EXECUTION VERSION

“SALE, PURCHASE AND ESCROW AGREEMENT
This Sale, Purchase and Escrow Agreement (this “Agreement”), dated as of
September 29, 2016, (the “Effective Date”) is made by and between REDROCK NOHO
RESIDENTIAL, LLC, a Delaware limited liability company (“Seller”) and NOHO
COMMONS PACIFIC OWNER LLC, a Delaware limited liability company(“Purchaser”) and
constitutes (i) a contract of sale and purchase between Seller and Purchaser;
and (ii) an escrow agreement among Seller, Purchaser, and Chicago Title
Insurance Company (“Escrow Agent”), the consent of which appears herein.
ARTICLE I

RECITALS
1.1    Real Property. Seller owns and holds fee title to that certain land (the
“Land”) described in Exhibit A, together with all improvements (the
“Improvements”) located thereon commonly known as the Lofts at NoHo Commons, a
residential property located at 11136 Chandler Boulevard in North Hollywood,
City of Los Angeles, County of Los Angeles, State of California (collectively,
the “Real Property”).
1.2    Personal Property. In connection with the Real Property, Seller has: (i)
obtained certain contractual rights and other intangible assets, including,
without limitation, permits, licenses, approvals, development rights,
warranties, guaranties, and plans, specifications, models and other construction
documents (collectively, “Intangible Property”); (ii) entered into certain
service contracts, equipment leases, maintenance agreements and other contracts
affecting the Real Property enumerated in Exhibit F attached hereto
(collectively, the “Contracts”); (iii) acquired certain other items of tangible
personal property which are located on the Real Property and used by Seller in
connection with the operation and maintenance thereof, including, but not
limited to, any desktop computers (with all data removed), and such other items
of personal property identified in Schedule 1 of the Bill of Sale (collectively,
the “Personal Property”); (iv) entered into the leases enumerated on the rent
roll attached hereto as Exhibit K (the “Rent Roll” and, together with any leases
executed in accordance with this Agreement after the date hereof, collectively,
the “Leases”), and currently holds certain unapplied tenant security deposits
under the Leases (collectively, the “Tenant Deposits”); and (v) acquired certain
items, including all master keys and keys to common areas and any and all other
rights, privileges and/or appurtenances owned by Seller and used exclusively in
connection with the existing business operation of the Real Property and other
transferable intangible property, miscellaneous rights, benefits or privileges
of any kind or character used exclusively in connection with the existing
business operation of the Real Property, including, without limitation, the
right to use the name “Lofts at NoHo Commons” and variations thereof, trade
marks, trade names, service marks, social media set up exclusively in connection
with the Property, phone accounts, phone numbers and phone lines, and the domain
names as set forth in Schedule 1.2 hereto (collectively, the “Miscellaneous
Property”). The Real Property, the Intangible Property, the

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Contracts, the Personal Property, the Leases, the Tenant Deposits, and the
Miscellaneous Property are collectively referred to as the “Property.”
1.3    Owner Participation Agreement. The Property is subject to that certain
Owner Participation Agreement, dated March 5, 2002, as subsequently amended,
(the “OPA”), by and between The Community Redevelopment Agency of the City of
Los Angeles (including any successor, the “Agency”) and NO HO Lofts, LLC, a
Delaware limited liability company, and predecessor-in-interest, by partial
assignment, to Seller.
1.4    Purchase and Sale. Seller now desires to sell and Purchaser now desires
to purchase the Property, upon the terms and covenants and subject to the
conditions set forth below.
ARTICLE II

PURCHASE PRICE
2.1    Price. In consideration of the covenants herein contained, Seller hereby
agrees to sell and Purchaser hereby agrees to purchase the Property for a total
purchase price of One Hundred Two Million Five Hundred Thousand Dollars
($102,500,000) (the “Purchase Price”), which shall be paid by Purchaser as
follows:
2.1.1    Deposit. Purchaser shall deliver, within two (2) business days of the
Effective Date to Escrow Agent by bank wire of immediately available funds the
sum of Three Million Dollars ($3,000,000) (the “Initial Deposit”). If Purchaser
elects to extend the Closing Date (as hereinafter defined) as provided in
Section 6.1 to the First Extension Date (as hereinafter defined), Purchaser
shall deliver, together with the First Extension Notice (as hereinafter
defined), to Escrow Agent by bank wire of immediately available funds the sum of
One Million Five Hundred Thousand Dollars ($1,500,000) (the “First Extension
Deposit”). If Purchaser further elects to extend the Closing Date as provided in
Section 6.1 to the Second Extension Date (as hereinafter defined), Purchaser
shall deliver, together with the Second Extension Notice (as hereinafter
defined), to Escrow Agent by bank wire of immediately available funds an
additional sum of One Million Five Hundred Thousand Dollars ($1,500,000) (the
“Second Extension Deposit”). The Initial Deposit, together with the First
Extension Deposit if made, and the Second Extension Deposit if made, shall be
referred to herein as the “Deposit.” If Purchaser fails to deliver the Initial
Deposit in full to Escrow Agent on or before the expiration of the two (2)
business day period as provided above, or the First Extension Deposit or Second
Extension Deposit together with the First Extension Date Notice (if the First
Extension Date Notice is delivered) or Second Extension Date Notice (if the
Second Extension Date Notice is delivered), as applicable, then Purchaser shall
be deemed to have terminated this Agreement, and the Deposit, to the extent then
made

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EXECUTION VERSION

by Purchaser, shall be immediately disbursed to Purchaser by Escrow Agent
without the necessity of any further escrow instruction. The Deposit, once made
shall be non-refundable to the Purchaser, except as otherwise set forth herein
to the contrary. The Deposit shall be held in an interest-bearing escrow account
by Escrow Holder in an institution as directed by Purchaser and reasonably
acceptable to Seller, and all interest earned on the Deposit shall be deemed
part of the Deposit for all purchase under this Agreement.
2.1.2    Balance of Purchase Price. Purchaser shall, on the day of Closing (as
defined in Section 6.1), deliver to Escrow Agent, by bank wire transfer of
immediately available funds, a sum equal to the balance of the Purchase Price;
provided, however, that if Purchaser fails to effectuate such wire transfer in
time to allow Seller to pay off the existing mortgage lender on the Closing
Date, Purchaser shall reimburse Seller for per diem interest and any other fees,
expenses or penalties it accrues as a result of its inability to make a timely
payoff of the loan. The balance of the Purchase Price received by Seller at
Closing shall be adjusted to reflect prorations and other adjustments pursuant
to Section 7.1 and Section 2.3.
2.2    Investments. Following the collection of the Deposit, Escrow Agent shall,
at the direction of Purchaser, invest the Deposit in:
(i)    obligations of the United States government, its agencies or independent
departments;
(ii)    certificates of deposit issued by a banking institution whose principal
office is in New York City, San Francisco, or Los Angeles, with assets in excess
of One Billion Dollars ($1,000,000,000); or
(iii)    an interest-bearing account of a banking institution whose principal
office is in New York City, San Francisco, or Los Angeles, with assets in excess
of One Billion Dollars ($1,000,000,000).
No investment of the Deposit shall have a maturity date beyond the Closing Date
(as defined in Section 6.1).
2.3    Interest on the Deposit. Any interest earned on the Deposit shall be
credited and delivered to the party receiving the Deposit; provided, however,
that if the transaction closes, at Closing any interest earned on the Deposit
shall be credited to Purchaser by applying the same against the Purchase Price.
2.4    Release of Deposit Upon Termination. If this Agreement terminates for any
reason other than solely as a result of Purchaser’s Default in accordance with
the terms and conditions hereof, Escrow Agent shall automatically and promptly
refund the Deposit, together with all accrued

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EXECUTION VERSION

interest, to Purchaser, and no party hereto shall have any further obligation
under this Agreement except for such obligations which by their terms expressly
survive the Closing or other termination of this Agreement (the “Surviving
Obligations”). If Seller terminates this Agreement as a result of Purchaser’s
Default, the Deposit, together with all accrued interest, shall be immediately
released by Escrow Agent to Seller as liquidated damages as provided in Section
10.1, and no party hereto shall have any further obligation under this Agreement
except for the Surviving Obligations.
ARTICLE III

CONDITIONS TO THE PARTIES’ OBLIGATIONS
3.1    Conditions to Purchaser’s Obligation to Purchase. Purchaser’s obligation
to purchase, unless waived in writing by Purchaser, is expressly conditioned
upon the fulfillment of, on or prior to the Closing Date, each of the following:
3.1.1    Performance by Seller. Performance in all material respects of the
obligations and covenants of, and deliveries required of, Seller hereunder.
3.1.2    Delivery of Title and Possession. Delivery at the Closing of (i) the
Deed (as defined in Section 4.2.1) and (ii) possession as provided in Section
15.1.
3.1.3    Title Insurance.
(a)    Delivery at the Closing of the standard current form of California Land
Title Association (CLTA) owner’s policy of title insurance (the “Title Policy”),
or an irrevocable commitment to issue the same, with liability in the amount of
the Purchase Price issued by Chicago Title Insurance Company (the “Title
Company”), insuring that fee title to the Real Property vests in Purchaser
subject to the Permitted Encumbrances (as defined in Section 15.1). (At its
option, Purchaser may direct the Title Company to issue an American Land Title
Association (ALTA) 2006 extended coverage owner’s policy and title insurance
endorsements, provided that Purchaser is solely responsible for, and timely
pays, any additional expense associated with such extended coverage and
additional endorsements, and further provided that the Title Company’s failure
to issue any such extended coverage and additional endorsements shall not affect
Purchaser’s obligations under this Agreement).
(b)    If additional exceptions to the Title Report (as defined in the Access
Agreement) are first identified by the Title Company following the Effective
Date, Purchaser shall have until the date that is three (3) business days after
receipt of an amendment or supplement to the Title Report (“Title Supplement”),
as applicable (the “Supplement Interim Date”), to provide written notice (the
“Supplement Title

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EXECUTION VERSION

Notice”) to Seller of any matters shown by the Title Supplement which are
material and adverse to the use, access or operation of the property, in
Purchaser’s commercially reasonable discretion, and of which Purchaser objects.
If Seller has not received such written notice from Purchaser by the applicable
Supplement Interim Date, Purchaser shall be deemed to have approved of the
subject PTR Supplement. Except as provided herein, Seller may have until the
Closing Date (as the same may be reasonably extended by Seller as necessary to
make such arrangements to satisfy Purchaser’s objectives) to make such
arrangements or take such steps as the parties shall mutually agree to satisfy
Purchaser’s objection(s); provided, however, that, except with respect to
Mandatory Removal Item (as defined below), Seller shall have no obligation
whatsoever to expend or agree to expend any funds, to undertake or agree to
undertake any obligations or otherwise to cure or agree to cure any title
objections. Within three (3) business days of receipt of a Supplement Title
Notice, Seller shall deliver written notice to Purchaser and Escrow Agent
identifying which disapproved exceptions (other than Mandatory Removal Items)
Seller shall undertake to cure or not cure (“Seller’s Supplement Response”). If
Seller does not deliver a Seller’s Supplement Response within said three (3)
Business Day period, Seller shall be deemed to have elected not to remove or
otherwise cure any disapproved exceptions included in Seller’s Supplement Title
Notice. If Seller elects, or is deemed to have elected, not to remove or
otherwise cure a disapproved exception included in Seller’s Supplement Title
Notice, Purchaser shall have until three (3) Business Days after receipt of
Seller’s Supplement Response (or the date Seller is deemed to have made an
election) to notify Seller and Escrow Agent, in writing, of Purchaser’s election
to either waive the objection or terminate this Agreement due to such objection
and the Escrow. If Seller and Escrow Agent have not received written notice from
Purchaser within such period of time, Purchaser shall be deemed to have approved
of Seller’s Supplement Response and elected to proceed with the Closing. Except
for Mandatory Removal Item, all title exceptions shown in a Title Supplement for
which Purchaser fails to give a Supplement Title Notice on or before the
applicable Supplement Interim Date shall be deemed to be approved by Purchaser.
If this Agreement is terminated by Purchaser pursuant to this Section, the
Deposit shall be returned to Purchaser in full.
3.1.4    Seller’s Representations. The representations and warranties by Seller
set forth in Section 11.1 being true and correct in all material respects as of
the Closing except as modified by notice (in accordance with Section 11.1) to
which Purchaser does not object in writing by the later of three business days
after receipt thereof.
3.1.5    Seller Termination of Property Management Agreement. Prior to Closing,
Seller shall terminate its existing property management and leasing agreements.

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EXECUTION VERSION

3.1.6    Transfer and Assignment of OPA. Consummation of the transfer by Seller,
by that certain Seventh Partial Assignment of Owner Participation Agreement and
Consent to Assignment substantially in the form attached hereto as Exhibit J
(such form subject to reasonable comments by Agency), which form includes the
total and complete release of Seller from its obligations under the OPA, of all
Seller’s right, title, interest, and obligation under the OPA and approval, by
Agency, of such transfer; provided, however, that such transfer shall be deemed
consummated only at such time as executed in counterparts by an authorized
signatory of Agency and its counsel, and each of Seller and Purchaser (the “OPA
Assignment”); provided that Seller (upon written notice to Purchaser) shall be
entitled to delay the Closing Date as necessary to accommodate Agency’s
execution of the OPA Assignment. In addition to the execution of the OPA
Assignment, which is a closing condition in favor of Purchaser, in connection
with the above, Seller agrees to use commercially reasonable efforts to obtain
an estoppel from Agency on a form reasonably acceptable to Purchaser, provided
that obtaining any such estoppel shall not be a condition precedent to
Purchaser’s obligation to close pursuant to the terms of this Agreement.
3.1.7    CC&R Estoppel. Purchaser’s receipt of: (i) an estoppel (the “Retail
Estoppel”) in the form attached hereto as Exhibit E relating to matters
contained in that certain Second Amended and Restated Declaration and
Establishment of Covenants, Conditions and Restrictions and Grant of Easements
dated as of December 31, 2014 (the “CC&R”) from the successor in interest to
Noho Redrock Retail LLC (“Retail Owner”), as party to the CC&R, (ii) an estoppel
(the “Residential Estoppel”) in the form attached hereto as Exhibit N relating
to the CC&R” from Seller and (iii) an Assignment by Seller, in its capacity as
Declarant of the CC&R, in the form attached hereto as Exhibit M (the “Declarant
Assignment”).
If any condition precedent to Purchaser’s obligation to close is not satisfied
by the Closing Date, unless such condition precedent is waived in writing by
Purchaser, this Agreement shall be automatically terminated, the Deposit shall
be returned to Purchaser without the necessity of any further escrow instruction
or any further action required from either party, and neither party shall have
any continuing obligations hereunder; provided, however, if such failure
constitutes a breach or default of Seller’s covenants, representations or
warranties Seller shall remain liable for such breach or default as otherwise
set forth in this Agreement.
3.2    Conditions to Seller’s Obligation to Sell. Seller’s obligation to sell,
unless waived in writing by Seller, is expressly conditioned upon the
fulfillment of, on or prior to the Closing Date, each of the following:
3.2.1    Performance by Purchaser. Performance in all material respects of the
obligations and covenants of, and deliveries required of, Purchaser hereunder.

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EXECUTION VERSION

3.2.2    Purchaser’s Representations. The representations and warranties by
Purchaser set forth in Section 11.2 being true and correct in all material
respects as of the Closing.
3.2.3    Receipt of Purchase Price. Receipt of the Purchase Price and any
adjustments due Seller under Article VII at the Closing in the manner herein
provided.
3.2.4    Transfer and Assignment of OPA. Consummation of the transfer to
Purchaser pursuant to the OPA Assignment; approval, by Agency, of such transfer;
and consent, by Agency, of the total and complete release of Seller from its
obligations under the OPA; provided, however, that such transfer shall be deemed
consummated only at such time as executed in counterparts by an authorized
signatory of Agency, and each of Seller and Purchaser.
If any condition precedent to Seller’s obligation to close, other than the
condition precedent set forth in Section 3.2.4 above, is not satisfied by the
Closing Date, unless such condition precedent is waived in writing by Seller,
this Agreement shall be automatically terminated, the Deposit shall be disbursed
to Seller by Escrow Agent as liquidated damages in accordance with Section 10.1
without the necessity of any further escrow instruction or further action
required from either party, and neither party shall have any continuing
obligations hereunder. If the condition precedent set forth in Section 3.2.4
above is not satisfied, unless such condition precedent is waived in writing by
Seller and Buyer, this Agreement shall be automatically terminated, the Deposit
shall be returned to Purchaser without the necessity of any further escrow
instruction or further action required from either party, and neither party
shall have any continuing obligations hereunder.
ARTICLE IV

PURCHASER’S DELIVERIES AND SELLER’S DELIVERIES TO ESCROW AGENT
4.1    Purchaser’s Deliveries. Purchaser shall, at or before the Closing,
deliver to Escrow Agent each of the following:
4.1.1    Purchase Price. The Purchase Price as set forth in Article II.
4.1.2    Assignment of Leases and Contracts. Four (4) executed counterparts of
the Assignment and Assumption of Leases, Contracts and Other Property Interests
in the form of Exhibit C (the “Assignment of Leases and Contracts”).
4.1.3    Bill of Sale. Four (4) executed counterparts of a bill of sale in the
form of Exhibit D (the “Bill of Sale”).
4.1.4    Closing Statement. An executed Purchaser’s settlement statement
reflecting the prorations and adjustments required under Article VII.

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4.1.5    Cash – Prorations. The amount, if any, required of Purchaser under
Article VII.
4.1.6    Assignment of OPA. Four (4) executed counterparts of the OPA
Assignment.
4.1.7    Holdback Agreement. Four (4) executed counterparts of the holdback
escrow Agreement in the form of Exhibit B (the “Holdback Agreement”).
4.1.8    Declarant Assignment. Four (4) executed counterparts of the Declarant
Assignment.    
4.2    Seller’s Deliveries. Seller shall, at or before the Closing, deliver to
Escrow Agent each of the following:
4.2.1    Deed. A grant deed in the form of Exhibit I (the “Deed”) with respect
to the Real Property, executed and acknowledged by Seller, pursuant to which
Seller shall convey title to the Real Property.
4.2.2    Assignment of Leases and Contracts. Four (4) executed counterparts of
the Assignment of Leases and Contracts, and (whether through the closing escrow
or through such other method of delivery as the parties may establish) original
executed Leases and Contracts (or copies if originals are not in Seller’s
possession) assigned thereby.
4.2.3    Bill of Sale. Four (4) executed counterparts of the Bill of Sale.
4.2.4    Notices to Tenants. A notice signed by Seller (or Seller’s manager for
the Improvements) addressed to the tenants under the Leases in the form of
Exhibit G (“Notice to Tenants”).
4.2.5    FIRPTA Affidavit. Four (4) executed copies of an affidavit in the form
of Exhibit H with respect to the Foreign Investment in Real Property Tax Act
(the “FIRPTA Affidavit”).
4.2.6    California Withholding Exemption. Four (4) executed copies of an
affidavit in the form of Exhibit L with respect to the California Withholding
Law (the “California Withholding Affidavit”).
4.2.7    Closing Statement. An executed Seller’s settlement statement reflecting
the prorations and adjustments required under Article VII.
4.2.8    Cash – Prorations. The amount, if any, required of Seller under
Article VII.

