENCE with respect to the
parties’ obligation to close on such date (the date on which the Closing shall
occur being herein referred to as the “Closing Date”). It is contemplated that
the Transaction shall be closed by means of a so called

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“New York Style Closing”, with the concurrent delivery of the documents of
title, the commitment to deliver the Owner’s Policy and the payment of the
Purchase Price. Notwithstanding the foregoing, there shall be no requirement
that Seller and Purchaser physically meet for the Closing, and all documents and
funds to be delivered at the Closing shall be delivered to Escrowee unless the
parties hereto mutually agree otherwise. Seller and Purchaser also agree that
disbursement of the Purchase Price, as adjusted by the prorations, shall not be
conditioned upon the recording of any document, but rather, upon the
satisfaction or waiver of all conditions precedent to the Closing and the
irrevocable agreement by the Title Company to issue the Owner’s Policy effective
as of the Closing. The Closing shall constitute approval by each party of all
matters to which such party has a right of approval and a waiver of all
conditions precedent. Purchaser shall have the right to extend the Scheduled
Closing Date by up to ten (10) days by (i) delivering written notice of
Purchaser’s election to exercise such extension option to Seller and Escrowee,
not less than three (3) Business Days prior to the Scheduled Closing Date and
(ii) concurrently with the delivery of such written notice to Seller and
Escrowee, depositing with Escrowee, by wire transfer of immediately available
federal funds to the account designated by Escrowee, the sum of Five Million and
No/100 Dollars ($5,000,000.00) (the “Extension Deposit”). The Extension Deposit
shall be nonrefundable to Purchaser, except as otherwise expressly provided in
this Agreement, and held by Escrowee pursuant to the Escrow Agreement.

5.1.Seller Deliveries. At or prior to the Closing, Seller shall deliver or cause
to be delivered to Purchaser or to the Escrowee, as the case may be the
following items executed and acknowledged by Seller, as appropriate:
5.1.1A deed (the “Deed”) in the form attached hereto as Exhibit F.

5.1.2An assignment and assumption of leases and contracts (the “Assignment and
Assumption of Leases and Contracts”), in the form attached hereto as Exhibit G.

5.1.3A bill of sale and general assignment (the “Bill of Sale”), in the form
attached hereto as Exhibit H.

5.1.4A certification of non-foreign status in the form attached hereto as
Exhibit I, and any required state certificate that is sufficient to exempt
Seller from any state withholding requirement with respect to the Transaction.

5.1.5All keys to the Improvements, to the extent the same are in Seller’s
possession or control.

5.1.6All original copies of the Leases, to the extent the same are in Seller’s
possession or control.

5.1.7All original copies of the Contracts that will bind Purchaser following
Closing to the extent the same are in Seller’s possession or control (all items
in Sections 5.1.5 through 5.1.7 may be either delivered at Closing or left at
the management office at the Real Property, to the extent not previously
delivered to Purchaser).

5.1.8All applicable transfer tax forms, if any.

5.1.9Such further instruments as may be reasonably required by the Title Company
to record the Deed.

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5.1.10A notice to each of the tenants under the Leases in effect on the Closing
Date (collectively, the “Tenant Notices”) in the form attached hereto as
Exhibit J, advising tenants under such Leases of the sale of the Real Property
to Purchaser and directing them to make all payments to Purchaser or its
designee, which Tenant Notices Purchaser shall, at Purchaser’s sole cost and
expense, either mail by certified mail return receipt requested or hand-deliver
to each of the tenants under such Leases.

5.1.11A notice to each of the vendors under the Assumed Contracts (collectively,
the “Vendor Notices”) in the form attached hereto as Exhibit K or such other
form as may be prescribed by the applicable Assumed Contract, advising them of
the sale of the Real Property to Purchaser and the assignment to and assumption
by Purchaser of Seller’s obligations in accordance with the Assignment and
Assumption of Leases and Contracts and directing them to deliver to Purchaser or
its designee all future statements or invoices under the Assumed Contracts for
obligations that were assumed by Purchaser, which Vendor Notices Purchaser
shall, at Purchaser’s sole cost and expense, mail by certified mail return
receipt requested to each of the vendors under the Assumed Contracts.

5.1.12An owner’s title certificate in the form attached hereto as Exhibit L.

5.1.13Evidence reasonably satisfactory to the Title Company respecting the due
organization of Seller and the due authorization and execution by Seller of this
Agreement and the documents required to be delivered by Seller hereunder.

5.1.14A settlement statement consistent with the provisions of this Agreement
prepared by Seller and reasonably approved by Purchaser (the “Settlement
Statement”).

5.1.15All original copies of the Tenant Estoppel Certificates and the
Association Estoppel Certificate, to the extent received by Seller.

5.1.16A certificate (a “Seller Update”) of Seller dated as of the Closing Date
certifying that the representations and warranties of Seller set forth in
Section 7.1.1 of this Agreement, other than those made as of the Effective Date
(the representations and warranties set forth in Section 7.1.1 of this
Agreement, other than those made as of the Effective Date, being hereafter
referred to as “Seller Closing Date Representations”) remain true and correct as
of the Closing Date in all material respects, it being agreed that if any Seller
Closing Date Representation shall no longer be true and correct on the Closing
Date in any material respect for any reason other than by reason of a material
breach of an express covenant of Seller contained in this Agreement and Seller
is unable to deliver a Seller Update, the failure of Seller to deliver a Seller
Update shall constitute a failure of a condition to Closing and shall not
constitute a default by Seller under this Agreement, and unless Purchaser elects
to waive such condition, Purchaser’s sole remedy in connection therewith shall
be to terminate this Agreement by written notice to Seller and Escrowee. If
Purchaser elects to terminate this Agreement pursuant to this Section 5.1.16,
(1) Escrowee shall return the Deposit to Purchaser and (2) no party hereto shall
have any further obligation under this Agreement except for the Surviving
Obligations.

5.1.17An assignment and assumption agreement (the “Assignment and Assumption of
Declarant Rights”), in the form attached hereto as Exhibit V, which shall
provide for La Jolla II Seller’s assignment to Purchaser, and Purchaser’s
assumption from La Jolla II Seller, of all rights of the “Declarant” under that
certain Declaration of Covenants, Conditions, Restrictions and Easements
recorded in the Official Records of San Diego County, California as Document No.
2003-0847500 on July 16, 2003.

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5.2.Purchaser Deliveries. At or prior to the Closing, Purchaser shall deliver or
cause to be delivered to Seller or to the Escrowee, as the case may be, the
following items, executed and acknowledged by Purchaser, as appropriate:
5.2.1The Closing Payment required to be paid in accordance with Section 3.3.

5.2.2The Assignment and Assumption of Leases and Contracts.

5.2.3All applicable transfer tax forms, if any.

5.2.4The Settlement Statement.

5.2.5Such further instruments as may be reasonably necessary to record the Deed.

5.2.6Evidence reasonably satisfactory to Seller and the Title Company respecting
the due organization of Purchaser and the due authorization and execution by
Purchaser of this Agreement and the documents required to be delivered by
Purchaser hereunder.

5.2.7The Assignment and Assumption of Declarant Rights.

5.3.Closing Costs. Seller shall pay (a) all state, county and city transfer
taxes, including transfer taxes of the State of California, County of San Diego
and City of San Diego, payable in connection with the Transaction, (b) the cost
of the portion of the premium for the Owner’s Policy that is applicable to
standard coverage, (c) all personal property taxes imposed on Seller in
connection with the Transaction, if any, and (d) fifty percent (50%) of the cost
of Escrowee. Purchaser shall pay (a) the cost of any title endorsements and the
cost of the portion of the premium for the Owner’s Policy that is applicable to
extended coverage, (b) the cost of the Survey (or any update thereto), (c) all
recording charges payable in connection with the recording of the Deed, (d) all
personal property taxes imposed on Purchaser in connection with the Transaction,
if any, (e) fifty percent (50%) of the cost of Escrowee, and (f) all fees, costs
or expenses in connection with Purchaser’s Investigations. Any other closing
costs shall be allocated in accordance with local custom. Except as expressly
provided in the indemnities set forth in this Agreement, Seller and Purchaser
shall pay their respective legal, consulting and other professional fees and
expenses incurred in connection with this Agreement and the Transaction and
their respective shares of prorations as hereinafter provided. The provisions of
this Section 5.3 shall survive the Closing or a termination of this Agreement.

5.4.Prorations.

5.4.1The following provisions shall govern the adjustments and prorations that
shall be made at Closing and the allocation of income and expenses from the
Property between Seller and Purchaser. Except as expressly provided in this
Section 5.4.1, all items of operating revenue and operating expenses of the
Property, with respect to the period on or prior to 11:59 p.m. local time at the
Real Property on the day immediately preceding the Closing Date (the “Cut-off
Time”), shall be for the account of Seller and all items of operating revenue
and operating expenses of the Property with respect to the period from and after
the Cut-off Time, shall be for the account of Purchaser. Without limitation on
the foregoing the following shall be prorated as of the Cut-off Time:

(a)All real estate taxes and assessments on the Real Property shall be prorated
on the basis of the fiscal year for which assessed. In no event shall Seller be
charged with or be responsible for any increase in the taxes on the Real
Property resulting from the sale of the Real Property or from any improvements
made or leases entered into on or after the Closing Date. If any assessments on
the Real

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Property are payable in installments, then the installment for the current
period shall be prorated (with Purchaser assuming the obligation to pay any
installments due after the Closing Date).

(b)Subject to this Section 5.4.1(b), all fixed rent and regularly scheduled
items of additional rent under the Leases, and other tenant charges if, as and
when received. Seller shall provide a credit in an amount equal to all prepaid
rentals for periods after the Closing Date and all refundable cash security
deposits (to the extent the foregoing were made by tenants under the Leases and
are not applied or forfeited prior to the Closing Date) to Purchaser on the
Closing Date. Seller shall deliver to Purchaser at Closing any tenant security
deposits which are held in the form of letters of credit. Rents and other tenant
charges which are delinquent as of the Closing Date shall not be prorated on the
Closing Date. Purchaser shall include such delinquencies in its normal billing
and shall use commercially reasonable efforts to pursue the collection thereof
in good faith after the Closing Date (but Purchaser shall not be required to
litigate or declare a default under any of the Leases). To the extent Purchaser
receives rents or other tenant charges on or after the Closing Date, such
payments shall be applied first to the rents or other tenant charges that shall
then be due and payable to Purchaser, and second to any delinquent rents or
other tenant charges owed to Seller, with Seller’s share thereof being held by
Purchaser in trust for Seller and promptly delivered to Seller by Purchaser.
Purchaser may not waive any delinquent rents or other tenant charges nor modify
any of the Leases so as to reduce or otherwise affect amounts owed thereunder
for any period in which Seller is entitled to receive a share of charges or
amounts without first obtaining Seller’s written consent, which consent may be
given or withheld in Seller’s sole and absolute discretion. Seller hereby
reserves the right to pursue the collection of delinquent rents and any other
amounts owed to Seller by any of the tenants; provided, however, Seller shall
not be entitled to (i) terminate any of the Leases or any tenant’s right to
possession or (ii) exercise any landlord remedy against a tenant other than to
continue or commence a legal action or proceeding for collection against any
tenant owing delinquent rent or any other amount to Seller. Delivery of the
Assignment and Assumption of Leases and Contracts shall not constitute a waiver
by Seller of such right, and such right shall survive the Closing. Purchaser
shall reasonably cooperate with Seller in any collection efforts hereunder (but
shall not be required to litigate or declare a default under any of the Leases
or incur any costs or expenses in connection with such cooperation). With
respect to delinquent rents and any other amounts or other rights of any kind
respecting tenants who are no longer tenants of the Real Property on the Closing
Date or who vacate the Real Property following the Closing Date, Seller shall
retain all rights relating thereto.