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EXECUTION VERSION

4.2.9    Assignment of OPA. Four (4) executed counterparts of the OPA
Assignment.
4.2.10    Holdback Agreement. Four (4) executed counterparts of the Holdback
Agreement.
4.2.11    Retail Estoppel. The executed Retail Estoppel.
4.2.12    Residential Estoppel. The executed Residential Estoppel.
4.2.13    Declarant Assignment. Four (4) executed counterparts of the Declarant
Assignment.    
4.2.14    Rent Roll.     A Rent Roll updated as of the Closing Date.
4.2.15    Title Documents.    Such other documents and instruments executed and
acknowledged by Seller, if applicable, as the Title Company may require from
Seller to issue the Title Policy.
4.2.16    Certificate. A certificate executed by Seller reaffirming and updating
to the Closing Date the representations and warranties given by Seller under
this Agreement, which certificate will include an updated Rent Roll (certifying
as to its accuracy in all material respects).
4.3    Failure to Deliver. The failure of Purchaser or Seller to make any
delivery required above by and in accordance with this Article IV which is not
waived by the other party shall constitute a default hereunder by Purchaser or
Seller, as applicable.
ARTICLE V

INVESTIGATION OF PROPERTY
5.1    Delivery of Documents. Purchaser and Seller are parties to that certain
Access and Indemnity Agreement dated August 30, 2016 (the “Access Agreement”).
To the extent any matters, terms and conditions set forth in the Access
Agreement are in conflict with any matters, terms and conditions set forth in
this Agreement, this Agreement shall control.
Pursuant to the Access Agreement, Seller has delivered, caused to be delivered,
or made available to Purchaser the following (the “Diligence Items”):
5.1.1     Preliminary Title Report. A current preliminary title report covering
the Real Property issued by the Title Company, together with copies of all
documents referred to as exceptions therein (collectively, the “Title Report”).

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EXECUTION VERSION

5.1.2    Survey. The existing survey of the Real Property in Seller’s possession
prepared by a licensed surveyor (the “Survey”).
5.1.3    Contracts. Copies of the Contracts.
5.1.4    Plans and Specifications. To the extent in Seller’s possession, copies
of all plans and specifications for the Improvements.
5.1.5    Reports. To the extent in Seller’s possession, copies of all
environmental reports prepared by third parties.
5.1.6    Permits. To the extent in Seller’s possession, copies of all
governmental permits, certificates of occupancy and approvals, in each case
regarding the Property.
5.1.7    Construction Repairs. Documentation identifying construction repairs
concerning the Improvements on the Property as listed on Schedule 5.1.7 hereto.
5.1.8    Insurance Loss. Insurance loss run for the prior three years related to
the construction repairs identified on Schedule 5.1.7 hereto.
5.1.9    Government Notices. All written correspondence which to Seller’s
knowledge have been received by Seller from governmental agencies concerning
current open violations at the Property.
5.1.10    Operating Statement. Operating statements and profit and loss
statements for the Property for the prior three years.
5.1.11    Utilities. Copies of utility capacity letters and utility bills for
the prior year.
5.1.12    Property Taxes. Copies of property tax bills for prior three years.
5.1.13    Leases. Copies of all residential and non-residential leases,
including a current rent roll for the Property listing tenant names, unit
occupied, monthly rentals, security deposits, and the names of any tenants in
arrears on their lease payments together with the amount of such arrearages.
5.1.14    Personal Property. Inventory of Personal Property.
5.2    Physical Inspection of the Property.
5.2.1    Pursuant to the Access Agreement, Seller has allowed, and as provided
herein, shall continue to allow Purchaser and Purchaser’s engineers,
consultants, representatives, architects or other employees and agents
reasonable access to the Property

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during normal business hours for the limited purposes of (i) reviewing
contracts, books and records relating to the Property (other than any
privileged, proprietary or confidential records), soil reports, environmental
studies and reports, surveys, and building and systems plans; (ii) reviewing
records relating to operating expenses and other instruments and correspondence
relating to the Property; (iii) interviewing tenants of the Property; and (iv)
inspecting the physical condition of the Property and conducting non-intrusive
physical and environmental tests and inspections thereof. Purchaser shall not
interview any tenant of the Property without providing prior notice to Seller
and affording Seller or its representative(s) the right to be present during
such interview. PURCHASER SHALL NOT CONDUCT OR ALLOW ANY PHYSICALLY INTRUSIVE
TESTING OF, ON OR UNDER THE PROPERTY WITHOUT FIRST OBTAINING SELLER’S WRITTEN
CONSENT AS TO THE TIMING AND SCOPE OF THE WORK TO BE PERFORMED AND THE PARTIES
ENTERING INTO AN AMENDMENT HERETO MEMORIALIZING SUCH SCOPE OF WORK AND ANY
ADDITIONAL AGREEMENTS OF THE PARTIES WITH RESPECT TO SUCH TESTING.
5.2.2    Purchaser agrees that it will cause it and any person accessing the
Property hereunder to be covered by not less than Two Million Dollars
($2,000,000) commercial general liability insurance (with, in the case of
Purchaser’s coverage, a contractual liability endorsement, insuring its
indemnity obligation under this Agreement), insuring all activity and conduct of
such person while exercising such right of access and naming Seller and Rockwood
Capital, LLC (“Advisor”) as the insureds, issued by a licensed insurance company
qualified to do business in the State in which the Property is located and
otherwise acceptable to Seller.
5.2.3    Purchaser agrees that, in the exercise of the right of access granted
hereby, it will not unreasonably interfere with or permit unreasonable
interference with any person occupying or providing service at the Property.
Purchaser agrees that it or its agents will not communicate with any tenants
without the participation or presence of Seller or Seller’s agent or
representative unless Purchaser first obtains the consent of Seller which
consent shall not be unreasonably withheld.
5.2.4    Purchaser agrees to indemnify, defend and hold harmless Seller and
Advisor and their respective affiliates, members, partners, subsidiaries,
shareholders, officers, directors and agents (collectively, “Seller Indemnified
Parties”) from any loss, injury, damage, cause of action, liability, claim,
lien, cost or expense, including reasonable attorneys’ fees and costs
(collectively, “Loss”), arising from the exercise by Purchaser or its employees,
consultants, agents, engineers, architects or representatives of the right of
access under this Agreement or out of any of the foregoing; provided, however,
that Purchaser shall have no obligation to so indemnify, defend and hold
harmless Seller Indemnified Parties

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with respect to any liability resulting from: (i) Seller’s or any Seller
Indemnified Party’s gross negligence or willful misconduct; (ii) any preexisting
hazardous materials; or (iii) any preexisting condition at the Real Property, in
the case of (ii) and (iii), not exacerbated by Buyer. The indemnity in this
Section 5.2.4 shall survive the Closing or any termination of this Agreement.
5.2.5    Purchaser agrees to give Seller reasonable prior notice of its intent
to conduct any inspections or tests so that Seller will have the opportunity to
have a representative present during any such inspection or test, the right to
do which Seller expressly reserves. Purchaser agrees to cooperate with any
reasonable request by Seller in connection with the timing of any such
inspection or test.
5.2.6    Purchaser agrees that any inspection, test or other study or analysis
of the Property shall be performed at Purchaser’s expense and in strict
accordance with applicable law.
5.2.7    Purchaser agrees at its own expense to promptly repair or restore the
Property, or, at Seller’s option, to reimburse Seller for any repair or
restoration costs, if any inspection or test requires or results in any damage
to or alteration of the condition of the Property. The obligations set forth in
this Section 5.2.7 shall survive the Closing or any termination of this
Agreement.
5.3    Effect of Prior Investigation As of the Effective Date, Purchaser has
waived all objections it may have had to any matters on the Title Report, the
Survey or any other aspects of the Property and, subject to any express
conditions set forth herein, agrees to accept the Property “as is”.
ARTICLE VI

THE CLOSING
6.1    Date and Manner of Closing. Escrow Agent shall close the escrow (the
“Closing”) on November 7, 2016 (the “Initial Scheduled Closing Date”) time being
of the essence (subject only to Seller’s express rights of remedy or cure
provided herein, in which event Seller will give Purchaser not less than three
(3) business days’ notice of the date of the Closing); provided, however, that
all conditions to closing contained in this Agreement have been satisfied (or
deemed satisfied) or waived in writing. Notwithstanding the foregoing, Purchaser
shall have the right to (a) extend Closing to November 17, 2016 (the “First
Extension Date”) by delivery of written notice of such extension to Seller (the
“First Extension Notice”) along with the deposit to Escrow Agent of the First
Extension Deposit as required by Section 2.1.1, not less than three (3) business
days prior to the Initial Scheduled Closing Date and (b) further extend Closing
to November 30, 2017 (the “Second

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EXECUTION VERSION

Extension Date”) by delivery of written notice of such extension to Seller (the
“Second Extension Notice”) along with the deposit to Escrow Agent of the Second
Extension Deposit as required by Section 2.1.1, not less than three (3) business
days prior to the First Extension Date. The Initial Scheduled Closing Date, as
same may be adjourned pursuant to the First Extension Date and Second Extension
Date, is referred to herein as the “Closing Date”.
ARTICLE VII

PRORATION, FEES, COSTS AND ADJUSTMENTS
7.1    Prorations. Prior to the Closing, Seller shall determine the amounts of
the prorations in accordance with this Agreement and notify Purchaser thereof.
Purchaser shall review and approve such determination promptly and prior to the
Closing, such approval not to be unreasonably withheld or delayed. Thereafter,
Purchaser and Seller shall each inform Escrow Agent of such amounts. All income
accruing from the ownership of the Property and expenses incurred in the
operation of the Property shall be pro-rated as of 12:01 a.m. on the Closing
Date (the “Cut-off Time”) on the basis of a 365-day year, and the pro-rated
amount attributable to the period following the Closing shall either be paid to
Purchaser at the Closing or credited against the Purchase Price as set forth
below.
7.1.1    Intentionally Omitted.
7.1.2    Collected Rents. All rents collected by Seller under the Leases in
effect on the Closing Date and other charges paid by tenants (“Collected Rents”)
shall be pro-rated as of the Closing by charging Seller and crediting Purchaser
for any Collected Rents applicable to periods after the Closing.
7.1.3    Uncollected and Delinquent Rents. All unpaid rents that are due and
owed to Seller under the Leases in effect on the Closing Date (“Delinquent
Rents”) shall remain the exclusive property of Seller. Purchaser shall apply
rent and other income from tenants that are collected after the Closing first to
then current rents and then to Delinquent Rents in inverse order of maturity.
For a period of six (6) months subsequent to the Closing, to the extent that any
Delinquent Rents, other amounts and other income are actually received by
Purchaser, all such amounts shall first be applied to any costs of collection,
and then shall be promptly paid by Purchaser to Seller. During such six (6)
month period, Purchaser shall make a commercially reasonable effort to collect
any such Delinquent Rents; provided, however, that Purchaser shall not be
required to expend any funds or institute any litigation in its collection
efforts. Following the Closing, Seller shall not have the right to pursue the
collection of Delinquent Rents from any tenant and shall rely solely on
Purchaser’s efforts pursuant to the preceding sentence with respect to all
Delinquent Rents.

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EXECUTION VERSION

7.1.4    Security Deposits. At Closing, Purchaser shall be credited and Seller
shall be charged with the amount of all pre-paid rents, security and other
deposits (together with any interest accrued thereon only if interest is
specifically required to be paid thereon under applicable law or under the terms
of a specific Lease) held by Seller as of the Closing Date.
7.1.5    Capital Expenditures and Accounts Payable. Except as otherwise provided
herein, all capital and other improvements (including labor and material) that
are performed or contracted for, by or on behalf of Seller before the Closing
Date, and all sums due for accounts payable that were owed or incurred before
the Closing Date, shall be paid by Seller.
7.1.6    Rent Ready Credit. Seller shall, at its expense, cause each unit at the
Property that has become vacant prior to the Closing Date to be placed in a
condition ready to be leased in accordance with Seller’s current practice. Prior
to Closing, Seller shall reasonably determine the number of vacant apartment
units that are not in rent ready condition. A vacant apartment unit shall be
“rent ready” if its condition is consistent with the condition of vacant units
currently being marketed to and accepted for rental by tenants of comparable
vacant apartment units in the Property and such units have a full complement of
operating appliances and components. If Seller reasonably determines within five
(5) business days before the Closing that fewer than all vacant apartment units
are in a rent ready condition at Closing, Purchaser shall accept such apartment
units in “as-is” condition at Closing and Purchaser shall receive a credit (the
“Estimated Rent Ready Credit”) against the Purchase Price at Closing in an
amount equal to $750.00 for each such apartment unit which is not in a rent
ready condition on the Closing Date.
7.1.7    Property Taxes. All real property taxes and assessments shall be
prorated on the basis of the fiscal period for which assessed (if the Closing
shall occur before the tax rate is fixed, the apportionment of taxes shall be
based on the tax rate for the preceding period applied to the latest assessed
valuation and after the Closing, when the actual real property taxes are finally
fixed, Seller and Purchaser shall promptly make a recalculation of such
proration, and the appropriate party shall make the applicable payment
reflecting the recalculation to the other party). If after the Closing there is
any retroactive increase in the real or personal property taxes or assessments
imposed on the Property: (1) if such increase relates to the tax year in which
the Closing occurred (not including any assessment of supplemental taxes for the
period after Closing due to any reappraisal of the Property after the sale
contemplated herein, which supplemental taxes shall be Purchaser’s sole
responsibility), such increase shall be prorated by Seller and Purchaser on a
per diem basis based on their respective periods of ownership during the period
to which such increase applies, (2) if such increase relates to any tax year
subsequent to the tax year which the Closing occurred, such increase shall be
the obligation of Purchaser, and (3) if such increase

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EXECUTION VERSION

relates to any tax year prior to the tax year in which the Closing occurred,
such increase shall be the obligation of Seller.
(1)    Real property tax refunds and credits received after the Closing which
are attributable to a fiscal tax year prior to the Closing shall belong to
Seller. Any such refunds and credits attributable to the fiscal tax year during
which the Closing occurs shall be apportioned between Seller and Purchaser after
deducting the reasonable out-of-pocket expenses of collection thereof. This
apportionment obligation shall survive the Closing.
(2)    If any tax appeal or certiorari proceedings shall not have been finally
resolved or settled prior to the Closing and shall relate to any tax period a
portion or all of which precedes the Closing, Seller shall be entitled to
control the disposition of any such tax appeal or certiorari proceeding and any
refunds received therefrom, net of any reasonable expenses incurred by Seller in
connection therewith, shall be prorated between the parties on the basis of the
portions accruing to periods before and after the Closing.
7.1.8    Intentionally Omitted.
7.1.9    Utility Charges. Charges for utilities, including water, sewer,
electric, and gas (“Utilities”) shall be pro-rated as of the Closing Date based
on the then most recent bills for such services. Seller shall pay for all
utility services to the Property for all periods before the Closing and
Purchaser shall pay for all utility services to the Property for the Closing
Date and all periods thereafter. Purchaser shall be responsible for making its
own arrangements with respect to future utility billings and deposits. If the
Closing shall occur before the actual amount of utilities and all other
operating expenses with respect to the Property for the month in which the
Closing occurs are determined, the apportionment of such utilities and other
operating expenses shall be upon the basis of a reasonable estimate by Seller of
such utilities and other operating expenses for such month, and thereafter,
shall be adjusted as provided herein.
7.1.10    Insurance. Seller’s existing liability and property insurance
pertaining to the Property shall be canceled as of the Closing Date, and Seller
shall receive any premium refund due thereon.
7.1.11    Assumed Contracts. All service fees and charges under the Assumed
Contracts assumed by Purchaser at the Closing whether paid, accrued or not yet
due and payable shall be pro-rated as of the Closing for periods before and
after the Closing.

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EXECUTION VERSION

7.1.12    Post-Closing Reconciliation. Notwithstanding the foregoing provisions,
the pro-rated Collected Rents, Payable Rents and Utilities are subject to
adjustment for six (6) months after the Closing Date if such items of income or
expense were incorrectly applied to the pre-closing or post-closing periods. The
party receiving evidence of such incorrect prorations must provide written
notice to the other within forty-five (45) days after receipt of such
information and the parties shall re-prorate such items of income or expense to
adjust for any excess credit by immediate reimbursement for such excess credit.
There shall be no right to adjust such items of income or expense after the
sixth (6th) month following the Closing Date.
7.1.13    Settlement Statement. Purchaser and Seller agree to use their good
faith efforts to prepare and approve the estimated settlement statement
consistent with this Section 7.1 no less than two (2) business days prior to the
Closing.
7.1.14    Survival. This Section 7.1 shall survive Closing.
7.1.15    Insurance. Seller’s existing liability and property insurance
pertaining to the Property shall be canceled as of the Closing, and Seller shall
receive any premium refund due thereon.
7.2    Seller’s Closing Costs. Seller shall pay (i) one-half of Escrow Agent’s
escrow fee or escrow termination charge; (ii) one-hundred percent (100%) of the
County transfer taxes and any city documentary stamp tax or transfer tax; (iii)
the cost of the Title Report, the title premium for the standard coverage for
the Title Policy, and the cost of any other endorsement ordered by Seller; (iv)
Seller’s own attorneys’ fees; (v) any costs incurred in recording the Deed or
any other instruments; and (vi) any recording fees or administrative fees
payable to the Agency pursuant to the OPA ( but not legal fees) and costs
associated with the assignment of the OPA.
7.2.1    Purchaser’s Closing Costs. Purchaser shall pay (i) Escrow Agent’s
escrow fee or escrow termination charge; (ii) the cost of extended coverage
portion of the title premium for the Title Policy and the cost of any other
title insurance endorsements ordered by Purchaser; (iii) any fees and costs to
update the Survey, (iv) any costs incurred in connection with Purchaser’s
investigation of the Property pursuant to Article V, including the cost of any
new environmental assessment commissioned by Purchaser, and (v) Purchaser’s own
attorneys’ fees.

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EXECUTION VERSION

ARTICLE VIII

DISTRIBUTION OF FUNDS AND DOCUMENTS
8.1    Delivery of the Purchase Price. At the Closing, Escrow Agent shall
deliver the Purchase Price to Seller, and the transaction shall not be
considered closed until such delivery occurs.
8.2    Other Monetary Disbursements. Escrow Agent shall, at the Closing, hold
for personal pickup or arrange for wire transfer: (i) to Seller, or order, as
instructed by Seller, all sums and any proration or other credits to which
Seller is entitled as adjusted by any appropriate proration or other charges as
set forth in the closing statement; and (ii) to Purchaser, or order, as
instructed by Purchaser, any excess funds therefor delivered to Escrow Agent by
Purchaser as adjusted by any sums and any proration or other credits to which
Purchaser is entitled as adjusted by any appropriate proration or other charges
as set forth in the closing statement.
8.3    Recorded Documents. Escrow Agent shall cause the Deed and any other
documents that Seller or Purchaser desires to record to be recorded with the
appropriate county recorder and, after recording, returned to the grantee,
beneficiary or person acquiring rights under said document or for whose benefit
said document was required.
8.4    Documents to Purchaser. Escrow Agent shall at the Closing deliver by
overnight express delivery to Purchaser the following:
(1)    one conformed copy of the Deed showing all recording data;
(2)    two originals of the Assignment of Leases and Contracts;
(3)    two originals of the Bill of Sale;
(4)    one original of the Notice to Tenants;
(5)    two originals of the FIRPTA Affidavit;
(6)    two originals of the California Withholding Affidavit;
(7)    one original of the Purchaser’s settlement statement;
(8)    one original of the Title Policy; and
(9)    one original of the OPA Assignment.
8.5    Documents to Seller. Escrow Agent shall at the Closing deliver by
overnight express delivery to Seller, the following:

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EXECUTION VERSION

(1)    one conformed copy of the Deed showing all recording data;
(2)    two originals of the Assignment of Leases and Contracts;
(3)    two originals of the Bill of Sale;
(4)    one copy of the Notice to Tenants;
(5)    two originals of the FIRPTA Affidavit;
(6)    two originals of the California Withholding Affidavit;
(7)    one original of the Seller’s settlement statement;
(8)    one copy of the Title Policy; and
(9)    one original of the OPA Assignment.
8.6    All Other Documents. Escrow Agent shall at the Closing deliver by
overnight express delivery, each other document received hereunder by Escrow
Agent to the person acquiring rights under said document or for whose benefit
said document was required.
ARTICLE IX

RETURN OF DOCUMENTS AND FUNDS UPON TERMINATION
9.1    Return of Seller’s Documents. If escrow or this Agreement is terminated
for any reason, Purchaser shall, within five (5) days following such
termination, deliver to Seller all documents and materials relating to the
Property previously delivered to Purchaser by Seller and; provided, however,
Purchaser shall have the right to retain copies of such Seller delivered
documents and materials to comply with internal record retention policies. In
addition, Purchaser shall deliver to Seller copies of all reports, studies,
documents and materials obtained by Purchaser from third parties in connection
with the Property and Purchaser’s investigation thereof so long as: (i) Seller
reimburses Purchaser the cost of such due diligence materials, and (ii)
Purchaser shall not be obligated to deliver any materials that are either
protected by the attorney-client privilege or work product doctrine or are
internally prepared analyses and studies by Purchaser, its members, employees,
affiliates or related parties. Such items shall be delivered without
representation or warranty as to accuracy or completeness and with no right of
Seller to rely thereon without the consent of the third party. Escrow Agent
shall deliver all documents and materials deposited by Seller and then in Escrow
Agent’s possession to Seller. Upon delivery by Escrow Agent to Seller of such
documents and materials, Escrow Agent’s obligations with regard to such
documents and

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EXECUTION VERSION

materials under this Agreement shall be deemed fulfilled and Escrow Agent shall
have no further liability with regard to such documents and materials to either
Seller or Purchaser.
9.2    Return of Purchaser’s Documents. If escrow or this Agreement is
terminated for any reason, Escrow Agent shall deliver all documents and
materials deposited by Purchaser and then in Escrow Agent’s possession to
Purchaser. Upon delivery by Escrow Agent to Purchaser of such documents and
materials, Escrow Agent’s obligations with regard to such documents and
materials under this Agreement shall be deemed fulfilled and Escrow Agent shall
have no further liability with regard to such documents and materials to either
Seller or Purchaser.
9.3    Deposit. If escrow or this Agreement is terminated (i) pursuant to
Section 10.2 or Article XII, or (ii) due to the failure of a condition set forth
in Section 3.1, or (iii) as otherwise set forth herein, then Purchaser shall be
entitled to obtain the return of the Deposit pursuant to Section 9.4 below. If
the Closing does not take place and escrow or this Agreement is terminated for
any other reason, Seller shall be entitled to the Deposit by retaining or
causing Escrow Agent to deliver the Deposit to Seller pursuant to Section 9.4
below.
9.4    Disbursement of Deposit. If Escrow Agent receives a notice from either
party instructing Escrow Agent to deliver the Deposit to such party, Escrow
Agent shall deliver a copy of the notice to the other party within three (3)
days after receipt of the notice. If the other party does not object to the
delivery of the Deposit as set forth in the notice within three (3) business
days after receipt of the copy of the notice, Escrow Agent shall, and is hereby
authorized to, deliver the Deposit to the party requesting it pursuant to the
notice. Any objection hereunder shall be by notice setting forth the nature and
grounds for the objection and shall be sent to Escrow Agent and to the party
requesting the Deposit.
9.5    No Effect on Rights of Parties; Survival. The return of documents and
monies as set forth above shall not affect the right of either party to seek
such legal or equitable remedies as such party may have under Article X with
respect to the enforcement of this Agreement. The obligations under this
Article IX shall survive termination of this Agreement.
ARTICLE X

DEFAULT
10.1    Seller’s Remedies. If, for any reason whatsoever (other than the failure
of a condition set forth in Section 3.1 and other than a termination of this
Agreement pursuant to Section 10.2 or Article XII), or arising out of any
material default of this Agreement by Seller, Purchaser fails to complete the
acquisition as herein provided, Purchaser shall be in breach of its obligations
hereunder and Seller shall be released from any further obligations hereunder.
BY INITIALING BELOW, PURCHASER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT
SELLER’S

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EXECUTION VERSION

ACTUAL DAMAGES IN THE EVENT OF SUCH A BREACH OF THIS AGREEMENT BY PURCHASER
WOULD BE EXTREMELY DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT THE AMOUNT OF THE
DEPOSIT IS THE PARTIES’ BEST AND MOST ACCURATE ESTIMATE OF THE DAMAGES SELLER
WOULD SUFFER IN THE EVENT THE TRANSACTION PROVIDED FOR IN THIS AGREEMENT FAILS
TO CLOSE, AND THAT SUCH ESTIMATE IS REASONABLE UNDER THE CIRCUMSTANCES EXISTING
ON THE DATE OF THIS AGREEMENT. PURCHASER AND SELLER AGREE THAT SELLER’S RIGHT TO
RETAIN THE DEPOSIT SHALL BE THE SOLE REMEDY OF SELLER AT LAW IN THE EVENT OF
SUCH A BREACH OF THIS AGREEMENT BY PURCHASER. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS SECTION 10.1, IF PURCHASER BRINGS AN ACTION AGAINST
SELLER FOR AN ALLEGED BREACH OR DEFAULT BY SELLER OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, RECORDS A LIS PENDENS OR OTHERWISE ENJOINS OR RESTRICTS SELLER’S
ABILITY TO SELL AND TRANSFER THE PROPERTY OR REFUSES TO CONSENT TO OR INSTRUCT
RELEASE OF THE DEPOSIT TO SELLER IF REQUIRED BY ESCROW AGENT (EACH A
“PURCHASER’S ACTION”), SELLER SHALL NOT BE RESTRICTED BY THE PROVISIONS OF THIS
SECTION 10.1 FROM BRINGING AN ACTION AGAINST PURCHASER SEEKING EXPUNGEMENT OR
RELIEF FROM ANY IMPROPERLY FILED LIS PENDENS, INJUNCTION OR OTHER RESTRAINT,
AND/OR RECOVERING FEES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES) WHICH
SELLER MAY SUFFER OR INCUR AS A RESULT OF ANY PURCHASER’S ACTION BUT ONLY TO THE
EXTENT THAT SELLER IS THE PREVAILING PARTY; AND THE AMOUNT OF ANY SUCH FEES,
COSTS AND EXPENSES AWARDED TO SELLER SHALL BE IN ADDITION TO THE LIQUIDATED
DAMAGES SET FORTH HEREIN. NOTHING IN THIS AGREEMENT SHALL, HOWEVER, BE DEEMED TO
LIMIT PURCHASER’S LIABILITY TO SELLER FOR DAMAGES OR INJUNCTIVE RELIEF FOR
BREACH OF PURCHASER’S INDEMNITY OBLIGATIONS UNDER THE ACCESS AGREEMENT OR UNDER
SECTION 5.2.4 ABOVE OR FOR ATTORNEYS’ FEES AND COSTS AS PROVIDED IN SECTION 16.5
BELOW.
ACCEPTED AND AGREED TO:
/s/ Authorized Signatory      /s/ Authorized Signatory
Seller    Purchaser
10.2    Purchaser’s Remedies. If the sale is not completed as herein provided by
reason of any material default of Seller, Purchaser shall be entitled, as its
sole and exclusive remedy, to either (i) terminate this Agreement (by delivering
written notice to Seller which includes a waiver of any right, title or interest
of Purchaser in the Property) in which event Escrow Agent shall refund the
Deposit to Purchaser and Seller shall reimburse Purchaser’s actual out-of-pocket
third-party costs

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EXECUTION VERSION

incurred as part of Purchaser’s efforts to acquire the Property, subject to a
cap of One Hundred Thousand Dollars ($100,000); provided, however, solely in the
event Seller transfers the Property to a third party in violation of this
Agreement and Purchaser’s remedy of specific performance is thus unavailable,
Purchaser shall be entitled to receive payment of Purchaser’s Costs from Seller
in an amount not to exceed Five Hundred Thousand Dollars ($500,000) or; (ii)
treat this Agreement as being in full force and effect and pursue only the
specific performance of this Agreement, provided that Purchaser must commence
any action for specific performance within sixty (60) days after the scheduled
Closing Date. Purchaser waives any right to pursue any other remedy at law or
equity for such default of Seller, including, without limitation, any right to
seek, claim or obtain damages (other than for costs under (i) (b) above),
punitive damages or consequential damages. In no case shall Seller ever be
liable to Purchaser under any statutory, common law, equitable or other theory
of law, either prior to or following the Closing, for any lost rents, profits,
“benefit of the bargain,” business opportunities or any form of consequential
damage in connection with any claim, liability, demand or cause of action in any
way or manner relating to the Property, the condition of the Property, this
Agreement, or any transaction or matter between the parties contemplated
hereunder. Purchaser’s remedies hereunder are in addition to the right to
receive the return of the Deposit, subject to Section 9.4, to the extent it is
not applied to the Purchase Price in connection with Purchaser’s action for
specific performance.
ARTICLE XI

REPRESENTATIONS AND WARRANTIES
11.1    Seller’s Warranties and Representations. The matters set forth in this
Section 11.1 constitute representations and warranties by Seller which are now
and (subject to matters contained in any notice given pursuant to the next
succeeding sentence) shall, in all material respects, at the Closing be true and
correct. Notwithstanding the veracity of Seller’s representation and warranties
contained in this Agreement when made, if Seller later acquires actual knowledge
of new information that may cause any of Seller’s representation and warranties
to be inaccurate or untrue in any material respect, then Seller shall give
prompt notice to Purchaser (which notice shall include copies of the instrument,
correspondence, or document, if any, upon which Seller’s notice is based). As
used in this Section 11.1, the phrase “to the extent of Seller’s actual
knowledge” shall mean the actual, current knowledge of Scott McCarter. Seller
represents that Scott McCarter is the person most knowledgeable regarding
Seller’s representations and warranties. There shall be no duty imposed or
implied to investigate, inquire, inspect, or audit any such matters, and there
shall be no personal liability on the part of such asset manager or disposition
director. To the extent Purchaser has actual knowledge or is deemed to know
prior to the date hereof that these representations and warranties are
inaccurate, untrue or incorrect in any way, such representations and warranties
shall be deemed modified to reflect Purchaser’s knowledge or deemed knowledge.

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EXECUTION VERSION

11.1.1    No Broker. Seller has not engaged or dealt with any broker or finder
in connection with the sale contemplated by this Agreement, except ARA Cal, Inc.
(the “Seller’s Broker”). Seller shall pay a brokerage commissions to the
Seller’s Broker in accordance with a separate agreement. Seller shall indemnify
and hold harmless Purchaser from Loss arising from any breach of the
representation contained in this Section 11.1.1 or if the same shall be based on
any statement, representation or agreement by Seller with respect to the payment
of any brokerage commissions or finder’s fees. The foregoing indemnification
shall survive Closing.
11.1.2    Organization. Seller has been duly formed, validly exists and is in
good standing in the jurisdiction of its formation and in the state in which the
Property is located.
11.1.3    Power and Authority. Seller has the legal power, right and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby.
11.1.4    Proceedings. To the best of Seller’s actual knowledge, Seller has not
received any written notice of any pending or threatened condemnation or similar
proceeding affecting any part of the Property.
11.1.5    Contravention. To the best of Seller’s actual knowledge, Seller is not
prohibited from consummating the transactions contemplated by this Agreement by
any law, regulation, agreement, instrument, restriction, order or judgment.
11.1.6    Leases and Contracts. The Leases and Contracts comprise all of the
leases and material contracts which will affect the Property on and after the
Closing.
11.1.7    Compliance. To the best of Seller’s actual knowledge, Seller has not
received written notice from any governmental authority that the Property is not
in material compliance with all applicable laws, except for such failures to
comply, if any, which have been remedied or otherwise disclosed to Purchaser.
11.1.8    Employees. Seller has no employees on-site at the Property providing
on-site services to the Property and all such services are performed by Seller’s
manager of the Property.
11.1.9    Litigation. Except as set forth on Schedule 11.1.9 attached hereto,
there is no litigation, suit, action or administrative proceeding (including but
not limited to LAHD, HUD and other housing agencies) pending against the
Property, nor to the best of Seller’s knowledge has Seller received any written
notice of any threatened litigation, suit, action or administrative proceeding
against the Seller or the Property.

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EXECUTION VERSION

11.1.10    PATRIOT Act.
(1)    Seller is in compliance with the requirements of Executive Order No.
133224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the “Order”) and other similar
requirements contained in the rules and regulations of the Office of Foreign
Assets Control, Department of the Treasury (“OFAC”) and in any enabling
legislation or other Executive Orders or regulations in respect thereof (the
Order and such other rules, regulations, legislation, or orders are collectively
called the “Orders”). Further, Seller covenants and agrees to make its policies,
procedures and practices regarding compliance with the Orders, if any, available
to Purchaser for its review and inspection during normal business hours and upon
reasonable prior notice.
(2)    To the best of Seller’s knowledge, neither Seller nor any beneficial
owner of Seller:
is listed on the Specially Designated Nationals and Blocked Persons List
maintained by OFAC pursuant to the Order and/or on any other list of terrorists
or terrorist organizations maintained pursuant to any of the rules and
regulations of OFAC or pursuant to any other applicable Orders (such lists are
collectively referred to as the “Lists”);
(b)    is a person or entity who has been determined by competent authority to
be subject to the prohibitions contained in the Orders; or
(c)    is owned or controlled by, or acts for or on behalf of, any person or
entity on the Lists or any other person or entity who has been determined by
competent authority to be subject to the prohibitions contained in the Orders.
Notwithstanding anything contained herein to the contrary, for the purposes of
this provision, the phrase “any beneficial owner of Seller” shall not include
(x) any holder of a direct or indirect interest in a publicly traded company
whose shares are listed and traded on a United States national stock exchange,
or (y) any limited partner, unit holder or shareholder owning an interest of
five percent (5%) or less in Seller or in the holder of any direct or indirect
interest in Seller.
11.1.11    Leases. The Rent Roll lists all of the Leases affecting the Property
and is otherwise be accurate and complete as of its date. Seller has or will,
deliver to Purchaser true, accurate and complete copies of all of the Leases and
there are no leases, subleases, licenses, occupancies or tenancies in effect
pertaining to any portion of the Property, and no persons, tenants or entities
occupy space in the Property, except as stated on the most current Rent Roll.
There are no rights to renew, extend or terminate the Leases or expand any Lease
premises, or options to purchase, except as shown in the Rent Roll and the
Leases. Except as disclosed on Schedule 11.1.11 hereto, no brokerage commission
or similar fee is

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EXECUTION VERSION

due or unpaid by Seller with respect to any Lease, and there are no written or
oral agreements that will obligate Purchaser, as Seller’s assignee, to pay any
such commission or fee under any Lease or extension, expansion or renewal
thereof. To Seller’s actual knowledge, except as disclosed on Schedule 11.1.11
hereto, the Leases and any guaranties thereof are in full force and effect,
neither Seller nor any tenant is in default under its Lease, and the Leases and
guaranties are subject to no defenses, setoffs or counterclaims for the benefit
of the tenants thereunder. Seller is in compliance with all of the landlord’s
material obligations under the Leases, and except as disclosed on
Schedule 11.1.11 hereto, Seller has no obligation to any tenant under the Leases
to further improve such tenant’s premises or to grant or allow any rent or other
concessions. Except as disclosed on Schedule 11.1.11 hereto or on the Rent Roll,
no rent or other payments have been collected in advance for more than one (1)
month and no rents or other deposits are held by Seller, except the security
deposits described on the Rent Roll and rent for the current month.
11.1.12    Environmental Reports. Schedule 11.1.12 lists all environmental
reports, studies and assessments relating to the Property that are in the
possession of Seller (the “Environmental Reports”) and Seller has delivered or
made available to Purchaser a true and correct copy of each of the Environmental
Reports.
11.1.13    Repairs. Seller has not received any estimate or other written
evaluation of any condition existing at the Property for which a written
violation notice has been received, of a material nature for which the
underlying repair work has not been completed. For purposes of the foregoing,
“material” means any condition that requires more than $25,000 of labor and/or
materials to remedy.
11.1.14    Documents and Materials. The contents contained in the documents and
materials provided by Seller to Purchaser regarding the Property are true and
correct, and Seller has used commercially reasonable efforts to provide all such
documents and materials in the possession or control of Seller to Purchaser.
11.1.15    Operating Statements. The operating statements and financial
statements delivered by Seller (or on Seller’s behalf) to Purchaser are the
actual operating statements used to operate the Property.
11.1.16    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

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EXECUTION VERSION

inability to pay its debts as they come due, or (vi) made an offer of
settlement, extension or composition to its creditors generally.
11.1.17    OPA. To the best of Seller’s knowledge, Seller has not received any
written notice that it is in default under the OPA.
11.2    Purchaser’s Warranties and Representations. The matters set forth in
this Section 11.2 constitute representations, warranties and covenants by
Purchaser which are now and shall, at the Closing, be true and correct.
11.2.1    No Broker. Except for Seller’s Broker, Purchaser has not engaged or
dealt with any broker or finder in connection with the sale contemplated by this
Agreement. Purchaser shall indemnify and hold harmless Seller Indemnified
Parties from any Loss arising from any breach of the representation contained in
this Section 11.2.1 or if the same shall be based on any statement,
representation or agreement by Purchaser with respect to the payment of any
brokerage commissions or finder’s fees. The foregoing indemnification shall
survive Closing.
11.2.2    Organization. Purchaser has been duly formed, validly exists and is in
good standing in the jurisdiction of its formation and in the state in which the
Property is located.
11.2.3    Power and Authority. Purchaser has the legal power, right and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
11.2.4    Independent Investigation. The consummation of this transaction shall
constitute Purchaser’s acknowledgment that it has independently inspected and
investigated the Property and has made and entered into this Agreement based
upon such inspection and investigation and its own examination of the condition
of the Property.
11.2.5    Purchaser Reliance. Purchaser is experienced in and knowledgeable
about the ownership and management of real estate, and it has relied and will
rely exclusively on its own consultants, advisors, counsel, employees, agents,
principals and/or studies, investigations and/or inspections with respect to the
Property, its condition, value and potential.
11.2.6    ERISA. Purchaser represents, warrants and covenants that it is not
using the assets of any (i) ”employee benefit plan” (within the meaning of
Section 3 (3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)); (ii) ”plan” (within the meaning of Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended (the “Code”)); or (iii) entity whose
underlying assets include “plan assets” by

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EXECUTION VERSION

reason of a plan’s investment in such entity, to fund its purchase of the
Property under this Agreement.
11.2.7    PATRIOT Act.
(1)    Purchaser is in compliance with the requirements of the Orders. Further,
Purchaser covenants and agrees to make its policies, procedures and practices
regarding compliance with the Orders, if any, available to Seller for its review
and inspection during normal business hours and upon reasonable prior notice.
(2)    To the best of Purchaser’s knowledge, Purchaser is not:
(a)    listed on the Lists;
(b)    a person or entity who has been determined by competent authority to be
subject to the prohibitions contained in the Orders; or
(c)    owned or controlled by, or acts for or on behalf of, any person or entity
on the Lists or any other person or entity who has been determined by competent
authority to be subject to the prohibitions contained in the Orders.
11.2.8    PATRIOT Act Notice. Purchaser hereby covenants and agrees that if
Purchaser obtains knowledge that Purchaser becomes listed on the Lists or is
indicted, arraigned, or custodially detained on charges involving money
laundering or predicate crimes to money laundering, Purchaser shall immediately
notify Seller in writing, and in such event, Seller shall have the right to
terminate this Agreement without penalty or liability to Purchaser immediately
upon delivery of written notice thereof to Purchaser.
11.3    No Other Warranties and Representations. Except as specifically set
forth in this Article XI, neither Seller nor Advisor has made, makes, or has
authorized anyone to make, any warranty or representation as to the Leases, the
Contracts, any written materials delivered to Purchaser, the persons preparing
such materials, the truth, accuracy or completeness of such materials, the
present or future physical condition, development potential, zoning, building or
land use law or compliance therewith, the operation, income generated by, or any
other matter or thing affecting or relating to the Property or any matter or
thing pertaining to this Agreement. Purchaser expressly acknowledges that no
such warranty or representation has been made and that Purchaser is not relying
on any warranty or representation whatsoever other than as is expressly set
forth in this Article XI. Purchaser shall accept the Property “as is” and in its
condition on the date of Closing subject only to the express provisions of this
Agreement and hereby acknowledges and agrees that SELLER HAS NOT MADE, DOES NOT
MAKE AND SPECIFICALLY NEGATES AND

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EXECUTION VERSION

DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, FUTURE
OR OTHERWISE, OF, AS TO, CONCERNING OR WITH RESPECT TO, THE PROPERTY.
11.3.1    No Environmental Representations. Seller makes no representations or
warranties as to whether the Property contains asbestos, radon or any hazardous
materials or harmful or toxic substances, or pertaining to the extent, location
or nature of same, if any. Further, to the extent that Seller has provided to
Purchaser information from any inspection, engineering or environmental reports
concerning asbestos, radon or any hazardous materials or harmful or toxic
substances, Seller makes no representations or warranties with respect to the
accuracy or completeness, methodology of preparation or otherwise concerning the
contents of such reports.
11.3.2    Release of Claims. Except for the representation and warranties,
covenants, obligations and requirements of Seller under this Agreement,
Purchaser acknowledges and agrees that Seller makes no representation or
warranty as to, and Purchaser, for itself, its successors and assigns, hereby
waives and releases Seller from any present or future claims, at law or in
equity, whether known or unknown, foreseeable or otherwise, arising from or
relating to, the Property, this Agreement or the transactions contemplated
hereby, including without limitation the presence or alleged presence of
asbestos, radon or any hazardous materials or harmful or toxic substances in,
on, under or about the Property, including without limitation any claims under
or on account of (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as the same may have been or may be amended from time to
time, and similar state statutes, and any regulations promulgated thereunder;
(ii) any other federal, state or local law, ordinance, rule or regulation, now
or hereafter in effect, that deals with or otherwise in any manner relates to,
environmental matters of any kind; (iii) this Agreement; or (iv) the common law.
Purchaser hereby specifically acknowledges that Purchaser has carefully reviewed
this Section 11.3.2 and has discussed its import with legal counsel and that the
provisions of this Section 11.3.2 are a material part of this Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the
foregoing release shall not extend to (a) a breach by Seller of Seller’s
representations and warranties set forth in this Agreement, (b) Seller’s actual
fraud and (c) a breach by Seller of any of Seller’s obligations or covenants
(including indemnity obligations) under this Agreement, including but not
limited to, Purchaser’s rights under the Holdback Agreement and Seller’s
indemnity with respect to the administrative proceedings as set forth in Section
16.8.2(b).
This Section 11.3.2 shall survive the Closing in perpetuity.