(c)Tenants are obligated to pay, as additional rent, certain escalations in base
rent and pass throughs of operating and similar expenses pursuant to the terms
of the Leases (collectively, “Additional Rents”). As to any Additional Rents
that are based on estimates and that are subject to adjustment or reconciliation
pursuant to the Leases after the Closing Date, Seller shall perform an estimated
reconciliation for the portion of the 2019 calendar year that ends as of the
Cut-off Time, with respect to Additional Rents received for such period from
tenants and the underlying operating expenses to which they relate. If, based on
Seller’s estimated reconciliation, during the period commencing on January 1,
2019 and ending as of the Cut-off Time, Seller collected estimated Additional
Rents in excess of any tenant’s share of such expenses for the period as shown
on such reconciliation, then Seller shall credit Purchaser for such excess and
Purchaser shall be responsible for crediting or repaying such amounts to
tenants. If, based on Seller’s estimated reconciliation, during the period
commencing on January 1, 2019 and ending as of the Cut-off Time, Seller
collected estimated Additional Rents which are less than any tenant’s share of
such expenses for the period as shown on such reconciliation, then Purchaser
shall credit Seller for such deficiency and Purchaser shall be responsible for
obtaining such amounts from tenants. The parties shall “re-prorate” such
Additional Rents (including, without limitation, any portions thereof that may
be required to be refunded to tenants) at the time that such estimates are
actually adjusted or reconciled pursuant to the terms of the Leases and based on
expenses actually incurred by Seller as compared to Additional Rents collected
by Seller from January 1, 2019 and ending as of the Cut-off Time (taking into
account the credit, if any, given at Closing related thereto).

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Any amounts that may be due Seller as a result of such re-prorations shall be
paid by Purchaser to Seller within ten (10) Business Days after Purchaser
collects such amounts from tenants (which Purchaser shall use commercially
reasonable efforts to collect), and any amounts that may be due from Seller as a
result of such re-prorations shall be paid by Seller to Purchaser within ten
(10) Business Days after written request therefor is delivered to Seller by
Purchaser accompanied by supporting statements and documents reasonably
satisfactory to Seller (to the extent not previously credited at Closing as
provided above). Seller shall be entitled to collect any Additional Rents owed
to Seller directly from the applicable tenants to the extent relating to its
period of ownership of the Property; provided, however, Seller shall not be
entitled to (i) terminate any of the Leases or any tenant’s right to possession
or (ii) exercise any landlord remedy against a tenant other than to commence a
legal action or proceeding for collection of such Additional Rents.

(d)Charges and payments under the Assumed Contracts or permitted renewals or
replacements thereof assigned to Purchaser pursuant to the Assignment and
Assumption of Leases and Contracts.

(e)Any prepaid items, including, without limitation, fees for licenses which are
transferred to Purchaser at the Closing and annual permit and inspection fees.

(f)Utilities in connection with the Real Property, including, without
limitation, telephone, steam, electricity, water, sewer and gas, on the basis of
the most recently issued bills therefor, subject to adjustment after the Closing
when the next bills are available, or if current meter readings are available,
on the basis of such readings.

(g)Deposits with telephone and other utility companies, and any other Persons
who supply goods or services in connection with the Real Property if the same
are assigned to Purchaser at the Closing, which shall be credited in their
entirety to Seller.

(h)Taxes payable by Seller relating to operations of the Real Property,
including, without limitation, business and occupancy taxes and sales taxes, if
any.

(i)All operating expenses and other items as are customarily apportioned between
sellers and purchasers of real estate of a type similar to the Property and
located in the same geographic area as the Property subject to the express terms
of this Agreement including this Section 5.4

5.4.2If any of the items described in Section 5.4.1 hereof cannot be apportioned
at the Closing because of the unavailability of information as to the amounts
which are to be apportioned or otherwise, or are incorrectly apportioned at
Closing or subsequent thereto, such items shall be apportioned or reapportioned,
as the case may be, as soon as practicable after the Closing Date or the date
such error is discovered, as applicable; provided that neither party shall have
the right to request apportionment or reapportionment of any such item at any
time following the nine (9) month anniversary of the Closing Date (the
“Reproration Outside Date”). If the Closing shall occur before a real estate or
personal property tax rate or assessment is fixed for the tax year in which the
Closing occurs, the apportionment of taxes at the Closing shall be upon the
basis of the tax rate or assessment for the preceding fiscal year applied to the
latest assessed valuation. Promptly after the new tax rate or assessment is
fixed, the apportionment of taxes or assessments shall be recomputed and any
discrepancy resulting from such recomputation and any errors or omissions in
computing apportionments at Closing shall be promptly corrected and the proper
party reimbursed, which obligations shall survive the Closing until the
Reproration Outside Date.

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5.4.3Purchaser shall receive a credit against the Purchase Price in the amount
that is equal to Nine Million Nine Hundred Twenty-Two Thousand Eight Hundred
Sixty-Five and No/100 Dollars ($9,922,865.00), less the amount of any
Prospective Leasing Costs (as defined below) paid by Seller prior to the Closing
Date (collectively, the “Seller Prospective Leasing Costs”). Seller shall
deliver written notice of the amount of the Seller Prospective Leasing Costs to
Purchaser on or before the date this is three (3) days prior to the Scheduled
Closing Date, together with reasonable documentation evidencing the amount and
payment of the Seller Prospective Leasing Costs. Following the Closing,
Purchaser shall be responsible for the obligation to pay all of the Leasing
Costs (as defined below). For the purposes of this Agreement, the term
“Prospective Leasing Costs” shall mean all tenant improvement costs, rent and
operating expense abatements and other out-of-pocket tenant inducements (such as
moving, design and lease buyout costs) in connection with prospective leases of
space within the Property that have not been executed by the Effective Date (the
“Prospective Leases”) and any leasing commissions provided for in any
Prospective Leases.

5.4.4Purchaser shall receive a credit against the Purchase Price equal to all
Existing Leasing Costs (as defined below), less the amount of any Existing
Leasing Costs paid by Seller prior to the Closing Date (collectively, the
“Seller Existing Leasing Costs”). Seller shall deliver written notice of the
amount of the Seller Existing Leasing Costs to Purchaser on or before the date
this is three (3) days prior to the Scheduled Closing Date, together with
reasonable documentation evidencing the amount and payment of any Existing
Leasing Costs made prior to the Closing Date. For the purposes of this
Agreement, the term “Existing Leasing Costs” shall mean all tenant improvement
costs, rent and operating expense abatements and other out-of-pocket tenant
inducements (such as moving, design and lease buyout costs) that are outstanding
as of the Effective Date in connection with the Leases and any leasing
commissions provided for in any Leases executed prior to the Effective Date and
relating to the current (or any prior, if applicable) term thereof. The
Prospective Leasing Costs, Existing Leasing Costs and all brokerage and leasing
commissions under the Leasing Commission Agreements shall be referred to herein,
collectively, as the “Leasing Costs”. In no event shall Seller be required to
credit Purchaser as Existing Leasing Costs any amount of Leasing Costs that were
included in the credit for Prospective Leasing Costs set forth in Section 5.4.3
above.

5.4.5Purchaser shall receive a credit against the Purchase Price in the amount
of One Million Five Hundred Thirty-Four Thousand One Hundred Eighteen and No/100
Dollars ($1,534,118.00) for speculative lease-up rent.

5.4.6The provisions of this Section 5.4 shall survive the Closing until the
Reproration Outside Date.

6.Condemnation or Destruction of Real Property. If, after the Effective Date but
prior to the Closing Date, Seller becomes aware that either any portion of the
Real Property is taken pursuant to eminent domain proceedings or condemnation or
any portion of the Property is damaged or destroyed by fire or other casualty,
then (i) Seller shall promptly deliver, or cause to be delivered, to Purchaser,
notice of any such eminent domain proceedings or casualty and (ii) Purchaser
shall have the right to adjourn the Scheduled Closing Date by such period of
time as is reasonably necessary for Purchaser to evaluate the portion of the
Property that has been taken, damaged or destroyed, but in no event longer than
thirty (30) days and the parties to obtain an estimate of the costs to repair
the damage or destruction or the value of the taking. Seller shall have no
obligation to restore, repair or replace any portion of the Property or any such
damage or destruction. Seller shall, at the Closing, assign to Purchaser all of
Seller’s interest in all awards or other proceeds for such taking by eminent
domain or condemnation or the proceeds of any insurance for such damage or
destruction, as applicable, except to the extent that (i) such damage or
destruction shall have been repaired prior to the Closing, (ii) any such awards,
proceeds or insurance are attributable to lost rents or items applicable to any

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period prior to the Closing, or (iii) Seller has incurred costs in connection
with the repair of such damage or destruction or reasonable collection costs of
Seller respecting any award or other proceeds for such taking by eminent domain
or condemnation, in which case Seller shall be reimbursed for such costs from
such award proceeds or insurance, as applicable. In connection with any
assignment of awards, proceeds or insurance in accordance with the immediately
preceding sentence, Purchaser shall receive a credit against the Purchase Price
in an amount that is equal to the applicable deductible amount under Seller’s
insurance; provided, however, the amount of such credit shall not exceed the
amount by which the cost, as of the Closing Date, to repair the damage or
destruction (as determined by an independent third party contractor or engineer
selected by Seller and reasonably approved by Purchaser) exceeds the insurance
proceeds assigned to Purchaser. Furthermore, if any damage to or destruction of
the Property is uninsured or underinsured, Purchaser shall receive a credit
against the Purchase Price in an amount that is equal to the replacement cost
for such damage or destruction (as determined by an independent third party
contractor or engineer selected by Seller and reasonably approved by Purchaser),
less the amount of any insurance proceeds assigned to Purchaser in accordance
with this Section 6. Notwithstanding the foregoing provisions of this Section 6,
(i) if the amount of the damage or destruction or the value of the taking (in
each case, as determined by an independent third party contractor or engineer
selected by Seller and reasonably approved by Purchaser) or the amount of
condemnation award shall exceed the sum of Twenty Five Million and No/100
Dollars ($25,000,000.00) or (ii) if any damage or destruction is uninsured and
the amount of the damage or destruction (as determined by an independent third
party contractor or engineer selected by Seller and reasonably approved by
Purchaser) shall exceed the sum of Five Million and No/100 Dollars
($5,000,000.00), Purchaser shall have the right to terminate this Agreement by
delivering written notice of such termination to Seller and Escrowee within ten
(10) days after notification to Purchaser of the estimated amount of the damages
or the value of the taking. In any instance where this Agreement is terminated
pursuant to this Section 6, the Deposit shall, provided that Purchaser is not
otherwise in default of its obligations pursuant to this Agreement, be promptly
returned to Purchaser, and this Agreement and the obligations of the parties
hereunder shall terminate (and no party hereto shall have any further obligation
under this Agreement except for the Surviving Obligations). The parties hereby
waive the provisions of any statute which provides for a different outcome or
treatment in the event of a casualty or a condemnation or eminent domain
proceeding. The provisions of this Section 6 shall survive the Closing or a
termination of this Agreement.