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EXECUTION VERSION

ARTICLE XII

CASUALTY AND CONDEMNATION
Promptly upon learning thereof, Seller shall give Purchaser written notice of
any condemnation, damage or destruction of the Property occurring prior to the
Closing. If prior to the Closing all or any portion of the Property is
condemned, damaged or destroyed by an insured casualty, Purchaser shall have the
option of either (i) proceeding to Closing without a reduction on the Purchase
Price and applying the proceeds of any condemnation award or payment under any
insurance policies (other than business interruption or rental loss insurance)
toward the payment of the Purchase Price to the extent such condemnation awards
or insurance payments have been received by Seller, receiving from Seller an
amount equal to any applicable deductible under any such insurance policy and
receiving an assignment from Seller of Seller’s right, title and interest in any
such awards or payments not theretofore received by Seller; or (ii) terminating
this Agreement by delivering written notice of such termination to Seller and
Escrow Agent within ten (10) days after Purchaser has received written notice
from Seller of such material condemnation, damage or destruction. If, prior to
the Closing, a portion of the Property is condemned, damaged or destroyed and
such portion is not a material portion of the Property, the proceeds of any
condemnation award or payment and any applicable deductible under any insurance
policies shall be applied toward the payment of the Purchase Price to the extent
such condemnation awards or insurance payments have been received by Seller and
Seller shall assign to Purchaser all of Seller’s right, title and interest in
any unpaid awards or payments. For purposes of this Article XII, the term
“material portion” shall mean greater than three and one half percent (3.5%) of
the Purchase Price or a material and adverse impact on the operation or use of
the Property (including, in the case of condemnation, loss of access to the
parking area of the Property). If the damage or destruction arises out of an
uninsured (or underinsured) risk, Seller shall elect, by written notice within
ten (10) days of the occurrence of such damage or destruction either to
terminate this Agreement or to close the transaction contemplated hereby with a
reduction of the Purchase Price equal to the costs of repairing the Property, as
reasonably estimated by an engineer engaged by Seller and reasonably acceptable
to Purchaser.
ARTICLE XIII

CONDUCT PRIOR TO CLOSING
13.1    Conduct. From and after the date hereof, Seller shall operate the
Property in accordance with its standard business procedures.
13.2    Actions Prohibited. Seller shall not, without the prior written
approval, such approval not to unreasonably withheld, conditioned, or delayed,
of Purchaser:
(i)    make any material structural alterations or additions to the Property
except as (a) in the ordinary course of operating the Property, (b) required for

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EXECUTION VERSION

maintenance and repair, (c) required by any of the Leases or the Contracts, or
(d) required by this Agreement;
(ii)    sell, transfer, encumber or change the status of title of all or any
portion of the Property;
(iii)    change or attempt to change, directly or indirectly, the current zoning
of the Real Property in a manner materially adverse to it;
(iv)    cancel, amend or modify, in a manner materially adverse to the Property,
any license or permit held by Seller with respect to the Property or any part
thereof which would be binding upon Purchaser after the Closing;
(v)    remove any Personal Property except in the ordinary course of business as
may be required for necessary repair or replacement;
(vi)    stop maintaining in full force and effect fire and commercial general
liability insurance on the Property which is at least equivalent in all material
respects to the insurance policies covering the Property as of the Effective
Date; or
(vii)    agree to pay third party brokers any commissions for any Leases entered
into after the Effective Date, which commission is not fully paid for by Seller
prior to the Closing Date.
13.3    New Leases and Contracts. Seller may enter into any new lease (on its
standard lease form and as long as consistent with current market terms) or
contract without Purchaser’s consent so long as: (i) Seller provides Purchaser
prior written notice of such lease and (ii) such leases are entered into in
accordance with Seller’s past practices, at current market rents, on Seller’s
standard lease form and for a length of term no longer than one (1) year (with
respect to residential leases); provided, however, in no event shall Seller
enter into a new lease, renew or otherwise modify the current lease for Unit 131
other than allowing the tenant in Unit 131 to move into Unit 132. Seller may not
enter into any new non-residential leases or amend any existing non-residential
leases without receiving Purchaser’s prior written consent, which consent may be
withheld in its sole discretion. Notwithstanding the preceding sentence Seller
may only enter into any new contracts without Purchaser’s consent if doing so is
in the ordinary course of operating the Property and the contract (i) will not
be binding on Purchaser; or (ii) is cancelable on thirty (30) days or less
notice without penalty or premium.
13.4    Confidentiality. Seller and Purchaser shall, prior to the Closing,
maintain the confidentiality of this sale and purchase and shall not, except as
required by law or governmental regulation applicable to Seller or Purchaser,
disclose the terms of this Agreement or of such sale

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EXECUTION VERSION

and purchase to any third parties whomsoever other than investors or prospective
investors in Seller or Purchaser or the principals of Seller’s Broker, Escrow
Agent, the Title Company, Purchaser's accountants, attorney's architects,
engineers and such other persons whose assistance is required in carrying out
the terms of this Agreement (“Purchaser’s Representatives”); notwithstanding the
foregoing, Purchaser shall not disclose to investors or prospective investors
the name of Seller or any of its affiliates without the prior written consent of
Seller, which consent may be withheld in Seller’s sole and absolute discretion.
Neither Seller nor Purchaser shall at any time issue a press release or
otherwise communicate with media representatives regarding this sale and
purchase unless such release or communication has received the prior written
approval of the other. Purchaser agrees that all documents and information
regarding the Property of whatsoever nature made available to it by Seller or
Seller’s agents and the results of all tests and studies of the Property
(collectively, the “Proprietary Information”) are confidential and Purchaser
shall not disclose any Proprietary Information to any other person except those
assisting it with the analysis of the Property and/or Purchaser’s Loan Parties
(as hereinafter defined), and only after procuring such person’s agreement to
abide by these confidentiality restrictions. As used in this Agreement,
“Purchaser’s Loan Parties” shall mean (A) any lender who contemplates providing
or provides financing to Purchaser in connection with the transactions
contemplated by this Agreement, together with the officers, employees, agents,
representatives, consultants and attorneys of such lender or prospective lender,
and (B) any broker who is engaged by Purchaser to identify a lender or
prospective lender for Purchaser in connection with the transactions
contemplated by this Agreement. The term “Proprietary Information” does not
include information which (i) becomes generally available to the public other
than as a result of a disclosure by Purchaser; (ii) was available to Purchaser
or any of the Purchaser’s Representatives or Purchaser’s Loan Parties on a
non-confidential basis prior to its disclosure by Seller; or (iii) becomes
available on a non-confidential basis from a source other than Seller, provided
that such source is not bound by a confidentiality agreement with Seller or
otherwise is prohibited from transmitting the information to Purchaser by a
contractual, legal or fiduciary obligation. Notwithstanding the foregoing and
anything to the contrary in this Agreement, nothing contained herein shall
impair Purchaser’s (or any Purchaser affiliate’s) right to disclose information
relating to this Agreement or the Property (a) to any due diligence
representatives and/or consultants that are engaged by, work for or are acting
on behalf of, any securities dealers and/or broker dealers evaluating Purchaser
or its affiliates, (b) in connection with any filings (including any amendment
or supplement to any S 11 filing) with governmental agencies (including the
United States Securities and Exchange Commission) by any REIT holding an
interest (direct or indirect) in Purchaser, and (c) to any broker/dealers in the
Purchaser’s or any REIT’s broker/dealer network and any of the REIT’s or
Purchaser’s investors. This Section 13.5 shall survive the Closing or
termination of this Agreement.
13.5    Right to Cure. If any title defect or other matter which would entitle
Purchaser to terminate this Agreement shall first arise after execution of this
Agreement, or if Seller shall have

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EXECUTION VERSION

breached any representation or warranty hereunder, Seller may elect, by written
notice to Purchaser, to cure such title defect or other matter by causing it to
be removed, insured over or bonded to cure such breach and Seller may adjourn
the Closing for up to thirty (30) business days to do so. Nothing contained in
this Section 13.6 shall require Seller to cure any matter or to incur any
liability or expense to do so.
ARTICLE XIV

NOTICES
All notices, demands or other communications given hereunder shall be in writing
and shall be deemed to have been duly delivered (i) upon the delivery (or
refusal to accept delivery) by messenger or overnight express delivery service
(or, if such date is not on a business day, on the business day next following
such date), or (ii) on the third (3rd) business day next following the date of
its mailing by certified mail, postage prepaid, at a post office maintained by
the United States Postal Service, or (iii) upon the receipt by facsimile
transmission as evidenced by a written transmission confirmation produced by the
facsimile transmitting machine or (iv) upon the receipt of an electronic email
transmission, followed by delivery by one of the other means identified in
(i)-(iii), addressed as follows:

If to Purchaser:    NOHO COMMONS PACIFIC OWNER LLC
c/o M West Holdings, LLC
13949 Ventura Blvd., Suite 350
Sherman Oaks, CA 91423
Attn: Karl Slovin
Email: kslovin@mwestholdings.com

And to:    c/o KBS Capital Advisors LLC
11150 Santa Monica Boulevard, Suite 400
Los Angeles, CA 90025
Attn: Jamie Rodgers
Telephone: (310) 432-2103
Email: jrodgers@kbs.com

c/o KBS Capital Advisors LLC
800 Newport Center Drive, Suite 700
Newport Beach, CA 92660
Attn: Brian Ragsdale
Telephone: (949) 797-0305
Email: bragsdale@kbs.com

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EXECUTION VERSION

With a copy to:    Sklar Kirsh LLP
1880 Century Park East, Suite 300
Los Angeles, CA 90067
Attn: Andrew Kirsh
Email: akirsh@sklarkirsh.com

And to:                Sheppard Mullin Richter and Hampton, LLP
650 Town Center Drive, 4th Floor
Costa Mesa, CA 92626
Attn: Scott A. Morehouse, Esq.
Telephone: (714) 424-2865
Email: smorehouse@sheppardmullin.com
If to Seller, to:    Redwood Partners, Inc.
32932 Pacific Coast Highway, 14-388
Dana Point, CA 92629
Attention: Scott McCarter
Facsimile: 949-2008772
Email: srm@redwoodpartnersinc.com
and
Rockwood Capital, LLC
140 East 45th Street
34th Floor
New York, NY 10017
Attention: Maysa Vahidi, Esq.
Facsimile: 212-867-2394
E-mail: mvahidi@rockwoodcap.com

with a copy to:    Akin, Gump, Strauss, Hauer & Feld, LLP
1999 Avenue of the Stars
Suite 600
Los Angeles, CA 90067
Attention: David Phelps
Facsimile: (310) 229-1001
Email: dphelps@akingump.com

If to Escrow Agent, to:    
Either party may, by notice given as aforesaid, change the address or addresses,
or designate an additional address or additional addresses, for its notices,
provided, however, that no notice of a change of address shall be effective
until actual receipt of such notice.

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EXECUTION VERSION

ARTICLE XV

TRANSFER OF POSSESSION
15.1    Transfer of Possession.
15.1.1    Possession of the Property shall be transferred to Purchaser at the
time of Closing subject to the following (the “Permitted Encumbrances”):
(a)    Non delinquent real property taxes and all assessments and unpaid
installments thereof which are not delinquent.
(b)    The Leases and the rights of tenants thereunder.
(c)    Any other lien, encumbrance, easement or other exception or matter
voluntarily imposed or consented to by Purchaser prior to or as of the Closing.
(d)    All exceptions (including printed exceptions) to title contained or
disclosed in the Title Report (as defined in Section 5.1.1) other than any
objections to title identified which Seller commits in writing to remove or have
removed and not thereafter waived by Purchaser). Notwithstanding the above, any
non-material exception to title first appearing after the Effective Date which
does not materially impair access to or value of the Property (a “Non-Material
Exception”) shall be considered a Permitted Encumbrance.
(e)    All matters, rights and interests that would be discovered by the survey
of the Property to be obtained by Purchaser.
15.1.2    Permitted Encumbrances shall not include, and Seller shall
affirmatively (i) discharge all liens of deeds of trust and/or mortgages or
other collateral financing interests and all other monetary liens created by,
under or through Seller, or assumed by Seller (with Seller having the right to
apply the Purchase Price or a portion thereof for such purpose), whether
voluntary or involuntary, (ii) discharge all mechanics’ or materialman’s liens
for work performed by or at the direction of Seller, (iii) satisfy or otherwise
eliminate to the satisfaction of the Title Company any and all judgment liens
against Seller and (iv) cure and/or remove any other exception or encumbrance
created by, under or through Seller after the Effective Date and not approved by
the Purchaser (each a “Mandatory Removal Item”).
15.2    Delivery of Documents at Closing. At the time of Closing, Seller shall
deliver to Purchaser, or leave at the Property: originals or copies of any
additional documents, instruments, records, keys, passwords, pass cards,
original leases, original Contracts and original plans, permits

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EXECUTION VERSION

and warranties in the possession of Seller or its agents which are necessary for
the ownership and operation of the Property.
ARTICLE XVI

GENERAL PROVISIONS
16.1    Captions. Captions in this Agreement are inserted for convenience of
reference only and do not define, describe or limit the scope or the intent of
this Agreement or any of the terms hereof.
16.2    Exhibits. All exhibits referred to herein and attached hereto are a part
hereof.
16.3    Entire Agreement. This Agreement contains the entire agreement between
the parties relating to the transaction contemplated hereby and all prior or
contemporaneous agreements, understandings, representations and statements, oral
or written, are merged herein.
16.4    Modification. No modification, waiver, amendment, discharge or change of
this Agreement shall be valid unless the same is in writing and signed by the
party against which the enforcement of such modification, waiver, amendment,
discharge or change is or may be sought.
16.5    Attorneys’ Fees. Should any party hereto employ an attorney for the
purpose of enforcing or construing this Agreement, or any judgment based on this
Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy,
arbitration, declaratory relief or other litigation, the prevailing party shall
be entitled to receive from the other party or parties thereto reimbursement for
all reasonable attorneys’ fees and all costs, whether incurred at the trial or
appellate level, including without limitation service of process, filing fees,
court and court reporter costs, investigative costs, expert witness fees and the
cost of any bonds, whether taxable or not, and such reimbursement shall be
included in any judgment, decree or final order issued in that proceeding. The
“prevailing party” means the party in whose favor a judgment, decree, or final
order is rendered.
16.6    Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California.
16.7    Time of Essence. Time is of the essence to this Agreement and to all
dates and time periods set forth herein.
16.8    Survival of Warranties/Holdback/Indemnity.
16.8.1    Unless otherwise expressly stated otherwise in this Agreement, only
those warranties and representations contained in Sections 11.1 and 11.2 and the
provisions of

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EXECUTION VERSION

Section 11.3, shall survive the Closing, the delivery of the Deed and the
payment of the Purchase Price; provided, however, that (i) such representations
and warranties (but not such provisions) shall cease and terminate nine (9)
months after the date of Closing, except in respect of any representation or
warranty as to which Purchaser or Seller, as the case may be, shall have
commenced, on or before such nine (9) month anniversary, a legal proceeding
based on the breach thereof as of the date of Closing, and then only for so long
as such proceeding shall continue and limited to the breach therein claimed;
(ii) Seller shall have no liability to Purchaser with respect thereto unless and
until the damages suffered by Purchaser as a result thereof shall equal or
exceed Seventy Five Thousand Dollars ($75,000) in the aggregate (the “Floor”)
(in which event Purchaser shall be entitled to damages without regard to the
Floor); and (iii) the maximum total liability for which Seller shall be
responsible with respect to all representations and warranties shall not exceed
the Maximum Liability Cap in the aggregate. Unless otherwise expressly herein
stated to survive, all other representations, covenants, indemnities, conditions
and agreements contained herein shall merge into and be superseded by the
various documents executed and delivered at Closing and shall not survive the
Closing. For the avoidance of doubt, pursuant to Section 11.1, Seller shall have
no liability to Purchaser after Closing for any matter disclosed by Seller or
learned of by Purchaser prior to Closing.
16.8.2    
(a)    At the Closing, an amount equal to Three Hundred Eighty Five Thousand
Dollars ($385,000.00) (less any sums expended by Seller prior to Closing
directly in connection with the Mandated Improvement Work (as defined below))
(the “Escrow Sum”) shall be deposited in an escrow established by Escrow Agent
for purposes of securing payment and performance of any work required to be
performed on the Property (“Mandated Improvement Work”) to comply with any court
order or settlement agreement stemming from that certain law suit (the “UFAS
Litigation”) known as “Independent Living Center et al. v. City of Los Angeles,
Redrock Noho Residential, LLC et al.; Docket No. 2:12-cv-00551-FMO-PJW (C.D.
CA)” as more particularly described in Schedule 11.1.0 of the Purchase Agreement
(the “UFAS Litigation”). The Escrow Sum will be invested, disbursed or otherwise
dealt with and disposed of pursuant to the terms of the Holdback Escrow
Agreement (the “Holdback Agreement”), the form of which is attached hereto as
Exhibit B. Seller and Purchaser shall deliver a duly executed copy of the
Holdback Agreement to Escrow Agent at the Closing. It is the parties’
understanding that Seller and/or its insurance shall continue to handle the UFAS
Litigation after the Closing Date directly, and at Seller’s or Seller’s
insurance company’s sole cost and expense, provided that Seller agrees to
provide notice to Purchaser of any status updates or other notifications it
receives concerning the UFAS Litigation.

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EXECUTION VERSION

(b)    The Property is currently subject to certain HUD administrative
proceedings (the “HUD Proceedings”) as more particularly described on Schedule
11.1.9 hereto. It is the parties’ understanding that Seller and/or its insurance
shall continue to handle the HUD Proceedings after the Closing Date directly,
provided that Seller agrees to provide notice to Purchaser of any status updates
or other notifications it receives concerning the HUD Proceedings. Seller agrees
to indemnify, defend and hold harmless Purchaser and its respective affiliates,
members, partners, subsidiaries, shareholders, officers, directors and agents
from any loss, injury, damage, cause of action, liability, claim, lien, cost or
expense, including reasonable attorneys’ fees and costs arising directly from
the HUD Proceedings. To the extent any new HUD proceedings (“New HUD
Proceedings”) arise in relation to the Property after Closing, which Seller did
not receive written notice of prior to the Closing, Purchaser agrees to
indemnify, defend and hold harmless Seller and its respective affiliates,
members, partners, subsidiaries, shareholders, officers, directors and agents
from any loss, injury, damage, cause of action, liability, claim, lien, cost or
expense, including reasonable attorneys’ fees and costs arising directly from
the New HUD Proceedings. The indemnities in this Section 16.8.2 shall survive
the Closing or any termination of this Agreement.
16.9    Assignment by Purchaser. Purchaser may not assign its rights under this
Agreement; provided, however, that Purchaser reserves the right to take title to
the Property in the name of an affiliate, or in the name of one or more
institutional investors for which Purchaser or one of its affiliates is then
acting as investment manager; provided Purchaser delivers to Seller written
notice of its intention to do so no less than five (5) business days prior to
the Closing including the legal name and structure of the assignee. No
assignment of Purchaser's rights hereunder shall relieve Purchaser of its
liabilities and obligations under this Agreement. This Agreement is solely for
the benefit of Seller and Purchaser; there are no third party beneficiaries
hereof. Any assignment of this Agreement in violation of the foregoing
provisions shall be null and void. Notwithstanding the foregoing, under no
circumstances shall Purchaser have the right to assign this Agreement to any
person or entity or employee benefit plan if Seller’s sale of the Property to
such person or entity or plan would, in the judgment of Seller, create or
otherwise cause a “prohibited transaction” under or violation of ERISA.
16.10    Severability. If any term, covenant, condition, provision or agreement
herein contained is held to be invalid, void or otherwise unenforceable by any
court of competent jurisdiction, the fact that such term, covenant, condition,
provision or agreement is invalid, void or otherwise unenforceable shall in no
way affect the validity or enforceability of any other term, covenant,
condition, provision or agreement herein contained.

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EXECUTION VERSION

16.11    Successors and Assigns. All terms of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by, the parties hereto and
their respective legal representatives, successors and assigns (subject to
Section 16.9).
16.12    Interpretation. Seller and Purchaser acknowledge each to the other that
both they and their counsel have reviewed and revised this Agreement and that
the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any amendments or exhibits hereto.
16.13    Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed an original; such
counterparts shall together constitute but one agreement.
16.14    Recordation. This Agreement may not be recorded and any attempt to do
so shall be of no effect whatsoever.
16.15    Limitation on Liability. In any action brought to enforce the
obligations of Seller under this Agreement or any other document delivered in
connection herewith, the judgment or decree shall be subject to the provisions
of Section 16.8 and shall, otherwise in any event, be enforceable against Seller
only up to an amount not to exceed two percent (2%) of the Purchase Price (the
“Maximum Liability Cap”); provided, however, any recovery by Purchaser pursuant
to the Holdback Agreement and Seller’s indemnity with respect to the litigation
and administrative proceedings as set forth in Section 16.8.2 shall be excluded
from the Maximum Liability Cap. In light of Seller’s indemnities and surviving
obligations expressly set forth in this Agreement, Seller shall not distribute
100% of the purchase proceeds from the Closing to its members if such
distribution would violate Section 18-607 of the Delaware Limited Liability
Company Act (6 Del. C. Section 18-101 et. seq.) and shall maintain reserves
reasonably sufficient to avoid such violation, as determined in Seller’s
reasonable determination. In connection with this Agreement, Advisor is acting
as the investment advisor to Seller and shall not have any individual liability
hereunder. No shareholder, officer, employee or agent of or consultant to
Advisor or of or to Seller shall be held to any personal liability hereunder,
and no resort shall be had to their property or assets, or the property or
assets of Advisor or of Seller for the satisfaction of any claims hereunder or
in connection with the affairs of Advisor or of Seller. Purchaser shall have no
recourse against any other property or assets of Seller, any assets of the
Advisor, or to any of the past, present or future, direct or indirect,
shareholders, partners, members, managers, principals, directors, officers,
agents, incorporators, affiliates or representatives of Seller or the Advisor
(collectively, “Seller Parties”) or of any of the assets or property of any of
the foregoing for the payment or collection of any amount, judgment, judicial
process, arbitral award, fee or cost or for any other obligation or claim
arising out of or based upon this Agreement and requiring the payment of money
by Seller. Except as otherwise expressly set forth in this Section 16.15,
neither Seller nor any Seller Party shall be subject to levy,

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EXECUTION VERSION

lien, execution, attachment or other enforcement procedure for the satisfaction
of any of Purchaser’s rights or remedies under or with respect to this
Agreement, at law, in equity or otherwise. The provisions of this Section shall
survive the termination of this Agreement.
16.16    Possession of Advisor. As used in this Agreement, the “possession” or
“receipt” of a document, notice or similar writing by Seller shall be deemed to
be only the possession, receipt or notice such document by Advisor.
16.17    Business Day. As used in this Agreement, “business day” shall be deemed
to be any day other than a day on which banks in the state of California shall
be permitted or required to close.
16.18    Energy Disclosure. Purchaser hereby acknowledges that Seller has
complied with California Public Resource Code § 25402.10 and the disclosure
regulations issued in connection therewith (e.g., California Code of
Regulations, Title 20, Sections 1680 – 1684) by, among other things, delivering
to Purchaser the Data Verification Checklist (as such term is defined in
California Code of Regulations, Title 20, Section 1681) for the Property prior
to the date hereof. By Purchaser's execution of this Agreement, Purchaser
acknowledges Purchaser's receipt of the Data Verification Checklist.
16.19    1031 Exchange. Either party may consummate at such party’s expense the
sale of the Property as part of a so-called like kind exchange (the “Exchange”)
pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended (the
“Code”), provided that: (i) the Closing shall not be delayed or affected by
reason of the Exchange nor shall the consummation or accomplishment of the
Exchange be a condition precedent or condition subsequent to the other party’s
obligations under this Agreement; (ii) the electing party shall effect the
Exchange through assignment of its right under this Agreement to a qualified
intermediary; (iii) the other party shall not be required to take an assignment
of the purchase agreement for the relinquished or replacement property of the
Exchange; (iv) the electing party shall indemnify and hold the other party
harmless with respect to any liability in connection with the Exchange and (v)
the electing party shall remain primarily liable under this Agreement and
indemnify the other party from any liability in connection with the Exchange.
The other party shall not by this Agreement or acquiescence to the Exchange (1)
have its right under this Agreement affected or diminished in any matter or (2)
be responsible for compliance with or be deemed to have warranted to the
electing party that the Exchange in fact complies with Section 1031 of the Code.
16.20    Exclusivity. Notwithstanding anything to the contrary provided
elsewhere herein, Seller acknowledges that neither Seller nor any affiliate,
representative, advisor, officer, director, employee or agent of Seller shall
enter into any purchase and sale agreements or term sheets regarding the sale of
the Property with any third party, during the period commencing on the Effective
Date

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EXECUTION VERSION

hereof and expiring on the earlier of the date on which this Agreement is
terminated or the Closing Date.
ARTICLE XVII

ESCROW AGENT DUTIES AND DISPUTES
17.1    Other Duties of Escrow Agent. Escrow Agent shall not be bound in any way
by any other agreement or contract between Seller and Purchaser, whether or not
Escrow Agent has knowledge thereof. Escrow Agent’s only duties and
responsibilities with respect to the Deposit shall be to hold the Deposit and
other documents delivered to it as agent and to dispose of the Deposit and such
documents in accordance with the terms of this Agreement. Without limiting the
generality of the foregoing, Escrow Agent shall have no responsibility to
protect the Deposit and shall not be responsible for any failure to demand,
collect or enforce any obligation with respect to the Deposit or for any
diminution in value of the Deposit from any cause, other than Escrow Agent’s
gross negligence or willful misconduct. Escrow Agent may, at the expense of
Seller and Purchaser, consult with counsel and accountants in connection with
its duties under this Agreement. Escrow Agent shall not be liable to the parties
hereto for any act taken, suffered or permitted by it in good faith in
accordance with the advice of counsel and accountants. Escrow Agent shall not be
obligated to take any action hereunder that may, in its reasonable judgment,
result in any liability to it unless Escrow Agent shall have been furnished with
reasonable indemnity satisfactory in amount, form and substance to Escrow Agent.
17.2    Disputes. Escrow Agent is acting as a stakeholder only with respect to
the Deposit. If there is any dispute as to whether Escrow Agent is obligated to
deliver the Deposit or as to whom the Deposit is to be delivered, Escrow Agent
shall not make any delivery, but shall hold the Deposit until receipt by Escrow
Agent of an authorization in writing, signed by all the parties having an
interest in the dispute, directing the disposition of the Deposit, or, in the
absence of authorization, Escrow Agent shall hold the Deposit until the final
determination of the rights of the parties in an appropriate proceeding. Escrow
Agent shall have no responsibility to determine the authenticity or validity of
any notice, instruction, instrument, document or other item delivered to it, and
it shall be fully protected in acting in accordance with any written notice,
direction or instruction given to it under this Agreement and believed by it to
be authentic. If written authorization is not given, or proceedings for a
determination are not begun, within thirty (30) days after the date scheduled
for the closing of title and diligently continued, Escrow Agent may, but is not
required to, bring an appropriate action or proceeding for leave to deposit the
Deposit with a court of the State of pending a determination. Escrow Agent shall
be reimbursed for all costs and expenses of any action or proceeding, including,
without limitation, attorneys’ fees and disbursements incurred in its capacity
as Escrow Agent, by the party determined not to be entitled to the Deposit. Upon
making delivery of the Deposit in the manner provided in this Agreement, Escrow
Agent shall have no further liability

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EXECUTION VERSION

hereunder. In no event shall Escrow Agent be under any duty to institute, defend
or participate in any proceeding that may arise between Seller and Purchaser in
connection with the Deposit.
17.3    Reports. Escrow Agent shall be responsible for the timely filing of any
reports or returns required pursuant to the provisions of Section 6045(e) of the
Internal Revenue Code of 1986 (and any similar reports or returns required under
any state or local laws) in connection with the closing of the transaction
contemplated by this Agreement.
[SIGNATURE PAGE TO FOLLOW]

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first set
forth above.
SELLER:
REDROCK NOHO RESIDENTIAL, LLC,
a Delaware limited liability company
By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member
By:    Redwood Partners, Inc.,
a California corporation,
its manager
By:      /s/ Scott McCarter
Name: Scott McCarter
Title: President

[Signature Page to Sale Purchase and Escrow Agreement]

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PURCHASER:

NOHO COMMONS PACIFIC OWNER LLC,
a Delaware limited liability company

By:  KBS SOR II Lofts at NoHo Commons, LLC,
a Delaware limited liability company,
its sole member

By: NoHo Commons Pacific Investors LLC,
a Delaware limited liability company,
its Managing Member

By: Slovin Properties, Inc.,
a Delaware corporation,
its Manager

By: /s/ Karl Slovin
Karl Slovin, President

[Signature Page to Sale Purchase and Escrow Agreement]

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CONSENT AND AGREEMENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement; (ii) be the escrow agent under said Agreement; and (iii) be bound by
said Agreement in the performance of its duties as escrow agent.
Chicago Title Insurance Company
By:     /s/ Authorized Signatory
Name:                            
Title:                            

[Signature Page to Sale Purchase and Escrow Agreement]

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EXHIBIT A
Description of Land

PARCEL 1A:

PARCEL B OF PARCEL MAP L.A. NO. 2002-6231, IN THE CITY OF LOS ANGELES, COUNTY OF
LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 340 PAGES 78 to 80
INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOT 25 OF BLOCK 6 OF
LANKERSHIM, AS PER MAP RECORDED IN BOOK 16 PAGES 114 AND 115 OF MAPS, IN THE
OFFICE OF THE LOS ANGELES COUNTY RECORDER, ALL OIL, GAS AND OTHER HYDROCARBON
SUBSTANCES IN AND UNDER SAID LAND, BUT WITHOUT ANY RIGHT TO PENETRATE, USE OR
DISTURB SAID PROPERTY WITHIN 500 FEET OF THE SURFACE THEREOF, AS EXCEPTED AND
RESERVED IN DEED RECORDED SEPTEMBER 10, 1986 AS INSTRUMENT NO. 86-1190583,
OFFICIAL RECORDS.

ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOT 27 OF SAID BLOCK 6
OF SAID LANKERSHIM ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER
ALL OF THE ABOVE DESCRIBED REAL PROPERTY, BUT WITHOUT ANY RIGHT TO PENETRATE,
USE OR DISTURB SAID PROPERTY WITHIN 500 FEET OF THE SURFACE THEREOF, AS EXCEPTED
AND RESERVED BY DAVID FEIGIN, ET AL, IN A DEED RECORDED ON MAY 26, 1989, AS
INSTRUMENT NO. 89-854239 OFFICIAL RECORDS.

ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOTS 20, 21 AND 22 IN
SAID BLOCK 6 OF SAID LANKERSHIM ALL OIL, GAS, WATER, AND MINERAL RIGHTS NOW
VESTED IN THE CITY OF LOS ANGELES WITHOUT, HOWEVER, THE RIGHT TO USE THE SURFACE
OF SAID LAND OR ANY PORTION THEREOF TO A DEPTH OF 500 FEET BELOW THE SURFACE,
FOR THE EXTRACTION OF SUCH OIL, GAS, WATER AND MINERALS, AS EXCEPTED AND
RESERVED BY THE CITY OF LOS ANGELES RECORDED APRIL 12, 2004 AS INSTRUMENT NO.
04-0870960 OF OFFICIAL RECORDS.

PARCEL 1B:

A NON-EXCLUSIVE EASEMENT AS PROVIDED IN THAT CERTAIN AMENDED AND RESTATED
DECLARATION AND ESTABLISHMENT OF COVENANTS, CONDITIONS AND RESTRICTIONS AND
GRANT OF EASEMENTS, RECORDED JANUARY 5, 2007 AS INSTRUMENT NO. 07-26534, OF
OFFICIAL RECORDS, (THE “DECLARATION”), FOR INGRESS AND EGRESS IN, ON, OVER,
ACROSS AND THROUGH THAT PORTION OF THE NOHO ALLEY (AS DEFINED IN THE
DECLARATION) LOCATED WITHIN PARCEL “A” OF SAID PARCEL MAP L.A. NO. 2002-6231.

 
Exhibit A-1
 

208130846 v5
4812-0574-7510, v. 6

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EXHIBIT B

Holdback Escrow Agreement

THIS HOLDBACK ESCROW AGREEMENT (this “Agreement”) is made and entered into as of
the ___ day of [_____], 2016, by and among [_______________________](“Seller”),
[_______________________] (“Purchaser”), and [_____________________________]
(“Escrow Holder”).
RECITALS
A.     Seller, Purchaser and Escrow Holder entered into that certain Purchase
and Sale Agreement dated [_________], 2016 (as amended and supplemented from
time to time, the “Purchase Agreement”).
B.    Pursuant to Purchase Agreement, Purchaser is acquiring the interests of
Seller in the property described therein (the “Property”). Each capitalized term
not defined herein shall have the respective meaning given to that term in the
Purchase Agreement.
C.     Section 16.8.2 of the Purchase Agreement provides, in part, that, upon
the Closing, the Escrow Sum will be deposited into the Escrow (as hereinafter
defined) for purposes of securing payment and performance of the Mandated
Improvement Work. It is the understanding of Seller and Purchaser that Seller
and/or its insurance company shall continue working towards a final settlement
agreement of the UFAS Litigation (the “Settlement Agreement”) after Closing
directly upon terms as further outlined in the attached Exhibit 1, provided that
Seller agrees to provide notice to Purchaser of any status updates or other
notifications it receives and Purchaser covenants and agrees to execute the
Settlement Agreement if ultimately required by the court. Upon execution of the
Settlement Agreement, Seller and Purchaser will jointly retain Christy Kim (the
“Consultant”) at Seller’s sole cost and expense, to assist Seller and Purchaser
in agreeing upon a reasonable estimate of the total costs plus an additional 25%
for Purchaser oversight of the Mandated Improvement Work (collectively, the
“Improvement Cost Amount”) to complete the Mandated Improvement Work. In
estimating the Improvement Cost Amount, Seller and Purchaser agree that the most
cost-effective solutions (consistent with the current fit and finish of the
Property and utilizing units with existing UFAS features where possible) shall
be used for completion of the Mandated Improvement Work.
D.     Except as otherwise expressly provided herein, this Agreement is not
intended to modify or alter in any way the obligations of the parties under the
Purchase Agreement.
NOW, THEREFORE, in consideration of the above Recitals and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser hereby agree as follows:
1.     Deposit; Investment of Funds.

208130846 v9

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(a)     Upon the Closing under the Purchase Agreement, The Escrow Sum shall be
deposited into an account maintained by the Escrow Holder (the “Escrow”). Such
amount, plus any interest, dividends and other proceeds earned on all escrowed
funds, shall at all times remain in the Escrow except as expressly provided
otherwise in this Agreement.
(b)    Escrow Holder shall invest all escrowed funds in an interest-bearing bank
account at a bank that Purchaser and Seller approve, or in such other
investments as shall be approved in writing by Seller and Purchaser. The Escrow
Holder is hereby authorized and directed to sell or redeem any such investments
as it deems necessary to make any payments or distributions required under this
Agreement. The Escrow Holder shall have no responsibility or liability for any
loss which may result from any investment or sale of investment made pursuant to
this Agreement. The Escrow Holder is hereby authorized, in making or disposing
of any investment permitted by this Agreement, to deal in good faith with itself
(in its individual capacity) or with any one or more of its affiliates, whether
it or any such affiliate is acting as agent of the Escrow Holder or for any
third person or dealing as principal for its own account. The Parties
acknowledge that the Escrow Holder is not providing investment supervision,
recommendations or advice.
(c)     All interest, dividends and other income or proceeds earned on the
Escrow Sum shall be treated as part of the Escrow Sum and shall be disbursed as
provided herein. Neither Purchaser nor Seller shall be liable in any manner to
the other as a result of any investment decision made, or any approval of or
failure to approve any investment decision, with respect to the Escrow.
2.     Disbursement of Escrow Sum and Indemnity. Within two (2) business days
after issuance of a final court order with respect to the UFAS Litigation or the
execution of the Settlement Agreement and agreement by Seller and Purchaser (in
consultation with the Consultant) of the Improvement Cost Amount, Escrow Holder
shall promptly disburse from the Escrow Sum to Purchaser the Improvement Cost
Amount, with the remainder of the Escrow Sum, if any, going to Seller. Purchaser
covenants and agrees, following the disbursement of the Improvement Cost Amount
to Purchaser, to complete the Mandated Improvement Work in a lien free manner
and hereby agrees to indemnify, defend and hold harmless Seller and its
respective affiliates, members, partners, subsidiaries, shareholders, officers,
directors and agents from any loss, injury, damage, cause of action, liability,
claim, lien, cost or expense, including reasonable attorneys’ fees and costs
arising from any claims relating to the Mandated Improvement Work under the
Settlement Agreement or any defects related thereto.
3.     Controversies. In the event that any controversy arises between the
Parties hereto or with any third person, Escrow Holder shall not be required to
make any determination of the same or take any action with regard to the same,
but may await settlement of the controversy by mutual instructions of the
parties or by appropriate legal or arbitration proceedings.
4.    Compensation. Escrow Holder shall be entitled to compensation for its
services in the amount of $_______________, which compensation shall be paid
one-half by Seller and one-half by Purchaser. The fee agreed upon for the
services rendered hereunder is intended as full compensation for Escrow Holder's
services as contemplated by this Agreement; provided, however, that in the event
that conditions for the disbursement of funds under this Agreement are not
fulfilled or Escrow Holder renders any services not contemplated in this
Agreement or the Escrow Holder

    

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is made a party to any litigation pertaining to this Agreement or the subject
matter hereof, Escrow Holder shall be compensated for such extraordinary
services and reimbursed for all costs and expenses, including reasonable
attorneys' fees and expenses occasioned by any such delay, controversy,
litigation, or event.
5.     Harmless. Seller and Purchaser hereby jointly and severally promise and
agree to pay promptly on demand and to indemnify and hold harmless Escrow Holder
from and against all costs, damages, judgments, attorneys’ fees, expenses,
obligations and liabilities of every kind which in good faith are incurred or
suffered by the Escrow Holder in connection with or arising out of the Escrow
(it being expressly understood and agreed, however, that nothing in this Section
4 shall alter or impair the right of Seller or Purchaser to recover from the
other any amount due from one to the other with respect to sums paid to Escrow
Holder pursuant to this Section 4).
6.     Notices.
(a)     Whenever any notice, demand, request or other communication is required
or permitted hereunder, such notice, demand, request or communication shall be
made in writing and shall be personally delivered to the addresses set forth in
the Purchase Agreement, sent via prepaid courier or telecopier, or deposited in
the United States mail, registered or certified, return receipt requested,
postage prepaid, addressed to the addresses set forth in the Purchase Agreement
(with respect to Seller or Purchaser), and any notices to Escrow Holder shall be
sent to:
(b)     Except as provided in subsection (c), below, any notice, demand, request
or other communication sent in the manner specified in this Section 6 shall be
deemed to have been delivered upon receipt by the person to whom such notice was
addressed.
(c)    The inability to deliver any notice, demand or request because the
individual to whom it is properly addressed in accordance with this Section 6
refuses delivery thereof or no longer can be located at that address shall
constitute delivery thereof to such individual.
(d)     Each party hereto shall have the right from time to time to designate by
written notice to the other parties thereto such other person or persons and
such other place or places as said party may desire written notices to be
delivered or sent in accordance herewith.
7.     Modification. No provision of this Agreement may be modified, amended,
supplemented or terminated nor may the obligations of the parties hereunder be
waived except by an agreement in writing signed by the parties hereto or their
respective successors in interest.
8.     Charges. Except as otherwise provided herein, all charges and expenses of
Escrow are to be shared equally by Purchaser and Seller.
9.     Governing Law. This Agreement and the transactions contemplated herein
shall be construed in accordance with and governed by laws of the State of
Louisiana, without giving effect to the conflict-of-law rules and principles of
said state.