7.Representations, Warranties and Covenants.

7.1Representations, Warranties and Covenants of Seller.

7.1.1Representations and Warranties of Seller. Subject to the provisions of this
Section 7.1.1, Seller hereby represents to Purchaser that:

(a)Leases. As of the Effective Date, the only leases affecting any portion of
the Real Property are the Leases described on the Lease Exhibit. As used in this
Agreement, “Leases” shall be deemed to mean, collectively, (i) the leases and
all amendments, assignments, commencement date certificates and delivery date
certificates described on Exhibit N attached hereto (the “Lease Exhibit”) and
(ii) the leases, licenses, and other occupancy agreements relating to the Real
Property that are entered into by Seller after the Effective Date in accordance
with this Agreement, if any. As of the Effective Date (x) to Seller’s knowledge,
the Leases described on the Lease Exhibit are in full force and effect, (y) the
Leases described on the Lease Exhibit have not been amended except as set forth
in the Lease Exhibit, and (z) the Lease Exhibit is true and correct in all
material respects. Prior to the Effective Date, Seller delivered or made
available true, correct and complete copies of the Leases described on the Lease
Exhibit to Purchaser. As of the Effective Date, Seller has received no written
notice of any default by Seller with respect to the Leases which has not been
cured and, to the best of Seller’s knowledge, no tenant under any Lease is in
default under such

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Lease. Exhibit Q lists, for all Leases in effect as of the Effective Date, all
of the Existing Leasing Costs as of the Effective Date; provided, however,
Seller shall have the right to correct Exhibit Q prior to the Closing Date in
the event any inaccuracies are discovered, without any opportunity for Purchaser
to terminate this Agreement in connection therewith.

(b)Contracts. The only maintenance, service and supply contracts, equipment
leases, leasing commission agreements or other contracts or agreements (other
than the Leases, management agreements, other agreements with the property
manager that are not assumed at the Closing or are terminated by Seller at the
Closing, parking agreements that are not assumed at the Closing or are
terminated by Seller at the Closing and Permitted Exceptions) to which Seller is
a party or is bound or, to Seller’s knowledge, otherwise affecting any portion
of the Property, are the Contracts. As used in this Agreement, “Contracts” shall
be deemed to mean, collectively, (i) maintenance, service and supply contracts,
and equipment leases described on Exhibit O-1 attached hereto, (ii) leasing
commission agreements described on Exhibit O-2 attached hereto (the “Leasing
Commission Agreements”), (iii) any leasing commissions described in the Leases
and (iv) contracts and agreements that are entered into by Seller after the
Effective Date in accordance with the terms of this Agreement, if any. As of the
Effective Date, (x) to Seller’s knowledge, the Contracts described on Exhibits
O-1 and O-2 attached hereto are in full force and effect, (y) such Contracts
have not been amended except as set forth in such exhibits and (z) Exhibits O-1
and O-2 are true and correct in all material respects. Prior to the Effective
Date, Seller delivered true, correct and complete copies of the Contracts
described on Exhibits O-1 and O-2 attached hereto to Purchaser.

(c)Litigation. Except as set forth on Exhibit T attached hereto, there is no
pending or, to the best of Seller’s knowledge, threatened in writing litigation
or condemnation action against the Property or against Seller, other than claims
which are personal injury claims that are, to Seller’s knowledge, covered by
insurance (subject to any deductible).

(d)No Insolvency. Seller has not (i) made a general assignment for the benefit
of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller’s creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Seller’s assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller’s assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally.

(e)Non-Foreign Person. Seller is not a “foreign person” as defined in
Section 1445 of the Internal Revenue Code, as amended (the “Code”).

(f)Due Authority. This Agreement has been duly authorized, executed, and
delivered by, and is binding upon, Seller, and each agreement, instrument and
document herein provided to be executed by Seller on the Closing Date will be
duly authorized, executed, and delivered by, and be binding upon, Seller, and
enforceable against Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting the rights and
remedies of creditors. Seller is a limited liability company, duly organized and
validly existing and in good standing under the laws of the State of Delaware,
is qualified to do business in the State of California, and is duly authorized
and qualified to do all things required of it under this Agreement. This
Agreement does not, and each agreement, instrument and document herein provided
to be executed by Seller on the Closing Date will not, violate any provision of
any agreement or judicial order to which Seller is a party or to which Seller or
the Property is subject.

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(g)Violation of Laws. Seller has not received written notice from any
Governmental Authority of any material violation of any law applicable to the
Property that has not been corrected.

(h)OFAC, PATRIOT Act, and Anti-Money Laundering Compliance. None of (A) Seller;
(B) any Person controlling or controlled by Seller, directly or indirectly,
including but not limited to any Person or Persons owning, in the aggregate, a
fifty percent (50%) or greater direct or indirect ownership interest in Seller;
(C) any Person, to the knowledge of Seller, having a legal or beneficial
interest in Seller; or (D) any Officer or Director or (to the knowledge of
Seller) any employee, agent, or representative of Seller (including any person
acting in such capacity for or on behalf of Seller); or (F) any Person for whom
Seller is acting as agent or nominee or otherwise in connection with the
Transaction; is: (1) a country, territory, government, government
instrumentality, individual or entity subject to sanctions under any U.S.
federal, state, or local law or regulation, or non-U.S. law or regulation,
including but not limited to any Executive Order issued by the President of the
United States or any regulation administered by the Office of Foreign Assets
Control of the United States Department of the Treasury, including but not
limited to identification as a Specially Designated National or blocked person,
or identification on the Denied Persons List, the Entity List, or the Unverified
List maintained by the Bureau of Industry & Security, U.S. Department of
Commerce, or under any order or regulation of (a) the United Nations; (b) the
European Union or any of its member states; (c) Her Majesty’s Treasury of the
United Kingdom; or (d) any other governmental authority; (2) a Foreign Terrorist
Organization designated by the United States Department of State, or (3) an
individual or entity who the Purchaser knows, or reasonably should know, has
engaged in or engages in terrorist activity, or has provided or provides
material support or resources for terrorist activities or terrorist
organizations, as prohibited by U.S. law, including but not limited to the USA
PATRIOT Act, P.L. 107-56.

(i)Personal Property and Intangible Property. All Personal Property and
Intangible Property transferred to Purchaser pursuant to the terms of this
Agreement on the Closing Date is transferred free and clear of all liens and
encumbrances.

(j)ERISA. Seller is not a party in interest with respect to any employee benefit
or other plan within the meaning of Section 3(3) the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or of Section 4975(e)(1) of the Code,
which is subject to ERISA or Section 4975 of the Code and which is an investor
in Seller.

(k)Real Estate Taxes. To Seller’s knowledge, all real estate taxes which would
be delinquent if unpaid will be paid in full or prorated at the Closing pursuant
to Section 5.4 and there are no pending real estate tax protest or appeal
proceedings by or for the benefit of Seller with respect to the Property.

Notwithstanding anything contained in this Agreement to the contrary, (i) if any
of the representations or warranties of Seller contained in this Agreement or in
any document or instrument delivered in connection herewith are false or
inaccurate or if Seller is in breach or default of any of its obligations under
this Agreement and if either (x) prior to the Effective Date, Purchaser shall
have had actual knowledge of the false or inaccurate representations or
warranties or other breach or default, or (y) the accurate state of facts
pertinent to such false or inaccurate representations or warranties or evidence
of such other breach or default was contained in any of the Information
furnished or made available to or otherwise obtained by Purchaser prior to the
Effective Date, then Seller shall have no liability or obligation respecting
such representations or warranties that are false or inaccurate or such other
breach or default (and Purchaser shall have no cause of action or right to
terminate this Agreement with respect thereto), and the representations and
warranties of Seller shall be deemed modified to the extent necessary to
eliminate such false and inaccurate

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information and to make such representations and warranties true and accurate in
all respects; and (ii) if any of the representations or warranties of Seller
that survive Closing contained in this Agreement or in any document or
instrument delivered in connection herewith are false or inaccurate, or if
Seller is in breach or default of any of its obligations under this Agreement
that survive Closing, (ii) prior to Closing, (x) Purchaser shall obtain
knowledge of such false or inaccurate representations or warranties or such
other breach or default, or (y) the accurate state of facts pertinent to such
false or inaccurate representations or warranties or evidence of such other
breach or default was contained in any of the Information furnished or made
available to or otherwise obtained by Purchaser following the Effective Date,
and (iii) the Transaction closes notwithstanding Purchaser’s right to terminate
this Agreement pursuant to Sections 4.5 and 5.1.16 or otherwise, then Purchaser
shall be deemed to have waived such breach or default, Seller shall have no
liability or obligation respecting such false or inaccurate representations or
warranties or such other breach or default, and Purchaser shall have no cause of
action with respect thereto. The provisions of this paragraph shall survive the
Closing.
References to the “knowledge”, “best knowledge” and/or “actual knowledge” of
Seller or words of similar import shall refer only to the current actual (as
opposed to implied or constructive) knowledge of Lauren Graham and shall not be
construed, by imputation or otherwise, to refer to the knowledge of Seller or
any parent, subsidiary or affiliate of Seller or to any other officer, agent,
manager, representative or employee of Seller or to impose upon her any duty to
investigate the matter to which such actual knowledge, or the absence thereof,
pertains. Notwithstanding anything to the contrary contained in this Agreement,
Lauren Graham shall in no event have any personal liability hereunder.
The representations and warranties of Seller set forth in this Section 7.1.1
shall survive the Closing for a period of two hundred seventy (270) days. In
furtherance thereof, Purchaser acknowledges and agrees that it shall have no
right to make any claim against Seller on account of any breach of any
representations or warranties set forth in this Section 7.1.1 unless an action
on account thereof shall be filed in a court of competent jurisdiction prior to
the expiration of the survival period set forth in this paragraph. To the
fullest extent permitted by law, the foregoing shall constitute the express
intent of the parties to shorten the period of limitations for bringing claims
on account of Seller’s breach of its representations and warranties contained in
this Section 7.1.1 if a longer period would otherwise be permitted by applicable
law.
7.1.2GENERAL DISCLAIMER. EXCEPT AS SPECIFICALLY SET FORTH IN SECTIONS 7.1.1 AND
10.1.1 OF THIS AGREEMENT, THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE
ON AN “AS IS”, “WHERE IS,” AND “WITH ALL FAULTS” BASIS, WITHOUT REPRESENTATIONS
AND WARRANTIES OF ANY KIND OR NATURE, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY CONCERNING TITLE TO THE
PROPERTY, THE PHYSICAL CONDITION OF THE PROPERTY (INCLUDING, WITHOUT LIMITATION,
THE CONDITION OF THE SOIL, AIR, WATER OR THE IMPROVEMENTS, OR THE MATTERS
DESCRIBED IN EXHIBIT E), THE ENVIRONMENTAL CONDITION OF THE PROPERTY (INCLUDING,
WITHOUT LIMITATION, THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON OR
AFFECTING THE PROPERTY), THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS AND
REGULATIONS (INCLUDING, WITHOUT LIMITATION, ZONING AND BUILDING CODES OR THE
STATUS OF DEVELOPMENT OR USE RIGHTS RESPECTING THE REAL PROPERTY), THE FINANCIAL
CONDITION OF THE PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY RESPECTING ANY
INCOME, EXPENSES, CHARGES, LIENS OR ENCUMBRANCES, RIGHTS OR CLAIMS ON, AFFECTING
OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF. PURCHASER ACKNOWLEDGES THAT
PURCHASER HAS EXAMINED, REVIEWED AND INSPECTED ALL MATTERS WHICH IN PURCHASER’S
JUDGMENT BEAR UPON THE PROPERTY AND ITS VALUE AND SUITABILITY