    

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10.     Incorporation of Prior Agreements. This Agreement, together with the
Purchase Agreement and any documents delivered in connection therewith, contain
the entire understanding of the parties hereto with respect to the subject
matter hereof, and no other prior or contemporaneous written or oral agreement
or understanding pertaining to any such matter shall be effective for any
purpose. The parties do not intend to confer any benefit hereunder on any
person, corporation or firm other than the parties hereto or their permitted
successors and assigns.
11.     Costs and Attorneys’ Fees. If any legal action or any arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, default, or misrepresentation in connection with any of the
provisions of this Agreement, or if Escrow Holder commences any action with
respect to the Escrow, the successful or prevailing party shall be entitled to
recover actual attorneys’ fees and other costs incurred in that action or
proceeding (together with costs of enforcing any judgments or rulings), in
addition to any other relief to which it may be entitled.
12.     Conflict. In the event of any conflict between the provisions of this
Agreement and the Purchase Agreement, the provisions of this Agreement shall
control.
13.     Time of Essence. All terms provided for in this Agreement for the
performance of any act will be strictly construed, time being of essence.
14.     Further Assurances. Purchaser and Seller agree to execute such further
instructions to Escrow Holder and such other instruments as may be reasonably
necessary to carry out the provisions of this Agreement.
15.     Counterparts. This Agreement, and any document or instrument entered
into, given or made pursuant to this Agreement or authorized hereby, and any
amendment or supplement thereto, may be executed in two or more counterparts,
and, when so executed, will have the same force and effect as though all
signatures appeared on a single document. Any signature page of this Agreement
or of such an amendment, supplement, document or instrument may be detached from
any counterpart without impairing the legal effect of any signatures thereon,
and may be attached to another counterpart identical in form thereto but having
attached to it one or more additional signature pages.
16.     Severability. If any term or provision of this Agreement is determined
to be illegal, unconscionable or unenforceable, all of the other terms,
provisions and selections hereof will nevertheless remain effective and be in
force to the fullest extent permitted by law.
17.     Construction of Agreement. The language in all parts of this Agreement
shall be in all cases construed simply according to its fair meaning and not
strictly for or against any of the parties hereto, despite the fact that the
Agreement may have been prepared in whole or part by one party or its counsel.
Headings at the beginning of paragraphs and subparagraphs of this Agreement are
solely for the convenience of the parties and are not a part of this Agreement.
When required by the context, whenever the singular number is used in this
Agreement, the same shall include the plural, and the plural shall include the
singular, the masculine gender shall include the feminine and neutral genders,
and vice versa.

    

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[signatures follow on next page]

    

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IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written.

PURCHASER:

[____________________________]

By:____________________________
Name:__________________________
Title:___________________________

    

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SELLER:

[_________________________________]

By:____________________________
Name:__________________________
Title:___________________________

    

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ESCROW HOLDER ACKNOWLEDGES RECEIPT OF THE FOREGOING AGREEMENT AND ACCEPTS AND
AGREES TO THE INSTRUCTIONS CONTAINED THEREIN AND THE OTHER MATTERS PERTAINING
THERETO.

CHICAGO TITLE INSURANCE COMPANY
By________________________________
Print Name________________________
Title_____________________________

Date: ____________________, 2016

    

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Exhibit 1
Proposed Settlement Terms
1) Adoption of accessibility policies to manage the leasing preferences for the
UFAS units.
2) Modifications to make 15 units (5%) UFAS MOBILITY compliant.
3) Modification to make 6 units (2%) UFAS SENSORY compliant.
4) Distribution of the UFAS units in both affordable and market rate categories,
with Purchaser attempting to distribute the bulk of the UFAS MOBILITY units to
the affordable category per what is believed to be the City of Los Angeles’
goal.
5) To the extent that the fire alarms already installed in units 201, 249, 349,
401, 252, 292, 352, 452, 492, 250, 302, 350, 450, 116 satisfy the UFAS-SENSORY
modifications then those units will be designated as the UFAS SENSORY UNITS.
6) Reasonable periods of time to complete the improvements: at least 6 months
with an attempt to have unit work to not be required until the particular unit
to be modified becomes vacant.

    

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EXHIBIT C
Assignment and Assumption of Leases,
Contracts and Other Property Interests
For good and valuable consideration, the receipt of which is hereby
acknowledged, REDROCK NOHO RESIDENTIAL, LLC, a Delaware limited liability
company (“Assignor”) hereby irrevocably assigns, transfers and sets over to
______________, a _____________ (“Assignee”) all of Assignor’s right, title and
interest in and to (i) the lease agreements (the “Leases”) enumerated on
Schedule A attached hereto and made a part hereof, together with tenant security
deposits held by Assignor under the Leases; (ii) to the extent assignable, the
contracts (the “Contracts”) enumerated in Schedule B attached hereto and made a
part hereof; (iii) to the extent assignable, any governmental permits and
approvals (the “Permits and Approvals”) related to the improvements (the
“Improvements”) located on the land (the “Land”) being conveyed by Assignor to
Assignee by Deed, dated the date hereof; and (iv) to the extent assignable, all
contract rights (including, without limitation, all existing third‑party
warranties, if any, on materials and equipment constituting a part of or used in
the operation and maintenance of the Improvements), licenses, permits, plans and
specifications, surveys, soils reports, insurance proceeds by reason of damage
to the Improvements, condemnation awards and all other rights, privileges or
entitlements necessary to continue the use and operation of the Land and the
Improvements.
Assignee hereby assumes all obligations in connection with the Leases, the
Contracts and the Permits and Approvals, arising or first becoming due and
payable after the date hereof, including without limitation, all leasing
commission and tenant improvement costs at any time owed or owing on the Leases.
Assignor hereby represents and warrants only that it has not previously assigned
the Leases, the Contracts, the Permits and Approvals, contract rights and other
rights assigned hereby. Assignor makes no other representation or warranty in
connection with this Assignment and, except for the foregoing, this Assignment
is made without recourse to Assignor.
All terms of this Assignment shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective legal representatives,
successors and assigns.
No modification, waiver, amendment, discharge or change of this Assignment shall
be valid unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge or change is or
may be sought.
This Assignment shall be construed and enforced in accordance with the laws of
the State of California.

 
 
 

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In any action brought to enforce the obligations of Assignor under this
Assignment, the judgment or decree shall be subject to Sections 16.8 and 16.15
of that certain Sale, Purchase and Escrow Agreement, dated as of __________,
2016, between Assignor, Assignee and [______________].
This Assignment may be executed in any number of counterparts, each of which so
executed shall be deemed an original; such counterparts shall together
constitute but one agreement.
[SIGNATURE PAGE TO FOLLOW]

 
 
 

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

IN WITNESS WHEREOF, Assignor and Assignee have each executed this Assignment of
this ______ day of __________, 2016.
ASSIGNOR:
]REDROCK NOHO RESIDENTIAL, LLC,
a Delaware limited liability company
By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member
By:    Redwood Partners, Inc.,
a California corporation,
its manager]
By:                     
Name:                    
Title:                    
ASSIGNEE:
[PURCHASER ENTITY]
By:                         
Name:                        
Title:                        

 
 
 

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EXHIBIT D
Form of Bill of Sale
KNOW ALL MEN BY THESE PRESENTS, that [REDROCK NOHO RESIDENTIAL, LLC., a Delaware
limited liability company] (“Seller”), for good and valuable consideration paid
by_____________, a _______________ (“Purchaser”), hereby sells to Purchaser, its
successors and assigns, the personal property (“Personal Property”) more
particularly referred to in Schedule A attached hereto.
TO HAVE AND TO HOLD the same unto Purchaser, its successors and assigns to and
for its own use and behalf forever.
This Bill of Sale shall be without representation or warranty by, and without
recourse to, Seller.
This Bill of Sale may be executed in any number of counterparts, each of which
so executed shall be deemed an original; such counterparts shall together
constitute but one agreement.

[SIGNATURE PAGE TO FOLLOW]

 
 
 
 

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

IN WITNESS WHEREOF, Seller and Purchaser have caused these presents to be signed
by their duly authorized officers as of this _______ day of ______________,
2016.
SELLER:
[REDROCK NOHO RESIDENTIAL LLC,
a Delaware limited liability company
By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member
By:    Redwood Partners, Inc.,
a California corporation,
its manager]
By:                         
Name:                        
Title:                        

PURCHASER:
[PURCHASER ENTITY]
By:                             
Name:                            
Title:                            

 
 
 
 

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EXHIBIT E
Form of Retail Estoppel

ESTOPPEL CERTIFICATE
This ESTOPPEL CERTIFICATE (this “Certificate”), is made with the knowledge that
[NoHo Commons Pacific Owner LLC, a Delaware limited liability company], and/or
its assignee (“Buyer”), is relying on it in connection with its acquisition of
the real property and improvements located at 11136 Chandler Blvd, North
Hollywood, CA 91601 (the “Property”), which is subject to the CC&Rs (as defined
below), and, in connection therewith, Buyer and its successors, assigns and
lenders (if any) (collectively, the “Beneficiaries”) may rely on this
Certificate for all purposes.
The undersigned does hereby certify to the Beneficiaries and to each of them,
that the following statements are true, correct and complete as of the date
hereof:
1.    The Property is subject to that certain the Second Amended and Restated
Declaration and Establishment of Covenants, Conditions and Restrictions and
Grant of Easements dated as of December 31, 2014, made by Redrock Noho Retail,
LLC, a Delaware limited liability company (“NoHo Retail”), and Redrock Noho
Residential, LLC, a Delaware limited liability company, as declarant
(“Declarant”), recorded in the Official Records, Los Angeles County (the
“Official Records”), on January 20, 2015 as Instrument No. 20150061853 (the
“CC&Rs”). A true, correct and complete copy of the CC&Rs are attached hereto as
Exhibit A, and by this reference incorporated herein. Any and all terms used in
this Certificate and not herein defined shall have the meanings ascribed to them
in the CC&Rs.
2.    The undersigned is the sole owner of the Retail Parcel.
3.    There are no past due or delinquent amounts due and payable under the
CC&Rs by the undersigned to Residential Owner. The amounts allocated to Retail
Owner for the fiscal year ended December 31, 2015 were (a) $_____________ for
utilities, in accordance with Section 8.2 of the CC&Rs (b) $_____________ for
Non-Segregable Maintenance Items, in accordance with Section 8.5 of the CC&Rs,
and (c) $_____________ for and Retail Owner’s Insurance Share, in accordance
with Section 10.2.5 of the CC&Rs, which amounts were all timely paid in full.
4.    The CC&Rs are in full force and effect and, except as set forth on Exhibit
A, there have been no amendments, modifications, supplements or revisions
thereto.
5.    No event of default by the undersigned or, to the knowledge of
undersigned, Residential Owner exists under the CC&Rs and the undersigned has no
knowledge of any facts or circumstances which, with the giving of notice, the
lapse of time, or both, would constitute a default by either the undersigned or
Residential Owner thereunder.
6.    The undersigned is duly authorized to execute and deliver this
Certificate.
[Remainder of Page Intentionally Left Blank]

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[Signatures Set Forth on Following Page]

 
 
 
 

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

Executed as of the __ day of ____________, 2016.

[TBD], a [TBD]

By:                     
Name:                 
Its:                     

 
 
 
 

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

Exhibit A
CC&Rs

[See Attached]

 

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EXHIBIT F
Contracts
Vendor
Description
Grounds
Eco Concepts
Pest Control Contract
Securitas
Courtesy Patrol
Landsco
Landscaping Contract
Republic Services
Trash Removal
Better Pools
Pool/Spa Contract
Total Access
Elevator Contract
Day-Lite Maintenance
Garage Light Bulb Replacement Contract
Utilities
So Cal Gas
Boiler
So Cal Gas
Models (2)
So Cal Gas
Pool
LADWP
Chandler Common Electricity
LADWP
Weddington - Fire Service/Irrigation
LADWP
Property
LADWP
Models (2)
Yes Energy
RUBS Utility Billing
Phones/Internet
8x8
Office Phones
BAI
Bulk Contract
BAI
Bus. Center Internet/Fitness Center Cable
BAI
Internet - Siemens
Vellarus
Business Center Computer Maintenance
AT&T
Call Boxes
AT&T
Fire Alarm, Elevators
Sprint
Maintenance Phones
Quarterly/Annual Contracts
Fitness Repair Shop
Fitness Center Maintenance
Regency Fire
Fire Monitoring
PFP
REf-4 Testing
Duthie
Generator Contract
Benrich
Boiler Contract
Jobe Roofing
Roof Contract
Siemens
Entry Systems Contract
Misc.
RICOH USA
Office Copier Machine
Rent Grow
Credit Screening
Handy Trac
Key Control Monthly Maintenance
PNPS
Maintenance Service Contract

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

EXHIBIT G
Form of Notice to Tenants
____________, 20___
[TENANT]
Re:    ____________________________
Dear Tenant:
Please be advised that effective _______________, 2016,
_________________________ has sold the above-referenced property to
________________________________ [with an address at ___________________]. Your
security deposit has been transferred to such entity and such entity shall be
responsible for holding the same in accordance with the terms of your lease.
Effective ___________, 20___, all future rental payments should be sent to the
following address:
                            
                            
                            
Any questions regarding maintenance and management of the property should be
addressed to:
                            
                            
                            
Very truly yours,
[REDROCK NOHO RESIDENTIAL LLC,
a Delaware limited liability company
By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member
By:    Redwood Partners, Inc.,
a California corporation,
its manager]
By:                             
Name:                            
Title:                            

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EXHIBIT H
FIRPTA Affidavit

Transferor’s Certification of Non-Foreign Status
To inform [PURCHASER ENTITY], a [_______] (“Transferee”), that withholding of
tax under Section 1445 of the Internal Revenue Code of 1986, as amended (the
“Code”), will not be required upon the transfer of certain real property to
Transferee by [REDROCK NOHO RESIDENTIAL, LLC, a Delaware limited liability
company] (“Transferor”), the undersigned hereby certifies the following on
behalf of Transferor:
1.    Transferor is not a foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined in the Code and the Income
Tax Regulations promulgated thereunder);
2.    Seller is not a disregarded entity as defined in §1.1445-2(b)(2)(iii);
3.    Transferor’s U.S. employer identification number is __________; and
4.    Transferor’s office address is [________].
Transferor understands that this Certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.
[SIGNATURE PAGE TO FOLLOW]

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

Under penalty of perjury I declare that I have examined this Certification and
to the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this document on behalf of
Transferor.
Dated: ______________, 2016
[REDROCK NOHO RESIDENTIAL, LLC,
a Delaware limited liability company
By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member
By:    Redwood Partners, Inc.,
a California corporation,
its manager]
By:                            
Name:                            
Title:                            

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

EXHIBIT I
Form of Deed

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
AND MAIL TAX STATEMENTS TO:
_____________________________________________________________________________
SPACE ABOVE THIS LINE FOR RECORDER’S USE
______________________________________________________________________________
ASSESSOR’S PARCEL NO. _____________ and __________________
GRANT DEED
THE UNDERSIGNED GRANTOR(S) DECLARE(S)
DOCUMENTARY TRANSFER TAX IS $ , CITY TAX $     
¨ computed on full value of property conveyed,
¨ computed on full value less value of liens or encumbrances,
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, [REDROCK
NOHO RESIDENTIAL LLC], a Delaware limited liability company (“Grantor”), hereby
grants, to __________________________a ____ (“Grantee”), that certain real
property located in the City of North Hollywood, County of Los Angeles, State of
California, as more particularly described in Exhibit “A” attached hereto and
all buildings and improvements, if any, situated thereon and all appurtenances
with respect thereto (the “Property”), subject to all matters of title and
subject to all covenants, conditions and restrictions, easements, and other
encumbrances of record and all other matters matters, rights and interests that
would be discovered by a survey or personal investigation of the Property.
THE PROPERTY IS CONVEYED SUBJECT TO THE PERMITTED EXCEPTIONS ATTACHED AS EXHIBIT
“B” attached hereto.
[SIGNATURE PAGE TO FOLLOW]

 
 
 

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

IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of _______, 20__.
GRANTOR:
[REDROCK NOHO RESIDENTIAL LLC,
a Delaware limited liability company
By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member
By:    Redwood Partners, Inc.,
a California corporation,
its manager]
By:                            
Name:                        
Title:                            
[Notary acknowledgment on following page]

 
 
 

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

ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of _____________________________)
On _________________________ before me, ________________________________________
    (insert name and title of the officer)
personally appeared
____________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ______________________________ (Seal)

 
 
 

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

EXHIBIT “A” TO GRANT DEED
LEGAL DESCRIPTION

PARCEL 1A:

PARCEL B OF PARCEL MAP L.A. NO. 2002-6231, IN THE CITY OF LOS ANGELES, COUNTY OF
LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 340 PAGES 78 to 80
INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOT 25 OF BLOCK 6 OF
LANKERSHIM, AS PER MAP RECORDED IN BOOK 16 PAGES 114 AND 115 OF MAPS, IN THE
OFFICE OF THE LOS ANGELES COUNTY RECORDER, ALL OIL, GAS AND OTHER HYDROCARBON
SUBSTANCES IN AND UNDER SAID LAND, BUT WITHOUT ANY RIGHT TO PENETRATE, USE OR
DISTURB SAID PROPERTY WITHIN 500 FEET OF THE SURFACE THEREOF, AS EXCEPTED AND
RESERVED IN DEED RECORDED SEPTEMBER 10, 1986 AS INSTRUMENT NO. 86-1190583,
OFFICIAL RECORDS.

ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOT 27 OF SAID BLOCK 6
OF SAID LANKERSHIM ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER
ALL OF THE ABOVE DESCRIBED REAL PROPERTY, BUT WITHOUT ANY RIGHT TO PENETRATE,
USE OR DISTURB SAID PROPERTY WITHIN 500 FEET OF THE SURFACE THEREOF, AS EXCEPTED
AND RESERVED BY DAVID FEIGIN, ET AL, IN A DEED RECORDED ON MAY 26, 1989, AS
INSTRUMENT NO. 89-854239 OFFICIAL RECORDS.

ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOTS 20, 21 AND 22 IN
SAID BLOCK 6 OF SAID LANKERSHIM ALL OIL, GAS, WATER, AND MINERAL RIGHTS NOW
VESTED IN THE CITY OF LOS ANGELES WITHOUT, HOWEVER, THE RIGHT TO USE THE SURFACE
OF SAID LAND OR ANY PORTION THEREOF TO A DEPTH OF 500 FEET BELOW THE SURFACE,
FOR THE EXTRACTION OF SUCH OIL, GAS, WATER AND MINERALS, AS EXCEPTED AND
RESERVED BY THE CITY OF LOS ANGELES RECORDED APRIL 12, 2004 AS INSTRUMENT NO.
04-0870960 OF OFFICIAL RECORDS.

PARCEL 1B:

A NON-EXCLUSIVE EASEMENT AS PROVIDED IN THAT CERTAIN AMENDED AND RESTATED
DECLARATION AND ESTABLISHMENT OF COVENANTS, CONDITIONS AND RESTRICTIONS AND
GRANT OF EASEMENTS, RECORDED JANUARY 5, 2007 AS INSTRUMENT NO. 07-26534, OF
OFFICIAL RECORDS, (THE “DECLARATION”), FOR INGRESS AND EGRESS IN, ON, OVER,
ACROSS AND THROUGH THAT PORTION OF THE NOHO ALLEY (AS DEFINED IN THE
DECLARATION) LOCATED WITHIN PARCEL “A” OF SAID PARCEL MAP L.A. NO. 2002-6231.

 
 
 

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

EXHIBIT “B” TO GRANT DEED
PERMITTED EXCEPTIONS
1.
Non delinquent real property taxes and all assessments and unpaid installments
thereof which are not delinquent.

2.
The Leases and the rights of tenants thereunder.

3.
Any other lien, encumbrance, easement or other exception or matter voluntarily
imposed or consented to by Purchaser prior to or as of the Closing.

4.
All exceptions (including printed exceptions) to title contained or disclosed in
the Title Report (as defined in Section 15.1 of the Sale, Purchase and Escrow
Agreement between Grantor and Grantee dated __, 2016 (the “Purchase Agreement”))
other than any objections to title identified which Grantor commits in writing
to remove or have removed and not thereafter waived by Purchaser), and any other
Non-Material Exceptions (as defined in the Purchase Agreement).

5.
All matters, rights and interests that would be discovered by a survey of the
Property.

 
 
 

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EXHIBIT J
Form of Seventh Partial Assignment of OPA
Recording Requested by and
When Recorded return to:
Sklar Kirsh LLP
1880 Century Park East, Suite 300
Los Angeles, CA 90067
Attention: Andrew T. Kirsh

______________________________________________________________________________
SEVENTH PARTIAL ASSIGNMENT OF
OWNER PARTICIPATION AGREEMENT
AND CONSENT TO ASSIGNMENT
THIS SEVENTH PARTIAL ASSIGNMENT OF OWNER PARTICIPATION AGREEMENT AND CONSENT TO
ASSIGNMENT (this “Agreement”) is entered into as of this ___ day of November,
2016, by and between REDROCK NOHO RESIDENTIAL, LLC, a Delaware limited liability
company (“Assignor”), [___________], a [_____________] (“Assignee”) and CRA/LA,
A DESIGNATED LOCAL AUTHORITY, a public body formed pursuant to California Health
& Safety Code Section 34173(d)(3) (the “CRA/LA”) (as successor to The Community
Redevelopment Agency of the City of Los Angeles (the “Former Agency”)).
Assignor, Assignee and CRA/LA shall hereinafter sometimes be referred to
individually as a “Party” and collectively as the “Parties”.
RECITALS
WHEREAS, SL No Ho, LLC, a California limited liability company (“Developer”) and
the Former Agency entered into that certain Owner Participation Agreement dated
as of March 5, 2002, as supplemented and amended by (i) that certain First
Implementation Agreement dated as of November 18, 2002, (ii) that certain Second
Implementation Agreement dated as of December 12, 2003, (iii) that certain Third
Implementation Agreement dated as of October 1, 2004, (iv) that certain Partial
Assignment and Assumption Agreement dated as of December 18, 2003, (v) that
certain Second Partial Assignment and Assumption Agreement dated as of October
1, 2004, (vi) that certain Third Partial Assignment of Owner Participation
Agreement and Consent to Assignment, dated as of January 9, 2007, (vii) that
certain letter agreement dated August 31, 2005 correcting Attachment 10, (viii)
that certain Fourth Partial Assignment of Owner Participation Agreement and
Consent to Assignment, dated as of August 3, 2007, (ix) that certain Fourth
Implementation Agreement dated June 16, 2008, (x) that certain Fifth Partial
Assignment of Owner Participation Agreement and Consent to Assignment dated as
of August 19, 2008 and (xi) that certain Sixth Partial Assignment of Owner
Participation Agreement and Consent to Assignment dated as of May 1, 2015
(collectively, the “OPA”).

 
 
 
 

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

WHEREAS, any capitalized terms not otherwise defined in this Agreement shall
have the respective meanings ascribed to such terms in the OPA.
WHEREAS, pursuant to that certain Partial Assignment of Owner Participation
Agreement and Consent to Assignment, dated as of December 18, 2003 (the “Subarea
A Assignment”), Developer assigned to SF No Ho, LLC, a California limited
liability company (the “Subarea A Assignee”) certain rights, duties and
obligations relating to the construction, operation and maintenance of Subarea
A.
WHEREAS, pursuant to the that certain Second Partial Assignment of Owner
Participation Agreement and Consent to Assignment, dated as of October 1, 2004
(the “Subarea B Assignment”), Developer assigned to NO HO Lofts, LLC, a Delaware
limited liability company (“NO HO Lofts”) all of its rights, duties and
obligations relating to the construction, operation and maintenance of Subarea B
and the Subarea B Improvements.
WHEREAS, pursuant to the that certain Third Partial Assignment of Owner
Participation Agreement and Consent to Assignment, dated as of January 9, 2007
(the “Subarea B-2 Assignment”), NO HO Lofts assigned to Assignor as to an
approximate 90% undivided interest, and SMA SPE, LLC, a Delaware limited
liability company (“SMA”), an affiliate of Assignor, as to an approximate 10%
undivided interest, as tenants in common, certain rights, duties and obligations
relating to the operation and maintenance of Subarea B-2 and the Subarea B-2
Improvements and SMA subsequently transferred its approximate 10% undivided
interest in the Property to Assignor.
WHEREAS, pursuant to the that certain Fourth Partial Assignment of Owner
Participation Agreement and Consent to Assignment, dated as of August 3, 2007
(the “Subarea B-1 Assignment”), NO HO Lofts assigned to Redrock Noho Retail,
LLC, a Delaware limited liability company (“Redrock Retail”) certain rights,
duties and obligations relating to the operation and maintenance of Subarea B-1
and the Subarea B-1 Improvements.
WHEREAS, pursuant to that certain Fifth Partial Assignment of Owner
Participation Agreement and Consent to Assignment, dated as of August 8, 2008
(the “Subarea C Assignment”), Developer assigned to Snyder Noho III, LLC, a
California limited liability company (the “Subarea C Assignee”), certain rights,
duties and obligations relating to the operation and maintenance of Subarea C
and the Subarea C Improvements.
WHEREAS, pursuant to the that certain Sixth Partial Assignment of Owner
Participation Agreement and Consent to Assignment, dated as of May 1, 2015 (the
“Subarea B-1 Assignment”), Redrock Retail assigned to Noho Lakewood Retail IX,
LLC, a Delaware limited liability company, as to a 12% undivided interest, and
Noho Meadowridge Retail IX, LLC, a Delaware limited liability company, as to an
88% undivided interest, as tenants in common (collectively, the “Subarea B-1
Assignee”), certain rights, duties and obligations relating to the operation and
maintenance of Subarea B-1 and the Subarea B-1 Improvements.
WHEREAS, Assignor has agreed to transfer and convey to Assignee its fee interest
in that portion of Subarea B and the Subarea B Improvements referred to in the
OPA as Subarea B-2 and to assign Assignor’s rights, duties and obligations under
the OPA to Assignee relating to the operation

 
 
 
 

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

and maintenance of Subarea B-2 and the Subarea B-2 Improvements, including that
certain 278 unit residential apartment complex and approximately 14 live/work
units and subterranean parking structure located thereon (collectively, the
“Property”), all subject to the terms and conditions of this Agreement.
WHEREAS, Assignor and Assignee require CRA/LA’s acknowledgement of those
obligations and restrictions in the OPA which continue to attach to the Property
and a release of Assignor from any responsibility or liability for the Assigned
Interests (as defined below) to the extent arising out of or accruing from and
after the Effective Date (as defined below), all as more particularly set forth
in this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:

DEFINITIONS
Defined Terms. In addition to terms defined elsewhere herein, the following
terms shall have the following respective meanings:
“Assigned Interests” means all Assignor’s right, title and interest under the
OPA to the operation and maintenance of the Property together with any and all
benefits associated therewith as are specifically set forth in the Subarea B-2
Assignment.
“Assumed Obligations” means all of Assignor’s duties and obligations under the
OPA relating to the operation and maintenance of the Property as are
specifically set forth in the Subarea B-2 Assignment.
“Business Day” means any day on which banks are open to conduct business in the
state of California.
“Effective Date” means the date upon which fee title to the Property shall be
conveyed to Assignee.

ASSIGNMENT AND ASSUMPTION
Assignment. Assignor hereby assigns and transfers to Assignee all of Assignor’s
right, title and interest in and to the Assigned Interests, without recourse,
representation or warranty.
Acceptance and Assumption. Assignee hereby accepts the foregoing assignment and
transfer from Assignor, and Assignee hereby assumes and agrees to perform all of
the Assumed Obligations which first arise or occur from and after the Effective
Date, and to be bound by, and to comply from and after the Effective Date with,
all of the terms and provisions of the OPA to the extent same relate to the
Assigned Interests and the Assumed Obligations.

 
 
 
 

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

Effect of Assignment. From and after the Effective Date: (a) Assignee shall be
deemed a party to the OPA and any reference therein to “Developer” shall be
deemed to refer to Assignee to the extent said reference relates to the
Property, the Assigned Interests and/or the Assumed Obligations; (b) Assignee
shall be entitled to exercise and enforce all rights to the Assigned Interests
under the OPA as if Assignee had been a signatory to the OPA or a beneficiary
thereunder as of the date of its original execution and Assignor shall no longer
have any entitlement thereto; (c) CRA/LA shall release Assignee, its successors
and assigns and the Property from all obligations, restrictions and requirements
described in the OPA except for the Assumed Obligations; and (d) Assignor is
released by CRA/LA from the obligations related to the Property, the Assigned
Interests and/or the OPA (to the extent applicable to the Property) in each case
to the extent first arising or accruing after the Effective Date.
Consent to Amendment. From and after the Effective Date, any future amendment of
the OPA which does not affect any of the Property, the Assigned Interests, or
the Assumed Obligations, shall not require the consent or signature of Assignee.
In addition, in the event CRA/LA has received written notice of the existence of
a Lender (as defined in Section 3.6, below) from Assignee, then from and after
the Effective Date, CRA/LA shall make a good faith effort to provide written
notification to such Lender, at least ten (10) days prior to executing any
proposed amendments or modifications to any of the provisions of the OPA which
are binding on the Assignee Property.

CRA/LA CONSENT
Consent to Assignment. CRA/LA consents to: (i) the assignment of Assignor’s
interest in the Property and the OPA to Assignee, (ii) the assignment, transfer
and/or hypothecation of Assignee’s interest in the Property and the OPA as
security for any Lender financing and (iii) any future assignment of the
Property and the OPA by Assignee to any Lender. CRA/LA shall have the right to
require any transferee of the Property to comply with the terms and obligations
of the OPA accruing and arising during the transferee’s period of ownership in
order for the transferee to enforce any benefits of, and obligations of CRA/LA
under, the OPA relating to the Property.
No Breach of the Assumed Obligations. CRA/LA hereby certifies to Assignee and to
Lender that Assignor is not currently in default of any of its obligations with
regards to Subarea B-2. CRA/LA acknowledges that Assignee is entering into this
Agreement in reliance upon said certification and that CRA/LA shall hereafter be
estopped from pursuing any rights or remedies against Assignee or Lender in
connection with any alleged breach of an Assumed Obligation prior to the date
hereof; notwithstanding this certification, however, CRA/LA does not waive any
rights it may have against Assignor for any such alleged breach.
Waiver and Release of Claims.
CRA/LA hereby acknowledges and agrees that, from and after the Effective Date,
Assignee (and its successors) shall only be responsible for (and the Property
shall only be bound and encumbered by) the Assumed Obligations, and from and
after the Effective Date, CRA/LA expressly, fully and forever releases and
discharges Assignee and the Property from any and all losses, expenses, claims,
costs, damages, debts, attorneys’ fees, actions, suits, judgments, awards,

 
 
 
 

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

obligations and/or liabilities of any kind, whether foreseeable or
unforeseeable, known or unknown, suspected or unsuspected, with respect to or in
any way relating to or arising out of the Retained Obligations (as defined in
the Subarea B-2 Assignment), the Assignor Property (as defined in the Subarea
B-1 Assignment) and/or any and all obligations assumed by (i) the Subarea A
Assignee or Subarea C Assignee and/or relating to the “Assignee Property” as
defined in the Subarea A Assignment or Subarea C Assignment, as applicable, or
(ii) Subarea B-1 Assignee and/or relating to the “Property” as defined in the
Subarea B-1 Assignment.
CRA/LA acknowledges and agrees, and without limiting the terms of any release
and/or other partial termination previously executed, delivered and/or recorded
by CRA/LA or in respect of the Property (or any portion thereof) that except for
the rights and obligations specifically enumerated in the Subarea B-2 Assignment
with respect to Subarea B-2, no other portion of the OPA is applicable to the
Property. CRA/LA acknowledges and agrees that the HUD Loan (as defined in the
Subarea B-2 Assignment) does not impact or encumber the Property and reaffirms
its release of the Assignor and Assignee (together with its successors, assigns
and/or lenders) and the Property from any remedies which might be construed as
in any way relating to or arising out of a default of the HUD Loan or any other
financing contemplated under the OPA. CRA/LA further acknowledges and agrees
that any Agency Participation Payment which was payable under the OPA in respect
of the sale of any portion of the Property has been previously paid in full by
Assignor’s predecessors in interest and that no Agency Participation Payment
shall be due in connection with the transactions contemplated by that certain
Sale, Purchase and Escrow Agreement dated as of [_________], 2016, between
Redrock Residential Noho, LLC and [____________] with respect to the sale of the
Property (as amended from time to time, the “Purchase Agreement”).
No Cross Default. CRA/LA hereby acknowledges that:
In the event the Subarea A Assignee defaults on any of the obligations assigned
under the Subarea A Assignment, then CRA/LA shall have no rights or remedies
against Assignee or the Property and, to the extent that such a default would
entitle CRA/LA to terminate the OPA, then CRA/LA shall have no right to
terminate the OPA to the extent it relates to Subarea B-2 or the Subarea B-2
Improvements, including without limitation, any of the Assigned Interests.
In the event the Subarea B-1 Assignee defaults on any of the obligations
assigned under the Subarea B-1 Assignment, then CRA/LA shall have no rights or
remedies against Assignee or the Property and, to the extent that such a default
would entitle CRA/LA to terminate the OPA, then CRA/LA shall have no right to
terminate the OPA to the extent it relates to Subarea B-2 or the Subarea B-2
Improvements, including without limitation, any of the Assigned Interests.
In the event the Subarea C Assignee defaults on any of the obligations assigned
under the Subarea C Assignment, then CRA/LA shall have no rights or remedies
against Assignee or the Property and, to the extent that such a default would
entitle CRA/LA to terminate the OPA, then CRA/LA shall have no right to
terminate the OPA to the extent it relates to Subarea B-2 or the Subarea B-2
Improvements, including without limitation, any of the Assigned Interests.

 
 
 
 

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

In the event Developer defaults on any obligations relating to Subarea D, then
CRA/LA shall have no right to terminate the OPA to the extent it relates to
Subarea B-2 or the Subarea B-2 Improvements, including without limitation, any
of the Assigned Interests.
Consent to Financing and Security Interest. CRA/LA hereby acknowledges and
agrees that Assignee, and any successors to Assignee, shall have the right, at
any time and without notice to or the need for approval from CRA/LA, to encumber
all or any portion of the Property.
Lender Reliance. Each Party hereto hereby acknowledges and agrees that any
lender to Assignee (“Lender”) shall have the right to rely on the contents and
provisions of this Agreement and that such lender will rely on such content and
provisions in connection with its loan to Assignee.

MISCELLANEOUS
Further Assignment of Assigned Interests. CRA/LA acknowledges that, from and
after the Effective Date, Assignee may sell, assign, transfer, encumber or grant
to any third parties any rights, duties or interests in the Assigned Property
without the prior written consent of CRA/LA.
Receipt of Further Payments. If Assignor receives, after the Effective Date, any
payments or benefits on account of any Assigned Interests, Assignor shall
promptly notify Assignee thereof, hold such amounts in trust for Assignee, and
promptly (but in no event later than thirty (30) days after Assignor’s receipt
thereof) turn over such amounts in full to Assignee or as Assignee may direct,
in the same or equivalent form received, without recourse, representation or
warranty of Assignor.
Survival. All representations, warranties, covenants and agreements made by the
Parties hereunder shall be considered to have been relied upon by the Parties
and shall survive the execution, delivery and performance of this Agreement and
all other documents contemplated herein.
Successors and Assigns. This Agreement, including, without limitation, the
representations, warranties, covenants and agreements contained herein (a) shall
inure to the benefit of and be enforceable by the Parties and their respective
permitted successors, assigns and transferees, and (b) shall be binding upon and
enforceable against the Parties and their respective successors, assigns and
transferees.
Further Assurances. Each of the Parties agrees to execute and deliver, or cause
to be executed and delivered, all such instruments, and to take all such action,
as the other Parties may reasonably require in order to effectuate the intent
and purposes of, and to carry out the terms of, this Agreement.
Costs and Expenses. Except as otherwise expressly provided herein, each Party
shall bear its own costs and expenses (including but not limited to attorneys’
fees and expenses) in connection with the negotiation and preparation of this
Agreement.
Counterpart Execution. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original, but all of which together shall

 
 
 
 

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

constitute one Agreement binding on all of the Parties. Any signature delivered
by facsimile or telecopier shall be deemed to constitute an original signature
hereto.
Amendments; Waivers.
No amendment of any provision of this Agreement shall be effective unless it is
in writing and signed by all the Parties, and no waiver of any provision of this
Agreement, nor consent to any departure by a Party therefrom, shall be effective
unless it is in writing and signed by the other Parties, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
No failure on the part of any Party to excuse, and no delay in exercising any
right hereunder or under any related document shall operate as a waiver thereof
by such Party, nor shall any single or partial exercise of any right hereunder
or under any other related document preclude any other or further exercise
thereof or the exercise of any other right. The rights and remedies of each
Party provided herein and in other related documents (i) are cumulative and are
in addition to, and not exclusive of, any rights or remedies provided by law,
and (ii) are not conditional or contingent on any attempt by such Party to
exercise any of its rights under any other related document against the other
Parties or any other entity.
Governing Law. This Agreement shall be governed by and construed under, and the
obligation of the Parties hereunder shall be determined in accordance with, the
laws of the State of California (without regard to any conflict of laws
provisions thereof).
Notices. All demands, notices, requests, consents and communications required
hereunder or under the OPA shall be in writing and shall be deemed to have been
duly given if personally delivered by courier service or messenger, sent by
overnight delivery service, or facsimile transmission, or deposited in the
mails, by certified or registered mail, postage prepaid, return receipt
requested, to the following addresses, or such other addresses as may be
furnished hereafter by notice in writing:
To Assignee:    c/o KBS Capital Advisors LLC
11150 Santa Monica Boulevard, Suite 400
Los Angeles, CA 90025
Attention: Jamie Rodgers
Telephone: (310) 432-2103
Facsimile:
Email: jrodgers@kbs.com

c/o KBS Capital Advisors LLC
800 Newport Center Drive, Suite 700
Newport Beach, CA 92660
Attention: Brian Ragsdale
Telephone: (949) 797-0305
Facsimile:
Email: bragsdale@kbs.com

 
 
 
 

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To Assignor:    RedRock Noho Retail, LLC
c/o Redwood Partners
32932 Pacific Coast Hwy, #14-388
Dana Point, CA 92629
Attention: Scott McCarter
Facsimile: 949-200-8772
Email: srm@redwoodpartnersinc.com
To CRA/LA:    CRA/LA
448 S. Hill Street, Suite 1200
Los Angeles, CA 90013
Attn: Chief Executive Officer
CRA/LA
448 S. Hill Street, Suite 1200
Los Angeles, CA 90013
Attn: General Counsel
        
All demands, requests, consents, notices and communications shall be deemed to
have been received if addressed in the same manner described above (i) at the
time of actual delivery thereof if delivered by hand, by courier service or by
facsimile transmission, or (ii) if sent by overnight delivery service, then one
(1) Business Day after deposit thereof with such delivery service, or (iii) if
sent by certified or registered mail, then three (3) Business Days after
certification or registration thereof.
Integration. This Agreement, together with the OPA, and any exhibits attached
hereto, constitute the entire agreement and understanding between the Parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings or representations pertaining to the subject matter hereof,
whether oral or written. There are no representations, warranties or other
agreements between the Parties in connection with the subject matter hereof
except as specifically set forth or incorporated herein.
Severability. If any provision of this Agreement or any other agreement or
document delivered in connection herewith, is partially or completely invalid or
unenforceable in any jurisdiction, then that provision shall be ineffective in
that jurisdiction to the extent of its invalidity or unenforceability, but the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability or any provision of this Agreement, all of which shall be
construed and enforced as if that invalid or unenforceable provision were
omitted, nor shall the invalidity or unenforceability of that provision in one
jurisdiction affect its validity or enforceability in any other jurisdiction.
Captions and Headings. The section captions and headings in this Agreement are
for convenience of reference only and are not intended to be full or accurate
descriptions of the contents thereof. They shall not be deemed to be part of
this Agreement and in no way define, limit, extend or describe the scope or
intent of any provisions hereof.