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FOR PURCHASER’S PURPOSES. PURCHASER IS A SOPHISTICATED PURCHASER WHO IS FAMILIAR
WITH THE OWNERSHIP AND OPERATION OF REAL ESTATE PROJECTS SIMILAR TO THE PROPERTY
AND THAT PURCHASER HAS HAD ADEQUATE OPPORTUNITY TO COMPLETE ALL PHYSICAL AND
FINANCIAL EXAMINATIONS (INCLUDING, WITHOUT LIMITATION, ALL OF THE EXAMINATIONS,
REVIEWS AND INVESTIGATIONS REFERRED TO IN SECTION 4) RELATING TO THE ACQUISITION
OF THE PROPERTY HEREUNDER IT DEEMS NECESSARY, AND WILL ACQUIRE THE SAME SOLELY
ON THE BASIS OF AND IN RELIANCE UPON SUCH EXAMINATIONS AND THE TITLE INSURANCE
PROTECTION AFFORDED BY THE OWNER’S POLICY AND NOT ON ANY INFORMATION PROVIDED OR
TO BE PROVIDED BY SELLER (OTHER THAN AS EXPRESSLY PROVIDED IN SECTIONS 7.1.1 AND
10.1.1 OF THIS AGREEMENT). EXCEPT AS TO MATTERS SPECIFICALLY SET FORTH IN THIS
AGREEMENT: (A) PURCHASER WILL ACQUIRE THE PROPERTY SOLELY ON THE BASIS OF ITS
OWN PHYSICAL AND FINANCIAL EXAMINATIONS, REVIEWS AND INSPECTIONS AND THE TITLE
INSURANCE PROTECTION AFFORDED BY THE OWNER’S POLICY, AND (B) WITHOUT LIMITING
THE FOREGOING (OTHER THAN AS EXPRESSLY PROVIDED IN SECTIONS 7.1.1 AND 10.1.1 OF
THIS AGREEMENT), PURCHASER WAIVES ANY RIGHT IT OTHERWISE MAY HAVE AT LAW OR IN
EQUITY, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO SEEK DAMAGES FROM SELLER IN
CONNECTION WITH THE ENVIRONMENTAL CONDITION OF THE PROPERTY, INCLUDING, WITHOUT
LIMITATION, ANY RIGHT OF CONTRIBUTION UNDER THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE COMPENSATION AND LIABILITY ACT. THE PROVISIONS OF THIS SECTION 7.1.2
SHALL SURVIVE THE CLOSING.

7.2Interim Covenants of Seller. Until the Closing Date or the sooner termination
of this Agreement in accordance with the terms and conditions of this Agreement:

7.2.1Seller shall maintain the Property in substantially the same manner as
prior hereto pursuant to Seller’s normal course of business (which maintenance
obligations shall not include any obligation to make capital expenditures or
expenditures not incurred in Seller’s normal course of business), subject to
reasonable wear and tear and further subject to destruction by casualty or other
events beyond the control of Seller.

7.2.2Seller shall not during the term of this Agreement modify, extend, renew or
terminate any Contract (except as a result of a default by the other party
thereunder) or enter into any additional contracts or agreements with respect to
the Property without Purchaser’s prior written consent, which consent may be
granted or withheld by Purchaser in Purchaser’s sole discretion. Purchaser’s
failure to deliver written notice of Purchaser’s approval of any request for
consent by Seller under this Section 7.2.2 within five (5) days following
Seller’s request therefor shall be deemed to constitute Purchaser’s disapproval
thereof; provided, however, if Purchaser fails to approve or disapproves the
extension or replacement of a Contract necessary for the operation of the
Property, Seller shall have the unilateral right to replace or extend the
Contract without Purchaser’s consent so long as Purchaser is not required to
assume the same following the Closing.

7.2.3(a)    Seller shall not, during the term of this Agreement, enter into any
new leases or, unless required by the term of an existing Lease, modify, extend,
renew or terminate any Lease without the prior written consent of Purchaser,
which consent may be granted or withheld in Purchaser’s sole discretion.
Purchaser’s failure to deliver written notice of Purchaser’s approval of any
request for consent by Seller under this Section 7.2.3(a) within five (5) days
following Seller’s request therefor shall be deemed to constitute Purchaser’s
disapproval thereof.

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(b)Notwithstanding anything to the contrary contained in this Agreement: (i)
Seller makes no representations and assumes no responsibility with respect to
the continued occupancy of the Property or any part thereof by any of the
tenants, (ii) the removal of any tenant as a result of a default by such tenant,
whether by summary proceedings or otherwise, prior to the Closing Date shall not
give rise to any claim on the part of Purchaser and (iii) Purchaser agrees that
it shall not be grounds for Purchaser’s refusal to close this Transaction that
(x) any of the tenants is no longer in possession of its leased premises, has
failed to pay rent, is a holdover tenant or is in default under its lease on the
Closing Date, or (y) any Contract has been terminated by the vendor that is a
party thereto or any vendor that is a party to any Contract is in default under
its Contract on the Closing Date and that Purchaser shall accept title without
an abatement in or credit against the Purchase Price. The provisions of this
Section 7.2.3(b) shall survive the Closing.

7.2.4Seller shall use commercially reasonable efforts to keep in force and
effect the insurance policies currently carried by Seller with respect to the
Property or policies providing similar coverage through the Closing Date.

7.2.5Seller shall (i) provide Purchaser with the names and contact information
for the Persons who performed any work or services (including any manufacturing
or installation work or services) or provided any materials (collectively, the
“Window Contractors”) in connection with the installation of the exterior
windows within the buildings located upon the Land (collectively, the “Exterior
Windows”) and (ii) use commercially reasonable efforts to (a) facilitate and
coordinate the transition of all communications with the Window Contractors
regarding the Exterior Windows from Seller to Purchaser upon the Closing and (b)
cause all of the Window Warranties to be assigned, to the extent assignable,
from Seller to Purchaser in connection with the Closing.

7.2.6Seller shall cause all Persons who serve on the board of directors of the
Association or any committee or subcommittee of the Association as a result of
Seller’s appointment or nomination to resign from all such board, committee and
subcommittee positions on the Closing Date.

7.2.7Seller shall not, during the term of this Agreement, voluntarily cause to
be encumbered all or any portion of the Property without the prior written
consent of Purchaser, which consent may be granted or withheld in Purchaser’s
sole discretion.

7.3Representations, Warranties and Covenants of Purchaser.

7.3.1Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to Seller that:

(a)Due Authority. This Agreement has been duly authorized, executed, and
delivered by, and is binding upon, Purchaser, and each agreement, instrument and
document herein provided to be executed by Purchaser on the Closing Date will be
duly authorized, executed, and delivered by, and be binding upon, Purchaser, and
enforceable against Purchaser in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting the rights and
remedies of creditors. Purchaser is a limited liability company, duly organized,
validly existing, and in good standing under the laws of the State of Delaware,
is qualified to do business in the State of California, and is duly authorized
and qualified to do all things required of it under this Agreement.

(b)Litigation. Except as set forth on Exhibit U attached hereto, there is no
pending or, to Purchaser’s knowledge, threatened in writing litigation against
Purchaser, other than claims which

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could not reasonably be expected to adversely impact Purchaser’s ability to
perform its obligations under this Agreement.

(c)No Insolvency. Purchaser has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by Purchaser’s creditors, (iii)
suffered the appointment of a receiver to take possession of all, or
substantially all, of Purchaser’s assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Purchaser’s assets, (v)
admitted in writing its inability to pay its debts as they come due, or (vi)
made an offer of settlement, extension or composition to its creditors
generally.

(d)OFAC, PATRIOT Act, and Anti-Money Laundering Compliance. The amounts payable
by Purchaser to Seller hereunder are not and were not, directly or indirectly,
derived from activities in contravention of U.S. federal, state, or local laws
or regulations, or any non-U.S. law or regulation (including, without
limitation, anti-money laundering laws and regulations). None of (A) Purchaser;
(B) any Person controlling or controlled by Purchaser, directly or indirectly,
including but not limited to any Person or Persons owning, in the aggregate, a
fifty percent (50%) or greater direct or indirect ownership interest in
Purchaser; (C) any Person, to the knowledge of Purchaser, having a legal or
beneficial interest in Purchaser; or (D) any Officer or Director or (to the
knowledge of Purchaser) any employee, agent, or representative of Purchaser
(including any person acting in such capacity for or on behalf of Purchaser); or
(F) any Person for whom Purchaser is acting as agent or nominee or otherwise in
connection with the Transaction; is: (1) a country, territory, government,
government instrumentality, individual or entity subject to sanctions under any
U.S. federal, state, or local law or regulation, or non-U.S. law or regulation,
including but not limited to any Executive Order issued by the President of the
United States or any regulation administered by the Office of Foreign Assets
Control of the United States Department of the Treasury, including but not
limited to identification as a Specially Designated National or blocked person,
or identification on the Denied Persons List, the Entity List, or the Unverified
List maintained by the Bureau of Industry & Security, U.S. Department of
Commerce, or under any order or regulation of (a) the United Nations; (b) the
European Union or any of its member states; (c) Her Majesty’s Treasury of the
United Kingdom; or (d) any other governmental authority; (2) a Foreign Terrorist
Organization designated by the United States Department of State, or (3) an
individual or entity who the Purchaser knows, or reasonably should know, has
engaged in or engages in terrorist activity, or has provided or provides
material support or resources for terrorist activities or terrorist
organizations, as prohibited by U.S. law, including but not limited to the USA
PATRIOT Act, P.L. 107-56.

(e)ERISA. Purchaser is not a party in interest with respect to any employee
benefit or other plan within the meaning of Section 3(3) of ERISA or of Section
4975(e)(1) of the Code, which is subject to ERISA or Section 4975 of the Code
and which is an investor in Purchaser.

(f)Acknowledgement. The provisions of Exhibit E are incorporated herein by
reference.

(g)Survival. The representations and warranties of Seller set forth in this
Section 7.3.1 shall survive the Closing for a period of two hundred seventy
(270) days. In furtherance thereof, Seller acknowledges and agrees that it shall
have no right to make any claim against Purchaser on account of any breach of
any representations or warranties set forth in this Section 7.3.1 unless an
action on account thereof shall be filed in a court of competent jurisdiction
prior to the expiration of the survival period set forth in this paragraph. To
the fullest extent permitted by law, the foregoing shall constitute the express
intent of the parties to shorten the period of limitations for bringing claims
on account of Purchaser’s breach of its

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representations and warranties contained in this Section 7.3.1 if a longer
period would otherwise be permitted by applicable law.