 
 
 
 

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[The remainder of this page has been intentionally left blank. Signatures appear
on the
following page.]

 
 
 
 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.
“ASSIGNOR”:
REDROCK NOHO RESIDENTIAL, LLC,
a Delaware limited liability company
By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member
By:    Redwood Partners, Inc.,
a California corporation,
its manager
By:                        
Name:                     
Title:                         

 
 
 
 

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“ASSIGNEE”:

[PURCHASING ENTITY]

By:                     
Name:                    
Title:                     

 
 
 
 

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“CRA/LA”
CRA/LA, A DESIGNATED LOCAL AUTHORITY

By: __________________________________
Barron McCoy
Chief Operating Officer
APPROVED AS TO FORM:
GOLDFARB & LIPMAN LLP

By: __________________________________

        Thomas H. Webber
CRA/LA Counsel

 
 
 
 

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ACKNOWLEDGMENT
State of California
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
County of _____________________________)
On _________________________ before me, ________________________________________
        (insert name and title of the officer)
personally appeared
____________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ______________________________ (Seal)

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ACKNOWLEDGMENT
State of California
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
County of _____________________________)
On _________________________ before me, ________________________________________
    (insert name and title of the officer)
personally appeared
____________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ______________________________ (Seal)

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ACKNOWLEDGMENT
State of California
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
County of _____________________________)
On _________________________ before me, ________________________________________
    (insert name and title of the officer)
personally appeared
____________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ______________________________ (Seal)

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EXHIBIT K
Rent Roll
[Attached hereto]

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EXHIBIT L
California Withholding Affidavit
[Attached hereto]

 
 
 

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EXHIBIT M
Declarant Assignment

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

SKLAR KIRSH, LLP
1880 Century Park East, Suite 300
Los Angeles, California 90067
Attn:    Andrew T. Kirsh, Esq.

                                                    
Space above line for recorder’s use.

ASSIGNMENT OF DECLARANT’S RIGHTS UNDER SECOND AMENDED AND RESTATED DECLARATION
AND ESTABLISHMENT OF COVENANTS, CONDITIONS, RESTRICTIONS AND GRANT OF EASEMENTS
THIS ASSIGNMENT OF DECLARANT’S RIGHTS UNDER SECOND AMENDED AND RESTATED
DECLARATION AND ESTABLISHMENT OF COVENANTS, CONDITIONS, RESTRICTIONS AND GRANT
OF EASEMENTS (this “Assignment”) is made as of the ___ day of ___________, 2016
(the “Effective Date”), by REDROCK NOHO RESIDENTIAL, LLC, a Delaware limited
liability company (“Assignor”), in favor of NOHO COMMONS PACIFIC OWNER LLC, a
Delaware limited liability company (“Assignee”).
RECITALS
A.
Assignor is the Declarant under that certain Second Amended and Restated
Declaration and Establishment of Covenants, Conditions, Restrictions and Grant
of Easements (the “Declaration”) recorded on January 20, 2015, in the Official
Records of Los Angeles County, California (“the “Official Records”), as
Instrument No. 20150061853.

B.
Assignor is the owner of certain land and improvements located in the County of
Los Angeles, State of California, as more particularly described in Exhibit A
attached hereto and made a part hereof (the “Property”).

C.
Assignor is simultaneously herewith conveying the Property to Assignee, pursuant
to that certain Sale, Purchase and Escrow Agreement dated effective as of
__________, 2016 ([as subsequently amended and assigned to date,] the “Purchase
Agreement”).

D.
The Declaration affects the Property.

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

E.
Assignor wishes to assign any and all of its rights under the Declaration to
Assignee in connection with the conveyance of the Property, and Assignee wishes
to accept such assignment.

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

ASSIGNMENT
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Assignor and Assignee agree as follows:
1.
Assignment. Assignor hereby expressly sells, transfers, assigns and conveys to
Assignee any and all of the rights, responsibilities and obligations of
Declarant under the Declaration including, without limitation, the power and
authority to perform all acts of Declarant under the Declaration.

2.
Assumption. Assignee agrees to assume, discharge and be bound by, in accordance
with the terms of the Declaration, all of the responsibilities and obligations
of Declarant under the Declaration, accruing upon and after the Effective Date,
and Assignor shall have no further liability under the Declaration from and
after the Effective Date.

3.
Recordation. This Assignment may be recorded in the Official Records and shall
serve as the express written assignment required by Section 1.6 of the
Declaration.

4.
No Warranties. This Assignment is made without representations or warranties,
express or implied, of any kind or nature.

5.
Counterparts. This Assignment may be executed in any number of counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURES COMMENCE ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the parties have executed this Assignment as of the
Effective Date.
ASSIGNOR:
REDROCK NOHO RESIDENTIAL, LLC,
a Delaware limited liability company
By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member
By:    Redwood Partners, Inc.,
a California corporation,
its manager
By:                     
Name:                    
Title:                    
    

A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

State of California

County of Los Angeles

On ________________, 2016, before me, ______________________, Notary Public,
personally appeared ____________________, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature:                     
Signature of Notary Public

(Notary Seal)

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

ASSIGNEE:
NOHO COMMONS PACIFIC OWNER LLC,
a Delaware limited liability company

By:                     
Name:                    
Title:                    

A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

State of California    )
County of Los Angeles    )

On ________________, 2016, before me, ______________________, Notary Public,
personally appeared ____________________, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.

Signature:                     
Signature of Notary Public

(Notary Seal)

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

EXHIBIT “A”
THE LAND SITUATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND
DESCRIBED AS FOLLOWS:
PARCEL 1:
PARCEL B OF PARCEL MAP L.A. NO. 2002-6231, IN THE CITY OF LOS ANGELES, COUNTY OF
LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 340 PAGES 78 to 80
INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,
AS AMENDED BY A CERTIFICATE OF CORRECTION RECORDED APRIL 24, 2009 AS INSTRUMENT
NO. 2009-0604533 OF OFFICIAL RECORDS.
EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOT 25 OF BLOCK 6 OF
LANKERSHIM, AS PER MAP RECORDED IN BOOK 16 PAGES 114 AND 115 OF MAPS, IN THE
OFFICE OF THE LOS ANGELES COUNTY RECORDER, ALL OIL, GAS AND OTHER HYDROCARBON
SUBSTANCES IN AND UNDER SAID LAND, BUT WITHOUT ANY RIGHT TO PENETRATE, USE OR
DISTURB SAID PROPERTY WITHIN 500 FEET OF THE SURFACE THEREOF, AS EXCEPTED AND
RESERVED IN DEED RECORDED SEPTEMBER 10, 1986 AS INSTRUMENT NO. 86-1190583,
OFFICIAL RECORDS.
ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOT 27 OF SAID BLOCK 6
OF SAID LANKERSHIM ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER
ALL OF THE ABOVE DESCRIBED REAL PROPERTY, BUT WITHOUT ANY RIGHT TO PENETRATE,
USE OR DISTURB SAID PROPERTY WITHIN 500 FEET OF THE SURFACE THEREOF, AS EXCEPTED
AND RESERVED BY DAVID FEIGIN, ET AL, IN A DEED RECORDED ON MAY 26, 1989, AS
INSTRUMENT NO. 89-854239 OFFICIAL RECORDS.
ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOTS 20, 21 AND 22 IN
SAID BLOCK 6 OF SAID LANKERSHIM ALL OIL, GAS, WATER, AND MINERAL RIGHTS NOW
VESTED IN THE CITY OF LOS ANGELES WITHOUT, HOWEVER, THE RIGHT TO USE THE SURFACE
OF SAID LAND OR ANY PORTION THEREOF TO A DEPTH OF 500 FEET BELOW THE SURFACE,
FOR THE EXTRACTION OF SUCH OIL, GAS, WATER AND MINERALS, AS EXCEPTED AND
RESERVED BY THE CITY OF LOS ANGELES RECORDED APRIL 12, 2004 AS INSTRUMENT NO.
04-0870960 OF OFFICIAL RECORDS.
PARCEL 2:
A NON-EXCLUSIVE EASEMENT AS PROVIDED IN THAT CERTAIN SECOND AMENDED AND RESTATED
DECLARATION AND ESTABLISHMENT OF COVENANTS, CONDITIONS AND RESTRICTIONS AND
GRANT OF EASEMENTS, RECORDED JANUARY 20, 2015 AS INSTRUMENT NO. 2015-0061853 OF
OFFICIAL RECORDS (THE “DECLARATION”), FOR INGRESS AND EGRESS IN, ON, OVER,
ACROSS AND THROUGH THAT PORTION OF THE

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

NOHO ALLEY (AS DEFINED IN THE DECLARATION) LOCATED WITHIN PARCEL “A” OF SAID
PARCEL MAP L.A. NO. 2002-6231.
APN: 2350-015-115

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

Exhibit N
Residential Estoppel

ESTOPPEL CERTIFICATE
This ESTOPPEL CERTIFICATE (this “Certificate”), is made with the knowledge that
[NoHo Commons Pacific Owner LLC, a Delaware limited liability company], and/or
its assignee (“Buyer”), is relying on it in connection with its acquisition of
the real property and improvements located at 11136 Chandler Blvd, North
Hollywood, CA 91601 (the “Property”), which is subject to the CC&Rs (as defined
below), and, in connection therewith, Buyer and its successors, assigns and
lenders (if any) (collectively, the “Beneficiaries”) may rely on this
Certificate for all purposes.
The undersigned does hereby certify to the Beneficiaries and to each of them,
that the following statements are true, correct and complete as of the date
hereof:
1.    The Property is subject to that certain the Second Amended and Restated
Declaration and Establishment of Covenants, Conditions and Restrictions and
Grant of Easements dated as of December 31, 2014, made by Redrock Noho Retail,
LLC, a Delaware limited liability company (“NoHo Retail”), and Redrock Noho
Residential, LLC, a Delaware limited liability company, as declarant (“Seller”),
recorded in the Official Records, Los Angeles County (the “Official Records”),
on January 20, 2015 as Instrument No. 20150061853 (the “CC&Rs”). A true, correct
and complete copy of the CC&Rs are attached hereto as Exhibit A, and by this
reference incorporated herein. Any and all terms used in this Certificate and
not herein defined shall have the meanings ascribed to them in the CC&Rs.
2.    The undersigned is the Declarant under the CC&Rs.
3.    The undersigned is the “manager” in accordance with Section 8.5 of the
CC&Rs.
4.    The CC&Rs are in full force and effect and, except as set forth on Exhibit
A, there have been no amendments, modifications, supplements or revisions
thereto.
5.    No event of default, by the undersigned or, to the knowledge of
undersigned, Retail Owner exists under the CC&Rs and the undersigned has no
knowledge of any facts or circumstances which, with the giving of notice, the
lapse of time, or both, would constitute a default by either the undersigned or
Retail Owner thereunder.
6.    The undersigned is duly authorized to execute and deliver this
Certificate.

[Remainder of Page Intentionally Left Blank]
[Signatures Set Forth on Following Page]

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Executed as of the __ day of ____________, 2016.

REDROCK NOHO RESIDENTIAL, LLC,
a Delaware limited liability company

By:    Redrock NoHo, LLC,
a Delaware limited liability company,
its sole member

By:    Redwood Partners, Inc.,
a California corporation,
its Manager

By:                     
Name:                     
Its:                     

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Exhibit A
CC&Rs

[See Attached]

 

 
 
 
 

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Schedule 1.2
Domain Names

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Schedule 5.1.7
Construction Defect Documenation
[Attached hereto]

 
 
 
 

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RedRock NoHo Residential, LLC
v.
Hill Contracting Group, et al.

CLOSEOUT BINDER - INDEX
TAB #
DATE
DESCRIPTION
1.
8/4/2010
Letter from D. McPherson to insurance carriers and Hill Contracting Group-Icon
Builders, Joint Venture regarding construction defects
2.
12/02/2010
RedRock NoHo Residential LLC’s Complaint
3.
6/29/2012
Hill Contracting Group and Hill Contracting Group-Icon Builders’ First Amended
Cross-Complaint
10/26/2012
Hill Contracting Group and Hill Contracting Group-Icon Builders’ ROE Amendment
to Cross-Complaint
4.
8/8/2012
Defect List
5.
1/25/2012
Repair List
6.
7/30/2013
WJE Final Report
7.
8/1/2013
John Duntemann Supplemental Report to WJE’s Exterior Enclosure Defect Report
8.
12/26/2013
Request for Dismissal of Complaint
9.
12/26/2013
Request for Dismissal of Cross-Complaint of Hill Contracting Group
10.
1/10/2014
Request for Dismissal of Cross-Complaint of Hill Contracting Group-Icon Builders
11.
4/26/2013
Permit Set of Drawings
12.
7/18/2013
Adapt's Podium Level Slab Strip Revised Design Loads
13.
Various
Hopkins Contracts (repair contracts and invoices)
14.
3/18/2014
Ace Restoration & Waterproofing, Inc.'s Contract
15.
4/2/2014
NoHo Closeout CD (with attached index)

 
 
 
 

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SCHEDULE 11.1.9
Litigation/Administrative Proceedings
[Attached hereto]

 
 
 
 

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Pending Litigation -
The Lofts at Noho Commons
1.    HUD Administrative Complaints
Each of the following complaints alleges disability discrimination and failure
to accommodate by providing the complainant with an accessible apartment. Each
of the complainants is of limited income, and requires an apartment in the
affordable housing program. The first two (Burns and Stansell) are not on the
affordable housing waitlist, which is closed. The last (Ling) is on the
waitlist, and was offered an affordable apartment at one time, but rejected it
because of its size.
Each of these three is under investigation by HUD to determine whether there is
cause to believe any unlawful discrimination has occurred.
Patrick Burns v. Redrock Noho Residential, LLC
HUD Case No. 09-13-0139-8
Daniel Stansell v. Redrock Noho Residential, LLC
HUD Case No. 09-13-0685-8
Mei Ling v. Redrock Noho Residential LLC
HUD Case No. 09-13-0686-8
(Note: This is the second administrative complaint filed by Ling against the
Lofts. The first was dismissed with “no cause” by HUD. The current complaint was
filed - with identical allegations - after Ling’s federal court litigation on
the same subject was dismissed by summary judgment; see Ling v. City of Los
Angeles, below.)
7/26/16 Update: I have heard nothing further from HUD on these complaints. I
understand they are still pending with HUD, and HUD considers them “open”
investigations, but nothing is happening on them with regard to anything the
Respondents must do.
2. Federal Court Litigation
Mei Ling v. City of Los Angeles, Redrock Noho Residential, LLC et al.
Docket No. 2:11-cv-07774 (C.D. CA)
on appeal as:
Mei Ling v. City of Los Angeles, Redrock Noho Residential, LLC et al.
Docket No. 12-57263 (9th Cir.)
In this lawsuit, Ling alleges that Redrock failed to reasonably accommodate her
disability by providing her a one-bedroom apartment at the Lofts. Ling is of
limited income, and only qualifies for the “affordable” units at the Lofts. The
designated “affordable” units at this property are all studio units; the only
one bedroom plan is only available as a market rate unit. Ling requests that she
be offered a one bedroom unit at the affordable rate.

 
 
 
 

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The United States District Court for the Central District of California granted
summary judgment on all of Ling’s claims in November 2012. Ling appealed to the
Ninth Circuit Court of Appeals. Briefing has been complete in the Ninth Circuit
since February 2014, and oral argument on the appeal is scheduled for February
4, 2015.
7/26/16 Update: The Ninth Circuit Court of Appeals affirmed the grant of summary
judgment by order of March 5, 2015. No further appeal was taken by Ling, and the
matter is closed.
Independent Living Center et al. v. City of Los Angeles, Redrock Noho
Residential, LLC et al.
Docket No. 2:12-cv-00551-FMO-PJW (C.D. CA)
This lawsuit was filed in 2012 by three different disabled advocacy groups. The
advocacy groups allege that the City of Los Angeles did not ensure that its
receipt and use of federal funds complied with the obligations of Section 504 of
the Rehabilitation Act. In particular, the advocacy groups allege the City
failed to ensure funds used for construction and renovation of housing included
adequate provision of housing accessible for people with disabilities.
The plaintiffs in this action have named 61 owners of housing that allegedly
received City funds for construction or renovation as “necessary” parties,
meaning they are necessary to obtain full resolution of the complaint.
Specifically, the plaintiffs named the Owner Defendants (Redrock Noho
Residential, LLC is one) to ensure that the Court could order physical
modifications to the properties as necessary.
The Owner Defendants have made substantial efforts to achieve settlement as to
their participation in the case. The Plaintiffs are not seeking any monetary
relief from the Owner Defendants, and the City’s cross-claims against the Owner
Defendants were dismissed by the Court. On January 21, 2015, the Court entered a
90 day stay of the litigation on representations from the plaintiffs and the
City that they intended to engage in substantive, global settlement
negotiations. The Owner Defendants will participate in those negotiations.
7/26/16 Update: I do not represent the Lofts at Noho Commons in this litigation;
Bill Goines from Greenburg Traurig is insurance defense counsel. However, I have
been in close contact with Bill, and I do represent other Owner Defendants in
this action. In July 2015, the Plaintiffs announced they had reached settlement
with the City that needed to be approved by the Mayor and City Council, then the
Court. That approval is pending.
Under the settlement, the City would provide funds to reach a target goal of a
certain number of accessible units over a ten year period, and would require all
properties it funds to adopt and implement certain policies and procedures.
However, 22 properties were specifically excluded from the settlement because of
the involvement of the CRA, and Lofts at Noho is one of those properties. The
litigation continues against the CRA, and the outcome for the Lofts at Noho
Commons is presumed to be essentially the same as for the other Owner
Defendants.

 
 
 
 

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SCHEDULE 11.1.11
Lease Disclosures
[Attached hereto]

 
 
 
 

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SCHEDULE 11.1.12
[Environmental Reports]

1.Preliminary Environmental Site Assessment – Phase I (October, 2006)