8.Indemnification and Release.

8.1Indemnification by Purchaser. Purchaser shall hold harmless, indemnify and
defend each of the Seller Related Parties from and against any and all third
party claims related to the Property or the ownership, operation or maintenance
thereof to the extent such claims arise out of acts or events occurring on or
after the Closing Date.

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8.2RELEASE. EFFECTIVE AS OF THE CLOSING, AND SUBJECT TO THE REPRESENTATIONS AND
WARRANTIES OF SELLER SET FORTH IN SECTIONS 7.1.1 AND 10.1.1 OF THIS AGREEMENT
AND ANY OBLIGATIONS OF SELLER WHICH SURVIVE THE CLOSING, PURCHASER SHALL BE
DEEMED TO HAVE RELEASED EACH OF THE SELLER RELATED PARTIES FROM ALL CLAIMS WHICH
PURCHASER OR ANY AGENT, REPRESENTATIVE, AFFILIATE, EMPLOYEE, DIRECTOR, OFFICER,
PARTNER, MEMBER, SERVANT, SHAREHOLDER OR OTHER PERSON OR ENTITY ACTING ON BEHALF
OF OR OTHERWISE RELATED TO OR AFFILIATED WITH PURCHASER HAS OR MAY HAVE ARISING
FROM OR RELATED TO ANY MATTER OR THING RELATED TO OR IN CONNECTION WITH THE
PROPERTY INCLUDING, WITHOUT LIMITATION, THE MATTERS DESCRIBED IN EXHIBIT E, THE
DOCUMENTS AND INFORMATION REFERRED TO HEREIN, THE LEASES AND THE TENANTS
THEREUNDER, THE CONTRACTS, ANY CONSTRUCTION DEFECTS, ERRORS OR OMISSIONS IN THE
DESIGN OR CONSTRUCTION OF ALL OR ANY PORTION OF THE PROPERTY AND ANY
ENVIRONMENTAL CONDITIONS, AND PURCHASER SHALL NOT LOOK TO ANY OF THE SELLER
RELATED PARTIES IN CONNECTION WITH THE FOREGOING FOR ANY REDRESS OR RELIEF. THIS
RELEASE SHALL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF ITS EXPRESSED
TERMS AND PROVISIONS, INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO UNKNOWN
AND UNSUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION.

AS PART OF THE PROVISIONS OF THIS SECTION, BUT NOT AS A LIMITATION THEREON,
PURCHASER HEREBY AGREES, REPRESENTS AND WARRANTS THAT THE MATTERS RELEASED
HEREIN ARE NOT LIMITED TO MATTERS WHICH ARE KNOWN OR DISCLOSED, AND PURCHASER
HEREBY WAIVES ANY AND ALL RIGHTS AND BENEFITS WHICH IT NOW HAS, OR IN THE FUTURE
MAY HAVE CONFERRED UPON IT, BY VIRTUE OF THE PROVISIONS OF FEDERAL, STATE OR
LOCAL LAW, RULES OR REGULATIONS, INCLUDING, WITHOUT LIMITATION SECTION 1542 OF
THE CIVIL CODE OF THE STATE OF CALIFORNIA, WHICH PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR RELEASING
PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE AND THAT WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
IN THIS CONNECTION AND TO THE FULLEST EXTENT PERMITTED BY LAW, PURCHASER HEREBY
AGREES, REPRESENTS AND WARRANTS THAT PURCHASER REALIZES AND ACKNOWLEDGES THAT
FACTUAL MATTERS NOW UNKNOWN TO PURCHASER MAY HAVE GIVEN OR MAY HEREAFTER GIVE
RISE TO CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS,
LOSSES AND EXPENSES WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED,
AND PURCHASER FURTHER AGREES, REPRESENTS AND WARRANTS THAT THE WAIVERS AND
RELEASES HEREIN HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF THAT
REALIZATION AND THAT PURCHASER NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE
AND ACQUIT EACH OF THE SELLER RELATED PARTIES FROM ANY SUCH UNKNOWN CAUSES OF
ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES AND
EXPENSES WHICH MIGHT IN ANY WAY BE INCLUDED IN THE WAIVERS AND MATTERS RELEASED
AS SET FORTH IN THIS SECTION. THE PROVISIONS OF THIS SECTION ARE MATERIAL AND

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INCLUDED AS A MATERIAL PORTION OF THE CONSIDERATION GIVEN TO SELLER BY PURCHASER
IN EXCHANGE FOR SELLER’S PERFORMANCE HEREUNDER.
PURCHASER’S INITIALS: ______

SELLER’S INITIALS: _____

8.3Survival. The provisions of this Section 8 shall survive the Closing.

9.Remedies For Default and Disposition of the Deposit.

9.1SELLER DEFAULTS. IF THE TRANSACTION SHALL NOT BE CLOSED BY REASON OF SELLER’S
BREACH OR DEFAULT UNDER THIS AGREEMENT, THEN PURCHASER SHALL HAVE, AS ITS SOLE
AND EXCLUSIVE REMEDIES (ALL OTHER RIGHTS AND/OR REMEDIES, WHETHER AVAILABLE AT
LAW OR IN EQUITY, BEING IRREVOCABLY WAIVED) THE RIGHT TO EITHER (A) TERMINATE
THIS AGREEMENT (IN WHICH EVENT THE DEPOSIT SHALL BE RETURNED TO PURCHASER,
SELLER SHALL PAY TO PURCHASER AN AMOUNT EQUAL TO PURCHASER’S REIMBURSABLE DUE
DILIGENCE EXPENSES (AS HEREINAFTER DEFINED) AND NEITHER PARTY HERETO SHALL HAVE
ANY FURTHER OBLIGATION OR LIABILITY TO THE OTHER EXCEPT FOR THE SURVIVING
OBLIGATIONS, PURCHASER HEREBY WAIVING ANY RIGHT OR CLAIM TO DAMAGES FOR SELLER’S
BREACH OR DEFAULT, OR (B) SPECIFICALLY ENFORCE SELLER’S OBLIGATION TO TRANSFER
THE PROPERTY (IT BEING ACKNOWLEDGED THAT THE REMEDY OF SPECIFIC PERFORMANCE
SHALL NOT BE APPLICABLE TO ANY OTHER COVENANT OR AGREEMENT OF SELLER CONTAINED
HEREIN); PROVIDED THAT ANY ACTION BY PURCHASER FOR SPECIFIC PERFORMANCE MUST BE
FILED, IF AT ALL, WITHIN FORTY-FIVE (45) DAYS OF SELLER’S BREACH OR DEFAULT, AND
THE FAILURE TO FILE WITHIN SUCH PERIOD SHALL CONSTITUTE A WAIVER BY PURCHASER OF
SUCH RIGHT AND REMEDY; PROVIDED, HOWEVER, NOTHING IN THIS SECTION SHALL BE
CONSTRUED TO LIMIT PURCHASER’S RIGHTS OR DAMAGES UNDER THE INDEMNITY GIVEN BY
SELLER TO PURCHASER UNDER SECTION 10.1.1 OF THIS AGREEMENT. IF PURCHASER SHALL
NOT HAVE FILED AN ACTION FOR SPECIFIC PERFORMANCE WITHIN THE AFOREMENTIONED TIME
PERIOD OR SO NOTIFIED SELLER OF ITS ELECTION TO TERMINATE THIS AGREEMENT,
PURCHASER SHALL BE DEEMED FOR ALL PURPOSES OF THIS AGREEMENT TO HAVE ELECTED TO
TERMINATE THIS AGREEMENT IN ACCORDANCE WITH CLAUSE (A) ABOVE. AS USED HEREIN,
“PURCHASER’S REIMBURSABLE DUE DILIGENCE EXPENSES” SHALL MEAN AND REFER TO
THIRD-PARTY OUT-OF-POCKET EXPENSES ACTUALLY INCURRED BY PURCHASER IN CONNECTION
WITH THE NEGOTIATION AND PREPARATION OF THIS AGREEMENT AND THE ACCESS AGREEMENT,
INCLUDING ATTORNEYS’ FEES, AND IN CONNECTION WITH PURCHASER’S INVESTIGATIONS
UNDER THIS AGREEMENT AND THE ACCESS AGREEMENT PRIOR TO THE TERMINATION OF THIS
AGREEMENT BY PURCHASER; PROVIDED, HOWEVER, (I) IN NO EVENT SHALL SELLER BE
OBLIGATED UNDER THIS AGREEMENT TO REIMBURSE PURCHASER FOR PURCHASER’S
REIMBURSABLE DUE DILIGENCE EXPENSES (IN THE AGGREGATE) IN EXCESS OF ONE HUNDRED
THOUSAND AND 00/100 DOLLARS ($100,000.00) AND (II) SELLER’S OBLIGATION HEREUNDER
TO REIMBURSE PURCHASER FOR PURCHASER’S REIMBURSABLE DUE DILIGENCE EXPENSES SHALL
RELATE ONLY TO PURCHASER’S REIMBURSABLE DUE DILIGENCE EXPENSES WITH RESPECT TO
WHICH PURCHASER DELIVERS TO SELLER A THIRD-PARTY INVOICE (WITH REASONABLE
SUPPORTING INFORMATION AND DOCUMENTATION AND EVIDENCE OF PAYMENT) WITHIN THIRTY
(30) DAYS AFTER THE DATE

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ON WHICH PURCHASER GIVES SELLER WRITTEN NOTICE OF PURCHASER’S TERMINATION OF
THIS AGREEMENT.

NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE CONTRARY IN THIS AGREEMENT,
PURCHASER HEREBY WAIVES ANY RIGHT TO FILE ANY LIS PENDENS, NOTICE OF PENDENCY OF
ACTION OR OTHER SIMILAR NOTICE OR FORM OF ATTACHMENT AGAINST THE PROPERTY,
EXCEPT IN CONNECTION WITH PURCHASER’S FILING OF AN ACTION FOR SPECIFIC
PERFORMANCE IN ACCORDANCE WITH THIS AGREEMENT.
9.2PURCHASER DEFAULTS. IF THE TRANSACTION SHALL NOT BE CLOSED BY REASON OF
PURCHASER’S BREACH OR DEFAULT UNDER THIS AGREEMENT, THEN THIS AGREEMENT SHALL
TERMINATE AND THE RETENTION OF THE DEPOSIT HELD BY ESCROWEE AS OF THE DATE OF
PURCHASER’S BREACH OR DEFAULT SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY UNDER
THIS AGREEMENT, SUBJECT TO THE SURVIVING OBLIGATIONS; PROVIDED, HOWEVER, NOTHING
IN THIS AGREEMENT SHALL BE CONSTRUED TO LIMIT SELLER’S RIGHTS OR DAMAGES UNDER
THE INDEMNITIES GIVEN BY PURCHASER TO SELLER UNDER SECTIONS 4.2.1(h), 4.2.2(e),
10.1.1 OR 10.24.2 OF THIS AGREEMENT OR LIMIT SELLER’S RIGHTS OR REMEDIES IF
PURCHASER FILES OR CAUSES TO BE FILED ANY LIS PENDENS, NOTICE OF PENDENCY OF
ACTION, OR OTHER SIMILAR NOTICE OR FORM OF ATTACHMENT AGAINST THE PROPERTY,
EXCEPT IN CONNECTION WITH PURCHASER’S FILING OF AN ACTION FOR SPECIFIC
PERFORMANCE IN ACCORDANCE WITH THIS AGREEMENT, OR LIMIT SELLER’S RIGHTS UNDER
THE PROVISIONS OF SECTION 4.2.2(F) OF THIS AGREEMENT. IN CONNECTION WITH THE
FOREGOING, PURCHASER EXPRESSLY AGREES THAT THE PROVISIONS OF THIS SECTION 9.2
ARE REASONABLE UNDER THE CIRCUMSTANCES AND THE PARTIES RECOGNIZE THAT SELLER
WILL INCUR EXPENSE IN CONNECTION WITH THE TRANSACTION AND THAT THE PROPERTY WILL
BE REMOVED FROM THE MARKET; FURTHER, THAT IT IS EXTREMELY DIFFICULT AND
IMPRACTICABLE TO ASCERTAIN THE EXTENT OF DETRIMENT TO SELLER CAUSED BY THE
BREACH OR DEFAULT BY PURCHASER UNDER THIS AGREEMENT AND THE FAILURE OF THE
CONSUMMATION OF THE TRANSACTION OR THE AMOUNT OF COMPENSATION SELLER SHOULD
RECEIVE AS A RESULT OF PURCHASER’S BREACH OR DEFAULT.

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IN PLACING THEIR INITIALS AT THE PLACES PROVIDED, EACH PARTY SPECIFICALLY
CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY
WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED
DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS MADE. THE PAYMENT OF SUCH
AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN
THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE
SECTIONS 1671, 1676 AND 1677. UPON BREACH OR DEFAULT BY PURCHASER, THIS
AGREEMENT SHALL BE TERMINATED AND NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR
OBLIGATIONS HEREUNDER, EACH TO THE OTHER, EXCEPT FOR THE RIGHT OF SELLER TO
COLLECT SUCH LIQUIDATED DAMAGES FROM PURCHASER. FURTHERMORE, EXCEPT IN
CONNECTION WITH PURCHASER’S EXERCISE OF ITS RIGHT TO SPECIFICALLY ENFORCE THIS
AGREEMENT PURSUANT TO SECTION 9.1, PURCHASER SHALL HAVE NO RIGHT TO SEEK
DECLARATORY AND/OR INJUNCTIVE RELIEF AND/OR EQUITABLE RELIEF, OR TO RECORD A
NOTICE OF THIS AGREEMENT OR ANY RIGHTS PURCHASER MAY HAVE HEREUNDER, OR TO
RECORD OR FILE A NOTICE OF PENDENCY OF ANY ACTION OR PROCEEDINGS TO ENFORCE THIS
AGREEMENT.
PURCHASER’S INITIALS: ______

SELLER’S INITIALS: _____

9.3Disposition of Deposit. If the Transaction shall close, then the Deposit
shall be applied as a partial payment of the Purchase Price. If the Transaction
does not close, the Deposit shall be handled in accordance with the provisions
set forth in this Agreement.

9.4Survival. The provisions of this Section 9 shall survive a termination of
this Agreement.

10.Miscellaneous.

10.1Brokers.

10.1.1Except as provided in Section 10.1.2 below, Seller represents and warrants
to Purchaser, and Purchaser represents and warrants to Seller, that no broker or
finder has been engaged by it, respectively, in connection with the Transaction.
In the event of a claim for broker’s or finder’s fee or commissions in
connection with the sale contemplated by this Agreement, then Seller shall
indemnify, defend and hold harmless Purchaser from the same if it shall be based
upon any statement or agreement alleged to have been made by Seller, and
Purchaser shall indemnify, defend and hold harmless Seller from the same if it
shall be based upon any statement or agreement alleged to have been made by
Purchaser.

10.1.2If and only if the Transaction closes, Seller has agreed to pay a
brokerage commission to Eastdil Secured (“Broker”) pursuant to a separate
written agreement with Broker, subject in all respects to the terms and
conditions of such separate written agreement. Section 10.1.1 hereof is not
intended to apply to leasing commissions incurred in accordance with this
Agreement.

10.2Limitation of Liability.

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10.2.1Notwithstanding anything to the contrary contained in this Agreement or
any documents executed in connection herewith, if the Closing of the Transaction
shall have occurred, (i) the aggregate liability of Seller arising pursuant to
or in connection with the representations, warranties, indemnifications,
covenants or other obligations (whether express or implied) of Seller under this
Agreement or any document or certificate executed or delivered in connection
herewith (other than under the provisions of Sections 5.4 and 10.1 of this
Agreement) shall not exceed Seven Million Eight Hundred Seventy-Five Thousand
and No/100 Dollars ($7,875,000) (the “Liability Ceiling”) and (ii) in no event
shall Seller have any liability to Purchaser unless and until the aggregate
liability of Seller arising pursuant to or in connection with the
representations, warranties, indemnifications, covenants or other obligations
(whether express or implied) of Seller under this Agreement or any document or
certificate executed or delivered in connection herewith (other than under the
provisions of Sections 5.4 and 10.1 of this Agreement) shall exceed Fifty
Thousand Dollars ($50,000) (the “Liability Floor”). If Seller’s aggregate
liability to Purchaser shall exceed the Liability Floor, then Seller shall be
liable for the entire amount thereof up to but not exceeding the Liability
Ceiling.

10.2.2None of the Seller Related Parties shall have any personal liability,
directly or indirectly, under or in connection with this Agreement or any
agreement made or entered into under or pursuant to the provisions of this
Agreement, or any amendment or amendments to any of the foregoing made at any
time or times, heretofore or hereafter, and Purchaser and its successors and
assigns and, without limitation, all other Persons, shall look solely to
Seller’s assets for the payment of any claim or for any performance, and
Purchaser, on behalf of itself and its successors and assigns, hereby waives any
and all such personal liability.

10.2.3No agent, advisor, representative, affiliate, employee, director, officer,
partner, member, beneficiary, investor, servant, shareholder, trustee or other
person or entity acting on Purchaser’s behalf or otherwise related to or
affiliated with Purchaser shall have any personal liability, directly or
indirectly, under or in connection with this Agreement or any agreement made or
entered into under or pursuant to the provisions of this Agreement, or any
amendment or amendments to any of the foregoing made at any time or times,
heretofore or hereafter, and Seller and its successors and assigns and, without
limitation, all other Persons, shall look solely to Purchaser’s assets for the
payment of any claim or for any performance, and Seller, on behalf of itself and
its successors and assigns, hereby waives any and all such personal liability.

10.3Exhibits; Entire Agreement; Modification. All exhibits attached and referred
to in this Agreement are hereby incorporated herein as if fully set forth in
(and shall be deemed to be a part of ) this Agreement. This Agreement contains
the entire agreement between the parties respecting the matters herein set forth
and supersedes any and all prior agreements between the parties hereto
respecting such matters. This Agreement may not be modified or amended except by
written agreement signed by both parties.

10.4Business Days. Whenever any action must be taken (including the giving of
notice or the delivery of documents) under this Agreement during a certain
period of time (or by a particular date) that ends (or occurs) on a non-Business
Day, then such period (or date) shall be extended until the next succeeding
Business Day. As used herein, the term “Business Day” shall be deemed to mean
any day, other than a Saturday or Sunday, on which commercial banks in the State
of New York or in the State of California are not required or are authorized to
be closed for business.

10.5Interpretation. Section headings shall not be used in construing this
Agreement. Each party acknowledges that such party and its counsel, after
negotiation and consultation, have reviewed and revised this Agreement. As such,
the terms of this Agreement shall be fairly construed and the usual rule of

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construction, to wit, that ambiguities in this Agreement should be resolved
against the drafting party, shall not be employed in the interpretation of this
Agreement or any amendments, modifications or exhibits hereto or thereto.
Whenever the words “including”, “include” or “includes” are used in this
Agreement, they shall be interpreted in a non-exclusive manner. Except as
otherwise indicated, all Exhibit and Section references in this Agreement shall
be deemed to refer to the Exhibits and Sections in this Agreement.

10.6Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
principles of conflicts of law except as specifically provided in any exhibit
hereto which provides that the law of another jurisdiction shall govern that
exhibit, in which event the law of the specified jurisdiction shall govern that
exhibit.

10.7Construction. Each party hereto acknowledges that it has participated in the
drafting of this Agreement, and any applicable rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in connection with the construction or interpretation hereof. Each
party has been represented by independent counsel in connection with this
Agreement.
  
10.8Successors and Assigns. Neither party hereto may assign or transfer its
rights or obligations under this Agreement without the prior written consent of
the other party, which consent may be given or withheld in the sole and absolute
discretion of such other party; provided that, in the event of such an
assignment or transfer, the transferee shall assume in writing all of the
transferor’s obligations hereunder (but neither such transferor nor any
subsequent transferor shall be released from its obligations hereunder).
Notwithstanding and without limiting the foregoing, no consent given by any
party hereto to any transfer or assignment of the other party’s rights or
obligations hereunder shall be deemed to constitute a consent to any other
transfer or assignment of the other party’s rights or obligations hereunder and
no transfer or assignment in violation of the provisions hereof shall be valid
or enforceable. Subject to the foregoing, this Agreement and the terms and
provisions hereof shall inure to the benefit of and be binding upon the
successors and assigns of the parties.

10.9Notices. Except as set forth in Section 4.3, all notices, demands, consents,
approvals, requests or other communications which any of the parties to this
Agreement may desire or be required to give hereunder (collectively, “Notices”)
shall be in writing and shall be given by personal delivery, electronic mail or
reputable overnight courier service (charges prepaid) or United States
registered or certified mail (postage prepaid, return receipt requested)
addressed as hereinafter; provided, however, without affecting the sufficiency
of delivery by electronic email and for confirmation purposes only, any Notice
given by electronic mail shall also be given by personal delivery, reputable
overnight courier service or United States registered or certified mail. Except
as otherwise specified herein, the time period in which a response to any notice
or other communication must be made, if any, shall commence to run on the
earliest to occur of (a) if by personal delivery, the date of receipt, or
attempted delivery, if such communication is refused; (b) if given by electronic
mail, the date on which such email is received; and (c) if sent by overnight
courier service or by mail (as aforesaid), the date of receipt or attempted
delivery, if such courier service mailing is refused. Any Notice received after
5:00 P.M New York time or on a day other than a Business Day shall be deemed
received on the first Business Day thereafter. Until further notice, Notices
under this Agreement shall be addressed to the parties listed below as follows:

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To Seller:
HSPF La Jolla Commons I Investors LLC
HSPF La Jolla Commons II Investors LLC
HSPF La Jolla Commons III Investors LLC
c/o J.P. Morgan Investment Management Inc.
2029 Century Park East, Suite 4150
Los Angeles, California 90067
Attention:Lauren Graham
Telephone:(310) 860-7027
Email:lauren.b.graham@jpmchase.com
 
 
With a Copy To:
HSPF La Jolla Commons I Investors LLC
HSPF La Jolla Commons II Investors LLC
HSPF La Jolla Commons III Investors LLC
c/o J.P. Morgan Investment Management Inc.
P.O. Box 5005
New York, New York 10163-5005
 
 
With a Copy To:
Stroock & Stroock & Lavan LLP
2029 Century Park East
Los Angeles, California 90067
Attention:Loryn Arkow, Esq.
Telephone:(310) 556-5985
Email:larkow@stroock.com
 
 
To Purchaser:
American Assets Trust, Inc.
11455 El Camino Real, Suite 200
San Diego, California 92130
Attention: Adam Wyll
Telephone: (858) 350-2600
Email: awyll@americanassets.com
 
 
With a Copy To:
Latham & Watkins LLP
12670 High Bluff Drive
San Diego, CA 92130
Attention: James Mann
Telephone: (858) 523-5289
Email: james.mann@lw.com
 
 
To Escrowee:
First American Title Insurance Company
3281 East Guasti Road, Suite 440
Ontario, California 91761
Attention: Christine Siegel
Telephone:(909) 510-6208
Email:csiegel@firstam.com
 
 

Any party may designate another addressee (and/or change its address) for
Notices hereunder by a Notice given pursuant to this Section.
10.10Third Parties. Nothing in this Agreement, whether expressed or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
upon any other Person other than the parties hereto and their respective
permitted successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third Persons to any
party to this Agreement, nor shall any provision give any third parties any
right of subrogation or action over or against any party to this

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Agreement. This Agreement is not intended to and does not create any third party
beneficiary rights whatsoever.

10.11Legal Costs. The parties hereto agree that they shall pay directly any and
all legal costs which they have incurred on their own behalf in the preparation
of this Agreement, all deeds and other agreements pertaining to the Transaction,
and that such legal costs shall not be part of the closing costs.
 
10.12Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same document. Executed copies hereof may be delivered by facsimile or
by email in a PDF attachment, and upon receipt, shall be deemed originals and
binding upon the parties hereto. Without limiting or otherwise affecting the
validity of executed copies hereof that have been delivered by facsimile or by
email in a PDF attachment, the parties shall use diligent efforts to deliver
originals as promptly as possible after execution.

10.13Effectiveness. In no event shall any draft of this Agreement create any
obligation or liability, it being understood that this Agreement shall be
effective and binding only when a counterpart hereof has been executed and
delivered by each party hereto. Seller shall have the right to discontinue
negotiations and withdraw any draft of this Agreement at any time prior to the
full execution and delivery of this Agreement by each party hereto. Purchaser
assumes the risk of all costs and expenses incurred by Purchaser in any
negotiations or due diligence investigations undertaken by Purchaser with
respect to the Property.

10.14No Implied Waivers. No failure or delay of either party in the exercise of
any right or remedy given to such party hereunder or the waiver by any party of
any condition hereunder for its benefit (unless the time specified in this
Agreement for exercise of such right or remedy has expired) shall constitute a
waiver of any other or further right or remedy nor shall any single or partial
exercise of any right or remedy preclude other or further exercise thereof or
any other right or remedy. No waiver by either party of any breach hereunder or
failure or refusal by the other party to comply with its obligations shall be
deemed a waiver of any other or subsequent breach, failure or refusal to so
comply.

10.15Discharge of Seller’s Obligations. Except as otherwise expressly provided
in this Agreement, Purchaser’s acceptance of the Deed shall be deemed a
discharge of all of the obligations of Seller hereunder and all of Seller’s
representations, warranties, covenants and agreements in this Agreement shall
merge in the documents and agreements executed at the Closing and shall not
survive the Closing, except and to the extent that, pursuant to the express
provisions of this Agreement, any of such representations, warranties, covenants
or agreements are to survive the Closing.

10.16No Recordation. Neither this Agreement nor any memorandum hereof shall be
recorded and any attempted recordation hereof shall be void and shall constitute
a default hereunder.

10.17Unenforceability. If all or any portion of any provision of this Agreement
shall be held to be invalid, illegal or unenforceable in any respect, then such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and such provision shall be limited and construed as if such invalid,
illegal or unenforceable provision or portion thereof were not contained herein
unless doing so would materially and adversely affect a party or the benefits
that such party is entitled to receive under this Agreement.

10.18Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY LAW, SELLER AND
PURCHASER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER ARISING IN TORT OR CONTRACT) BROUGHT BY

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EITHER AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS AGREEMENT.

10.19Disclosure. Notwithstanding any terms or conditions in this Agreement to
the contrary, any Person may disclose to any and all Persons, without limitation
of any kind, the tax treatment and structure of the Transaction and all
materials of any kind (including, without limitation, opinions or other tax
analyses) that are provided relating to such tax treatment and tax structure.
For the avoidance of doubt, this authorization is not intended to permit
disclosure of the names of, or other identifying information regarding, the
participants in the Transaction, or of any information or the portion of any
materials not relevant to the tax treatment or structure of the Transaction.

10.20Designation of Reporting Person. In order to assure compliance with the
requirements of Section 6045 of the Code and any related reporting requirements
of the Code, the parties hereto agree as follows:

10.20.1.The Title Company (for purposes of this Section, the “Reporting
Person”), by its execution hereof, hereby assumes all responsibilities for
information reporting required under Section 6045(e) of the Code.

10.20.2.Seller and Purchaser each hereby agree:

(a)to provide to the Reporting Person all information and certifications
regarding such party, as reasonably requested by the Reporting Person or
otherwise required to be provided by a party to the Transaction under
Section 6045 of the Code; and

(b)to provide to the Reporting Person such party’s taxpayer identification
number and a statement (on Internal Revenue Service Form W-9 or an acceptable
substitute form, or on any other form the applicable current or future Code
sections and regulations might require and/or any form requested by the
Reporting Person), signed under penalties of perjury, stating that the taxpayer
identification number supplied by such party to the Reporting Person is correct.

(c)Each party hereto agrees to retain this Agreement for not less than four
years from the end of the calendar year in which Closing occurred, and to
produce it to the Internal Revenue Service upon a valid request therefor.

(d)The addresses for Seller and Purchaser are as set forth in Section 10.9
hereof, and the real estate subject to the transfer provided for in this
Agreement is described in Exhibit A.

10.21Tax Reduction Proceedings. If any party hereto has heretofore filed, or
shall hereafter file, applications for the reduction of the assessed valuation
of the Property (other than any reduction of the assessed value relating to the
Transactions contemplated herein and/or instituted certiorari proceedings to
review such assessed valuations for any tax year that ends on or before June 30,
2019, Purchaser acknowledges and agrees that Seller shall have sole control of
such proceedings, including, without limitation, the right to withdraw,
compromise and/or settle the same or cause the same to be brought on for trial
and to take, conduct, withdraw and/or settle appeals, and Purchaser hereby
consents to such actions as Seller may take therein. If any party hereto has
heretofore filed, or shall hereafter file, applications for the reduction of the
assessed valuation of the Property and/or instituted certiorari proceedings to
review such assessed valuations for any tax year that ends after June 30, 2019
(or for the prior tax year with respect to any reduction of the assessed value
relating to the Transactions contemplated herein), Seller acknowledges and
agrees that, following the

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Closing, Purchaser shall have sole control of such proceedings, including,
without limitation, the right to withdraw, compromise and/or settle the same or
cause the same to be brought on for trial and to take, conduct, withdraw and/or
settle appeals, and Seller hereby consents to such actions as Purchaser may take
therein. Any refund or the savings or refund for any year or years prior to the
tax year in which the Closing herein occurs shall belong solely to Seller. Any
tax savings or refund for the tax year in which the Closing occurs shall be
prorated between Seller and Purchaser after deduction of attorneys’ fees and
other expenses related to the proceeding and all sums payable to tenants under
the Leases. Any refund or the savings or refund for any year or years following
the tax year in which the Closing herein occurs shall belong solely to
Purchaser. Purchaser and Seller agree that all sums payable to tenants under the
Leases on account of such tax savings or refund shall be promptly paid to such
tenants following receipt of such tax savings or refund. Seller shall execute
all consents, receipts, instruments and documents which may reasonably be
requested in order to facilitate settling such proceeding and collecting the
amount of any refund or tax savings. Purchaser shall assume the retainer of the
attorney, if any, representing Seller in any tax proceeding pending for the tax
year in which the Closing occurs and the subsequent tax year, if applicable.

10.22California Required Natural Hazard Disclosure. Seller has commissioned
First American Title Insurance Company to prepare the natural hazard disclosure
statement in the form required by California Civil Code Section 1103. Purchaser
acknowledges that the Transaction is not subject to that Civil Code Section, but
that nevertheless the form promulgated therein serves to satisfy other statutory
disclosure requirements of the Government Code and Public Resources Code. Seller
does not warrant or represent either the accuracy or completeness of the
information on that form, and Purchaser shall use same merely as a guideline in
its overall investigation of the Property.

10.23No Offer. Seller's delivery of unsigned copies of this Agreement is solely
for the purpose of review by the Purchaser, and neither the delivery nor any
prior communications between the parties, whether oral or written, shall in any
way be construed as an offer by Seller, nor in any way imply that Seller is
under any obligation to enter the transaction which is the subject of this
Agreement. The signing of this Agreement by Purchaser constitutes an offer which
shall not be deemed accepted by Seller unless and until Seller has signed this
Agreement and delivered a duplicate original to Purchaser.

10.24SEC Requirements/Public Disclosure.

10.24.1For the period of time commencing on the Effective Date and continuing
through the nine (9) month anniversary of the Closing Date, Seller shall, from
time to time, upon reasonable advance notice from Purchaser, provide Purchaser
and its representatives, agents and employees with access to all financial and
other information in Seller’s possession relating to the Property pertaining to
the period of Seller’s ownership and operation of the Property (other than such
matters that relate to the negotiation and execution of this Agreement or to
transactions potentially competing with or alternative to the transactions
contemplated by this Agreement), which information is relevant and reasonably
necessary, in the reasonable opinion of the outside, third party accountants and
counsel of American Assets Trust, Inc. (“REIT”), to enable REIT and its
accountants to prepare financial statements in compliance with any or all of
(1) Rule 3-14 of Regulation S-X of the Securities and Exchange Commission (the
“Commission”); (2) any other rule issued by the Commission and applicable to
REIT; and (3) any other applicable requirements of any registration statement,
report or disclosure statement filed with the Commission by, or on behalf of,
REIT. Seller acknowledges and agrees that Exhibit W sets forth a representative
description of the information and documentation that REIT and the accountants
may possibly require, to the extent in Seller’s possession or control, in order
to comply with (1), (2) and (3) above. Any access or furnishing of information
must be conducted at Purchaser’s expense during normal business hours, under the
supervision of Seller’s personnel, and in such a manner as to not unreasonably
interfere with the normal operations of Seller. Notwithstanding

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anything in this Agreement to the contrary, nothing in this Section 10.24.1 will
obligate Seller or its representatives (x) to prepare or create any financial or
other data or other information, summaries or materials of any kind or nature
outside the ordinary course of business of Seller as of the Closing Date, (y) to
incur any out-of-pocket expenses in connection with such cooperation unless
reimbursed promptly by Purchaser or (z) to disclose to Purchaser or its
representatives any information (A) if doing so would violate any contract or
applicable law to which Seller is subject or (B) if Seller believes in good
faith based on advice of counsel that doing so would jeopardize the ability to
assert a claim of privilege (including the attorney-client and work product
privileges). Furthermore, Seller, or in the event Seller is dissolved, an
affiliate of Seller acceptable to Purchaser shall execute, if reasonably
necessary, from time to time upon reasonable advanced notice, the form of audit
letter attached as Exhibit X (the “Audit Letter”) to Purchaser’s auditor (the
“Auditor”), as same may be modified as provided in Section 10.24.2(D); provided,
however, that if Seller is requested to provide an Audit Letter, Purchaser shall
reimburse Seller for any reasonable actual, third-party out-of-pocket costs and
expenses, including attorneys’ and accountants’ reasonable fees and
disbursements, that Seller incurs in order to comply with the foregoing
requirement. The Seller’s covenants and agreements set forth in this Section
10.24.1 shall survive the Closing for a period of nine (9) months. The
Purchaser’s covenants and agreements set forth in this Section 10.24.1 shall
survive the Closing indefinitely.

10.24.2Purchaser hereby acknowledges and agrees that (A) Seller’s sole duty
under the penultimate sentence of Section 10.24.1 is to execute the proposed
Audit Letter, which is for the sole purpose of enabling the Auditor to complete
its audit and express an opinion as to Purchaser’s financial statements,
(B) none of the statements of Seller in the Audit Letter shall constitute
representations or warranties to Purchaser, (C) as the Audit Letter will be
delivered after the Closing, if at all, Purchaser is not relying upon the
contents of the Audit Letter or Seller’s willingness to execute the Audit Letter
(except insofar as such willingness allows Purchaser to comply with Commission
regulations and requirements) in making its decision to purchase the Property,
(D) Seller may need to modify the contents of the Audit Letter to accurately
reflect developments that arise after the Closing or are brought to the
attention of the appropriate Seller representative(s) after the Closing, (E) as
of the Effective Date, Seller has not made any inquiry or investigation into the
matters addressed in the Audit Letter, and (F) Seller’s financial statements and
financial information may not have been audited. Purchaser agrees to indemnify,
defend and hold harmless Seller from any and all claims, demands, liabilities,
losses, damages, liens, costs and expenses asserted by a third party or third
parties against Seller arising from or relating to the Audit Letter and to pay
Seller all costs and expenses, including reasonable attorneys’ fees and
expenses, incurred in defending any such matter. The provisions of this Section
10.24.2 shall survive the Closing.

10.24.3Additionally, notwithstanding anything to the contrary in this Agreement,
Purchaser shall be entitled to, and intends to, (a) provide a summary of the
material terms of this Agreement in its 8-K filing, and (b) file a complete copy
of this Agreement, excepting therefrom all exhibits (provided, however,
Purchaser shall have the right to file such exhibits with the complete copy of
this Agreement in the event that (i) the filing of such exhibits is required by
applicable law or (ii) Purchaser receives reasonable advice from Purchaser’s
counsel that such exhibits should be filed with the complete copy of this
Agreement), with the Commission upon filing its 10-Q, which will be available to
the public, and additionally Purchaser shall be entitled to, and intends to,
issue up to a maximum of three (3) press releases during the term of this
Agreement. Purchaser shall not identify the Seller or any of its direct or
indirect owners or other affiliates, including J.P. Morgan Investment Management
Inc., and JPMorgan Chase Bank, N.A or any of their affiliates, in its press
releases.

10.25Tax Free Exchange. Notwithstanding anything to the contrary in this
Agreement, Seller acknowledges and agrees that Purchaser shall have the right at
the Closing to exchange the Property in a

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transaction intended to qualify as a tax-free exchange under Section 1031 of the
Code (the “Tax-Free Exchange”). If Purchaser elects to effect a Tax-Free
Exchange pursuant to this Section 10.25, Purchaser shall provide written notice
thereof to Seller prior to the Closing, in which case Purchaser shall enter into
an exchange agreement and other exchange documents with a “qualified
intermediary” (as defined in Treas. Reg. § 1.1031(k)-1(g)(4) of the Code) (the
“Exchange Party”), pursuant to which Purchaser shall assign all of its right,
title and interest (but not its liabilities or obligations) under this Agreement
to the Exchange Party. Seller agrees to use reasonable efforts to accommodate
Purchaser in effectuating a like-kind exchange pursuant to Section 1031 of the
Code in connection with the sale of the Property; provided however, that (a)
such exchange does not directly or indirectly reduce the Purchase Price, (b)
such exchange will not delay or otherwise adversely affect the Closing, (c)
there is no additional unreimbursed loss, cost, damage, tax, expense or adverse
consequence incurred by Seller resulting from, or in connection with, such
exchange (including, without limitation, any adverse consequences under ERISA),
(d) all documents to be executed by Seller in connection with such exchange
shall be subject to the approval of Seller, which approval shall not be
unreasonably withheld provided that Purchaser has otherwise fully complied with
the terms and provisions of this Section 10.25, and shall expressly state,
without qualification, that Seller (x) is acting solely as an accommodating
party to such exchange, (y) shall have no liability with respect thereto, and
(z) is making no representation or warranty that the Tax-Free Exchange qualifies
as a tax-free exchange under Section 1031 of the Code or any applicable state or
local laws, (e) in no event shall Seller be obligated to acquire any property or
otherwise be obligated to take title, or appear in the records of title, to any
property in connection with such exchange, and (f) Purchaser shall pay all of
the costs and expenses (including, without limitation, reasonable legal fees and
expenses) reasonably incurred by Seller in connection with the consideration
and/or consummation of any such exchange.

10.26Cooperation During Operation and Management Transition. Following the
Closing, Seller shall reasonably cooperate with Purchaser, at no cost to Seller
(except to the extent Purchaser agrees to reimburse Seller for such costs), in
connection with the transition of the operation and management of the Property
from Seller to Purchaser. Pursuant to this Section 10.26, Seller shall use
commercially reasonable efforts to cause the Seller Related Parties who were
engaged with the operation and management of the Property prior to the Closing
(such as employees who served on Seller’s asset and property management staffs)
to be reasonably available to provide information and respond to questions
regarding the systems, operations and policies relating to the Property,
including all buildings and other structures located thereon to the extent such
commercially reasonable efforts do not include or require Seller to expend any
costs that Purchaser has not agreed to reimburse to Seller. Purchaser’s requests
for cooperation by Seller and Seller Related Parties shall be limited to
cooperation during the normal business hours of operation of Seller and Seller
Related Parties and shall be made in a manner intended to minimize the impact on
the business operations, resources and personnel of Seller and Seller Related
Parties.

10.27Association Tax Returns. Seller shall (i) cause all tax returns and other
filings for the Association which relate to Seller’s period of ownership of the
Property to be properly and timely filed with the applicable Governmental
Authorities and (ii) timely pay all taxes that are owed by the Association and
relate to Seller’s period of ownership of the Property. The provisions of this
Section 10.27 shall survive the Closing.

10.28Joint and Several Liability. The obligations and liabilities of each party
that comprises the Seller hereunder and under any documents executed pursuant
hereto or in connection herewith shall be joint and several obligations and
liabilities of each of the parties that constitute the Seller regardless of
which such party actually receives the benefits provided for herein or therein.
To the extent this Agreement is assigned by Purchaser to more than one party,
all such parties shall be jointly and severally liable to the same extent

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as provided herein with respect to Seller hereunder and under any documents
executed pursuant hereto or in connection herewith.

10.29Environmental Inquiry.  Purchaser acknowledges and agrees that Seller has
indicated that the sole inquiry and investigation that Seller has conducted in
connection with the environmental condition of the Property is to review the
environmental reports in its possession, and that, for all purposes, including
California Health and Safety Code Section 25359.7, Seller has acted reasonably
in solely relying upon said inquiry and investigation.  Purchaser acknowledges
receipt of notice in accordance with the foregoing statue and receipt of the
identified environmental reports. 

10.30Survival. Except as otherwise provided in this Section 10, the provisions
of this Section 10 shall survive the Closing or a termination of this Agreement.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

SELLER:

HSPF LA JOLLA COMMONS I INVESTORS LLC,
a Delaware limited liability company
 
 
 
 
By:
/s/ Lauren Bilger Graham
 
Name: Lauren Bilger Graham
 
 
Title: Authorized Signatory

HSPF LA JOLLA COMMONS II INVESTORS LLC,
a Delaware limited liability company
 
 
 
 
By:
/s/ Lauren Bilger Graham
 
Name: Lauren Bilger Graham
 
 
Title: Authorized Signatory

HSPF LA JOLLA COMMONS III INVESTORS LLC,
a Delaware limited liability company
 
 
 
 
By:
/s/ Lauren Bilger Graham
 
Name: Lauren Bilger Graham
 
 
Title: Authorized Signatory

[signatures continue on next page]

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PURCHASER:
 
AAT LA JOLLA COMMONS, LLC
a Delaware limited liability company
 
By:
/s/ Robert F. Barton
 
Name: Robert F. Barton
 
Title: Executive Vice President and Chief Financial Officer

By:
/s/ Adam Wyll
 
Name: Adam Wyll
 
Title: Senior Vice President

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JOINDER AS TO SECTION 10.20 ONLY:
 
FIRST AMERICAN TITLE INSURANCE COMPANY
 
 
By:
 /s/ Christine Siegel
 
Name Christine Siegel
 
Title Sr. National Commerical Escrow Officer
 
 

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EXHIBIT A-1
(LA JOLLA COMMONS I Land)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT A-2
(LA JOLLA COMMONS II LAND)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT A-3
(LA JOLLA COMMONS III LAND)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT B
(Title PROFORMA)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT C
(INTENTIONALLY OMITTED)

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EXHIBIT D-1
TENANT ESTOPPEL CERTIFICATE

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT D-2
TENANT ESTOPPEL CERTIFICATE - BASE FORM

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT E
PURCHASER ACKNOWLEDGMENT

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT F
(Deed)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT G
ASSIGNMENT AND ASSUMPTION OF LEASES AND CONTRACTS

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT H
BILL OF SALE AND GENERAL ASSIGNMENT

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT I
CERTIFICATION OF NON-FOREIGN STATUS UNDER
TREASURY REGULATIONS SECTION 1.1445-2(b)
(ENTITY TRANSFEROR, AS SOLE OWNER OF DISREGARDED ENTITY)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT J
(Form of Tenant Notice)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT K
(Form of VENDOR Notice)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT L
OWNER’S TITLE CERTIFICATE

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT M
(Tenant Options, Rights of First Refusal and Other Purchase Rights)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT N
(Lease Exhibit)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT O-1
(Maintenance, Service and Supply Contracts,
and Equipment Leases)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT O-2
(Leasing Commission Agreements)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT P
ESCROW AGREEMENT

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT Q
LIST OF EXISTING LEASING COSTS

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT R
(ASSUMED CONTRACTS)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT S
(IDENTIFIED CONTRACTS)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT T
(PENDING OR THREATENED LITIGATION - SELLER)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT U
(PENDING OR THREATENED LITIGATION - PURCHASER)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT V

ASSIGNMENT AND ASSUMPTION OF DECLARANT RIGHTS

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT W
(ACCOUNTING RECORDS)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT X
(FORM OF AUDIT LETTER)

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.

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EXHIBIT Y
(ASSOCIATION ESTOPPEL CERTIFICATE)
ESTOPPEL LETTER

Contents have been omitted pursuant to Item 601(a)(5) of Regulation S-K.  See
exhibit title for identification of the contents of this exhibit that have been
omitted.